<PAGE>    1
                                  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 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 333-16453

                              SHOP VAC CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          NEW JERSEY                                             13-5609081
 (STATE OR OTHER JURISDICTION                                 (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NO.)

                     2323 REACH ROAD, WILLIAMSPORT, PA 17701
                                 (717) 326-0502
          (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)


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,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes [x] No [ ]

Common  Shares,  No Par Value,  Outstanding  at June 30,  1998 -- 6,500  Class A
voting and 650,000 Class B non-voting.


<PAGE>    2
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands)

<TABLE>
<CAPTION>
====================================================================================
Assets                                          December 31, 1997     June 30, 1998
                                                                       (Unaudited)
------------------------------------------------------------------------------------
<S>                                             <C>                   <C>     
Current assets:
   Cash and cash equivalents ................        $ 34,450            $ 34,731
   Receivables, less allowance for doubtful
      accounts of $1,946 in 1997 and $1,351
      in 1998 ...............................          25,265              17,779
    Inventories (note 2) ....................          22,508              17,193
    Prepaid expenses and other current assets           2,636               1,249
    Deferred income taxes ...................           3,502               4,762
------------------------------------------------------------------------------------
Total current assets ........................          88,361              75,714
    Property, plant, and equipment, net .....          35,603              29,591
    Deferred income taxes ...................          15,846              13,305
    Other assets ............................           5,588               5,111
------------------------------------------------------------------------------------
Total assets ................................        $145,398            $123,721
====================================================================================
</TABLE>
























                                                                     (Continued)

                                        1

<PAGE>    3
SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands)

<TABLE>
<CAPTION>
================================================================================================
Liabilities and Stockholders' Equity (Deficit)             December 31, 1997      June 30, 1998
                                                                                   (Unaudited)
------------------------------------------------------------------------------------------------
<S>                                                        <C>                    <C>      
Current liabilities:
   Current portion of long-term debt ....................       $   3,175           $      30
    Accounts payable ....................................          19,450              11,503
    Accrued expenses ....................................          17,701              11,300
------------------------------------------------------------------------------------------------
Total current liabilities ...............................          40,326              22,833
Long-term debt ..........................................         102,492             100,024
Other liabilities .......................................          13,652              13,462

Stockholders' equity (deficit):
    Common stock, Class A voting, no par,
       20,000 shares  authorized,  6,500 shares
       issued.  Class B non-voting,  no par,
       1,000,000 shares authorized, 650,000
       shares issued ....................................              85                  85
    Paid in capital .....................................             110                 110
    Accumulated deficit .................................         (13,649)            (12,275)
    Other comprehensive income - foreign currency
       translation adjustment ...........................           2,382                (518)
------------------------------------------------------------------------------------------------
Total stockholders' equity (deficit) ....................       $ (11,072)          $ (12,598)
------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity (deficit).....       $ 145,398           $ 123,721
================================================================================================
</TABLE>


See accompanying notes to condensed consolidated financial statements.

















                                                                     (Continued)

                                        2

<PAGE>    4
SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(dollars in thousands)

<TABLE>
<CAPTION>
=============================================================================================================================
                                                                Three months ended                    Six months ended
                                                                     June 30,                             June 30,
-----------------------------------------------------------------------------------------------------------------------------
                                                             1997               1998               1997               1998
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                <C>               <C>                 <C>      
Net sales.........................................        $ 49,727           $ 47,884          $  99,665           $  96,561

Cost of sales.....................................          35,484             32,760             72,192              67,411
-----------------------------------------------------------------------------------------------------------------------------
Gross profit......................................          14,243             15,124             27,473              29,150
Selling, general and administrative expense.......           8,586             10,162             17,671              20,010
Loss on sale of European operations...............           -----              1,540              -----               1,540
-----------------------------------------------------------------------------------------------------------------------------
Income from operations............................           5,657              3,422              9,802               7,600

Interest expense, net.............................           2,996              2,623              5,818               5,213
Other expense (income), net.......................             (34)                39                (65)                 23
-----------------------------------------------------------------------------------------------------------------------------
Income before income taxes........................           2,695                760              4,049               2,364

Income tax expense................................               9                161                152                 990
-----------------------------------------------------------------------------------------------------------------------------
Net income .......................................      $    2,686        $       599         $    3,897           $   1,374
=============================================================================================================================
</TABLE>

See accompanying notes to condensed consolidated financial statements.



















                                                                     (Continued)

                                        3

<PAGE>    5
SHOP VAC CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

<TABLE>
<CAPTION>
===============================================================================================
                                                                         Six months ended
                                                                             June 30,
-----------------------------------------------------------------------------------------------
                                                                      1997               1998
-----------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>       
Cash flows from operating activities:
    Net income .............................................        $ 3,897         $    1,374
    Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation and amortization......................           3,003              2,728
        Amortization included in interest expense..........             292                292
        Loss on sale of European operations................           -----              1,540
        Restructuring charges..............................            (918)               (46)
        Changes in assets and liabilities:
           Accounts and notes receivable...................           1,745                457
           Inventories.....................................          (3,613)            (2,415)
           Prepaid expenses and other current assets.......            (717)              (230)
           Other assets....................................            (100)               (19)
           Deferred income taxes...........................           -----                563
           Accounts payable and accrued expenses...........           4,563             (4,093)
           Other liabilities...............................           1,639                750
-----------------------------------------------------------------------------------------------
Net cash provided by continuing operations.................           9,791                901
Net cash provided (used) by discontinued operations........           1,619               (588)
-----------------------------------------------------------------------------------------------
Net cash provided by operating activities..................          11,410                313
-----------------------------------------------------------------------------------------------
Cash flows from investing activities:
        Proceeds from sale of European operations,
           net of European cash balance at date of
           sale............................................           -----              6,043
        Capital expenditures...............................          (1,843)            (2,257)
-----------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities...........          (1,843)             3,786
-----------------------------------------------------------------------------------------------
Cash flows from financing activities:
    Long-term debt and capital lease payments...............         (2,755)            (3,800)
-----------------------------------------------------------------------------------------------
Net cash used by financing activities.......................         (2,755)            (3,800)
-----------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash.....................           (345)               (18)
-----------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents...................          6,467                281
Cash and cash equivalents, beginning of year................         21,141             34,450
-----------------------------------------------------------------------------------------------
Cash and cash equivalents, end of quarter...................         27,608             34,731
-----------------------------------------------------------------------------------------------
Supplemental cash flow information:
    Cash paid for interest..................................          4,779              4,959
    Cash paid for income taxes..............................            111                475
===============================================================================================
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                        4

<PAGE>    6
SHOP VAC CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(dollars in thousands)

(1)     The accompanying  interim unaudited  consolidated  financial  statements
        include  the  accounts  of Shop Vac  Corporation  and its  wholly  owned
        subsidiaries (the "Company"). All intercompany accounts and transactions
        are eliminated in consolidation.

        These  condensed  financial  statements have been prepared in accordance
        with generally  accepted  accounting  principles  for interim  financial
        information  and with the  instructions  to Form 10-Q and  Article 10 of
        Regulation S-X. Accordingly,  they do not include all of the information
        and footnotes required by generally accepted  accounting  principles for
        complete  financial  statements.  In the  opinion  of  management,  such
        interim  statements  reflect  all  adjustments   (consisting  of  normal
        recurring  accruals)  necessary to present fairly the financial position
        and the results of  operations  and cash flows for the  interim  periods
        presented.  The results of  operations  for the interim  periods are not
        necessarily  indicative of the results to be expected for the full year.
        These  financial  statements  should  be read in  conjunction  with  the
        audited consolidated  financial statements and footnotes included in the
        Company's  Annual  Report on Form 10-K dated March 30, 1998 for the year
        ended December 31, 1997.

(2)     Inventories are classified as follows:

<TABLE>
<CAPTION>
========================================================================================
                                                  December 31, 1997       June 30, 1998
                                                                           (Unaudited)
----------------------------------------------------------------------------------------
<S>                                               <C>                     <C>     
Raw materials..................................       $  8,518               $  7,935
Work-in-process................................          4,821                  5,162
Finished goods.................................          9,169                  4,096
----------------------------------------------------------------------------------------
                                                      $ 22,508               $ 17,193
========================================================================================
</TABLE>

(3)  The Company will be required to adopt  Statement  of  Financial  Accounting
     Standards  No. 130  "Reporting  Comprehensive  Income"  for its 1998 annual
     financial  statements.  Comprehensive income for the periods ended June 30,
     1997 and 1998 are presented below:

<TABLE>
<CAPTION>
===================================================================================================================
                                                             Three months ended                Six months ended
                                                                   June 30,                        June 30,
-------------------------------------------------------------------------------------------------------------------
                                                            1997            1998            1997             1998
-------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>            <C>              <C>              <C>   
Net income..........................................       $2,686         $   599          $3,897           $1,374

Other comprehensive income (loss):
   Foreign currency translation adjustment..........         (467)             57          (1,319)            (270)
Less: reclassification adjustment for gain
   included in net income resulting from the
   sale of the European operations..................        -----          (2,630)          -----           (2,630)
-------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss).........................       $2,219         $(1,974)         $2,578          $(1,526)
===================================================================================================================
</TABLE>

(4)     On May  28,  1998,  the  Company  completed  the  sale  of its  European
        operations  to  Glen  Dimplex  and  certain  of  its  affiliates  ("Glen
        Dimplex").  In the transaction Shop Vac sold its capital stock ownership
        in Goblin

                                        5

<PAGE>    7
        Limited  (a  UK   corporation),   Goblin   Ireland   Limited  (an  Irish
        corporation),  FAM Nederland B.V. (a Netherlands corporation),  and Shop
        Vac  Gesellschaft  mbH (an Austrian  corporation)  and  transferred  the
        businesses of its French branch operation and of its German  subsidiary,
        Shop Vac Vertriebs GmbH for  approximately  $7,500,000 less  transaction
        costs of  approximately  $600,000.  Glen Dimplex  also  assumed  certain
        liabilities  of the French  branch  operation  and of Shop Vac Vertriebs
        GmbH.

        The European  operations  had assets of $27.5 million as of December 31,
        1997. Summarized information relating to the European operations for the
        year ended  December 31, 1997 and the period from January 1, 1998 to May
        28, 1998 (date of sale) is presented below.  Amounts  presented  exclude
        intercompany management fees charged to the European operations.

<TABLE>
<CAPTION>
==================================================================================
                                                           1997            1998
----------------------------------------------------------------------------------
<S>                                                     <C>             <C>     
Net sales ........................................      $ 66,654        $ 20,902
Cost and expenses ................................        64,868          21,115
----------------------------------------------------------------------------------
Income (loss) before income taxes ................         1,786            (213)
Income taxes .....................................           286             198
----------------------------------------------------------------------------------
Net income (loss) ................................      $  1,500        $   (411)
==================================================================================
</TABLE>



































                                        6

<PAGE>    8
SHOP VAC CORPORATION AND SUBSIDIARIES

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

RESULTS OF OPERATIONS

Net sales in the second quarter were $47.9  million,  a decrease of $1.8 million
or 3.7% compared to the second  quarter of 1997. Net sales of the European Group
were  $12.2  million  lower  in the  second  quarter  primarily  due to a  large
promotional  order in the first  half of last year and the sale of the  European
operations in May 1998. Net sales of the North  American  Group (which  includes
the Company's  Australian  operations)  were $10.4 million  higher in the second
quarter compared to 1997. New products introduced in the fall of 1997, increased
advertising,  and generally  favorable  business  conditions  all had a positive
impact on North American revenues.

Net sales in the first six months were $96.6 million, a decrease of $3.1 million
or 3.1%  compared  to the first six  months of 1997.  Net sales of the  European
Group were $16.5 million lower in the first six months  primarily due to a large
promotional  order in the first  half of last year and the sale of the  European
operations  in May.  Net sales of the North  American  Group were $13.4  million
higher in the first six months of 1998 compared to 1997.

Gross profit in the quarter  totaled $15.1  million,  an increase of $900,000 or
6.2% over the  second  quarter  of 1997.  Gross  profit in the first six  months
totaled  $29.2  million,  an increase of $1.7 million or 6.1% over the first six
months of 1997.  The  improvements  in the quarter and the first six months were
due to a more favorable  product mix,  continued cost improvements and the sales
volume increases in the North American Group.

Selling,  general and  administrative  ("SG&A")  expense in the quarter  totaled
$10.2  million,  an increase of $1.6 million or 18.4% over the second quarter of
1997.  SG&A expenses in the first six months totaled $20.0 million,  an increase
of $2.3  million or 13.2% over the first six months of 1997.  Increases  in SG&A
expenses in the quarter and the first six months were primarily due to increased
advertising and sales promotional expenditures.

The Company  incurred a loss in the second  quarter of $1,540,000 on the sale of
its European operations computed as follows:

<TABLE>
<CAPTION>
================================================================================
(Amounts in thousands)
--------------------------------------------------------------------------------
<S>                                                                 <C>      
Cash proceeds (net of expenses)..............................       $   6,900
Less net assets sold and fees incurred.......................           8,440
--------------------------------------------------------------------------------
Loss on sale.................................................       $   1,540
================================================================================
</TABLE>

Income from operations  (including the loss on sale of the European  operations)
in the quarter was $3.4 million, a decrease of $2.2 million or 39.5% compared to
the second  quarter of 1997.  This  decrease is  primarily  attributable  to the
European  operations where operating income was $2.1 million lower in the second
quarter  than the same  period for the prior year as well as the loss on sale of
European  operations ($1.5 million).  This decline in European  operating income
was due to the significant decline in sales compared to the prior year.

Income from operations in the first six months totaled $7.6 million,  a decrease
of $2.2 million or 22.5% compared to the first six months of 1997. This decrease
is primarily  attributable to the European operations where operating income was
$3.0  million  lower in the first six months  than the same period for the prior
year as well as the loss on sale of the  European  operations.  This  decline in
European  operating income was due to the significant  decline in sales compared
to the prior year.

These  decreases  were partially  offset by improved  North  American  operating
income.



                                        7

<PAGE>    9
Income  from  operations  in 1998  (excluding  the loss on sale of the  European
operations)  was $5.0 million and $9.1  million in the second  quarter and first
six months, respectively.

Net interest expense was $2.6 million in the quarter,  a decrease of $400,000 or
12.4% compared to the second quarter of 1997. Net interest  expense in the first
six months was $5.2  million,  a decrease of  $600,000 or 10.4%  compared to the
first six  months of 1997.  The lower net  interest  expense  was due to reduced
borrowings and increased interest income on higher cash investments.

Income tax expense for the quarter increased  approximately $150,000 compared to
the second  quarter of 1997.  Year to date income tax expense was  approximately
$800,000 greater than the comparable  prior year period.  The effective tax rate
for the  quarter  was  21.2%  and for the  first six  months  was  41.9%.  These
effective  rates differ from the U.S.  federal tax rate due to losses in foreign
jurisdictions,  principally Europe, as well as state income taxes, both of which
increased the effective tax rate, less the effect of a U.S. state tax law change
enacted  during the second quarter of 1998 which reduced the effective tax rate.
The effective tax rates for the second  quarter of 1997 and the first six months
of 1997 were .3% and 3.8% respectively,  which are substantially  lower than the
U.S. federal tax rate,  principally due to decreases in the valuation  allowance
for deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES

The consolidated balance sheet as of June 1998 reflects the reductions in assets
and  liabilities  that  were  transferred  with  the  European  operations.  The
accompanying consolidated statement of cash flows excludes the changes in assets
and liabilities that were transferred.  The following  comments on liquidity are
based on operating  performance and do not include changes in balance sheet line
items resulting from the sale of the European operations.

During the six months ended June 30, 1998, cash equivalents increased from $34.5
million  to $34.7  million  due to cash  received  on the  sale of the  European
operations   (after  expenses)  of  $6.9  million  and  cash  generated  through
operations of $300,000,  partially offset by cash used for capital  expenditures
of $2.3 million, debt reduction of $3.8 million and European cash transferred as
part of the sale of $900,000. Debt reduction primarily resulted from the payment
of capital leases with cash received from the sale of the European operations.

North  American  inventories  at  year  end  1997  were  unusually  low  due  to
unexpectedly  heavy demand in December.  Inventories  increased during the first
half of  1998,  returning  to more  normal  levels  and  consuming  cash of $2.4
million.  Accounts payable and accrued expenses consumed $4.1 million during the
first six months of 1998 due to reductions in European accounts payable prior to
the sale and the payment of North American  accrued  expenses.  Other  operating
activities generated cash of $6.8 million.

During the three months ended June 30, 1998 there were no significant changes to
the Company's Year 2000 assessment.

The  Company  believes  that  it  will  be able  to  satisfy  its  debt  service
requirements and its working capital and capital  expenditure  requirements from
operating cash flows.

FORWARD-LOOKING INFORMATION  -- RISK FACTORS

To the extent the Registrant has made "forward-looking statements," certain risk
factors could cause results to differ  materially from those anticipated in such
forward-looking statements.  Competition from new entrants in the wet/dry vacuum
market or the loss of significant customers could adversely effect the Company's
share of the  wet/dry  vacuum  market.  Increases  in raw  material  costs could
adversely impact the future  profitability of the Company. The Company's ability
to  successfully  address Year 2000 issues could also  adversely  impact  future
profits. Overall anticipated performance of the Company could be affected by any
serious economic downturns.





                                        8

<PAGE>    10
                           PART II - OTHER INFORMATION


Items 1 - 5.  NOT APPLICABLE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.   Exhibits

27.1    Financial Data Schedule

B.  Reports on Form 8-K

A report on Form 8-K was filed on June 10, 1998  reporting  the sale of the Shop
Vac European operations on May 28, 1998.

                                   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.


                                        SHOP VAC CORPORATION



                                            By       /s/ David A. Grill
                                              -----------------------------
                                                      David A. Grill
                                                    Vice President and
                                                  Chief Financial Officer

Date:     August 12, 1998

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