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 January 2, 1999

                                       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
January 2, 1999 was 5,704,404 shares.
<PAGE>
                                             BRIDGEPORT MACHINES, INC.
                                                 AND SUBSIDIARIES




                                                       INDEX


Part I - FINANCIAL INFORMATION                             
------------------------------                             

Item l.             FINANCIAL STATEMENTS

                    Consolidated Balance Sheets as of
                    January 2, 1999 and March 28, 1998          

                    Consolidated Statements of Operations for
                    the three month and nine month periods
                    ended January 2, 1999 and
                    December 27, 1997                           

                    Consolidated Statements of Stockholders'
                    Equity for the nine month periods ended
                    January 2, 1999 and December 27, 1997       

                    Consolidated Statements of Cash Flows
                    for the nine month periods ended
                    January 2, 1999 and December 27, 1997       

                    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-5.           OTHER INFORMATION                           

Item 6.             EXHIBITS AND REPORTS ON FORM 8-K            

Signatures                                                   


<PAGE>
                            BRIDGEPORT MACHINES, INC.

                           FORWARD LOOKING STATEMENTS



         The  Private  Securities  Litigation  Reform of 1995  provides  a "safe
harbor" for forward-looking  statements.  Certain  information  included in this
Quarterly Report on Form 10-Q and the Company's  previously filed Annual Reports
on Form 10-K is forward-looking,  such as information  relating to the expansion
of the use of the Company's products into the factory floor market, expansion of
the Company's  marketing efforts into foreign markets,  the Company's ability to
develop  additional  sources of supply,  the  Company's  shipment of its current
backlog,  the Company's  expected  expenditures on  environmental  matters,  the
Company's  use of  cash  in  operating  activities,  the  Company's  ability  to
satisfactorily resolve any outstanding litigation, the ability of the Company to
meet  working  capital  needs,  and the effect on the Company of the adoption of
certain  accounting   standards.   Such  forward-looking   information  involves
important  risks and  uncertainties  that could  significantly  affect  expected
results in the future from those  expressed  in any  forward-looking  statements
made by, or on behalf of, the Company.  These risks and  uncertainties  include,
but are not limited to,  uncertainties  relating to general economic conditions,
product  introductions,  contingent  liabilities,  changes in currency  exchange
rates,  the  mix  of  products  sold  and  the  profit  margins  thereon,  order
cancellations  or reduced  bookings by  customers or  distributors,  discounting
necessitated by price competition, and general market conditions.



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

                           CONSOLIDATED BALANCE SHEETS
                      (In Thousands, Except Share Amounts)


                                                       January 2,      March 28,
                                                          l999           l998
                                                      ---------       ---------
<S>                                                   <C>             <C>      
          ASSETS

CURRENT ASSETS:
        Cash ...................................      $   4,390       $   4,892
        Trade accounts receivable,
          less allowance of $1,808
          and $1,551, respectively .............         30,626          39,236
        Inventories ............................         59,315          66,707
        Deferred income taxes ..................          3,100           3,100
        Prepaid expenses and other current
          assets ...............................            685           1,190
                                                      ---------       ---------

            Total current assets ...............         98,116         115,125

PROPERTY, PLANT AND EQUIPMENT
        Land ...................................            348             351
        Buildings, improvements and
          leasehold improvements ...............          4,239           4,081
        Machinery and equipment ................         20,691          19,880
        Furniture and fixtures .................          6,284           5,979
                                                      ---------       ---------
                                                         31,562          30,291


Less:  Accumulated depreciation ................        (12,770)        (10,586)
                                                      ---------       ---------

             Property, plant and equipment,
                net .............................        18,792          19,705
                                                      ---------       ---------

INVESTMENTS IN AND ADVANCES TO AFFILIATES ......            935             859

OTHER ASSETS, net of accumulated
  amortization of $331 and
  $1,585 respectively ..........................            318             421
                                                      ---------       ---------

             Total assets ......................      $ 118,161       $ 136,110
                                                      =========       =========

</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.
                           CONSOLIDATED BALANCE SHEETS
                      (In Thousands, Except Share Amounts)

                                                     January 2,          March 28,
                                                        1999              l998
                                                    ------------      ------------
<S>                                                 <C>               <C>         
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
        Bank overdrafts .......................     $      1,401      $      2,386
        Working capital revolver ..............           18,166            23,106
        Accounts payable ......................           11,013            20,153
        Accrued expenses ......................           13,434            14,396
        Income taxes payable ..................              219             1,001
        Current portion of long-term debt
          obligations .........................            2,418             2,483
                                                    ------------      ------------

             Total current liabilities ........           46,651            63,525

LONG-TERM DEBT OBLIGATIONS ....................            1,400             3,142
OTHER LONG-TERM LIABILITIES ...................              120               120
                                                    ------------      ------------

             Total liabilities ................           48,171            66,787

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;
          5,704,404 shares issued
          at January 2, 1999 and
          5,702,404 shares issued
          at March 28, 1998 ...................               57                57
        Capital in excess of par value ........           38,533            38,513
        Retained earnings--subsequent to
          reclassification of $6,750
          deficit as part of the quasi-
          reorganization as of January 3,
          l993 ................................           31,475            30,991
        Accumulated other comprehensive income:
          Cumulative translation adjustment ...              909               271
        Treasury stock at cost, 110,500 shares              (984)             (509)
                                                    ------------      ------------

             Total stockholders' equity .......           69,990            69,323
                                                    ------------      ------------

             Total liabilities and stock-
             holders' equity ..................     $    118,161      $    136,110
                                                    ============      ============
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE THREE MONTH AND NINE MONTH PERIODS
                   ENDED JANUARY 2, 1999 AND DECEMBER 27, 1997
                    (In Thousands, Except Per Share Amounts)


                              THREE MONTHS ENDED            NINE MONTHS ENDED
                           January 2,   December 27,    January 2,    December 27,
                             1999           1997           1999           1997
                          ---------      ---------      ---------      ---------
<S>                       <C>            <C>            <C>            <C>      
Net sales ...........     $  41,885      $  58,728      $ 141,418      $ 158,170
Cost of sales .......        33,027         45,632        111,718        122,959
                          ---------      ---------      ---------      ---------

  Gross profit ......         8,858         13,096         29,700         35,211

Selling, general and
  administrative
  expenses ..........         8,301          9,774         27,067         28,706
                          ---------      ---------      ---------      ---------

   Operating income .           557          3,322          2,633          6,505

Interest expense ....          (590)          (654)        (1,869)        (1,955)
Other income
  (expense), net ....          (186)           222           (181)           268
                          ---------      ---------      ---------      ---------

   Income (loss)
   before provision
   (benefit) for
   income taxes .....          (219)         2,890            583          4,818

Provision (benefit)
   for income taxes .           (97)         1,166             99          2,350
                          ---------      ---------      ---------      ---------

   Net income (loss)      $    (122)     $   1,724      $     484      $   2,468
                          =========      =========      =========      =========

Basic Earnings (loss)
  Per Share .........     $   (0.02)     $    0.30      $    0.09      $    0.44
                          =========      =========      =========      =========

Diluted Earnings
  (loss) Per Share ..     $   (0.02)     $    0.30      $    0.09      $    0.43
                          =========      =========      =========      =========

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

                                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     FOR THE NINE MONTH PERIODS ENDED JANUARY 2, 1999 AND DECEMBER 27, 1997
                                                 (In Thousands)

                                                                         ACCUMULATED
                                                                            OTHER
                                                                       COMPENHENSIVE
                                                                           INCOME:
                                               CAPITAL IN                CUMULATIVE                   TOTAL
                                    COMMON     EXCESS OF     RETAINED    TRANSLATION   TREASURY   STOCKHOLDERS'
                                    STOCK      PAR VALUE     EARNINGS    ADJUSTMENT     STOCK        EQUITY
                                  --------     --------     --------     --------      --------      --------
<S>                               <C>          <C>          <C>          <C>          <C>           <C>     
BALANCE, March 29, 1997 .....     $     57     $ 38,285     $ 27,076     $    168     $   --        $ 65,586
                                                                                                    --------

Comprehensive Income:
  Net income for the nine
    months ended December
    27, 1997 ................           --           --        2,468           --         --           2,468
  Other Comprehensive Income:
    Translation adjustment
      for the nine months
      ended December 27,
      1997                              --           --           --          356         --             356
                                                                                                    --------
           Total Comprehensive
           Income ...........                                                                          2,824
                                                                                                    --------

Exercise of stock options
  for Common Stock ..........           --            8           --           --         --               8
Purchase of Common Stock
    for treasury ............           --           --           --           --         (509)         (509)
                                  --------     --------     --------     --------      --------      --------

BALANCE, December 27, 1997 ..     $     57     $ 38,293     $ 29,544     $    524     $   (509)     $ 67,909
                                  ========     ========     ========     ========      ========      ========

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

                                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     FOR THE NINE MONTH PERIODS ENDED JANUARY 2, 1999 AND DECEMBER 27, 1997
                                                 (In Thousands)

                                                                         ACCUMULATED
                                                                            OTHER
                                                                       COMPENHENSIVE
                                                                           INCOME:
                                               CAPITAL IN                CUMULATIVE                   TOTAL
                                    COMMON     EXCESS OF     RETAINED    TRANSLATION   TREASURY   STOCKHOLDERS'
                                    STOCK      PAR VALUE     EARNINGS    ADJUSTMENT     STOCK        EQUITY
                                  --------     --------     --------     --------      --------      --------
<S>                               <C>          <C>          <C>          <C>          <C>           <C>     
BALANCE, March 28, 1998 .....     $     57     $ 38,513     $ 30,991     $    271     $   (509)     $ 69,323
                                                                                                    --------

Comprehensive Income:
  Net income for the nine
    months ended January 2,
    l999 ....................           --           --          484           --           --           484
  Other Comprehensive Income:
    Translation adjustment
      for the nine months
      ended January 2, 1999 .           --           --           --          638           --           638
                                                                                                    --------
          Total Comprehensive
          Income ............                                                                          1,122
                                                                                                    --------
Exercise of stock options
  for common stock ..........           --           20           --           --           --            20

Purchase of Common Stock
for treasury ................           --           --           --           --         (475)         (475)
                                  --------     --------     --------     --------      --------      --------

BALANCE, January 2, 1999 ....     $     57     $ 38,533     $ 31,475     $    909     $   (984)     $ 69,990
                                  ========     ========     ========     ========     ========      ========

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
     FOR THE NINE MONTH PERIODS ENDED JANUARY 2, 1999 AND DECEMBER 27, 1997
                                 (In Thousands)


                                                       January 2,    December 27,
                                                          1999            1997
                                                        --------       --------
<S>                                                     <C>            <C>     
CASH FLOWS PROVIDED BY (USED IN)
  OPERATING ACTIVITIES:
  Net income .....................................      $    484       $  2,468
  Adjustments to reconcile net
    income to net cash provided
    by operating activities:
         Depreciation and amortization ...........         2,714          2,525
         Net (gain) on sale of property,
         plant and equipment .....................           (16)          --
  Changes in operating assets and
      liabilities:
      Decrease (increase) in net trade
        accounts receivable ......................         8,771          1,311
      Decrease (increase) in inventories .........         7,524          4,150
      Decrease (increase) in prepaid expenses
        and other current assets .................           516            502
      Decrease (increase) in other assets ........           (52)           295
      (Decrease) increase in bank overdrafts .....          (984)          (558)
      Increase (decrease) in accounts payable
        and accrued expenses .....................       (11,115)        (3,744)
                                                        --------       --------

        Total adjustments ........................         7,358          4,481
                                                        --------       --------

  Cash flows provided by (used in)
    operating activities .........................         7,842          6,949
                                                        --------       --------

CASH FLOWS PROVIDED BY (USED IN)
  INVESTING ACTIVITIES:
  Capital expenditures ...........................        (1,208)        (2,210)
  Proceeds from sale of property,
    plant and equipment ..........................            21              9
  Purchase of certain assets of a distributor ....          --           (1,245)
                                                        --------       --------

    Cash flows provided by (used in)
      investing activities .......................        (1,187)        (3,446)
                                                        --------       --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            BRIDGEPORT MACHINES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
     FOR THE NINE MONTH PERIODS ENDED JANUARY 2, 1999 AND DECEMBER 27, 1997
                                 (In Thousands)

                                                        January 2,    December 27,
                                                           1999           1997
                                                         -------        -------
<S>                                                      <C>            <C>    
CASH FLOWS PROVIDED BY (USED IN)
  FINANCING ACTIVITIES:

  Sale of common stock ...........................       $    20        $     8
  Borrowings (payments) under working
    capital revolver, net ........................        (4,755)          (301)
  Borrowings (payments) of other debt and
    capitalized lease obligations ................        (2,039)        (1,927)
  Purchase of Treasury Stock .....................          (475)          (509)
                                                         -------        -------

    Cash flows provided by (used in)
      financing activities .......................        (7,249)        (2,729)
                                                         -------        -------

  Effect of exchange rate changes
    on cash ......................................            92            (45)
                                                         -------        -------

    Net change in cash ...........................          (502)           729
  CASH, beginning of period ......................         4,892          2,992
                                                         -------        -------

  CASH, end of period ............................       $ 4,390        $ 3,721
                                                         =======        =======

  SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid ..................................       $ 1,595        $ 1,994
  Income taxes paid, net .........................           848          4,048


</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these financial statements.
<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.   Sales  are  principally  in  North  America  and  Europe.   A
         substantial  portion  of the end users of the  Company's  products  are
         small and medium sized independent job shops who produce machined parts
         for customers in a wide variety of industries.

         The  consolidated  balance  sheet as of January 2, 1999 and the related
         consolidated  statements of operations,  stockholders'  equity and cash
         flows for the nine months  ended  January 2, 1999 and December 27, 1997
         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  January  2, 1999 and  December  27,  1997 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  the
                  estimated tax rate for the period for each tax jurisdiction.


3.       EARNINGS PER SHARE

         In February 1997,  Statement of Financial Accounting Standards No. 128,
         "Earnings Per Share" ("FAS 128"),  was issued.  FAS 128 established new
         standards for computing and presenting EPS. The Company adopted the new
         standard  in the third  quarter  of  fiscal  1998.  Earnings  per share
         information   for  prior  periods  has  been  restated  using  the  new
         guidelines.
<PAGE>
         Basic  earnings  per common  share for the three and nine months  ended
         January 2, 1999 and  December 27, 1997 are  calculated  by dividing net
         income by weighted average common shares outstanding during the period.
         Diluted  earnings  per common share for the three and nine months ended
         January 2, 1999 and  December 27, 1997 are  calculated  by dividing net
         income by weighted average common shares  outstanding during the period
         plus dilutive potential common shares which are determined as follows:
<TABLE>
<CAPTION>

                                       THREE MONTHS ENDED      NINE MONTHS ENDED
                                      Jan. 2,    Dec. 27,    Jan. 2,     Dec. 27,
                                       1999        1997        1999        1997
                                       -----       -----       -----       -----
                                                (amounts in thousands)
<S>                                    <C>         <C>         <C>         <C>  
Weighted average common
  shares outstanding ...........       5,606       5,680       5,636       5,669
Effect of dilutive
  options to purchase
  common stock .................           0          11          14           9
Adjusted weighted
  average common shares ........       5,606       5,691       5,650       5,678
</TABLE>

         Stock options to purchase 347,510 and 198,600 shares of common stock at
         January 2, 1999 and December 27, 1997, respectively,  at prices ranging
         from  $9.50  to  $16.25  and from  $10.75  to  $16.25  per  share  were
         outstanding  at  January 2, 1999 and December  27, 1997,  respectively,
         and did not meet the  requirements to be included in the computation of
         diluted  earnings per share for the three month periods.  These options
         expire in fiscal years 2000 to 2003.

         Dilutive  potential common shares are calculated in accordance with the
         treasury  stock method which assumes that proceeds from the exercise of
         all options are used to repurchase  common stock at market  value.  The
         number of shares remaining after the proceeds are exhausted  represents
         the potentially dilutive effect of the securities.


4.       COMPREHENSIVE INCOME

         In June 1997,  Statement of  Financial  Accounting  Standards  No. 130,
         "Reporting  Comprehensive  Income"  ("FAS  130")  was  issued.  FAS 130
         requires the disclosure of  comprehensive  income to reflect changes in
         equity that result from transactions and economic events from non-owner
         sources.  Comprehensive  income  for the  three and nine  months  ended
         January 2, 1999 and December 27, 1997 presented  below include  foreign
         currency  translation  items.  There was no tax  expense or tax benefit
         associated with the foreign currency translation items.
<PAGE>
<TABLE>
<CAPTION>

                                        THREE MONTHS ENDED      NINE MONTHS ENDED
                                        Jan. 2,    Dec. 27,    Jan. 2,    Dec. 27,
                                         1999        1997        1999       1997
                                        ------      ------     ------     ------
                                                (amounts in thousands)
<S>                                     <C>         <C>        <C>        <C>   
Net income (loss) .................     $ (122)     $1,724     $  484     $2,468
Foreign currency
  translation adjustments .........       (680)        896        638        356
                                        ------      ------     ------     ------
Comprehensive income (loss) .......     $ (802)     $2,620     $1,122     $2,824
                                        ======      ======     ======     ======
</TABLE>

5.       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In June 1997, the Financial  Accounting Standards Board ("FASB") issued
         SFAS No. 131,  "Disclosures about Segments of an Enterprise and Related
         Information"  ("SFAS No. 131"),  which changes the way public companies
         report information about segments.  SFAS No. 131, which is based on the
         management  approach to segment  reporting,  includes  requirements  to
         report  selected  segment   information   quarterly,   and  entity-wide
         disclosures  about  products and  services,  major  customers,  and the
         material  countries  in which  the  entity  holds  assets  and  reports
         revenues.  The first  disclosure  required by this statement will be in
         the Company's annual financial  statements for the year ending April 3,
         1999.  The Company does not expect  adoption of the statement to have a
         significant impact on the presentation of its financial statements.

         In June  1998,  the  FASB  issued  Statement  of  Financial  Accounting
         Standards No. 133,  "Accounting for Derivative  Instruments and Hedging
         Activities" which provides new guidelines for accounting for derivative
         instruments.  The Company is currently  analyzing  what, if any, impact
         the new  guideline  will have on the  Company.  This new  statement  is
         effective for financial periods beginning after June 15, 1999.


6.       ACQUISITION

         On August 1, 1997,  the  Company  acquired  certain  assets and assumed
         certain  liabilities of its German  distributor.  The  acquisition  was
         accounted  for  as  a  purchase.   The  Company  paid  in  installments
         approximately  $1.8 million in cash for the assets acquired and assumed
         approximately   $2.5  million  of   liabilities.   The  purchase  price
         approximated  book value.  The  purchase  did not meet the  significant
         subsidiary rules of SEC reporting requirements.


7.       COMMITMENTS AND CONTINGENCIES

         The  Company  is  subject  to  various  legal  proceedings,  claims and
         liabilities  which have arisen in the ordinary  course of its business.
         In the opinion of management, the amount of ultimate liability, if any,
         with respect to these actions will not materially  affect the financial
         results of operations or financial position of the Company.
<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
                                         January 2,           December 27,        January 2,          December 27,
                                            1999                 1997                1999                1997
                                           -----                -----               -----               ----- 
<S>                                        <C>                  <C>                 <C>                 <C>   
Net sales                                  100.0%               100.0%              100.0%              100.0%
Gross profit                                21.1                 22.3                21.0                22.3
Selling, general and
  administrative
  expenses                                  19.8                 16.6                19.1                18.1
Operating income                             1.3                  5.7                 1.9                 4.1
Interest                                     1.4                  1.1                 1.3                 1.2
expense
Other income (expense)                      (0.4)                 0.4                (0.1)                0.2
Income tax expense
  (benefit)                                 (0.2)                 2.0                 0.1                 1.5
Net income (loss)                           (0.3)                 2.9                 0.3                 1.6


</TABLE>

FISCAL CALENDAR

         The Company's  fiscal year is the 52 or 53 week period ending  Saturday
nearest to March 31.  Fiscal  1998 was a 52 week year while  fiscal 1999 is a 53
week year. The additional  week in fiscal 1999 is included in the second quarter
of fiscal 1999.  As a result,  the nine months ended  January 2, 1999 include 40
weeks, while the nine months ended December 27, 1997 include 39 weeks.


COMPARISON OF THE THREE MONTHS ENDED  JANUARY 2, 1999 ("THIRD  QUARTER OF FISCAL
1999") TO THE THREE  MONTHS ENDED  DECEMBER  27, 1997 ("THIRD  QUARTER OF FISCAL
1998")

         Net sales were $41.9  million in the third  quarter of fiscal  l999,  a
decrease of $16.8 million,  or 28.7%, as compared to the third quarter of fiscal
l998.  The  decrease  in sales  consists  primarily  of a  decrease  in sales of
approximately  $13.6  million,  $2.1 million and $1.1 million in North  America,
Europe and the Pacific Rim/South America, respectively. These decreases in sales
are primarily a result of weaker market  conditions in the United States and the
Pacific  Rim/South  America.  The  decrease in sales in Europe was  comprised of
decreased  sales in the  United  Kingdom  of $4.2  million  partially  offset by
increased  sales in  continental  Europe.  The  decrease  in sales in the United
Kingdom is primarily a result of weaker market conditions.
<PAGE>
         During the third  quarter of fiscal 1999,  the  Company's  net incoming
orders  in  North  America  and  Europe  were  approximately  44% and 63%  less,
respectively,  than the  incoming  orders in the third  quarter of fiscal  1998.
These declines appear to represent a cyclical trend in the United States and the
United Kingdom,  the Company's two principal markets,  of declining purchases by
customers for machine tools in the segment of the machine tool industry in which
the Company participates. The Company cannot predict for what period of time the
decreased  level of  customer  purchases  could  continue,  whether the level of
customer  purchases will decline  further or the level at which incoming  orders
will be.

         Backlog at January 2, 1999 was  approximately  $19.5  million  compared
with  approximately  $28.3 million at October 3, 1998. Of the backlog at January
2, 1999,  approximately $7.7 million relates to sales primarily in North America
and  approximately  $11.8  million  relates to sales  primarily  in Europe.  The
Company's  backlog  balances  fluctuate  as a result of many  factors  including
length  of time to  deliver  products,  new  product  introductions  and  market
conditions.  At the current levels of backlog,  the Company is more dependent on
future  incoming  orders than it has been in the recent  past.  During the third
quarter of fiscal  1999,  the  Company's  incoming  orders in North  America and
Europe were  approximately  44% and 63% less,  respectively,  than the  incoming
orders in the third quarter of fiscal 1998.

         Gross  profit was $8.9  million in the third  quarter of fiscal l999, a
decrease of $4.2 million,  or 32.4%,  as compared to the third quarter of fiscal
l998.  Gross profit  declined  approximately  $4.0 million in the Company's U.S.
operations due to decreased North American  sales.  Gross profit as a percent of
net sales was 21.1% compared with 22.3% in the third quarter of fiscal 1998. The
decline  in gross  profit as a percent  of sales  was  predominately  due to the
decline in sales in North America which resulted in a lower profit margin in the
Company's  U.S.  operations.  As a result of lower  North  American  sales,  the
Company's  production volume decreased in its U.S. operations  resulting in less
absorption of its fixed costs.

         Selling,  general and administrative  expenses were $8.3 million in the
third quarter of fiscal l999, a decrease of $1.5 million,  or 15.1%, as compared
to the third quarter of fiscal l998.  The decrease  consisted of $0.3 million in
advertising expenses, $0.5 million in compensation and related expenses and $0.4
million  research and  development  expenditures.  As a percentage of net sales,
selling,  general and administrative expenses were 19.8% in the third quarter of
fiscal l999, as compared to 16.6% for the third quarter of fiscal l998.

         Operating income was $0.6 million for the third quarter of fiscal l999,
as compared to $3.3 million for the third quarter of fiscal l998.

         Interest  expense was $0.6 million for the third quarter of fiscal l999
as compared to $0.7 million for the third quarter of fiscal l998.

         Benefit  for  income  taxes was $0.1  million  in the third  quarter of
fiscal  l999,  compared to a provision  for income  taxes of $1.2 million in the
third  quarter  of fiscal  1998.  During the third  quarter  of fiscal  1999 the
Company  utilized net operating loss  carryforwards  in its German and Malaysian
operations.  The tax  provision  in the third  quarter of fiscal 1998  primarily
represents a tax  provision for the U.S.  operating  results.  In addition,  tax
benefits  for  losses  incurred  in the  Company's  German  operations  were not
established  in the third quarter of fiscal 1998 because they were not currently
recognizable for tax return purposes.
<PAGE>
COMPARISON  OF THE NINE MONTHS  ENDED  JANUARY 2, 1999 TO THE NINE MONTHS  ENDED
DECEMBER 27, 1997

         Net sales were  $141.4  million for the nine  months  ended  January 2,
1999,  a decrease  of $16.8  million,  or 10.6%,  as compared to the nine months
ended  December 27, 1997.  Net sales in North America and the Pacific  Rim/South
America decreased approximately $24.8 million and $3.3 million, respectively, in
the nine months  ended  January 2, 1999 as  compared  to the nine  months  ended
December 27, 1997. Net sales in Europe increased by approximately  $11.4 million
in the nine months  ended  January 2, 1999 as compared to the nine months  ended
December 27, 1997. The increase in sales in Europe was a result of better market
conditions in continental  Europe,  while the decrease in sales in North America
and the Pacific Rim/South America is due to weaker market conditions.

         Since the  beginning  of  fiscal  1999,  the  Company  has  experienced
declining  net  incoming  orders in certain  markets as compared to fiscal 1998.
Fiscal year-to-date, net incoming orders in North America and the United Kingdom
were approximately 31% and 35% less,  respectively,  than the incoming orders in
the same  fiscal  year-to-date  period.  These  declines  appear to  represent a
cyclical  trend in the United States and the United  Kingdom,  the Company's two
principal markets,  of declining purchases by customers for machine tools in the
segment of the machine  tool  industry in which the  Company  participates.  The
Company cannot  predict for what period of time the decreased  level of customer
purchases could continue,  whether the level of customer  purchases will decline
further or the level at which incoming orders will be.

         Gross  profit was $29.7  million for the nine months  ended  January 2,
1999, a decrease of $5.5 million, or 15.7%, as compared to the nine months ended
December  27,  1997.  Gross profit  declined  approximately  $7.9 million in the
Company's U.S.  operations due to decreased North American  sales.  This decline
was offset  somewhat by an increase in gross  profit in the  Company's  European
operations  due primarily to increased  continental  European  sales.  The gross
profit as a percentage  of net sales was 21.0% for the nine months ended January
2, 1999 versus 22.3% for the nine months ended  December 27, 1997.  Gross profit
as a percent  of sales  declined  primarily  due to a decline  in sales in North
America.  As a result of lower North American  sales,  the Company's  production
volume  decreased in its U.S.  operations  resulting in less  absorption  of its
fixed costs.

         Selling, general and administrative expenses were $27.1 million for the
nine months  ended  January 2, 1999,  a decrease of $1.6  million,  or 5.7%,  as
compared to the nine months ended December 27, 1997.  The decrease  consisted of
$0.5 million in advertising  expenses,  $0.4 million in compensation and related
expenses,  and  $0.5  million  research  and  development  expenditures.   As  a
percentage of net sales, selling, general and administrative expenses were 19.1%
for the nine  months  ended  January 2, 1999,  as compared to 18.1% for the nine
months ended December 27, 1997.

         Operating  income was $2.6 million for the nine months ended January 2,
1999, as compared to $6.5 million for the nine months ended December 27, 1997.

         Interest  expense was $1.9 million for the nine months ended January 2,
1999 and $2.0 million for the nine months ended December 27, 1997.

         Provision  for income  taxes was $0.1 million for the nine months ended
January 2, 1999, compared to a tax provision of $2.4 million for the nine months
ended  December 27, 1997. The tax provision for the nine months ended January 2,
1999 reflects a benefit in the Company's  German  operations for the utilization
<PAGE>
of net operating loss carryforwards.  The tax provision in the nine months ended
December 27, 1997  primarily  represents a tax provision for the U.S.  operating
results.  In addition,  tax benefits for losses incurred in the Company's German
operations  in the nine months  ended  December  27,  1997 were not  established
because they were not currently recognizable for tax return purposes.


FOREIGN OPERATIONS:

         During the nine months ended  January 2, 1999,  net sales outside North
America represented approximately 51.9% of total net sales, as compared to 41.3%
for the nine months ended December 27, 1997. A substantial  portion of these net
sales were made by the Company's European operations.

         Generally,  from time to time, the Company enters into forward exchange
contracts to provide  economic  hedges  against  foreign  currency  fluctuations
primarily  on its  intercompany  sales  transactions  between its U.S.  and U.K.
operations.  At  January  2,  1999,  the  Company  did not have any  outstanding
commitments under forward purchase contracts.


LIQUIDITY AND CAPITAL RESOURCES:

         As of January 2, 1999, the Company had working capital of $51.5 million
compared with $51.6 million at March 28, 1998.  The Company meets its short-term
financing needs through cash from operations and its revolving  credit facility,
as amended,  which  could  provide  for  maximum  borrowing,  subject to certain
limitations,  of up to $24.5  million in the United  States and $19.5 million in
the United  Kingdom.  The amount the Company can actually borrow is based upon a
calculation using, among other items, the Company trade accounts  receivable and
inventories. As a result, the actual available amount the Company can borrow may
be less than the combined maximum borrowing limits of $44 million. As of January
2, 1999,  the Company could borrow  approximately  an  additional  $19.1 million
under the terms of the revolving credit facility, as amended, beyond the balance
already borrowed.

         In February  1999,  the Company  executed a waiver and amendment to its
revolving  credit  facility to change,  among other items,  the senior  interest
coverage  covenant,  as defined in the credit facility,  from a requirement that
the Company  maintain a coverage  ratio of at least 4.0 to 1.0,  measured at the
end of each fiscal  quarter,  to 1.0 to 1.0,  measured at the end of each fiscal
quarter,  until April 3, 2000 and to waive any event of default that occurred as
a result of the Company not  achieving  the  required  ratio of 4.0 to 1.0 as of
January 2, 1999.

         The table  below  presents  the  summary  of cash flow for the  periods
indicated:
<TABLE>
<CAPTION>
                                                    NINE MONTHS ENDED
                                          January 2, 1999      December 27, 1997
                                          ---------------      -----------------
                                                   (amounts in thousands)
<S>                                           <C>                    <C>    
Net cash provided by (used in)
  operating activities .................      $ 7,842                $ 6,949
Net cash provided by (used in)
  investing activities .................       (1,187)                (3,446)
Net cash provided by (used in)
 financing activities ..................       (7,249)                (2,729)
</TABLE>
<PAGE>
         Net cash provided by (used in) operating activities  fluctuates between
periods  primarily as a result of differences  in net income,  the timing of the
collection of accounts  receivable,  purchase of  inventory,  level of sales and
payment  of  accounts  payable.  Included  in net cash  provided  by  (used  in)
investing  activities  in the nine  months  ended  December  27,  1997 is a $1.2
million payment for the purchase of certain assets as discussed in Note 6 to the
financial statements. The net cash provided by (used in) financing activities in
the nine  months  ended  January  2,  1999 and  December  27,  1997,  represents
primarily net borrowings or repayments of debt.

         The Company believes that cash generated from operations and borrowings
available  under the  revolving  credit  facility will be sufficient to meet its
working capital and capital expenditure requirements for at least 12 months from
January 2, 1999. Such facility,  together with cash from operations, is expected
to be sufficient  to enable the Company to meet its working  capital and capital
expenditure needs for the longer term.  However,  there can be no assurance that
liquidity  would not be  adversely  impacted  by a decline in  general  economic
conditions or other factors, or that future credit facilities will be available.


CHANGES IN FINANCIAL POSITION:

         At January 2, 1999, accounts receivable and inventories  decreased $8.6
million and $7.4 million,  respectively, as compared to March 28, 1998 primarily
due to lower sales.


ECONOMIC CYCLES:

         The overall market for machine tools is cyclical,  reflecting  economic
conditions, production capacity utilization, changes in tax and fiscal policies,
corporate  profitability and financial condition as well as the general level of
business  confidence.  During the third  quarter of fiscal 1999,  the  Company's
incoming orders in North America and Europe were approximately 44% and 63% less,
respectively,  than the  incoming  orders in the third  quarter of fiscal  1998.
These declines appear to represent a cyclical trend in the United States and the
United Kingdom,  the Company's two principal markets,  of declining purchases by
customers for machine tools in the segment of the machine tool industry in which
the Company participates. The Company cannot predict for what period of time the
decreased  level of  customer  purchases  could  continue,  whether the level of
customer  purchases will decline  further or the level at which incoming  orders
will be.


YEAR 2000 READINESS DISCLOSURE:

         Many companies may face potential  serious  business  problems  because
software  applications  and  business  equipment  developed  in the past may not
properly  recognize  future calendar dates due to Year 2000  limitations.  These
problems  could  cause  systems  to become  unstable,  stop  working  or provide
incorrect data based upon dates.
<PAGE>
         The Company is continuing its assessment of the impact on the Year 2000
issue on its operations. Based upon its assessment to date, the Company believes
that the  majority  of its  significant  internal  computer  operating  and date
sensitive  systems are Year 2000  compliant or will be able to operate after the
date  change  without  having  a  material   adverse  impact  on  the  Company's
operations.  Part of this  belief is based  upon  third  party  representations.
Discussions  to date with third  party  suppliers  have not  indicated  that any
significant  problems  will  occur  as a  result  of the Year  2000  that  would
materially  effect the  Company's  ability  to  operate.  Many of the  Company's
suppliers are still  working on ensuring that they will be Year 2000  compliant.
Based on the current  status of the Company's Year 2000  compliance  assessment,
the estimated total costs to be incurred for all the Company's Year 2000 related
projects are not expected to exceed approximately  $200,000.  Such expenses will
be expensed as incurred and are exclusive of systems being  replaced or upgraded
in the normal course of business.

         In addition,  the Company's  customer base may also be facing  problems
related to Year 2000.  Such problems  could affect their spending plans and thus
potentially impact the Company's future sales.

         Due to the intricate  nature of the Year 2000 problems that could arise
if the Company and other  businesses  with which it transacts  business  fail to
address this issue,  such problems could result in a material  financial risk to
the Company.
<PAGE>
PART II - OTHER INFORMATION

Item l   Legal Proceedings

         On August 12,  1998,  the Company was named as a defendant in an action
         filed by Alamo Iron Works, Inc. (the "Plaintiff") in the State of Texas
         District  Court.  The  Plaintiff  alleges  that the Company  breached a
         contract under which the Plaintiff  distributed the Company's  products
         and  that  the  Company  performed   tortious   interference  with  the
         Plaintiff's present and prospective business relationships and employee
         relationships.  The  Plaintiff  seeks  among  other  things an award of
         damages to compensate the Plaintiff for the above allegations.

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)  Material Contracts:

                                  Consent and Amendment
                                  No. 7 to Amended and
                                  Restated Revolving
                                  Credit, Term Loan and
                                  Security Agreement                 10.1

                                  Waiver and Amendment No. 8
                                  to Amended and Restated
                                  Revolving Credit, Term Loan
                                  and Security Agreement             10.2

                    (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

                    (18)  Not Applicable

                    (l9)  Not Applicable

                    (22)  Not Applicable

                    (23)  Not Applicable
<PAGE>
                    (24)  Not Applicable

                    (27)  Financial Data Schedule                    27

                    (99)  Not Applicable

         b)         There were no reports or  exhibits  on Form 8-K filed
                    during the three months ended January 2, 1999.

<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 12, 1999                              /s/ Dan L. Griffith
                                                  -------------------
                                                  By: Dan L. Griffith
                                                      President and
                                                      Chief Executive Officer



   February 12, 1999                              /s/ Walter C. Lazarcheck
                                                  ------------------------
                                                  By: Walter C. Lazarcheck
                                                      Vice President and
                                                      Chief Financial Officer


<PAGE>

                                  EXHIBIT INDEX





        Exhibit No.                          Description
        -----------                          -----------

          10.1            Consent and  Amendment  No. 7 to Amended and  Restated
                          Revolving Credit, Term Loan and Security Agreement


          10.2            Waiver and  Amendment  No. 8 to Amended  and  Restated
                          Revolving Credit, Term Loan and Security Agreement
                      

          27              Financial Data Schedule