<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended FEBRUARY 28, 1999

                                       OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES   
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                             to

Commission file number: 0-1461

                             THE TODD-AO CORPORATION
             (Exact name of registrant as specified in its charter)

         DELAWARE                                       13-1679856
(State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation)

   900 N. SEWARD STREET, HOLLYWOOD, CALIFORNIA                    90038
    (Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (213) 962-5304

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  
                 --------             --------

The number of shares of common stock outstanding at April 15, 1999 was:
7,702,038 Class A Shares and 1,747,178 Class B Shares.

<PAGE>

THE TODD-AO CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FEBRUARY 28, 1999

INDEX                             
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                          Page
<S>                                                                     <C>
  Item 1- FINANCIAL STATEMENTS

     The following financial statements are filed herewith:

          Condensed Consolidated Balance Sheets, February 28, 1999
                 (Unaudited) and August 31, 1998                           3

          Condensed Consolidated Statements of Income and Retained 
                 Earnings for the Six and Three Months Ended 
                 February 28, 1999 and 1998 (Unaudited)                    5

          Condensed Consolidated Statements of Cash Flows for the Six 
                 Months Ended February 28, 1999 and 1998 (Unaudited)       6

          Notes to Condensed Consolidated Financial Statements for the 
                 Six Months Ended February 28, 1999 (Unaudited)            8

  Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS                  10
<CAPTION>
PART II - OTHER INFORMATION
<S>                                                                     <C>
  Item 1 - Legal Proceedings                                              14

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

           Signature                                                      14
</TABLE>


                                       2

<PAGE>

                             THE TODD-AO CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

                                     ASSETS
<TABLE>
<CAPTION>
                                                                          AUGUST 31,    FEBRUARY 28,
                                                                        -------------  --------------
                                                                            1998           1999
                                                                                         (UNAUDITED)
                                                                        -------------  --------------
<S>                                                                     <C>            <C>
CURRENT ASSETS

Cash and cash equivalents...........................................         $  3,997       $  7,773
Marketable securities...............................................            1,490          1,379
Trade receivables
   (net of allowance for doubtful accounts of $1,773 at
   February 28, 1999 and $1,768 at August 31, 1998) ................           18,164         20,988
Income tax receivable...............................................            1,397          1,307
Inventories (first-in first-out basis)..............................              783            756
Deferred income taxes...............................................              301            280
Prepaid deposits and other..........................................            3,629          3,096
                                                                        -------------  -------------
Total current assets................................................           29,761         35,579
                                                                        -------------  -------------
INVESTMENTS.........................................................              956          1,209
                                                                        -------------  -------------
PROPERTY AND EQUIPMENT - At Cost:
Land................................................................            4,270          4,270
Buildings...........................................................           11,293         11,536
Leasehold improvements..............................................           15,054         14,914
Lease acquisition costs.............................................            2,187          2,187
Equipment...........................................................           76,172         74,963
Equipment under capital leases......................................            1,151          1,151
Construction in progress............................................            1,466          2,265
                                                                        -------------  -------------
Total...............................................................          111,593        111,286
Accumulated depreciation and amortization...........................          (38,046)       (43,369)
                                                                        -------------  -------------
Property and equipment - net........................................           73,547         67,917
                                                                        -------------  -------------
GOODWILL
   (net of accumulated amortization of $2,160 at
   February 28, 1999 and $1,646 at August 31, 1998).................           29,193         28,680
                                                                        -------------  -------------
OTHER ASSETS........................................................            1,909          2,018
                                                                        -------------  -------------
TOTAL...............................................................         $135,366       $135,403
                                                                        -------------  -------------
                                                                        -------------  -------------
</TABLE>

            See notes to condensed consolidated financial statements.


                                       3

<PAGE>

                             THE TODD-AO CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                             (DOLLARS IN THOUSANDS)
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                           AUGUST 31,    FEBRUARY 28,
                                                                         -------------  -------------
                                                                            1998             1999
                                                                                          (UNAUDITED)
                                                                         -------------  -------------
<S>                                                                      <C>            <C>
  CURRENT LIABILITIES:
  Accounts payable..................................................           $  6,464        $  5,721
  Accrued liabilities:
     Payroll and related taxes......................................              3,520           4,274
     Interest.......................................................                369             513
     Equipment lease................................................                569             750
     Other..........................................................              3,201           2,395
  Income taxes payable..............................................              1,090           2,325
  Current maturities of long-term debt..............................                537             269
  Capitalized lease obligations - current...........................                422             370
  Deferred income...................................................                897           1,006
                                                                          -------------  --------------
  Total current liabilities.........................................             17,069          17,623
                                                                          -------------  --------------
  LONG-TERM DEBT....................................................             44,654          45,700
  DEFERRED COMPENSATION AND OTHER...................................                266             204
  DEFERRED GAIN ON SALE/LEASEBACK TRANSACTIONS......................              6,085           5,101
  DEFERRED INCOME TAXES.............................................              4,911           4,834
  OTHER.............................................................              2,061           1,502
                                                                          -------------  --------------
  Total liabilities.................................................             75,046          74,964
                                                                          -------------  --------------
  COMMITMENTS AND CONTINGENCIES

  STOCKHOLDERS' EQUITY:
  Common Stock:
     Class A; authorized 30,000,000 shares of $0.01 par value; 
     7,778,338 issued at February 28, 1999 and 8,438,700 at
     August 31, 1998.....................................................            84              78
     Class B; authorized 6,000,000 shares of $0.01 par value; issued and
     outstanding 1,747,178...............................................            17              17
  Additional capital.....................................................        40,805          35,959
  Treasury stock (56,700 and 235,151 shares at cost
      as of February 28, 1999 and August 31, 1998, respectively).........        (2,338)           (471)
  Retained earnings......................................................        20,538          23,623
  Accumulated comprehensive income:
      Unrealized gains on marketable securities
      and long-term investments..........................................           198             248
      Cumulative foreign currency translation adjustment.................         1,016             985
                                                                          -------------  --------------
  Total stockholders' equity.............................................        60,320          60,439
                                                                          -------------  --------------
  TOTAL..................................................................      $135,366        $135,403
                                                                          -------------  --------------
                                                                          -------------  --------------
</TABLE>

            See notes to condensed consolidated financial statements.


                                       4

<PAGE>


                             THE TODD-AO CORPORATION

        CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
          FOR THE SIX AND THREE MONTHS ENDED FEBRUARY 28, 1999 AND 1998
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                                                             SIX MONTHS                 THREE MONTHS
                                                                      --------------------------  --------------------------
                                                                           1998         1999          1998          1999
                                                                       (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
                                                                      ------------  ------------  ------------  ------------
<S>                                                                   <C>           <C>           <C>           <C>
  REVENUES.....................................................        $    47,606   $    62,335   $    22,582   $    28,388
                                                                      ------------  ------------  ------------  ------------
  COSTS AND EXPENSES:
  Operating costs and other expenses...........................             37,528        49,593        18,214        23,888
  Depreciation and amortization................................              4,714         6,371         2,293         2,968
  Interest.....................................................                589         1,618           177           752
  Equipment lease expense - net................................                111           420            84           365
  Other (income) - net.........................................               (123)         (703)         (221)         (847)
                                                                      ------------  ------------  ------------  ------------
  Total costs and expenses.....................................             42,819        57,299        20,547        27,126
                                                                      ------------  ------------  ------------  ------------
  INCOME BEFORE PROVISION FOR INCOME TAXES                                   4,787         5,036         2,035         1,262
  PROVISION FOR INCOME TAXES...................................              1,698         1,671           719           365
                                                                      ------------  ------------  ------------  ------------
  NET INCOME...................................................              3,089         3,365   $     1,316   $       897
                                                                                                  ------------  ------------
                                                                                                  ------------  ------------
  RETAINED EARNINGS BEGINNING OF PERIOD........................             17,711        20,538
  LESS: DIVIDENDS PAID.........................................               (295)         (280)
                                                                      ------------  ------------  
  RETAINED EARNINGS END OF PERIOD..............................        $    20,505   $    23,623
                                                                      ------------  ------------  
                                                                      ------------  ------------  
  NET INCOME PER COMMON SHARE:
  Net income available to common stockholders..................        $     3,089   $     3,365   $     1,316   $       897
  Effect of dilutive securities:
     5% convertible debentures.................................                159           129            75            62
                                                                      ------------  ------------  ------------  ------------
  Net income available to common stockholders
     plus assumed conversions..................................        $     3,248   $     3,494   $     1,391   $       959
                                                                      ------------  ------------  ------------  ------------
  WEIGHTED AVERAGE SHARES
     OUTSTANDING - BASIC.......................................         10,004,781     9,506,418     9,987,278     9,477,070
  Effect of dilutive securities:
     Stock options.............................................            510,835       380,694       487,096       429,850
     5% convertible debentures.................................            711,057       670,509       711,057       643,341
                                                                      ------------  ------------  ------------  ------------
  WEIGHTED AVERAGE SHARES
     OUTSTANDING - DILUTED.....................................         11,226,673    10,557,621    11,185,431    10,550,261
                                                                      ------------  ------------  ------------  ------------
  NET INCOME PER COMMON SHARE - BASIC..........................        $      0.31   $      0.35   $      0.13   $      0.10
                                                                      ------------  ------------  ------------  ------------
                                                                      ------------  ------------  ------------  ------------
  NET INCOME PER COMMON SHARE - DILUTED........................        $      0.29   $      0.33   $      0.12   $      0.09
                                                                      ------------  ------------  ------------  ------------
                                                                      ------------  ------------  ------------  ------------
</TABLE>

            See notes to condensed consolidated financial statements.


                                       5

<PAGE>

                             THE TODD-AO CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 AND 1998
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                            1998           1999
                                                                         (UNAUDITED)    (UNAUDITED)
                                                                        -------------  -------------
<S>                                                                     <C>            <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income......................................................         $  3,089        $ 3,365
    Adjustments to reconcile net income to net cash
       provided by (used in) operating activities:
       Depreciation and amortization................................            4,714          6,371
       Deferred income taxes........................................              334            (56)
       Deferred compensation and other..............................             (138)           (93)
       Amortization of deferred gain on
           sale/leaseback transaction...............................           (1,060)        (1,230)
       (Gain) on sale of marketable securities
           and investments..........................................              (49)            --
       (Gain) loss on disposition of fixed assets...................                8           (190)
       Shares issued for stock award................................               66             --
       Changes in assets and liabilities (net of acquisitions):
          Trade receivables, net....................................           (3,311)        (2,824)
          Inventories and other current assets......................              (39)           557
          Accounts payable and accrued liabilities..................             (291)          (651)
             Accrued equipment lease................................              (69)           181
          Income taxes payable, net.................................            1,230          1,328
          Provision for liabilities.................................               --           (559)
          Deferred income...........................................              (59)           109
                                                                        -------------  -------------
  Net cash flows provided by operating activities: .................            4,425          6,308
                                                                        -------------  -------------
  CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of marketable securities and investments...............              (38)           (92)
    Proceeds from sale of marketable securities
       and investments..............................................              979             --
    Proceeds from disposition of fixed assets.......................                5            136
    Capital expenditures............................................          (13,189)        (8,640)
    Other assets....................................................               75           (206)
                                                                        -------------  -------------
  Net cash flows (used in) investing activities: ...................         $(12,168)       $(8,802)
                                                                        -------------  -------------
</TABLE>

                                       6
<PAGE>

                             THE TODD-AO CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 AND 1998
                             (DOLLARS IN THOUSANDS)
                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                       1998           1999
                                                                    (UNAUDITED)    (UNAUDITED)
                                                                   -------------  ------------
<S>                                                                <C>            <C>
  CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowings of long-term debt...............................          $ 6,400      $ 10,846
    Payments of long-term debt.................................           (8,870)      (10,068)
    Payments on capital lease obligations......................              (33)          (52)
    Proceeds from sale/leaseback transaction...................            8,500         8,809
    Proceeds from issuance of common stock.....................              182             4
    Treasury stock transactions................................             (489)       (2,989)
    Dividends paid.............................................             (295)         (280)
                                                                   -------------  ------------
  Net cash flows provided by financing activities: ............            5,395         6,270
     Effect of exchange rate changes on cash ..................               --            --
                                                                   -------------  ------------
  NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS......................................           (2,348)        3,776
  CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD.......................................            5,127         3,997
                                                                   -------------  ------------
  CASH AND CASH EQUIVALENTS AT
     END OF PERIOD.............................................          $ 2,779      $  7,773
                                                                   -------------  ------------
                                                                   -------------  ------------
  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for:

    Interest...................................................          $   303      $  1,392
                                                                   -------------  ------------
                                                                   -------------  ------------
    Income taxes...............................................               --      $    240
                                                                   -------------  ------------
                                                                   -------------  ------------
</TABLE>

            See notes to condensed consolidated financial statements.


                                       7

<PAGE>

THE TODD-AO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
(Dollars in Thousands, except per share amounts)
--------------------------------------------------------------------------------

If complete notes were to accompany these statements they would be 
substantially in the same form as those to the Company's Financial Statements 
for the Year Ended August 31, 1998. In addition the following notes are 
applicable:

1.     In the opinion of management for the Company, all adjustments (which
       comprise only normal recurring accruals) necessary for a fair
       presentation of the results of operations have been included.

2.     The consolidated financial statements include the Company and its wholly
       owned subsidiaries.

3.     The Company adopted Statement of Financial Accounting Standards ("SFAS")
       No. 128, "Earnings Per Share" ("EPS"), during the year ending August 31,
       1998 and has restated its net income per common share disclosures for
       prior periods to comply with SFAS No. 128. Under SFAS No. 128, primary
       EPS is replaced by "Basic" EPS, which excludes dilution and is computed
       by dividing income available to common shareholders by the weighted
       average number of common shares outstanding for the period. "Diluted"
       EPS, which is computed similarly to fully diluted EPS, reflects the
       potential dilution that could occur if securities or other contracts to
       issue common stock were exercised or converted into common stock. When
       dilutive, stock options are included as share equivalents in computing
       diluted earnings per share using the treasury stock method.

4.     On May 8, 1998, Todd-AO Europe Holding Co., Ltd. ("Todd Europe"), a
       wholly owned United Kingdom subsidiary of the Company, purchased
       substantially all of the outstanding shares of Tele-Cine Cell Group plc.
       ("TeleCine"), a U.K. Corporation. The purchase price of the shares was
       $17,948 (L11,011) of which $15,741 was paid in cash and $2,207 is
       represented by unsecured loan notes guaranteed as to principal only and
       bearing interest at a fixed rate of 4.5% payable annually in arrears.
       Included above is cash in the amount of $495 which was paid by Todd
       Europe for costs incurred in connection with the acquisition. TeleCine is
       a London based facility that specializes in video post-production and
       special effects providing services to the film and television industries.

       The acquisition is being accounted for under the purchase method of
       accounting. The following unaudited pro forma consolidated financial
       information for the six months ended February 28, 1998 is presented as if
       the acquisition had occurred on September 1, 1997. Pro forma adjustments
       for TeleCine are primarily to eliminate operations discontinued as part
       of the acquisition plan, to adjust depreciation to estimated useful lives
       of assets acquired, amortization of goodwill, interest expense on
       borrowings in connection with the acquisition, and income taxes.

<TABLE>
<CAPTION>
                                                                    1997
                                                                -----------
           <S>                                                  <C>
           Revenues........................................         $57,617
                                                                -----------
                                                                -----------
           Net income......................................         $ 4,075
                                                                -----------
                                                                -----------
           Net income per common share - Basic.............         $  0.41
                                                                -----------
                                                                -----------
           Net income per common share - Diluted...........         $  0.38
                                                                -----------
                                                                -----------
</TABLE>


                                       8

<PAGE>

5.     In December 1998, November 1997 and December 1994 the Company signed
       agreements with its bank to implement the sale/leaseback of certain
       equipment. The agreements terminate on December 30, 2005, December 1,
       2002 and December 30, 1999, respectively, and are being treated as
       operating leases for financial statement purposes. On December 30, 1998,
       November 3, 1997 and December 30, 1994 an aggregate of $8,809, $8,500 and
       $11,218, respectively, of sound studio and video equipment was sold and
       leased back. The total deferred gain on the transactions to be amortized
       over five to seven years is $12,525. The annual lease cost currently is
       approximately $3,350.

       The net equipment lease expense is as follows for the six months ended:

<TABLE>
<CAPTION>
                                                     FEBRUARY 28,   FEBRUARY 28,
                                                    -------------  --------------
                                                         1998            1999
                                                    -------------  --------------
           <S>                                      <C>            <C>
           Equipment lease costs..................        $ 1,171         $ 1,650
           Amortization of deferred gain
              on sale of equipment................         (1,060)         (1,230)
                                                    -------------  --------------
           Equipment lease expense, net...........        $   111         $   420
                                                    -------------  --------------
                                                    -------------  --------------
</TABLE>

6.     The Company has a stock repurchase program under which 2,300,000 shares
       may be purchased from time to time in the open market or in private
       transactions. As of February 28, 1999, 1,597,156 shares had been
       repurchased. 1,532,905 of these shares have been cancelled and returned
       to authorized but unissued status.

7.     In June 1997, the Financial Accounting Standards Board issued SFAS No.
       130, "Reporting Comprehensive Income." The Company adopted SFAS No. 130
       beginning in the first quarter of fiscal 1999. Comprehensive income is
       defined as all changes in shareholders' equity, except those resulting
       from investments by or distributions to shareholders. The Company's
       comprehensive income is as follows for the six months ended:

<TABLE>
<CAPTION>
                                                            FEBRUARY 28,   FEBRUARY 28,
                                                          --------------- --------------
                                                                1998           1999
                                                          --------------- --------------
        <S>                                               <C>             <C>
        Net income.....................................         $3,089       $ 3,365
        Unrealized gain (loss) on marketable
            securities and long-term investments.......             (8)           50 
        Foreign currency translation
            Adjustments................................            (42)          (31)
                                                          --------------- --------------
        Comprehensive income...........................         $3,039       $ 3,384
                                                          --------------- --------------
                                                          --------------- --------------
</TABLE>


                                       9

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
         (DOLLARS IN THOUSANDS, EXCEPT AMOUNTS PER SHARE)

1.     Material Changes in Financial Condition

       Through February 28, 1999 the Company has signed three agreements with
       its bank to implement the sale/leaseback of certain equipment. An
       aggregate of $28,527 of sound studio and video equipment has been sold
       and leased back. The agreements terminate on December 30, 1999, December
       1, 2002 and December 30, 2005. All the agreements provide for interest
       based on LIBOR rates.

       Under a long-term credit agreement the Company may borrow up to $60,000
       in revolving loans until November 30, 2001. On that date and thereafter
       the revolving loan commitment will reduce to nil by the expiration of the
       agreement on December 31, 2003. Annually, the Company may request an
       automatic extension of the revolving period of the facility for one year
       that will also extend the term period and the expiration date of the
       agreement. The Company also has the availability of Standby Letters of
       Credit up to $2,500 under the facility. The credit facility provides for
       borrowings based on the Bank's Reference, CD, and LIBOR rates. The
       facility includes commitment fees on the unused balance of the credit
       facility. The agreement also contains various restrictive covenants which
       must be met by the Company.

       In January 1998 the Company entered into a three year interest rate swap
       agreement for a notional amount of $10,000 to hedge the impact of
       fluctuations in interest rates on its floating rate credit facility.
       Under the agreement, the Company is obligated to pay 5.65% in exchange
       for receiving three-month LIBOR on the notional amount. Settlements are
       quarterly and the contract expires in March 2001.

       The credit facilities are available for general corporate purposes,
       capital expenditures and acquisitions. Management believes that funds
       generated from operations, proceeds from the sale/leaseback agreements
       and the borrowings available under the restated credit facility will be
       sufficient to meet the needs of the Company at least through the end of
       fiscal year 1999.

       As of February 28, 1999, the Company had $35,725 outstanding under the
       credit facility which had been used principally to fund acquisitions of
       companies and equipment.

       The Company expects capital expenditures of approximately $21,000 for its
       Los Angeles, Santa Monica, New York City, Atlanta and London facilities
       in fiscal 1999. These capital expenditures will be financed by internally
       generated funds and borrowings under credit facilities.

       The Company does not believe that it is currently exposed to any material
       foreign exchange rate risk and, at present, does not have a policy for
       managing such risk beyond the utilization of local currency borrowings to
       fund foreign acquisitions whenever possible.


                                       10

<PAGE>

2.     Material Changes in Results of Operations

       SIX MONTHS ENDED FEBRUARY 28, 1999 COMPARED TO SIX MONTHS ENDED 
       FEBRUARY 28, 1998

       Revenues increased $14,729 or 30.9% from $47,606 to $62,335 primarily due
       to the acquisition of TeleCine in May 1998 ($11,884) and the formation of
       Todd-AO Video Services DVD ("TAO DVD") formed in May 1998 to provide DVD
       product services to the major Hollywood Studios and others ($1,735).
       Higher utilization and activity in the Company's sound services divisions
       was responsible for an increase of $710 and the Company's other video
       services provided the remaining increase in revenues.

       Operating costs and other expenses increased $12,065 or 32.1% from
       $37,528 to $49,593. Cost increases are related to the TeleCine
       acquisition ($9,117), the formation of TAO DVD ($1,090) and the other
       revenue increases described above.

       Depreciation and amortization increased $1,657 or 35.1% primarily due to
       the equipment and goodwill acquired in the TeleCine acquisition ($1,017)
       and to the assets placed in service in March 1998 in connection with the
       new THD Santa Monica facility ($536) as well as increased capital
       expenditures in other divisions.

       Interest expense increased $1,029 or 174.7% primarily due to the TeleCine
       acquisition financing.

       Net equipment lease expense increased $309 as a result of the
       sale/leaseback to the Company's financial institution of additional
       equipment in December 1998.

       Net other income increased $580 primarily from the sale of assets no
       longer used in the U.K.

       The effective income tax rate was reduced primarily due to the additional
       income generated by the acquisition of TeleCine in the U.K.

       As a result of the above, income before taxes increased $249 or 5.2% from
       $4,787 to $5,036 and net income increased $276 or 8.9% from $3,089 to
       $3,365.

       THREE MONTHS ENDED FEBRUARY 28, 1999 COMPARED TO THREE MONTHS ENDED
       FEBRUARY 28, 1998

       Revenues increased $5,806 or 25.7% from $22,582 to $28,388 primarily due
       to the acquisition of TeleCine in May 1998 ($5,428) and the formation of
       TAO DVD formed in May 1998 to provide DVD product services to the major
       Hollywood Studios and others ($1,000). These increases were offset by
       revenue decreases in the sound services and other U.S. video divisions of
       the Company due to lower capacity utilization as post production of
       feature films fell below expectations. The U.K. video divisions of the
       Company posted revenue increases.

       Operating costs and other expenses increased $5,674 or 31.2% from $18,214
       to $23,888. Cost increases are related primarily to the TeleCine
       acquisition ($4,308) and the formation of TAO DVD ($614).

       Depreciation and amortization increased $675 or 29.4% primarily due to
       the equipment and goodwill acquired in the TeleCine acquisition ($418)
       and to the assets placed in service in March 1998 in connection with the
       new THD Santa Monica facility ($242).

       Interest expense increased $575 or 324.9% primarily due to the TeleCine
       acquisition financing.


                                       11

<PAGE>

       Net equipment lease expense increased $281 as a result of the
       sale/leaseback to the Company's financial institution of additional
       equipment in December 1998.

       Net other income increased $626 primarily from the reduction of expenses
       in connection with the Company's development projects.

       The effective income tax rate was reduced primarily due to the additional
       income generated by the acquisition of TeleCine in the U.K.

       As a result of the above, income before taxes decreased $773 or 38% from
       $2,035 to $1,262 and net income decreased $419 or 10.6% from $1,316 to
       $897.

       MATERIAL CHANGES IN CASH FLOWS

       For the six months ended February 28, 1999, the Company generated $6,308
       in cash from operating activities compared to $4,425 in 1998. Net income
       of $3,365 adjusted for depreciation and net amortization of $5,141
       provided cash of $8,506 in 1999 compared to $6,743 in 1998. The net
       increase in accounts payable and other liabilities was restricted to $299
       in 1999 compared to $870 in 1998. Cash provided by operations was
       utilized primarily to fund trade receivables and capital expenditures in
       both years.

       Net cash generated by proceeds from the sale/leaseback of certain
       equipment and net borrowings from the Company's credit facility totaling
       $9,587 were used to purchase treasury stock under the Company's stock
       repurchase program and to reinvest in capital assets of the Company.

       OTHER BUSINESS INFORMATION

       In January 1999, the Company, through its newly-formed subsidiary,
       TODD-AO GERMANY GMBH, entered into a joint venture agreement with BUENA
       VISTA INTERNATIONAL FILM PRODUCTION (GERMANY) GMBH ("BVI"), an affiliate
       of Disney Enterprises, Inc. This agreement established a partnership,
       which shall be known as Todd-AO [Germany] GmbH & Co. KG, which shall
       develop and operate a German language dubbing facility in Germany. Under
       the agreement, Disney Character Voices International, Inc. ("DCVI") shall
       give the Studio the first opportunity to dub all of its products
       appropriate for the German market, including live action and animated
       theatrical features, trailers, videos, television, and animated
       interactive projects. To this venture, Todd-AO and BVI committed to a
       capital equivalent of $1,025 and a financial accommodation or loans not
       to exceed $2,975 each.

       On March 4, 1999, the Company and DCVI announced an agreement in
       principle to build the Studio in Munich, Germany. A non-binding letter of
       intent, signed by the Company, DCVI and the Minister of the Free State of
       Bavaria, provides that the Studio would be located at the "Alte-Messe" in
       the heart of Munich, shall encompass 36,000 square feet and would include
       feature and video mixing studios, film and video dialogue recording rooms
       and editorial suites. The City of Munich and the Free State of Bavaria
       have offered a subsidy of DM 27,000 for the construction, development and
       equipment of the Studio at this site location. A definitive agreement is
       expected to be negotiated and signed by Todd-AO Germany and BVI, the
       joint venture partners.

       FORWARD LOOKING STATEMENTS

       When used in this document, the words "believes", expects", anticipates",
       "intends", and similar expressions are intended to identify forward
       looking statements. Such statements are subject to a


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<PAGE>

       number of known risks and uncertainties. Actual results in the future
       could differ materially from those described in the forward looking
       statements. Such risks and uncertainties include, but are not limited to,
       industry-wide market factors such as the timing of, and spending on,
       feature film and television programming production, foreign and domestic
       television advertising, and foreign and domestic spending by
       broadcasters, cable companies and syndicators on first run and existing
       content libraries. In addition, the failure of the company to maintain
       relationships with key customers and certain key personnel, more rapid
       than expected technological obsolescence, and failure to integrate
       acquired operations in expected time frames could also cause actual
       results to differ materially from those described in forward looking
       statements.

       YEAR 2000 COMPLIANCE ISSUE

       The Company is currently working to resolve the potential impact of the
       year 2000 on the processing of date-sensitive information by the
       Company's computerized information systems. The year 2000 problem is the
       result of computer programs being written using two digits (rather than
       four) to define the applicable year. Any of the Company's programs that
       have time-sensitive software may recognize a date using "00" as the year
       1900 rather than the year 2000, which could result in miscalculations or
       system failure. The Company has conducted a review of its computer
       information systems and its technological operating equipment to identify
       the systems that could be affected by the year 2000 compliance issue.

       The Company uses purchased software programs for a variety of functions,
       including general ledger, accounts payable, and accounts receivable
       accounting packages as well as comprehensive facility management
       packages. These programs are generally Year 2000 compliant, and any
       software and/or computer systems not currently compliant will be upgraded
       during fiscal 1999 under existing maintenance and other agreements and
       through normal replacement programs currently in place. A review of the
       Company's equipment containing embedded microprocessors or other
       technology has revealed few systems that are not Year 2000 compliant and
       those that are not compliant are expected to be upgraded through normal
       maintenance replacements in fiscal 1999. Operation of these systems is
       generally not time-sensitive and, if necessary, equipment settings can be
       adjusted without posing any significant operational problems for the
       Company.

       Based on these reviews, costs of addressing potential problems are not
       currently expected to have a material adverse impact on the Company's
       financial position, results of operations or cash flows in future
       periods.

       To date, the Company has not identified any system which presents a
       material risk of not being Year 2000 ready in a timely fashion or for
       which a suitable alternative cannot be implemented. As the Company
       progresses with its Year 2000 conversion, however, it may identify
       systems which do present a material risk of Year 2000 disruption. Such
       disruption may include, among other things, the inability to process
       transactions or information, to record or access data, or engage in
       similar normal business activities. If the Company, its customers or
       vendors are unable to resolve such processing issues in a timely manner,
       it could result in a material financial risk. Accordingly, the company
       will devote the necessary resources to resolve all significant Year 2000
       issues in a timely manner.

       The discussion above contains certain forward looking statements. The
       costs of the Year 2000 conversion, the date which the Company has set to
       complete such conversion, and possible risks associated with the Year
       2000 issue are based on the Company's current estimates and are subject
       to various uncertainties that could cause the actual results to differ
       materially from the Company's expectations. Such uncertainties include,
       among others, the success of the Company in identifying systems that are
       not Year 2000 compliant, the nature and amount of programming required to
       upgrade or replace each of the affected systems, the availability of
       qualified personnel, consultants and other resources, and the success of
       the Year 2000 conversion efforts of others.


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<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

        The Company is involved in litigation and similar claims incidental to
        the conduct of its business. None of the pending actions is considered
        material.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a).        (1)      Exhibit 27 Financial Data Schedule.

                                    SIGNATURE

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.

                                         THE TODD-AO CORPORATION

     April 14, 1999                             /s/  Silas R. Cross  
---------------------------              -------------------------------------
          Date                                       Silas R. Cross
                                                Chief Accounting Officer



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