<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended March 31, 1999

Commission File Number-   0-27602
                          -------

                              NCS HealthCare, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                        No. 34-1816187
-------------------------------                         ----------------------
(State or other jurisdiction of                             (IRS employer
 incorporation or organization)                         identification number)

3201 Enterprise Parkway, Suite 220, Beachwood, Ohio 44122
---------------------------------------------------------
  (Address of principal executive offices and zip code)

                     (216) 378-6800
---------------------------------------------------------
  (Registrant's telephone number, including area code)


* Indicate by check 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 requirement for the past 90 days.

Yes  X   No
    ---     ---

Common Stock Outstanding
------------------------

Indicate the number of shares outstanding of each of the Issuers' classes of
common stock, as of the latest practical date.

Class A Common Stock, $ .01 par value -- 14,140,595 shares as of May 12, 1999

Class B Common Stock, $ .01 par value -- 6,135,737 shares as of May 12, 1999


<PAGE>   2
<TABLE>
                              NCS HEALTHCARE, INC.
                                AND SUBSIDIARIES

                                      INDEX

<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
Part I.  Financial Information:

Item 1.  Financial Statements (Unaudited)

         Condensed Consolidated Balance Sheets-
             March 31, 1999 and June 30, 1998                                3

         Condensed Consolidated Statements of Income-
             Three and nine months ended-
             March 31, 1999 and 1998                                         4

         Condensed Consolidated Statements of Cash Flows-
             Nine months ended-
             March 31, 1999 and 1998                                         5

Notes to Condensed Consolidated Financial Statements - March 31, 1999        6

Item 2.  Management's Discussion and Analysis of
         Results of Operations and Financial Condition                       9 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk         13

Part II. Other Information:

Item 6.  Exhibits and Reports on Form 8-K                                   14

Signatures                                                                  15
</TABLE>

                                       2
<PAGE>   3
                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
                                  NCS HEALTHCARE, INC.
                                    AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE INFORMATION)

<CAPTION>
                                                                 (Unaudited)   (Note A)
                                                                  March 31,    June 30,
ASSETS                                                              1999         1998
                                                                  --------     --------
<S>                                                              <C>           <C>
Current Assets:
Cash and cash equivalents                                         $ 24,014     $ 21,186
Accounts receivable, less allowances                               193,805      142,325
Inventories                                                         50,609       43,784
Other                                                               17,241       14,224
                                                                  --------     --------
                   Total current assets                            285,669      221,519

Property and equipment, at cost
          net of accumulated depreciation and amortization          56,392       43,593
Goodwill, less accumulated amortization                            338,914      340,209
Other assets                                                        24,823       18,469
                                                                  --------     --------
                   Total assets                                   $705,798     $623,790
                                                                  ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
          Accounts payable                                        $ 31,199     $ 34,131
          Accrued expenses and other liabilities                    42,257       38,026
                                                                  --------     --------
                   Total current liabilities                        73,456       72,157

Line of credit                                                     212,700      147,800
Long-term debt, excluding current portion                            2,514        3,879
Convertible subordinated debentures                                100,000      102,753
Other                                                                9,767        9,867


Stockholders' Equity:
          Preferred stock, par value $ .01 per share,
              1,000,000 shares authorized; none issued                --           --
          Common stock, par value $ .01 per share:
              Class A - 50,000,000 shares authorized;
                14,126,176 and 13,334,639 shares issued and
                outstanding at March 31, 1999 and June 30,
                1998, respectively                                     141          133
              Class B - 20,000,000 shares authorized;
                6,135,787 and 6,463,244 shares issued and
                outstanding at March 31, 1999 and June 30,
                1998, respectively                                      61           65

          Paid-in capital                                          262,517      258,462
          Retained earnings                                         44,642       28,674
                                                                  --------     --------
                   Total stockholders' equity                      307,361      287,334
                                                                  --------     --------
                   Total liabilities and stockholders' equity     $705,798     $623,790
                                                                  ========     ========
</TABLE>

Note A:  The balance sheet at June 30, 1998 has been derived from the audited
         consolidated financial statements at that date, but does not include
         all of the information and footnotes required by generally accepted
         accounting principles for complete financial statements.

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>   4
<TABLE>
                                      NCS HEALTHCARE, INC.
                                        AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                           (UNAUDITED)
                          (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)

<CAPTION>
                                                   THREE MONTHS ENDED        NINE MONTHS ENDED
                                                        MARCH 31,                 MARCH 31,
                                                 ---------------------     ---------------------
                                                   1999         1998         1999         1998
                                                 ---------------------     ---------------------
<S>                                              <C>          <C>          <C>          <C>     
Revenues                                         $184,611     $137,669     $535,487     $355,888
Cost of revenues                                  137,167      102,812      398,787      265,766
                                                 ---------------------     ---------------------
Gross profit                                       47,444       34,857      136,700       90,122
Selling, general and administrative expenses       32,815       25,390       95,665       65,972
                                                 ---------------------     ---------------------
Operating income                                   14,629        9,467       41,035       24,150
Interest expense, net                               4,588        1,808       13,367        3,063
                                                 ---------------------     ---------------------
Income before income taxes                         10,041        7,659       27,668       21,087
Income tax expense                                  4,167        3,294       11,700        9,068
                                                 ---------------------     ---------------------
Net income                                       $  5,874     $  4,365     $ 15,968     $ 12,019
                                                 =====================     =====================

Net income per share - basic                     $   0.29     $   0.22     $   0.79     $   0.64
                                                 =====================     =====================
Net income per share - diluted                   $   0.29     $   0.22     $   0.79     $   0.63
                                                 =====================     =====================

Shares used in the computation - basic             20,252       19,486       20,176       18,903
Shares used in the computation - diluted           23,410       19,757       20,338       19,219
</TABLE>

            See notes to condensed consolidated financial statements.

                                       4
<PAGE>   5
<TABLE>
                                  NCS HEALTHCARE, INC.
                                    AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (UNAUDITED)
                                     (IN THOUSANDS)
<CAPTION>

                                                                    Nine Months Ended
                                                                        March 31,
                                                                -----------------------
                                                                   1999          1998
                                                                -----------------------
<S>                                                             <C>           <C>
OPERATING ACTIVITIES
Net income                                                      $ 15,968      $  12,019
Adjustments to reconcile net income to net cash used in
 operating activities:
          Depreciation and amortization                           17,505         11,708
          Changes in assets and liabilities, net of effects
           of assets and liabilities acquired:
                   Accounts receivable, net                      (52,372)       (31,053)
                   Accrued expenses and other liabilities          1,215          7,539
                   Other, net                                     (9,756)       (16,972)
                                                                -----------------------
Net cash used in operating activities                            (27,440)       (16,759)
                                                                -----------------------

INVESTING ACTIVITIES
Purchases of businesses                                           (1,204)      (108,116)
Capital expenditures for property and equipment, net             (21,128)       (14,953)
Other                                                            (11,390)        (5,933)
                                                                -----------------------
Net cash used in investing activities                            (33,722)      (129,002)
                                                                -----------------------

FINANCING ACTIVITIES
Proceeds from convertible subordinated debentures, net              --           97,250
Borrowings on line-of-credit                                      93,575         99,499
Payments on line-of-credit                                       (28,675)       (31,784)
Repayment of long-term debt                                       (1,418)        (3,763)
Proceeds from issuance of long-term debt                             137            178
Proceeds from exercise of  stock options                             371           --
                                                                -----------------------
Net cash provided by financing activities                         63,990        161,380
                                                                -----------------------

Net increase in cash and cash equivalents                          2,828         15,619
Cash and cash equivalents at beginning of period                  21,186          8,160
                                                                -----------------------
Cash and cash equivalents at end of period                      $ 24,014      $  23,779
                                                                =======================
</TABLE>

            See notes to condensed consolidated financial statements.

                                       5
<PAGE>   6
                              NCS HEALTHCARE, INC.
                                AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999
                                   (UNAUDITED)

1.  The accompanying unaudited condensed consolidated financial statements have
    been prepared in accordance with generally accepted accounting principles
    for interim financial information and with the instructions to Form 10-Q and
    Article 10 of Regulation S-X. Accordingly, they do not include all of the
    information and footnotes required by generally accepted accounting
    principles for complete financial statements. In the opinion of management,
    all adjustments (consisting of normal recurring accruals) considered
    necessary for a fair presentation have been included. Operating results for
    the nine month period ended March 31, 1999 are not necessarily indicative
    of the results that may be expected for the year ending June 30, 1999. For
    further information, refer to the consolidated financial statements and
    footnotes thereto included in the Company's Form 10-K for the year ended
    June 30, 1998.

2.  On August 13, 1997, the Company issued $100,000,000 of convertible
    subordinated debentures (debentures) due 2004. Net proceeds to the Company
    were approximately $97,250,000, net of underwriting discounts and expenses.
    The debentures carry an interest rate of 5 3/4% and are convertible into
    shares of Class A Common Stock. A portion of the proceeds from the debenture
    offering was used to repay approximately $21,000,000 of outstanding
    indebtedness under short-term borrowings.

    The debentures are obligations of the Company. The operations of the Company
    are currently conducted principally through subsidiaries, which are separate
    and distinct legal entities. Each of the Company's wholly-owned subsidiaries
    has unconditionally guaranteed, jointly and severally, the Company's payment
    obligations under the debentures. Accordingly, summarized financial
    information regarding the guarantor subsidiaries has not been presented
    because management of the Company believes that such information would not
    be meaningful to investors.

    In July 1998, $2,753,000 of 8% convertible subordinated debentures due in
    fiscal 1999 were converted into 273,707 shares of Class A Common Stock.

    During July 1998, the Company amended its credit facility increasing the
    total commitment from $150,000,000 to $245,000,000.

3.  During the fourth quarter of fiscal 1998, the Company recorded a
    nonrecurring charge of $8,900,000 primarily related to: 1) the adoption of a
    formal plan of restructuring to consolidate certain pharmacy sites in
    similar geographies; 2) the buyout of existing employment agreements with
    the prior owners of certain acquired businesses; 3) the write-off of certain
    financing fees; and 4) additional acquisition related expenses.

    The Company has adopted a formal plan of restructuring that will combine
    pharmacies in close geographical proximity in order to improve operating
    efficiencies. As a result of the plan, 17 pharmacy sites will be
    consolidated into either new or existing locations and an estimated total of
    149 employees will be terminated. As of March 31, 1999, 13 site
    consolidations were completed, with the remainder expected to be completed
    by the end of fiscal 1999.
<PAGE>   7
Details of the nonrecurring charge, related activity and reserve balance are 
as follows:

<TABLE>
<CAPTION>
                                                Nonrecurring              Reserve                Reserve
         Description            Cash/Non-cash      Charge     Activity   At 6/30/98  Activity   At 3/31/99
         -----------            -------------   ------------  --------   ----------  --------   ----------
                                                    (In millions)
<S>                             <C>             <C>           <C>        <C>         <C>        <C>
Site Consolidations
     Severance packages            Cash             $ .5       $  --        $ .5     $ (.2)        $ .3
     Lease terminations            Cash               .7          --          .7       (.3)          .4
     Asset impairments             Non-cash          3.5        (3.5)         --        --           --
     Other                         Cash               .6         (.4)         .2        --           .2

Buyout of employment agreements    Cash               .9         (.2)         .7       (.6)          .1

Write-off financing fees           Non-cash          1.3        (1.3)         --        --           --

Other
     Cash                                            1.0         (.8)         .2       (.1)          .1
     Non-cash                                         .4         (.4)         --        --           --
                                                    ----       -----        ----     -----         ----

Total                                               $8.9       $(6.6)       $2.3     $(1.2)        $1.1
                                                    ====       =====        ====     =====         ====
</TABLE>

4.  Significant acquisitions completed by the Company during fiscal 1998 include
    Cheshire LTC Pharmacy, Inc. in Cheshire, Connecticut, PharmaSource
    Healthcare, Inc. in Norcross, Georgia, Marco & Company, LLC in Billings,
    Montana, MedStar Pharmacy, Inc. in Benson, North Carolina, Greenwood
    Pharmacy and Managed Pharmacy Services, affiliates of Eckerd Corporation
    based in Sharon, Pennsylvania, Medical Pharmacy in Bakersfield, California,
    Robcin Enterprises, Inc. in Independence, Missouri, Apple Institutional
    Services in Salisbury, Maryland and the institutional pharmacy assets of
    Walgreen Co., an Illinois corporation. The aggregate purchase price for all
    businesses acquired during fiscal 1998 was $188,854,000 consisting of
    $171,083,000 in cash, $959,000 of debt and $16,812,000 of Class A and Class
    B Common Stock of the Company.


    The Cheshire LTC Pharmacy, Inc. and MedStar Pharmacy, Inc. acquisitions were
    accounted for as pooling of interests transactions, however the impact of
    these transactions on the Company's historical financial statements is not
    material; consequently, prior period financial statements have not been
    restated for these transactions. All other acquisitions have been accounted
    for as purchase transactions.

    Unaudited pro forma data, as though the Company had purchased each of these
    businesses as of July 1, 1997, are set forth below:

<TABLE>
<CAPTION>
                                                     Nine Months          Nine Months
                                                        Ended               Ended
                                                    March 31, 1999      March 31, 1998
                                                    --------------      --------------
                                              (In thousands, except per share information)
<S>                                                 <C>                 <C>
          Revenues                                     $537,099            $450,380
          Net income                                   $ 16,069            $ 11,437
          Net income per share - basic                 $   0.79            $   0.59
          Net income per share - diluted               $   0.79            $   0.58
</TABLE>

    The pro forma information does not intend to be indicative of operating
    results that would have occurred had the acquisitions been made at the
    beginning of the respective periods or of results that may occur in the
    future. The primary pro forma adjustments reflect amortization of goodwill
    acquired and interest costs. The pro forma information does not give effect
    to any potential synergies anticipated by the Company as a result of the
    acquisitions such as improvements in gross margin attributable to the
    Company's purchasing leverage and increased operating efficiencies.

                                       7
<PAGE>   8
5.  The Company has adopted Statement of Financial Accounting Standards No. 128,
    "Earnings per Share" (SFAS No. 128), which replaces the previously reported
    primary and fully diluted earnings per share with basic and diluted earnings
    per share. Unlike primary earnings per share, basic earnings per share
    exclude any dilutive effects of options, warrants and convertible
    securities. Diluted earnings per share is very similar to the previously
    reported fully diluted earnings per share. All earnings per share amounts
    for all periods have been presented, and where necessary, restated to
    conform to the requirements of SFAS No. 128. The following table sets forth
    the computation of basic and diluted earnings per share:

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED        NINE MONTHS ENDED
                                                                      MARCH 31,                 MARCH 31,
                                                                -------------------       -------------------
                                                                  1999        1998          1999        1998
                                                                -------------------       -------------------
<S>                                                             <C>         <C>           <C>         <C>
     Numerator:
       Numerator for basic earnings per share - net income      $ 5,874     $ 4,365       $15,968     $12,019
       Effect of dilutive securities:
          Convertible debentures
                                                                    819          --            --          --
                                                                -------------------       -------------------

          Numerator for diluted earnings per share              $ 6,693     $ 4,365       $15,968     $12,019
                                                                ===================       ===================

     Denominator:
        Denominator for basic earnings per share -
          Weighted average common shares                         20,252      19,486        20,176      18,903
                                                                -------------------       -------------------
        Effect of dilutive securities:
           Stock options                                             99         271           162         316
           Convertible debentures                                 3,059          --            --          --
                                                                -------------------       -------------------
        Dilutive potential common shares                          3,158         271           162         316
                                                                ===================       ===================

        Denominator for diluted earnings per share               23,410      19,757        20,338      19,219
                                                                ===================       ===================


     Basic earnings per share                                   $  0.29     $  0.22       $  0.79     $  0.64
                                                                ===================       ===================
     Diluted earnings per share                                 $  0.29     $  0.22       $  0.79     $  0.63
                                                                ===================       ===================
</TABLE>

    The Company had $100,000,0000 and  $102,753,000 of convertible
    subordinated debentures outstanding at March 31, 1999 and 1998,
    respectively, that were convertible into 3,058,000 and 3,332,000 shares,
    respectively, of Class A Common Stock that were not included in the
    computation of diluted earnings per share as their effect would be
    antidilutive for all periods presented except for the three months ended
    March 31, 1999.

                                       8
<PAGE>   9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION


Results of Operations

Revenues for the three months ended March 31, 1999 increased 34.1% to
$184,611,000 from $137,669,000 recorded in the comparable period in fiscal 1998.
Revenues for the nine months ended March 31, 1999 increased 50.5% to
$535,487,000 from $355,888,000 recorded in the comparable period in fiscal 1998.

The increase in quarter and year to date revenues during fiscal 1999 over the
comparable prior year period is primarily attributed to two factors: the
Company's acquisition program and internal growth. Of the $179,599,000 increase
for the nine months ended March 31, 1999, $107,752,000 of the increase is
attributable to a full period of operations for fiscal 1998 acquisitions. These
fiscal 1998 acquisitions include Cheshire LTC Pharmacy, Inc. in August 1997,
PharmaSource Healthcare, Inc. in September 1997, Marco & Company, LLC in
December 1997, MedStar Pharmacy, Inc. in January 1998, Medical Pharmacy, Robcin
Enterprises, Inc. and Greenwood Pharmacy and Managed Pharmacy Services,
affiliates of Eckerd Corporation in February 1998, Apple Institutional Services
in March 1998 and the institutional pharmacy assets of Walgreens Co. in June
1998. Internal growth accounted for $71,847,000 of the increase as the Company's
existing operations continued to grow through marketing efforts to new and
existing clients, increased drug utilization of long-term care facility
residents and the growth and integration of new and existing products and
services. The total number of beds serviced by the Company as of March 31, 1999
increased 16% to 258,000 beds, from 223,000 beds at March 31, 1998.

Of the $46,942,000 increase in revenues for the three months ended March 31,
1999, $22,830,000 was due to the fiscal 1998 acquisitions noted above and
internal growth accounted for $24,112,000 of the increase.

Cost of revenues for the three months ended March 31, 1999 increased 33.4% to
$137,167,000 from $102,812,000 recorded in the comparable period in fiscal
1998. For the nine months ended March 31, 1999, cost of revenues increased
50.1% to $398,787,000 from $265,766,000 recorded in the comparable period in
fiscal 1998. Cost of revenues as a percentage of revenues for the three and
nine month periods ended March 31, 1999 was 74.3% and 74.5%, respectively,
compared to 74.7% and 74.7% for the comparable periods during the prior fiscal
year.

The decrease in cost of revenues as a percentage of revenues is primarily the
result of the timing of acquisitions. At the time of acquisition, the gross
margins of the acquired companies are typically lower than the Company as a
whole; however, the Company is typically able to increase the gross margins of
the acquired companies through more advantageous purchasing terms and the use of
formulary management. The Company's leverage associated with purchasing
pharmaceuticals, formulary management program and leveraging of production costs
positively impacted gross margins during the past year. However, these
improvements were partially offset by the lower margins of companies acquired
during the past year.

Selling, general and administrative expenses for the three months ended March
31, 1999 increased 29.2% to $32,815,000, from $25,390,000 recorded in the
comparable period in fiscal 1998. For the nine months ended March 31, 1999,
selling, general and administrative expenses increased 45.0% to $95,665,000 from
$65,972,000 recorded in the comparable period in fiscal 1998. Selling, general
and administrative expenses as a percentage of revenues was 17.8% and 17.9% for
the three and nine month periods ended March 31, 1999, respectively, compared to
18.4% and 18.5% during the comparable periods in fiscal 1998. The percentage
decrease for the three and nine month periods ended March 31, 1999 is a result
of creating operational efficiencies with acquisitions and the ability to
leverage overhead expenses over a larger revenue base. At the time of
acquisition, the selling, general and administrative expenses of the acquired
companies are typically higher than the Company as a whole. The Company has been
able to create operational efficiencies with acquisitions as selling, general
and administrative expenses as a percentage of revenues have decreased nine
quarters in a row. The increase in selling, general, and administrative expenses
in absolute dollars is mainly attributable to expenses associated with the
operations of businesses acquired during the prior fiscal year and the cost of
upgrading information systems as the Company converts all sites to a common
operating system.


                                       9
<PAGE>   10

The Company had net interest expense of $4,588,000 and $13,367,000 for the
three and nine month periods ended March 31, 1999, compared to net interest
expense of $1,808,000 and $3,063,000 during the comparable periods in fiscal
1998. The increase is primarily attributable to increased borrowing on the
Company's revolving credit facility during fiscal 1998 and 1999 and a full nine
months of interest expense during the nine months ended March 31, 1999 on
$100,000,000 of convertible subordinated debentures issued by the Company in
August 1997. The additional funds were primarily used for acquisitions.

During the fourth quarter of fiscal 1998, the Company recorded a nonrecurring
charge of $8,900,000 primarily related to: 1) the Company adopting a formal plan
of restructuring to consolidate certain pharmacy sites in similar geographies;
2) the buyout of existing employment agreements with the prior owners of certain
acquired businesses; 3) the write-off of certain financing fees; and 4)
additional acquisition related expenses.

The Company adopted a formal plan of restructuring that will combine pharmacies
in close geographical proximity in order to improve operating efficiencies. As a
result of the plan, 17 pharmacy sites will be consolidated into either new or
existing locations and an estimated total of 149 employees will be terminated as
a result of the plan. As of March 31, 1999, 13 site consolidations were
completed with the remainder expected to be completed by the end of fiscal 1999.

Details of the nonrecurring charge, related activity and reserve balance are 
as follows:

<TABLE>
<CAPTION>
                                                Nonrecurring              Reserve                Reserve
         Description            Cash/Non-cash      Charge     Activity   At 6/30/98  Activity   At 3/31/99
         -----------            -------------   ------------  --------   ----------  --------   ----------
                                                    (In millions)
<S>                             <C>             <C>           <C>        <C>         <C>        <C>
Site Consolidations
     Severance packages            Cash             $ .5       $  --        $ .5     $ (.2)        $ .3
     Lease terminations            Cash               .7          --          .7       (.3)          .4
     Asset impairments             Non-cash          3.5        (3.5)         --        --           --
     Other                         Cash               .6         (.4)         .2        --           .2

Buyout of employment agreements    Cash               .9         (.2)         .7       (.6)          .1

Write-off financing fees           Non-cash          1.3        (1.3)         --        --           --

Other
     Cash                                            1.0         (.8)         .2       (.1)          .1
     Non-cash                                         .4         (.4)         --        --           --
                                                    ----       -----        ----     -----         ----

Total                                               $8.9       $(6.6)       $2.3     $(1.2)        $1.1
                                                    ====       =====        ====     =====         ====
</TABLE>

Liquidity and Capital Resources

Net cash used in operating activities was $27,440,000 for the nine months ended
March 31, 1999, as compared to $16,759,000 during the comparable period in
fiscal 1998. The increase in net cash used in operating activities was primarily
due to an increase in accounts receivable. The increase in accounts receivable
from June 30, 1998 is mainly attributable to a 20.5% increase in sales during
the three months ended March 31, 1999, as compared to the three months ended
June 30, 1998.

Net cash used in investing activities decreased to $33,722,000 during the nine
months ended March 31, 1999, as compared to $129,002,000 during the comparable
period in fiscal 1998. The decrease is primarily the result of a decrease in
cash used for acquisitions, partially offset by an increase in capital
expenditures. Significant capital expenditures during the nine months ended
March 31, 1999 included computer and information systems equipment, computer
software, furniture and fixtures, leasehold improvements, medication carts and
delivery vehicles. The Company continues to invest in converting all sites to a
common operating system.


                                       10
<PAGE>   11

Net cash provided by financing activities decreased to $63,990,000 during the
nine months ended March 31, 1999, from $161,380,000 during the comparable period
in fiscal 1998. The decrease is a result of the Company completing a
$100,000,000 convertible subordinated debenture offering during August 1997.

In August 1997, the Company issued $100 million of convertible subordinated
debentures due 2004. The debentures carry an interest rate of 5 3/4%. The
debentures are obligations of the Company. The operations of the Company are
currently conducted principally through subsidiaries, which are separate and
distinct legal entities. The Company's ability to make payments of principal and
interest on the debentures will depend on its ability to receive distributions
of cash from its subsidiaries. Each of the Company's wholly-owned subsidiaries
has guaranteed the Company's payment obligations under the debentures, so long
as such subsidiary is a member of an affiliated group (within the meaning of
Section 279(g) of the Internal Revenue Code of 1986, as amended) that includes
the Company. The satisfaction by the Company's subsidiaries of their contractual
guarantees, as well as the payment of dividends and certain loans and advances
to the Company by such subsidiaries, may be subject to certain statutory or
contractual restrictions, are contingent upon the earnings of such subsidiaries
and are subject to various business considerations.

The Company expects to meet future financing needs principally through the use
of its revolving credit facility. In June 1998, the Company entered into a four
year, $150,000,000 revolving credit facility (the "Credit Facility") with a
bank, which replaced the existing $135,000,000 revolving credit facility. Under
the Credit Facility, the Company also has available a $10,000,000 swing line
revolving facility. In June 1998, the Company entered into a $50,000,000 bridge
facility agreement (the "Bridge Facility") due December 31, 1998. Effective July
13, 1998, the Credit Facility was amended to increase the total commitment from
$150,000,000 to $245,000,000 and was syndicated to a consortium of 11 banks.
Also effective July 13, 1998, the Bridge Facility was paid with funds under the
Credit Facility and was terminated. The Credit Facility bears interest at a
variable rate based upon the Eurodollar rate plus a spread of 37.5 to 162.5
basis points, dependent upon the Company's Interest Coverage Ratio. The Credit
Facility contains certain debt covenants including Interest Coverage Ratio and
minimum consolidated net worth as amended on March 3, 1999. As of March 31,
1999, the Company had $212,700,000 outstanding under the Credit Facility. The
Company believes that its cash and available sources of capital, including funds
available under the Credit Facility, are sufficient to meet its normal operating
requirements.

New Accounting Standards

The Financial Accounting Standards Board recently issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information." This
statement establishes standards for the reporting of financial information about
reportable segments in annual and interim financial statements. SFAS No. 131
also requires disclosure of revenues from each group of products and services,
geographic areas and major customers. Currently, the Company does not expect the
adoption of SFAS No. 131 to have a significant impact on the Company's reporting
and disclosures.

In April 1998, the Accounting Standards Executive Committee issued Statement of
Position ("SOP") 98-5, "Reporting on the Costs of Start-up Activities." This SOP
requires that start-up and organization costs be expensed as incurred, and that
such previously capitalized costs be written-off as a cumulative effect of
change in accounting principle upon adoption. The SOP is effective for fiscal
years beginning after December 15, 1998 or the Company's fiscal year ended June
30, 2000. The Company plans to adopt this SOP in the first quarter of fiscal
2000 and will continue to capitalize and amortize start-up costs and
organization costs during fiscal 1999. The Company currently estimates the
adoption of the SOP will result in a charge of approximately $7,500,000, net of
tax, which will be recorded as a cumulative effect of change in accounting
principle.

Year 2000 Readiness Disclosure

Computer systems in use after the beginning of the year 2000 will need to accept
four-digit entries in the date code field in order to distinguish 21st century
dates from 20th century dates. Consequently, many companies face significant
uncertainties because of the need to upgrade or replace their currently
installed computer systems to comply with such "Year 2000" requirements. Various
systems could be affected ranging from complex information technology ("IT")
computer systems to non-IT devices, such as an individual machine's programmable
logic controller.


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The Company has reviewed all significant current and planned internal IT systems
and believes these systems are Year 2000 compliant. However, there can be no
assurance that coding errors or other defects will not be discovered
in the future. The Company is currently in the process of reviewing and
assessing all significant non-IT devices for Year 2000 compliance. The Company
expects to complete this review and assessment process by June 30, 1999. Testing
of devices and resolution of noncompliance issues, if any, is expected to be
completed by September 30, 1999.

The Company is currently determining the extent to which it may be impacted by
any third parties' failure to remediate their own Year 2000 issues. The Company
is assessing and reviewing relationships with all significant customers,
suppliers, payors and other third parties to determine the extent, if any, to
which the Company could be impacted by those third-parties' failure to remediate
their own Year 2000 issues. The Company expects to complete this review and
assessment by June 30, 1999. At this stage of the review no assurance can be
given that the failure by one or more third parties to become Year 2000
compliant will not have a material adverse impact on its operations.

The Company intends to develop contingency plans for significant third parties'
determined to be at high risk of noncompliance or business disruption before
September 30, 1999. The contingency plans will be developed on a case-by-case
basis. Judgments regarding contingency plans are themselves subject to many
variables and uncertainties. There can be no assurance that the Company will
correctly anticipate the level, impact or duration of noncompliance by third
parties, or that its contingency plan will be sufficient to mitigate the impact.

Management of the Company believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner. Nevertheless, since it is not
possible to anticipate all future outcomes, especially when third parties are
involved, there could be circumstances in which the Company's operations could
be interrupted. If the federal and state healthcare reimbursement agencies or
their intermediaries fail to implement Year 2000 compliant technologies before
December 31, 1999, a significant cash flow problem may result. These agencies
and intermediaries have Year 2000 plans in place and we continue to monitor the
status of these projects. All of these government agencies have stated that
interim procedures would be implemented if their Year 2000 solutions are not in
place by January 1, 2000. In addition, disruptions in the economy in general
resulting from Year 2000 issues could also adversely impact the Company.

The majority of costs related to Year 2000 readiness issues will be expensed as
incurred and are expected to be funded through operating cash flows. Through the
third quarter of fiscal 1999 costs related to the Year 2000 issue have been
immaterial to the financial results of the Company. Future costs related to Year
2000 issues are also expected to be immaterial to the financial results of the
Company. Estimates of costs are based on currently available information and
developments may occur that could increase the costs related to Year 2000
issues.

Disclosure Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Quarterly
Report on Form 10-Q, including, but not limited to, those regarding the
Company's financial position, business strategy, acquisition strategy, Year 2000
readiness disclosure and other plans and objectives for future operations and
any other statements that are not historical facts constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company, or industry results, to differ
materially from any future results, performance or achievements expressed or
implied by such forward-looking statements. Although the Company believes that
the expectations reflected in these forward-looking statements are reasonable,
there can be no assurance that the actual results or developments anticipated by
the Company will be realized or, even if substantially realized, that they will
have expected effects on its business or operations. Among the factors that
could cause actual results to differ materially from the Company's expectations
include the availability and cost of attractive acquisition candidates,
continuation of various trends in the long-term care market (including the trend

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toward consolidation), competition among providers of long-term care pharmacy
services, the availability of capital for acquisitions and capital requirements,
changes in regulatory requirements, reform of the health care delivery system,
disruption to the operations of the Company resulting from Year 2000 issues and
other factors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to certain market risks from transactions that are
entered into during the normal course of business. The Company has not entered
into derivative financial instruments for trading purposes. The Company's
primary market risk exposure relates to interest rate risk. The Company has
managed its interest rate risk by balancing its exposure between fixed and
variable rates while attempting to minimize its interest costs. The Company has
a balance of $212,700,000 on its revolving credit facility at March 31, 1999,
which is subject to a variable rate of interest based on the Eurodollar rate.
Assuming borrowings at March 31, 1999, a one-hundred basis point change in
interest rates would impact net interest expense by approximately $2,127,000 per
year.

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                           PART II. OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a)      Exhibits

                 Exhibit
                 Numbers                    Exhibit
                 -------                    -------
                   10.1       Amendment No. 2, dated March 3, 1999, to the
                              Credit Agreement dated as of June 1, 1998,
                              among the Company and the Lenders named 
                              therein, NBD Bank and National City Bank, as
                              co-agents, and KeyBank National Association, 
                              as a Lender, the Swing Line Lender, the Letter
                              of Credit issuer and as Administrative Agent.

                   15.1       Independent Accountants' Review Report

                   15.2       Independent Accountants' Acknowledgment Letter

                   27.1       Financial Data Schedule


        (b)      Reports on Form 8-K:


                 No reports on Form 8-K were filed during the three months
                 ended March 31, 1999.

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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.


                                    NCS HealthCare, Inc.
                                        (Registrant)

Date:  May 17, 1999          By  /s/  Kevin B. Shaw
                                 -----------------------------------------------
                                 Kevin B. Shaw
                                 President, Chief Executive Officer and Director
                                 (Principal Executive Officer)

Date:  May 17, 1999          By  /s/  Gerald D. Stethem
                                 -----------------------------------------------
                                 Gerald D. Stethem
                                 Chief Financial Officer
                                 (Principal Financial and Accounting Officer)

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