<PAGE>
 
                                   FORM 10-Q


                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


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

     For the quarterly period ended March 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 No. 333-3621


                        CHANNELL COMMERCIAL CORPORATION
            (Exact name of Registrant as specified in its charter)


                                   DELAWARE
        (State or other jurisdiction of incorporation or organization)


                                  95-2453261
                     (I.R.S. Employer Identification No.)


                     26040 Ynez Road, Temecula, California
                   (Address of principal executive offices)

                                     92591
                                  (Zip Code)

                                (909) 694-9160
             (Registrant's telephone number, including area code)


     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 
                                                 -----       -----

     9,237,000 shares of common stock of the Registrant were outstanding at
March 31, 1998.
<PAGE>
 
                        CHANNELL COMMERCIAL CORPORATION

                 CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

                 (amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                                     Three months ended
                                                          March 31,
                                                     ------------------- 
                                                      1998        1997
                                                     -------     -------
<S>                                                 <C>         <C>
Net sales                                            $15,704     $12,804
Cost of goods sold                                     9,290       7,661
                                                     -------     -------
        Gross profit                                   6,414       5,143
Commission income                                         80         148
                                                     -------     -------
                                                       6,494       5,291
Operating expenses
        Selling                                        2,219       1,753
        General and administrative                     1,404       1,210
        Research and development                         378         235
                                                     -------     -------
                                                       4,001       3,198
                                                     -------     -------
        Income from operations                         2,493       2,093

Interest income                                          152         299
                                                     -------     -------

        Income before income taxes                     2,645       2,392

Income taxes                                           1,098       1,005
                                                     -------     -------

        Net income                                   $ 1,547     $ 1,387
                                                     =======     =======

        Net income per share - basic and diluted     $  0.17     $  0.15
                                                     =======     =======

        Weighted average shares outstanding            9,237       9,237
                                                     =======     =======
</TABLE> 

                                                                    Page 1 of 10
<PAGE>

                        CHANNELL COMMERCIAL CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                 (amounts in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                   Unaudited
                                                                   March 31,            December 31,
                                                                     1998                  1997
                                                                  -----------           -----------
<S>                                                               <C>                   <C> 
ASSETS
Current assets
           Cash and cash equivalents                                 $  3,354              $  3,840
           Investments                                                 11,708                11,651
           Accounts receivable (net)                                   10,345                 9,191
           Inventories                                                  8,593                 7,269
           Deferred income taxes                                          868                   688
           Prepaid expenses                                               177                   613
                                                                     --------              --------
                      Total current assets                             35,045                33,252

Property and equipment at cost, net                                    15,752                14,758
Deferred income taxes                                                     483                   664
Intangible assets, net                                                  1,615                 1,649
Other assets                                                              371                   302
                                                                     --------              --------
           Total assets                                              $ 53,266              $ 50,625
                                                                     ========              ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
           Accounts payable                                          $  2,767              $  2,606
           Notes payable current                                          133                   --
           Current maturities of capital lease obligations                226                   226
           Accrued expenses                                             1,025                   791
           Income taxes payable                                         1,138                   390
                                                                     --------              --------
                      Total current liabilities                         5,289                 4,013
                                                                     --------              --------
Long-term obligations                                                     267                   400
                                                                     --------              --------
Capital lease obligations                                                 271                   320
                                                                     --------              --------
Commitments

Stockholders' equity
           Preferred stock                                                 --                    --
           Common stock, par value $.01 per share, authorized --
                  19,000 shares; issued and outstanding --
                   9,237 shares                                            92                    92
           Additional paid-in capital                                  27,991                27,991
           Retained earnings                                           19,356                17,809
                                                                     --------              --------
           Total stockholders' equity                                  47,439                45,892
                                                                     --------              --------
           Total liabilities and stockholders' equity                $ 53,266              $ 50,625
                                                                     ========              ========
</TABLE> 
                                                                    Page 2 of 10
<PAGE>
 
                        CHANNELL COMMERCIAL CORPORATION
               CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                            (amounts in thousands)
<TABLE> 
<CAPTION> 
                                                                                       Three months ended
                                                                                             March 31
                                                                                ----------------------------------
                                                                                  1998                      1997
                                                                                --------                  --------
<S>                                                                           <C>                      <C> 
Cash flows from operating activities:
         Net income                                                            $ 1,547                   $ 1,387
         Adjustments to reconcile net income to net cash
           provided by operating activities:
             Depreciation and amortization                                         619                       523
             Deferred income taxes                                                   1                        (2)
         (Increase) decrease in assets:
             Accounts receivable                                                (1,154)                      348  
             Inventories                                                        (1,324)                   (1,221) 
             Prepaid expenses                                                      436                       160  
             Other                                                                 (69)                      (86) 
         Increase (decrease) in liabilities:                                                                      
             Accounts payable                                                      161                        83  
             Accrued expenses                                                      234                        61  
             Income taxes payable                                                  748                      (701)  
                                                                               -------                   -------
Net cash provided by operating activities                                        1,199                       552
                                                                               -------                   -------
Cash flows from investing activities:
         Acquisition of property and equipment                                  (1,579)                     (412)
         Acquisitions                                                               --                    (2,085)
         Increase in investments                                                   (57)                       --
                                                                               -------                   -------
Net cash (used in) investing activities                                         (1,636)                   (2,497)
                                                                               -------                   -------
Cash flows from financing activities:
         Repayment of debt                                                          --                      (735)
         Repayment of obligations under capital lease                              (49)                      (34)
                                                                               -------                   -------
Net cash (used in) financing activities                                            (49)                     (769)
                                                                               -------                   -------
Increase (decrease) in cash and cash equivalents                                  (486)                   (2,714)

Cash and cash equivalents, beginning of period                                   3,840                     9,190
                                                                               -------                   -------
Cash and cash equivalents, end of period                                       $ 3,354                   $ 6,476
                                                                               =======                   =======
Cash paid during the period for:
         Interest                                                              $    18                   $    33
                                                                               =======                   =======
         Income taxes                                                          $   343                   $ 1,623
                                                                               =======                   =======
</TABLE> 

                                                                    Page 3 of 10
<PAGE>
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)
                                        
                 (amounts in thousands, except per share data)


1.   Unaudited financial statements:  In the opinion of management, all
     adjustments, consisting only of normal recurring adjustments necessary for
     a fair presentation of (a) the consolidated results of operations for the
     three-months ended March 31, 1998 and 1997, (b) the consolidated financial
     position at March 31, 1998, and (c) the consolidated statements of cash
     flows for the three-month periods ended March 31, 1998 and 1997 have been
     made.  The results for the three-month period ended March 31, 1998, are not
     necessarily indicative of the results for the entire year.

2.   Inventories:  Inventories stated at the lower of cost or market (first-in,
     first-out method) are summarized as follows:

<TABLE>
<CAPTION>
                                          March 31, 
                                            1998          
                                          ---------
                   <S>                    <C>
                   Raw materials            $1,269       
                   Work-in process           1,025       
                   Finished goods            6,299       
                                            $8,593       
                                          ========
</TABLE>
3.   Marketable Securities: The Company has invested in certain U.S. Government
     issued debt instruments and other taxable securities. These investments are
     classified as "available for sale" as defined by Statement of Financial
     Accounting Standards No. 115. The investment in these securities are
     therefore recorded at fair value with any differences between fair value
     and cost recorded as a separate component of stockholders' equity. At March
     31, 1998, there were no material differences between the fair value and
     cost of these marketable securities.

4.   In 1997, the Financial Accounting Standards Board ("FASB") issued Statement
     of Financial Accounting Standards No. 130 ("SFAS 130"), reporting
     comprehensive income, which prescribes standards for reporting
     comprehensive income and its components.  Comprehensive income consists of
     net income or loss for the current period and other comprehensive income
     (income, expenses, gains and losses that currently bypass the income
     statement and are reported directly in a separate component of equity).
     SFAS 130 requires that components of comprehensive income be reported in a
     financial statement that is displayed with the same prominence as other
     financial statements.  SFAS 130 is effective for financial statements
     issued for periods beginning after December 15, 1997.  There are no
     components of income, other than as reflected on the Consolidated
     Statements of Income, for the periods presented in these statements.

                                                                    Page 4 of 10
<PAGE>
 
     In 1997, the FASB issued Statement of Financial Accounting Standards No.
     131 ("SFAS 131"), Disclosures About Segments of an Enterprise and Related
     Information, which applies only to publicly held business entities.  A
     reportable segment, referred to as an operating segment, is a component of
     an entity about which separate financial information is produced
     internally, that is evaluated by the chief operating decision-maker to
     assess performance and allocate resources.  SFAS 131 is effective for
     financial statements issued for periods beginning after December 15, 1997.
     The Company operates in a one industry segment as supplier of
     telecommunications equipment.  While the Company offers a wide range of
     items for sale, many of them are marketed by a common sales force.

                                                                    Page 5 of 10
<PAGE>
 
RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1998 WITH THE THREE MONTHS ENDED
MARCH 31, 1997

     Net Sales.  Net sales increased $2.9 million or 22.7% from $12.8 million in
the first quarter of 1997 to $15.7 million in the first quarter of 1998 as a
result of increased sales of telecommunication enclosure products of $2.3
million, RF passive electronic devices of $0.4 million and $0.2 million of other
related equipment.

     Domestic net sales increased $2.3 million or 20.5% from $11.2 million in
the first quarter of 1997 to $13.5 million in the first quarter of 1998,
primarily due to accelerated growth in both upgrade and rebuild construction to
facilitate increased broadband requirements.

International net sales increased $0.6 million or 37.5% from $1.6 million in the
1997 period to $2.2 million in the 1998 period, primarily due to new
construction in Europe, South America and Canada.

     Gross Profit.  Gross profit increased $1.3 million or 25.5% from $5.1
million in the first quarter of 1997 to $6.4 million in the first quarter of
1998.  Gross margin increased from 40.2% to 40.9% during the comparable periods.
The improvements in gross profit and gross margin are primarily due to an
increase in overall sales volume, which resulted in higher operating leverage.

     Commission Income.  Commission income was $0.1 million in both of the first
quarters of 1997 and 1998.

     Selling.  Selling expense increased $0.4 million or 22.2% from $1.8 million
in the first quarter of 1997 to $2.2 million in the first quarter of 1998,
primarily as a result of increased payroll, benefits and employee related
expenses of $0.3 million related to the Standby Electronics acquisition and
increased selling and marketing activities.  Freight expense increased $0.1
million in the comparable periods due to the increase of sales volume.  As a
percentage of net sales, selling expense increased from 13.7% in the 1997 period
to 14.0% in the 1998 period.

     General and Administrative.  General and administrative expenses increased
$0.2 million or 16.7% from $1.2 million in the first quarter of 1997 to $1.4
million in the first quarter of 1998, primarily as a result of increased payroll
and benefits expenses of $0.1 million related to increased staffing.  Employee
related expenses increased $0.1 million as a result of the recruiting of an
operations manager in addition to an information systems director.  As a
percentage of net sales, general and administrative expense decreased from 9.5%
in the 1997 period to 8.9% in the 1998 period.

                                                                    Page 6 of 10
<PAGE>
 
     Research and Development.  Research and development expenses increased $0.2
million or 100.0% from $0.2 million in the first quarter of 1997 to $0.4 million
in the first quarter of 1998, primarily as a result of increased payroll and
benefits related to increased staffing.  As a percentage of net sales, research
and development expense increased from 1.8% in the 1997 period to 2.4% in the
1998 period.

     Income from Operations.  As a result of the items discussed above, income
from operations increased $0.4 million or 19.1% from $2.1 million in the first
quarter of 1997 to $2.5 million in the first quarter of 1998, while the
operating margin decreased from 16.4% to 15.9% in the comparable periods.

     Income Taxes.  Income taxes increased $0.1 million or 10.0% from $1.0
million in the first quarter of 1997 to $1.1 million in the first quarter of
1998.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash provided by operating activities for the first quarter was $0.6
million and $1.2 million in 1997 and 1998, respectively.  Net cash used in
financing activities was $0.8 million and less than $0.1 million in 1997 and
1998, respectively.  Net cash used in investing activities was $2.5 million in
1997 and $1.6 million in 1998 respectively.

     Accounts receivable increased from $9.2 million at December 31, 1997, to
$10.3 million at March 31, 1998, as a result of increased sales.  Inventories
increased from $7.3 million at December 31, 1997, to $8.6 million at March 31,
1998, primarily as a result of increased RF passive electronic devices, finished
goods.

     The Company made capital expenditures for the first quarter of $0.4 million
and $1.6 million in 1997 and 1998, respectively, and anticipates increased
capital spending for equipment, product tooling and test equipment.

     The Company has historically financed its operations and capital
expenditures through internally generated funds and bank borrowing.  The Company
currently maintains a revolving credit facility with a $5.0 million working
capital revolving line of credit and a $5.0 million equipment revolving line of
credit, neither of which currently has any outstanding balance.  Availability of
advances under the revolving credit facilities expires on May 1, 1999.

     On May 1, 1998, the Company acquired all of the stock in A.C. Egerton
(Holdings) Plc ("Egerton").  Egerton is a U.K. holding company with subsidiaries
in the U.K., Australia and the U.S., which are involved primarily in the
manufacturing and sales of telephone equipment primarily in Europe, Asia and
Australia.  Purchase price of the stock was approximately $26.9 million and was
paid from the proceeds of bank borrowing and liquidation of short-term
investments.

                                                                    Page 7 of 10
<PAGE>
 
     The Company believes that income from operations, coupled with the
remaining proceeds from the Initial Public Offering and bank borrowings will be
sufficient to fund the acquisition of Egerton, capital expenditures and working
capital requirements through the remainder of 1998.

     Forward-looking statements contained within this 10-Q are subject to many
uncertainties in the Company's operations and business environments.  Examples
of such uncertainties include customer demand, low material costs, integration
of acquired business and worldwide economic conditions among others.  Such
uncertainties are discussed further in the Company's annual report and S-1 filed
with the Securities and Exchange Commission.

                                                                    Page 8 of 10
<PAGE>
 
Part II - Other Information


Item 1.    Legal Proceedings

     The Company is from time to time involved in ordinary routine litigation
incidental to the conduct of its business.  The Company regularly reviews all
pending litigation matters in which it is involved and establishes reserves
deemed appropriate for such litigation matters.  Management believes that no
presently pending litigation matters will have a material adverse effect on the
Company's financial statements taken as a whole or on its results of operations.

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

<TABLE> 
<CAPTION> 

Exhibit
Number    Description
------    -----------
<C>      <S>  
 3.1      Restated Certificate of Incorporation of the Company (1)
 3.2      Bylaws of the Company (1)
 4        Form of Common Stock Certificate (1)
10.1      Tax Agreement between the Company and the Existing Stockholders (1)
10.2      Channell Commercial Corporation 1996 Incentive Stock Plan (including
          form of Stock Option Agreements and Restricted Stock Agreement) (1)
10.3      Business Loan Agreement dated as of May 13, 1997 between the Company
          and Bank of America National Trust and Savings Association ("Bank of
          America") (3)
10.8      Employment Agreement between the Company and William H. Channell, Sr. (1)
10.9      Employment Agreement between the Company and William H. Channell, Jr. (1)
10.10     Channell Commercial Corporation 1996 Performance-Based Annual Incentive
          Compensation Plan (1)
10.11     Lease dated December 22, 1989 between the Company and William H.
          Channell, Sr., as amended (1)
10.12     Lease dated May 29, 1996 between the Company and the Channell Family
          Trust (1)
10.14     Lease dated September 24, 1997 between the Company and SCI North Carolina
          Limited Partnership (5)
10.15     Lease dated November 2, 1989 between the Company and Meadowvale Court
          Property Management Ltd., as amended (1)
10.16     Lease Agreement dated as of March 1, 1996 between Winthrop Resources
          Corp. and the Company (1)
10.17     Form of Indemnity Agreement (1)
</TABLE> 
                                                                    Page 9 of 10
<PAGE>
 
<TABLE> 
<C>      <S> 
10.18     Form of Agreement Regarding Intellectual Property (1)
10.19     401(k) Plan of the Company (4)
10.20     Letter Agreement regarding employment, Andrew M. Zogby (2)
10.21     Letter Agreement regarding employment, John B. Kaiser (2)
11        Computation of Proforma Income per Share (2)
27        Financial Data Schedule (5)
</TABLE> 

_______
(1)  Incorporated by reference to the indicated exhibits filed in connection
     with the Company's Registration Statement on Form S-1 (File No. 333-3621).
(2)  Incorporated by reference to the indicated exhibits filed in connection
     with the Company's Form 10-K on March 31, 1997.
(3)  Incorporated by reference to the indicated exhibits filed in connection
     with the Company's Form 10-Q on August 13, 1997.
(4)  Incorporated by reference to the indicated exhibits filed in connection
     with the Company's Form 10-K on March 30, 1998.
(5)  Filed herewith.


                                   SIGNATURES
                                   ----------

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


                        CHANNELL COMMERCIAL CORPORATION
                                  (Registrant)



Dated:  May 4, 1998                 By: /s/ Gary W. Baker
                                       ----------------------
                                       Gary W. Baker
                                       Chief Financial Officer


                                                                   Page 10 of 10