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                                   FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended 01-31-99                        Commission File Number 0-2865
                               UNIVERSAL MFG, CO.
                               ------------------
             (Exact name of Registrant as specified in its charter)

                  Nebraska                                42 0733240
                  --------                                ----------
(State or other jurisdiction of incorporation  (IRS Employer Identification No.)
              or organization)

             405 Diagonal Street., P. O. Box 190, Algona, Iowa 50511
                     (Address of principal executive office)

Registrant's telephone number, including area code       (515)-295-3557
                                                         --------------

                                 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 the Securities Exchange Act 
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 requirements for the past ninety 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.
                 Number of shares outstanding as of 01-31-99            816,000
                                                                        -------
                                                                        Common

Transitional Small Business Disclosed Format  ( Check one ):


                               Yes__________  No     X


                                        1


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                               UNIVERSAL MFG. CO.
                                   FORM 10-QSB
                                      INDEX


                                                                          PAGES
Part I   FINANCIAL INFORMATION
         Item 1.   Financial Statements:                                    3
            Balance Sheets Ended January 31, 1999 
            (unaudited) and July 31, 1998

            Statements of Income and Retained                               4
             Earnings - Three Months ended January 31, 1999
             and 1998. (unaudited)

            Statements of Income and Retained Earnings                      5
            Six Months ended January 31, 1999 and
            January 31, 1998. (unaudited)

            Statements of Cash Flows - Six months ended                     6
            January 31, 1999 and 1998. (unaudited)


            Notes to Financial Statements as of and for the Six Months    7-8
            Ended January 31, 1999

         Item 2.  Management's Discussion and Analysis of Financial
                  Condition and results of Operations                       9

Part II   OTHER INFORMATION

          Item 1.   Legal Proceedings                                       9

          Item 2.   Changes in securities                                   9

          Item 3.   Defaults upon senior securities                         9

          Item 4.   Submission of Matters to a vote of security holders     9

          Item 5.   Other information                                      10

          Item 6.   Exhibits and reports on Form 8-K                       10

          Signatures                                                       11



                                        2



<PAGE>


ITEM 1.  FINANCIAL STATEMENTS

UNIVERSAL MFG. CO.
BALANCE SHEETS

<TABLE>
<CAPTION>


                                                       January 31,
                                                           1999                 July 31,
                                                       (Unaudited)               1998
                                                     ---------------         --------------
<S>                                                    <C>                     <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                             $1,380,280              $1,234,007
  Accounts receivable                                    1,873,345               2,141,099
  Inventories                                            3,267,798               2,611,961
  Income taxes recoverable                                  54,522                  23,545
  Prepaid expenses                                          21,354                  19,798
                                                       -----------             -----------
  Total current assets                                   6,597,299               6,030,410
                                                       -----------             -----------
Deferred Income Taxes                                       24,188                  24,188
                                                       -----------             -----------
Lease Receivable                                                 0                       0
                                                       -----------             -----------

PROPERTY - At cost
  Land                                                     120,499                 120,499
  Buildings                                              1,406,747               1,406,747
  Machinery and equipment                                1,013,923               1,013,923
  Furniture and fixtures                                   289,074                 264,924
  Trucks and automobiles                                   844,934                 870,579
  Construction-in-Progress                                  36,015                       0
                                                       -----------             -----------
  Total property                                         3,711,192               3,676,672
  Less accumulated depreciation                         (2,253,056)             (2,201,225)
                                                       -----------             -----------
  Property - net                                         1,458,136               1,475,447
                                                       -----------             -----------
                                                        $8,079,623              $7,530,045
                                                       -----------             -----------
                                                       -----------             -----------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                      $2,889,100              $2,199,744
  Dividends payable                                        122,400                 163,200
  Payroll taxes                                             36,401                  27,828
  Accrued compensation                                      37,180                  81,495
  Accrued local taxes                                       19,153                  17,570
                                                       -----------             -----------
  Total current liabilities                              3,104,234               2,489,837
                                                       -----------             -----------

STOCKHOLDERS' EQUITY
  Common stock, $1 par value,
    authorized,  2,000,000 shares,
    issued and outstanding,  816,000 shares                816,000                 816,000
  Additional paid-in capital                                17,862                  17,862
  Retained earnings                                      4,141,527               4,206,346
                                                       -----------             -----------
  Total stockholders' equity                             4,975,389               5,040,208
                                                       -----------             -----------
                                                        $8,079,623              $7,530,045
                                                       -----------             -----------
                                                       -----------             -----------

</TABLE>


                                       3


UNIVERSAL MFG. CO.
STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)


<TABLE>
<CAPTION>

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

NET SALES                                               $4,267,938              $4,794,903

COST OF GOODS SOLD                                       3,721,348               3,999,027
                                                       -----------             -----------
GROSS PROFIT                                               546,590                 795,876

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                                  724,304                 513,472
                                                       -----------             -----------
INCOME/(LOSS) FROM OPERATIONS                             (177,714)                282,404
                                                       -----------             -----------
OTHER INCOME:
  Interest                                                  19,722                  12,097
  Other income                                               6,209                   5,346
                                                       -----------             -----------
  Total other income                                        25,931                  17,443
                                                       -----------             -----------

INCOME/(LOSS) BEFORE INCOME TAXES                         (151,783)                299,847

INCOME TAX EXPENSE/(BENEFIT)                               (60,435)                116,941
                                                       -----------             -----------

NET INCOME/(LOSS)                                          (91,348)                182,906

RETAINED EARNINGS, Beginning of period                   4,355,275               3,808,875

DIVIDENDS                                                 (122,400)               (204,000)
                                                       -----------             -----------
RETAINED EARNINGS, End of period                        $4,141,527              $3,787,781
                                                       -----------             -----------
                                                       -----------             -----------
PER COMMON SHARE INFORMATION:

 Earnings/(Loss) per common share                           ($0.11)                  $0.22

Dividends per common share                                    0.15                    0.25
                                                       -----------             -----------
                                                       -----------             -----------

</TABLE>

                                       4


<PAGE>



UNIVERSAL MFG. CO.
STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)

<TABLE>
<CAPTION>

                                                                   Six Months Ended
                                                        ------------------------------------
                                                        January 31,              January 31,
                                                           1999                     1998
                                                        -----------              -----------
<S>                                                    <C>                     <C>


NET SALES                                               $9,259,667              $9,493,294

COST OF GOODS SOLD                                       7,692,184               7,461,399
                                                       -----------             -----------
GROSS PROFIT                                             1,567,483               2,031,895

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                                1,270,624               1,056,143
                                                       -----------             -----------
INCOME FROM OPERATIONS                                     296,859                 975,752
                                                       -----------             -----------
OTHER INCOME:
  Interest                                                  45,919                  26,223
  Other income                                              17,126                   8,155
                                                       -----------             -----------
  Total other income                                        63,045                  34,378
                                                       -----------             -----------

INCOME BEFORE INCOME TAXES                                 359,904               1,010,130

INCOME TAXES                                               139,123                 393,953
                                                       -----------             -----------
NET INCOME                                                 220,781                 616,177

RETAINED EARNINGS, Beginning of period                   4,206,346               3,851,093

DIVIDENDS                                                 (285,600)               (408,000)
                                                       -----------             -----------
RETAINED EARNINGS, End of period                        $4,141,527              $4,059,270
                                                       -----------             -----------
                                                       -----------             -----------

PER COMMON SHARE INFORMATION:

 Earnings per common share                                   $0.27                   $0.76

Dividends per common share                                    0.35                    0.50
                                                       -----------             -----------
                                                       -----------             -----------

</TABLE>

                                       5


<PAGE>


UNIVERSAL MFG. CO.
STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>

                                                                   Six Months Ended
                                                        ------------------------------------
                                                        January 31,              January 31,
                                                           1999                     1998
                                                        -----------              -----------
<S>                                                    <C>                     <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                             $  220,781             $   616,177
Adjustments to reconcile net income to
 net cash from operating activities:
  Depreciation                                            114,490                  62,512
  Gain on sale of property                                  3,423                       0
Changes in operating assets and liabilities:
  Accounts receivable                                     266,807                 170,360
  Inventories                                            (655,842)             (1,409,943)
  Prepaid expenses                                         (1,557)               (133,111)
  Income taxes recoverable                                (30,977)                 (8,123)
  Lease receivable                                              0                   6,445
  Accounts payable                                        679,595                 702,764
  Payroll taxes                                             8,571                  10,938
  Accrued compensation                                    (37,733)                (33,372)
  Accrued local taxes                                       1,583                  (3,176)
                                                       -----------             -----------
Net cash flows from operating activities                  569,141                 (18,529)
                                                       -----------             -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property                                     (96,468)               (116,294)
                                                       -----------             -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends                                     (326,400)               (408,000)
                                                       -----------             -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS                   146,273                (542,823)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        1,234,007                 881,389
                                                       -----------             -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD             $1,380,280              $  338,566
                                                       -----------             -----------
                                                       -----------             -----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during period for:
  Income taxes                                         $  170,100              $  403,955
                                                       -----------             -----------
                                                       -----------             -----------
</TABLE>

                                       6

<PAGE>



                               UNIVERSAL Mfg. Co.
                          NOTES TO FINANCIAL STATEMENTS
                          AS OF AND FOR THE SIX MONTHS
                       ENDED JANUARY 31, 1999 (unaudited)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS - The Company is engaged in the business of 
remanufacturing and distribution on a wholesale basis, engines and other 
automobile parts for Ford, Lincoln and Mercury automobile and trucks. On 
October 1, 1998, the Company signed a new sales agreement with Ford Motor 
Company authorizing the Company to be a Ford authorized distributor. The 
Company purchases the majority of its new raw materials from Ford Motor 
Company. Remanufactured engines for non-Ford vehicles are also marketed on a 
limited basis. The principal markets for the Company's products are 
automotive dealers and jobber supply houses. The Company has no separate 
segments, major customers, foreign operations or export sales.

USE OF ESTIMATES - In preparing financial statements in conformity with 
generally accepted accounting principles, management is required to make 
estimates and assumptions that affect the reported amounts of assets and 
liabilities and the disclosure of contingent assets and liabilities at the 
date of the financial statements and the reported amounts of revenues and 
expenses during the reported period. Actual results could differ from those 
estimates.

INVENTORIES - Inventories are stated at the lower of cost (last -in first-out 
method) or market.

INVESTMENTS - Short-term investments are considered as either trading 
securities or available for sale securities and, accordingly, are carried at 
fair market value in the Company's financial statements.

DEPRECIATION, MAINTENANCE, AND REPAIRS - Property is depreciated generally as 
follows:



ASSETS                     DEPRECIATION METHOD                    LIVES
------                     -------------------                    -----
Buildings                  Straight-line and declining balance    10 - 20 years
Mach & Equip               Declining balance                       7 - 10 years
Furniture & Fix.           Declining balance                       5 - 7 years
Trucks & Auto's            Declining balance                       3 - 5 years

Maintenance and repairs are charged to operations as incurred. Renewals and 
betterment's are capitalized and depreciated over their estimated useful 
service lives. The applicable property accounts are relieved of the cost and 
related depreciation upon disposition. Gains or losses are recognized at the 
time of disposal.

REVENUE RECOGNITION - Sales and related cost of sales are recognized 
primarily upon shipment of product.

CASH EQUIVALENT - For the purposes of the Statement of Cash Flows, the 
Company considers all highly liquid instruments purchased with a maturity of 
three months or less to be cash equivalents.

WARRANTY - Warranty expense is based upon receipt of warranty claims and 
prior historical experience.


                                       7


<PAGE>


NOTES TO FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Financial Instruments - Cash and cash equivalents, accounts receivable and 
accounts payable are short term in nature and the values at which they are 
recorded are considered to be reasonable estimates of their fair market 
values.

Earnings Per Share - Earnings per share have been computed on the weighted 
average number of shares outstanding. (816,000 shares.)

Company Representation - In the opinion of the Company, the accompanying 
unaudited financial statements contain all adjustments (consisting of only 
normal recurring accruals) necessary to present fairly the financial position 
as of January 31, 1999, and the results of operations and cash flows for the 
three and six month period ending January 31, 1999 and January 1998. The 
results of operations for these periods are not necessarily indicative of 
results to be expected for the full year. Certain information and footnote 
disclosures normally included in financial statements prepared in accordance 
with generally accepted accounting principles have been omitted. The Company 
suggests that these condensed financial statements be read in conjunction 
with the financial statements and notes included in the Company's Form 10-KSB 
for the fiscal year ended July 31, 1998.

EPA PROJECT COSTS

In February, 1991, the Company was served with a complaint from the United 
States Environmental Protection Agency (EPA), which contained eight counts of 
alleged violations of the Resource Conservation and Recovery Act of 1976 and 
the Hazardous Solid Waste Amendments of 1984. The complaint alleges, among 
other things, that the Company failed to adequately test and properly 
transport certain residue of hazardous wastes, which it was treating at its 
facility. The Company entered into a Consent Agreement and Consent Order with 
the EPA, dated May 6, 1994, which provides for settlement of this complaint. 
This settlement called for payment of civil penalties of $32,955 and for 
completion of certain remedial projects, estimated to cost approximately 
$149,725. Total costs paid as of January 31, 1999 are $116,251. The remaining 
amount of $33,474 has been recorded, as a liability, in the accompanying 
financial statements.

On June 10, 1998, the Company received notice from the EPA authorizing 
submission of a proposal for treatment on additional contamination found 
after the initial hazardous waste was removed. The EPA approved that costs 
related to studies for the removal of the additional contamination could be 
offset against the remaining liability. On August 6, 1998, the Company 
received a proposal to study the additional contamination with an estimated 
cost approximating the liability at July 31, 1998.


                                       8



<PAGE>


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

Effective October 1, 1998, Universal Manufacturing Co. signed a new sales 
agreement with Ford Motor Company. This agreement establishes the Company as 
a Ford Authorized Distributor and as such, authorizes the Company to 
distribute to Ford and Lincoln-Mercury dealerships. Currently, we distribute 
Company remanufactured parts, Ford Motor Company remanufactured components 
and Motorcraft branded products - a new line for us. With the new agreement 
we now directly compete with other Ford Authorized Distributors in our major 
markets.

The sales agreement with Ford requires and competition dictates, that 
same-day delivery service be offered to as many dealerships as possible. This 
standard required the addition of trucks, drivers, warehouse space, warehouse 
personnel, computer system enhancements, and sales personnel. As of yet, 
sales revenue has not increased correspondingly with the added costs, thus 
the adverse effect in earnings.

Other factors have contributed to the reduced earnings. For a few product 
lines, such as starters and alternators, sales of lower margin Ford 
remanufactured units displaced units remanufactured by us. Also, some one 
time costs were incurred by liquidation of discontinued parts and cores. 
Sales were also adversely affected by product returns on deauthorized 
products and mild weather throughout most of the quarter.

We have initiated an aggressive marketing program for Motorcraft and Ford 
remanufactured parts, with positive initial results. We are also aggressively 
seeking alternative markets for our remanufactured products. We are 
optomistic that these efforts combined with additional distribution 
opportunities planned by Ford Motor Company should return us to normal 
profitability in the near future.

PART II OTHER INFORMATION
Item 1.   LEGAL PROCEEDINGS                                     NONE

Item 2.   CHANGES IN SECURITIES                                 NONE

Item 3.   DEFAULTS UPON SENIOR SECURITIES                       NONE

Item 4.   SUBMISSION OF MATTERS TO A                            NONE
          VOTE OF SECURITY HOLDERS


                                       9


<PAGE>


ITEM 5.  OTHER INFORMATION

In fiscal year 1998, through routine upgrades, as represented by the software 
suppliers, the Company made the computer software programs and equipment 
utilized at the company's facilities year 2000 compliant. These upgrades 
include, but are not limited to, the manufacturing, financial and accounting, 
invoicing, production, sales, and warehouse management systems. Preliminary 
testing of the software has been completed and found to be satisfactory. The 
supplier will continue to conduct in-depth testing on date sensitive fields 
and processing. The Company has not incurred significant costs as a result of 
the upgrade of its internal system to year 2000 compliance. The Company is 
investigating the year 2000 status of the Company's 
non-information/technology systems, which include phones, voice mail, 
heating/air conditioning, electricity, security systems and lift trucks. The 
Company expects that its non-IT systems will be year 2000 compliant before 
the end of calendar year 1999. In addition to reviewing its internal systems, 
the Company has sent surveys to its major outside vendors to determine if 
they are year 2000 compliant and to identify any potential issues. Of the 
fifty surveys sent, approximately fifty percent have replied. All replies 
indicate the supplier will be compliant before year end 1999. We will 
initiate a follow-up to those suppliers who have not responded.
The Company currently believes that the most likely worst case scenario with 
respect to the year 2000 issue is the failure of a supplier, including 
utility, financial or governmental, to become year 2000 compliant. This could 
result in the temporary interruption in supply of goods or services to our 
facilities. This would cause interruptions in production or inventory of 
distributive products, which in turn could result in potential lost sales and 
profits. However, our major supplier- Ford, our financial institution, the 
utility company and our telephone/fax companies have responded favorably to 
our survey.
Management is committed to devoting the appropriate resources to ensure a 
timely year 2000 solution and will continue to test current and new versions 
of the Company's computer software and equipment, and will work with the 
necessary third parties to achieve the solution.

FORWARD LOOKING STATEMENTS:         
Statements herein that are not historical facts, including statements about the
company's Confidence and strategies and the Company's expectations about future
market opportunities, market demand or acceptance of the Company's products are
forward looking statements that involve risks and uncertainties. These
uncertainties include, without limitation, the effect of general economic and
market conditions, customer requirements for our products, the continuing
strength of the automotive industry, competitor pricing, maintenance of our
current momentum, weather conditions and other factors.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         a. EXHIBITS                                      NONE
         b. Reports on Form 8-K
            The Company filed a Form 8-K on October 20, 1998.



                                       10


<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.

     2/18/99          /s/ Donald D. Heupel
Date_________         _______________________________________________________
                      Donald D. Heupel, President and Chief Financial Officer





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