FORM 10-Q
                       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 March 31, 1999
                                       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   No X

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:  11,847,046 common shares, $.01
par value, as of June 30, 1999.





<PAGE>



            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES


                                      INDEX


        PART I.  FINANCIAL INFORMATION
                 ---------------------

                 ITEM 1. FINANCIAL STATEMENTS

                         INTRODUCTION

                         CONDENSED CONSOLIDATED BALANCE SHEETS-
                          March 31, 1999 and December 31, 1998

                         CONDENSED CONSOLIDATED  STATEMENTS OF INCOME (LOSS)
                          Three Months Ended March 31, 1999 and 1998

                         CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS-
                          Three Months Ended March 31, 1999 and 1998

                         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.  NOT APPLICABLE

                 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

         The condensed  consolidated financial statements included herein (as of
March 31, 1999 and for the three months ended March 31, 1999 and 1998) 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, 1998 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 month periods ended March 31,
1999 and 1998 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>

                                                                March 31, 1999        December 31, 1998
                                                               ----------------      -------------------
<S>                                                             <C>                   <C>
Current Assets:
  Cash and cash equivalents                                     $      413,000        $         727,000
                                                               ----------------      -------------------
  Notes and accounts receivable, less allowances of
     $837,000 and $519,000, respectively                        $   84,758,000        $      68,827,000
                                                               ----------------      -------------------
  Inventories:
    Raw materials                                               $   11,048,000        $      11,529,000
    Work in process                                                 48,727,000               68,296,000
    Finished goods                                                  15,094,000               17,019,000
                                                               ----------------      -------------------
                                                                $   74,869,000        $      96,844,000
                                                               ----------------      -------------------
 Deferred tax asset                                             $   15,060,000        $      15,060,000
                                                               ----------------      -------------------
 Prepaid expenses                                               $      312,000        $         406,000
                                                               ----------------      -------------------

       Total current assets                                     $  175,412,000        $     181,864,000
                                                               ----------------      -------------------

 Plant and Equipment, at cost:
    Land                                                        $    2,423,000        $       2,430,000
    Building and improvements                                       59,694,000               57,022,000
    Machinery and equipment                                         70,810,000               69,196,000
                                                               ----------------      -------------------
                                                                $  132,927,000        $     128,648,000
   Less-Accumulated depreciation and amortization                   50,137,000               48,181,000
                                                               ----------------      -------------------
                                                                $   82,790,000        $      80,467,000
                                                               ----------------      -------------------
 Other Assets:
    Deferred tax asset                                          $    4,165,000        $       4,165,000
    Deferred charges (goodwill), net of amortization                 6,043,000                6,154,000
    Other                                                            4,661,000                3,154,000
                                                               ----------------      -------------------
                                                                $   14,869,000        $      13,473,000
                                                               ----------------      -------------------
                                                                $  273,071,000        $     275,804,000
                                                               ================      ===================
</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 BALANCE SHEETS
                                   (UNAUDITED)

                    LIABILITIES AND SHAREHOLDERS' INVESTMENT
<TABLE>
<CAPTION>

                                                                March 31, 1999        December 31, 1998
                                                               ----------------      -------------------
<S>                                                             <C>                   <C>
Current Liabilities:
  Revolving credit agreement                                    $  121,200,000        $     119,300,000
  Current portion of long-term debt                                    627,000                  627,000
  Accounts payable                                                  60,098,000               52,634,000
  Accrued expenses                                                  25,507,000               24,258,000
                                                               ----------------      -------------------
         Total current liabilities                              $  207,432,000        $     196,819,000
                                                               ----------------      -------------------
Long-term debt, less current portion shown above                $    2,051,000        $       2,298,000
                                                               ----------------      -------------------
Other long-term liabilities                                     $    4,993,000        $       4,957,000
                                                               ----------------      -------------------
Commitments and Contingencies
Shareholders' Investment:
    Preferred stock:
       Undesignated-authorized 1,500,000 shares at March 31,
         1999 and  December 31, 1998; none issued               $         -           $             -
   Common Stock, par value $.01 per share; authorized
      25,000,000 shares; issued 14,047,249 shares at March 31,
       1999 and December 31, 1998                                      140,000                  140,000
   Additional paid-in capital                                       98,377,000               98,377,000
   Retained earnings                                                 2,996,000               16,131,000
                                                               ----------------      -------------------
                                                                $  101,513,000        $     114,648,000
   Less: Treasury stock, at cost:  2,228,640
     shares at March 31, 1999 and December 31, 1998                (42,918,000)             (42,918,000)
                                                               ----------------      -------------------
         Total shareholder's equity                             $   58,595,000        $      71,730,000
                                                               ----------------      -------------------

                                                                $  273,071,000        $     275,804,000
                                                               ================      ===================

</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 INCOME (LOSS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                             Three Months Ended March 31,
                                          -----------------------------------
                                                                  Restated
                                               1999                 1998
                                          --------------       --------------
<S>                                       <C>                  <C>
Net sales                                 $  82,240,000        $  62,831,000
Cost of products sold                        82,249,000           43,676,000
                                          --------------       --------------
  Gross profit                            $      (9,000)       $  19,155,000
                                          --------------       --------------

Other costs and expenses:
  Selling and administrative expense      $  10,737,000        $   9,790,000
  Interest expense                            2,361,000            1,090,000
  Other (income) expense, net                  (441,000)            (128,000)
                                          --------------       --------------
                                          $  12,657,000        $  10,752,000
                                          --------------       --------------
Income (loss) before taxes                $ (12,666,000)       $   8,403,000
Provision for income taxes                          -              3,073,000
                                          --------------       --------------
Net income (loss)                         $ (12,666,000)       $   5,330,000
                                          ==============       ==============

Earning (loss) per common share:
  Basic                                   $       (1.07)       $        0.45
                                          ==============       ==============
  Diluted                                 $       (1.07)       $        0.44
                                          ==============       ==============

Weighted average shares outstanding:
  Basic                                      11,819,000           11,925,000
                                          ==============       ==============
  Diluted                                    11,819,000           12,112,000
                                          ==============       ==============

Dividends per common share                $        0.04        $        0.04
                                          ==============       ==============


</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>


                                                                                      Three Months Ended March 31,
                                                                                --------------------------------------
                                                                                      1999                  1998
                                                                                ----------------       ---------------
<S>                                                                              <C>                    <C>

   Net income (loss)                                                             $  (12,666,000)        $   5,330,000
   Adjustments to reconcile net income (loss) to net cash
      provided from (used for) operating activities:
      Gains on sales of operating and nonoperating assets                               (82,000)              (15,000)
      Depreciation and amortization                                                   2,144,000             1,350,000
      Amortization of deferred charges                                                  111,000                44,000
      Deferred income tax provision                                                         -               2,602,000
      Provision for inventory valuation                                               6,926,000                   -
      Stock option compensation                                                             -               1,119,000
      Changes in noncash assets and liabilities, net of noncash transactions:
         (Increase) in accounts receivable                                          (16,266,000)          (19,851,000)
         (Increase) decrease in inventories                                          15,049,000           (25,055,000)
         (Increase) decrease in prepaid expenses                                         94,000               (42,000)
         Increase in accounts payable and accrued expenses                            8,713,000            14,415,000
      Other,net                                                                      (1,041,000)             (551,000)
                                                                                ----------------       ---------------
   Net cash provided from (used for) operating activities                       $     2,982,000         $ (20,654,000)
                                                                                ----------------       ---------------

Cash Flows from Investing Activities:
   Additions to plant and equipment                                             $    (4,486,000)        $  (7,077,000)
   Proceeds from sales of plant and equipment                                             6,000                15,000
                                                                                ----------------       ---------------
   Net cash used for investing activities                                       $    (4,480,000)        $  (7,062,000)
                                                                                ----------------       ---------------

Cash Flows from Financing Activities:
   Borrowings under revolving credit agreement                                  $    49,000,000         $  38,000,000
   Payments under revolving credit agreement                                        (47,100,000)           (8,800,000)
   Payments of short and long-term debt                                                (247,000)              (68,000)
   Purchase of treasury stock                                                               -                (776,000)
   Dividends paid                                                                      (469,000)                  -
   Stock option transactions                                                                -                  24,000
                                                                                ----------------       ---------------
Net cash provided from financing activities                                     $     1,184,000         $  28,380,000
                                                                                ----------------       ---------------
Net increase (decrease) in cash and cash equivalents                            $      (314,000)        $     664,000
Cash and cash equivalents at beginning of year                                          727,000               609,000
                                                                                ----------------       ---------------
Cash and cash equivalents at end of period                                      $       413,000         $   1,273,000
                                                                                ================       ===============


</TABLE>




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












<PAGE>



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

(1)      Restatement of Previously Issued Financial Statements
         -----------------------------------------------------

                  Operating  results  for the  first  quarter  of 1998 have been
         restated  to reflect  the  effect of (a)  compensation  expenses  which
         should  have been  recognized  in  relation  to  certain  stock  option
         exercise transactions and (b) the correction of gross profit margins at
         the Verson  division.  See Note 13 of Notes to  Consolidated  Financial
         Statements  in the  Company's  1998 Annual  Report for a more  detailed
         explanation of the restatement.

                  The following table reconciles the amounts previously reported
         to the amounts  currently being reported in the Condensed  Consolidated
         Statement of Income (Loss) for the quarter ended March 31, 1998:


                                        Income          Tax
                                        Before        Provision          Net
                                         Taxes        (Benefit)        Income
                                      -----------    -----------     -----------
         As previously reported       $9,224,000     $3,359,000      $5,865,000
         Restatement associated with
         Verson gross profit margin      298,000        106,000         192,000
         Restatement associated with
         stock option compensation    (1,119,000)      (392,000)       (727,000)
                                      -----------    -----------     -----------
         As restated                  $8,403,000     $3,073,000      $5,330,000
                                      ===========    ===========     ===========

(2)      Accrued Expenses
-------------------------

         The Company's accrued expenses consist of the following:


                                                    3/31/99         12/31/98
                                                 ------------     ------------

         Salaries and wages                      $  7,258,000     $  6,573,000
         Warranty                                   6,154,000        5,794,000
         Self insurance accruals                    2,341,000        2,905,000
         Pensions, including retiree health         4,222,000        4,644,000
         Taxes, other than income taxes               831,000          888,000
         Environmental matters                      1,195,000        1,225,000
         Other                                      3,506,000        2,229,000
                                                 ------------     ------------
                                                 $ 25,507,000     $ 24,258,000
                                                 ============     ============







<PAGE>



(3)      Earnings Per Common Share
         -------------------------

                  Basic earnings per common share is based on the average number
         of common shares  outstanding - 11,819,000 and 11,925,000 for the three
         months ended March 31, 1999 and 1998,  respectively.  Diluted  earnings
         per  common  share is based on the  average  number  of  common  shares
         outstanding,  as noted  above,  increased  by the  dilutive  effect  of
         outstanding  stock options 187,000 for the three months ended March 31,
         1998. For the quarter ended March 31, 1999,  dilutive  securities  were
         excluded from the calculation of diluted loss per share as their effect
         would have been antidilutive.

(4)      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.  For all matters
         excluding one recently asserted claim, after  consideration of relevant
         data,  including  insurance coverage and accruals,  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.  For one recently  asserted  product  liability
         claim, the amount of damages claimed against all defendants exceeds the
         Company  liability  insurance limits. No estimate can currently be made
         as to whether the  ultimate  outcome of this claim  against the Company
         could exceed such limits, therefore changes in the estimate in the near
         term  could be  material  to the  financial  position  and  results  of
         operations if an unfavorable outcome were to occur.

                  As  described  in Note 1 of  Notes to  Consolidated  Financial
         Statements in the Company's 1998 Annual Report on Form 10-K, the Verson
         division may not be able to meet delivery schedules for certain presses
         currently on order or in production. Certain customers of this division
         have  advised  the Company  that they will seek to recover  damages for
         late  delivery,  which  could  include  downtime,  lost  sales and lost
         profit.  The Company  cannot at this time  determine  the amount of any
         potential  claim that may be asserted  due to late  delivery,  however,
         such  claims  could have a  material  adverse  effect on the  financial
         position and results of operations in the near term, if an  unfavorable
         outcome were to occur.

                  At March 31,  1999,  the Company was  contingently  liable for
         approximately  $1,734,000  primarily relating to outstanding letters of
         credit.

(5)      Income Taxes
         ------------

                  The provision for income taxes in the first quarter of 1998 is
         based upon the Federal  statutory  rate adjusted for items that are not
         subject to taxes. No tax benefit was recorded


<PAGE>



         in the  first  quarter  of  1999  as the  Company  had no tax  benefits
         available  to record  against the pre tax loss.  See Note 4 of Notes to
         Consolidated  Financial  Statements in the Company's 1998 Annual Report
         on Form 10-K for a further discussion related to income taxes.

(6)      Operations By Industry Segment
         ------------------------------

                  During 1998, the Company adopted SFAS 131--  Disclosures about
         Segments  of  a  Business  Enterprise  and  Related  Information.   The
         determination  of  business  segments  is based  upon the nature of the
         products  manufactured  and current  management and internal  financial
         reporting.  The  segment  information  for 1998 has  been  restated  to
         reflect the business segments noted below.
                  Information relating to operations by industry segment follows
         (in thousands of dollars):

<TABLE>
<CAPTION>

                                                   Agricultural        Industrial
                                                     Products           Products       Corporate      Consolidated
                                                   ------------       -----------    -----------      ------------

<S>                                                <C>                <C>            <C>               <C>
         1999
         ----
           Net sales to unaffiliated customers     $ 36,902           $ 45,338       $     -           $  82,240
           Income (loss) before taxes (a)             5,083 (b)        (12,999)       ( 4,750)(d)        (12,666)
           Total assets                             120,266            130,301         22,504 (C)        273,071


         1998
         ----
           Net sales to unaffiliated customers     $ 34,268           $ 28,563       $     -           $   62,831
           Income (loss) before taxes (a)             6,767 (b)          5,632         (3,996)(d)           8,403
           Total assets                              94,472            129,385         22,912 (C)         246,769
</TABLE>

         -------------------
         (a)   Segment income (loss) before taxes does not reflect an allocation
               or charge for general  corporate income or expenses,  or interest
               expense.
         (b)  Includes  interest  income of $32,000 in 1999 and $31,000 in 1998.
         (C)  Corporate assets consist principally of cash, deferred income
              taxes, other assets, properties not used in operations and
              investment in a unconsolidated joint venture.
         (d)  Corporate income (loss) before taxes consists of the following:

                                                           1999         1998
                                                         --------     --------
              General corporate income and expense       $(2,414)     $(1,802)
              Stock option compensation (Note 1)            -          (1,119)
              Interest expense                            (2,361)      (1,090)
              Interest income                                 25           15
                                                         --------     --------
                   Total                                 $(4,750)     $(3,996)
                                                         ========     ========









<PAGE>



(7)      Summary of Other (Income) Expense
         ---------------------------------

            Other (income)  expense for the three month period ended
         March 31, 1999 and 1998 consists of the following:

                                                   For the three months ended
                                                   ---------------------------
                                                     3/31/99         3/31/98
                                                   -----------     -----------
            Interest income                        $  (57,000)     $  (46,000)
            Goodwill amortization                     112,000          44,000
            Net (gain) on sales of operating
               and non-operating assets               (81,000)        (15,000)
            Legal settlement                         (389,000)           -
            Credit for recovery of long-term
               note receivable                           -           (195,000)
            Other miscellaneous                       (26,000)         84,000
                                                   -----------     -----------
                                                   $ (441,000)     $ (128,000)
                                                   ===========     ===========

(8)      Financial Arrangements
         ----------------------

                  During the first quarter of 1999,  the Company  entered into a
         Second  Amended and  Restated  Credit  Agreement  replacing  the former
         Amended and Restated Credit  Agreement.  This new agreement was amended
         in April 1999. The loan  agreement as amended  obligates the Company to
         repay all  outstanding  borrowings  on  expiration  of the agreement on
         February 28, 2000.  Before that date the Company must either  negotiate
         an extension of the loan with its current  lenders,  refinance the loan
         with other  lenders or develop  other sources of liquidity to repay the
         loan.  The Company's  ability to achieve any of these three options may
         depend upon the results of its  operations  during 1999.  See Note 5 of
         Notes to Consolidated Financial Statements in the Company's 1998 Annual
         Report  on  Form  10-K  for  more  detailed  explanation  on  Financial
         Arrangements.

(9)      Subsequent Event
         ----------------

                  Subsequent  to the  end of the  first  quarter  of  1999,  the
         Company  received  notice  asserting  that it was in default  under the
         terms of a lease  agreement  due to the failure by the  assignee of the
         lease to pay rent when due.  The facility  associated  with this notice
         was  formerly  leased by the Coz  division of the  Industrial  Products
         Group.  The lease was assigned by the Company in 1997 to the  purchaser
         of the assets of the former Coz division.  The lessor  consented to the
         assignment but did not release the Company from  liabilities as lessee.
         The assignee has announced its intent to vacate the facility. The lease
         provides  for rental  payments  of  approximately  $1,000,000  over the
         remaining term. The Company is in the process of evaluating its options
         under the terms of the lease
 .


<PAGE>



                  During the months of May and June, the Company was served with
         two  complaints   purporting  to  be  a  class  lawsuit  on  behalf  of
         shareholders  who  purchased  Allied  Products'  common  stock  between
         February 6, 1997 and March 11, 1999. The complaints, which appear to be
         virtually   identical,   allege  various   violations  of  the  federal
         securities laws and seek  unspecified  damages.  The Company  believes
         that the  actions are without  merit and intends to  vigorously  defend
         against the actions.  The Company has notified its insurance carrier of
         the actions.  The Company  cannot at this time  determine the amount of
         any  potential  claim that may be  asserted  in relation to these class
         action  lawsuits.  However,  such claims could have a material  adverse
         effect on the  financial  position  and  results  of  operations  if an
         unfavorable outcome were to occur.

                  On July 15,  1999,  the  Company  and CC  Industries  Inc.  of
         Chicago  signed a letter  of  intent  to form a joint  venture  for the
         ownership and operation of the Company's  Agricultural  Products Group.
         The letter of intent  contemplates  that the Company will  transfer the
         business,  assets and liabilities of the Agricultural Products Group to
         a newly formed  limited  liability  company and then will sell an 80.1%
         interest  in the new  entity to CC  Industries  for  $120,710,700.  The
         current  management  of the  Bush Hog and  Great  Bend  divisions  will
         continue  as  the  operating   managers  of  the  joint  venture.   The
         transaction is subject, among other things, to satisfactory  completion
         of  due  diligence  inquiries  by  CC  Industries,   the  execution  of
         definitive agreements, the approval of the respective boards of the two
         companies and the approval of Allied's shareholders.




















<PAGE>



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

OPERATING RESULTS
-----------------

         Consolidated  net sales for the first quarter of 1999 were  $82,240,000
compared to consolidated net sales of $62,831,000  reported in the first quarter
of 1998. Loss before taxes in the first quarter of 1999 was $12,666,000 compared
to income before taxes (on a restated  basis) of $8,403,000 in the first quarter
of the  prior  year.  Net loss in the  first  quarter  of 1999  was  $12,666,000
compared to net income (on a restated  basis) of $5,330,000 in the first quarter
of 1998.

         Subsequent  to  the  end of  1998,  the  Company  determined  that  the
accounting  for certain  stock  option  exercise  transactions  during the first
quarter of 1998 was incorrect. Compensation expense for certain option exercises
in the first quarter of 1998 which was not recognized in the statement of income
issued at that time is now reflected in the accompanying  restated  statement of
income  (loss).  The Company also  determined  that gross profit  margins at the
Verson division of the Industrial  Products Group were  incorrectly  reported in
the  first  quarter  of  1998.  Corrected  amounts  are  now  reflected  in  the
accompanying  restated statement of income (loss).  Reference is made to Note 13
of Notes to Consolidated  Financial  Statements in the Company's  recently filed
Annual Report on Form 10-K regarding the  reconciliation  of amounts  previously
reported in the first quarter of 1998 to the amounts currently being reported in
the accompanying restated statement of income (loss).

         Within  the  Agricultural   Products  Group,  net  sales  increased  to
$36,902,000  compared to net sales of $34,268,000  reported in the first quarter
of 1998. The entire  increase was associated  with the  acquisition of the Great
Bend operation in the second quarter of 1998. Bush Hog sales decreased  slightly
in the first  quarter of 1999.  The majority of this decrease was related to the
cutter product line and was partially  offset by the effect of increased  loader
and turf and landscape product sales. Operating results of the Bush Hog division
includes results of the Universal Turf operation  acquired in the second quarter
of 1998.  External  financial  conditions in the U.S.  agricultural  sector have
weakened since the first quarter of 1998 and are expected to remain weak for the
balance of the  current  year and on into 2000.  Commodity  prices are lower for
most major crops and for most livestock  segments.  Net farm income decreased in
1998 and is  projected  to decline  further in 1999 and 2000.  The  Agricultural
Products Group has been affected by these factors, but has lessened their impact
on the group through the continued expansion of the turf and landscape products.
Income before taxes for this segment in the first  quarter of 1999  decreased to
$5,083,000 compared to income before taxes of $6,767,000 in the first quarter of
the prior year.  Gross profit margin  decreases  were  primarily  related to the
effects of lower production  levels in the current year.  Production levels were
affected  by  decreased  demand by farmers and  ranchers  and  increased  dealer
inventory levels.  Increases in selling and adminstrative  expense were related
to the acquisition of


<PAGE>



the Great Bend division as noted above. The increase was offset in part by lower
commission  expenses  at the Bush Hog  division  due to lower  sales  subject to
commissions and the mix of products sold.

         In the Industrial  Products Group net sales increased to $45,338,000 in
the first  quarter of 1999  compared  to net sales of  $28,563,000  in the first
quarter of 1998.  The  entire  increase  was  related to  increase  press  sales
(production)  at the Verson  division.  Revenues and profits are recognized on a
percentage  of  completion  basis  at the  Verson  division.  This  division  is
currently  working on orders for eight large  transfer  presses  from two of the
major U.S. automobile  manufacturers.  The division also has a greater number of
small presses in production compared to the prior year.

         The  Industrial   Products  Group  reported  a  loss  before  taxes  of
$12,999,000  in the first  quarter of 1999 compared to income before taxes (on a
restated  basis)  of  $5,632,000  in the first  quarter  of 1998.  In 1998,  the
Industrial  Products  Group  recorded a loss of  $12,079,000  on several jobs in
process  including  reserves  of  $8,813,000  (none in the  first  quarter)  for
estimated  future  losses on those  jobs.  The Company  indicated  in its annual
report that it was reasonably  possible that  additional  losses would occur. In
the first quarter of 1999, the Company  revised its cost estimates on these jobs
and increased the reserves for future losses by $7,515,000.  The excess of costs
over  revenues  in the  first  quarter  of 1999  (approximately  $9,500,000)  is
primarily attributable to the increase in the reserve for future losses on these
jobs.  Two  factors  described  in  "Management's  Discussion  and  Analysis  of
Financial  Condition and Results of  Operations"  in the  Company's  1998 Annual
Report on Form 10-K  affected the low margins  reported in the first  quarter of
1999.  First, the Industrial  Products Group's opening backlog included revenues
of approximately  $50 million to be recognized in 1999 and 2000 on the loss jobs
described  above.  No gross  margins  are  expected  to be  recognized  on those
revenues. The backlog also included future revenues of approximately $95 million
to be recorded  principally in 1999 for which  anticipated gross margins will be
lower than historical levels prior to 1998.

         Second,  the Industrial  Products Group is reporting no gross profit on
any  press  manufactured  during  1999  until a point  in  production  when  all
manufacturing costs can be reasonably estimated.  Currently,  that point is when
the press is in final  assembly.  This method of  recognition  of gross  profits
adversely affected first quarter 1999 results.

         Gross  profits  within the  Industrial  Products  Group were  favorably
affected  in the first  quarter  of 1998 by the  Company's  recovery  of a claim
associated with a prior period. Selling and administrative expenses increased in
the first quarter of 1999. Most increases were related to salary and fringe cost
increases and an additional provision for doubtful accounts.



<PAGE>



         The Industrial Products Group backlog as of March 31, 1999, composed of
revenues to be recorded in future years on orders received, included revenues of
approximately  $41,000,000 on orders for which estimated losses were recorded in
1998 and 1999 and on which no gross margin is expected to be  recognized in 1999
and 2000.  Uncertainties  associated  with these  contracts  make it  reasonably
possible that additional  losses could occur. The March 31, 1999 backlog for the
Industrial  Products  Group  also  included  future  revenues  of  approximately
$89,000,000 to be recorded  principally in 1999 for which the group  anticipates
gross margins lower than levels prior to 1998.

         The  backlog of low  margin and no margin  work in process at March 31,
1999 will have a substantial  negative  effect on the Industrial  Products Group
earnings in 1999 and, to a lesser  extent,  in 2000. In addition,  the method of
recognition of gross margins until the later stages of the production of a press
may result in fluctuations in quarter-to-quarter results.

         Because of the difficulties the Industrial  Products Group  encountered
in 1998, the group failed to meet delivery date requirements provided in several
press orders. The group incurred  penalties of approximately  $1,200,000 in 1998
(none in the first  quarter) as a result of delays in shipments and expects that
it may receive additional claims for significant  penalty payments or damages in
the  remainder  of 1999  and  2000.  Reference  is made to Note 10 of  Notes  to
Consolidated  Financial  Statements in the Company's  1998 Annual Report on Form
10-K. The Company's difficulties in completing orders during 1998 and 1999 could
adversely  affect its  relationship  with one or more of its customers and could
have a negative  impact on the Company's  ability to obtain future business from
such customers.

         Corporate  expenses consisted  primarily of administrative  charges and
other (income) expense.  Administrative  expenses  decreased slightly (less than
$100,000)  in the first  quarter  of 1999.  First  quarter  1998  administrative
expenses included $1,119,000 of compensation expenses (none in the first quarter
of 1999)  related  to the  exercise  of  certain  stock  options  as  previously
discussed. This decrease was offset by the effects of costs in 1999 related to a
matching  provision  now provided for the  Company's  401(k)  pension  plans and
normal  salary  and  fringe  cost  increases  since the first  quarter  of 1998.
Reference  is  made to  Note 7 of  Notes  to  Consolidated  Condensed  Financial
Statements  for an analysis of other  (income)  expense in the first  quarter of
1999 and 1998.

         Interest  expense in the first quarter of 1999 was $2,361,000  compared
to interest  expense of $1,090,000  reported in the first  quarter of 1998.  The
increase was primarily  associated with increased  borrowings related to greater
receivable  levels,  fixed asset additions and the acquisition of the Great Bend
and Universal Turf operations in the second quarter of 1998.

         No current or deferred tax benefit was recorded in the first quarter of
1999 as the Company had no expected tax benefits available to record against the
pretax loss. Reference is made to Note


<PAGE>



5  of  Notes  to  Condensed  Consolidated  Financial  Statements.  No  valuation
allowance  has been  provided for the net deferred  tax assets  associated  with
temporary  deductible  differences  that existed at the beginning of 1999 as the
Company believes it is more likely than not that such assets will be utilized.


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

         Working  capital at March 31,  1999 was  $(32,020,000)  and the current
ratio was .85 to 1.0 compared to working capital of $(14,955,000)  and a current
ratio  of .92 to 1.00  at  December  31,  1998.  Net  receivables  increased  by
$15,931,000  since the end of 1998. The entire  increase was associated with the
Agricultural Products Group where cash collections are dependent upon the retail
sale of the  product  by the  dealer.  The  majority  of  sales to  dealers  are
typically  strong  in the  first  quarter  of the year or just  prior to the use
season by the farmer.  Extended payment terms are offered to dealers in the form
of floor plan financing  which is customary in the industry.  Receivable  levels
within  this  group  have also been  impacted  by the  overall  downturn  in the
agricultural  economy  in the United  States  brought  about by lower  commodity
prices,   excess  grain  inventory  levels  and  decreased   exports  of  grain,
particularly to the far eastern  countries.  These economic  factors have led to
decreased agricultural equipment sales by dealers and, in turn, increased dealer
receivable  levels. Net inventory levels have decreased by $21,975,000 since the
end of 1998. The majority of the decrease was related to the Industrial Products
Group. As noted above,  the Verson division  recorded  reserves of $7,515,000 in
the first quarter of 1999 for estimated additional costs associated with certain
press  orders  currently  in  production  on which  losses are  anticipated.  In
addition,   customer   payments  on  presses  in  process   have   increased  by
approximately  $11,700,000  since the end of 1998.  Agricultural  Products Group
inventory levels have also decreased by  approximately  $2,500,000 due to normal
seasonal product demand as noted above.

         Fixed asset additions in the first quarter of 1999 totaled  $4,486,000.
Approximately $2,700,000 represented building costs associated with the assembly
facility  addition  at the  Verson  division.  There were no major  fixed  asset
dispositions in the first quarter of 1999.

         Net increases in accounts  payable  ($7,464,000)  and accrued  expenses
($1,249,000)  were primarily  related to the increased  production levels at the
Verson  division.  Borrowings  under the Company's  revolving  credit  agreement
increased by $1,900,000 since the end of 1998.

         During the first  quarter of 1999,  the Company  entered  into a Second
Amended and Restated Credit Agreement  replacing the former Amended and Restated
Credit  Agreement.  This new agreement  was amended in April 1999.  Reference is
made to Note 8 of Notes to Condensed  Consolidated  Financial  Statements  for a
description of the major terms of this agreement. The loan


<PAGE>



agreement as amended  obligates the Company to repay all outstanding  borrowings
on  expiration  of the  agreement  on February  28,  2000.  Before that date the
Company must either negotiate an extension of the loan with its current lenders,
refinance  the loan with other  lenders or develop other sources of liquidity to
repay the loan. The Company's  ability to achieve any of these three options may
depend upon the results of its operations during 1999.

         As of March 31,  1999,  the  Company had cash and cash  equivalents  of
$413,000 and additional funds of $16,963,000  available under the Second Amended
and Restated Credit  Agreement and the related  amendment.  The Company believes
that its  expected  operating  cash flow and funds  available  under the  Second
Amended and  Restated  Credit  Agreement  and the related  amendment  may not be
adequate to finance its operations and capital expenditures in 1999. The Company
is exploring  additional or alternate sources of financing necessary to continue
operations  in a  normal  manufacturing  environment  and to  finance  necessary
capital  expenditures.  During the first quarter of 1999, the Company was not in
compliance with certain provisions of the Amended and Restated Credit Agreement.
This agreement was replaced by the Second Amended and Restated Credit  Agreement
which contained waivers for  noncompliance of certain  provisions of the Amended
and Restated Credit Agreement.

         Reference is made to Note 9 of Notes to Condensed Financial  Statements
as it relates to the Company's  involvement in legal  proceedings as a defending
party.

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

         In June 1998, the Financial  Accounting  Standards  Board (FASB) issued
Statement  of  Financial  Accounting  Standard  (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.  This  statement is effective for all
quarters of fiscal years  beginning  after June 15, 2000.  The Company is in the
process of evaluating the impact of this statement on its financial reporting.

 YEAR 2000 COMPLIANCE
 --------------------

         Many older computer  software programs refer to years in terms of their
final two digits only.  Such  programs may  interpret  the year 2000 to mean the
year 1900 instead.  If not corrected,  these  programs could cause  date-related
transaction failures. The Company's program to address this year 2000 compliance
issue is broken down into the following major categories:

                  1.   Financial related hardware/software.


<PAGE>



                  2.   Manufacturing/engineering  process controls.
                  3.   Equipment manufactured for sale.
                  4.   Outside source suppliers.

         The general phases of the year 2000 compliance program common to all of
the above categories are:

                  1.   Identifying items that are not year 2000 complaint.
                  2.   Assigning  priorities to identified items,  including
                       the assessment of items material to the operations of
                       the Company.
                  3.   Repairing or replacing  material items determined not
                       to be year 2000 complaint.
                  4.   Testing of material items repaired or replaced.

         The Company has completed the identification process in relation to the
four  categories  noted above.  The Company  recently  purchased  and  installed
financial  software  which  is  year  2000  compliant.  Outside  service  bureau
financial  software currently in place has been determined and tested to be year
2000 compliant. Payroll services for the Company are currently being provided by
an outside  service.  The Company is currently in the process of upgrading  this
service to year 2000 compliant software. One major location is already utilizing
this new software.  Compliance  certificates have been received for non personal
computer systems  owned/leased by the Company.  Compliance  testing is currently
being conducted.  The majority of all personal computers used within the Company
(both financial and non financial  applications)  have been purchased within the
last two years and have been successfully  tested for compliancy.  Remaining non
compliant  personal  computers will be replaced with year 2000  compliant  units
during 1999 as a part of the Company's normal upgrade program.

         Manufacturing/engineering   process  controls  and  equipment  includes
equipment  to  manufacture  and  design  products  sold by the  Company.  Design
equipment used in the engineering of agricultural  equipment has been tested and
determined  to be  year  2000  compliant.  At the  Verson  division,  year  2000
compliance  certificates have been received on all major purchased  hardware and
software applications for designing equipment and programs.  While the intent of
the  division  is to rely on  these  certificates  (due  to the  quality  of the
information  received and the reputation of the vendors involved),  some testing
will take  place in 1999.  The  Company  is giving  consideration  to the use of
outside experts in the testing of the related software and hardware. The process
will be completed in 1999. The majority of internally  developed design software
at Verson has been  determined  not to contain  date fields.  Programs  which do
contain date fields have been determined to be year 2000 compliant.  The Company
does not have a  significant  amount of  manufacturing  equipment  with embedded
computer chips or hardware/software which would present a problem at


<PAGE>



the beginning of the year 2000. Compliancy  certificates have been received from
the majority of equipment manufacturers and testing, where necessary,  should be
completed by the end of the first half of 1999.

         None of the equipment  manufactured by the Agricultural  Products Group
include   hardware/software   or  embedded  computer  chips.   Stamping  presses
manufactured  by the Verson  division  contain  software and  embedded  computer
chips.  Compliance  certificates  have been received on all software included in
the presses sold.  Some internal  testing has also been  performed.  The Company
believes that it has little, if any, exposure related to equipment  manufactured
by its divisions in relation to the year 2000 issue.

         The Company has identified key outside  vendors which provide  services
which, if not year 2000 compliant, could have an effect on the operations of the
Company. Sources include banking,  investment,  pension obligations,  insurance,
utilities,  etc. businesses.  During 1999, these service providers will be asked
to update the Company on the status of their year 2000  compliance.  The Company
will then need to evaluate these  responses and determine if a contingency  plan
would be necessary should the vendor not be compliant.

         The total cost  associated with required  modifications  to become year
2000  compliant  (both incurred to date and to be incurred in the future) is not
expected to be material to the  Company's  financial  position.  This total cost
does not include the cost of internal efforts to complete the project. The costs
associated with the replacement of computerized  systems,  substantially  all of
which  were  capitalized,  are  not  included  in the  above  estimate  as  such
replacements  or upgrades were necessary to operate  efficiently  and such costs
would have been  incurred  even if year 2000  compliance  was not an issue.  The
Company anticipates that additional amounts will be spent in completing the year
2000  compliance  project.  These costs are being funded through  operating cash
flow. The Company's year 2000  compliance  program is an ongoing process and the
estimates of costs and  completion  dates for various  components of the program
described above are subject to change. Other major system projects have not been
deferred due to the year 2000 compliance project.

         The risk to the  Company  from the  failure of  suppliers  of goods and
services  (over  which the  Company  does not have  control) to attain year 2000
compliance  is the same to other  business  enterprises  generally.  Failure  of
information systems by financial institutions (banks, service bureaus, insurance
companies,  etc.) would  disrupt the flow of funds to and from the Company until
systems can be remedied or replaced by these  providers.  Failure of delivery of
critical components by suppliers and subcontractors resulting from non year 2000
compliance could result in disruptions of manufacturing processes with delays in
the delivery of our products to our customers until non- compliant conditions or
components  can be  remedied or  replaced.  The  Company  has  identified  major
suppliers of goods and services and is in the process of determining  their year
2000 compliance status.


<PAGE>



Alternate  suppliers  of  critical  components  are also in the process of being
identified.  The Company  believes it is taking the  necessary  steps to resolve
year 2000 issues. However, given the possible consequences of failure to resolve
significant  year 2000 issues,  there can be no  assurance  that any one or more
such  failures  would not have a material  adverse  effect on the  Company.  The
Company is currently  assessing the need for contingency  planning.  The Company
believes,  however,  that  with the  completion  of the  year  2000  project  as
scheduled,  the possibility of significant  interruptions  of normal  operations
should be reduced.


<PAGE>



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

         Statements  contained within the Management  Discussion and Analysis of
Financial  Conditions 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  Agricultural  Products Group,  forward-looking  statements  involve certain
factors  that are  subject  to change.  These  elements  encompass  interrelated
factors that affect farmers 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 Votes of Security Holders
                  ----------------------------------------------------
         On  June  18,  1999  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 Two Directors.  Proxies for the meeting were solicited
pursuant to Regulation 14A.  The nominees received the number of votes:

         Class C Directors- Terms expire in 2002 - Mr. S. S. Sherman and
         ----------------------------------------------------------------
                Mr. Stanley J. Goldring
                -----------------------
            For Mr. Sherman - 10,415.902; withheld from Mr. Sherman - 140,933.
            For Mr. Goldring - 10,416,486; withheld from Mr. Goldring - 140,349

The terms of the following directors continued after the meeting:
         Class A Directors - Terms expire in 2000
         ----------------------------------------
                  Mr. Richard A. Drexler and Mr. Mitchell I. Quain
         Class B Directors - Terms expire in 2001
         ----------------------------------------
                  Mr.  John E. Jones and Mr. Lloyd A. Drexler

         Approximately  1,397,000  shares held by brokers and nominees  were not
voted in the election of directors.

         2000 Annual Meeting.  After April 24, 2000,  notice to the Company of a
         --------------------
Shareholder  proposal  submitted for consideration at the 2000 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.


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 March 31, 1999.





<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)
                                                ------------




July 19, 1999                   /s/ Robert J. Fleck
-------------                   -----------------------------------------------
                                Robert J. Fleck
                                Vice President- Accounting and Chief Accounting
                                 & Administrative Officer




July 19,  1999                  /s/ Mark C. Standefer
--------------                  -----------------------------------------------
                                Mark C. Standefer
                                Vice President, General Counsel & Secretary












<PAGE>



                           ALLIED PRODUCTS CORPORATION

                                INDEX TO EXHIBITS


         The  following  exhibit is attached to the copies of this report  filed
with the Securities and Exchange Commission:

EXHIBIT NO.                  DESCRIPTION OF EXHIBITS
----------                   -----------------------
    27                       Financial Data Schedules

The following exhibits are incorporated by reference as noted below:

    99(a)                    The Registrant's Notification of Late Filing as it
                             relates to the Registrant's Annual Report on Form
                             10-K for the year ended December 31, 1998 is
                             Incorporated by reference to Registrant's
                             Form 12b-25 dated March 31, 1999 (File No. 1-5530)

    99(b)                    The Registrant's Notification of Late Filing as it
                             relates to the Registrant's Quarterly Report on
                             Form 10-Q for the period ended March 31, 1999 is
                             Incorporated by reference to Registrant's
                             Form 12b-25 dated May 17, 1999 (File No. 1-5530)