FORM 10-Q/A
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1998
                                       OR

              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                    For the transition period from_____to____

                          Commission file number 1-5530

                           ALLIED PRODUCTS CORPORATION
                           ---------------------------
             (Exact name of registrant as specified in its charter)





            DELAWARE                                      38-0292230
 -------------------------------              -------------------------------
 (State or other jurisdiction of              (I.R.S. Employer Identification
 incorporation or organization)                 Number)


 10 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS                         60606
-------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)


        Registrant's telephone number, including area code (312) 454-1020


                                 Not Applicable
                 ----------------------------------------------
                 (former name, former address and former fiscal
                       year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports),  and (2) has been subject to such filing  requirement for
the past 90 days. Yes x No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:  11,927,105 common shares, $.01
par value, as of July 31, 1998.





<PAGE>



            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES


                                      INDEX


         PART I.   FINANCIAL INFORMATION

                  ITEM 1. FINANCIAL STATEMENTS

                          INTRODUCTION

                          CONDENSED CONSOLIDATED BALANCE SHEETS-
                            June  30, 1998 and December 31, 1997

                          CONDENSED  CONSOLIDATED  STATEMENTS OF INCOME Three
                            and Six Months Ended June 30, 1998 and 1997

                          CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS-
                            Six Months Ended June 30, 1998 and 1997

                          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                                     CONDITION AND RESULTS OF OPERATIONS


         PART II.  OTHER INFORMATION

                  ITEM 1. NOT APPLICABLE

                  ITEM 2. NOT APPLICABLE

                  ITEM 3. NOT APPLICABLE

                  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  ITEM 5. OTHER INFORMATION

                  ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         SIGNATURES

         EXHIBIT  INDEX


<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES

                                  INTRODUCTION
         Subsequent  to  the  end of  1998,  the  Company  determined  that  the
accounting for certain stock option exercise  transactions during 1996, 1997 and
interim reporting periods for 1998 was incorrect.  Non-cash compensation expense
for certain option  exercises  during the above periods which was not recognized
in  previously  issued  10-Q's is now  reflected  in the  accompanying  restated
financial  statements.  The Company also determined that gross profit margins at
the Verson  division  were  incorrectly  reported in 1997 and interim  reporting
periods  in 1998.  Reference  is made to Note 13 of the  Consolidated  Financial
Statements  in the  Company's  1998  Annual  Report on Form 10-K  regarding  the
reconciliation of the amounts previously reported to the amounts currently being
reported  in the  quarterly  consolidated  statements  of income  (loss) for the
periods ended June 30, 1998 and 1997. It was further determined that the Company
should have accrued for product liability claims incurred but not reported prior
to 1996. The product liability adjustment  ($1,040,000 net of tax) had no impact
on  operating  results  reported on within this  report and is  reflected  as an
adjustment to retained earnings at December 31, 1995.

         The condensed  consolidated financial statements included herein (as of
June 30,  1998 and for the three and six months  ended  June 30,  1998 and 1997)
have been  prepared by the  Company,  without  audit,  pursuant to the rules and
regulations  of  the   Securities  and  Exchange   Commission  and  reflect  all
adjustments which are, in the opinion of management, necessary to present fairly
the condensed  consolidated  financial  information  required therein.  All such
adjustments are of a normal,  recurring  nature.  The information as of December
31,  1997 is derived  from the  audited  year end  balance  sheet for that year.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted pursuant to such rules and regulations,  although
the Company  believes that the  disclosures are adequate to make the information
presented not  misleading.  It is suggested that these  financial  statements be
read in conjunction with the financial statements and the notes thereto included
in the Company's latest annual report on Form 10-K.

         The results of  operations  for the three and six month  periods  ended
June 30,  1998 and 1997 are not  necessarily  indicative  of the  results  to be
expected for the full year.


<PAGE>


            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


                                     ASSETS
<TABLE>
<CAPTION>

                                                                   June 30, 1998   December 31,1997
                                                                   -------------   -----------------

<S>                                                                <C>             <C>
Current Assets:
  Cash and cash equivalents ........................               $     489,000   $        609,000
                                                                   -------------   -----------------
  Notes and accounts receivable, less allowances of
     $652,000 and $531,000, respectively ...........               $  67,724,000   $     54,729,000
                                                                   -------------   ----------------
  Inventories:
    Raw materials ..................................               $   8,986,000   $      6,193,000
    Work in process ................................                  98,787,000         52,811,000
    Finished goods .................................                  17,416,000         14,419,000
                                                                   -------------   ----------------
                                                                   $ 125,189,000   $     73,423,000
                                                                   -------------   ----------------
 Deferred tax asset ................................               $  12,773,000   $     12,773,000
                                                                   -------------   ----------------
 Prepaid expenses ..................................               $     533,000   $        415,000
                                                                   -------------   ----------------
       Total current assets ........................               $ 206,708,000   $    141,949,000
                                                                   -------------   ----------------

 Plant and Equipment, at cost:
    Land ...........................................               $   2,170,000   $      2,243,000
    Building and improvements ......................                  51,557,000         40,750,000
    Machinery and equipment ........................                  58,121,000         51,339,000
                                                                   -------------   ----------------
                                                                   $ 111,848,000   $     94,332,000
   Less-Accumulated depreciation and amortization ..                  46,285,000         48,811,000
                                                                   -------------   ----------------
                                                                   $  65,563,000   $     45,521,000
                                                                   -------------   ----------------
 Other Assets:
    Deferred tax asset .............................               $   4,631,000   $      4,631,000
    Deferred charges (goodwill), net of amortization                   6,618,000          1,491,000
    Other ..........................................                   3,353,000          1,472,000
                                                                   -------------   ----------------
                                                                   $  14,602,000   $      7,594,000
                                                                   -------------   ----------------

                                                                   $ 286,873,000   $    195,064,000
                                                                   =============   ================

</TABLE>



The accompanying notes to consolidated  financial  statements are an
integral part of these statements.

<PAGE>



            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


                    LIABILITIES AND SHAREHOLDERS' INVESTMENT
<TABLE>
<CAPTION>

                                                                   June 30, 1998   December 31,1997
                                                                   -------------   ----------------
<S>                                                                <C>             <C>
Current Liabilities:
  Revolving credit agreement ................................      $ 109,200,000   $     50,400,000
  Current portion of long-term debt .........................            388,000            268,000
  Accounts payable ..........................................         35,114,000         19,923,000
  Accrued expenses ..........................................         24,868,000         25,145,000
                                                                   -------------   ----------------
         Total current liabilities ..........................      $ 169,570,000   $     95,736,000
                                                                   -------------   ----------------
Long-term debt, less current portion shown above ............      $   1,235,000   $        670,000
                                                                   -------------   ----------------
Other long-term liabilities .................................      $  15,541,000   $     10,105,000
                                                                   -------------   ----------------
Commitments and Contingencies
Shareholders' Investment:
    Preferred stock:
       Undesignated-authorized 1,500,000 shares at June 30,
         1998 and  December 31, 1997; none issued ...........      $        --     $        --
   Common Stock, par value $.01 per share; authorized
      25,000,000 shares; issued 14,047,249 shares at June 30,
       1998 and December 31, 1997 ...........................            140,000            140,000
   Additional paid-in capital ...............................         98,872,000         98,518,000
   Retained earnings ........................................         43,626,000         32,148,000
                                                                   -------------   ----------------
                                                                   $ 142,638,000    $   130,806,000
   Less: Treasury stock, at cost:  2,120,144 and 2,144,263
     shares at June 30, 1998 and December 31, 1997,
     respectively ...........................................        (42,111,000)       (42,253,000)
                                                                   -------------   ----------------
         Total shareholder's equity .........................      $ 100,527,000    $    88,553,000
                                                                   -------------   ----------------

                                                                   $ 286,873,000    $   195,064,000
                                                                   =============   ================

</TABLE>


The accompanying notes to consolidated  financial  statements are an
integral part of these statements.

<PAGE>



            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES


             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>



                                           Three Months Ended June 30,        Six Months Ended June 30,
                                          ------------------------------   ----------------------------------------
                                              1998              1997           1998             1997
                                          -------------     ------------   -------------    -------------
<S>                                       <C>              <C>             <C>              <C>
Net sales .............................   $  88,985,000    $  76,902,000   $ 151,816,000    $ 149,783,000

Cost of products sold .................      69,770,000       58,565,000     113,446,000      113,188,000
                                          -------------    -------------   -------------    -------------
  Gross profit ........................   $  19,215,000    $  18,337,000   $  38,370,000    $  36,595,000
                                          -------------    -------------   -------------    -------------

Other costs and expenses:

  Selling and administrative expenses .   $   8,859,000    $   8,775,000   $  18,649,000    $  17,355,000

  Interest expense ....................       1,447,000          958,000       2,537,000        1,652,000

  Other (income) expense, net .........      (1,736,000)         112,000      (1,864,000)         541,000
                                          -------------    -------------   -------------    -------------

                                          $   8,570,000    $   9,845,000   $  19,322,000    $  19,548,000
                                          -------------    -------------   -------------    -------------

Income before taxes ...................   $  10,645,000    $   8,492,000   $  19,048,000    $  17,047,000

Provision for income taxes ............       3,544,000        3,093,000       6,617,000        6,142,000
                                          -------------    -------------   -------------    -------------

Net income and comprehensive net income   $   7,101,000    $   5,399,000   $  12,431,000    $  10,905,000
                                          =============    =============   =============    =============

Earnings per common share:
  Basic ...............................   $        0.60    $        0.45   $        1.04    $        0.89
                                          =============    =============   =============    =============

  Diluted .............................   $        0.59    $        0.44   $        1.03    $        0.88
                                          =============    =============   =============    =============

Weighted average shares outstanding:
  Basic ...............................      11,923,000       12,120,000      11,924,000       12,202,000
                                          =============    =============   =============    =============

  Diluted .............................      12,099,000       12,366,000      12,105,000       12,440,000
                                          =============    =============   =============    =============

Dividends per common share ............   $        0.04    $      0.0333   $        0.08    $      0.0667
                                          =============    =============   =============    =============

</TABLE>


The accompanying  notes to condensed  consolidated  financial  statements are an
integral part of these statements.

<PAGE>



            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                 Six Months Ended June 30,
                                                                                ----------------------------
                                                                                    1998            1997
                                                                                ------------    ------------
<S>
Cash Flows from Operating Activities:                                           <C>             <C>
   Net income ...............................................................   $ 12,431,000    $ 10,905,000
   Adjustments to reconcile net income to net cash
      used for operating activities:
      Gains on sales of operating and nonoperating assets ...................     (1,972,000)       (143,000)
      Depreciation and amortization .........................................      2,743,000       2,525,000
      Amortization of deferred charges ......................................        132,000          89,000
      Deferred income tax provision .........................................      5,661,000       5,394,000
      Stock option compensation .............................................      1,119,000          87,000
      Changes in noncash assets and liabilities, net of noncash transactions:
         (Increase) in accounts receivable ..................................    (10,448,000)    (22,151,000)
         (Increase) in inventories ..........................................    (48,830,000)     (3,878,000)
         (Increase) decrease in prepaid expenses ............................       (100,000)         15,000
         Increase (decrease)  in accounts payable and accrued expenses ......     13,070,000         (27,000)
      Other,net .............................................................     (1,455,000)        113,000
                                                                                ------------    ------------
   Net cash used for operating activities ...................................   $(27,649,000)   $ (7,071,000)
                                                                                ------------    ------------

Cash Flows from Investing Activities
   Additions to plant and equipment .........................................   $(22,060,000)   $ (7,233,000)
   Payment for businesses acquired ..........................................    (11,290,000)           --
   Proceeds from sales of plant and equipment ...............................      3,383,000         404,000
                                                                                ------------    ------------
   Net cash used for investing activities ...................................   $(29,967,000)   $ (6,829,000)
                                                                                ------------    ------------

Cash Flows from Financing Activities:
   Borrowings under revolving credit agreement ..............................   $ 92,400,000    $ 63,700,000
   Payments under revolving credit agreement ................................    (33,600,000)    (36,900,000)
   Payments of short and long-term debt .....................................       (135,000)        (96,000)
   Purchase of treasury stock ...............................................       (776,000)    (12,956,000)
   Dividends paid ...........................................................       (478,000)       (407,000)
   Stock option transactions ................................................         85,000         894,000
                                                                                ------------    ------------
Net cash provided from financing activities .................................   $ 57,496,000    $ 14,235,000
                                                                                ------------    ------------
Net increase (decrease) in cash and cash equivalents ........................   $   (120,000)   $    335,000
Cash and cash equivalents at beginning of year ..............................        609,000         833,000
                                                                                ------------    ------------
Cash and cash equivalents at end of period ..................................   $    489,000    $  1,168,000
                                                                                ============    ============

</TABLE>



The accompanying notes to condensed consolidated financial statements are an
integral part of the statements






<PAGE>




            Allied Products Corporation and Consolidated Subsidiaries
              Notes to Condensed Consolidated Financial Statements


(1)      Accrued Expenses
         ----------------
         The Company's accrued expenses consist of the following:
<TABLE>
<CAPTION>

                                                     6/30/98          12/31/97
                                                   -----------       -----------
         <S>                                       <C>               <C>
         Salaries and wages ................       $ 8,070,000       $ 5,560,000
         Warranty ..........................         4,831,000         4,938,000
         Self insurance accruals ...........         1,515,000         2,858,000
         Pensions, including retiree health          5,052,000         6,439,000
         Taxes, other than income taxes ....         1,349,000         1,158,000
         Environmental matters .............         1,463,000         1,810,000
         Other .............................         2,588,000         2,382,000
                                                   -----------       -----------
                                                   $24,868,000       $25,145,000
                                                   ===========       ===========

</TABLE>


(2)      Earnings Per Common Share
         -------------------------
                  During 1997, the Financial  Accounting  Standards Board (FASB)
         issued  Statement  of  Financial  Accounting  Standards  No.  128 (SFAS
         128)--Earnings  per  Share.  Earnings  per  common  share and  weighted
         average shares  outstanding for the three and six months ended June 30,
         1997 have been restated to reflect the effect of a three-for-two  stock
         split  in 1997  and the  effect  of  adopting  the  provisions  of this
         accounting standard. Basic earnings per common share for the periods in
         1998 is  based on the  average  number  of  common  shares  outstanding
         (11,923,000  and 11,924,000 for the three and six months ended June 30,
         1998,  respectively).  Diluted  earnings  per common share for the same
         periods is based on the average number of common shares outstanding, as
         noted  above,  increased by the dilutive  effect of  outstanding  stock
         options  (176,000  and 181,000 for the three and six months  ended June
         30,  1998,  respectively).  Basic  earnings  per  common  share for the
         periods  in 1997 is  based  on the  average  number  of  common  shares
         outstanding  (12,120,000  and  12,202,000  for the three and six months
         ended June 30, 1997,  respectively).  Diluted earnings per common share
         for the same  periods in 1997 is based on the average  number of common
         shares  outstanding,  as noted  previously,  increased  by the dilutive
         effect of  outstanding  options  (246,000 and 238,000 for the three and
         six months ended June 30, 1997, respectively).

(3)      Acquisitions
         ------------
                  During  the  second  quarter  of 1998,  the  Company  acquired
         substantially  all of the assets and  assumed  certain  liabilities  of
         Great Bend  Manufacturing  Company  (Great Bend) located in Great Bend,
         Kansas.  Great Bend  manufactures and sells  tractor-mounted  front-end
         loaders which are used  principally in agricultural  applications.  The
         Company also acquired in the second quarter of 1998  substantially  all
         of the assets of Universal Turf Equipment Corporation  (Universal Turf)
         located in Opp, Alabama. Universal Turf manufactures and


<PAGE>



         sells turf  maintenance  implements  including  reel mowers,  verti-cut
         mowers,  reel  grinders  and  spraying  equipment.  The impact of these
         acquisitions on the  consolidated  operating  results of the Company in
         the  second   quarter  and  first  half  of  1998  is  not   considered
         significant.

(4)      Dispositions/Sales of Assets
         ----------------------------
                  "Other  (income)  expense,  net" for the six months ended June
         30, 1998 includes gains of approximately  $1,972,000 ($1,957,000 in the
         second quarter)  primarily  related to the sale of the Coldwater,  Ohio
         facility noted below.

(5)      Contingent Liabilities
         ----------------------
                  The Company is involved in a number of legal  proceedings as a
         defending party,  including product liability and environmental matters
         for which additional liability is reasonably possible.  However,  after
         consideration  of relevant  data  (consultation  with legal counsel and
         review of insurance coverage, accruals, etc.), management believes that
         the eventual  outcome of these matters will not have a material adverse
         effect on the Company's  financial  position or its ongoing  results of
         operations.

                  Reference  is  made  to  Note  10  of  Notes  to  Consolidated
         Financial  Statements in the Company's  1997 Annual Report on Form 10-K
         as it relates to a note receivable taken in connection with the sale of
         the business  and assets of the former  Littell  division.  Collections
         from this note in the six months ended June 30, 1998  totaled  $390,000
         ($195,000 in the second  quarter) and were included in "Other  (income)
         expense."

                  Reference  is  made  to  Note  10  of  Notes  to  Consolidated
         Financial  Statements in the Company's  1997 Annual Report on Form 10-K
         as it relates to the sale by the Company of a site in  Coldwater,  Ohio
         that  was  contingent  on the  issuance  by the  State  of  Ohio,  Ohio
         Environmental Protection Agency, of a covenant not to sue. On March 31,
         1998, the Ohio Environmental  Protection Agency issued the covenant not
         to sue.  The Company  closed on the sale of this  facility  for cash of
         $3,156,000 on May 13, 1998.
                  At June 30,  1998,  the  Company was  contingently  liable for
         approximately  $1,048,000  primarily relating to outstanding letters of
         credit.

(6)      Income Taxes
         ------------
                  The  provision  for income taxes in the first half of 1998 and
         1997 is based upon the Federal  statutory rates adjusted for items that
         are not subject to taxes. See Note 4 of Notes to Consolidated Financial
         Statements  in the  Company's  1997  Annual  Report  on Form 10-K for a
         further discussion related to income taxes.




<PAGE>



(7)      Summary of Other (Income) Expense
         ---------------------------------
                  Other  (income)  expense  for the three and six month  periods
         ended June 30, 1998 and 1997 consists of the following:
<TABLE>
<CAPTION>
                            For the three months ended    For the six months ended
                            --------------------------    ------------------------
                              6/30/98        6/30/97        6/30/98      6/30/97
                            -----------    -----------    -----------  -----------
<S>                         <C>            <C>            <C>            <C>
Interest income .........   $   (41,000)   $   (23,000)   $   (87,000)   $ (40,000)
Goodwill amortization ...        87,000         45,000        132,000       89,000
Net (gain) loss on sales
  of operating and non-
  operating assets ......    (1,957,000)       (18,000)    (1,972,000)    (143,000)
Litigation
  settlements/insurance
  provision .............       569,000        115,000        569,000      557,000
Payments received
  long-term notes
  receivable reserved for
  as uncollectible ......      (195,000)      (500,000)      (390,000)    (500,000)
 Other miscellaneous ....      (199,000)       493,000       (116,000)     578,000
                            -----------    -----------    -----------    ---------
                            $(1,736,000)   $   112,000    $(1,864,000)   $ 541,000
                            ===========    ===========    ===========    =========
</TABLE>

(8)      Financial Arrangements
         ----------------------
                  On June 30, 1998 the Company  entered into an amendment to the
         Amended and Restated Credit Agreement. The amendment provides for up to
         $145,000,000 (from $125,000,000) of borrowings and/or letters of credit
         at either a floating  prime or fixed LIBOR (with the rate  dependent in
         the ratio of Funded Debt to Operating Cash Flow) rate. The funds may be
         used for future  working  capital  needs of the  Company,  fixed  asset
         additions and possible acquisitions.













<PAGE>




ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

OPERATING RESULTS
-----------------
         During the second quarter of 1998, the Company  acquired  substantially
all of the assets and assumed  certain  liabilities of Great Bend  Manufacturing
Company (Great Bend) located in Great Bend, Kansas.  Great Bend manufactures and
sells   tractor-mounted   front-end   loaders  which  are  used  principally  in
agricultural  applications.  The Company also acquired in the second  quarter of
1998  substantially  all of the assets of Universal Turf  Equipment  Corporation
(Universal Turf) located in Opp, Alabama.  Universal Turf manufactures and sells
turf  maintenance  implements  including  reel mowers,  verti-cut  mowers,  reel
grinders  and  spraying  equipment.  The  impact  of these  acquisitions  on the
consolidated  operating  results of the Company in the second  quarter and first
half of 1998 is not considered significant.
         During  the  fourth   quarter  of  1997,  the  Company  sold  for  cash
substantially all of the assets of its Coz division.  The purchaser also assumed
certain specified liabilities associated with this division.

First Half of 1998 Compared to First Half of 1997
-------------------------------------------------
         Net sales in the first half of 1998 were  $151,816,000  compared to net
sales of $149,783,000 reported in the first half of 1997. Increased sales at the
Bush Hog  division  more than  offset the loss of revenues  associated  with the
Company's  former Coz  division,  which was sold in the fourth  quarter of 1997.
Income  before  taxes in the  first  half of the  current  year was  $19,048,000
compared to income before taxes of $17,047,000 reported in the first half of the
prior year.  Income  before  taxes in the first half of 1998  included  gains of
approximately  $1,972,000  primarily related to the sale of the Coldwater,  Ohio
facility - See Note 4 of Notes to Condensed  Consolidated  Financial Statements.
Net income was $12,431,000  ($1.04 per common  share-basic) in the first half of
1998 compared to net income of $10,905,000 ($.89 per common  share-basic) in the
first half of 1997.  "Earnings per common share" and  "Weighted  average  shares
outstanding" have been restated for the three and six months ended June 30, 1997
to reflect the effect of a  three-for-two  stock split in 1997 and the effect of
adopting Statement of Financial Accounting Standards (SFAS) No. 128-Earnings per
Share.

         At the Bush Hog and Great Bend  divisions,  net sales  increased 18% in
the first half of 1998  compared to the first half of 1997.  The majority of the
increase was associated  with the cutter products line at the Bush Hog division.
Cutter sales have benefitted from the end of the cattle herd  liquidation  cycle
in the spring of 1997.  Cattle  ranchers  use the cutters  for  grazing  pasture
maintenance. Cutter sales in 1998 were also favorably affected by new/redesigned
products for the turf and landscaping  market for utilization by commercial turf
(sod) growers and for golf course


<PAGE>



maintenance.  Loader  sales have also  increased in the current  year,  with the
majority of the increase in this product line related to the  acquisition of the
Great Bend division,  as noted above. Sales of the Great Bend division represent
approximately  25% of the overall increase in agricultural  product sales in the
first half of 1998  compared to the first half of 1997.  Gross profits and gross
profit  margins  increased  in the  first  half of the  current  year due to the
effects of favorable  manufacturing  variances  which  resulted  from  increased
facility  utilization  (production)  including  longer  production lot sizes and
increased labor efficiencies. The impact of increased sales volume also resulted
in increased gross profits in 1998.

         Severe weather conditions in the southwestern  United States as well as
some local flooding in the central part of the country are anticipated to result
in lower than  expected  sales for the  Company's  agricultural  products in the
third quarter.  Some cattle herd liquidation has taken place in the southwest as
a result of drought  conditions.  Commodity  prices have also  decreased  in the
first half of 1998.  As a result,  the Bush Hog  division  expects to scale back
production  schedules  in  the  third  quarter  of  1998  to  adjust  to  market
conditions.

         Net sales at the Verson  division  increased by 8% in the first half of
1998 compared to the first half of 1997. Revenue and profits are recognized on a
percentage  of  completion  basis for press  production  at this  division.  The
increase in net sales was primarily  related to increased  press orders received
during the second quarter of 1998 including the recently  announced major orders
for presses of approximately $80,000,000. Gross profits and gross profit margins
decreased at the Verson  division in the first half of 1998 compared to the same
six month period of 1997. Margins have been negatively impacted by manufacturing
constraints  associated with insufficient  manufacturing causing the division to
out source an increased level of production,  resulting in increased  costs. The
mix of production has also resulted in  inefficiencies.  Production in the first
half of 1998  included  newly  designed  presses for each of the major U.S. auto
manufacturers.  Some of the engineering  requirements related to these and other
orders have also been subcontracted out. These  manufacturing  problems have led
to the delayed shipment of certain  presses.  Warranty costs have also increased
in 1998 due to the  increased  sales  volume and mix of  products  manufactured.
These increased costs were partially offset by the settlement of a claim against
a third party, which negatively impacted periods prior to 1997.

         Selling and administrative expenses increased in the first half of 1998
to $18,649,000 (12.3% of net sales) from $17,355,000 (11.6% of net sales) in the
first  half of  1997.  Selling  expense  increases  were  primarily  related  to
increased  commissions  at the  Bush Hog  division  (associated  with  increased
sales),  costs  related  to the  establishment  of an  international  sales  and
marketing  department  at the Verson  division  (primarily  salaries  and travel
costs) and the  acquisition  of the Great Bend  division as noted  above.  These
increases were partially  offset by decreased costs  associated with the sale of
the Coz division in the fourth quarter of 1997.  Administrative  costs have also
increased in


<PAGE>



the first half of 1998.  Corporate  administrative  costs increased in the first
half of 1998  primarily  due to the effect of  compensation  expense  recognized
($1,119,000  in the first half of 1998  compared to $87,000 in the first half of
the prior year) in relation  to stock  options  exercised  in each  period.  The
effect of this  increase was partially  offset by the impact of corporate  staff
retirements  in the last half of 1997.  Other  cost  increases  related to staff
expansion and legal fees associated with the settlement of a claim at the Verson
division and the acquisition of the Great Bend division were partially offset by
the impact of the sale of the Coz division.

         Interest  expense in the first half of 1998 was $2,537,000  compared to
interest  expense of  $1,652,000  reported  in the first half of the prior year.
Increased borrowing needs were related to higher consolidated  receivable levels
(primarily  associated  with Bush Hog's  increased  sales  volume) and increased
inventory levels  (primarily  associated with the Verson division where shipment
delays have occurred). Other borrowing needs included fixed asset additions over
the past twelve  months,  including  the Verson plant  expansion,  the impact of
decreased  customer  deposits and progress  payments against press orders at the
Verson  division,  and the  acquisitions of Great Bend and Universal Turf in the
second quarter of 1998. Interest expense in the first half of 1998 was partially
offset by the  interest  cost  capitalized  relating to the  Company's  building
expansion project at the Verson division.

         Reference  is  made  to  Note  7 of  Notes  to  Condensed  Consolidated
Financial Statements for an analysis of Other (income) expense in the first half
of 1998 and 1997.

Second Quarter of 1998 Compared to Second Quarter of 1997
---------------------------------------------------------
         Net sales in the second  quarter of 1998 were  $88,985,000  compared to
net sales of $76,902,000  reported in the second quarter of 1997.  Income before
taxes in the second  quarter of the  current  year was  $10,645,000  compared to
income  before taxes of $8,492,000  reported in the second  quarter of the prior
year.  Income  before  taxes in the  second  quarter of 1998  included  gains of
approximately  $1,972,000  primarily related to the sale of the Coldwater,  Ohio
facility - See Note 4 of Notes to Condensed  Consolidated  Financial Statements.
Net income was $7,101,000 ($.60 per common share-basic) in the second quarter of
1998 compared to net income of $5,399,000  ($.45 per common  share-basic) in the
second  quarter of 1997.  Reference is made to the  restatement of "Earnings per
common share" and "Weighted average share outstanding" noted above.

         At the Bush Hog and Great Bend  divisions,  net sales  increased 27% in
the second quarter of 1998 compared to the same quarter of the prior year,  with
approximately  one-third of this increase  related to the  acquisition  of Great
Bend.  The majority of the  increase  was related to Bush Hog's  cutter  product
lines.  Loader sales also increased  during the period at the Bush Hog division.
Sales during the period benefitted from the effects of favorable spring planting
conditions.  Gross  profits  improved  at the Bush Hog  division  in the  second
quarter of 1998 primarily due to increased sales


<PAGE>



volume noted above.  Gross profit  margins also improved  compared to the second
quarter of the prior  year.  Favorable  manufacturing  variances  resulted  from
increased production lot sizes and increased labor efficiencies.

         At the Verson  division,  sales  increased 28% in the second quarter of
1998 compared to the second quarter of the prior year.  The entire  increase was
related to increased press production.  As noted above,  major press orders were
received during the second quarter of 1998. Production has begun on these orders
in order to meet delivery date deadlines. Gross profits and gross profit margins
have decreased at the Verson  division in the second quarter of the current year
compared to the same quarter of 1997.  Margins have been pressured by the impact
of increased  outsourcing  of production  and  engineering  services,  increased
warranty provisions and lack of adequate manufacturing capacity. The division is
in the process of expanding its assembly area and construction will be completed
in the last quarter of this year.  Some press shipments have been delayed due to
production  problems.  While no  significant  penalties  have been incurred with
these late  shipments,  the excess  number of presses in the  assembly and other
manufacturing areas have led to manufacturing inefficiencies.

         Selling and  administrative  expenses  have  increased  slightly in the
second  quarter of 1998 to  $8,859,000  from  $8,775,000  reported in the second
quarter of 1997. As a percent of net sales,  these costs have decreased to 10.0%
in the second  quarter of this year compared to 11.4% of net sales in the second
quarter  of the  prior  year.  Increases  in  selling  expenses  at the Bush Hog
division were  primarily  related to commissions  associated  with the increased
sales volume. At the Verson division, increases were related to costs associated
with the establishment of an international sales and marketing department. Great
Bend (acquired in the second quarter of 1998) selling expenses also added to the
consolidated increase in these costs.  Administrative  expenses decreased in the
second quarter of 1998. The impact of Corporate  Office  retirements in the last
half of 1997 was the main cause of this decrease.

         Interest expense in the second quarter of 1998 was $1,447,000  compared
to  interest  expense  of  $958,000  reported  in the  second  quarter  of 1997.
Increased  borrowing  needs were related to increased  receivable  levels of the
Bush Hog division,  increased  inventory  levels at the Verson  division,  fixed
asset additions at both the Bush Hog and Verson  divisions and the  acquisitions
of Great Bend and Universal Turf.  Interest  expense was partially offset by the
interest cost capitalized  relating to the Company's  building expansion project
at the Verson division.

         Reference  is  made  to  Note  7 of  Notes  to  Condensed  Consolidated
Financial  Statements  for an analysis of Other  (income)  expense in the second
quarter of 1998 and 1997.




<PAGE>



FINANCIAL CONDITION AND LIQUIDITY
---------------------------------

         Working capital at June 30, 1998 was $37,138,000 (current ratio of 1.22
to 1.0) compared to working  capital of  $46,213,000  (current  ratio of 1.48 to
1.0) at December 31, 1997. Net  receivables  increased by $12,995,000  since the
end of 1997.  The  majority of the  increase  was  associated  with the Bush Hog
division  where cash  collections  are  dependent  upon the  retail  sale of the
product by the dealer. Sales, which are typically strong in the first quarter of
the year or just prior to the use season by the farmer,  continued  to be strong
in the second quarter of 1998.  Extended payment terms are offered to dealers in
the form of floor plan financing which is customary in the industry. Receivables
also  increased  with  the  acquisition  of  the  Great  Bend  division.   On  a
consolidated basis, inventory levels have increased $51,766,000 since the end of
1997.  The majority of the  increase was related to the Verson  division and was
the direct  result of the number  and extent of jobs in  process,  the impact of
decreased  customer  deposits and progress payments against press orders and the
effects of delivery date extensions. Inventory levels have also increased at the
Bush Hog  division  where  record  first half sales have  occurred in 1998.  The
acquisition of Great Bend also resulted in increased consolidated inventories.

         Fixed   asset   additions   in  the  first  half  of  1998   (excluding
acquisitions)  totaled  $22,060,000.   The  majority  of  these  additions  were
represented  by  construction  costs  associated  with a  $28,000,000  expansion
project at the Verson  division.  This project will more than double the size of
Verson's assembly facility and increase the division's capacity by approximately
35%. This,  combined with the division's focused factory concept and the overall
strengthening of its infrastructure,  should help alleviate capacity constraints
at this operation.  Expenditures  for production  machinery and equipment at all
manufacturing  divisions  were  also  made  in the  first  half of  1998.  It is
anticipated  that the equipment will result in reduced  manufacturing  costs and
improvements in product quality.

         Net  borrowings  under  the  Company's   Amended  and  Restated  Credit
Agreement  increased by $58,800,000 since the end of 1997. These borrowings were
used to finance working capital needs and fixed asset additions noted above.

         As of June 30,  1998,  the  Company had cash  balances of $489,000  and
additional funds of $33,963,000  available under its Amended and Restated Credit
Agreement.  Significant  capital  will be  required to  complete  the  expansion
project at the Verson  division as noted above. At the end of the second quarter
of 1998,  the Company  entered  into an  amendment  to the Amended and  Restated
Credit  Agreement.   The  amendment   provides  for  up  to  $145,000,000  (from
$125,000,000) of borrowings  and/or letters of credit at either a floating prime
or fixed LIBOR (with the rate dependent on the ratio of Funded Debt to Operating
Cash Flow) rate. These funds may be used for future working capital needs of the
Company,  fixed asset additions and acquisitions.  The Company believes the cash
flow from operations and funds available under the Amended and Restated Credit


<PAGE>



Agreement are adequate to finance its operations and capital expenditures in the
near future.  During the first half of 1998,  the Company has been in compliance
with all provisions of loan agreements in effect.

IMPACT FROM NOT YET EFFECTIVE RULES
-----------------------------------

         In June 1997, the Financial  Accounting  Standards  Board (FASB) issued
SFAS  No.  131   Disclosures   about  Segments  of  an  Enterprise  and  Related
Information.  This  statement  establishes  standards  for the way  that  public
business  enterprises  report  information  about operating  segments in interim
financial reports issued to shareholders  subsequent to initial annual financial
statements  disclosure.  It also establishes  standards for related  disclosures
about  products  and  services,  geographic  areas  and  major  customers.  This
statement is effective on an annual basis for financial  statements  for periods
beginning after December 15, 1997. Interim reporting requirements begin in 1999.
Comparative information for earlier years is also to be presented.

         In February 1998, the FASB issued SFAS No. 132 -Employers'  Disclosures
about  Pensions  and  Other  Postretirement  Benefits.  This  statement  revises
employers'  disclosures about pension and other postretirement benefit plans. It
does not change the  measurement or recognition of these plans.  It standardizes
the disclosure requirements for pension and other postretirement benefits to the
extent practicable,  requires  additional  information on changes in the benefit
obligations  and fair  values  of plan  assets  that will  facilitate  financial
analysis,  and eliminates  certain  disclosures  that are no longer as useful as
they were when other related SFAS were issued.  The Company is in the process of
evaluating the impact of these statements on its financial reporting.

         In June 1998,  the FASB issued SFAS No. 133 - Accounting for Derivative
Instruments and Hedging Activities.  This statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other  contracts,   (collectively   referred  to  as
derivatives)  and for  hedging  activities.  The  Company  at this time does not
participate  in any  transactions  covered under the provisions of SFAS No. 133,
which would be effective July 1, 1999.

SAFE HARBOR STATEMENT
---------------------

         Statements  contained within the Management  Discussion and Analysis of
Financial  Condition and Results of Operations  that relate to future  operating
periods are subject to risks and  uncertainties  that could cause actual results
to differ from management's  projections.  Operations of the Company include the
manufacturing and sale of agricultural and industrial machinery.  In relation to
the  Bush Hog and  Great  Bend  divisions,  forward-looking  statements  involve
certain   factors  that  are  subject  to  change.   These  elements   encompass
interrelated factors that affect farmers


<PAGE>



and cattle ranchers'  confidence,  including  demand for agricultural  products,
grain  stock  levels,  commodity  prices,  weather  conditions,  crop and animal
diseases,  crop yields,  farm land values and government  farm  programs.  Other
factors  affecting all operations of the Company  include actions of competitors
in the  industries  served by the  Company,  production  difficulties  including
capacity and supply constraints, labor relations, interest rates and other risks
and uncertainties.  The Company's outlook is based upon assumptions  relating to
the factors discussed above.












<PAGE>



                           PART II - OTHER INFORMATION


Item 4.           Submission of Matters to a Vote of Security Holders
                  ---------------------------------------------------

            On  May  20,  1998  the  Registrant   held  its  annual  meeting  of
shareholders.  Copies of the related proxy statement have been previously  filed
with the Securities and Exchange Commission.
The following item was voted on by the Company's shareholders:

         Election of Three  Directors.  Proxies for the meeting  were  solicited
         -----------------------------
pursuant to  Regulation  14A.  There was no  solicitation  in  opposition to the
management's  nominees as listed in the proxy statement.  The nominees  received
the following number of votes:

         Class B Directors - Terms expire in 2001 - Mr. L.A. Drexler,
         -------------------------------------------------------------
         Mr. John E. Jones and Mr. Stanley J. Goldring
         ---------------------------------------------
              For Mr. Drexler - 10,498,910; withheld from Mr. Drexler - 20,848.
              For Mr. Jones - 10,507,749; withheld from Mr. Jones - 12,009.
              For Mr. Goldring - 10,508,912; withheld from Mr. Goldring - 10,846

         The terms of the following directors continued after the meeting:

         Class C Directors - Terms expire in 1999
         ----------------------------------------
              Mr. William D. Fischer and Mr. S.S. Sherman

         Class A  Directors - Terms expire in 2000
         -----------------------------------------
              Mr. Richard A. Drexler, Mr. John Puth and Mr. Michell I.Quain
       .
         Approximately  1,397,000 shares held by brokers and nominees were not
voted in the election of directors.

         1999 Annual Meeting.  After February 23, 1999, notice to the Company of
         --------------------
a Shareholder proposal submitted for consideration at the 1999 Annual Meeting of
Shareholders  which  is not  submitted  for  inclusion  in the  Company's  proxy
Statement and form of proxy,  will be considered  untimely and the persons named
in the proxies solicited by the Company may exercise  discretionary voting power
with respect to any such proposal.






<PAGE>



Item 5            Other Information
                  -----------------

                  Reference is made to Note 8 Financial  Arrangements of " Notes
to Condense  Consolidated  Financial  Statements" and Exhibit 10 for information
related to the Amendment to the Amended and Restated Credit Agreement.


Item 6.           Exhibit and Reports on Form 8-K
                  -------------------------------

(a)      Exhibits - See Exhibit Index included herein.

(b)      Reports on Form 8-K - there were no reports on Form 8-K for the
         three months ended June 30, 1998.






<PAGE>



SIGNATURES
----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                          ALLIED PRODUCTS CORPORATION
                                          ---------------------------
                                                (REGISTRANT)




August 3,1999                    /s/ Robert J. Fleck
-------------                    -----------------------------------------------
                                 Robert J. Fleck
                                 Vice President- Accounting and Chief Accounting
                                  & Administrative Officer




August 3, 1999                   /s/ Mark C. Standefer
--------------                   -----------------------------------------------
                                 Mark C. Standefer
                                 Vice President, General Counsel & Secretary







<PAGE>



                           ALLIED PRODUCTS CORPORATION

                                INDEX TO EXHIBITS




                      EXHIBIT NO. DESCRIPTION OF EXHIBITS
                      -----------------------------------

    10            Material Contract - Amendment No. 3 to the Credit Agreement
    27            Financial Data Schedules