UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549
                                                    

                                    FORM 10-Q



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

               For the Quarterly Period Ended December 28, 1996

                                       OR

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

                        For the transition period from to

                        Commission file number 000-25l02

                            BRIDGEPORT MACHINES, INC.
--------------------------------------------------------------------------------
             (exact name of registrant as specified in its charter)

         Delaware                                     06-ll69678
--------------------------------------------------------------------------------
(State of Incorporation)                   (IRS Employer Identification No.)

   500 Lindley Street, Bridgeport, CT                   06606
--------------------------------------------------------------------------------
(Address of principal executive offices)              (zip code)

               Registrant's telephone number, including area code:
--------------------------------------------------------------------------------
                                 (203) 367-365l

                                 NOT APPLICABLE
              (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 shares of Issuer's  Common Stock,  $.0l par value,  outstanding on
December 28, l996 was 5,679,361 shares.
<PAGE>


                            BRIDGEPORT MACHINES, INC.
                                AND SUBSIDIARIES




                                      INDEX


Part I - FINANCIAL INFORMATION                            

Item l.             FINANCIAL STATEMENTS

                    Consolidated Balance Sheets as of
                    December 28, 1996 and March 30, 1996  

                    Consolidated Income Statements for
                    the three month and nine month periods
                    ended December 28, 1996 and December 30,
                    1995                                        

                    Consolidated Statements of Stockholders'
                    Equity for the nine month periods ended
                    December 28, 1996 and December 30, 1995     

                    Consolidated Statements of Cash Flows
                    for the nine month periods ended
                    December 28, 1996 and December 30, 1995     

                    Notes to Consolidated Financial Statements  

Item 2.             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF
                    OPERATIONS.                                 


Part II - OTHER INFORMATION

Item l-4.           OTHER INFORMATION                           

Item 5.             OTHER INFORMATION                           

Item 6.             EXHIBITS AND REPORTS ON FORM 8-K            

Signatures                                                  
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.

                           CONSOLIDATED BALANCE SHEETS
                      (In Thousands, Except Share Amounts)

                                                     December 28,      March 30,
                                                        1996             1996
                                                      ---------       ---------

          ASSETS
<S>                                                   <C>             <C>
CURRENT ASSETS:
        Cash ...................................      $   4,574       $   4,960
        Trade accounts receivable,
          less allowance of $1,342
          and $1,182, respectively .............         45,704          41,321
        Inventories ............................         61,291          56,364
        Deferred income taxes ..................          2,680           2,680
        Prepaid expenses and other current
          assets ..................................       1,785           1,275
                                                      ---------       ---------

            Total current assets ...............        116,034         106,600

NOTES RECEIVABLE - NON-CURRENT .................            103            --

PROPERTY, PLANT AND EQUIPMENT
        Land ...................................            351             334
        Buildings and improvements .............          3,464           3,284
        Machinery and equipment ................         18,928          18,087
        Furniture and fixtures .................          4,862           4,174
                                                      ---------       ---------
                                                         27,605          25,879

Less:  Accumulated depreciation ................         (7,228)         (4,903)
                                                      ---------       ---------

             Property, plant and equipment, net.         20,377          20,976
                                                      ---------       ---------

INVESTMENTS IN AFFILIATED COMPANIES ............          1,223           1,088

OTHER ASSETS, net of accumulated amortization
      of $1,453 and $1,353 respectively ........            408             492
                                                      ---------       ---------

             Total assets ......................      $ 138,145       $ 129,156
                                                      =========       =========




The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.

                           CONSOLIDATED BALANCE SHEETS
                      (In Thousands, Except Share Amounts)

                                                     December 28,     March 30,
                                                         l996           l996
                                                      ---------       ---------
<S>                                                   <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
        Bank overdrafts .......................       $   1,769       $   1,974
        Working capital revolver ..............          28,496          27,917
        Accounts payable ......................          15,250          20,707
        Accrued expenses ......................          14,413          11,618
        Income taxes payable ..................           3,262           3,548
        Current portion of long-term debt
          obligations .........................           2,635           1,688
                                                      ---------       ---------

             Total current liabilities ........          65,825          67,452

LONG-TERM DEBT OBLIGATIONS ....................           6,749           4,475
OTHER LONG-TERM LIABILITIES ...................             120             120
                                                      ---------       ---------

             Total liabilities ................          72,694          72,047

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
        Preferred stock, $.0l par value,
          2,000,000 shares authorized,
          no shares issued ....................            --              --
        Common stock, $.0l par value,
          13,000,000 shares authorized;
          5,679,361 shares issued and
          outstanding at December 28, 1996
          and 5,676,697 shares issued and
          outstanding at March 30, 1996 .......              57              57
        Capital in excess of par value ........          38,285          38,259
        Retained earnings--subsequent to
          reclassification of $6,750
          deficit as part of the quasi-
          reorganization as of January 3, 1993.          25,347          19,075
        Cumulative translation adjustment .....           1,762            (282)
                                                      ---------       ---------

             Total stockholders' equity .......          65,451          57,109
                                                      ---------       ---------
             Total liabilities and stock-
             holders' equity ..................       $ 138,145       $ 129,156
                                                      =========       =========
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.

                          CONSOLIDATED INCOME STATEMENTS
                   FOR THE THREE MONTH AND NINE MONTH PERIODS
                  ENDED DECEMBER 28, 1996 AND DECEMBER 30, 1995
                    (In Thousands, Except Per Share Amounts)


                             THREE MONTHS ENDED           NINE MONTHS ENDED
                         December 28,  December 30,   December 28,  December 30,
                            1996          1995           1996           1995
                            ----          ----           ----           ----
<S>                      <C>            <C>            <C>            <C>
Net sales ..........     $  59,779      $  56,751      $ 173,471      $ 151,329
Cost of sales ......        47,081         42,831        134,977        114,868
                         ---------      ---------      ---------      ---------

  Gross profit .....        12,698         13,920         38,494         36,461
Selling, general and
  administrative
  expenses .........         8,928          8,314         26,487         23,387
                         ---------      ---------      ---------      ---------

    Operating income         3,770          5,606         12,007         13,074
Interest expense ...          (755)          (703)        (2,181)        (1,807)
Other income, net ..            58            101            149            164
                         ---------      ---------      ---------      ---------

    Income before
    provision for
    income taxes ...         3,073          5,004          9,975         11,431
Provision for
  income taxes .....         1,135          2,014          3,703          4,727
                         ---------      ---------      ---------      ---------

    Net income .....     $   1,938      $   2,990      $   6,272      $   6,704
                         =========      =========      =========      =========

Primary earnings
  per share ........     $    0.34      $    0.52      $    1.09      $    1.17
                         =========      =========      =========      =========

Weighted average
 number of shares
 outstanding .......         5,705          5,745          5,730          5,746






The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
    FOR THE NINE MONTH PERIODS ENDED DECEMBER 28, 1996 AND DECEMBER 30, 1995
                                 (In Thousands)



                                               CAPITAL IN             CUMULATIVE
                                    COMMON     EXCESS OF    RETAINED TRANSLATION
                                     STOCK     PAR VALUE    EARNINGS  ADJUSTMENT
                                     -----     ---------    --------  ----------
<S>                                 <C>         <C>         <C>         <C>

BALANCE, April 1, l995 ........     $    57     $38,106     $10,651     $ 1,395
Translation adjustment
  for the nine months
  ended December 30, 1995 .....        --          --          --        (1,425)
Net income for the nine
  months ended December 30,
  l995 ........................        --          --         6,704        --
Provision in lieu of
  income taxes ................        --             4        --          --
Exercise of stock options
  for common stock ............        --            35        --          --
                                    -------     -------     -------     -------

BALANCE, December 30, 1995 ....     $    57     $38,145     $17,355     $   (30)
                                    =======     =======     =======     =======




BALANCE, March 30, 1996 .......     $    57     $38,259     $19,075     $  (282)
Translation adjustment
  for the nine months
  ended December 28, 1996 .....        --          --          --         2,044
Net income for the nine
  months ended December
  28, 1996 ....................        --          --         6,272        --
Exercise of stock options
  for common stock ............        --            26        --          --
                                    -------     -------     -------     -------

BALANCE, December 28, 1996 ....     $    57     $38,285     $25,347     $ 1,762
                                    =======     =======     =======     =======





The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
    FOR THE NINE MONTH PERIODS ENDED DECEMBER 28, 1996 AND DECEMBER 30, 1995
                                 (In Thousands)


                                                      December 28,  December 30,
                                                          1996          1995
                                                       --------        --------
<S>                                                   <C>             <C>
CASH FLOWS PROVIDED BY OPERATING
  ACTIVITIES:
  Net income ...................................       $  6,272        $  6,704
  Adjustments to reconcile net
    income to net cash provided
    by operating activities:
         Depreciation and amortization .........          2,481           2,435
         (Increase) in deferred
           income taxes ........................           --              (376)
         Provision in lieu of income taxes .....           --                 4
         Net (gain) on sale of property,
         plant and equipment ...................             (3)            (15)
Changes in operating assets and
    liabilities:
    (Increase) in net trade
      accounts receivable ......................         (2,260)        (11,802)
    (Increase) in inventories ..................         (2,535)        (11,988)
    (Increase) in prepaid
      expenses and other current assets ........           (424)           (121)
     (Increase) in other assets ................            (73)           (462)
    Increase (decrease) in bank overdrafts .....           (205)            894
    Increase (decrease) in accounts payable
      and accrued expenses .....................         (4,842)          7,473
                                                       --------        --------

      Total adjustments ........................         (7,861)        (13,958)
                                                       --------        --------

    Cash flows (used in)
      operating activities .....................         (1,589)         (7,254)
                                                       --------        --------



CASH FLOWS PROVIDED BY (USED IN)
  INVESTING ACTIVITIES:
  Capital expenditures .........................         (1,908)        (14,006)
  Proceeds from sale of property,
    plant and equipment ........................             71              83
                                                       --------        --------

    Cash flows (used in)
      investing activities .....................         (1,837)        (13,923)
                                                       --------        --------
<PAGE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
    FOR THE NINE MONTH PERIODS ENDED DECEMBER 28, 1996 AND DECEMBER 30, 1995
                                 (In Thousands)
                                   (Continued)

                                                      December 28,  December 30,
                                                          1996          1995
                                                       --------        --------
<S>                                                   <C>              <C>
CASH FLOWS PROVIDED BY (USED IN)
  FINANCING ACTIVITIES:
  Sale of common stock .......................              26               35
  Borrowings (payments) under working
    capital revolver, net ....................            (472)          20,661
  Borrowings of other debt and
    capitalized lease obligations ............           3,417            2,739
                                                      --------         --------

    Cash flows provided by
      financing activities ...................           2,971           23,435
                                                      --------         --------

  Effect of exchange rate changes
    on cash ..................................              69             (486)
                                                      --------         --------

    Net change in cash .......................            (386)           1,772
  CASH, beginning of period ..................           4,960            3,806
                                                      --------         --------

  CASH, end of period ........................        $  4,574         $  5,578
                                                      ========         ========

  SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid ..............................        $  2,879         $  1,592
  Income taxes paid (received), net ..........           3,927            4,817





The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
</TABLE>
<PAGE>
                            BRIDGEPORT MACHINES, INC.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       THE COMPANY AND BASIS OF PRESENTATION

         Bridgeport  Machines,  Inc.  and  subsidiaries  (the  "Company")  is  a
         manufacturer  and  distributor  of  metal  cutting  machine  tools  and
         accessories.  The Company  manufactures  its  products in the U.S.  and
         Europe.

         The consolidated  balance sheet as of December 28, 1996 and the related
         consolidated statements of income,  stockholders' equity and cash flows
         for the three month and nine month periods ended  December 28, 1996 and
         December 30, l995 have been prepared by the Company  without audit.  In
         the opinion of management,  all adjustments necessary to present fairly
         the financial  position,  results of operations and cash flows as of or
         for the periods ended December 28, 1996 and December 30, l995 have been
         made. The accounting  principles  followed  during interim  periods are
         generally  consistent  with those  applied  for annual  periods and are
         described in the Company's  financial  statements  included in its Form
         10-K filed with the Securities and Exchange Commission (the "SEC").


2.       INTERIM STATEMENTS

         The following accounting policies which are applied in the
         preparation  of the interim  financial  statements  are different  from
         those applied in the year-end financial statements:

         Inventories:

                  Inventories are valued at year-end based upon actual inventory
                  on hand verified by a physical count. Inventories are adjusted
                  during interim periods for purchases, production and shipments
                  based upon standard costs for material, labor and overhead.

         Income Taxes:

                  The income tax provision is calculated based upon an estimated
                  tax rate for the year for each tax jurisdiction.


3.       EARNINGS PER SHARE

         Primary  earnings  per share has been  computed  based on the  weighted
         average number of common shares and common equivalent shares calculated
         for stock options under the treasury stock method.


4.       ACQUISITION OF ASSETS

         In June 1995, the Company acquired,  through a newly formed subsidiary,
         for  6,000,000(pounds)  (approximately  $9,600,000) certain assets of a
         bankrupt German machine tool manufacturer.  The assets acquired consist
         of  machinery  and  equipment  that are being  used by the  Company  to
         establish operations in the Republic of Germany.
<PAGE>
         In addition,  the subsidiary entered into a lease for manufacturing and
         office  space in Germany.  The lease  requires  minimum  annual  rental
         payments of approximately  $525,000. The lease is for a minimum term of
         seven years and can be extended  at the  Company's  option up to twenty
         years.


5.       DEBT OBLIGATIONS

         In August 1996,  the Company's  subsidiary,  Bridgeport  Machines GmbH,
         borrowed DM 7,375,000 (approximately $4,868,000). This loan is with the
         same financial institutions with which the Company maintains its credit
         facility and falls under the same covenant  guidelines.  The loan bears
         interest  at 7.345%  and is  repayable  in 39 monthly  installments  of
         approximately DM 123,000  (approximately  $81,000) beginning  September
         1996 and a final  payment  in  December  1999 of the  remaining  unpaid
         balance.


6.       RECLASSIFICATIONS

         Certain  reclassifications  have been made to prior period  balances to
         conform to current period presentation.
<PAGE>
                   BRIDGEPORT MACHINES, INC. AND SUBSIDIARIES


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS:

         The  following  table  sets  forth,  for  the  periods  indicated,  the
percentage of net sales  represented by certain items reflected in the Company's
consolidated financial statements:
<TABLE>
<CAPTION>
 
                                                     THREE MONTHS ENDED                      NINE MONTHS ENDED
                                              December 28,         December 30,       December 28,           December 30,
                                                 1996                 1995                 1996                 1995
                                                 ----                 ----                 ----                 ----
<S>                                              <C>                  <C>                  <C>                  <C>
Net sales ...................................... 100.0%               100.0%               100.0%               100.0%
Gross profit ...................................  21.2                 24.5                 22.2                 24.1
Selling, general and
  administrative expenses ......................  14.9                 14.6                 15.3                 15.5
Operating income ...............................   6.3                  9.9                  6.9                  8.6
Interest expense................................   1.3                  1.2                  1.3                  1.2
Other income, net ..............................   0.1                  0.2                  0.1                  0.1
Income tax expense..............................   1.9                  3.5                  2.1                  3.1
Net income......................................   3.2                  5.3                  3.6                  4.4
</TABLE>


COMPARISON OF THE THREE MONTHS ENDED DECEMBER 28, 1996 ("THIRD QUARTER OF FISCAL
1997") TO THE THREE  MONTHS ENDED  DECEMBER  30, 1995 ("THIRD  QUARTER OF FISCAL
1996")


         Net sales were $59.8  million in the third  quarter of fiscal l997,  an
increase of $3.0  million,  or 5.3%,  as compared to the third quarter of fiscal
l996.  The  increase  in sales was  primarily  a result  of a new lathe  product
introduced during the quarter.

         Gross profit was $12.7  million in the third  quarter of fiscal l997, a
decrease of $1.2  million,  or 8.8%,  as compared to the third quarter of fiscal
l996.  Gross profit as a percent of net sales was 21.2%  compared  with 24.5% in
the  third  quarter  of fiscal  1996.  The  decrease  in gross  profit  resulted
primarily from price  discounting  and to a lesser  extent,  a change in product
mix.

         Selling,  general and administrative  expenses were $8.9 million in the
third quarter of fiscal l997, an increase of $0.6 million,  or 7.4%, as compared
to the third quarter of fiscal l996. The increase in dollar amount  consisted of
increases in salaries and benefits of $0.3 million. The remaining increase was a
result of small increases in numerous categories.  As a percentage of net sales,
selling,  general and administrative expenses were 14.9% in the third quarter of
fiscal l997, as compared to 14.6% for the third quarter of fiscal l996.
<PAGE>
         Operating  income was $3.8 million in the third quarter of fiscal l997,
a decrease of $1.8 million, or 32.8%, as compared to the third quarter of fiscal
l996.  The  decreased  operating  income was  primarily  a result of lower gross
profit.  As a percentage  of net sales,  operating  income was 6.3% in the third
quarter of fiscal l997 as compared to 9.9% in the third quarter of fiscal l996.

         Interest  expense was $0.8 million in the third  quarter of fiscal l997
and $0.7 million in the third quarter of fiscal l996.

         Provision  for income  taxes was $1.1  million in the third  quarter of
fiscal  l996, a decrease of $0.9 million or 43.6%.  The  effective  tax rate was
36.9% in the third  quarter of fiscal  l997 as  compared  to 40.2% for the third
quarter of fiscal  l995.  The decline in the  effective  tax rate is a result of
more income being generated in lower tax  jurisdictions and the utilization of a
net operating loss carryforward in the Company's German operations.


COMPARISON  OF THE NINE MONTHS ENDED  DECEMBER 28, 1996 TO THE NINE MONTHS ENDED
DECEMBER 30, 1995

         Net sales were $173.5  million for the nine months  ended  December 28,
1996,  an increase of $22.1  million,  or 14.6%,  as compared to the nine months
ended  December 30,  1995.  Increased  production  at the  Company's  facilities
resulted in increased sales of machining centers of approximately  $19.9 million
in the nine months ended  December 28, 1996 as compared to the nine months ended
December  30,  1995.  Sales  increases  were  attributable  to unit  growth  and
increased sales of higher priced products.

         Gross profit was $38.5  million for the nine months ended  December 28,
1996, an increase of $2.0 million, or 5.6%, as compared to the nine months ended
December 30, 1995.  The gross profit as a percentage  of net sales was 22.2% for
the nine months  ended  December 28, 1996 versus 24.1% for the nine months ended
December  30,  1995.  The  decline  in gross  profit  is  primarily  a result of
increased  sales of machining  centers and CNC lathes,  both of which have lower
gross margins than many of the Company's  other products.  Also  contributing to
the decline in gross  profit were price  discounts  which  occurred in the third
fiscal quarter.

         Selling, general and administrative expenses were $26.5 million for the
nine months ended December 28, 1996, an increase of $3.1 million,  or 13.3%,  as
compared to the nine months  ended  December  30,  1995.  The increase in dollar
amount  consisted  primarily  of  salaries  and  benefits  of $1.6  million  and
advertising and trade show expenses of $0.8 million.  The remaining increase was
a result of small  increases  in numerous  categories.  As a  percentage  of net
sales,  selling,  general and  administrative  expenses  were 15.3% for the nine
months ended  December 28, 1996,  as compared to 15.5% for the nine months ended
December 30, 1995.

         Operating  income was $12.0 million for the nine months ended  December
28, 1996, a decrease of $1.1  million,  or 8.2%,  as compared to the nine months
ended  December 30, 1995.  The  decreased  operating  income was a result of the
lower  gross  profit  margin  and higher  selling,  general  and  administrative
expenses.  As a percentage of net sales,  operating income was 6.9% for the nine
months  ended  December  28, 1996  compared  to 8.6% for the nine  months  ended
December 30, 1995.

         Interest  expense was $2.2 million for the nine months  ended  December
28, 1996 and $1.8 million for the nine months ended December 30, 1995.
<PAGE>
         Provision  for income  taxes was $3.7 million for the nine months ended
December 28, 1996, a decrease of $1.0 million or 21.7%.  The  effective tax rate
was 37.1% for the nine months  ended  December 28, 1996 as compared to 41.4% for
the nine months ended  December 30, 1995.  The decline in the effective tax rate
is a result of more income being  generated in lower tax  jurisdictions  and the
utilization  of a net  operating  loss  carryforward  in  the  Company's  German
operations.


FOREIGN OPERATIONS:

         During the nine months ended December 28, 1996, net sales outside North
America represented approximately 47.5% of total net sales, as compared to 41.5%
for the nine months ended December 30, 1995. A substantial  portion of these net
sales were made by the Company's  European  operations.  The Company's  European
operations  were  expanded  during  fiscal 1996 through the  establishment  of a
manufacturing   facility  in  Kempten,   Germany  in  June  1995.  In  addition,
approximately  50,000  square feet of leased  assembly and  warehouse  space was
added to the Company's existing Leicester, England facility.

         The  Kempten,   Germany   operations  were   established   through  the
acquisition of machinery and equipment by the Company's newly formed  indirectly
wholly owned  subsidiary,  Bridgeport  Machines  GmbH.  In addition,  Bridgeport
Machines GmbH entered into a lease for 124,000 square feet of manufacturing  and
office space.  The Kempten,  Germany  operations are being used to machine parts
which are used by the Leicester  facility to manufacture  the Company's  machine
tool  products.  The  Company  paid  approximately  $9.6  million to acquire the
machinery and equipment in Kempten,  Germany.  This payment was financed through
borrowings under the Company's revolving credit facility.

         Generally,  from time to time, the Company enters into forward exchange
contracts to provide  economic hedges against foreign  currency  fluctuations on
its intercompany sales  transactions  between its U.S. and U.K.  operations.  At
December 28, 1996, the Company had no outstanding forward purchase contracts.

LIQUIDITY AND CAPITAL RESOURCES:

         As of December  28,  1996,  the  Company  had working  capital of $50.2
million  compared  with $39.1  million at March 30, 1996.  The Company meets its
short-term financing needs through cash from operations and its revolving credit
facility  which  provides  for  maximum  borrowings  of up to $23 million in the
United States and $16 million in the United Kingdom.

         The table  below  presents  the  summary  of cash flow for the  periods
indicated:
<TABLE>
<CAPTION>
                                             NINE MONTHS ENDED
                                    December 28, 1996   December 30, 1995
                                    -----------------   -----------------
<S>                                     <C>                 <C>
Net cash (used in)
  operating activities                  $( 1,589)           $( 7,254)

Net cash (used in)
  investing activities                   ( 1,837)            (13,923)

Net cash provided by
 financing activities                      2,971              23,435
</TABLE>
<PAGE>
         Net  cash  used in  operating  activities  fluctuates  between  periods
primarily as a result of differences in net income,  the level of sales activity
and the timing of the collection of accounts  receivable,  purchase of inventory
and payment of accounts payable. During the nine months ended December 28, 1996,
increases in the Company's trade accounts  receivable and inventories  accounted
for uses of cash in operations of $2.3 and $2.5  million,  respectively,  versus
uses of $11.8 million and $12.0  million for the nine months ended  December 30,
1995, respectively.

         During periods when the Company's sales are  increasing,  net cash used
in operating  activities  generally  increases in order to support  higher trade
accounts receivable and inventory levels.  During the nine months ended December
28,  1996,  net sales  increased  14.6% as compared  with the same period in the
prior year.  During the nine months ended December 30, 1995, net sales increased
42.4% as compared  with the same period in the prior  year.  Management  expects
that if sales  continue  to  increase,  the  trend of  using  cash in  operating
activities would continue.

         The net cash used in  investing  activities  in the nine  months  ended
December  30, 1995  includes  the  acquisition  of  machinery  and  equipment in
Kempten,  Germany  for  approximately  $9.6  million.  The net cash  provided by
financing  activities in the nine months ended December 30, 1995  represents net
borrowings under the Company's  credit  facility.  These borrowings were made to
finance the acquisition of the machinery and equipment in Kempten,  Germany, and
higher  inventory and trade accounts  receivable due to the Company's  increased
sales level.
<PAGE>
PART II - OTHER INFORMATION

Item l   Legal Proceedings                                    None

Item 2   Changes in Securities                                None

Item 3   Defaults Upon Senior Securities                      None

Item 4   Submission of Matters to a
                  Vote of Security Holders                    None

Item 5   Other Information                                    None

Item 6   Exhibits and Reports on Form 8-K                  Exhibit No.
         --------------------------------                  -----------

                  a)   Exhibits

                       ( 2)  Not Applicable

                       ( 4)  Not Applicable

                       (l0)  Not Applicable

                       (ll)  Statement  regarding  computation  of per share
                       earnings  is  not   required   because  the  relevant
                       computation  can  be  determined  from  the  material
                       contained  in  the  Financial   Statements   included
                       herein.

                       (l5)  Not Applicable

                       (l8)  Not Applicable

                       (l9)  Not Applicable

                       (22)  Not Applicable

                       (23)  Not Applicable

                       (24)  Not Applicable

                       (27)  Not Applicable

                       (99)  Not Applicable

                b)     There were no reports or exhibits on Form 8-K filed
                       during the three months ended December 28, 1996.
<PAGE>

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  l934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereto duly authorized.


                                             BRIDGEPORT MACHINES, INC.
                                                  (Registrant)



                    February 7, 1997     /s/ Dan L. Griffith
                                         -------------------
                                     By:     Dan L. Griffith
                                             President and
                                             Chief Executive Officer



                    February 7, 1997     /s/ Walter C. Lazarcheck
                                         ------------------------
                                     By:     Walter C. Lazarcheck
                                             Vice President and
                                             Chief Financial Officer