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 June 27, 1998 

                                       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
June 27, l998 was 5,654,404 shares.
<PAGE>
                            BRIDGEPORT MACHINES, INC.
                                AND SUBSIDIARIES




                                      INDEX


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

Item l.             FINANCIAL STATEMENTS

                    Consolidated Balance Sheets as of
                    June 27, 1998 and March 28, 1998        

                    Consolidated Statements of Income for
                    the three month periods ended June 27,
                    1998 and June 28, 1997                

                    Consolidated Statements of Stockholders'
                    Equity for the three month periods ended
                    June 27, 1998 and June 28, 1997         

                    Consolidated Statements of Cash Flows
                    for the three month periods ended
                    June 27, 1998 and June 28, 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-4.           OTHER INFORMATION                          

Item 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)


                                                       June 27,        March 28,
                                                         l998             l998
                                                      ---------       ---------
          ASSETS
<S>                                                   <C>             <C>      
CURRENT ASSETS:
        Cash ...................................      $   5,409       $   4,892
        Trade accounts receivable,
          less allowance of $1,580
          and $1,551, respectively .............         35,839          39,236
        Inventories ............................         69,731          66,707
        Deferred income taxes ..................          3,100           3,100
        Prepaid expenses and other current
          assets ...............................            866           1,190
                                                      ---------       ---------

            Total current assets ...............        114,945         115,125

PROPERTY, PLANT AND EQUIPMENT
        Land ...................................            348             351
        Buildings, improvements and
          leasehold improvements ...............          4,093           4,081
        Machinery and equipment ................         20,333          19,880
        Furniture and fixtures .................          6,109           5,979
                                                      ---------       ---------
                                                         30,883          30,291


Less:  Accumulated depreciation ................        (11,395)        (10,586)
                                                      ---------       ---------

             Property, plant and equipment,
               net .............................         19,488          19,705
                                                      ---------       ---------

INVESTMENTS IN AND ADVANCES TO AFFILIATES ......          1,090             859

OTHER ASSETS, net of accumulated
  amortization of $1,608
  and $1,585 respectively ......................            347             421
                                                      ---------       ---------

             Total assets ......................      $ 135,870       $ 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)

                                                        June 27,       March 28,
                                                          l998            l998
                                                       ---------      ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                    <C>            <C>      
CURRENT LIABILITIES:
        Bank overdrafts ..........................     $   1,466      $   2,386
        Working capital revolver .................        23,771         23,106
        Accounts payable .........................        18,987         20,153
        Accrued expenses .........................        15,582         14,396
        Income taxes payable .....................         1,233          1,001
        Current portion of long-term debt
          obligations ............................         2,490          2,483
                                                       ---------      ---------

             Total current liabilities ...........        63,529         63,525

LONG-TERM DEBT OBLIGATIONS .......................         2,537          3,142
OTHER LONG-TERM LIABILITIES ......................           120            120
                                                       ---------      ---------

             Total liabilities ...................        66,186         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 June 27,
          1998 and 5,702,404 shares issued
          and outstanding 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 ...................................        31,538         30,991
        Other comprehensive income:
          Cumulative translation adjustment ......            65            271
        Treasury stock at cost, 50,000 shares ....          (509)          (509)
                                                       ---------      ---------

             Total stockholders' equity ..........        69,684         69,323
                                                       ---------      ---------

             Total liabilities and stock-
             holders' equity .....................     $ 135,870      $ 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 INCOME
                THREEMONTHS ENDED JUNE 27, 1998 AND JUNE 28, 1997
                    (In Thousands, Except Per Share Amounts)
                                    

                                                    June 27,            June 28,
                                                      1998                1997
                                                    --------           --------
<S>                                                 <C>                <C>     
Net sales ................................          $ 51,086           $ 54,546
Cost of sales ............................            39,943             41,934
                                                    --------           --------


  Gross profit ...........................            11,143             12,612
Selling, general and
  administrative expenses ................             9,567              9,279
                                                    --------           --------

    Operating income .....................             1,576              3,333
Interest expense .........................              (630)              (644)
Other income (expense), net ..............               (82)              (130)
                                                    --------           --------
    Income before provision
      for income taxes ...................               864              2,559
Provision for income taxes ...............               317              1,058
                                                    --------           --------
    Net income ...........................          $    547           $  1,501
                                                    ========           ========


Basic earnings per share .................          $    .10           $    .26
                                                    ========           ========


Diluted earnings per share ...............          $    .10           $    .26
                                                    ========           ========

</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 THREE MONTHS ENDED JUNE 27, 1998 AND JUNE 28, 1997
                                                         (In Thousands)


                                                                                    ACCUMULATED
                                                                                      OTHER
                                                                                   COMPREHENSIVE
                                                                                      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 three
    months ended June 28,
                         1997            --              --             1,501             --              --              1,501
  Other Comprehensive Income:
    translation adjustment
      for the three months
      ended June 27, 1998 ...            --              --              --                180            --                180
                                                                                                                       --------
        Total Comprehensive
        Income ..............                                                                                             1,681
                                     --------        --------        --------         --------        --------         -------- 

BALANCE, June 28, 1997 ......        $     57        $ 38,285        $ 28,577         $    348            --           $ 67,267
                                     ========        ========        ========         ========        ========         ========


BALANCE, March 28, 1998 .....        $     57        $ 38,513        $ 30,991         $    271        $   (509)        $ 69,323
                                                                                                                       --------

Comprehensive Income:
  Net income for the three
    months ended June 27,
    l998 ....................            --              --               547             --              --                547
  Other Comprehensive Income:
    translation adjustment
      for the three months
      ended June 27, 1998 ...            --              --               --              (206)           --               (206)
                                                                                                                       --------
          Total Comprehensive
          Income ............                                                                                               341
                                                                                                                       --------
Exercise of stock options
  for common stock ..........            --                20            --               --              --                 20
                                     --------        --------        --------         --------        --------         --------

BALANCE, June 27, 1998 ......        $     57        $ 38,533        $ 31,538         $     65        $   (509)        $ 69,684
                                     ========        ========        ========         ========        ========         ========

</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 THREE MONTHS ENDED JUNE 27, 1998 AND JUNE 28, 1997
                                 (In Thousands)


                                                         June 27,       June 28,
                                                           1998           1997
                                                         -------        -------
<S>                                                      <C>            <C>    
CASH FLOWS PROVIDED BY (USED IN)
  OPERATING ACTIVITIES:
  Net income .....................................       $   547        $ 1,501
  Adjustments to reconcile net
    income to net cash provided
    by operating activities:
         Depreciation and amortization ...........           867            790
         Net (gain) on sale of property,
        plant and equipment ......................           (13)            (3)
Changes in operating assets and
    liabilities:
    (Increase) decrease in net trade
      accounts receivable ........................         3,217           (578)
    (Increase) decrease in inventories ...........        (3,373)         2,548
    (Increase) decrease in prepaid expenses
      and other current assets ...................           321            465
    (Increase) decrease in other assets ..........          (187)           410
    Increase (decrease) in bank overdrafts .......          (920)          (491)
    Increase (decrease) in accounts payable
      and accrued expenses .......................           489           (888)
                                                         -------        -------

      Total adjustments ..........................           401          2,253
                                                         -------        -------

    Cash flows provided by (used in)
      operating activities .......................           948          3,754
                                                         -------        -------

CASH FLOWS PROVIDED BY (USED IN)
  INVESTING ACTIVITIES:
  Capital expenditures ...........................          (628)          (896)
  Proceeds from sale of property,
    plant and equipment ..........................            17              3
                                                         -------        -------

    Cash flows provided by (used in)
      investing activities .......................          (611)          (893)
                                                         -------        -------

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE THREE MONTHS ENDED JUNE 27, 1998 AND JUNE 28, 1997
                                 (In Thousands)


                                                        June 27,       June 28,
                                                          1998           l997
                                                        -------         -------
<S>                                                     <C>             <C>           
CASH FLOWS PROVIDED BY (USED IN)
  FINANCING ACTIVITIES:

  Sale of common stock .........................             20            --
  Borrowings (payments) under working
    capital revolver, net ......................            813          (2,739)
  Payments of other debt and
    capitalized lease obligations ..............           (661)           (671)
                                                        -------         -------

    Cash flows provided by (used in)
      financing activities .....................            172          (3,410)
                                                        -------         -------
  Effect of exchange rate changes
    on cash ....................................              8              (4)
                                                        -------         -------

    Net change in cash .........................            517            (553)
  CASH, begining of period .....................          4,892           2,992
                                                        -------         -------

  CASH, end of period ..........................        $ 5,409         $ 2,439
                                                        =======         =======

  SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid ................................        $   708         $   673
  Income taxes paid, net .......................             86             151


</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 June 27,  1998 and the  related
         consolidated statements of income,  stockholders' equity and cash flows
         for the three  months  ended June 27,  1998 and June 28, 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
         June 27,  1998 and  June  28,  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 an estimated
                  tax rate for the year 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.

         Basic  earnings  per common  share for the three  months ended June 27,
         1998  and June 28,  1997 are  calculated  by  dividing  net  income  by
<PAGE>
         weighted average common shares outstanding  during the period.  Diluted
         earnings  per common share for the three months ended June 27, 1998 and
         June 28, 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:


                                              1998            1997
                                           ---------        ---------

         Weighted average common
           shares outstanding              5,654,000        5,679,000
         Effect of dilutive options
           to purchase common stock           34,000            4,000
         Adjusted weighted average
           common shares                   5,688,000        5,683,000


         Stock  options to purchase  88,500 and 84,500 shares of common stock at
         June 27, 1998 and June 28, 1997,  respectively,  at prices ranging from
         $11.00 to $16.25 and from  $11.44 to $16.25 per share were  outstanding
         at June 27, 1998 and June 28, 1997, respectively, but were not included
         in the  computation of diluted  earnings per share because the options'
         exercise  prices  were  greater  than the average  market  price of the
         common stock. These options expire in fiscal years 2000 to 2002.

         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 months ended June 27, 1998
         and June 28, 1997 presented below include foreign currency  translation
         items.  There was no tax  expense or tax  benefit  associated  with the
         foreign currency translation items.


                                                       1998               1997
                                                       ----               ----
                                                        (amounts in thousands)

         Net income                                    $547             $1,501
         Foreign currency translation adjustments      (206)               180
                                                       ----             ------
         Comprehensive income                          $341             $1,681
                                                       ====             ======

<PAGE>
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 is required
         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.
<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:

                                                  THREE MONTHS ENDED
                                         June 27, 1998             June 28, 1997
                                         -------------             -------------


Net sales                                    100.0%                     100.0%
Gross profit                                  21.8%                      23.1%
Selling, general and adminis-
  trative expenses                            18.7%                      17.0%
Operating income                               3.1%                       6.1%
Interest expense                              (1.2%)                     (1.2%)
Other income (expense), net                   (0.2%)                     (0.2%)
Income tax expense                             0.6%                       1.9%
Net income                                     1.1%                       2.8%




COMPARISON  OF THE THREE MONTHS  ENDED JUNE 27, 1998  ("FIRST  QUARTER OF FISCAL
1999") TO THE THREE MONTHS ENDED JUNE 28, 1997 ("FIRST QUARTER OF FISCAL 1998")

         Net sales were $51.1  million in the first  quarter of fiscal  l999,  a
decrease of $3.5  million,  or 6.3%,  as compared to the first quarter of fiscal
l998.  The decrease in sales is primarily due to a $5.9 million or 18.5% decline
in sales in North  America and a $2.3 million or 73.9%  decline in sales in Asia
offset  somewhat by a $4.2  million or 21.2%  increase  in sales in Europe.  The
Company experienced a decline in demand for its products in North America and an
increase in demand in continental Europe for its products during the quarter.

         Backlog at June 27, 1998 was approximately  $38.1 million compared with
$36.5 million at March 28, 1998. 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.

         Gross profit was $11.1  million in the first  quarter of fiscal l999, a
decrease of $1.5 million,  or 11.6%,  as compared to the first quarter of fiscal
l998.  The  decline in gross  profit is  primarily  a result of lower  sales and
production volumes in the Company's U.S.  operations.  Gross profit as a percent
of sales was 21.8% in the first  quarter of fiscal  1999 as compared to 23.1% in
the first quarter of fiscal 1998.

         Selling,  general and administrative  expenses were $9.6 million in the
first quarter of fiscal l999, an increase of $0.3 million,  or 3.1%, as compared
to the first  quarter of fiscal l998.  The increase in dollar  amount  consisted
<PAGE>
primarily  of  increases  in  salaries  and selling  commissions  related to the
Company's  direct selling  operation in Germany which was acquired in July 1997.
As a percentage of net sales, selling,  general and administrative expenses were
18.7% in the first  quarter of fiscal  l999,  as compared to 17.0% for the first
quarter of fiscal l998.

         Operating  income was $1.6 million in the first quarter of fiscal l999,
a decrease of $1.8 million, or 52.7%, as compared to the first quarter of fiscal
l998.  The  decreased  operating  income was  primarily  a result of lower gross
profit in the U.S.  operations  due to decreased  sales in North  America.  As a
percentage  of net  sales,  operating  income  was 3.1% in the first  quarter of
fiscal l999 as compared to 6.1% in the first quarter of fiscal l998.

         Interest  expense was $0.6 million in the first  quarter of fiscal l999
and $0.6 million in the first quarter of fiscal l998.

         Provision  for income  taxes was $0.3  million in the first  quarter of
fiscal  l999, a decrease of $0.7 million or 70.0%.  The  effective  tax rate was
36.7% in the first  quarter of fiscal  l999 as  compared  to 41.3% for the first
quarter of fiscal l998.  The decline in the effective tax rate was a result of a
higher  percent  of  income  being  generated  in lower  tax  jurisdictions.  In
addition,  the  effective  tax rate in the  first  quarter  of  fiscal  1998 was
impacted by net losses incurred in the Company's German  operations for which no
tax  benefit  was  recorded.  This did not occur in the first  quarter of fiscal
1999.

FOREIGN OPERATIONS:

        During the three  months ended June 27, 1998,  net sales  outside  North
America  represented  approximately 48.9% of total net sales, as compared to 41%
for the three months ended June 28,  1997.  A  substantial  portion of these net
sales were made by the Company's European operations.

         At times 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 June 27, 1998, the Company
did not have any commitments outstanding under forward purchase contracts.

LIQUIDITY AND CAPITAL RESOURCES:

         As of June 27, 1998,  the Company had working  capital of $51.4 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
which  provides  for  maximum  borrowings  of up to $24.5  million in the United
States and $19.5 million in the United  Kingdom.  At June 27, 1998,  the Company
had term loans totalling approximately $5.0 million.

         The table  below  presents  the  summary  of cash flow for the  periods
indicated:
                                          THREE MONTHS ENDED
                                    June 27, 1998   June 28, 1997
                                    -------------   -------------

Net cash provided by (used in)
  operating activities                $    948        $3,754
Net cash provided by (used in)
  investing activities                    (611)         (893)
Net cash provided by (used in)
  financing activities                     172        (3,410)
<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 and payment of accounts
payable.  The net cash provided by (used in)  financing  activities in the three
months ended June 27, 1998 and June 28, 1997, represents primarily repayments or
borrowings under the Company's credit facility.

         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
June 27, 1998. 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 June 27, 1998,  trade  accounts  receivable  decreased  $3.4 million
(8.7%) and inventories  increased $3.0 million (4.5%),  as compared to March 28,
1998.


SEASONALITY:

        The  Company  experiences  a seasonal  decline  in net sales  during its
second fiscal  quarter,  particularly  during the July and August summer holiday
period.  During such period,  the Company's  manufacturing  facilities close for
approximately  one to three weeks. The fourth fiscal quarter may also experience
decreases in net sales as a result of weather conditions.


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.
<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                                        None
                  Vote of Security Holders

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)  Financial Data Schedule                  Ex-27

                           (99)  Not Applicable


There were no  reports or  exhibits  on Form 8-K filed  during the three  months
ended June 27, 1998.
<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)



                             August 5, 1998           /s/ Dan L. Griffith
                                                      -------------------
                                                  By: Dan L. Griffith
                                                      President and
                                                      Chief Executive Officer



                             August 5, 1998           /s/ Walter C. Lazarcheck
                                                      ------------------------
                                                  By: Walter C. Lazarcheck
                                                      Vice President and
                                                      Chief Financial Officer