<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


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

For the quarter ended 31 March 1999
                      -------------
                                       or

            ( ) TRANSITION REPORT PURSUANT OT SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File No. 1 - 1997
                    --------

                        THE MONARCH MACHINE TOOL COMPANY
                        --------------------------------
             (Exact name of registrant as specified in its charter)

 Ohio                                                            34-43407810
---------------------------                                      -----------
(State or other jurisdiction                                  (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                    2600 Kettering Tower, Dayton, Ohio 45423
                    ----------------------------------------
               (Address of principal executive offices, zip code)

                                 (937) 910-9300
                                 --------------
               (Registrant's telephone number including area code)


                                     N.A.
             -------------------------------------------------------
         (Former name, former address and former fiscal year, if changed
                               since last report)



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 common shares outstanding as of May 5, 1999 was 3,782,817.


<PAGE>   2

              THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES

                               INDEX TO FORM 10-Q



                                                                          PAGE
                                                                         NUMBER
                                                                         ------





PART 1.  FINANCIAL INFORMATION:

         ITEM 1. - Condensed Financial Statements:

           Balance Sheets - 31 March 1999 and 31 December 1998             2


           Statements of Operations and Comprehensive Income -
           Quarter ended 31 March 1999 and 1998                            3


           Statements of Cash Flow - Quarter ended 31 March 1999 
                   and 1998                                                4

           Notes to Condensed Financial Statements                         5-7


         ITEM 2. - Management's Discussion and Analysis
                   of Financial Condition and Results of
                   Operations                                              8-9

         ITEM 3. - Quantitative and Qualitative Disclosure
                   About Market Risk (inapplicable)                        10


PART II. OTHER INFORMATION:

         ITEM 1.   Legal Proceedings                                       10

         ITEM 2.   Changes in Securities                                   10

         ITEM 3-4. Inapplicable                                            10

         ITEM 5.   Other Information                                       10-11

         ITEM 6.   Exhibits and Reports on Form 8-K                        11

                                       1

<PAGE>   3


PART 1 - FINANCIAL INFORMATION

                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
                            CONDENSED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                             31 March   31 December
                                                               1999         1998
                                                               ----         ----
                                                           (Unaudited)

<S>                                                        <C>         <C>
CURRENT ASSETS:
    Cash                                                     $  2,514    $  1,733
    Accounts receivable                                        21,945      23,893
    Costs and estimated earnings in excess of
        billings on uncompleted contracts                       5,828       3,275
    Inventories                                                 9,323      10,486
    Prepaid expenses                                              661         667
    Deferred income taxes                                       1,933       1,874
                                                             --------    --------

         Current assets                                        42,204      41,928


PROPERTY, PLANT & EQUIPMENT - NET                              10,778      11,070
PREPAID PENSION COSTS                                          19,391      19,051
DEFERRED INCOME TAXES                                           1,242       1,631
GOODWILL                                                        9,658      10,099
OTHER ASSETS                                                    4,711       4,678
                                                             --------    --------

                                                             $ 87,984    $ 88,457
                                                             ========    ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES:
    Short-term borrowings                                    $           $    500
    Accounts payable                                            6,265       8,930
    Accrued liabilities                                        10,317      12,153
    Billings in excess of costs and estimated
        earnings on uncompleted contracts                       9,764       5,517
                                                             --------    --------

         Current liabilities                                   26,346      27,100

POSTRETIREMENT BENEFITS                                         1,376       1,450
LONG-TERM DEBT                                                 16,497      16,497
OTHER LONG-TERM LIABILITIES                                       734         756

SHAREHOLDERS' EQUITY:
    Preferred stock                                                14          14
    Common stock                                                5,880       5,815
    Unearned compensation, restricted stock                       (29)        (37)
    Retained earnings                                          37,435      37,042
    Accumulated other comprehensive income                       (269)       (180)
                                                             --------    --------
                                                               43,031      42,654
                                                             --------    --------

                                                             $ 87,984    $ 88,457
                                                             ========    ========

</TABLE>

        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                       2
<PAGE>   4

                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
           CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                    (In thousands, except per share amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                          Quarter Ended 31 March
                                          ----------------------
                                            1999         1998
                                            ----         ----

<S>                                     <C>         <C>     
Net sales                                 $ 23,009    $ 23,064

Operating costs and expenses:
    Cost of sales                           18,296      18,933
    Selling, general and administrative      4,681       3,195
                                          --------    --------

Operating earnings                              32         936

Other income (expense):
    Interest expense                          (328)        (89)
    Interest income                             38          57
    Other income (expense), net              1,175         (69)
                                          --------    --------

Income before income taxes                     917         835

Income tax provision                           329         255
                                          --------    --------

Net income                                     588         580

Other comprehensive income,
    net of tax - foreign
    currency translation
    adjustments                                (59)        (16)
                                          --------    --------

Comprehensive income                      $    529    $    564
                                          ========    ========


Average common shares outstanding            3,776       3,766
                                          ========    ========

Net income per common share,              $    .15    $    .15
                                          ========    ========
    basic and diluted

Dividends per share:
     Preferred                            $    .45    $    .45
     Common                               $    .05    $    .05

</TABLE>


   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       3
<PAGE>   5

                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
                       CONDENSED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                               Quarter Ended 31 March
                                                               ----------------------
                                                                  1999       1998
                                                                  ----       ----

<S>                                                            <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                  $   588    $   580
    Adjustments to reconcile net income to net
       cash provided by (used in) operating activities:
        Depreciation and amortization                               586        240
        Pension income                                             (323)      (882)
        Gain on sale of fixed assets                                 (6)
        Deferred tax provision                                      329        255
        Changes in operating assets and liabilities:
           Accounts receivable                                    1,947     (1,421)
           Inventories                                            1,163      1,310
           Accounts payable                                      (2,692)    (3,589)
           Accrued liabilities                                   (1,904)      (993)
           Billings in excess of costs and estimated earnings
             on uncompleted contracts                             1,694     (2,008)
                                                                -------    -------


    Net cash provided by (used in) operating activities           1,382     (6,508)


CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of fixed assets                               13
    Capital expenditures                                           (168)      (111)
    Increase (decrease) in other assets                             270        311
                                                                -------    -------

    Net cash provided by (used in) investing activities             115        200

CASH FLOWS FROM FINANCING ACTIVITIES:
    Dividends                                                      (195)      (195)
    Issuance of common stock                                         65
    Repayments of short-term borrowings                            (500)
    Proceeds from long-term borrowings                            1,000      5,000
    Repayments of long-term borrowings                           (1,000)        (4)
                                                                -------    -------

     Net cash provided by (used in) financing activities           (630)     4,801

EFFECT OF EXCHANGE RATES ON CASH                                    (86)        (9)
                                                                -------    -------

INCREASE (DECREASE) IN CASH                                         781     (1,516)

CASH - BEGINNING OF PERIOD                                        1,733      5,022
                                                                -------    -------

CASH - END OF PERIOD                                            $ 2,514    $ 3,506
                                                                =======    =======

</TABLE>


        The accompanying notes are an integral part of the consolidated
                              financial statements

                                       4
<PAGE>   6


                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                      QUARTER ENDED 31 MARCH 1999 AND 1998


1.       FINANCIAL STATEMENTS
         --------------------

         The balance sheet at 31 December 1998 presents condensed financial
         information taken from the audited financial statements. The interim
         financial statements are unaudited. In the first quarter of 1999 the
         Company recorded an accrual for $350,000 as the estimated cost to
         settle litigation. The Company has also recognized $1.1 million of
         other income as a result of the reduction of amounts previously accrued
         for an environmental liability. In the opinion of management, all other
         adjustments, which consist of normal recurring adjustments necessary to
         present fairly the financial position and results of operations for the
         interim periods presented, have been made. The results shown for the
         first quarter of 1999 are not necessarily indicative of the results
         that may be expected for the entire year.

         The Accounting Standards Executive Committee ("AcSEC") of the AICPA has
         issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of
         Computer Software Developed or Obtained for Internal Use" effective for
         financial statements for fiscal years beginning after December 15,
         1998. SOP 98-1 provides guidance on accounting for the costs of
         computer software developed or obtained for internal use. The Company
         has chosen earlier application of SOP 98-1, effective for 1998, in
         conjunction with the Company's implementation of its Enterprise
         Resource Planning system.

         In June 1998, the Financial Accounting Standards Board (the "FASB")
         issued Statement of Financial Accounting Standards ("SFAS") No. 133,
         "Accounting for Derivative Instruments and Hedging Activities". SFAS
         No. 133 establishes standards for derivative instruments, including
         certain derivative instruments imbedded in other contracts, and for
         hedging activities. It requires that an entity recognizes all
         derivatives as either assets or liabilities in the statement of
         financial position and measures those instruments at fair value. This
         statement is effective for all fiscal quarters of fiscal years
         beginning after June 15, 1999. The Company does not expect the effect
         of SFAS No. 133 on its financial statements to be significant.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted. It is suggested
         that these financial statements be read in conjunction with the
         financial statements and notes thereto included in the Company's 31
         December 1998 annual report to shareholders.

2.       EARNINGS PER SHARE
         ------------------

         Basic earnings per common share is computed by dividing net income
         (loss), after adjustment for the preferred stock dividend requirement,
         by the weighted average number of common shares outstanding during the
         period. Diluted earnings per share is computed by adding the dilutive
         effect of common stock equivalents, such as the convertible preferred
         shares and any stock options outstanding, to the weighted average
         number of common shares outstanding.


                                       5

<PAGE>   7


                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                      QUARTER ENDED 31 MARCH 1999 AND 1998


3.       INVENTORIES
         -----------

         The Company's inventories consist of the following balances (in
         thousands):

<TABLE>
<CAPTION>
                                                       31 March            31 December
                                                         1999                 1998
                                                         ----                 ----

       <S>                                           <C>                 <C>     
         Finished goods                                $  2,285            $  1,285
         Work-in process and parts                       10,519              12,967
         Raw materials                                    1,024                 739
         Less LIFO reserve                               (4,505)             (4,505)
                                                       --------            --------
         Net inventories                               $  9,323            $ 10,486
                                                       ========            ========
</TABLE>


4.       INDEBTEDNESS
         ------------

         The Company has borrowed $16,497,000 under its $25,000,000 revolving
         credit facility at a weighted average interest rate of 6.0%. The
         Company also has a $2.5 million line of credit available at .5% below
         prime rate, which was unused as of March 31, 1999.

5.       SEGMENTS
         --------

         The Company operates in two primary reportable segments, coil
         processing and machining centers. Business segment information is as
         follows (in thousands):

<TABLE>
<CAPTION>

                                         Quarter Ended 31 March
                                         ----------------------

                                            1999        1998
                                            ----        ----
       <S>                              <C>        <C>
         Sales:                                                       
              Coil Processing             $ 18,555    $ 13,525       
              Machining Centers              4,651       9,301       
              All other                        833         242       
              Segment eliminations          (1,030)         (4)      
                                          --------    --------       
              Total                       $ 23,009    $ 23,064       
                                          ========    ========       
                                                                     
         Operating Earnings:                                          
              Coil Processing             $  1,289    $  1,117       
              Machining Centers               (342)        462       
              All other                       (104)       (221)      
              Corporate and eliminating       (811)       (422)      
                                          --------    --------       
              Total                       $     32    $    936       
                                          ========    ========       
                                                                     
</TABLE>

Included in the coil processing segment results for the quarter ended March 31,
1999 were sales of $5,038,000 and operating earnings of $268,000 from GFG
Corporation which was acquired by the Company on December 31, 1998.

                                       6

<PAGE>   8



                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                      QUARTER ENDED 31 MARCH 1999 AND 1998


6.       ACQUISITION OF GFG CORPORATION
         ------------------------------

         In April 1999, the Company received $525,000 from the seller of GFG
         Corporation ("GFG") as an adjustment to the purchase price related to
         the net worth of GFG at acquisition date. This amount has been recorded
         as an accounts receivable at March 31, 1999, with a corresponding
         decrease in the goodwill recorded as a result of the purchase. The
         Company could pay up to an additional $1,780,000 of purchase price in
         2000 if GFG attains a certain level of earnings in 1999.

7.       ENVIRONMENTAL LIABILITY
         -----------------------

         As discussed in the Company's 1998 10K filing, in 1998, a Consent
         Decree was entered into among the EPA, several other potentially
         responsible parties ("PRP's") and a group of ten other companies
         ("Defendants") related to the costs of remediation of the Rosen Site, a
         former scrap yard in Cortland, New York. During April 1999, the Consent
         Decree was approved by the Department of Justice and is in the process
         of being formally approved by the U.S. District Court in New York.
         Based on the fact that this Consent Decree substantially reduced the
         Company's future liability for this matter, the accrual recorded at
         December 31, 1998 was reduced by $1,100,000. The reduction in the
         accrual is recorded in other income, net. The Company believes that the
         remaining amount accrued of $200,000, is adequate to cover its share of
         costs which may be incurred in this matter.

8.       SUBSEQUENT EVENT
         ----------------

         In May, 1999 the Company entered into an agreement to purchase
         Herr-Voss Industries, Inc. ("Herr-Voss") from private investors for
         approximately $55 million in cash, 500,000 shares of common stock, and
         assumption of approximately $19 million in indebtedness. Herr-Voss
         designs and manufactures coil processing lines, leveling rolls and
         components and provides a full range of roll reconditioning to the flat
         rolled metals industry. Herr-Voss reported revenues of $81 million for
         fiscal year ended March 31, 1999.

         Completion of the transaction is subject to regulatory clearance under
         the Hart Scott Rodino Act and the Company completing financing for the
         purchase. The Company is involved in discussions with potential lenders
         to obtain financing for this transaction, although it has no assurance
         that adequate financing would be available with acceptable terms. If
         the Company is not able to obtain the necessary financing commitments
         by May 31, 1999, or later under certain circumstances, the seller can
         terminate the transaction and require the Company to pay a $250,000
         termination fee.

                                       7

<PAGE>   9



                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                      QUARTER ENDED 31 MARCH 1999 AND 1998


         RESULTS OF OPERATIONS
         ---------------------

         Net earnings for the first quarter of this year were $588,000 or $.15
         per share (basic and diluted) compared to net earnings of $580,000 or
         $.15 per share (basic and diluted) in the first quarter of 1998. During
         the first quarter of 1999, the Company recorded $1.1 million of other
         income as a result of a reversal of a previous accrual for an
         environmental liability. The Company also recorded $350,000 of expense
         related to settlement of litigation at its coil processing segment.
         Excluding the aforementioned items, the 1999 net earnings were affected
         by higher depreciation as a result of fixed asset additions, including
         the new ERP system, higher interest expense due to increased borrowing
         related to the GFG acquisition, and lower pension income in 1999 due to
         the Company's 1998 decision to terminate two of its pension plans and 
         related changes in projected investment returns and the cost of 
         replacement plans. A discussion of results of operations on a segment 
         basis follows.

         Coil Processing
         ---------------

         Sales increased to $18.6 million in the first quarter of 1999 compared
         to $13.5 million for the first quarter of 1998 with the addition of $5
         million of sales from GFG, which was acquired on December 31, 1998.
         Cost of sales as a percentage of sales has improved to 78.8% in the
         first quarter of 1999 from 80.6% in the first quarter of 1998 as the
         addition of GFG and improvements in the gross margins on orders
         received in late 1998 have positively affected the cost of sales
         percentage.

         Operating earnings improved to $1.3 million in the first quarter of
         1999 compared to $1.1 million in the first quarter of 1998 as a result
         of the increase in sales and the addition of GFG which has historically
         been profitable. This segment was negatively impacted by the recording
         of $350,000 in expense related to settlement of litigation. Positively
         impacting operating earnings was the addition of GFG which contributed
         $268,000 of operating earnings in the first quarter of 1999.

         Orders received during the first quarter of 1999 totaled $13.0 million,
         including $8.6 million from by GFG, compared to $11.2 million for the
         same period in 1998. Backlog at March 31, 1999 was $37.5 million,
         including $9.3 million for GFG, compared to $26.7 million at March 31,
         1998.

         Machining Centers
         -----------------

         Sales declined to $4.7 million in the first quarter of 1999 compared to
         $9.3 million in the first quarter of 1998 as a slow-down in domestic
         capital goods orders and continued selling pressures from foreign,
         particularly Asian, competitors negatively affected sales volume and
         selling prices for this segment. Cost of sales as a percentage of sales
         was 86.3% in the first quarter of 1999 compared to 84.5% in the first
         quarter of 1998 due in part to fixed production costs being applied to
         the lower sales volume in 1999. This segment took steps to control
         manufacturing costs and to reduce labor force in late 1998 in
         anticipation of the lower sales volume.

         As a result of the lower sales volume and lower margins, this segment
         reported an operating loss of $342,000 in the first quarter of 1999
         compared to operating earnings of $462,000 for the same period in 1998.

         Orders received during the first quarter of 1999 totaled $3.1 million
         compared to $7.4 million during the same period last year. The
         reduction in the level of orders booked was primarily due to foreign
         competition and lower demand for this segments products. Backlog at the
         end of the first quarter of this year was $2.9 million compared to $9.6
         million at 31 March 1998.

                                       8
<PAGE>   10

                THE MONARCH MACHINE TOOL COMPANY AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                      QUARTER ENDED 31 MARCH 1999 AND 1998


         LIQUIDITY AND CAPITAL RESOURCES
         -------------------------------

         During the first quarter of 1999, the Company's operating activities
         provided $1.4 million of cash, which was used to reduce accounts
         payable ($2.7 million) and accrued liabilities ($1.9 million). In
         addition, advance payments from customers net of costs incurred and
         estimated earnings on contracts in process, decreases in accounts
         receivable and decreases in inventory provided $1.7 million, $1.9
         million, and $1.2 million in cash, respectively. The cash provided from
         operations was used to repay short term debt, pay dividends and for
         capital expenditures. The cash provided during the first quarter of
         1999 was primarily due to the Company's ability to collect advance
         payments from customers of its coil processing operation as a result of
         new orders received in the last half of 1998. The Company forecasts
         that its operating activities will provide cash during the remainder of
         1998.

         In May 1999 the Company entered into an agreement to purchase a company
         from private investors for approximately $55 million in cash, 500,000
         shares of common stock and the assumption of approximately $19 million
         of indebtedness. The acquisition is anticipated to be completed by June
         30, 1999. In addition to the amount borrowed under Company's existing
         $25 million dollar revolver, additional financing would be required to
         pay the acquisition purchase price and to repay the assumed
         indebtedness. The Company is involved in discussions with potential
         lenders to obtain financing for this transaction, although it has no
         assurance that adequate financing would be available with acceptable
         terms. If the Company is not able to obtain the necessary financing
         commitments by May 31, 1999, or later under certain circumstances, the
         seller can terminate the transaction and require the Company to pay a
         $250,000 termination fee.

         YEAR 2000
         ---------

         Year 2000 issues arise because of the inability of many existing
         computer systems and software, which utilize a two-digit conversion for
         recording years, to properly recognize and process information relating
         to Year 2000. In early 1998, the Company began a Company-wide program
         to replace its internal information processing systems for reasons
         unrelated to Year 2000 issues. It expects to complete this program
         during the third quarter of 1999, which should result in its internal
         information processing systems being Year 2000 compliant. The cost to
         the Company to fully implement this new system is estimated at
         approximately $2.5 million. During 1998, the Company spent $1.8 million
         on this project. Funds for this program are expected to be available to
         the Company from its internal operations and, if necessary, from its
         line of credit. GFC Corporation, acquired by the Company in late 1998,
         is also in the process of replacing its information processing system.
         This process began in 1998 and is expected to be substantially
         completed during the second quarter of 1999. The Company estimates the
         cost of this process to be $325,000, of which $200,000 was expended in
         1998. As part of a comprehensive Year 2000 compliance project, the
         Company is also assessing other key aspects of its operating and
         administrative processes which, if they would become inoperable due to
         Year 2000 issues, would have a material impact on the Company's ability
         to continue its normal operations. This program includes a plan to
         identify the extent to which key vendors and consultants are addressing
         this same issue and an assessment of the Company's products. The
         Company will monitor and evaluate the progress of its vendors and
         consultants on this matter. The Company is also reviewing its
         non-information technology systems to determine the extent of any
         changes that may be necessary and presently believes that there will be
         minimal changes necessary for compliance. Although the Company cannot
         assess the result of this evaluation until it has obtained further
         information, based upon the work it has performed to date, it is not
         presently aware of any Year 2000 issues which would have a disruptive
         impact on its operations or a material adverse impact upon its
         financial condition or results of operation. The Company believes it
         is diligently addressing Year 2000 issues and that it will
         satisfactorily resolve any significant Year 2000 problems. The Company
         anticipates completing its Year 2000 projects during 1999, with major
         completion milestones being targeted for the second and third quarters.
         In the event the Company falls short of these milestones, additional
         internal resources will be focused on completing these projects or
         implementing contingency plans.

         FORWARD LOOKING STATEMENTS
         --------------------------

         In addition to historical information, this document contains various
         forward-looking statements which are subject to risks and uncertainties
         that could cause actual results to differ materially from these
         statements. These risks include, but are not limited to, changes in
         economic conditions, interest rates, price and product offering
         competition from domestic and foreign entities, customer purchasing
         patterns, labor costs, product liability issues and other legal claims
         and governmental regulatory issues. Words identifying forward-looking
         statements include "plan", "believe", "expect", "anticipate",
         "project", "intend", "estimate" and other expressions which are
         predictions or indications of future events or trends which do not
         relate to historical matters.

         Readers are cautioned not to place undue reliance on these
         forward-looking statements, which speak only as of the date the
         statement is made. The Company undertakes no obligation to publicly
         update or revise any forward-looking statements, whether as a result of
         new information, future events or otherwise. Readers are urged to
         carefully review and consider the various disclosures made by the
         Company in this document and other reports filed with the Securities
         and Exchange Commission that attempt to advise interested parties of
         the risks and factors that may affect the Company's business.

                                       9


<PAGE>   11

PART II - OTHER INFORMATION



Item 1 - Legal Proceedings

         As discussed in the Company's 1998 10K filing, in 1998, a Consent
         Decree was entered into among the EPA, several other potentially
         responsible parties ("PRP's") and a group of ten other companies
         ("Defendants") related to the costs of remediation of the Rosen Site, a
         former scrap yard in Cortland, New York. During April 1999, the Consent
         Decree was approved by the Department of Justice and is in the process
         of being formally approved by the U.S. District Court in New York.
         Based on the fact that this Consent Decree substantially reduced the
         Company's future liability for this matter, the accrual recorded at
         December 31, 1998 was reduced by $1,100,000. The reduction in the
         accrual is recorded in other income, net. The Company believes that the
         remaining amount accrued of $200,000, is adequate to cover its share of
         costs which may be incurred in this matter.


Item 2 - Changes in Securities

         (a)  Inapplicable

         (b)   Inapplicable

         (c)  On February 12, 1999 the Company issued 9,966 shares of restricted
              stock to certain officers in the Company under its 1998 management
              incentive program. The shares were issued in reliance on the
              exemption from registration under the Securities Act of 1933
              contained at Section 4 (2) of such Act.


Item 3-4 - Inapplicable


Item 5 - Other Information

         On May 14, 1999 the Company issued the following press release.

         "The Monarch Machine Tool Company (NYSE:MMO) announced today that it
         has entered into an agreement to purchase Herr-Voss Industries, Inc.
         from a group of investors led by Three Cities Research, Inc. for
         approximately $55 million in cash, 500,000 Monarch common shares, and
         assumption of approximately $19 million in indebtedness.

         Herr-Voss designs and manufactures coil processing lines, leveling
         rolls and components, and also provides a full range of roll
         reconditioning services to the flat rolled metals industry.
         Headquartered in Callery, PA, Herr-Voss has six domestic manufacturing
         locations and operations in the United Kingdom and Japan. Revenues for
         its fiscal year ended March 31, 1999 were approximately $81 million.

         Richard E. Clemens, President & CEO of Monarch, notes "The breadth of
         capabilities offered by Herr-Voss, Stamco, and recently acquired GFG
         Corporation, positions Monarch as a market leader in the coil
         processing industry. Our focus has been to expand the Company's coil
         processing operations while building a customer driven after-market
         service organization. We will now have the unique capability to provide
         total systems and services to our customers. Herr-Voss, Stamco and GFG
         will each continue to serve their long standing customers throughout
         the industry while combining their expertise where appropriate to
         benefit customers worldwide."

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<PAGE>   12

PART II - OTHER INFORMATION



         Monarch expects the acquisition to be completed by the end of June
         1999. Completion of the transaction is subject to regulatory clearance
         under the Hart Scott Rodino Act and Monarch concluding acceptable
         financing for the purchase."



Item 6 - Exhibits and Reports on Form 8-K

         (a) Inapplicable

         (b) On January 14, 1999 the Company filed an 8-K in conjunction with
             its acquisition of GFG Corporation. On March 17, 1999 the Company
             filed an 8-KA in which it provided financial statements and
             exhibits and proforma financial information related to its
             acquisition of GFG Corporation.


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<PAGE>   13


                                    SIGNATURE



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




                                     THE MONARCH MACHINE TOOL COMPANY
                                     (Registrant)



         DATE: 17 May 1999           By /s/Karl A. Frydryk
             ---------------            ----------------------------------------
                                        Karl A. Frydryk
                                        Vice President & Chief Financial Officer
                                        (principal financial officer)

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