<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


               Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                  For The Quarterly Period ended March 31, 1999
                          Commission File Number 0-6955


                               WALBRO CORPORATION

             (Exact name of registrant as specified in its charter)

                                    Delaware

                            (State of incorporation)


                                   38-1358966
                            (I.R.S. Employer ID No.)

                    1227 Centre Road, Auburn Hills, MI 48236
               (Address of principal executive offices) (Zip Code)

                                 (248) 377-1800
               Registrant's telephone number, including area code

   Indicate by check mark whether the registrant has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (of for such shorter period that the registrant
was required to file such reports) and has been subject to such filing
requirements 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 May 14, 1999:


                       Common Stock (one class): 8,688,294
<PAGE>   2
                                     PART I
                              FINANCIAL INFORMATION

                    ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

              INTRODUCTION TO THE CONSOLIDATED FINANCIAL STATEMENTS

     The condensed consolidated financial statements of Walbro Corporation and
subsidiaries (the "Company") have been prepared by the Company without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
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. The
condensed consolidated financial statements of the Company should be read in
conjunction with the financial statements and the notes thereto included in the
Company's Form 10-K as filed with the Securities and Exchange Commission for the
year ended December 31, 1998.

     The financial information presented reflects all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of the results to
be expected for the year.




                                       1
<PAGE>   3


WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

<TABLE>
<CAPTION>

                                                              3/31/99           12/31/98
                                                              -------           --------
ASSETS                                                       (Unaudited)
<S>                                                          <C>              <C>       
CURRENT ASSETS:
  CASH AND CASH EQUIVALENTS                                  $  13,407        $   19,647
  ACCOUNTS RECEIVABLE, NET                                     156,328           154,416
  INVENTORIES, NET                                              59,572            60,871
  OTHER CURRENT ASSETS                                          26,275            22,469
                                                             ---------        ----------

    TOTAL CURRENT ASSETS                                       255,582           257,403

PROPERTY, PLANT & EQUIPMENT:
  LAND, BUILDINGS & IMPROVEMENTS                                99,242            99,747
  MACHINERY & EQUIPMENT                                        290,889           308,151
                                                             ---------        ----------
    SUBTOTAL                                                   390,131           407,898
  LESS: ACCUMULATED DEPRECIATION                              (131,419)         (129,357)
                                                             ---------        ----------

    NET PROPERTY, PLANT & EQUIPMENT                            258,712           278,541

OTHER ASSETS:
  GOODWILL, NET                                                 31,419            31,887
  JOINT VENTURES, INVESTMENTS & OTHER                           76,642            80,836
                                                             ---------        ----------

    TOTAL OTHER ASSETS                                         108,061           112,723
                                                             ---------        ----------

    TOTAL ASSETS                                             $ 622,355        $  648,667
                                                             =========        ==========


</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.


                                       2


<PAGE>   4

WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)


<TABLE>
<CAPTION>
                                                                                3/31/99           12/31/98
                                                                                -------           --------
LIABILITIES                                                                   (Unaudited)
<S>                                                                          <C>                <C>      
CURRENT LIABILITIES:
  CURRENT PORTION LONG-TERM DEBT                                             $   2,243          $   2,403
  NOTES PAYABLE-BANKS                                                            4,535             12,012
  ACCOUNTS PAYABLE                                                             121,074            114,133
  ACCRUED LIABILITIES                                                           35,839             31,929
                                                                             ---------          ---------

    TOTAL CURRENT LIABILITIES                                                  163,691            160,477

LONG-TERM LIABILITIES:
  LONG-TERM DEBT, NET OF CURRENT                                               312,485            324,289
  OTHER LONG-TERM LIABILITIES                                                   16,584             17,345
                                                                             ---------          ---------

    TOTAL LONG-TERM LIABILITIES                                                329,069            341,634

COMPANY-OBLIGATED MANDATORILY REDEEMABLE 
  CONVERTIBLE PREFERRED SECURITIES OF WALBRO CAPITAL
  TRUST HOLDING SOLELY CONVERTIBLE DEBENTURES                                   69,000             69,000

STOCKHOLDERS' EQUITY
COMMON STOCK, $.50 PAR VALUE;                                                    4,344              4,344
  AUTHORIZED 25,000,000;
  OUTSTANDING 8,688,294 IN 1999 AND
  8,688,294 IN 1998
PAID-IN CAPITAL                                                                 66,026             66,088
RETAINED EARNINGS                                                               38,728             37,656
DEFERRED COMPENSATION                                                                0               (125)
ACCUMULATED OTHER COMPREHENSIVE INCOME                                         (48,503)           (30,407)
                                                                             ---------          ---------

    TOTAL STOCKHOLDERS' EQUITY                                                  60,595             77,556
                                                                             ---------          ---------


    TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                                 $ 622,355          $ 648,667
                                                                             =========          =========


</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.



                                       3



<PAGE>   5

WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)

<TABLE>
<CAPTION>


                                                               THREE MONTHS ENDED
                                                           03/31/99          03/31/98
                                                           --------          --------
                                                                  (Unaudited)
<S>                                                      <C>               <C>    
NET SALES                                                $   188,706       $   169,292

COST OF SALES & EXPENSES:
   COST OF SALES                                             161,072           144,058
   SELLING AND ADMINISTRATIVE EXPENSES                        14,207            12,951
   RESEARCH & DEVELOPMENT EXPENSES                             2,649             4,007
   RESTRUCTURING CHARGES                                        (825)                0
                                                         -----------       ----------- 

OPERATING INCOME                                              11,603             8,276

OTHER EXPENSE (INCOME):
   INTEREST EXPENSE                                            7,637             7,665
   INTEREST INCOME                                              (119)             (162)
   ROYALTY INCOME, NET                                          (676)             (951)
   OTHER (INCOME) EXPENSE                                         71              (517)
                                                         -----------       ----------- 

INCOME (LOSS) BEFORE INCOME TAXES,
 MINORITY INTEREST, AND JOINT VENTURES                         4,690             2,241


PROVISION FOR INCOME TAXES                                    (1,135)             (752)
MINORITY INTEREST                                             (1,577)           (1,391)
EQUITY IN INCOME OF JOINT VENTURES                              (906)              474
                                                         -----------       ----------- 


NET INCOME                                               $     1,072       $       572
                                                         ===========       =========== 


BASIC NET INCOME PER SHARE                               $      0.12       $      0.07
                                                         ===========       =========== 

DILUTED NET INCOME PER SHARE                             $      0.12       $      0.07
                                                         ===========       =========== 

WEIGHTED AVERAGE SHARES OUTSTANDING                        8,688,294         8,682,602

DILUTIVE OPTIONS ISSUED TO EXECUTIVES                              0             3,885
                                                         -----------       ----------- 

DILUTED SHARES OUTSTANDING                                 8,688,294         8,686,487
                                                         ===========       =========== 


NET INCOME                                               $     1,072       $       572

OTHER COMPREHENSIVE INCOME, NET OF TAX:
  UNREALIZED LOSS ON SECURITIES AVAILABLE FOR SALE               (51)               (1)
  CUMULATIVE TRANSLATION ADJUSTMENTS                         (18,045)           (3,386)
                                                         -----------       ----------- 
OTHER COMPREHENSIVE INCOME (LOSS)                            (18,096)           (3,387)
                                                         -----------       ----------- 
COMPREHENSIVE INCOME (LOSS)                              $   (17,024)      $    (2,815)
                                                         ===========       =========== 
</TABLE>

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


                                       4
<PAGE>   6


WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

(In thousands)                                                   THREE MONTHS ENDED
                                                            03/31/99          03/31/98
                                                            --------          --------
CASH FLOWS FROM OPERATING ACTIVITIES:                               (Unaudited)
<S>                                                        <C>               <C>      
  NET INCOME                                               $   1,072         $     572
  ADJUSTMENTS TO RECONCILE NET INCOME TO NET
  CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
    DEPRECIATION & AMORTIZATION                                9,014             9,718
    (GAIN) LOSS ON DISPOSITION OF ASSETS                           9              (549)
    MINORITY INTEREST                                            197                26
    (INCOME)LOSS OF JOINT VENTURES                               906              (474)
    CHANGES IN ASSETS AND LIABILITIES:
      DEFERRED INCOME TAXES                                      (77)             (612)
      PENSION OBLIGATIONS & OTHER                                654               583
      ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                13,587            34,819
      ACCOUNTS RECEIVABLE, NET                                (7,688)          (19,703)
      INVENTORIES                                                (28)           (2,640)
      PREPAID EXPENSES AND OTHER                                (607)           (5,284)
                                                           ---------         ----------
      TOTAL ADJUSTMENTS                                       15,967            15,884
                                                           ---------         ----------
    NET CASH PROVIDED BY (USED IN)
     OPERATING ACTIVITIES                                     17,039            16,456
                                                           ---------         ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  PURCHASE OF FIXED ASSETS                                    (3,060)          (11,826)
  PURCHASE OF OTHER ASSETS                                      (236)              (12)
  INVESTMENT IN JOINT VENTURES & OTHER                             0            (1,838)
  PROCEEDS FROM DISPOSAL OF ASSETS                                40             3,689
                                                           ---------         ----------
    NET CASH USED IN INVESTING ACTIVITIES                     (3,256)           (9,987)
                                                           ---------         ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  BORROWINGS UNDER LINES-OF-CREDIT                            72,622            21,713
  REPAYMENTS UNDER LINES-OF-CREDIT                           (83,965)          (23,600)
  DEBT REPAYMENTS                                             (6,761)             (156)
  FINANCING FEES PAID                                           (348)             (366)
  CASH DIVIDENDS PAID                                              0              (868)
                                                           ---------         ----------
    NET CASH PROVIDED BY (USED IN)
      FINANCING ACTIVITIES                                   (18,452)           (3,277)
                                                           ---------         ----------

  EFFECT OF EXCHANGE RATE CHANGES ON CASH                     (1,571)              359
                                                           ---------         ----------

  NET INCREASE (DECREASE) IN CASH                             (6,240)            3,551
  CASH AND CASH EQUIVALENTS BEGINNING BALANCE                 19,647            13,539
                                                           ---------         ----------

  CASH AND CASH EQUIVALENTS ENDING BALANCE                 $  13,407         $  17,090
                                                           =========         ==========
</TABLE>

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


                                       5


<PAGE>   7

                      WALBRO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1: SUBSEQUENT EVENT

    Walbro Corporation announced April 28, 1999 that it had entered into a
definitive merger agreement with TI Group plc, headquartered in London, England,
pursuant to which Walbro will become a wholly-owned subsidiary of TI Group. The
all-cash transaction of $20.00 per share values Walbro at $570 million
(including debt) and is subject to customary regulatory approvals. The Board of
Directors of both companies have unanimously approved the merger agreement and
will be effected through a tender offer launched by TI Group.

NOTE 2: RESTRUCTURING OF OPERATIONS AND OTHER ACTIONS.

    During the fourth quarter of 1997, the Company recorded a $27,000,000
pre-tax charge for restructuring its operations and other actions. The charge
was comprised of a $17,000,000 charge for restructuring and a $10,000,000 charge
associated with asset impairments. In addition, the Company recorded a pre-tax
charge of $5,700,000 for warranty costs (included in cost of sales) which became
known during the fourth quarter of 1997.

    The components of the restructuring charge included $15,100,000 million for
the divestiture of non-strategic businesses and facilities, $1,200,000 for
personnel reductions and $700,000 for other actions. The divestiture component
included $8,100,000 related to the divestiture of the Company's Ligonier,
Indiana, steel fuel rail manufacturing facility, $5,700,000 related to the
planned disposition of its interest in U.S. Coexcell Inc., a manufacturer of
blow-molded plastic drums in Maumee, Ohio, $400,000 related to the movement of
small engine operations in Mexico to a larger facility, $500,000 related to the
divestiture of the Company's share of an automotive joint venture in Korea and
$400,000 related to the consolidation of small engine operations in the
Asia-Pacific region. Amounts paid to consolidate these small engine operations
were charged against the reserve during 1998 at approximately the amount
established as of December 31, 1997.

    The $8,100,000 charge related to the divestiture of the Company's steel fuel
rail facility is comprised of $7,800,000 of non-cash asset revaluations and
$300,000 of exit cost liabilities. This facility was sold as of May 31, 1998,
resulting in a gain of approximately $500,000. Exit costs were paid and charged
against the reserve during 1998 at approximately the amount established as of
December 31, 1997.


<PAGE>   8

    The $5,700,000 charge related to the planned disposition of the Company's
interest in U.S. Coexcell Inc. is comprised of $5,300,000 of non-cash asset
revaluations and $400,000 of exit cost liabilities. The Company did not complete
the disposition of U.S. Coexcell Inc. during 1998 or the first quarter of 1999
and continued to operate the facility. The Company is continuing to evaluate its
options for U.S. Coexcell Inc. As such, no payments were made or charged
against the reserve during 1998 nor the first quarter 1999.

    The $400,000 related to the movement of small engine operations in Mexico to
a larger facility represents primarily remaining lease payments on the old
facility for the period of time in which the Company will no longer use the
facility. Of the amount established as of December 31, 1997, $300,000 was paid
and charged against the reserve during 1998 and $100,000 during the first
quarter of 1999.

    The $500,000 related to the divestiture of the Company's share of an
automotive joint venture in Korea represents a non-cash charge to reduce the
Company's investment to zero. During 1998, the Company divested its share of the
joint venture.

    The $1,200,000 charge for personnel reductions relates to severance costs
associated with a corporate-wide headcount reduction program including
reductions related to the divestitures and restructuring. The Company planned to
reduce the overall work force by approximately 10% or 500 employees, working in
both manufacturing and administrative capacities. During 1998, approximately
$1,000,000 was paid and charged against the reserve. The remainder will be paid
and charged against the reserve during 1999.

    The components of the $10,000,000 charge for asset impairments include
$4,200,000 to write-down to net realizable value certain tooling, machinery and
equipment, $2,800,000 to reserve for uncertainties related to its Korean
automotive activities, $1,300,000 to write-off its interest in Saginaw Plastics,
an injection molder in Saginaw, Michigan and $1,700,000 associated with other
impairment issues. No further circumstances arose during 1998 to question the
net realizable value of these assets. However, during the first quarter 1999,
improving business conditions and a reduction of the level of assets at risk
associated with the Korean automotive activities allowed an $825,000 reduction
in these reserves. 



NOTE 3: INVENTORIES

    Inventories are stated at the lower of cost (first-in, first-out) or market.
Inventories include raw material and component parts, work-in-process and


<PAGE>   9


finished products. Work-in-process and finished products inventories include
material, labor and manufacturing overhead costs.

    Inventories are comprised of the following:

<TABLE>
<CAPTION>


                                            March 31,     December 31,
                                              1999            1998     
                                              ----            ----     
                                                 (in thousands)        
<S>                                           <C>           <C>    
Raw materials and components                  $33,677       $34,804
Work-in-process                                 7,085         6,287
Finished products                              18,810        19,780
                                              -------       -------         
                                              $59,572       $60,871
                                              =======       =======
</TABLE>

<PAGE>   10


Note 4.  Business Segment Information.
The Company has adopted SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information." SFAS No. 131 establishes standards for
reporting information about operating segments in annual financial statements
and requires selected information about operating segments in interim financial
reports issued to stockholders. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.

Management uses information at the plant level for evaluating performance and
allocating resources. Management also uses information from the plants at the
product line and geographic levels as the basis for management decisions. The
Company's reportable segments are managed separately as each business utilizes
different technology and marketing strategies. The Company's reportable segments
are grouped as follows:

  1.  Automotive, which designs, develops and manufactures fuel storage and 
delivery products for a broad range of U.S. and non U.S. manufacturers of 
passenger automobiles and light trucks (including minivans),
  2. Small Engine, which designs, develops and manufactures diaphragm
carburetors for portable engines, float feed carburetors for ground supported
engines and ignition systems and other components for a variety of small engine
products.
  3. Aftermarket, which provides replacement parts for both the automotive and
small engine markets. 
  4. Corporate, which includes corporate headquarters and direct investments. 

  The accounting policies of the reportable segments are the same as those 
described in the summary of significant accounting policies which are included
in the Company's Form 10-K, as filed. The Company evaluates performance based on
earnings before interest, income taxes, minority interest, equity in income of
joint ventures and extraordinary items (EBIT). The Company accounts for
intercompany sales as if they were to third parties, that is, at current market
prices. The Company accounts for property transfers at net book value.

The following tables present financial information for the quarters ended March
31 by reportable segment

<TABLE>
<CAPTION>

                                                               3/31/99            3/31/98             3/31/97
                                                              --------            --------           --------
<S>                                                           <C>                 <C>                <C>     
Net sales to external customers
  Automotive                                                  $136,006            $126,249           $113,724
  Small Engine                                                  41,551              33,323             31,473
  Aftermarket                                                    9,189               7,751              6,774
  Corporate                                                      1,960               1,969              2,048
                                                              --------            --------           --------
Total net sales to external customers                          188,706             169,292            154,019
                                                              ========            ========           ========

Intercompany sales
  Automotive                                                    19,463              18,093             16,171
  Small Engine                                                  11,515              11,320             10,146
  Aftermarket                                                      214                 268                256
  Corporate                                                        373                  18                 66
                                                              --------            --------           --------
Total intercompany sales                                        31,565              29,699             26,639
Elimination of intercompany sales                              (31,565)            (29,699)           (26,639)
                                                              --------            --------           --------
Total net sales                                               $188,706            $169,292           $154,019
                                                              ========            ========           ========

EBIT
  Automotive                                                  $ 12,459            $  7,569           $  8,537
  Small Engine                                                     978               2,690              3,227
  Aftermarket                                                    2,263               2,116              1,825
  Corporate                                                     (3,492)             (2,631)            (3,772)
                                                              --------            --------           --------
Total EBIT                                                      12,208               9,744              9,817
                                                              --------            --------           --------

  Unallocated amounts
     Interest income                                               119                 162                131
     Interest expense                                           (7,637)             (7,665)            (6,023)
     Minority Interest, net of tax                              (1,577)             (1,391)              (984)
     Equity in income (loss)of joint ventures, net of tax         (906)                474                801
                                                              --------            --------           --------

Total income (loss) before income taxes and
  extraordinary item                                          $  2,207            $  1,324           $  3,742
                                                              ========            ========           ========
</TABLE>



<PAGE>   11




                       WALBRO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE (5) SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS


<TABLE>
<CAPTION>


                                                                                    as of March 31, 1999                        
                                                         ---------------------------------------------------------------------------
                                                                                           Walbro                                   
                                                                                        Corporation    Consolidation                
                                                          Guarantor     Nonguarantor      (Parent     and Elimination   Consolidated
                                                         Subsidiaries   Subsidiaries    Corporation)      Entries           Total   
                                                         ------------   ------------    ------------      -------           -----   
                                                                                (in thousands, except share data)          
                                                                                ---------------------------------          
<S>                                                      <C>             <C>             <C>            <C>              <C>       
ASSETS
CURRENT ASSETS
    Cash and cash equivalents                            $    (271)      $  12,287       $  1,391       $        -       $  13,407  
    Accounts receivable, net                                62,940          42,660         50,728                -         156,328  
    Accounts receivable, intercompany                      (77,786)        (21,396)       101,225           (2,043)              -  
    Inventories, net                                        19,926          38,606          1,040                           59,572  
    Prepaid expenses and other                               2,880          11,722          1,110                -          15,712  
    Deferred and refundable income taxes                         -           1,335          9,228                -          10,563  
                                                         ---------------------------------------------------------------------------
        Total current assets                                 7,689          85,214        164,722           (2,043)        255,582  
                                                         ---------------------------------------------------------------------------
PLANT AND EQUIPMENT, NET                                   106,617         143,305          8,682              108         258,712  
                                                         ---------------------------------------------------------------------------
OTHER ASSETS:
    Assets held for sale                                         -           3,175              -                -           3,175  
    Joint ventures                                          19,205          16,879              -                -          36,084  
    Investments                                            129,887          24,753         58,947         (210,987)          2,600  
    Goodwill, net                                           13,772           9,106              -            8,541          31,419  
    Notes receivable                                         2,000           6,060              -           (6,056)          2,004  
    Deferred income taxes                                        -           3,947            346                -           4,293  
    Other                                                    9,364           4,630         14,492                -          28,486  
                                                         ---------------------------------------------------------------------------
        Total other assets                                 174,228          68,550         73,785         (208,502)        108,061  
                                                         ---------------------------------------------------------------------------
    Total assets                                         $ 288,534       $ 297,069       $247,189       $ (210,437)      $ 622,355  
                                                         ===========================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Current portion of long-term debt                    $     664       $      86       $  1,493       $        -       $   2,243  
    Bank and other borrowings                                    -           4,535              -                -           4,535  
    Accounts payable                                        40,232          74,889          5,953                -         121,074  
    Accrued liabilities                                     14,139          18,777          1,837              166          34,919  
    Dividends payable                                            -             920              -                -             920  
                                                         ---------------------------------------------------------------------------
        Total current liabilities                           55,035          99,207          9,283              166         163,691  
                                                         ---------------------------------------------------------------------------
LONG-TERM LIABILITIES
    Long-term debt, less current portion                   163,759          16,360        169,741          (37,375)        312,485  
    Pension obligations                                          -           3,877          8,233                -          12,110  
    Deferred income taxes                                        -           3,715           (663)               -           3,052  
    Minority interest                                            -           1,422              -                -           1,422  
                                                         ---------------------------------------------------------------------------
        Total long-term liabilities                        163,759          25,374        177,311          (37,375)        329,069  
                                                         ---------------------------------------------------------------------------
REDEEMABLE PREFERRED STOCK                                       -          69,000              -                -          69,000  
STOCKHOLDERS' EQUITY
    Common stock, $.50 par value;
        authorized 25,000,000; outstanding
        8,688,294 in 1999; 8,688,294 in 1998                     -          25,678          4,344          (25,678)          4,344  
    Paid-in capital                                              -          72,884         66,026          (72,884)         66,026  
    Retained earnings                                       73,048          38,866         38,728         (111,914)         38,728  
    Deferred compensation                                        -                              -                -               -  
    Accumulated other comprehensive income                  (3,308)        (33,940)       (48,503)          37,248         (48,503) 
                                                         ---------------------------------------------------------------------------
        Total stockholders' equity                          69,740         103,488         60,595         (173,228)         60,595  
                                                         ---------------------------------------------------------------------------
        Total liabilities and stockholders' equity       $ 288,534       $ 297,069       $247,189       $ (210,437)      $ 622,355  
                                                         ===========================================================================

</TABLE>


<PAGE>   12

                       WALBRO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE (5) SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS



<TABLE>
<CAPTION>

                                                                                                                                    
                                                                              Three Months Ended March 31, 1999         
                                                        ----------------------------------------------------------------------------
                                                                                           Walbro                                   
                                                                                        Corporation    Consolidation                
                                                          Guarantor     Nonguarantor      (Parent     and Elimination   Consolidated
                                                         Subsidiaries   Subsidiaries    Corporation)       Entries           Total  
                                                         ------------   ------------    ------------       -------           -----  
                                                                              (in thousands, except share data)         
                                                                              ---------------------------------         
<S>                                                       <C>            <C>            <C>                <C>            <C>       
NET SALES                                                 $ 90,346       $ 104,667      $     890          $ (7,197)      $ 188,706 
COSTS AND EXPENSES:                                                                                                                 
    Cost of sales                                           75,868          91,612            789            (7,197)        161,072 
    Selling, administration & other expenses                 5,037           7,375          4,444                            16,856 
    Restructuring expense                                     (825)              -              -                              (825)
                                                        ----------------------------------------------------------------------------
OPERATING INCOME (LOSS)                                     10,266           5,680         (4,343)                -          11,603 
OTHER EXPENSE (INCOME):                                                                                                             
    Interest expense, net                                    3,059             371          4,088                             7,518 
    Royalty income, net                                       (763)             87              -                 -            (676)
    Foreign currency exchange loss(gain)                       135             (73)             -                 -              62 
    Other                                                       21             (12)             -                 -               9 
                                                        ----------------------------------------------------------------------------
    Income before provision for income taxes,                                                                                       
        minority interest, equity in (income) loss                                                                                  
        of joint ventures and subsidiaries                   7,814           5,307         (8,431)                -           4,690 
    Provision for income taxes                              (2,824)         (1,129)         2,818                 -          (1,135)
    Minority Interest                                            -          (1,577)             -                 -          (1,577)
    Equity in income (loss) of joint ventures                 (964)             58              -                 -            (906)
    Equity in income (loss) of subsidiaries                  2,788               -          6,685            (9,473)              - 
                                                        ============================================================================
    Net Income Before Extraordinary Item                  $  6,814       $   2,659      $   1,072          $ (9,473)      $   1,072 
                                                        ============================================================================
    Extraordinary Item                                                                  $       -                                 - 
                                                        ============================================================================
    Net Income                                            $  6,814       $   2,659      $   1,072          $ (9,473)      $   1,072 
                                                        ============================================================================
                                                                                                                                    
    Net Income                                            $  6,814       $   2,659      $   1,072          $ (9,473)      $   1,072 
    Other Comprehensive Income, Net of Tax                                                                                          
        Unrealized loss on Securities Avail. for Sale            -               -            (51)                -             (51)
        Cumulative Translation Adjustments                       -         (14,950)       (18,045)           14,950         (18,045)
                                                        ----------------------------------------------------------------------------
    Other Comprehensive Income (Loss)                     $      -       $ (14,950)     $ (18,096)         $ 14,950       $ (18,096)
                                                        ----------------------------------------------------------------------------
    Comprehensive Income                                  $  6,814       $ (12,291)     $ (17,024)         $  5,477       $ (17,024)
                                                        ============================================================================
</TABLE>


<PAGE>   13

                       WALBRO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     NOTE(5) SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS




<TABLE>
<CAPTION>

                                                                              Three Months Ended March 31, 1999         
                                                         --------------------------------------------------------------------------
                                                                                           Walbro                                  
                                                                                        Corporation    Consolidation               
                                                          Guarantor     Nonguarantor      (Parent     and Elimination  Consolidated
                                                         Subsidiaries   Subsidiaries    Corporation)      Entries         Total    
                                                         ------------   ------------    ------------      -------         -----    
                                                                              (in thousands, except share data)         
                                                                              ---------------------------------         
<S>                                                         <C>            <C>           <C>                <C>        <C>      
Net cash provided by (used in) operating activities         $   813        $  4,992      $  11,234          $ -        $ 17,039 
                                                         -----------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                           
    Purchase of plant and equipment                             233          (2,478)          (815)           -          (3,060)
    Acquisitions, net of cash acquired                            -               -              -            -               - 
    Purchase of other assets                                    419            (636)           (19)           -            (236)
    Investment in joint ventures and other                   (2,788)              -          2,788            -               - 
    Proceeds/(payments) of intercompany note rec.                 -               -              -            -               - 
    Proceeds from disposal of assets                             13              27              -            -              40 
                                                         -----------------------------------------------------------------------
Net cash provided by(used in) investing activities           (2,123)         (3,087)         1,954            -          (3,256)
                                                         -----------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                           
    Net borrowings (repayments) under revolving                                                                                 
        line-of-credit agreements                                                 -        (11,343)           -         (11,343)
    Debt repayments                                            (151)         (6,610)             -            -          (6,761)
    Proceeds from issuance of long-term debt                      -               -              -            -               - 
    Proceeds from issuance of stock                                                                                             
        and options                                               -               -              -            -               - 
    Financing fees paid                                           -               -           (348)           -            (348)
    Cash dividends paid                                           -               -              -            -               - 
                                                         -----------------------------------------------------------------------
Net cash provided by(used in) financing activities             (151)         (6,610)       (11,691)           -         (18,452)
                                                         -----------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON                                                                                              
    CASH                                                          -          (1,571)             -            -          (1,571)
                                                         -----------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                              (1,461)         (6,276)         1,497            -          (6,240)
CASH AND CASH EQUIV. AT BEGIN OF YEAR                         1,190          18,563           (106)           -          19,647 
                                                         -----------------------------------------------------------------------
CASH AND CASH EQUIV. AT END OF PERIOD                       $  (271)       $ 12,287      $   1,391          $ -        $ 13,407 
                                                         =======================================================================

                                                                                                                                
</TABLE>


<PAGE>   14

                       WALBRO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE(5) SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS


<TABLE>
<CAPTION>


                                 
                                                                              as of December 31, 1998                             
                                                    ------------------------------------------------------------------------------- 
                                                                                       Walbro                                       
                                                                                     Corporation        Consolidation               
                                                      Guarantor     Nonguarantor       (Parent         and Elimination  Consolidated
                                                    Subsidiaries    Subsidiaries    Corporation)           Entries          Total   
                                                    ------------    ------------    ------------           -------          -----   
                                                                          (in thousands, except share data)           
                                                                          ---------------------------------           
<S>                                                  <C>            <C>               <C>               <C>              <C>       
ASSETS                                                                                                                              
CURRENT ASSETS                                                                                                                      
    Cash and cash equivalents                        $   1,190      $  18,563         $    (106)        $        -       $  19,647  
    Accounts receivable, net                            66,739         55,015            32,662                  -         154,416  
    Accounts receivable, intercompany                 (103,735)       (37,056)          141,663               (872)              -  
    Inventories, net                                    21,898         37,918             1,055                             60,871  
    Prepaid expenses and other                           1,690          9,007             1,037                  -          11,734  
    Deferred and refundable income taxes                     -          1,507             9,228                  -          10,735  
                                                    ------------------------------------------------------------------------------- 
        Total current assets                           (12,218)        84,954           185,539               (872)        257,403  
                                                    ------------------------------------------------------------------------------- 
PLANT AND EQUIPMENT, NET                               109,941        160,478             8,014                108         278,541  
                                                    ------------------------------------------------------------------------------- 
OTHER ASSETS:                                                                                                                       
    Assets held for sale                                     -          3,175                 -                  -           3,175  
    Joint ventures                                      20,169         18,266                 -                  -          38,435  
    Investments                                        134,676         24,766            68,408           (225,160)          2,690  
    Goodwill, net                                       13,886          9,460                 -              8,541          31,887  
    Notes receivable                                     2,000          8,310                 -             (8,287)          2,023  
    Deferred income taxes                                    -          5,266               346                  -           5,612  
    Other                                                9,705          4,740            14,456                  -          28,901  
                                                    ------------------------------------------------------------------------------- 
        Total other assets                             180,436         73,983            83,210           (224,906)        112,723  
                                                    ------------------------------------------------------------------------------- 
    Total assets                                     $ 278,159      $ 319,415         $ 276,763         $ (225,670)      $ 648,667  
                                                    =============================================================================== 
                                                                                                                                    
LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                
CURRENT LIABILITIES:                                                                                                                
    Current portion of long-term debt                $     776      $     134         $   1,493         $        -       $   2,403  
    Bank and other borrowings                                -         12,012                 -                  -          12,012  
    Accounts payable                                    28,094         79,454             6,585                  -         114,133  
    Accrued liabilities                                 13,164         14,440             2,176              1,229          31,009  
    Dividends payable                                        -            920                 -                  -             920  
                                                    ------------------------------------------------------------------------------- 
        Total current liabilities                       42,034        106,960            10,254              1,229         160,477  
                                                    ------------------------------------------------------------------------------- 
LONG-TERM LIABILITIES                                                                                                               
    Long-term debt, less current portion               165,617         18,882           181,757            (41,967)        324,289  
    Pension obligations                                      -          3,754             7,831                  -          11,585  
    Deferred income taxes                                    -          5,170              (635)                 -           4,535  
    Minority interest                                        -          1,225                 -                  -           1,225  
                                                    ------------------------------------------------------------------------------- 
        Total long-term liabilities                    165,617         29,031           188,953            (41,967)        341,634  
                                                    ------------------------------------------------------------------------------- 
REDEEMABLE PREFERRED STOCK                                   -         69,000                 -                  -          69,000  
STOCKHOLDERS' EQUITY                                                                                                                
    Common stock, $.50 par value;                                                                                                   
        authorized 25,000,000; outstanding                                                                                          
        8,688,294 in 1999; 8,688,294 in 1998                 -         25,678             4,344            (25,678)          4,344  
    Paid-in capital                                          -         73,618            66,088            (73,618)         66,088  
    Retained earnings                                   73,816         34,118            37,656           (107,934)         37,656  
    Deferred compensation                                    -                             (125)                 -            (125) 
    Accumulated other comprehensive income              (3,308)       (18,990)          (30,407)            22,298         (30,407) 
                                                    ------------------------------------------------------------------------------- 
        Total stockholders' equity                      70,508        114,424            77,556           (184,932)         77,556  
                                                    ------------------------------------------------------------------------------- 
        Total liabilities and stockholders' equity   $ 278,159      $ 319,415         $ 276,763         $ (225,670)      $ 648,667  
                                                    =============================================================================== 
</TABLE>

<PAGE>   15

                       WALBRO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE(5) SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

<TABLE>
<CAPTION>


                                                                             Three Months Ended March 31, 1998           
                                                       -----------------------------------------------------------------------------
                                                                                         Walbro                                     
                                                                                       Corporation    Consolidation                 
                                                       Guarantor       Nonguarantor     (Parent      and Elimination  Consolidated  
                                                       Subsidiaries    Subsidiaries    Corporation)      Entries          Total     
                                                       ------------    ------------    ------------      -------          -----     
                                                                             (in thousands, except share data)           
                                                                             ---------------------------------           
<S>                                                     <C>            <C>               <C>            <C>            <C>       
NET SALES                                               $ 93,868       $ 83,421          $    667       $ (8,664)      $ 169,292 
COSTS AND EXPENSES:                                                                                                              
    Cost of sales                                         80,829         71,223               670         (8,664)        144,058 
    Selling, administration & other expenses               7,389          6,344             3,225              -          16,958 
    Restructuring expense                                      -              -                 -              -               - 
                                                       --------------------------------------------------------------------------
OPERATING INCOME (LOSS)                                    5,650          5,854            (3,228)             -           8,276 
OTHER EXPENSE (INCOME):                                                                                                          
    Interest expense, net                                  4,096          2,851             8,471         (7,753)          7,665 
    Royalty income, net                                   (1,853)        (1,752)           (4,310)         7,753            (162)
    Foreign currency exchange loss (gain)                     (8)            96                 -              -              88 
    Other                                                 (1,062)            98              (592)             -          (1,556)
                                                       --------------------------------------------------------------------------
    Income before provision for income taxes,                                                                                    
        minority interest, equity in (income) loss                                                                               
        of joint ventures and subsidiaries                 4,477          4,561            (6,797)             -           2,241 
    Provision for income taxes                            (1,608)        (1,784)            2,640              -            (752)
    Minority Interest                                          -         (1,391)                -              -          (1,391)
    Equity in income (loss) of joint ventures                 39            435                 -              -             474 
    Equity in income (loss) of subsidiaries                1,980              -             4,729         (6,709)              - 
                                                       --------------------------------------------------------------------------
    Net Income Before Extraordinary Item                $  4,888       $  1,821          $    572       $ (6,709)       $    572 
                                                       ==========================================================================
    Extraordinary Item                                                                                                           
                                                       --------------------------------------------------------------------------
    Net Income                                          $  4,888       $  1,821          $    572       $ (6,709)       $    572 
                                                       ==========================================================================
                                                                                                                                 
    Net Income                                          $  4,888       $  1,821          $    572       $ (6,709)       $    572 
    Other Comprehensive Income, Net of Tax                                                                                       
        Unrealized loss on Securities Avail. for Sale          -              -                (1)             -              (1)
        Cumulative Translation Adjustments                     -           (263)           (3,386)           263          (3,386)
                                                       --------------------------------------------------------------------------
    Other Comprehensive Income (Loss)                   $      -       $   (263)         $ (3,387)         $ 263        $ (3,387)
                                                       --------------------------------------------------------------------------
    Comprehensive Income                                $  4,888       $  1,558          $ (2,815)      $ (6,446)       $ (2,815)
                                                       ==========================================================================

</TABLE>

<PAGE>   16

                       WALBRO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE (5) SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS



                                                             
<TABLE>
<CAPTION>
                                                                             Three Months Ended March 31, 1998            
                                                       ----------------------------------------------------------------------------
                                                                                         Walbro                                    
                                                                                       Corporation    Consolidation                
                                                        Guarantor     Nonguarantor       (Parent     and Elimination   Consolidated
                                                       Subsidiaries    Subsidiaries    Corporation)       Entries          Total   
                                                       ------------    ------------    ------------       -------          -----   
                                                                            (in thousands, except share data)            
                                                                            ---------------------------------            
<S>                                                    <C>            <C>              <C>            <C>              <C>       
Net cash provided by (used in) operating activities        $ 8,494        $ 3,947           $ 4,015          $ -        $ 16,456  
                                                       -------------------------------------------------------------------------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                             
    Purchase of plant and equipment                         (4,807)        (7,011)               (8)           -         (11,826) 
    Acquisitions, net of cash acquired                           -              -                 -            -               -  
    Purchase of other assets                                   (94)            89                (7)           -             (12)
    Investment in joint ventures and other                  (3,534)          (282)            1,978            -          (1,838)
    Proceeds/(payments) of intercompany note rec.                -              -                 -            -               - 
    Proceeds from disposal of assets                             -             51             3,638            -           3,689 
                                                       -------------------------------------------------------------------------- 
Net cash provided by(used in) investing activities          (8,435)        (7,153)            5,601            -          (9,987) 
                                                       -------------------------------------------------------------------------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                             
    Net borrowings (repayments) under revolving                                                                                   
        line-of-credit agreements                                -         (2,287)              400            -          (1,887) 
    Debt repayments                                           (156)             -                 -            -            (156) 
    Proceeds from issuance of long-term debt                     -              -                 -            -               -  
    Proceeds from issuance of stock                                                                                               
        and options                                              -              -                 -            -               -  
    Financing fees paid                                          -              -              (366)           -            (366) 
    Cash dividends paid                                          -              -              (868)           -            (868) 
                                                       -------------------------------------------------------------------------- 
Net cash provided by(used in) financing activities            (156)        (2,287)             (834)           -          (3,277) 
                                                       -------------------------------------------------------------------------- 
EFFECT OF EXCHANGE RATE CHANGES ON                                                                                                
    CASH                                                         -            359                 -            -             359  
                                                       -------------------------------------------------------------------------- 
NET INCREASE (DECREASE) IN CASH                                (97)        (5,134)            8,782            -           3,551  
CASH AND CASH EQUIV. AT BEGIN OF YEAR                         (744)        13,431               852            -          13,539  
                                                       -------------------------------------------------------------------------- 
CASH AND CASH EQUIV. AT END OF PERIOD                      $  (841)       $ 8,297           $ 9,634          $ -        $ 17,090  
                                                       ========================================================================== 
</TABLE>
                                                                           
                                                            
<PAGE>   17
  
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

                              Results of Operations

THREE MONTHS ENDED MARCH 31, 1999 VS. THREE MONTHS ENDED MARCH 31, 1998

         Net sales in the first quarter of 1999 increased 11.5% to $188.7
million compared to $169.3 million for the same period of 1998. Sales of
automotive products increased 7.8% to $136.0 million for the first quarter of
1999 compared to $126.2 million for the same period of 1998. Sales of small
engine products increased 24.9% to $41.6 million for the first quarter of 1999
compared to $33.3 million for the same period of 1998. Sales of aftermarket
products increased 17.9% to $9.2 million for the first quarter of 1999 compared
to $7.8 million for the first quarter of 1998.

         Sales of automotive products in the U.S. increased to $74.0 million, an
increase of 3.0%, led by  higher plastic fuel tank system sales.

         Sales of automotive products in Europe for the first quarter of 1999
increased by 14.8%, but were below expectations due to delayed customer launches
in Europe and the economic conditions in Brazil.

         Sales of small engine products increased in Asia Pacific due to new
product introductions and a strong market in the two-wheeled vehicle segment.
The largest increase in sales came from carburetor sales in the People's
Republic in China, up by 245.9%. In addition, sales of small engine products in
Japan increased by 35.0%.

         Cost of sales for the first quarter of 1999 increased 11.8% to $161.1
million compared to $144.1 million for the same period of 1998. Cost of sales as
a percent of net sales was 85.4% for the first quarter of 1999 compared to 85.1%
for the same 1998 period, resulting in a gross margin of 14.6% in 1999, down
slightly from 14.9% in 1998.

          Automotive products gross margin improvement resulted in general from
the cost reduction programs initiated in 1998 and improved performance in
Ossian, Indiana. Gross margin in Europe/South America declined 2.4 percentage
points due to delayed new product launches at customers of Belgium and the U.K.,
and the volume declines in Brazil. The small engine products gross margin
declined to 11.9% compared to 18.8% in 1998 due to continuing performance issues
associated with the consolidation of multiple facilities and product lines into
the Company's plant in Mexico, which more than offset the gross margin increases
in Asia Pacific.


<PAGE>   18

         Selling and administrative ("S & A") expenses increased 9.7% for the
first quarter of 1999 compared to the first quarter of 1998, while Research and
Development ("R & D") expenses decreased 33.9% for the first quarter of 1999.
These changes were driven by a realignment in the product engineering and R & D
organization to increase the effectiveness of the product development activities
of the company. Overall, operating expenses were 8.9% of sales compared to 10.1%
in 1998.

         Restructuring charges were a credit of $0.8 million for the quarter.
This was due to a continuing evaluation of the necessity for certain reserves
taken in the 1997 restructuring charge for activities in the Asia Pacific
region. The Company determined changes in business conditions and reduced level
of assets at risk which reduced the need for these reserves.

         Royalty income decreased to $0.7 million in the first quarter of 1999
compared to $1.0 million in 1998 due to weaker performance in certain of the
company's joint ventures.

         Equity income of the joint ventures was a loss of $.9 million for the
quarter compared to income of $.5 million in the same period of 1998. This loss
was driven by the start up costs of VITEC and the performance of the joint
venture in Brazil, which has been impacted by severe economic conditions.

         Net income for the first three months of 1999 was $1.1 million compared
to net income of $.6 million for the same period of 1998. Net income per share
was $.12 for the first quarter of 1999 compared to $.07 for the same period of
1998.

                          Foreign Currency Transactions

         Approximately 43% of the Company's sales during the first three months
of 1999 were derived from international manufacturing operations in Europe,
Asia, South America and Mexico. The financial position and the results of
operations of the Company's subsidiaries in Europe (30% of sales), Japan (5% of
sales), South American (2% of sales) and China (1% of sales) were measured in
local currency of the countries in which they operated and translated into U.S.
dollars.

         The effects of foreign currency fluctuations in Europe, South America,
Japan and China are somewhat mitigated by the fact that expenses are generally
incurred in the same currencies in which sales are generated. The reported
income of these subsidiaries will be higher or lower depending on a weakening or
strengthening of the U.S. dollar.

        The Comprehensive (Loss) of $17,024 was primarily due to the impact of 
the devaluation of the Brazilian real during the quarter.  The revalued assets
are reflected in the consolidated balance sheet.


<PAGE>   19

         The Company's subsidiary in Mexico (2% of sales) operates as a
maquiladora, or contract manufacturer, where certain direct manufacturing
expenses are incurred in the local currency and sales are generated in U.S.
dollars. Thus, results of operations of the Company's subsidiary in Mexico are
also more directly influenced by a weakening or strengthening of the local
currency.

         Approximately 48% of the company's assets at March 31, 1999, were based
in its foreign operations and these assets are translated into U.S. dollars at
foreign currency exchange rates in effect as of the end of each period.
Accordingly, the Company's consolidated stockholders' equity will fluctuate
depending upon the weakening or strengthening of the U.S. dollar. In addition,
the Company has equity investments in unconsolidated joint ventures in Brazil,
France, Japan, and Mexico. The Company's reported income from these joint
ventures will be higher or lower depending upon a weakening or strengthening of
the U.S. dollar.

                               The Year 2000 Issue

         The year 2000 issue ("Y2K") is the result of computer programs that
were written using two digits (rather than four) to define the applicable year.
Any of the Company's computer programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000, which
could result in miscalculations or system failures.

          The Company is actively participating in the Automotive Industry
Action Group ("AIAG") for Y2K and is using AIAG procedures and standards as the
guideline for compliance. The Company's plan for compliance includes several
phases: (1) awareness, (2) assessment, (3) renovation, (4) validation and (5)
implementation. Each phase considers the impact of Y2K on information technology
systems, embedded technology (i.e. machinery and equipment with date sensitive
technology) and the Company's suppliers. None of the Company's products include
date sensitive technology.

         The Company is currently at various stages of completion within each
phase. The Company has completed its assessment of its information technology
systems and embedded technology identifying those that need further evaluation.
The Company has also identified critical suppliers that need evaluation. This
phase of the process includes obtaining compliance certificates from suppliers
for all existing systems and embedded technology that are already Y2K compliant
and obtaining compliance certificates for all significant vendors.

         The renovation phase, which is also in process, includes obtaining
revised software for existing systems and purchasing new computer programs and


<PAGE>   20


replacement computer hardware for non-compliant systems. This phase is expected
to be complete by June 30, 1999. The estimated remaining cost associated with
the purchase of these items is approximately $0.5 million. Existing staff will
do all of the implementation and testing. The Company does not have a project
tracking system that tracks the cost and time that its own internal employees
spend on the Y2K project. The validation and implementation phases are also in
process, and are expected to be substantially completed by June 30, 1999.

         Management believes that this plan will effectively mitigate the risks
associated with Y2K. A worst-case scenario with respect to a Y2K failure in a
key internal system or supplier system would result in shipments of product to
customers to be temporarily interrupted. This could result in missing production
schedules with customers, which in turn could lead to lost sales and profits for
the Company and our customers.

         As part of the Y2K strategy, the company is in the process of
developing contingency plans on a site-by-site, system-by-system basis. These
plans include identifying alternative sources of materials and components as
well as potentially stockpiling some key raw materials. All plans will be
documented and will be executed if necessary.


                         Liquidity and Capital Resources

         As of March 31, 1999, the Company had outstanding $6.8 million in
short-term debt, including current portion of long-term debt, and $312.5 million
in long-term debt. The approximate minimum principal payments required on the
Company's long-term debt in each of the five fiscal years subsequent to December
31, 1998 are $2.4 million in 1999, $2.6 million in 2000, $2.6 million in 2001,
$2.0 million in 2002, $95.9 million in 2003 and $221.3 million thereafter.

         As of March 31, 1999, accounts receivable amounted to $156.3 million, a
decline of $4.4 million compared to March 31, 1998. The average collection
period at March 31, 1999 was 75.0 days compared to 82.3 days at March 31, 1998.

         The Company's plans for 1999 capital expenditures for facilities,
equipment and tooling total approximately $40 million. The Company intends to
finance the capital expenditures with the existing Credit Facilities, potential
lease financing, access to capital markets and cash from operations.

         Management believes that the Company's long-term cash needs will
continue to be provided principally by operating activities supplemented, to
the extent required, by borrowing under the Company's existing and future
credit facilities and by access to the capital markets. Management expects to
replace these credit facilities as they expire with comparable facilities.

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------

         The statements contained in this discussion that are not historical
facts are forward-looking statements subject to the safe harbor created by the
Securities Litigation Reform Act of 1995. Whenever possible, the Company has
identified these forward-looking statements by words such as "anticipating,"
"believes," "estimates," "expects," and similar expressions. The Company
cautions readers of this discussion that a number of important factors could
cause the Company's actual consolidated results for 1999 and beyond to differ
materially from those expressed in any forward-looking statements made by, or
on behalf of, the Company. These important factors include, without limitation,
changes in demand for automobiles and light trucks, relationships with
significant customers, price pressures, the timing and structure of future
acquisitions or dispositions including the restructuring program announced
during the fourth quarter of 1997, impact of environmental regulations, the
year 2000 computer issue, continued availability of adequate funding sources,
currency and other risks inherent in international sales, and general economic
and business conditions. These important factors and other factors which could
affect the Company's results are more fully disclosed in the Company's filings
with the Securities and Exchange Commission. Readers of this discussion are
referred to such filings. The Company assumes no obligation to update publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise.

                                                             
<PAGE>   21
                                    PART II
                                        
                               OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  The following exhibit is filed with this report

     EXHIBIT NO.

     27.1 Financial Data Schedule

(a)  Reports of Form 8-K

     There were no forms 8-K filed during the quarter.


                                   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 authorized.


                                          WALBRO CORPORATION
                                          (Registrant)



Dated: May 17, 1999                       /s/ Frank E. Bauchiero
                                          --------------------------------------
                                          Frank E. Bauchiero, President and
                                          Chief Executive Officer




Dated: May 17, 1999                       /s/ Michael A. Shope
                                          --------------------------------------
                                          Michael A. Shope
                                          Chief Financial Officer and Treasurer