<PAGE>
 
                       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 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 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 AUGUST 6, 1998, 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.
---------------------                                                --------
<TABLE>
<CAPTION>
 
Item 1. Financial Statements
<S>                                                                    <C>
 
     Condensed Consolidated Balance Sheets-
     June 30, 1998 (Unaudited) and March 31, 1998                          3
 
     Condensed Consolidated Statements of Operations (Unaudited) -
     Three Months Ended June 30, 1998 and June 27, 1997                    4
 
     Condensed Consolidated Statements of Cash Flows (Unaudited) -
     Three Months Ended June 30, 1998 and June 27, 1997                    5
 
     Notes to Condensed Consolidated Financial Statements                6-9
 
Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                      10-15
 
PART II.
 
Other Information
-----------------
 
Item 1. Legal Proceedings                                                 16
 
Item 2. Changes in Securities                                             16
 
Item 3. Defaults Upon Senior Securities                                   16
 
Item 4. Submission of Matters to a Vote of Security Holders               16
 
Item 5. Other Information                                                 17
 
Item 6. Exhibits and Reports on Form 8-K                                  17
 
Signature Page                                                            18
--------------
</TABLE>

                                      -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>
                                                      June 30, 1998   March 31, 1998/1/
                                                      --------------  ------------------
                                                       (Unaudited)
ASSETS:
<S>                                                   <C>             <C>
Cash and cash equivalents                                  $ 22,988            $ 22,456
Receivables, net                                              9,482               7,750
Inventories                                                  14,896              13,430
Prepaid expenses                                              6,580               6,308
Advance location payments                                    77,772              74,026
Land, property and equipment, less accumulated
  depreciation of $83,998 and $72,234                       216,262             194,328
Contract rights, less accumulated amortization of
  $46,798 and $39,923                                       420,519             366,762
Goodwill, less accumulated amortization of $14,521
  and $12,530                                               132,079             110,424
Other assets                                                 23,462              21,464
                                                           --------            --------
Total assets                                               $924,040            $816,948
                                                           ========            ========
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
Accounts payable                                           $ 18,209            $ 17,128
Accrued rental payments                                      25,080              20,977
Accrued interest                                              5,605              13,993
Other accrued expenses                                       13,621              15,178
Deferred income taxes                                       102,010              79,511
11-3/4% Senior Notes                                        296,655             296,655
Premium on 11 3/4% Senior Notes, net                          8,949               9,258
Credit facility indebtedness                                389,561             296,267
Other long-term debt                                          8,498               9,236
 
Stockholders' equity:
  Common stock and capital in excess of par value           103,431             103,210
  Notes receivable from management                             (335)               (335)
  Accumulated deficit                                       (47,244)            (44,130)
                                                           --------            --------
Total stockholders' equity                                   55,852              58,745
                                                           --------            --------
Total liabilities and stockholders' equity                 $924,040            $816,948
                                                           ========            ========
 
</TABLE>
      The accompanying notes are an integral part of these financial statements.

______

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

                                      -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
                                            ----------------------------
 
                                             June 30,          June 27,
                                               1998              1997
                                            ----------------------------
 
<S>                                         <C>            <C>
REVENUES                                     $   117,934    $    72,095
COSTS AND EXPENSES:
     Laundry operating expenses                   77,568         48,236
     General and administrative expenses           1,997          1,489
     Depreciation and amortization                26,843         16,475
     Stock-based compensation charge                 221            145
                                             -----------    -----------
                                                 106,629         66,345
                                             -----------    -----------
OPERATING INCOME                                  11,305          5,750
INTEREST EXPENSE, NET                             15,567         10,063
                                             -----------    -----------
LOSS BEFORE INCOME TAXES                          (4,262)        (4,313)
                                             -----------    -----------
PROVISION (BENEFIT) FOR INCOME TAXES:
     Currently payable                               108             50
     Deferred                                     (1,256)          (850)
                                             -----------    -----------
                                                  (1,148)          (800)
                                             -----------    -----------
NET LOSS                                     $    (3,114)   $    (3,513)
                                             ===========    ===========
BASIC AND DILUTED LOSS PER SHARE                   $(.24)         $(.34)
                                             ===========    ===========
WEIGHTED AVERAGE SHARES OUTSTANDING:
     Common Shares                            13,167,783     10,484,926
</TABLE>



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

                                      -4-
<PAGE>
 
                 COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                -----------------------------------------------
                                  (UNAUDITED)
                                  -----------
                           (In thousands of dollars)
<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                      ---------------------
                                                                       June 30,   June 27,
                                                                         1998       1997
                                                                      ----------  ---------
<S>                                                                   <C>         <C>
OPERATING ACTIVITIES:
     Net loss                                                         $  (3,114)  $ (3,513)
     Adjustments to reconcile net loss to net cash
      provided by operating activities:
     Depreciation                                                        12,133      6,473
     Amortization of advance location payments                            4,985      3,050
     Amortization of intangibles                                          9,725      6,952
     Deferred income taxes                                               (1,256)      (850)
     Stock-based compensation charge                                        221        145
     Amortization of premium on 11 3/4% Senior Notes                       (309)        --
     Amortization of debt discount and deferred issuance costs              376        161
 
     Change in operating assets and liabilities,
         net of business acquired:
         Other assets                                                      (504)       870
         Receivables, net                                                  (866)       896
         Inventories and prepaid expenses                                  (294)    (1,810)
         Accounts payable                                                   (79)      (162)
         Accrued interest                                                (8,388)    (5,451)
         Accrued expenses, net                                            2,546      1,912
                                                                      ---------   --------
     Net cash provided by operating activities                           15,176      8,673
                                                                      ---------   --------
INVESTING ACTIVITIES:
     Additions to property and equipment                                (15,481)   (11,483)
     Advance location payments to location owners                        (5,276)    (3,639)
     Additions to net assets related to acquisitions of businesses      (86,123)   (45,494)
                                                                      ---------   --------
         Net cash used for investing activities                        (106,880)   (60,616)
                                                                      ---------   --------
FINANCING ACTIVITIES:
Debt transactions:
     Net repayments of bank and other borrowings                           (226)      (225)
     Deferred debt issuance costs                                          (267)      (900)
     Proceeds from issuance of term loans from credit facility           93,294     58,000
     Principal payments on capitalized lease obligations                   (565)      (260)
                                                                      ---------   --------
         Net cash provided by financing activities                       92,236     56,615
                                                                      ---------   --------
         Net increase in cash and cash equivalents                          532      4,672

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                           22,456     14,729
                                                                      ---------   --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                              $  22,988   $ 19,401
                                                                      =========   ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:
     Interest paid                                                    $  24,307   $ 15,428
                                                                      =========   ========
</TABLE>

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

                                      -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 744,000 washers and dryers in approximately 75,000 locations on
routes throughout the United States and in 150 retail laundromats located
throughout Texas.

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
therein.  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
1998 presentation.


3.  LOSS PER SHARE

     Basic and diluted loss per share for the three months ended June 30, 1998
and June 27, 1997 was calculated based upon the weighted average number of
common shares outstanding of 13,167,783 and 10,484,926, respectively.
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 (AUDITED)
(continued)

4.  COMPREHENSIVE INCOME

     As of April 1, 1998, the Company adopted Financial Accounting Standards
Board ("FASB") Statement of Financial Accounting Standard ("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 income or
stockholders' equity.  SFAS No. 130 requires unrealized gains or losses on the
Company's available-for-sale securities and foreign currency translation
adjustments, which prior to adoption would have been reported separately in
stockholders' equity to be included in other comprehensive income.  The Company
does not have any elements of comprehensive income which would be required to be
included in its financial statements.

5.  LONG-TERM DEBT

     At June 30, 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"), (b) $274.0 million of term loans, and (c) approximately $115.6 million
of a revolving line of credit.  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 June 30, 1998, the Company has granted 402,250 stock options to
various employees of the Company pursuant to the Stock Option Plan, of which
148,500 were granted during the past fiscal quarter.

     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%
                                      -8-
<PAGE>
 
                 COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES

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

6. STOCKHOLDERS' EQUITY (continued)

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 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 148,500 
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 will record 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 three months ended June 30, 1998 and June 27, 1997, 
the Company has recorded a stock-based compensation charge of approximately
$221,000 and $145,000, respectively, relating to the options described above.

7.  ACQUISITIONS

     On May 19, 1998, the Company completed the acquisition (the "Cleanco
Acquisition") of Cleanco, Inc. and certain of its affiliates ("Cleanco") for a
cash purchase price of approximately $23.0 million (excluding transaction
expenses), 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 (the "G&T
Acquisition") of Gordon & Thomas Companies, Inc. ("G&T") for a cash purchase
price of approximately $58 million (excluding transaction expenses) 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 the historical information contained herein, certain matters
discussed in this document are forward-looking statements that involve certain
risks and uncertainties, including the risks and uncertainties discussed below,
as well as other risks set forth in the Company's Annual Report on Form 10-K for
the year ended March 31, 1998.

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 744,000 washers and
dryers in approximately 75,000 multi-family housing properties on routes
throughout the United States and 150 retail laundromats located throughout
Texas.

     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 $2.4 million and $0.8 million for the three
months ended June 30, 1998 and June 27, 1997, respectively); (ii) operating,
maintaining and servicing retail laundromats (approximately $4.8 million and
$5.5 million for the three months ended June 30, 1998 and June 27, 1997,
respectively); 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 $6.5 million and $4.8 million for the three months ended June 30,
1998 and June 27, 1997, respectively).

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.

                                      -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 (continued)

COMPARISON OF THE THREE MONTH PERIOD ENDED JUNE 30, 1998 AND JUNE 27, 1997

     Revenues increased by approximately 64% for the three month period ended
June 30, 1998, as compared to the prior year's corresponding period. 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 $41.4 million of its revenue increase for the
current three 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 1997.  In addition, during the current
three month period, the Company's installed machine base increased by
approximately 6,500 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 5,500 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 61% for the three
month period ended June 30, 1998, as compared to the prior year's corresponding
period.  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.

     General and administrative expenses increased by approximately $0.5 million
for the three month period ended June 30, 1998, as compared to the prior year's
corresponding period.  The increase for the period was due to various expenses
associated with (i) costs and expenses relating to the Company's acquisition
strategy, including systems development and refinement relating to the
integration of prior acquisitions, and (ii) additional expenses, such as
accounting, management information systems and other administrative functions
related to the Company's growth.  However, as a percentage of revenues, general
and administrative expenses were 1.7% for the current period as compared to 2.1%
for the prior year's corresponding period.

     Depreciation and amortization expenses increased by approximately 63% for
the three month period ended June 30, 1998, as compared to the prior year's
corresponding period, due primarily to the 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
disinterested directors Independent Director Options to purchase up to a total
of 120,000 shares of Common Stock.  

                                      -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)

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 to certain employees 148,500 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 will record 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 three months ended June 30, 1998
and June 27, 1997, the Company recorded a stock-based compensation charge of
approximately $221,000 and $145,000, respectively, relating to these options.

     Operating income margins were approximately 9.6% for the three month period
ended June 30, 1998, as compared to approximately 8.0% for the three month
period ended June 27, 1997.

     Interest expense, net, increased by approximately 55% for the three month
period ended June 30, 1998, as compared to the prior year's corresponding
period, 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 the stock-based compensation charges was
approximately $38.4 million for the three months ended June 30, 1998, as
compared to approximately $22.4 million for the corresponding period in 1997,
representing an improvement of approximately 72%.  EBITDA margins improved to
approximately 32.5% for the three months ended June 30, 1998, compared to
approximately 31.0% 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 June 30, 1998, the Company had outstanding long-term debt
(excluding the premium on the Series C Notes) of approximately $694.7 million
and stockholders' equity of approximately $55.9 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 

                                      -12-
<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)

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 three
months ended June 30, 1998 were approximately $106.9 million.  Of such amount,
the Company spent approximately $86.1 million in acquisition and related
transaction costs, primarily due to the Cleanco Acquisition and the G&T
Acquisition, and approximately $6.6 million related to the net increase in the
installed base of machines of approximately 6,500 machines.  The balance of
approximately $14.1 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.

     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.

                                      -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 depreciation and amortization expenses (aggregating
approximately $26.8 million for the three months ended June 30, 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.

     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 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 acquisition of Cleanco, Inc. and
certain if its affiliates ("Cleanco") for a cash purchase price of approximately
$23.0 million, excluding transaction expenses (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.

                                      -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)

     On June 5, 1998, Coinmach acquired all of the common stock of Gordon &
Thomas Companies, Inc. ("G&T") for a cash purchase price of approximately $58
million, excluding transaction expenses and the assumption of certain
liabilities (the "G&T Acquisition").  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.

     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.

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 generally is not seasonal.

                                      -15-
<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

          Not applicable

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

          On June 9, 1998, the Company held a special meeting of stockholders
          (the "Special Meeting") at which the following proposals were
          submitted to a vote of the holders of record of the Company's Class A
          Common Stock as of May 19, 1998 (the "Record Date"):

            1. the ratification and adoption of an amendment to the Company's
               charter increasing the number of authorized shares of Class A
               Common Stock from 15,000,000 to 35,000,000 ("Proposal 1"); and

            2. the ratification and adoption of the amendment to the Company's
               charter increasing the number of authorized shares of Series
               Preferred Stock from 1,000,000 to 20,000,000 ("Proposal 2").

          12,687,135 shares of Common Stock were issued and outstanding and
          eligible to vote as of the Record Date for the Special Meeting.

          Proposal 1 relating to an amendment to the Company's charter
          increasing the shares of Class A Common Stock from 15,000,000 to
          35,000,000 was approved.  Results of the voting were as follows: (i)
          8,991,891 shares were voted in favor of Proposal 1; (ii) 533,576
          shares were voted against Proposal 1; and (iii) 300 shares abstained.

          Proposal 2 relating to an amendment to the Company's charter
          increasing the number of authorized shares of Series Preferred Stock
          from 1,000,000 to 20,000,000 was approved.  Results of the voting were
          as follows: (i) 6,656,532 shares were voted in favor of Proposal 2;
          (ii) 2,868,935 shares were voted against Proposal 2; and (iii) 300
          shares abstained.  

                                      -16-
<PAGE>
 
                 COINMACH LAUNDRY CORPORATION AND SUBSIDIARIES


ITEM 5.   OTHER INFORMATION

          None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits
               --------

               3.4   Certificate of Amendment of the Certificate of
                     Incorporation of Coinmach Laundry
     
               3.5   Fourth Amended and Restated Certificate of Incorporation of
                     Coinmach Laundry
     
              10.76  Third Amended and Restated 1996 Employee Stock Option Plan
                     of Coinmach Laundry
     
              10.77  Stock Purchase Agreement, dated May 19, 1998, by and
                     between Gordon & Thomas Companies, Inc., Thomas L. Litwin,
                     Dorothy E. Litwin, Stuart M. Litwin, Thomas L. Litwin, GRIT
                     No. 2 and Coinmach Corporation
     
              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: August 11, 1998    /s/    ROBERT M. DOYLE
                         -------------------------------
                         Robert M. Doyle
                         Senior Vice President and Chief Financial Officer
                         (On behalf of registrant and as Principal Financial
                          Officer)

                                      -18-