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 September 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:  11,818,609 common shares, $.01
par value, as of October 31, 1998.





<PAGE>



            ALLIED PRODUCTS CORPORATION AND CONSOLIDATED SUBSIDIARIES


                                      INDEX


         PART I.   FINANCIAL INFORMATION

                    ITEM 1. FINANCIAL STATEMENTS

                            INTRODUCTION

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

                            CONDENSED  CONSOLIDATED  STATEMENTS OF INCOME- Three
                              and Nine Months Ended September 30, 1998 and 1997

                            CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS-
                              Nine Months Ended September 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. NOT APPLICABLE

                    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  September 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
September  30, 1998 and for the three and nine months ended  September  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 nine month  periods ended
September 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>

                                                          September 30, 1998   December 31, 1997
                                                          ------------------   -----------------
<S>                                                       <C>                  <C>
 Current Assets:
  Cash and cash equivalents ........................      $          428,000   $         609,000
                                                          ------------------   -----------------
  Notes and accounts receivable, less allowances of
     $699,000 and $531,000, respectively ...........      $       64,928,000   $      54,729,000
                                                          ------------------   -----------------
  Inventories:
    Raw materials ..................................      $       10,015,000   $       6,193,000
    Work in process ................................             107,855,000          52,811,000
    Finished goods .................................              16,155,000          14,419,000
                                                          ------------------   -----------------
                                                          $      134,025,000   $      73,423,000
                                                          ------------------   -----------------
 Deferred tax asset ................................      $       12,773,000   $      12,773,000
                                                          ------------------   -----------------
 Prepaid expenses ..................................      $          540,000   $         415,000
                                                          ------------------   -----------------
       Total current assets ........................      $      212,694,000   $     141,949,000
                                                          ------------------   -----------------

 Plant and Equipment, at cost:
    Land ...........................................      $        2,366,000   $       2,243,000
    Buildings and improvements .....................              56,589,000          40,750,000
    Machinery and equipment ........................              62,088,000          51,339,000
                                                          ------------------   -----------------
                                                          $      121,043,000   $      94,332,000
   Less-Accumulated depreciation and amortization ..              47,792,000          48,811,000
                                                          ------------------   -----------------
                                                          $       73,251,000   $      45,521,000
                                                          ------------------   -----------------
 Other Assets:
    Deferred tax asset .............................      $        4,631,000   $       4,631,000
    Deferred charges (goodwill), net of amortization               6,173,000           1,491,000
    Other ..........................................               2,629,000           1,472,000
                                                          ------------------   -----------------
                                                          $       13,433,000   $       7,594,000
                                                          ------------------   -----------------

                                                          $      299,378,000   $     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>


                                                          September 30, 1998   December 31, 1997
                                                          ------------------   -----------------
<S>                                                       <C>                  <C>
Current Liabilities:
  Revolving credit agreement ........................     $      116,000,000   $      50,400,000
  Current portion of long-term debt .................                388,000             268,000
  Accounts payable ..................................             50,560,000          19,923,000
  Accrued expenses ..................................             26,493,000          25,145,000
                                                          ------------------   -----------------
         Total current liabilities ..................     $      193,441,000   $      95,736,000
                                                          ------------------   -----------------
Long-term debt, less current portion shown above ....     $        1,168,000   $         670,000
                                                          ------------------   -----------------
Other long-term liabilities .........................     $       12,246,000   $      10,105,000
                                                          ------------------   -----------------
Commitments and Contingencies
Shareholders' Investment:
    Preferred stock:
       Undesignated-authorized 1,500,000 shares
       at September 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
      September 30, 1998 and December 31, 1997 ......                140,000             140,000
   Additional paid-in capital .......................             98,845,000          98,518,000
   Retained earnings ................................             36,002,000          32,148,000
                                                          ------------------   -----------------
                                                          $      134,987,000   $     130,806,000
   Less: Treasury stock, at cost:  2,160,740 and
     2,144,263 shares at September 30, 1998 and
     December 31, 1997, respectively ................            (42,464,000)        (42,253,000)
                                                          ------------------   -----------------
         Total shareholder's equity .................     $       92,523,000   $      88,553,000
                                                          ------------------  ------------------

                                                          $      299,378,000   $     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 (LOSS) (UNAUDITED)
<TABLE>
<CAPTION>

                                        Three Months Ended September 30,        Nine Months Ended September 30,
                                        ------------------------------          -------------------------------
                                             1998               1997                1998             1997
                                        -------------      -------------        -------------    --------------
<S>                                     <C>                <C>                  <C>               <C>
Net sales ...........................   $  77,184,000      $  63,714,000        $ 229,000,000     $ 213,497,000
Cost of products sold ...............      76,228,000         47,093,000          189,674,000       160,281,000
                                        -------------      -------------        -------------     -------------
  Gross profit(loss) ................   $     956,000      $  16,621,000        $  39,326,000     $  53,216,000
                                        -------------      -------------        -------------     -------------

Other costs and expenses:

  Selling and administrative expenses   $   9,571,000      $   9,217,000        $  28,220,000     $  26,572,000

  Interest expense ..................       1,802,000            847,000            4,339,000         2,499,000

  Other (income) expense, net .......         379,000         (1,623,000)          (1,485,000)       (1,082,000)
                                        -------------      -------------        -------------     -------------

                                        $  11,752,000      $   8,441,000        $  31,074,000     $  27,989,000
                                        -------------      -------------        -------------     -------------

Income (loss) before taxes ..........   $ (10,796,000)     $   8,180,000        $   8,252,000     $  25,227,000

Provision (credit) for income taxes .      (3,648,000)         2,893,000            2,969,000         9,035,000
                                        -------------      -------------        -------------     -------------

Net income (loss) and comprehensive
  net income(loss) ..................   $  (7,148,000)     $   5,287,000        $   5,283,000     $  16,192,000
                                        =============      =============        =============     =============

Earnings (loss) per common share:
  Basic .............................   $       (0.60)     $        0.44        $        0.44     $        1.33
                                        =============      =============        =============     =============

  Diluted ...........................   $       (0.60)     $        0.43        $        0.44     $        1.30
                                        =============      =============        =============     =============

Weighted average shares outstanding:
  Basic .............................      11,914,000         12,091,000           11,920,000        12,165,000
                                        =============      =============        =============     =============

  Diluted ...........................      11,914,000         12,358,000           12,069,000        12,412,000
                                        =============      =============        =============     =============

Dividends per common share ..........   $        0.04      $        0.04        $        0.12     $        0.11
                                        =============      =============        =============     =============

</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>

                                                                                Nine Months Ended September 30,
                                                                                -------------------------------
                                                                                    1998              1997
                                                                                -------------     -------------

<S>                                                                             <C>               <C>
Cash Flows from Operating Activities:
   Net income ...............................................................   $   5,283,000     $  16,192,000
   Adjustments to reconcile net income to net cash provided from
      (used for) provided from operating activities:
      Gains on sales of operating and nonoperating assets ...................      (1,962,000)         (151,000)
      Depreciation and amortization .........................................       4,406,000         3,840,000
      Amortization of deferred charges ......................................         240,000           133,000
      Deferred income tax provision .........................................       2,414,000         7,959,000
      Provision for inventory valuation .....................................       1,906,000              --
      Stock option compensation .............................................       1,119,000            87,000
      Changes in noncash assets and liabilities, net of noncash transactions:
         (Increase) in accounts receivable ..................................      (7,710,000)       (9,572,000)
         (Increase) in inventories ..........................................     (59,572,000)      (11,862,000)
         (Increase) decrease in prepaid expenses ............................        (107,000)           16,000
         Increase (decrease)  in accounts payable and accrued expenses ......      30,143,000         2,418,000
      Other,net .............................................................        (713,000)           65,000
                                                                                -------------     -------------
   Net cash provided from (used for) operating activities ...................   $ (24,553,000)    $   9,125,000
                                                                                -------------     -------------

Cash Flows from Investing Activities
   Additions to plant and equipment .........................................   $ (31,411,000)    $ (10,165,000)
   Payment for businesses acquired ..........................................     (10,953,000)             --
   Proceeds from sales of plant and equipment ...............................       3,373,000           414,000
                                                                                -------------     -------------
   Net cash used for investing activities ...................................   $ (38,991,000)    $  (9,751,000)
                                                                                -------------     -------------

Cash Flows from Financing Activities:
   Borrowings under revolving credit agreement ..............................   $ 131,400,000     $  83,100,000
   Payments under revolving credit agreement ................................     (65,800,000)      (67,000,000)
   Payments of short and long-term debt .....................................        (202,000)         (145,000)
   Purchase of treasury stock ...............................................      (1,171,000)      (15,995,000)
   Dividends paid ...........................................................        (955,000)         (811,000)
   Stock option transactions ................................................          91,000         1,147,000
                                                                                -------------     -------------
Net cash provided from financing activities .................................   $  63,363,000     $     296,000
                                                                                -------------     -------------
Net (decrease) in cash and cash equivalents .................................   $    (181,000)    $    (330,000)
Cash and cash equivalents at beginning of year ..............................         609,000           833,000
                                                                                -------------     -------------
Cash and cash equivalents at end of period ..................................   $     428,000     $     503,000
                                                                                =============     =============
</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>

                                                 9/30/98      12/31/97
                                              -----------   -----------
         <S>                                  <C>           <C>
         Salaries and wages ...............   $ 7,726,000   $ 5,560,000
         Warranty .........................     5,290,000     4,938,000
         Self insurance accruals ..........     1,576,000     2,858,000
         Pensions, including retiree health     5,642,000     6,439,000
         Taxes, other than income taxes ...     1,812,000     1,158,000
         Environmental matters ............     1,403,000     1,810,000
         Other ............................     3,044,000     2,382,000
                                              -----------   -----------
                                              $26,493,000   $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  nine  months  ended
         September 30, 1997 have been restated to reflect 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  (11,914,000  and 11,920,000 for the three and nine
         months ended September 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  (82,000 and 149,000 for the three
         and nine months ended September 30, 1998, respectively). Basic earnings
         per common share for the periods in 1997 is based on the average number
         of common shares  outstanding  (12,091,000 and 12,165,000 for the three
         and nine  months  ended  September  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  (267,000 and
         247,000  for the  three  and nine  months  ended  September  30,  1997,
         respectively).

(3)      Treasury Shares
         ---------------
                  During  the third  quarter  of 1998,  the  Company's  Board of
         Directors authorized the purchase of up to 500,000 additional shares of
         the Company's  outstanding  common stock  subject to prevailing  market
         conditions.  See Note 10  regarding  an  Amendment  to the  Amended and
         Restated  Credit  Agreement  and the  availability  of funds related to
         these future treasury stock purchases.


<PAGE>



(4)      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 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 third quarter
         and nine month periods of 1998 is not considered significant.

(5)      Dispositions/Sales of Assets
         ----------------------------
                  "Other  (income)  expense,  net"  for the  nine  months  ended
         September 30, 1998 includes gains of approximately  $1,962,000 ($10,000
         loss  in the  third  quarter)  primarily  related  to the  sale of idle
         facilities.

(6)      Revised Cost Estimate
         ---------------------
                  During  the  latter  part of the third  quarter  of 1998,  the
         Company  recorded a pretax  charge of  $11,180,000.  This charge  stems
         primarily  from  revised cost  estimates  for several  newly  designed,
         automated,  multi-station  transfer presses  currently in production at
         the  Verson  division.  The need for the  revised  cost  estimates  was
         identified  in the  third  quarter  1998 and  reflects  the  impact  of
         production  bottlenecks in the assembly process as well as greater than
         anticipated  increases in subcontracting  costs.  These factors are all
         directly  attributable to the strain on engineering  and  manufacturing
         resources caused by Verson's recent significant  increase in orders. In
         addition to the impact on third  quarter  earnings,  the  revised  cost
         estimates  are  expected  to  result  in lower  margins  at the  Verson
         division  until the presses  currently  in  production  are  completed.
         Completion  of  production   for  the  majority  of  these  presses  is
         anticipated  to occur by the end of the  second  quarter  of 1999.  The
         Company,  as part of the estimate  revision  process,  has reviewed all
         work  currently in process,  all committed  press orders and all future
         business currently being quoted.

(7)      Contingent Liabilities
         ----------------------
                  The Company is involved in a number of legal  proceedings as a
         defending party,  including product liability and environmental matters
         for  which   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


<PAGE>



         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 nine months  ended  September  30,  1998  totaled
         $520,000  ($130,000 in the third  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 in the
         amount of $3,156,000 on May 13, 1998.

                  At September 30, 1998, the Company was contingently liable for
         approximately  $938,000  primarily  relating to outstanding  letters of
         credit.

(8)      Income Taxes
         ------------
                  The  provision  (credit)  for income  taxes in the nine months
         ended  September 30, 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>



(9)      Summary of Other (Income) Expense
         ---------------------------------
                  Other  (income)  expense for the three and nine month  periods
         ended September 30, 1998 and 1997 consists of the following:
<TABLE>
<CAPTION>


                                    For the three months ended    For the nine months ended
                                      9/30/98        9/30 97        9/30/98       9/30/97
                                    -----------    -----------    -----------   -----------

         <S>                        <C>            <C>            <C>           <C>
         Interest income .........  $   (59,000)   $   (46,000)   $  (146,000)  $   (86,000)
         Goodwill amortization ...      108,000         44,000        240,000       133,000
         Net (gain) loss on sales
          of operating and non-
          operating assets ......        10,000         (8,000)    (1,962,000)     (151,000)
         Litigation
          settlements/insurance
          provision .............       314,000         81,000        883,000       638,000
         Payments received on
          long-term notes
          receivable reserved for
          as uncollectible ......      (130,000)    (1,695,000)      (520,000)   (2,195,000)
         Other miscellaneous ....       136,000          1,000         20,000       579,000
                                    -----------    -----------    -----------   -----------
                                    $   379,000    $(1,623,000)   $(1,485,000)  $(1,082,000)
                                    ===========    ===========    ===========   ===========
</TABLE>


(10)     Financial Arrangements
         ----------------------
                  On June 30, 1998 the Company  entered into  Amendment No. 3 to
         the Amended and Restated Credit Agreement.  The amendment  provides for
         an increase 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.  The funds may be used for future  working  capital  needs of the
         Company, fixed asset additions and possible acquisitions. On August 21,
         1998,  the  Company  entered  into  Amendment  No. 4 to the Amended and
         Restated   Credit   Agreement.   The  Amendment   provides  for  up  to
         $152,500,000 (from $145,000,000) of borrowings and/or letters of credit
         at either a floating  prime or fixed LIBOR (with rate  dependent on the
         ratio of Funded Debt to Operating Cash Flow) rate. The funds associated
         with this  increase  will be used for the  additional  purchases of the
         Company's stock.

                  During the third quarter of 1998, the Company entered into an
         interest rate lock in conjunction with a $75,000,000 private placement
         agreement that was in process. The Company anticipated that by entering
         into a private placement agreement, favorable fixed interest rates
         could be obtained on a long-term basis and that exposure to floating
         interest rates under the Amended and Restated Credit Agreement (which
         would be reduced by the principal amount of the private placement)
         would be reduced.  After entering into the interest rate lock, interest
         rates continued to decrease.  Hedging losses totaling $4,136,000
         associated with the interest rate lock agreement have been deferred at
         September 30, 1998 as the agreement was designed as a hedge with
         respect to the private placement in process. The interest rate lock
         agreement has been extended and now expires on November 20, 1998.  The
         Company has the right to further extend this agreement or to make a
         payment (based on then current interest rates) in settlement of this
         agreement.  Subsequent to the end of the  third quarter of 1998, the
         Company decided to suspend it efforts to secure financing through a
         private placement.  Hedging losses at the point of suspension were
         reduced to approximately $2,352,000 and will be recorded in the fourth
         quarter of 1998.  The Company will record additional charges or credits
         monthly based on changes in current interest rates until a final
         settlement of the agreement is effective.

                  Also,  during 1998, the Company  entered into an interest rate
         swap  agreement  for  $50,000,000  as part of the Amended and  Restated
         Credit Agreement. Under the terms of this swap agreement, which expires
         on May 14,  2001,  the  Company  has  fixed the  interest  rate on that
         portion  of  the  Amended  and  Restated  Credit  Agreement.  Remaining
         balances under the Amended and Restated Credit  Agreement bear interest
         at either a floating  prime or fixed LIBOR (with the rate  dependent on
         the ratio of Funded Debt to  Operating  Cash Flow) rate.  The  interest
         rate under the swap agreement  exceeds the average borrowing rate under
         the portion of the Amended and Restated Credit Agreement not covered by
         the  swap  agreement  by .61%  as of  September  30,  1998.  This  rate
         differential is being recorded as interest expense on a monthly basis.









<PAGE>



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

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

         During  the  latter  part of the third  quarter  of 1998,  the  Company
recorded a pretax  charge of  $11,180,000.  This  charge  stems  primarily  from
revised cost  estimates for several  newly  designed,  automated,  multi-station
transfer presses  currently in production at the Verson  division.  The need for
the revised  cost  estimates  was  identified  in the third  quarter of 1998 and
reflects the impact of production bottlenecks in the assembly process as well as
greater than anticipated  increases in subcontracting  costs.  These factors are
all  directly  attributable  to the  strain  on  engineering  and  manufacturing
resources caused by Verson's recent significant  increase in orders. In addition
to the impact on third quarter earnings, the revised cost estimates are expected
to result in lower margins at the Verson division until the presses currently in
production  are  completed.  Completion of production  for the majority of these
presses is  anticipated  to occur by the end of the second  quarter of 1999. The
Company,  as part of the  estimate  revision  process,  has  reviewed  all  work
currently  in  process,  all  committed  press  orders and all  future  business
currently being quoted.

         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 third  quarter and first
nine months of 1998 is not  considered  significant.  The Universal Turf product
lines were integrated into the operations of the Bush Hog division.

         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.

         "Earnings  (loss)  per  common  share"  and  "Weighted  average  shares
outstanding"  have been  restated for the three and nine months ended  September
30, 1997 to reflect the effect of adopting  Statement  of  Financial  Accounting
Standards No. 128 - Earnings per Share.




<PAGE>



First Nine Months of 1998 Compared to First Nine Months of 1997
---------------------------------------------------------------
         Net sales for the  nine-month  period  ending  September  30, 1998 were
$229,000,000  compared to net sales of  $213,497,000  reported in the first nine
months of 1997. Increased sales at all of the Company's operating divisions more
than  offset  the loss of  revenue  associated  with the  Company's  former  Coz
division,  which was sold in the fourth quarter of 1997.  Income before taxes in
the first nine months of 1998 was $8,252,000  compared to income before taxes of
$25,227,000  reported  in the same  nine-month  period  of the prior  year.  The
majority  of the  decrease  in 1998 was  related to the  $11,180,000  charge for
revised cost estimates  described  above.  Net income was  $5,283,000  ($.44 per
common share-diluted) in the first nine months of 1998 compared to net income of
$16,192,000 ($1.30 per common share-diluted) in the first nine months of 1997.

         At the Bush Hog and Great Bend divisions,  combined net sales increased
over 15% in the first nine  months of 1998  compared to the first nine months of
the  prior  year.  Approximately  40%  of  this  increase  was  related  to  the
acquisition  of the Great  Bend and  Universal  Turf  operations  in the  second
quarter of 1998. The remainder of the increase was  principally  associated with
increased  cutter sales at the Bush Hog division which benefitted from increased
demand in the first half of 1998.  Cutter  sales  during this period  benefitted
from a reduction of the cattle herd liquidation  cycle.  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
maintenance.  Since the end of the second  quarter of the current  year,  cutter
sales have been  negatively  affected  by lower  prices for major  crops  (corn,
wheat,  soybeans) and livestock  commodities.  Strong crop yields in the Midwest
and fewer exports are expected to keep crop and live stock commodity prices at a
low level for the next several  months.  Loader sales have also increased in the
current year,  with the majority of the increase  related to the  acquisition of
the Great Bend  division as noted above.  Gross  profits  increased in the first
nine months of 1998  compared  to the first nine months of the prior year.  This
increase was  primarily  related to the effects of increased  sales as discussed
above.  Gross  profit  margins  remained  constant  between  the two  nine-month
periods.  Margin  improvements  related  to  favorable  manufacturing  variances
(resulting from increased facility utilization and increased labor efficiencies)
were offset by the effect of the mix of products sold in each period.

         At the Verson division, sales increased 23% in the first nine months of
1998  compared  to the  first  nine  months 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 principally  related to increased press
production  in the  current  year.  During  the middle  part of this  year,  the
division received a major order for presses totaling approximately  $80,000,000.
Other  significantly  large press orders were received during 1997. During 1998,
all of these large press orders were in


<PAGE>



production,  resulting in increased sales. Gross profits and gross profit margin
decreased during the 1998 nine-month  period compared to the same nine months of
1997. The majority of the decrease was related to a $11,180,000  charge recorded
in the  third  quarter  of the  current  year and  discussed  above.  Additional
decreases were associated with the mix of presses in production (the majority of
revenue in 1998 was related to newly designed presses resulting in manufacturing
inefficiencies and increased engineering/design costs), increased subcontracting
costs,  costs related to the hiring and training of manufacturing  personnel and
lack of adequate  assembly area.  The division has identified  these issues and,
during the fourth  quarter of 1998,  anticipates  bringing on line a $28,000,000
assembly area expansion which will  approximately  double the division's current
assembly area. Warranty costs have also increased in the current year due to the
increased sales volume noted above.  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 nine months
of 1998 to  $28,220,000  from  $26,572,000  reported in the first nine months of
1997.  As a percent of net sales,  these costs have  decreased  to 12.3% in 1998
compared to 12.4% in 1997.  At the  agricultural  equipment  divisions,  selling
expenses  increased due to the impact of increased sales  (commissions)  and the
acquisition of the Great Bend and Universal Turf operations. Selling expenses at
the Verson division increased due to the establishment of an international sales
and  marketing   department   (primarily   salaries  and  travel  costs).  On  a
consolidated basis,  administrative  expenses have increased in 1998.  Corporate
administrative  costs  increased in the 1998 nine month period  primarily due to
the effect of  compensation  expense  recognized  ($1,119,000  in the first nine
months of 1998  compared  to $87,000 in the first nine months of the prior year)
in relation to stock options exercised in each period. Other administrative cost
increases  related to normal  staff  expenses,  legal fees  associated  with the
settlement of a claim at the Verson  division and the  acquisition  of the Great
Bend division were offset by the impact of certain Corporate Office  retirements
in late 1997 and the sale of the Coz division.

         Interest  expense  in the  first  nine  months  of 1998 was  $4,339,000
compared to interest expense of $2,499,000  reported in the first nine months 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 orders for a total of 10  multi-station  transfer presses are currently in
production  and some  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
nine months of 1998 was partially offset by the capitalization of $637,000 of


<PAGE>



interest costs relating to the Company's building expansion project at the
Verson division.


         Reference  is  made  to  Note  9 of  Notes  to  Condensed  Consolidated
Financial Statements for an analysis of Other (income) expense in the first nine
months of 1998 and 1997.

Third Quarter of 1998 Compared to Third Quarter of 1997
-------------------------------------------------------
         Net sales in the third quarter of 1998 were $77,184,000 compared to net
sales of $63,714,000  reported in the third quarter of 1997.  Loss before income
taxes in the third  quarter of 1998 was  $10,796,000  compared to income  before
taxes of  $8,180,000  reported  in the  third  quarter  of the prior  year.  The
majority  of the  decrease  related to a charge of  $11,180,000  recorded in the
third  quarter of 1998 for  revised  cost  estimates  at the Verson  division as
described above. Net loss was $7,148,000 ($.60 per common  share-diluted) in the
third  quarter of 1998  compared  to net income of  $5,287,000  ($.43 per common
share-diluted) in the third quarter of 1997.

         Agricultural equipment (Bush Hog and Great Bend) sales increased 10% in
the third  quarter of 1998  compared to the same quarter of the prior year.  The
increase was primarily  related to the  acquisitions of Great Bend and Universal
Turf as previously discussed. Rotary cutter sales decreased in the third quarter
of 1998  due to the  impact  of lower  prices  that  farmers  and  ranchers  are
receiving for major crop and livestock  commodities.  Parts sales also decreased
in the current year's third quarter. Other product line sales (loaders, tillers,
backhoes,  etc.)  increased  slightly in the third  quarter of the current year.
Gross  profits and gross profit  margins have  decreased in the third quarter of
1998  compared to the third  quarter of the prior year.  Production  levels have
been reduced in the current  year's third  quarter  resulting in less  favorable
manufacturing variances. The mix of products sold was also less favorable in the
third quarter of 1998.

         At the Verson  division,  sales have increased by over 60% in the third
quarter of 1998  compared  to the third  quarter of the prior  year.  Production
continues  on  major  press  orders  from  each  of the  major  U.S.  automobile
manufacturers.  Gross  profits and gross profit  margins  have  decreased in the
third  quarter of 1998.  The  majority of the  decrease in the gross  profit was
related to a $11,180,000  charge  recorded during the third quarter of this year
as discussed above. Margins on sales currently in process are lower than margins
on sales in  process  in the third  quarter  of the  prior  year.  Margins  were
impacted by several factors  including  increased  manufacturing and engineering
subcontracting  costs  (compared to internal costs to  manufacture  and design),
lack of adequate assembly facilities (an assembly facility addition is currently
being constructed) and costs to hire and train qualified manufacturing employees
to handle the increased production levels.


<PAGE>



         Selling and  administrative  expenses  have  increased  slightly in the
third  quarter  of 1998  ($9,217,000)  compared  to the  third  quarter  of 1997
($9,571,000).  As a percent of net sales,  these expenses  decreased to 12.4% in
the 1998 third quarter compared to 14.5% in the third quarter of the prior year.
Over 90% of the  increase in these costs was related to the  acquisition  of the
Great  Bend and  Universal  Turf  operations  in 1998.  Increases  at the Verson
division  in  selling  costs  (due  to the  impact  of the  establishment  of an
international sales and marketing  department) and administrative  costs (due to
the expanded  operations  including the upgrading of its management  information
systems) were offset by the effect of the sale of the Coz division noted above.

         Interest  expense in the third quarter of 1998 was $1,802,000  compared
to interest expense of $847,000 reported in the third quarter of 1997. Increased
borrowing  needs were  related to  increased  receivable  levels at 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
capitalization of $335,000 of interest costs relating to the Company's  building
expansion project at the Verson division.

         Reference  is  made  to  Note  9 of  Notes  to  Condensed  Consolidated
Financial  Statements  for an  analysis of Other  (income)  expense in the third
quarter of 1998 and 1997.

FINANCIAL CONDITION AND LIQUIDITY
---------------------------------
         Working capital at September 30, 1998 was $19,253,000 (current ratio of
1.10 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 $10,199,000 since the
end of 1997.  The  majority  of the  increase  was  related to the  agricultural
equipment divisions where record nine month sales have been recorded by the Bush
Hog division. Cash collections are dependent upon the retail sale of the product
by dealers.  Dealer sales have decreased in the third quarter of 1998 due to the
impact of lower prices the  farmers/ranchers  are  receiving for major crops and
livestock commodities. 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  $60,602,000  since  the end of 1997.
Approximately 90% 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.  The  acquisitions  of  Great  Bend and
Universal  Turf  also  resulted  in  increased  consolidated  inventories.   The
consolidated  increase in the accounts payable level ($30,637,000) since the end
of 1997 was principally  associated  with the Verson  division where  production
levels have increased significantly during 1998.



<PAGE>



         Fixed  asset  additions  in the first  nine  months of 1998  (excluding
acquisitions)  totaled  $31,411,000.   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,  are intended to help alleviate  capacity
constraints  at  this  operation.  Expenditures  for  production  machinery  and
equipment at all manufacturing divisions were also made in the first nine months
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  $65,600,000  since the end of 1997.  These borrows were
used to finance working capital needs and fixed asset additions noted above.

         As of September 30, 1998, the Company had cash balances of $428,000 and
additional funds of $34,663,000  available under its Amended and Restated Credit
Agreement. Additional capital will be required to complete the expansion project
at the Vernon  division as noted above.  During the third  quarter of 1998,  the
Company  entered  into  Amendment  No.  4 to the  Amended  and  Restated  Credit
Agreement.  The amendment provides for up to $152,500,000 (from $145,000,000) of
borrows and/or letters of credit at either a floating prime or fixed LABOR (with
the rate  dependent  on the ratio of Funded Debt to  Operating  Cash Flow) rate.
During the third quarter of 1998,  the Company's  Board of Directors  authorized
the purchase of up to 500,000  additional  shares of the  Company's  outstanding
common stock subject to prevailing market conditions.  The funds associated with
the above noted amendment to the Amended and Restated  Credit  Agreement will be
used for  these  stock  purchases.  The  Company  believes  the cash  flow  from
operations and funds available  under the Amended and Restated Credit  Agreement
are  adequate to finance its  operations  and capital  expenditures  in the near
future.  At  September  30,  1998,  the Company was not in  compliance  with two
provisions  under the Amended and Restated Credit  Agreement.  Subsequent to the
end of the third quarter of 1998, the lenders waived compliance with the related
provisions  solely for the quarter ended  September  30, 1998. In addition,  the
amount  available under the Amend and Restated  Credit  Agreement was reduced to
$145,000,000.

         Reference  is  made  to  Note 10 of  Notes  to  Condensed  Consolidated
Financial Statements regarding the Company's hedging activities in relation to a
private debt placement  agreement which was in process at September 30, 1998 and
subsequently suspended November 11, 1998.





<PAGE>



IMPACT FROM NOT YET EFFECTIVE RULES
-----------------------------------
         In June 1997, the Financial  Accounting  Standards  Board (FAST) issued
Statement of Financial  Accounting  Standards (SAS) 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 FAST issued SAS 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 SAS were issued.  The Company is in the process of
evaluating the impact of these statements on its financial reporting.

         In June 1998,  the FAST issued SAS 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  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 the year 2000 compliance
issue is broken down into the following major categories:

                  1.       Financial related hardware/software.
                  2.       Manufacturing/engineering process controls.
                  3.       Equipment manufactured for sale.
                  4.       Outside source suppliers.
         The general phases common to all of the above categories are:



<PAGE>



                  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.

         As of September 30, 1998, the Company has completed the  identification
process in relation to three of the four categories noted above. Outside service
bureau financial  software  currently in place has been determined and tested to
be year 2000  compliant.  The  Company  has  recently  purchased  and  installed
financial  software which is year 2000 compliant.  Divisions not currently using
year 2000  compliant  software  will be utilizing  these new  programs.  Payroll
services for the Company are  currently  being  provided by an outside  service.
Payroll  software is not year 2000  compliant.  The Company is in the process of
having  this  software  upgraded  by the  end of  1998.  Financial  hardware  is
currently  being  tested for  compliancy.  The majority of the hardware has been
purchased   within  the  last  two  years  and  is  believed  to  be  compliant.
Certification of compliance and subsequent testing needs to be completed.  Older
hardware  will be  replaced  over  the  next  year as  part of  ongoing  upgrade
programs.

         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 determined
and tested to be year 2000 compliant.  At the Vernon division,  design equipment
not year 2000 compliant has yet to be identified and prioritized. The Company is
in the process of selecting  outside experts to identify,  repair or replace and
test the equipment  (hardware and software) which is not compliant at this time.
This process  should be completed by the first quarter of 1999. The Company does
not have a significant amount of manufacturing  equipment with embedded computer
chips or hardware/software which would present a problem at the beginning of the
year  2000.  Compliancy  certificates  have  been  received  from the  equipment
manufacturers and all testing,  where necessary,  should be completed by the end
of the first quarter of 1999.

         None of the equipment  manufactured  by Bush Hog and Great Bend include
hardware/software  or embedded computer chips.  Stamping presses manufactured by
the Vernon  division  contain  software and embedded  computer  chips.  However,
neither of these items effect the operation of the presses as it relates to year
2000 issues.  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 outside vendors which provide services
which, if not year


<PAGE>



2000 compliant,  could have an effect on the operations of the Company.  Sources
include banking,  investment,  pension obligations,  insurance,  etc. During the
fourth  quarter of 1998,  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  is not  expected  to be  material  to the  Company's  financial
position.  Through  September  30,  1998,  the Company  has spent  approximately
$250,000  on the  project to become  year 2000  compliant.  This amount does not
include  the cost of  internal  efforts  to  complete  the  project.  The  costs
associated with the replacement of computerized systems,  hardware or equipment,
substantially  all of  which  is  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 an  additional  $250,000  may 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.

         The Company is in the process of  developing  contingency  plans should
the year  2000  compliance  not be  achieved  in a timely  manner.  The  Company
believes its  greatest  risk of exposure to  noncompliance  (in relation to year
2000 issues over which the Company has  control) is  associated  with  financial
related hardware and software.  While significant progress toward compliance has
been made over the past year,  failure to obtain  compliance could result in the
delay of the  reporting of financial  results.  The  Company,  at this time,  is
unable to determine the impact of non year 2000  compliance by outside  vendors.
In many  instances,  the use of alternative  vendors who are year 2000 compliant
would be considered.

         The above  expectations are subject to uncertainties.  For example,  if
the Company was affected by the  inability  of  suppliers or major  customers to
continue  operations  due to  such  a  problem,  the  Company  could  experience
interruption in some aspects of its activities,  which could  materially  impact
our results of operations or financial condition. The Company believes that with
the  completion  of the year 2000  project,  as scheduled,  the  possibility  of
significant interruptions of normal operations should be reduced.

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.


<PAGE>



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 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,  the ability of the Company to
identify and correct any year 2000 issues in a timely manner 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 5            Other Information
                  -----------------

                  Reference is made to Note 10 Financial Arrangements of " Notes
                  to Condensed  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 September 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. 4 to the Credit Agreement
    27               Financial Data Schedules