<PAGE>   1

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

                                    FORM 10-Q

(Mark One)

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

                  For the quarterly period ended June 30, 1998

                                       or

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

           For the transition period from ____________ to ____________

Commission file number: 0-26580

                        AMERICAN COIN MERCHANDISING, INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                   84-1093721
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

                  5660 CENTRAL AVENUE, BOULDER, COLORADO 80301
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (303) 444-2559
                         (Registrant's telephone number)

     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 proceeding 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
                                                                      ---    ---

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
                                                           OUTSTANDING AT
                          CLASS                            AUGUST 1, 1998
                          -----                            --------------
             <S>                                           <C>             
              Common Stock, $0.01 par value               6,470,403 shares
</TABLE>



<PAGE>   2



                        AMERICAN COIN MERCHANDISING, INC.

                                      INDEX


<TABLE>
<CAPTION>
PART 1        FINANCIAL INFORMATION.                                                                         PAGE
<S>                                                                                                        <C>
              Item 1.   Financial Statements

                             Condensed Balance Sheets
                               June 30, 1998 and December 31, 1997..........................................  3

                             Condensed Statements of Earnings for the Three Months and
                               Six Months Ended June 30, 1998 and 1997......................................  4

                             Condensed Statement of Stockholders' Equity for the
                               Six Months Ended June 30, 1998...............................................  5

                             Condensed Statements of Cash Flows for the
                               Six Months Ended June 30, 1998 and 1997......................................  6

                             Notes to Condensed Financial Statements........................................  7

              Item 2.   Management's Discussion and Analysis of Financial Condition
                             and Results of Operations......................................................  8

PART II       OTHER INFORMATION.

              Item 4.   Submission of Matters to a Vote of Security Holders.................................  11

              Item 5.   Other Information...................................................................  11

              Item 6.   Exhibits and Reports on Form 8-K....................................................  11

</TABLE>




                                       2
<PAGE>   3



                        AMERICAN COIN MERCHANDISING, INC.
                            CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                                    JUNE 30,        DECEMBER 31,
                                                                                                     1998              1997
                                                                                                  ------------      ------------
<S>                                                                                               <C>               <C>         
                                                        ASSETS
Current assets:
   Cash and cash equivalents ................................................................     $  3,690,000      $  1,929,000
   Trade accounts and other receivables .....................................................          660,000           979,000
   Inventories ..............................................................................        8,704,000         5,625,000
   Prepaid expenses and other assets ........................................................        1,139,000           365,000
                                                                                                  ------------      ------------
       Total current assets .................................................................       14,193,000         8,898,000
                                                                                                  ------------      ------------

Property and equipment, at cost:
   Vending machines .........................................................................       35,824,000        22,829,000
   Vehicles .................................................................................        6,218,000         4,652,000
   Office equipment, furniture and fixtures .................................................        1,994,000         1,242,000
                                                                                                  ------------      ------------
                                                                                                    44,036,000        28,723,000
   Less accumulated depreciation ............................................................       (9,909,000)       (7,557,000)
                                                                                                  ------------      ------------
       Property and equipment, net ..........................................................       34,127,000        21,166,000
                                                                                                  ------------      ------------

Placement fees, net of accumulated amortization of $254,000 in 1998 and $155,000 in 1997 ....          459,000           281,000
Cost in excess of assets acquired and other intangible assets, net of accumulated
   amortization of $664,000 in 1998 and $393,000 in 1997 ....................................       39,343,000         6,682,000
Other assets ................................................................................          691,000            50,000
                                                                                                  ------------      ------------

       Total assets .........................................................................     $ 88,813,000      $ 37,077,000
                                                                                                  ============      ============

                                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current portion of long-term debt ........................................................     $  1,586,000      $    945,000
   Current portion of notes payable to Control Group ........................................          337,000           674,000
   Income taxes payable .....................................................................          384,000           317,000
   Accounts payable .........................................................................        6,777,000         1,680,000
   Accrued commissions ......................................................................        1,221,000         1,001,000
   Other accrued expenses ...................................................................          648,000           655,000
                                                                                                  ------------      ------------
       Total current liabilities ............................................................       10,953,000         5,272,000

Long-term debt, net of current portion ......................................................       45,181,000         1,292,000
Deferred income taxes .......................................................................          421,000           421,000
                                                                                                  ------------      ------------
       Total liabilities ....................................................................       56,555,000         6,985,000
                                                                                                  ------------      ------------

Stockholders' equity:
   Preferred stock, $.10 par value (Authorized 500,000 shares; none issued) .................               --                --
   Common stock, $.01 par value (Authorized 20,000,000 shares; issued 6,468,903
       in 1998 and 6,452,904 in 1997) .......................................................           65,000            65,000
   Additional paid-in-capital ...............................................................       21,949,000        22,352,000
   Unearned stock option compensation .......................................................          (10,000)          (21,000)
   Retained earnings ........................................................................       10,254,000         7,696,000
                                                                                                  ------------      ------------
       Total stockholders' equity ...........................................................       32,258,000        30,092,000
                                                                                                  ------------      ------------

       Total liabilities and stockholders' equity ...........................................     $ 88,813,000      $ 37,077,000
                                                                                                  ============      ============
</TABLE>


            See accompanying notes to condensed financial statements.


                                       3
<PAGE>   4


                        AMERICAN COIN MERCHANDISING, INC.
                        CONDENSED STATEMENTS OF EARNINGS


<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED              SIX MONTHS ENDED
                                                                      JUNE 30,                       JUNE 30,
                                                               1998            1997            1998            1997
                                                            -----------     -----------     -----------     -----------
<S>                                                         <C>             <C>             <C>             <C>        
Revenue:
   Vending ............................................     $20,094,000     $11,892,000     $37,709,000     $22,648,000
   Franchise and other ................................         868,000       1,898,000       2,014,000       3,499,000
                                                            -----------     -----------     -----------     -----------
       Total revenue ..................................      20,962,000      13,790,000      39,723,000      26,147,000
                                                            -----------     -----------     -----------     -----------

Cost of revenue:
   Vending ............................................      14,055,000       8,443,000      26,669,000      16,042,000
   Franchise and other ................................         572,000       1,357,000       1,252,000       2,309,000
                                                            -----------     -----------     -----------     -----------
       Total cost of revenue ..........................      14,627,000       9,800,000      27,921,000      18,351,000
                                                            -----------     -----------     -----------     -----------

       Gross profit ...................................       6,335,000       3,990,000      11,802,000       7,796,000

General and administrative expenses ...................       3,862,000       2,429,000       7,388,000       4,725,000
                                                            -----------     -----------     -----------     -----------

       Operating earnings .............................       2,473,000       1,561,000       4,414,000       3,071,000

Interest expense, related parties .....................           8,000          20,000          19,000          45,000
Interest expense, other, net ..........................         353,000         136,000         460,000         222,000
                                                            -----------     -----------     -----------     -----------
       Earnings before income taxes ...................       2,112,000       1,405,000       3,935,000       2,804,000
Provision for income taxes ............................         739,000         521,000       1,377,000       1,039,000
                                                            -----------     -----------     -----------     -----------
       Net earnings ...................................     $ 1,373,000     $   884,000     $ 2,558,000     $ 1,765,000
                                                            ===========     ===========     ===========     ===========

       Basic earnings per share of common stock .......     $      0.21     $      0.16     $      0.40     $      0.33
       Diluted earnings per share of common stock .....     $      0.21     $      0.16     $      0.38     $      0.33
       Basic weighted average common shares ...........       6,469,000       5,394,000       6,463,000       5,323,000
       Diluted weighted average common shares .........       6,678,000       5,452,000       6,664,000       5,350,000
</TABLE>






            See accompanying notes to condensed financial statements.


                                       4
<PAGE>   5


                        AMERICAN COIN MERCHANDISING, INC.
                   CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                  UNEARNED
                                                                                   STOCK                              TOTAL
                                                               ADDITIONAL          OPTION                             STOCK-
                                                COMMON           PAID-IN           COMPEN-           RETAINED         HOLDERS'
                                                 STOCK           CAPITAL           SATION            EARNINGS          EQUITY
                                              ------------     ------------      ------------      ------------     ------------
<S>                                           <C>              <C>              <C>               <C>              <C>         
DECEMBER 31, 1997 .........................   $     65,000     $ 22,352,000      $    (21,000)     $  7,696,000     $ 30,092,000
   Acquisition of 70,000 warrants to
     purchase common stock ................             --         (492,000)               --                --         (492,000)
   Amortization of deferred
     compensation .........................             --               --            10,000                --           10,000
   Termination of employee stock
     options ..............................             --           (1,000)            1,000                --               --
   Exercise of employee stock
     options ..............................             --           90,000                --                --           90,000
   Net earnings ...........................             --               --                --         2,558,000        2,558,000
                                              ------------     ------------      ------------      ------------     ------------

JUNE 30, 1998 .............................   $     65,000     $ 21,949,000      $    (10,000)     $ 10,254,000     $ 32,258,000
                                              ============     ============      ============      ============     ============
</TABLE>




            See accompanying notes to condensed financial statements.



                                       5
<PAGE>   6





                        AMERICAN COIN MERCHANDISING, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                  SIX MONTHS ENDED
                                                                                     JUNE 30,
                                                                               1998               1997
                                                                               ----               ----
<S>                                                                        <C>               <C>         
Operating activities:
   Net earnings ......................................................     $  2,558,000      $  1,765,000
   Adjustments to reconcile net earnings to net cash provided
     by operating activities:
       Depreciation and amortization .................................        2,791,000         1,359,000
       Compensation expense related to stock options .................           10,000            11,000
       Changes in operating assets and liabilities:
           Trade accounts and other receivables ......................          319,000           (53,000)
           Inventories ...............................................       (1,144,000)         (230,000)
           Prepaid expenses and other assets .........................       (1,359,000)         (173,000)
           Income taxes payable ......................................           67,000           (52,000)
           Accounts payable and accrued expenses .....................        5,310,000         1,505,000
                                                                           ------------      ------------
         Net cash provided by operating activities ...................        8,552,000         4,132,000
                                                                           ------------      ------------

Investing activities:
   Acquisitions of property and equipment, net .......................      (10,668,000)       (5,570,000)
   Acquisition of franchisees and others .............................      (36,147,000)               --
   Placement fees ....................................................         (267,000)         (215,000)
                                                                           ------------      ------------
         Net cash used in investing activities .......................      (47,082,000)       (5,785,000)
                                                                           ------------      ------------

Financing activities:
   Net borrowings on credit facility .................................       41,795,000         2,248,000
   Principal payments on long-term debt ..............................         (765,000)         (217,000)
   Principal payments on notes payable to Control Group ..............         (337,000)         (338,000)
   Acquisition of warrants ...........................................         (492,000)               --
   Exercise of employee stock options ................................           90,000            15,000
                                                                           ------------      ------------
         Net cash provided by financing activities ...................       40,291,000         1,708,000
                                                                           ------------      ------------

         Net increase in cash and cash equivalents ...................        1,761,000            55,000
Cash and cash equivalents at beginning of period .....................        1,929,000           771,000
                                                                           ------------      ------------

Cash and cash equivalents at end of period ...........................     $  3,690,000      $    826,000
                                                                           ============      ============
</TABLE>




            See accompanying notes to condensed financial statements.


                                       6
<PAGE>   7

                        AMERICAN COIN MERCHANDISING, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


1.   DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

     American Coin Merchandising, Inc., d/b/a Sugarloaf Creations, Inc. (the
"Company") and its franchisees own and operate coin-operated skill-crane
machines ("Shoppes") that dispense stuffed animals, plush toys, watches, jewelry
and other items. The Company's Shoppes are placed in supermarkets, mass
merchandisers, bowling centers, bingo halls, bars, restaurants, warehouse clubs
and similar locations. The Company also operates bulk vending equipment, kiddie
rides and video equipment that are located primarily in supermarkets and mass
merchandisers. At June 30, 1998, the Company had 40 field offices operating in
40 states and there were 17 Company franchises in operation. The Company sells
both skill-crane machines and related product vended in the machines to its
franchisees and collects continuing royalties ranging from 2% to 5% of the
franchisees' gross machine revenue.

     The accompanying condensed financial statements have been prepared, 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. Certain amounts for prior periods have been reclassified to conform
to the June 30, 1998 presentation. Although the Company believes that the
disclosures are adequate to make the information presented not misleading, it is
suggested that these condensed financial statements be read in connection with
the financial statements and notes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1997.

     In the opinion of the Company, the accompanying condensed financial
statements include all adjustments (consisting of normal recurring accruals and
adjustments) required to present fairly the Company's financial position at June
30, 1998 and December 31, 1997, and the results of its operations for each of
the three month and six month periods ended June 30, 1998 and 1997, and the cash
flows for each of the six month periods then ended.

     The operating results for the six months ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998.

2.   SUPPLEMENTAL DISCLOURES OF CASH FLOW INFORMATION

     A schedule of supplemental cash flow information follows:

<TABLE>
<CAPTION>
                                                                                   SIX MONTHS ENDED
                                                                                        JUNE 30,
                                                                                  1998           1997
                                                                                  ----           ----
<S>                                                                             <C>            <C>       
     Cash paid during the period:
       Interest paid ......................................................     $  335,000     $  282,000
       Income taxes paid ..................................................      1,309,000      1,092,000
     Significant noncash investing and financing activity:
       Notes payable issued for acquisition of franchisees and others .....      3,500,000             --
</TABLE>

3.   EARNINGS PER SHARE

     Basic earnings and diluted earnings per share are computed by dividing
earnings available to common stockholders by the weighted average number of
common shares outstanding during the period and by all dilutive potential common
shares outstanding during the period, respectively. The weighted average number
of shares used in the computation of basic earnings per share were 6,468,760 and
5,393,763 for the three months ended June 30, 1998 and 1997 and 6,463,025 and
5,322,675 for the six months ended June 30, 1998 and 1997, respectively. The
weighted average number of shares used in the computation of diluted earnings
per share were 6,678,106 and 5,451,811 for the three months ended June 30, 1998
and 1997 and 6,663,652 and 5,349,914 for the six months ended June 30, 1998 and
1997, respectively.

4.    INCOME TAXES

     Quarterly income taxes are computed using the anticipated effective tax
rate for the year.




                                       7
<PAGE>   8



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

Except for the historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed in this section and the Company's Form 10-K for the
year ended December 31, 1997.

GENERAL

     Substantially all of the Company's revenue and gross profit is derived from
Company-owned Shoppes. The Company's revenue and gross profit in a particular
period is directly related to the number of Shoppes in operation during the
period. Management believes that the Company's business is somewhat seasonal,
with average revenue per machine per week greater during the Easter and
Christmas periods. Vending revenue represents cash receipts from customers using
vending machines and is recognized when collected. The cost of vending revenue
is comprised of the cost of vended product, location commissions, depreciation
and direct service cost.

     Franchise and other revenue represents the Company's percentage of gross
vending revenue generated by Shoppes owned and operated by franchisees, as well
as product sold to franchisees. Product sold to the franchisees consists of
goods to vend in Shoppes. Equipment sales to the franchisees have been done on a
pass-through basis from the Company's main suppliers. The Company anticipates
that franchise and other revenue will decline in the future as a result of the
Company's acquisition of franchises.

REVENUE

     Total revenue for the first six months of 1998 increased 51.9% to $39.7
million from $26.1 million for the same period in 1997. For the second quarter
of 1998, total revenue increased 52.0% to $21.0 million as compared to $13.8
million for the same period in 1997.

     Vending revenue increased $15.1 million or 66.5% for the first six months
of 1998 to $37.7 million from $22.6 million for the comparable period in 1997 as
a result of a 75.5% increase in the average number of Shoppes in place during
the first six months of 1998 compared to the average number in place during the
same period in 1997. For the second quarter of 1998, vending revenue increased
$8.2 million or 69.0% to $20.1 million as compared to the same period in 1997.
The average number of machines in place during the second quarter of 1998
increased by 76.3% as compared to the second quarter of 1997. The average number
of Shoppes in place during the three months and six months ended June 30, 1998
includes the acquisition of the operating assets (including approximately 1,380
Shoppes) of a significant franchisee that occurred on June 12, 1998.

     The Company has recently experienced substantial growth, however, there can
be no assurance that the Company will continue to grow at historical rates or at
all. The Company's ability to generate increased revenue and achieve higher
levels of profitability will depend upon its ability and the ability of its
franchisees to place additional Shoppes as well as to maintain or increase the
average financial performance of the Shoppes. The Company's ability to place
additional Shoppes depends on a number of factors beyond the Company's control,
including general business and economic conditions. Installation of additional
Shoppes will also depend, in part, upon the Company's ability to secure
additional national and regional supermarket, mass merchandiser and restaurant
chain accounts and to obtain approval to place additional Shoppes in individual
locations of such accounts. The Company, its franchisees and their suppliers
also may be unable to place and adequately service additional Shoppes.

     The Company has recently completed a number of acquisitions and intends to
continue to acquire other businesses in the future. Acquisitions have placed,
and are likely to continue to place, a significant strain on the Company's
managerial, operating, financial and other resources. The Company's future
performance will depend, in part, upon its ability to integrate its acquisitions
effectively, which will require that the Company implement additional management
information systems capabilities, further develop its operating, administrative
and financial and accounting systems and controls, improve coordination among
accounting, finance, marketing and operations, and hire and train additional
personnel. Failure by the Company to develop adequate operational and control
systems or to attract and retain additional qualified management, financial,
sales and marketing and customer care personnel could materially adversely
affect the Company's ability to integrate the businesses it has acquired and
continues to acquire. While the Company anticipates that it will recognize
various economies and efficiencies of scale as a result of its acquisitions and
the integration of the businesses it has acquired, the process of consolidating
the businesses and implementing integrations, even if successful, may take a
significant period of time, will place a significant strain on the Company's
resources and could subject the Company to additional expenses during the
integration process. Furthermore, the Company's performance will depend on the
internal growth generated through acquired operations. As a result, there can be
no assurance that the Company will be able to integrate the businesses it has
acquired successfully or in a timely manner in


                                       8
<PAGE>   9


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

accordance with its strategic objectives. Failure to effectively and efficiently
integrate acquired businesses could have a material adverse effect on the
Company's business, financial condition and results of operations.

     Franchise and other revenue decreased $1.5 million or 42.4% to $2.0 million
for the first six months of 1998 as compared to the same period in 1997 due to
the acquisition of franchises by the Company and a reduction in the number of
machines sold to the franchisees. For the second quarter of 1998, franchise and
other revenue decreased $1.0 million or 54.3% to $868,000 compared to the same
period in 1997. The decrease results from the acquisition of franchises by the
Company and a reduction in the number of machines sold to the franchisees.

COST OF REVENUE AND GROSS PROFIT

     The cost of vending operations for the first six months of 1998 increased
$10.6 million or 66.2% to $26.7 million from $16.0 million for the comparable
period in 1997. The vending operation's contribution to gross profit for the
first six months of 1998 increased to $11.0 million, which represents a 67.1%
increase over gross profit from vending operations realized in the same period
in 1997. Vending gross profit realized during the first six months of 1998 was
29.3% of vending revenue, as compared to 29.2% for the same period in 1997. For
the second quarter of 1998, the cost of vending increased $5.6 million or 66.5%
to $14.1 million from $8.4 million for the comparable period in 1997. Vending
gross profit realized during the second quarter of 1998 was $6.0 million or
30.1% of vending revenue as compared to $3.4 million or 29% for the second
quarter of 1997.

     Substantially all the Company's plush toys and other products dispensed
from the Shoppes are produced by foreign manufacturers. A majority are purchased
directly by the Company from manufacturers in the People's Republic of China
("China"). The Company purchases its other products indirectly from vendors who
obtain a significant percentage of such products from foreign manufacturers. As
a result, the Company is subject to changes in governmental policies, the
imposition of tariffs, import and export controls, transportation delays and
interruptions, political and economic disruptions and labor strikes which could
disrupt the supply of products from such manufacturers. Among other things, the
loss of China's "most favored nation" status under U.S. tariff laws could result
in a substantial increase in the import duty of certain products manufactured in
China, which could result in substantially increased costs for certain products
purchased by the Company which could have a material adverse effect on the
Company's financial condition and results of operations.

     Gross profit on franchise and other revenue for the first six months of
1998 decreased to $762,000 or 37.8% of franchise and other revenue, which is 3.8
percentage points higher than the gross margin achieved for the same period in
1997. For the second quarter of 1998, gross profit on franchise and other
revenue decreased to $296,000 or 34.1% of franchise and other revenue, as
compared to $541,000 or 28.5% of franchise and other revenue for the second
quarter of 1997. The increase in gross profit resulted primarily from a
reduction in equipment sales to franchisees.

OPERATING EXPENSE

     General and administrative expenses for the first six months of 1998
increased $2.7 million to $7.4 million or 18.6% of total revenue, as compared to
$4.7 million or 18.1% of total revenue for the comparable period in 1997. The
increase in general and administrative expense results primarily from the
additional operating and satellite offices opened by the Company during the past
year.

OPERATING EARNINGS

     Operating earnings for the first six months of 1998 increased 43.7% to $4.4
million, or 11.1% of total revenue, as compared to $3.1 million, or 11.7% of
total revenue for the comparable period in 1997. The increase in operating
earnings results primarily from the 75.5% increase in the average number of
Shoppes in place during the first six months of 1998 compared to the average
number in place for the comparable period in 1997.

NON OPERATING INCOME (EXPENSE)

     Interest expense for the first six months of 1998 increased $212,000 to
$479,000 as compared to the same period in 1997. Interest expense for the second
quarter of 1998 increased $205,000 to $361,000 primarily as a result of the
increase in debt resulting from the acquisition of the operating assets of a
significant franchisee. The Company's interest expense is directly related to
its level of borrowings and changes in the underlying interest rates.

NET EARNINGS AND NET EARNINGS PER SHARE

     Net earnings for the first six months of 1998 increased 44.9% to $2.6
million, or 6.4% of total revenue, as compared to net earnings of $1.8 million
for the comparable period in 1997. Diluted earnings per share for the first six




                                       9
<PAGE>   10

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

months of 1998 increased 15.2% to $0.38, as compared to $0.33 for the comparable
period in 1997. Diluted weighted average common shares for the first six months
of 1998 increased 24.6% to 6,663,652, as compared to 5,349,914 for the
comparable period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of liquidity and capital resources
historically have been cash flows from operations, borrowings under the
Company's bank credit facilities and issuances of its common stock. These
sources of cash flows have been offset by cash used for investment in
skill-crane machines and other amusement devices, the acquisition of franchisees
and other amusement vending businesses and payment of long-term borrowings.

     Net cash provided by operating activities was $8.6 million and $4.1 million
for the six months ended June 30, 1998 and 1997, respectively. The Company
anticipates that cash will continue to be provided by operations as additional
skill-crane machines and other amusement devices are placed in service. Cash
required in the future is expected to be funded by existing cash and cash
provided by operations, borrowings under the Company's credit facility or the
sale of equity securities.

     Net cash used in investing activities was $47.1 million and $5.8 million
for the six months ended June 30, 1998 and 1997, respectively. Capital
expenditures for the six months ended June 30, 1998 and 1997 amounted to $10.7
million and $5.6 million, respectively, of which $8.7 million and $4.1 million
was represented by the acquisition of skill-crane and other machines. The
acquisition of franchisees and other amusement vending businesses in 1998 used
$36.1 million.

     Net cash provided by financing activities was $40.3 million and $1.7
million for the six months ended June 30, 1998 and 1997, respectively. Financing
activities consist primarily of advances and repayments on the Company's credit
facility and other debt obligations and in 1998 the repurchase of warrants.

     Under its current reducing revolving loan agreement (the "Credit
Facility"), the Company may borrow up to $50.0 million at the bank's prime
interest rate (8.5% at June 30, 1998) or, at the Company's option, an interest
rate based on the current LIBOR rate. The Credit Facility is available through
July 13, 2001 and at June 30, 1998 there was a principal amount of approximately
$41.8 million outstanding. The Credit Facility provides that certain financial
ratios be met and places restrictions on, among other things, the occurrence of
additional debt financing and the payment of dividends. The Company was in
compliance with such financial ratios and restrictions at June 30, 1998.

     The Company may use a portion of its capital resources to effect
acquisitions. Because the Company cannot predict the timing or nature of
acquisition opportunities, or the availability of acquisition financing, the
Company cannot determine the extent to which capital resources may be used.
Company management believes the Company's financial condition is strong and that
funds generated from operations and borrowings available under its Credit
Facility and the Company's ability to negotiate additional and enhanced credit
agreements and to sell additional equity securities will be sufficient to meet
the Company's foreseeable operating and capital expenditure needs.

YEAR 2000 COMPLIANCE

     Certain management information systems use two-digit data fields which,
recognize dates using the assumption that the first two digits are "19" (i.e.,
the number 98 is recognized as the year 1998). The Company has conducted a
comprehensive review of its computer systems to identify systems that are not
year 2000 compliant and has developed a plan to resolve all year 2000 issues.
The Company also is in the process of verifying whether its major suppliers,
service providers and financial institutions are year 2000 compliant. The
Company will make any necessary investments in its software and hardware systems
and applications to ensure that they are year 2000 compliant. The financial
impact to the Company is not anticipated to be material in any single year or
over the life of the year 2000 project.




                                       10
<PAGE>   11




                           PART II. OTHER INFORMATION.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of Stockholders was held on May 6, 1998, at which the
stockholders elected seven directors to each serve until the next annual meeting
of stockholders and until their successor is elected and has qualified or until
such director's death, resignation or removal, and the ratification of the
selection of KPMG Peat Marwick LLP as independent auditors of the Company for
its fiscal year ending December 31, 1998. Votes were cast as follows:

<TABLE>
<CAPTION>
                                                              Votes Against
                                              Votes For        Or Withheld     Votes Abstained      Broker Non-Votes
                                              ---------        -----------     ---------------      ----------------
<S>                                           <C>                  <C>          <C>                 <C>                  
Election of Directors:
   Jerome M. Lapin.........................   5,697,691            6,673        Not Applicable       Not Applicable
   Randall J. Fagundo......................   5,697,691            6,673        Not Applicable       Not Applicable
   Abbe M. Stutsman........................   5,697,691            6,673        Not Applicable       Not Applicable
   Richard D. Jones........................   5,697,691            6,673        Not Applicable       Not Applicable
   J. Gregory Theisen......................   5,636,812           67,552        Not Applicable       Not Applicable
   Jim D. Baldwin..........................   5,663,612           40,752        Not Applicable       Not Applicable
   John A. Sullivan........................   5,697,491            6,873        Not Applicable       Not Applicable

Ratification of KPMG Peat Marwick LLP as
independent auditors for the fiscal year
ending December 31, 1998...................   5,697,235            4,650            2,479                 None
</TABLE>


ITEM 5.    OTHER INFORMATION

           Notice of Deadlines for Stockholder Proposals for 1999 Proxy
           Statement.

           The deadline for submitting a stockholder proposal for inclusion in
           the Company's proxy statement and form of proxy for the Company's
           1999 annual meeting of stockholders pursuant to Rule 14a-8,
           "Shareholder Proposals," of the Securities and Exchange Commission's
           Regulation 14A and the date after which notice of a stockholder
           proposal submitted outside the procedures of Rule 14a-8 is considered
           untimely is November 30, 1998.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

               (a)  Exhibits.

                    11.1      Statement re: Computation of Per Share Earnings

                    27        Financial Data Schedule

               (b)  Reports on Form 8-K.

                    A report on Form 8-K was filed with the SEC on June 2, 1998
                    reporting the Company's Purchase of the assets of each of
                    Suncoast Toys, Inc., Oregon Coin Company and NW Toys Co.




                                       11
<PAGE>   12



                        AMERICAN COIN MERCHANDISING, INC.
                                   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.

                                    AMERICAN COIN MERCHANDISING, INC.

      August 13, 1998           By:  /s/ Jerome M. Lapin
     -----------------              ------------------------------------------
            Date                        Jerome M. Lapin
                                        President and Chief Executive Officer

      August 13, 1998           By:  /s/ W. John Cash
     -----------------              ------------------------------------------
            Date                        W. John Cash
                                        Vice President, Chief Financial Officer




                                       12
<PAGE>   13



                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
          Exhibit No.                              Description                               Page
          -----------                              -----------                               ----
<S>                     <C>                                                                 <C>
            11.1        Statement re: Computation of Per Share Earnings....................   14

            27          Financial Data Schedule............................................   15

</TABLE>