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 period ended December 31, 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 1-11907

                          Coinmach Laundry Corporation
             (Exact name of registrant as specified in its charter)

                Delaware                                       11-3258015
    (State or other jurisdiction of                        (I.R.S. Employer
     incorporation or organization)                       Identification No.)

    55 Lumber Road, Roslyn, New York                            11576
    (Address of principal executive offices)                  (zip code)

Registrant's telephone number, including area code:   (516) 484-2300


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 __.

As of the close of business on February 5, 1999,  Coinmach  Laundry  Corporation
had outstanding  12,687,135  shares of Class A common stock,  par value $.01 per
share (the "Common  Stock"),  and 480,648  shares of  non-voting  Class B Common
Stock, par value $.01 per share (the "Non-Voting Common Stock").





<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

                                      INDEX

PART I.

Financial Information                                                   Page No.
---------------------                                                   --------

Item 1. Financial Statements

        Condensed Consolidated Balance Sheets-
        December 31, 1998 (Unaudited) and March 31, 1998                       3

        Condensed Consolidated Statements of Operations (Unaudited) -
        Three and Nine Months Ended December 31, 1998 
        and December 26, 1997                                                  4

        Condensed Consolidated Statements of Cash Flows (Unaudited) -
        Three and Nine Months Ended December 31, 1998 
        and December 26, 1997                                                  5

        Notes to Condensed Consolidated Financial 
        Statements (Unaudited)                                               6-9


Item 2. Management's Discussion and Analysis of Financial Condition 
        and Results of Operations                                          10-16

PART II.

Other Information

Item 1. Legal Proceedings                                                     17

Item 2. Changes in Securities                                                 17

Item 3. Defaults Upon Senior Securities                                       17

Item 4. Submission of Matters to a Vote of Security Holders                   17

Item 5. Other Information                                                     17

Item 6. Exhibits and Reports on Form 8-K                                      17

Signature Page                                                                18


                                       -2-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

PART I.    FINANCIAL INFORMATION

           ITEM 1.  FINANCIAL STATEMENTS

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands of dollars)

<TABLE>
<CAPTION>

                                             December 31, 1998  March 31, 1998 1
                                             -----------------  --------------  
                                                 (Unaudited)
<S>                                                  <C>               <C>
ASSETS:
Cash and cash equivalents                             $23,995          $22,456
Receivables, net                                        8,436            7,750
Inventories                                            16,535           13,430
Prepaid expenses                                        6,007            6,308
Advance location payments                              79,034           74,026
Land, property and equipment, less accumulated                            
  depreciation of $111,287 and $72,234                218,587          194,328
Contract rights, less accumulated amortization of
  $62,098 and $39,923                                 412,788          366,762
Goodwill, less accumulated amortization of $18,309
  and $12,530                                         110,658          110,424
Other assets                                           21,479           21,464
                                                      -------          -------
Total assets                                         $897,519         $816,948
                                                      =======          =======

LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable                                      $20,225        $  17,128
Accrued rental payments                                26,473           20,977
Accrued interest                                        5,421           13,993
Other accrued expenses                                 12,215           15,178
Deferred income taxes                                  82,364           79,511
11-3/4% Senior Notes                                  296,655          296,655
Premium on 11 3/4% Senior Notes, net                    8,332            9,258
Credit facility indebtedness                          388,489          296,267
Other long-term debt                                    7,021            9,236
Stockholders' equity:                                
  Common stock and capital in excess of par value     104,093          103,210
  Notes receivable from management                      (232)             (335)
  Accumulated deficit                                (53,537)          (44,130)
                                                     --------          -------
Total stockholders' equity                             50,324           58,745
                                                      -------          -------
Total liabilities and stockholders' equity           $897,519         $816,948
                                                      =======         ========

See accompanying notes.

------
1.   The  March  31,  1998  balance  sheet  has been  derived  from the  audited
     financial statements as of that date.
</TABLE>


                                       -3-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                (In thousands of dollars, except per share data)

<TABLE>
<CAPTION>


                                                      Three Months Ended                  Nine Months Ended
                                                      ------------------                  -----------------

                                                December 31,   December 26,           December 31,   December 26,
                                                      1998          1997                  1998            1997
                                                ------------   ------------           ------------   ------------
<S>                                                 <C>             <C>                   <C>             <C> 

REVENUES                                           $130,736        $80,618              $373,645        $230,415
COSTS AND EXPENSES:
   Laundry operating expenses                        85,738         53,840               245,461         154,150
   General and administrative
     expenses                                         2,006          1,600                 5,987           4,517
   Depreciation and amortization                     28,847         17,957                83,940          52,537
   Stock-based compensation
    charge                                              369            400                   987             945
                                                  ---------        -------            ----------       ---------
                                                    116,960         73,797               336,375         212,149
                                                  ---------         ------             ---------       ---------
OPERATING INCOME                                     13,776          6,821                37,270          18,266

INTEREST EXPENSE, NET                                16,902         11,301                49,336          32,430
                                                   --------         ------             ---------       ---------
LOSS BEFORE INCOME TAXES                            (3,126)         (4,480)              (12,066)       (14,164)
                                                  ---------         -------            ---------      ----------
PROVISION (BENEFIT) FOR
INCOME TAXES:
   Currently payable                                   400              80                   647             230
   Deferred                                           (828)           (775)               (3,306)        (2,830)
                                                      -----           -----             ---------     ----------
                                                      (428)           (695)               (2,659)        (2,600)
                                                      -----           -----             ---------     ----------

NET LOSS                                           $(2,698)        $(3,785)              $(9,407)      $(11,564)
                                                   =========      =========             =========     ==========
BASIC AND DILUTED LOSS PER
  SHARE                                              $(.20)          $(.35)                $(.71)      $  (1.09)
                                                     ======          ======                ======     ==========
WEIGHTED AVERAGE COMMON                          13,167,783      10,872,450            13,167,783     10,614,101
   SHARES OUTSTANDING


See accompanying notes.
</TABLE>



                                       -4-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                            (In thousands of dollars)
<TABLE>
<CAPTION>

                                                                                       Nine Months Ended
                                                                                       -----------------
                                                                                 December 31,          December 26,
                                                                                     1998                   1997
                                                                                 ------------           -----------
<S>                                                                                   <C>                   <C>

OPERATING ACTIVITIES:
         Net loss                                                                   $(9,407)             $(11,564)
         Adjustments to reconcile net loss to net cash
          provided by operating activities:
         Depreciation                                                                38,580                22,910
         Amortization of advance location payments                                   15,035                 7,566
         Amortization of intangibles                                                 30,325                22,061
         Deferred income taxes                                                       (3,306)               (2,830)
         Stock-based compensation charge                                                987                   945
         Amortization of premium on 11 3/4% Senior Notes                               (926)                 (206)
         Amortization of debt discount and deferred issuance
            costs                                                                     1,316                   533

         Change in operating assets and liabilities,
             net of business acquired: 
             Other assets                                                            (1,499)               (1,348)
             Receivables, net                                                          (131)                  718
             Inventories and prepaid expenses                                        (1,201)               (3,679)
             Accounts payable                                                         1,278                   172
             Accrued interest                                                        (8,572)               (5,653)
             Accrued expenses, net                                                    2,284                  (916)

             Net cash provided by operating activities                               64,763                28,709
                                                                                     ------                ------

INVESTING ACTIVITIES:
         Additions to property and equipment                                        (45,718)              (36,357)
         Advance location payments to location owners                               (16,230)              (10,257)
         Additions to net assets related to acquisitions of businesses              (89,584)              (63,903)

             Net cash used for investing activities                                (151,532)             (110,517)
                                                                                  ---------             ---------
FINANCING ACTIVITIES:
Debt transactions:
           Net (repayments) borrowing of bank and other
             borrowings                                                              (1,507)                2,075
           Deferred debt issuance costs                                                (381)               (5,355)
           Proceeds (repayments) from credit facility, net                           92,222               (55,000)
           Proceeds from issuance of 11 3/4% Senior Notes                                 -               109,875
           Repayment of 9-7/8% promissory note                                            -               (15,000)
           Principal payments on capitalized lease obligations                       (2,026)                 (841)
Equity Transactions:
           Proceeds from issuance of common stock                                         -                48,900
                                                                                    -------                ------
             Net cash provided by financing activities                               88,308                84,654
                                                                                     ------                ------
             Net increase in cash and cash equivalents                                1,539                 2,846
CASH AND CASH EQUIVALENTS, BEGINNING
   OF PERIOD                                                                         22,456                14,729
                                                                                     ------                ------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                            $23,995               $17,575
                                                                                    =======               =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW 
INFORMATION:
         Interest paid                                                              $57,863               $36,500
                                                                                    =======               =======

See accompanying notes.
</TABLE>

                                       -5-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------


        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1.  Description of Business

         Coinmach  Laundry   Corporation   ("Coinmach   Laundry"),   a  Delaware
corporation,   through  its   wholly-owned   subsidiaries   (collectively,   the
"Company"),  is the leading supplier of outsourced laundry equipment services to
multi-family housing properties throughout the United States. The Company's core
business  involves  leasing  laundry  rooms from  building  owners and  property
management  companies,  installing  and  servicing  the  laundry  equipment  and
collecting  revenues  generated  from  laundry  machines.  The Company  owns and
operates  approximately  755,000  washers  and  dryers in  approximately  75,000
locations on routes  throughout the United States and in 162 retail  laundromats
located throughout Texas and Arizona.


2.  Basis of Presentation

         The accompanying  unaudited condensed consolidated financial statements
of the  Company  have  been  prepared  in  conformity  with  generally  accepted
accounting  principles  ("GAAP") for interim financial reporting and pursuant to
the  rules  and   regulations  of  the   Securities  and  Exchange   Commission.
Accordingly, such financial statements do not include all of the information and
footnotes required by GAAP for complete financial statements.  GAAP requires the
Company's  management to make estimates and assumptions  that affect the amounts
reported  in the  financial  statements.  Actual  results  could  vary from such
estimates.  The interim results presented herein are not necessarily  indicative
of the results to be expected for the entire year.

         In the opinion of management of the Company,  these unaudited condensed
consolidated  financial statements contain all adjustments of a normal recurring
nature  necessary for a fair  presentation  of the financial  statements for the
interim periods presented.

         These unaudited condensed  consolidated  financial statements should be
read in conjunction with the audited consolidated  financial statements included
in Coinmach  Laundry's  Annual  Report on Form 10-K for the year ended March 31,
1998.

         Certain prior year's  balances have been  reclassified  to conform with
the current period presentation.


3.  Loss per Share

         Basic and diluted  loss per share for each of the three and nine months
ended December 31, 1998 was calculated based upon the weighted average number of
common shares  outstanding of  13,167,783.  Basic and diluted loss per share for
the three months ended December 26, 1997 was calculated  based upon the weighted
average number of common shares  outstanding  of  10,872,450.  Basic and diluted
loss per share for the nine months ended December 26, 1997 was calculated  based
upon the weighted  average  number of common shares  outstanding  of 10,614,101.
Conversion of common equivalent shares (stock options) was not assumed since the
results would have been antidilutive.




                                       -6-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(continued)


4.  Comprehensive Income

         On April 1, 1998, the Company adopted  Financial  Accounting  Standards
Board ("FASB")  Statement of Financial  Accounting  Standards  ("SFAS") No. 130,
"Reporting  Comprehensive  Income." SFAS No. 130  establishes  new rules for the
reporting and display of comprehensive  income and its components;  however, the
adoption  of  SFAS  No.  130  had  no  impact  on  the  Company's  net  loss  or
stockholders'  equity.  The Company did not have any  elements of  comprehensive
income which would be required to be included in its  financial  statements  for
the periods presented.


5.  Long-Term Debt

         At December 31, 1998, Coinmach Corporation ("Coinmach"), a wholly-owned
subsidiary of Coinmach Laundry, had outstanding long-term debt consisting of (a)
approximately  $296.7  million  of 11 3/4%  Senior  Notes due 2005 (the  "Senior
Notes") and (b) $272.5 million of term loans and approximately $116.0 million of
a  revolving  line of credit  under the Amended and  Restated  Credit  Facility.
Indebtedness under the Amended and Restated Credit Facility is secured by all of
the Company's real and personal  property.  Coinmach  Laundry has guaranteed the
indebtedness  under the  Amended and  Restated  Credit  Facility  and pledged to
Bankers Trust Company,  as Collateral  Agent, its interests in all of the issued
and  outstanding  shares of capital  stock of  Coinmach.  In addition to certain
terms and provisions, events of default, and customary restrictive covenants and
agreements,  the Amended and Restated Credit Facility contains certain covenants
including,  but not limited to, a maximum leverage ratio, a minimum consolidated
interest coverage ratio and limitations on indebtedness,  capital  expenditures,
advances,  investments and loans,  mergers and  acquisitions,  dividends,  stock
issuances and transactions  with affiliates.  Also, the indenture  governing the
Senior  Notes and the Amended and  Restated  Credit  Facility  limit  Coinmach's
ability to pay dividends.


6.  Stockholders' Equity

         a.  Secondary Offering

         On December 19, 1997,  Coinmach Laundry completed a secondary  offering
(the  "Secondary  Offering")  of 4,600,000  shares of Common Stock at a price of
$19.75 per share  (including the issuance of 600,000  shares in connection  with
the exercise of an  underwriters'  over-allotment  option  granted in connection
therewith).  In connection with the Secondary  Offering,  2,665,000  shares were
sold by Coinmach Laundry and 1,935,000 shares were sold by certain  stockholders
of the Company. The Company did not receive any proceeds from the sale of shares
by selling stockholders.

         Proceeds generated from the Secondary Offering were approximately $49.9
million, after underwriting discounts and commissions and before expenses.




                                       -7-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(continued)


6.  Stockholders' Equity (continued)

         b.  Stock Option Plan

         Prior to the  Company's  initial  public  offering  in July  1996  (the
"Initial Offering"), the Company adopted the 1996 Employee Stock Option Plan (as
amended and restated,  the "Stock Option Plan"), which provides that the Company
may grant stock  options for the  purchase of up to  1,109,147  shares of Common
Stock to key employees of the Company over a period not to exceed ten years. The
Company may grant  incentive  stock  options at an exercise  price per share not
less than 100% of the fair market value of the Common Stock at the date of grant
and stock options which do not qualify as incentive stock options at an exercise
price per share not less than the average  closing price of the Common Stock for
the thirty consecutive trading days immediately preceding the date of grant. All
stock  options  granted under the Stock Option Plan vest over four years in five
equal  installments (20% vest immediately on the date of grant and the remainder
over a four year period) and expire ten years from the date of grant.

         Through  December  31,  1998,  the Company has  granted  502,250  stock
options to various  employees of the Company  pursuant to the Stock Option Plan,
of which 248,500 were granted during the past fiscal nine months.

         During  July and  September,  1996,  in  connection  with  the  Initial
Offering,  Coinmach  Laundry  granted  certain  non-qualified  stock  options to
certain  members of management to purchase up to 739,437  shares of Common Stock
at 85% of the initial  offering price of the Common Stock.  Such options vest in
equal annual  installments  (20% vest  immediately  on the date of grant and the
remainder  over a four year period)  commencing on July 23, 1996,  the effective
date of the Initial  Offering.  The Company  records the difference  between the
exercise price of such options and the initial offering price of Common Stock as
a stock-based compensation charge over the applicable four year vesting period.

         On September 17, 1996,  Coinmach Laundry granted to certain  directors,
each of whom was appointed by the Board of Directors of Coinmach Laundry on such
date to serve as  independent  directors,  stock  options  entitling  each  such
director  to  purchase  up to 60,000  shares of Common  Stock (the  "Independent
Director  Options").  The  Independent  Director  Options  vest in equal  annual
installments (25% vest immediately on the date of grant and the remainder over a
three year  period),  commencing  on September  17, 1996,  and entitle each such
director to purchase shares of Common Stock at the initial public offering price
of the Common Stock.  The Company  records the  difference  between the exercise
price of the  Independent  Director  Options  and the fair  market  value of the
Common Stock on September 17, 1996 as a stock-based compensation charge over the
applicable three year vesting period.

         On September 5, 1997,  Coinmach  Laundry  granted to certain members of
management certain  non-qualified stock options to purchase up to 200,000 shares
of Common Stock at an exercise  price of $11.90 per share.  Such options vest in
equal annual  installments  (20% vest  immediately  on the date of grant and the
remainder  vest over a four year period)  commencing  on September 5, 1997.  The
Company  records the  difference  between the exercise price of such options and
the fair market value of


                                       -8-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(continued)


6.  Stockholders' Equity (continued)

the Common Stock on September 5, 1997 as a stock-based  compensation charge over
the applicable four year vesting period.

         On May 4,  1998,  the  Company  granted to  certain  employees  248,500
non-qualified  stock  options  pursuant  to the  Stock  Option  Plan and  31,244
non-qualified stock options to a director of the Company at an exercise price of
$22.30938 per share.  Such options vest in equal annual  installments  (20% vest
immediately  on June 10, 1998 and the  remainder  vest over a four year period).
The Company  records the  difference  between the exercise price of such options
and the fair market  value of the Common  Stock on May 4, 1998 as a  stock-based
compensation charge over the applicable four year vesting period.

         For the nine months ended  December 31,  1998,  the Company  recorded a
stock-based  compensation  charge  relating  to the options  described  above of
approximately $987,000. For the nine months ended December 26, 1997, the Company
recorded a stock-based  compensation  charge  relating to the options  described
above of approximately $945,000.


7.  Acquisitions - 1998

         On May 19, 1998, the Company completed the acquisition of Cleanco, Inc.
and  certain  of  its  affiliates  ("Cleanco")  for a  cash  purchase  price  of
approximately  $23.0  million,  excluding  transaction  expenses  (the  "Cleanco
Acquisition"),  financed with cash and borrowings under the Amended and Restated
Credit  Facility.  Cleanco,  headquartered  in  Miami,  Florida,  was a  leading
provider of  outsourced  laundry  equipment  services in southern  Florida.  The
Cleanco  Acquisition  added  approximately  21,000  machines  to  the  Company's
installed base.

         On June 5, 1998,  the Company  completed  the  acquisition  of Gordon &
Thomas  Companies,  Inc. ("G&T") for a cash purchase price of approximately  $58
million,   excluding  transaction  expenses  (the  "G&T  Acquisition")  and  the
assumption of certain  liabilities.  This transaction was financed with cash and
borrowings under the Amended and Restated Credit Facility. G&T, headquartered in
New Jersey,  was a leading provider of outsourced  laundry equipment services in
the New York metropolitan  area. The G&T Acquisition  strengthened the Company's
presence  in the  northeastern  United  States  by adding  approximately  36,000
machines to the Company's installed base.




                                       -9-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

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

         Except for historical information contained herein, certain information
contained and matters discussed in this document are forward-looking  statements
based on the  beliefs of the  Company's  management  and are  subject to certain
risks and  uncertainties  described herein and contained in the Company's Annual
Report on Form 10-K for the year ended  March 31,  1998.  Should  these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, the
Company's  future   performance  and  actual  results  of  operations  may  vary
materially from those expected or intended.

General

         The Company, through its operating subsidiaries, is principally engaged
in supplying  outsourced  laundry  equipment  services to  multi-family  housing
properties.  The Company owns and  operates  approximately  755,000  washers and
dryers  in  approximately  75,000  multi-family  housing  properties  on  routes
throughout the United States and 162 retail laundromats located throughout Texas
and Arizona.

         The Company provides outsourced laundry equipment services to locations
by leasing laundry rooms from building owners and property management  companies
typically on a long-term,  renewable basis. In return for the exclusive right to
provide these services,  most of the Company's  contracts provide for commission
payments to the location  owners.  Commission  expense (also referred to as rent
expense),  the  Company's  single  largest  expense item, is included in laundry
operating expenses and represents  payments to location owners.  Commissions may
be fixed amounts or percentages of revenues and are generally paid monthly. Also
included in laundry operating expenses are the costs of servicing and collecting
in the route  business,  including  payroll,  parts,  vehicles and other related
items, the cost of sales associated with the equipment distribution business and
certain expenses related to the operation of retail laundromats.  In addition to
commission  payments,  many of the Company's  leases require the Company to make
advance  location  payments to the location  owners.  These advance payments are
capitalized and amortized over the life of the applicable lease.

         Other  revenue  sources for the Company  include:  (i) leasing  laundry
equipment  and other  household  appliances  and  electronic  items to corporate
relocation  entities,  individual  property  owners and managers of multi-family
housing  properties  (approximately  $8.1  million  for the  nine  months  ended
December  31, 1998 and  approximately  $2.2  million  for the nine months  ended
December 26, 1997); (ii) operating, maintaining and servicing retail laundromats
(approximately  $14.9  million for the nine months  ended  December 31, 1998 and
approximately  $15.9 million for the nine months ended  December 26, 1997);  and
(iii)  constructing  complete turnkey retail  laundromats,  retrofitting  retail
laundromats,  distributing  exclusive  lines of  commercial  coin  and  non-coin
operated machines and parts, and selling service contracts  (approximately $27.5
million for the nine months  ended  December  31, 1998 and  approximately  $18.9
million for the nine months ended December 26, 1997).



                                      -10-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

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

Results of Operations

         The  following  discussion  should  be read  in  conjunction  with  the
attached unaudited condensed consolidated financial statements and notes thereto
and with the  Company's  audited  consolidated  financial  statements  and notes
thereto  included in the Company's  Annual Report on Form 10-K as of and for the
year ended March 31, 1998.


Comparison  of the three and nine month  periods  ended  December  31,  1998 and
December 26, 1997

         Revenues  increased  by  approximately  62% for both the three and nine
month  periods  ended  December  31,  1998,  as  compared  to the  prior  year's
corresponding  periods. This improvement in revenues resulted primarily from the
Company's  execution of its  acquisition  strategy and increased  route revenues
resulting from internal expansion.  Based on the historical revenues of acquired
businesses,  the Company  estimates  that  approximately  $127.6  million of its
revenue  increase  for the current  nine month  period is  primarily  due to the
National Coin  Acquisition  (as defined) in July 1997, the ALI  Acquisition  (as
defined) in January 1998, the Macke  Acquisition (as defined) in March 1998, the
Cleanco  Acquisition  in May  1998  and the G&T  Acquisition  in June  1998.  In
addition,  during the current nine month period, the Company's installed machine
base increased by approximately  18,000 machines from internal growth (excluding
the machines added from the Cleanco  Acquisition and the G&T Acquisition  during
such period) as compared to an increase of approximately  16,700 machines during
the  prior  year's  corresponding  period.   Included  in  internal  growth  are
acquisitions of small,  local route  operators and new customers  secured by the
Company's sales force.

         Laundry operating  expenses increased by approximately 59% for both the
three and nine month periods  ended  December 31, 1998, as compared to the prior
year's  corresponding  periods. The increase was due basically to an increase in
laundry  operating  expenses  (primarily  commission  expense)  related  to  the
National Coin  Acquisition,  the ALI  Acquisition,  the Macke  Acquisition,  the
Cleanco  Acquisition  and the  G&T  Acquisition.  However,  as a  percentage  of
revenue,  laundry operating expenses were 65.6% for the three month period ended
December 31, 1998 and 65.7% for the nine month period ended December 31, 1998 as
compared to 66.8% for the three month period  ended  December 26, 1997 and 66.9%
for the nine month period ended December 26, 1997.

         General and  administrative  expenses  increased by approximately  $0.4
million for the three month period ended December 31, 1998 and by  approximately
$1.5 million for the nine month period ended  December 31, 1998,  as compared to
the prior year's corresponding periods. The increase for such periods was due to
various costs and expenses  related to (i) the Company's  acquisition  strategy,
including  systems  development  and refinement  relating to the  integration of
prior  acquisitions,  and (ii) accounting,  management  information  systems and
other administrative functions associated with the Company's growth. However, as
a percentage of revenues,  general and administrative expenses were 1.5% for the
three month  period  ended  December 31, 1998 and 1.6% for the nine month period
ended  December  31,  1998,  as  compared  to 2.0% for each of the prior  year's
corresponding periods.



                                      -11-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

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


Results of Operations (continued)

         Depreciation and amortization  expenses  increased by approximately 61%
for the three month period ended December 31, 1998 and by approximately  60% for
the nine month period ended  December 31, 1998,  as compared to the prior year's
corresponding  periods, due primarily to contract rights and goodwill associated
with  the  above-mentioned  acquisitions,  as well  as an  increase  in  capital
expenditures with respect to the Company's installed base of machines.

         During  1996 and 1997,  the  Company  granted  to  certain  members  of
management of the Company and certain other individuals non-qualified options to
purchase shares of Common Stock at a 15% discount to the initial  offering price
of the Common Stock. With respect to such options granted to its employees,  the
Company  records such  discount as a  stock-based  compensation  charge over the
applicable  four year  vesting  period.  The Company  also granted to two of its
directors  Independent  Director  Options to  purchase  up to a total of 120,000
shares of Common Stock. The Company records the difference  between the exercise
price of such  options and the fair market value of the Common Stock on the date
of grant as a stock-based  compensation  charge over the  applicable  three year
vesting period. On May 4, 1998, the Company granted 248,500  non-qualified stock
options  to  certain  employees  pursuant  to the Stock  Option  Plan and 31,244
non-qualified stock options to a director of the Company at an exercise price of
$22.30938 per share.  Such options vest in equal annual  installments  (20% vest
immediately  on June 10, 1998 and the  remainder  vest over a four year period).
The Company  records the  difference  between the exercise price of such options
and the fair market  value of the Common  Stock on May 4, 1998 as a  stock-based
compensation  charge over the applicable  four year vesting  period.  During the
nine  months  ended  December  31,  1998,  the  Company  recorded a  stock-based
compensation charge relating to these options of approximately $987,000.  During
the nine months  ended  December 26, 1997,  the Company  recorded a  stock-based
compensation charge relating to these options of approximately $945,000.

         Operating income margins were  approximately  10.5% for the three month
period ended December 31, 1998, as compared to approximately  8.5% for the three
month  period  ended   December  26,  1997.   Operating   income   margins  were
approximately  10.0% for the nine month  period  ended  December  31,  1998,  as
compared to  approximately  7.9% for the nine month  period  ended  December 26,
1997.

         Interest  expense,  net,  increased by approximately  50% for the three
month period ended December 31, 1998 and by approximately 52% for the nine month
period  ended  December  31,  1998,  as  compared  to each of the  prior  year's
corresponding  periods due  primarily  to increased  borrowing  levels under the
Amended and Restated Credit Facility in connection with certain acquisitions, as
well as  increased  interest  expense due to the offering by the Company of $100
million  aggregate  principal  amount of 11 3/4% Series C Senior  Notes due 2005
(the "Series C Notes") in October 1997.

         EBITDA  (earnings  before   deductions  for  interest,   income  taxes,
depreciation and  amortization)  before  deduction for stock-based  compensation
charges was approximately  $122.2 million for the nine months ended December 31,
1998, as compared to approximately $71.7 million for the corresponding period in
1997,  representing an improvement of approximately 70%. EBITDA margins improved
to

                                      -12-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

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


Results of Operations (continued)

approximately  32.7% for the nine months ended  December  31, 1998,  compared to
approximately 31.1% for the prior year's corresponding period. EBITDA is used by
certain investors as an indicator of a company's  historical  ability to service
debt.  Management  believes  that an increase in EBITDA is an  indication of the
Company's improved ability to service existing debt, to sustain potential future
increases in debt and to satisfy capital  requirements.  However,  EBITDA is not
intended to represent cash flows for the period, nor has it been presented as an
alternative  to  either  (a)  operating  income  (as  determined  by GAAP) as an
indicator of operating  performance or (b) cash flows from operating,  investing
and  financing  activities  (as  determined  by GAAP) as a measure of liquidity.
Given that EBITDA is not a measurement determined in accordance with GAAP and is
thus  susceptible  to  varying  calculations,  EBITDA  as  presented  may not be
comparable to other similarly titled measures of other companies.

Liquidity and Capital Resources

         The Company continues to have substantial indebtedness and debt service
requirements.  At December 31, 1998, the Company had outstanding  long-term debt
(excluding  the premium on the Series C Notes) of  approximately  $692.2 million
and stockholders' equity of approximately $50.3 million.

         The Company's level of indebtedness will have several important effects
on its future operations,  including,  but not limited to, the following:  (a) a
significant  portion of the Company's cash flow from operations will be required
to pay interest on its indebtedness;  (b) the financial  covenants  contained in
certain of the agreements governing the Company's  indebtedness will require the
Company  to meet  certain  financial  tests and may limit its  ability to borrow
additional  funds or to dispose of assets;  (c) the Company's  ability to obtain
additional  financing in the future for working capital,  capital  expenditures,
acquisitions  or  general  corporate  purposes  may be  impaired;  and  (d)  the
Company's  ability  to adapt to  changes  in the  outsourced  laundry  equipment
services industry and to economic conditions in general will be limited.

         As the Company has focused on increasing  its cash flow from  operating
activities,  it has made significant capital investments primarily consisting of
capital  expenditures  related to acquisitions,  renewal and growth. The Company
anticipates  that it will  continue  to utilize  cash flows from  operations  to
finance its capital  expenditures and working capital needs,  including interest
payments on its  outstanding  indebtedness.  Capital  expenditures  for the nine
months  ended  December  31, 1998 were  approximately  $151.5  million.  Of such
amount, the Company spent approximately $89.6 million in acquisition and related
transaction  costs,  primarily  due to  the  Cleanco  Acquisition  and  the  G&T
Acquisition,  and approximately $17.4 million related to the net increase in the
installed  base of machines of  approximately  18,000  machines.  The balance of
approximately  $44.5 million (which  consists of machine  expenditures,  advance
location  payments  and laundry  room  improvements)  was used to  maintain  the
existing  machine  base  in  current   locations  and  through   replacement  of
discontinued  locations and for general corporate  purposes.  The full impact on
revenues and cash flow generated from capital  expended on acquisitions  and the
net  increase in the  installed  base are not  expected to be  reflected  in the
Company's  financial results until subsequent  reporting  periods,  depending on
certain factors, including the timing of the capital expended. While the Company
estimates that it will generate sufficient cash flows from operations to finance
anticipated  capital  expenditures,  there can be no assurances  that it will be
able to do so.

                                      -13-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

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


Liquidity and Capital Resources (continued)

         The Company's  working  capital  requirements  are, and are expected to
continue to be, minimal since a significant  portion of the Company's  operating
expenses are not paid until after cash is collected from the installed machines.
In connection with certain of the financing  agreements  governing the Company's
indebtedness,  Coinmach is required to make  monthly cash  interest  payments as
required  by the Amended and  Restated  Credit  Facility  and  semi-annual  cash
interest payments on the Senior Notes.

         Management believes that the Company's future operating activities will
generate sufficient cash flow to repay indebtedness outstanding under the Senior
Notes and borrowings under the Amended and Restated Credit Facility or to permit
any necessary  refinancings  thereof.  An inability of the Company,  however, to
comply with covenants or other  conditions under the Amended and Restated Credit
Facility or contained in the  indenture  governing the Senior Notes could result
in an acceleration  of all amounts due  thereunder.  If the Company is unable to
meet its debt service obligations,  it could be required to take certain actions
such as reducing or delaying capital expenditures,  selling assets,  refinancing
or restructuring  its indebtedness,  selling  additional equity capital or other
actions.  There is no assurance  that any of such  actions  could be effected on
commercially  reasonable  terms,  if at all,  or on terms  permitted  under  the
Amended and  Restated  Credit  Facility or the  indenture  governing  the Senior
Notes.

         The  Company's  depreciation  and  amortization  expenses  (aggregating
approximately  $83.9  million for the nine months ended  December 31, 1998) have
the effect of reducing net income but not  operating  cash flow.  In  accordance
with GAAP, a significant amount of the purchase price of businesses  acquired by
the Company is allocated to "contract  rights",  which costs are amortized  over
periods of 15 years.

         Summary of Recent Acquisitions

         On July 17,  1997,  Coinmach  completed  the  acquisition  of  National
Laundry Equipment Company, Whitmer Vend-O-Mat Laundry Services, Inc. and certain
other  related  parties  (the  "National  Coin  Acquisition")  for an  aggregate
purchase price of approximately $19 million, excluding transaction expenses. The
National  Coin  Acquisition,  which was financed  through  borrowings  under the
Company's then existing credit  facility,  enabled the Company to further expand
its operations by providing laundry equipment  services to multi-family  housing
properties in the states of Ohio, Indiana,  Kentucky,  Michigan,  West Virginia,
Pennsylvania,   Georgia,  Tennessee,   Illinois  and  Florida,  as  well  as  by
distributing  exclusive lines of commercial coin and non-coin  laundry  machines
and parts.

         On January 15, 1998,  Coinmach  completed the  acquisition of the route
business of  Apartment  Laundries,  Inc.  ("ALI"),  pursuant  to which  Coinmach
acquired  substantially all the assets of ALI for a cash purchase price of $16.2
million,  excluding  transaction  expenses  (the  "ALI  Acquisition").  The  ALI
Acquisition  was  financed  through  working  capital and  borrowings  under the
Company's  then  existing  credit  facility.  ALI  provided  outsourced  laundry
equipment services for multi-family housing units in Oklahoma, Texas, Kansas and
Arkansas.

         On March 2, 1998,  Coinmach  completed the acquisition of Macke Laundry
Service,  L.P. and  substantially  all of the assets of certain related entities
(collectively, "Macke") for a cash purchase price


                                      -14-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

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


Liquidity and Capital Resources (continued)

of  approximately  $213  million,  excluding  transaction  expenses  (the "Macke
Acquisition"). The Macke Acquisition was financed with cash and borrowings under
the Amended and  Restated  Credit  Facility,  which was amended and  restated in
connection with such acquisition to provide for additional borrowing capacity on
substantially  similar  terms.  The Macke  Acquisition  enabled  the  Company to
further expand its route operations by providing  outsourced  laundry  equipment
services to  multi-family  housing  properties  throughout the United States and
added approximately 236,000 machines to the Company's base.

         On May 19,  1998,  Coinmach  completed  the  Cleanco  Acquisition.  The
Cleanco  Acquisition was financed with cash and borrowings under the Amended and
Restated  Credit  Facility.  Cleanco,  headquartered  in Miami,  Florida,  was a
leading provider of outsourced  laundry equipment  services in southern Florida.
The Cleanco  Acquisition  added  approximately  21,000 machines to the Company's
installed base.

         On June 5,  1998,  Coinmach  completed  the G&T  Acquisition  which was
financed  with  cash and  borrowings  under  the  Amended  and  Restated  Credit
Facility. G&T, headquartered in New Jersey, was a leading provider of outsourced
laundry  equipment   services  in  the  New  York  metropolitan  area.  The  G&T
Acquisition  strengthened  the  Company's  presence in the  northeastern  United
States by adding approximately 36,000 machines to the Company's installed base.

         As part of its business strategy, the Company will continue to evaluate
opportunities to acquire local,  regional and  multi-regional  route businesses.
There can be no  assurance  that the Company  will find  attractive  acquisition
candidates or effectively manage the integration of acquired businesses into its
existing business.

Year 2000

         The Company has undertaken a comprehensive Year 2000 initiative managed
by a team  consisting of internal staff and outside  consultants.  The Year 2000
initiative has involved an extensive review of the Company's information systems
and an assessment of the compliance  status of customers,  suppliers and lenders
with whom the Company has a significant  relationship.  The Company  anticipates
its information systems will be substantially Year 2000 compliant by the fall of
1999.

         The Company has  contacted  its  significant  customers,  suppliers and
lenders to ensure that those parties have  appropriate  plans to remediate  Year
2000  issues  where  their  systems  interface  with the  Company's  systems  or
otherwise  impact its operations.  Based on its evaluations to date, the Company
believes that it will not be materially  impacted by Year 2000 problems  arising
from its relationships with customers,  suppliers and lenders.  During 1999, the
Company will  continue to assess the Year 2000  compliance  of these parties and
will develop  contingency  plans should it appear that these parties will not be
adequately  prepared  to address  Year 2000  problems  that could  significantly
impact the Company's operations.



                                      -15-

<PAGE>

                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------

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


Year 2000 (continued)

         As of December 31, 1998,  costs  incurred in connection  with Year 2000
compliance  have not been material.  The Company  anticipates  that future costs
associated  with the Year 2000  initiative will not be material to the Company's
results of operation or financial condition.

         The Company believes it is devoting  appropriate  resources to the Year
2000 issue and that its internal  systems will be  adequately  prepared for Year
2000  processing.  While there can be no  assurance  of third party  compliance,
based on the  analysis  performed  to date,  the  Company  believes  that it has
resolved or has adequately  addressed all identified Year 2000 issues. While the
Company  believes  its  planning  efforts  are  adequate  to  address  Year 2000
concerns,  there can be no  assurance  that all such Year 2000  issues have been
adequately identified and addressed,  and actual results could differ materially
from those  planned or  anticipated.  The Company will  continue to monitor Year
2000 readiness and to develop appropriate responses should they be required.


Inflation and Seasonality

         In general,  the Company's laundry  operating  expenses and general and
administrative expenses are affected by inflation,  and the effects of inflation
may be experienced by the Company in future  periods.  Management  believes that
such effects have not been nor will be material to the  Company.  The  Company's
business does not exhibit material seasonality fluctuations.



                                      -16-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------


PART II.   OTHER INFORMATION

ITEM 1.     Legal Proceedings

         From time to time, the Company has been, and expects to continue to be,
subject to legal  proceedings and claims in the ordinary course of its business.
Although  the amount of any  liability  that could  arise with  respect to these
actions  can not be  accurately  predicted,  management  believes  that any such
liability,  individually or in the aggregate,  will not have a material  adverse
effect on the financial condition and results of operations of the Company.

ITEM 2.     Changes in Securities

            None.

ITEM 3.     Defaults Upon Senior Securities

            None.

ITEM 4.     Submission of Matters to a Vote of Security Holders

            None.

ITEM 5.     Other Information

            None.

ITEM 6.     Exhibits and Reports on Form 8-K

            (a)    Exhibits


                   3.1   Fourth    Amended   and   Restated    Certificate   of
                         Incorporation  of Coinmach  Laundry  (incorporated  by
                         reference from Exhibit 3.5 to Coinmach  Laundry's Form
                         10-Q for the quarterly period ended June 30, 1998)

                   3.2   Third Amended and Restated Bylaws of Coinmach  Laundry
                         (incorporated   by  reference   from  Exhibit  3.1  to
                         Coinmach  Laundry's Form 10-Q for the quarterly period
                         ended September 27, 1996)

                   27.1  Financial Data Schedule

            (b)    Reports on Form 8-K

                   None.



                                      -17-

<PAGE>


                  COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES
                  ---------------------------------------------


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                              COINMACH LAUNDRY CORPORATION

Date: February 5, 1999        /s/    ROBERT M. DOYLE 
                             --------------------------------------------
                             Robert M. Doyle
                             Senior Vice President and Chief Financial Officer
                             (On behalf of registrant and as Principal Financial
                              Officer)




                                      -18-

<PAGE>