================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                             -----------------------
                                    FORM 10-Q
                             -----------------------

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

                   For the Quarterly Period ended October 2, 1999

                                       OR

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

             For the transition period from __________ to __________

                             -----------------------

                          Commission file number 0-4723

                                  FARR COMPANY
              Incorporated pursuant to the Laws of Delaware State

                             -----------------------

     Internal Revenue SService -- Employer Identification Number 95-1288401

                      2201 Park Place, El Segundo, CA 90245
                                 (310) 727-6300

                             -----------------------

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 of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
                                                       Yes  (x)      No  ( )

Number of shares of  registrants  common  stock  outstanding  as of close of the
period covered by this report: 7,259,676.

================================================================================
<PAGE>






                         PART I - FINANCIAL INFORMATION

                          FARR COMPANY AND SUBSIDIARIES

                                    INDEX TO

                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 OCTOBER 2, 1999


Part I - Financial Information

Introduction

Condensed Consolidated Financial Statements

     Balance Sheets - October 2, 1999 and January 2, 1999

     Income Statements for the three months ended October 2, 1999 and
          October 3, 1998 and for the nine months ended October 2, 1999
          and October 3, 1998

     Statements  of Cash Flows for the nine months ended October 2, 1999 and
          October 3, 1998

     Notes to Condensed Consolidated Financial Statements

Management's Discussion and Analysis



Part II - Other Information

Item 6.a.         Exhibits




<PAGE>




                          FARR COMPANY AND SUBSIDIARIES

                                 INTRODUCTION TO

                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 OCTOBER 2, 1999


         The Condensed  Consolidated  Financial  Statements included herein have
     been prepared by the Company  without  audit,  and include all  adjustments
     which are, in the opinion of management,  necessary for a fair presentation
     of the  financial  position  as of  October  2,  1999  and the  results  of
     operations  for the three and nine months ended October 2, 1999 and October
     3, 1998  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   although  the  Company  believes  that  the
     disclosures are adequate to make the information  presented not misleading.
     These condensed financial statements should be read in conjunction with the
     consolidated  financial  statements  and  notes  thereto  included  in  the
     Company's latest annual report on Form 10-K.




<PAGE>
<TABLE>
                          FARR COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<CAPTION>
Assets .....................................................   Oct. 2, 1999    Jan. 2, 1999
                                                               ------------    ------------
 ............................................................    (Unaudited)       (Audited)
Current Assets:
<S>                                                            <C>             <C>
  Cash and cash equivalents ................................   $  1,324,000    $  6,083,000
  Restricted cash ..........................................      4,853,000               0
  Accounts receivable, less allowance of $438,000
      in 1999 and $370,000 in 1998 .........................     19,332,000      19,433,000
  Inventories
      Raw materials ........................................      3,281,000       4,629,000
      Work in process ......................................      4,619,000       3,413,000
      Finished goods .......................................      2,657,000       2,774,000
                                                               ------------    ------------
                                                                 10,557,000      10,816,000
  Prepaid expenses .........................................        774,000         688,000
  Income taxes receivable ..................................        349,000         849,000
  Deferred tax benefit .....................................      1,221,000       1,221,000
                                                               ------------    ------------
      Total current assets .................................     38,410,000      39,090,000
                                                               ------------    ------------

Property, Plant and Equipment, at Cost
  Land .....................................................      1,993,000       2,246,000
  Buildings and improvements ...............................     16,927,000      18,468,000
  Machinery and equipment ..................................     37,153,000      36,340,000
                                                               ------------    ------------
                                                                 56,073,000      57,054,000
  Less-accumulated depreciation and amortization ...........     38,950,000      39,027,000
                                                               ------------    ------------
                                                                 17,123,000      18,027,000
Other ......................................................      3,870,000       2,784,000
                                                               ------------    ------------
                                                               $ 59,403,000    $ 59,901,000
                                                               ============    ============

Liabilities & Stockholders' Investment .....................   Oct. 2, 1999    Jan. 2, 1999
                                                               ------------    ------------
 ............................................................    (Unaudited)       (Audited)
Current Liabilities:
  Notes/overdraft payable to banks .........................   $          0    $    145,000
  Accounts payable .........................................      5,349,000       6,061,000
  Accrued liabilities ......................................      9,191,000       7,072,000
  Income taxes payable and deferred taxes ..................        866,000       1,287,000
                                                               ------------    ------------
      Total current liabilities ............................     15,406,000      14,565,000
                                                               ------------    ------------

Deferred Income Taxes ......................................      1,773,000       1,773,000
Other Non-current Liabilites ...............................      2,777,000       1,509,000
Commitments and Contingencies
Stockholders' Investment:
  Common stock, $.10 par value--Authorized 20,000,000 shares
  Outstanding--8,888,902 shares at October 2, 1999
      and 8,874,468 shares at January 2, 1999 ..............        889,000         887,000
  Additional paid-in capital ...............................     13,748,000      13,701,000
  Accumulated comprehensive loss ...........................     (1,945,000)     (2,405,000)
  Treasury stock at cost-1,629,226 shares at October 2, 1999
      and 743,944 shares at January 2, 1999 ................    (13,773,000)     (5,295,000)
  Retained earnings:
      Balance beginning of year ............................     35,166,000      27,644,000
      Net income for the period ............................      5,329,000       7,205,000
      Other ................................................         33,000         317,000
                                                               ------------    ------------
      Balance at end of period .............................     40,528,000      35,166,000
                                                               ------------    ------------
          Total stockholders' investment ...................     39,447,000      42,054,000
                                                               ------------    ------------
                                                               $ 59,403,000    $ 59,901,000
                                                               ============    ============
</TABLE>

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

<PAGE>

<TABLE>

                          FARR COMPANY AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED INCOME STATEMENTS


<CAPTION>

 ...........................................        Three Months Ended               Nine Months Ended
                                              Oct. 2, 1999    Oct. 3, 1998    Oct. 2, 1999    Oct. 3, 1998
                                              ------------    ------------    ------------    ------------

<S>                                           <C>             <C>             <C>             <C>
Net Sales .................................   $ 28,146,000    $ 31,011,000    $ 87,353,000    $ 93,434,000
Cost of Sales .............................     21,232,000      23,114,000      64,912,000      69,431,000
                                              ------------    ------------    ------------    ------------

Gross Margin ..............................      6,914,000       7,897,000      22,441,000      24,003,000

    Selling, general and administrative ...      4,925,000       5,112,000      15,254,000      15,450,000
    Interest expense ......................         19,000          25,000          60,000          89,000
    Interest income .......................        (62,000)        (71,000)       (172,000)       (201,000)
    Gain on disposal of assets, net .......     (1,545,000)              0      (1,545,000)              0
    Retirement benefit ....................        443,000               0         443,000               0
                                              ------------    ------------    ------------    ------------

Total Expenses ............................      3,780,000       5,066,000      14,040,000      15,338,000
                                              ------------    ------------    ------------    ------------


Income Before Income Taxes ................      3,134,000       2,831,000       8,401,000       8,665,000

    Income taxes ..........................      1,139,000       1,047,000       3,072,000       3,087,000
                                              ------------    ------------    ------------    ------------


Net Income ................................   $  1,995,000    $  1,784,000    $  5,329,000    $  5,578,000
                                              ============    ============    ============    ============




Net Income per diluted common share .......   $       0.27    $       0.21    $       0.68    $       0.66
                                              ============    ============    ============    ============
Net Income per basic common share .........   $       0.27    $       0.21    $       0.70    $       0.67
                                              ============    ============    ============    ============


Shares outstanding for diluted earnings ...     7,494,888       8,408,761       7,792,728       8,443,112
                                             ============    ============    ============    ============
Shares outstanding for basic earnings .....     7,310,694       8,303,045       7,620,734       8,313,662
                                             ============    ============    ============    ============

</TABLE>

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


<PAGE>

<TABLE>
                          FARR COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<CAPTION>
                                                                   Nine Months Ended
Cash Provided by ( Used in ) : ...........................   Oct. 2, 1999    Oct. 3, 1998
                                                             ------------    ------------
Operating Activities:

<S>                                                          <C>             <C>
    Net Income ...........................................   $  5,329,000    $  5,578,000
      Adjustments to reconcile net income to net cash
          provided by operating activities:
        Depreciation and amortization ....................      1,912,000       1,854,000
        Provision for loss on accounts receivable ........        117,000         120,000
        Equity in loss of affiliate ......................         50,000          35,000
        Benefit retirement trust .........................      1,268,000         614,000
        Change in deferred income taxes ..................        (35,000)         16,000
        Exchange (gain) loss .............................         50,000         (32,000)
        Net (gain) loss on sale/retirement of assets .....     (1,555,000)          4,000
        Loss on asset held for sale ......................         25,000               0
        Changes in assets and liabilities
          Inventories ....................................        395,000          80,000
          Receivables and prepaid expenses ...............         57,000        (968,000)
          Accounts payable & accrued expenses ............      3,902,000      (4,128,000)
          Net change in current income taxes payable .....       (510,000)        137,000
                                                             ------------    ------------

      Net cash provided by operating activities ..........     11,005,000       3,310,000
                                                             ------------    ------------

  Investing Activities:

    Purchases of property, plant and equipment ...........     (1,304,000)     (2,136,000)
    Redemptions of short term investments ................              0       2,031,000
    Note receivable - affiliate ..........................              0        (106,000)
    Net proceeds from sale of assets .....................         10,000               0
    Purchase of investments, benefits trust ..............     (1,268,000)       (614,000)
    Other ................................................        (25,000)              0
                                                             ------------    ------------

      Net cash used in investing activities ..............     (2,587,000)       (825,000)
                                                             ------------    ------------

  Financing Activities:

    Principal payments on revolving line of credit
        and long-term debt borrowings & overdrafts .......       (149,000)        (93,000)
    Treasury stock acquired ..............................     (8,478,000)     (2,844,000)
    Proceeds from sale of stock, stock option plans ......         49,000         719,000
    Other ................................................        140,000           9,000
                                                             ------------    ------------

      Net cash used in financing activities ..............     (8,438,000)     (2,209,000)
                                                             ------------    ------------

  Effect of Exchange Rate Changes on Cash ................        114,000        (146,000)
                                                             ------------    ------------

  Increase in Cash and Cash Equivalents ..................         94,000         130,000
  Cash and Cash Equivalents at Beginning of Period .......      6,083,000       5,109,000
                                                             ------------    ------------

    Cash and Cash Equivalents at End of Period ...........   $  6,177,000    $  5,239,000
                                                             ============    ============


</TABLE>

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

<PAGE>

                          FARR COMPANY AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 OCTOBER 2, 1999

                                   (Unaudited)

1.       There have been no significant changes in the Company's policies,
         practices or position from that described in the notes to the
         Consolidated Financial Statements included in the 1998 Annual Report to
         Stockholders which was incorporated by reference in the Annual Report
         on Form 10-K for the year ended January 2, 1999.

2.       Restructuring Costs

         The Company recorded a restructuring charge of $1,500,000 in the fourth
         quarter of 1992 related to anticipated costs associated with closures
         of two manufacturing plants. The two United States plants located in
         Pryor, Oklahoma and Eatonton, Georgia were closed in 1993 as part of
         the Company's efforts to consolidate manufacturing operations and
         increase production efficiency, asset utilization and profitability.
         During the third quarter of 1999, the Company increased its
         restructuring reserve through the recognition of a $570,000 long-term
         lease obligation charge netted against the reported gain on disposal of
         assets to cover anticipated lease buy-out costs for the remaining net
         present value of all future lease payments related to the Eatonton,
         Georgia facility. As of October 2, 1999, a restructuring charge balance
         of $776,000 is included as a component of accrued liabilities in the
         accompanying Consolidated Balance Sheet. Approximately 97 percent of
         this reserve balance is associated with the Eatonton, Georgia facility
         covering estimated cost associated with a lease buy-out. In the event
         management is unable to negotiate an early termination of the lease by
         paying a lump sum equal to the discounted value of the future lease
         payments over the remaining term of the lease, the Company will likely
         need to increase the reserve to cover the future expenses with making
         actual lease payments and cover actual operating expenses for taxes,
         utilities, insurance and maintenance of the facility. This additional
         reserve is estimated to be less that $300,000.

3.       Common Stock

         On February 16, 1999 and May 4, 1999, the Board of Directors authorized
         purchases of 500,000 shares and 1,000,000 shares, respectively, in
         addition to the original 500,000 shares under the stock repurchase plan
         approved on June 26, 1998. Under the plan, the Company may purchase
         from time to time a cumulative total of 2,000,000 shares of its common
         stock either on the open market or through negotiated transactions. No
         time limit has been set for completion of this stock repurchase
         program. Shares purchased are planned to be made with existing cash on
         hand. During the third quarter of 1999, 87,500 shares were acquired
         under the repurchase program, bringing the total purchases to 1,245,550
         shares.


<PAGE>


         As of October 2, 1999 and January 2, 1999 the Company held in treasury
         1,629,226 and 743,944 shares of its common stock at a cost of
         $13,773,000 and $5,295,000, respectively.

         During the third quarter of 1999, the method of presenting the treasury
         stock was changed. Common stock, additional paid-in capital and
         retained earnings amounts previously reported net of treasury stock
         costs have been restated to present treasury shares at cost as a
         separate line item under Stockholders' Investment. Certain
         reclassifications have been made to the prior year's Stockholders'
         Equity to conform to the current year's presentation.

4.       Earnings per Share Calculation

         As a result of the 3-for-2 stock split distributed on May 29, 1998, per
         share amounts for 1998 have been restated to reflect the weighted
         average number of shares of common stock outstanding. The per share
         amounts are calculated as though the stock split occurred in the first
         day of the year.
<TABLE>
<CAPTION>
                                                        Three Months Ended             Nine Months Ended
                                                    Oct. 2, 1999  Oct. 3, 1998    Oct. 2, 1999  Oct. 3, 1998
                                                    ------------  ------------    ------------  ------------

BASIC EARNINGS PER SHARE CALCULATION

    Earnings:
    ---------
<S>                                                  <C>           <C>             <C>           <C>
    Net Income                                       $1,995,000    $1,784,000      $5,329,000    $5,578,000
                                                     ==========    ==========      ==========    ==========

    Shares:
    -------
    Weighted average number of common
        shares outstanding                            7,310,694     8,303,045       7,620,734     8,313,662
                                                      =========     =========       =========     =========

    Net Income Per Common Share                      $     0.27    $     0.21      $     0.70    $     0.67
                                                     ==========    ==========      ==========    ==========



DILUTED EARNINGS PER SHARE CALCULATION

    Earnings:
    ---------
    Net Income                                       $1,995,000    $1,784,000      $5,329,000    $5,578,000
                                                     ==========    ==========      ==========    ==========

    Shares:
    -------
    Weighted average number of common
        shares outstanding                            7,310,694     8,303,045       7,620,734     8,313,662
    Assuming exercise of options reduced by
        the number of shares which could have
        been purchased with the proceeds from
        exercise of such options                        184,194       105,716         171,994       129,450
                                                     ----------    ----------      ----------     ---------
    Weighted average number of common
        shares and dilutive common share
        equivalents outstanding                       7,494,888     8,408,761       7,792,728     8,443,112
                                                      =========     =========       =========     =========

    Net Income Per Common Share                      $     0.27    $     0.21      $     0.68    $     0.66
                                                     ==========    ==========      ==========    ==========


</TABLE>


<PAGE>

5.       Gain on Disposal of Assets

         During the third quarter of 1999, the Company reported a net gain of
         $1,545,000 related to the disposal of assets. The net gain is comprised
         of two components, one a $2,115,000 gain from the sale of surplus real
         estate located in El Segundo, California and two, a $570,000 charge
         related to anticipated lease-buy out cost for the Company's leased
         Eatonton, Georgia facility.

         The Company received approximately $5,000,000 in cash from the sale of
         surplus real estate and intends to a portion of the proceeds from the
         sale for the purchase of a new facility. The new facility is intended
         to be used primarily for manufacturing. The purchase of this facility
         is anticipated to be completed during the first quarter of 2000 and is
         intended to be accounted for under IRS section 1031 like-property
         exchange rules.

6.       Comprehensive income for the current quarter and year-to-date, and
         comparable prior year's three months and nine months, are as follows:

<TABLE>
<CAPTION>
                                                           Three Months Ended             Nine Months Ended
                                                       Oct. 2, 1999  Oct. 3, 1998    Oct. 2, 1999  Oct. 3, 1998
                                                       ------------  ------------    ------------  ------------
<S>                                                     <C>           <C>             <C>           <C>

 Net Income                                             $1,995,000    $1,784,000      $5,329,000    $5,578,000
 Other Comprehensive income, net of tax
   Foreign currency translation adjustments gain (loss)    246,000      (399,000)        460,000      (503,000)
                                                           -------     ---------         -------     ---------

 Comprehensive Income                                   $2,241,000    $1,385,000      $5,789,000    $5,075,000
                                                        ==========    ==========      ==========    ==========
</TABLE>

7.       Cash and Restricted Cash

         As of October 2, 1999, cash and restricted cash included $4,853,000
         held in trust received from the sale of surplus real estate. This cash
         is being held in a trust account pending completion of an IRS section
         1031 like-property exchange. Upon completion of the exchange,
         anticipated net cash proceeds from the trust will be approximately
         $2,400,000. The exchange is anticipated to be completed during the
         first quarter of 2000.

8.       Retirement Benefit

         On September 15, 1999, the Company entered into a five-year employment
         and retirement agreement with its Chairman of the Board of Directors.
         Under terms of the agreement, the Company purchased an annuity at a
         cost of $998,000 to fund the Chairman's retirement benefits that will
         be paid monthly over a ten year period commencing October 1, 2004. The
         Company had previously accrued $555,000 for estimated retirement
         benefits and recorded an additional $443,000 retirement benefit
         provision during the third quarter of 1999 to cover the total funding
         cost of the retirement benefit.




<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS


Liquidity and Capital Resources
-------------------------------

FINANCIAL CONDITION

As of October 2, 1999, working capital was $23,004,000 compared to $24,525,000
at the end of 1998, representing a $1,521,000 decrease in total working capital
for the first nine months of 1999. The primary components of the change in
working capital during the first nine months were increases in current
liabilities ($841,000) and a decrease other current assets ($414,000).

The increase in current liabilities primarily reflects the deferred gain from
the sale of the Company's surplus real estate in El Segundo, California that
will be applied toward reducing the cost basis of the anticipated purchase of a
new manufacturing facility. The decrease in other current assets reflects a
reduction in income taxes receivable.

As of October 2, 1999, borrowing availability under the Company's domestic
revolving credit facility was $10,000,000 and no borrowings were outstanding.

During the third quarter, the Company acquired 87,500 shares of its common stock
at a cost of $854,000 under its stock repurchase program. As of October 2, 1999,
a cumulative total of 1,245,550 shares have been purchased under the stock
repurchase program.

The Company's cash flow generated from operating activities combined with
current cash balances are anticipated to generate adequate cash flow to meet
planned operating needs, provide for capital spending and fund stock repurchase
program activity.

During the third quarter of 1999, the Company increased its restructuring
reserve through the recognition of a $570,000 long-term lease obligation charge
netted against the reported gain on disposal of assets to cover anticipated
lease buy-out costs for the remaining net present value of all future lease
payments related to the Eatonton, Georgia facility. As of October 2, 1999, a
restructuring charge balance of $776,000 is included as a component of accrued
liabilities in the accompanying Consolidated Balance Sheet. Approximately 97
percent of this reserve balance is associated with the Eatonton, Georgia
facility covering estimated cost associated with a lease buy-out. In the event
management is unable to negotiate a early lease buy-out on its Eatonton, Georgia
lease, or successfully sublease the facility over the remaining 60 month lease
period, the Company would likely need to increase its reserve to cover future
expenses related to undiscounting future lease payments, property taxes,
insurance and maintenance that are estimated to be less than $300,000.


<PAGE>

CASH FLOW

Cash flow generated from operating activities during the first nine months
totaled $11,005,000 compared to $3,310,000 for the same period a year ago. The
increase in cash flow from operating activities was primarily related to the
decrease in working capital associated with increases in current liabilities as
compared with a decrease over the same period last year.

Capital expenditures for the first nine months declined to $1,304,000 from
$2,136,000 for the same period a year ago. Total 1999 capital expenditures are
anticipated to remain below 1998 levels as 1998 expenditures for the Company's
headquarters will not reoccur in 1999.

On August 24, 1999, the Company completed the sale of its surplus real estate
located at 2221 Park Place in El Segundo, California, for $5,000,000 in cash.
The Company intends to use a portion of the proceeds from the sale for the
purchase of a new facility. The new facility is intended to be used for
manufacturing various high performance products that are currently being
manufactured in Arkansas, Mississippi and North Carolina. The purchase of the
new facility is anticipated to be completed during the fourth quarter of 1999
and is intended to be accounted for under IRS section 1031 like-property
exchange rules.

On September 15, 1999, the Company entered into a five-year employment and
retirement agreement with its Chairman of the Board of Directors. Under terms of
the agreement, the Company purchased an annuity at a cost of $998,000 to fund
the Chairman's retirement benefits that will be paid monthly over a ten year
period commencing October 1, 2004. The Company had previously accrued $555,000
for estimated retirement benefits and recorded an additional $443,000 retirement
benefit provision during the third quarter of 1999 to cover the total funding
cost of the retirement benefit.


Results of Operations
---------------------

For the third quarter of 1999, the Company's sales of $28,146,000 were down
$2,865,000 or 9 percent from 1998 third quarter sales of $31,011,000. Third
quarter year-to-date sales of $87,353,000 were behind last year's first nine
months sales of $93,434,000 by 7 percent. Both the third quarter and first
nine-month's sales results reflected softness across all of the company's
products. HVAC product sales continue to reflect a slight downtrend as industry
conditions continue to be soft coupled with increased pricing competition.
Lingering effects from financial problems in the Pacific Rim countries adversely
impacted Export business, and reduced orders for custom OEM filters continued to
erode sales in our OEM business. In addition, weaker Canadian and UK foreign
currency exchange rates, as compared to last year's level, reduced comparable
reported third quarter and first nine months sales for 1999 by approximately
$190,000 and $350,000, respectively.


<PAGE>

Foreign subsidiaries third quarter 1999 sales declined from the same period last
year by 10 percent and first nine months sales declined from last year's first
nine month sales by 6 percent in part due to weak foreign currency exchange
rates as compared to the prior year and weak economic conditions in the United
Kingdom that have unfavorably impacted sales of our UK subsidiary. In terms of
products, decreases in Gas Turbine sales accounted for a majority of the sales
decline in both the third quarter and first nine month periods.

Third quarter net income totaled $1,995,000, up $211,000 or 12 percent from
$1,784,000 in the third quarter last year. First nine month 1999 net income
declined to $5,329,000, representing a decrease of 4 percent from last year's
first nine months net income of $5,578,000. The current quarter included net
nonrecurring income of $678,000 from the sale of surplus real estate in El
Segundo, California, partially offset by a charge related to long-term lease
obligations and a retirement benefit expense related to an employment agreement
with the Company's Chairman of the Board. Excluding the net nonrecurring net
income of $678,000, third quarter and the first nine month's net income
decreased by 26 and 17 percent, respectively from the same periods a year ago.

Foreign subsidiaries net income for the third quarter and first nine month
periods of 1999 decreased compared to the same periods a year ago by 32 and 14
percent, respectively. The decreases are primarily related to the drop in sales
volumes.

Gross margin as a percent of sales during the third quarter decreased to 24.6
percent as compared to 25.5 percent during the third quarter of last year. The
decrease in gross margin is primarily related to fixed manufacturing cost
included in cost of sales increasing as a percentage of sales as third quarter
sales volume declined from the prior year.

Selling, general and administrative expenses as a percentage of sales during the
quarter increased to 17.5 percent compared to 16.5 percent during the third
quarter of 1998. Third quarter spending totaled $4,925,000 compared to
$5,112,000 for the same period last year, reflecting nominal decreases in
foreign selling and marketing related expenses.

Changes in both interest expense and interest income were nominal and generally
reflect the Company's lower average cash position as compared to last year's
ending third quarter average cash balance.

The effective tax rate during the third quarter dropped to 36.3 percent from 37
percent last year due to recognizing certain deferred tax benefits associated
with the Company's Foreign Sales Corporation (FSC). Tax rates are expected to
remain between 35 and 37 percent for both the fourth quarter and the full year
period of 1999.


<PAGE>

On April 3, 1998, the AICPA issued Statement of Position 98-5, "Reporting on the
Costs of Start-Up Activities". Application of this statement will have no
significant impact to the Company's financial position or operating results.

YEAR 2000

The Company's internal business systems including all manufacturing processes
are Year 2000(Y2K) compliant. All external systems of major customers and
suppliers areY2K compliant. The Company does not anticipate material or
significant external risks or exposures associated with year 2000 issues.
Contingency plans that address a reasonably likely worst case Y2K scenario
including those related with a Company supply chain or critical service
interruption are approximately 50 percent complete and are expected to be
finalized before November 30, 1999. These plans address key systems and third
parties that present potential significant risk and analyze the strategies and
resources necessary to restore operations in the unlikely event that an
interruption does occur. The plans also outline recovery programs detailing the
necessary participants needed to restore operations.

The Company's costs for Y2K efforts was approximately $250,000. This cost does
not include internal costs incurred for the Y2K efforts that were principally
related to payroll costs for information systems group employees. Collectively,
incurred Y2K remediation costs are not material to the Company's business,
operations or financial condition. Future unforeseen cost associated with Y2K
issues are uncertain and cannot be assessed in terms of their impact to the
Company's balance sheet, operations or financial condition, although based upon
current information such costs are not anticipated to be material.


<PAGE>



PART II. - OTHER INFORMATION


Item 6.a.         Exhibits

The following are being filed with this Quarterly Report on Form 10-Q.

- Schedule II              Valuation and Qualifying Accounts

- Exhibit 27               Financial data schedule.



                               -------------------

     Copies of Exhibits are available, on prepayment of 15 cents per page, by
     writing to the Secretary of the Company at the address set forth on the
     cover page of this Form 10-Q.


<PAGE>





                           PART II - OTHER INFORMATION

                                   (Continued)

                                   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 hereunto duly authorized.



                                            FARR COMPANY
                                            (Registrant)


November 15, 1999                           /s/  Stephen E. Pegg

                                            Stephen E. Pegg
                                            Senior Vice President and
                                            Chief Financial Officer



<PAGE>


<TABLE>
                                   Schedule II

                          FARR COMPANY AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS

                  YEARS ENDED DECEMBER 31, 1998, 1997 and 1996

<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                                                          Additions
                                                     Balance at     Charged to   Charged to   Deductions    Balance at
                                                     beginning       cost and      other      charged to      end of
                   Description                       of period        expense     accounts     allowance      period
-------------------------------------------------------------------------------------------------------------------------

<S>                                                      <C>            <C>         <C>           <C>           <C>
For the year ended December 31, 1998
    Allowance for doubtful accounts ..............       254            174         (3)           55            370

For the year ended December 31, 1997
    Allowance for doubtful accounts ..............       297            206           0          249            254

For the year ended December 31, 1996
    Allowance for doubtful accounts ..............       214            108           1           26            297


</TABLE>