UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X] Quarterly Report under Section 13 or 15 (d) of the Securities Exchange Act
    of 1934

For the quarterly period ended    MARCH 31, 1998


[ ] Transition Report under Section 13 or 15 (d) of the Exchange Act

For the transition period from                    to 
                               ------------------    ------------------

Commission File Number:             0-4036

                       KREISLER MANUFACTURING CORPORATION
         --------------------------------------------------------------- 
        (Exact name of small business issuer as specified in its charter)

                    DELAWARE                            22-1044792
         -------------------------------            -------------------
         (State of other jurisdiction of             (I.R.S. employer
         incorporation or organization)             Identification No.)


          5960 CENTRAL AVENUE, SUITE H., ST. PETERSBURG, FLORIDA 33707
          ------------------------------------------------------------
                    (Address of principal executive offices)

                                 (813) 347-1144
                           ---------------------------
                           (Issuer's telephone number)

                                 NOT APPLICABLE
-------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last 
report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 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.

                                 [X] Yes  [ ] No

The number of shares outstanding of issuer's Common Stock, par value $.125 per
share, as of March 31, 1998, was 1,942,048 shares.

Transitional small business disclosure format (check one): Yes [ ]  No [X]


<PAGE>


               KREISLER MANUFACTURING CORPORATION AND SUBSIDIARIES
                                TABLE OF CONTENTS

PART I   Financial Information

Item 1   Financial Statements
           Consolidated Balance Sheets
           Consolidated Statements of Operations and Retained Earnings
           Consolidated Statements of Cash Flows
           Notes To Financial Statements

Item 2   Management Discussion and Analysis of Financial Condition
         and Results of Operations

PART II  Other Information

Item 1   Legal Proceedings

Item 2   Changes in Securities

Item 3   Defaults Upon Senior Securities

Item 4   Submission of Matters to Vote of Security Holders

Item 5   Other Information

Item 6   Exhibits and Reports on Form 8-K



<PAGE>


PART I        FINANCIAL INFORMATION

ITEM 1        FINANCIAL STATEMENTS

               KREISLER MANUFACTURING CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                            (UNAUDITED)         (AUDITED)
                                        THIRD QUARTER ENDED     YEAR ENDED
                                              3/31/98            6/30/97
                                        -------------------     -----------
ASSETS

Cash and cash equivalents                    $1,633,486         $  691,916
Certificates of deposit - current               577,296               --
Accounts receivable - trade                   1,981,810          1,609,913
Inventories
   Raw Materials                              1,218,045          1,232,044
   Work in process                              446,044            528,880
   Finished goods                                51,467             61,646
                                             ----------         ----------
                                              1,715,556          1,822,570

Deferred tax asset                              261,127            300,000
Other current assets                             29,338             22,987
                                             ----------         ----------
Total current assets                          6,198,613          4,447,386
                                             ----------         ----------

Certificates of deposit                            --              554,934
Property, plant & equip., at cost,
  less accum.deprec                             330,647            197,246
                                             ----------         ----------
                                             $6,529,260         $5,199,566
                                             ----------         ----------
LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable - trade                     $  652,310         $  552,959
Accrued expenses                                288,930            174,216
                                             ----------         ----------
Total current liabilities                       941,240            727,175
                                             ----------         ----------
Stockholders' Equity

Common Stock, $.125 par value - 3,000,000
  shares authorized 1,942,048 and
  485,512 shares issued and outstanding
  for 1998 and 1997, respectively               242,756            242,756
Additional paid-in capital                    1,571,702          1,571,703
Retained earnings                             3,773,562          2,657,932
                                             ----------         ----------
Total Stockholders' Equity                    5,588,202          4,472,391
                                             ----------         ----------
                                             $6,529,260         $5,199,566
                                             ----------         ----------

See accompanying Notes to Financial Statements

<PAGE>


               KREISLER MANUFACTURING CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)


THREE MONTHS ENDED MARCH 31                       1998          1997
--------------------------------------------   -----------   -----------

Sales                                          $ 3,527,159   $ 2,517,852
                                               -----------   -----------

Cost of goods sold                               2,981,858     2,378,814
Selling, general and administrative expenses        84,561        68,891
                                               -----------   -----------
                                                 3,066,419     2,447,705
                                               -----------   -----------
Profit from operations                             460,740        70,147

Other income (expense):
Interest and other earnings                         27,923        17,154
                                               -----------   -----------
Profit before income taxes                         488,663        87,301

Provision (benefit) for income tax                  89,189          --
                                               -----------   -----------
Net Profit                                     $   399,474   $    87,301
                                               -----------   -----------
Earnings per share of:
   Common stock and equivalents
Net Profit                                     $       .20   $       .04
                                               -----------   -----------


NINE MONTHS ENDED MARCH 31                            1998          1997
--------------------------------------------   -----------   -----------

Sales                                          $ 9,190,726   $ 6,803,330
                                               -----------   -----------

Cost of goods sold                               7,783,235     6,616,915
Selling, general and administrative expenses       323,304       213,713
                                               -----------   -----------
                                                 8,106,539     6,830,628
                                               -----------   -----------
Profit (loss) from operations                    1,084,187       (27,298)

Other income (expense):
Interest and other earnings                         70,315        49,098
                                               -----------   -----------
Profit  before income taxes                      1,154,502        21,800

Provision (benefit) for income tax                  38,873          --
                                               -----------   -----------
Net Profit                                     $ 1,115,629   $    21,800
                                               -----------   -----------
Earnings per share of:
   common stock and equivalents
Net Profit                                     $       .56   $       .01
                                               -----------   -----------


See accompanying Notes to Financial Statements


<PAGE>


               KREISLER MANUFACTURING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


NINE MONTHS ENDED MARCH 31                               1998           1997
--------------------------------------------------   -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net profit                                           $ 1,115,629    $    21,800

Adjustments to reconcile net profit to
  cash (used) provided by operating activities:

Depreciation and amortization                             51,135         27,015
Decrease (increase) in accounts receivable - trade      (371,897)      (699,223)
Decrease (increase) in inventories                       107,014        133,728
Decrease (increase) in deferred tax asset                 38,873           --
Decrease (increase) in other current assets               (6,351)         9,233
Increase (decrease) in accounts payable - trade           99,351        311,407
Increase (decrease) in accrued expenses                  114,714         33,616
                                                     -----------    -----------
Net adjustments                                           32,839       (184,224)
                                                     -----------    -----------
Net cash provided (used) by operations                 1,148,468       (162,424)
                                                     -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of investments                                  (22,362)       (22,075)
Proceeds from sale of investments                           --          300,000
Purchase of property and equipment                      (184,536)       (11,287)
                                                     -----------    -----------
Net cash provided (used) by investing activities        (206,898)       266,638
                                                     -----------    -----------

Net increase in cash and cash equivalents                941,570        104,214
Cash and cash equivalents at beginning of year           691,916        587,064
                                                     -----------    -----------
Cash and cash equivalents at March 31                $ 1,633,486    $   691,278
                                                     -----------    -----------

See accompanying Notes to Financial Statements

<PAGE>


               KREISLER MANUFACTURING CORPORATION AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

1.  Principles of Consolidation

The financial statements include the accounts of the Company and its
wholly-owned subsidiaries after elimination of significant intercompany
transactions. The consolidated balance sheet as of March 31, 1998, and the
related consolidated statements of operations and retained earnings and cash
flows for the three and nine month periods ended March 31,1998 and 1997 are
unaudited. The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of management's estimates. In
the opinion of management, all adjustments necessary for a fair presentation of
such financial statements have been included. Such adjustments consisted only of
normal recurring items. Interim results are not necessarily indicative of
results for a full year.

The financial statements and notes are presented as permitted by Form 10-QSB,
and do not contain certain information included in the Company's annual
financial statements and notes. Accordingly, these statements should be read in
conjunction with the consolidated financial statements and notes thereto
appearing in the Annual Report of the Company for the fiscal year ended June 30,
1997.

2.  Inventories

On interim reports the inventory is determined on a cost of goods sold basis.
Material usage is based on historical cost. Any change in year end physical
inventory compared with that based on cost of goods sold could materially effect
increasing or decreasing profits.

3.  Income Tax Provision (Benefit)

Changes in economic circumstances made the utilization of a portion of the net
operating loss carryforwards likely, resulting in a reduction of the valuation
allowance and generating a tax benefit.

The income tax on earnings has been reduced by the decrease to zero in the
income tax benefit allowance of $97,551 for the three months and $421,000 for
the nine months ended March 31, 1998. The result is a net income tax expense of
$89,189 and $38,873 for the three months and the nine months ended March 31,
1998, respectively.

At March 31, 1998, the deferred tax benefit balance was $261,127 and the
offsetting valuation allowance account balance was zero.


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

               KREISLER MANUFACTURING CORPORATION AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 1998

Description of Business

Kreisler Manufacturing Corporation is a Delaware business corporation which was
incorporated on December 13, 1968. Kreisler Manufacturing Corporation and its
wholly-owned subsidiary, Kreisler Industrial Corporation (collectively the
"Company") manufacture precision metal components and assemblies at Elmwood
Park, New Jersey for use in military and commercial aircraft engines.

Products

The Company fabricates precision metal components and assemblies primarily for
aircraft engines with both military and commercial applications. The primary
function of the Company's products is to transport fluids, including air, to
various parts of the aircraft or aircraft engine. The redirection of air is a
major element in reducing the high temperatures generated by aerospace
propulsion. These high temperatures are a limiting factor in increasing thrust
in jet engines.

Tube assemblies may be made of various materials and configurations, including
titanium, inconel and stainless steel. These quality controlled and highly
engineered manifold assemblies transfer fuel for combustion, oil for
lubrication, hydraulic fluid to activate thrust reversers and impingement tubes
or baffles to cool vanes in the combustion section of the engine.

For the nine months ended March 31, 1998, the sales activity was approximately
thirty-five percent for military aircraft engines and sixty-five percent for
commercial aircraft engines.

Substantially all sales of products are made through an in-house sales staff
supported by a government sales representative. All products are manufactured to
the blueprints and specifications of the particular customer. Orders for these
are received through competitive proposals, which are made in response to
requests for bids from contractors who are frequently supplying engines to
various branches of the Untied States Government or to commercial businesses.

Results of Operations

Kreisler Manufacturing Corporation sales and profits continue to improve
compared to the same periods in the prior year. The Company's mission is to
increase the productivity and competitiveness of Kreisler, to accelerate
profitable growth and broaden our customer base. Sales increased $1,019,000 or
40% and $2,387,000 or 35% compared to the third quarter and nine months of
fiscal year 1997. As airline profitability improved so has the demand for new
aircraft. At the present time there are well over 2,000 jet transports on
backlog and 700 scheduled for delivery in 1998

Profit before income taxes of $489,000 for the third quarter and $1,155,000 for
the nine months compared with profit of $87,000 and $21,000 in the third quarter
and nine months of fiscal year 1997.


<PAGE>


Profits improved with increased sales, improved pricing and efficiencies derived
from higher unit volume. Profit before income taxes of $1,155,000 for the period
ended March 31, 1998, compares to $676,000 for the fiscal year ended June 30,
1997.

Selling, general and administrative expenses increased for the three months and
nine months ended March 31, 1998, $16,000 and $110,000 respectively, as compared
to the same period in the prior fiscal year. Primary increases were in bonus,
legal expenses and stock administration fees.

Income tax expense for the third quarter was $89,000 compared to none in the
third quarter of the prior year. For the nine months ended March 31, 1998 there
was a tax provision of $39,000. At the end of the third quarter all tax
allowances against the deferred tax benefit have been used, and the fourth
quarter will reflect only an income tax expense at a 40% tax rate. Tax benefits
for tax purposes continue to be available, so the provision for taxes for the
balance of the year will be a non-cash item.

With improved sales and profits our cash flow is positive with cash and cash
equivalents increasing $942,000 since June 30, 1997. Accounts receivable has
increased $372,000, or 23%, and accounts payable increased $99,000, or 18%,
since June 30, 1997. The balance sheet continues to show no long term debt.
Management believes there are sufficient funds available to take care of both
its short term and long term requirements by internally generated funds or
reserves.

Capital equipment will be purchased on an as needed basis. Current backlog is
slightly over $11,000,000 as of March 31, 1998.

Stockholder equity increased 25% from $2.25 as of June 30, 1997, to $2.81 as of
March 31, 1998. After the four for one stock split, basic outstanding shares are
1,942,048; fully diluted outstanding shares are 1,984,858.


<PAGE>


PART II       OTHER INFORMATION

ITEM 1        LEGAL PROCEEDINGS
              None

ITEM 2        CHANGES IN SECURITIES
              None

ITEM 3        DEFAULTS UPON SENIOR SECURITIES
              None

ITEM 4        SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
              None

ITEM 5        OTHER INFORMATION
              None

ITEM 6        EXHIBITS AND REPORTS ON FORM 8K

              (a) Part I Exhibits
                  11.  Statement re: computation of per share earnings


<PAGE>


                                    SIGNATURE

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



                                          KREISLER MANUFACTURING CORPORATION
                                                   (Registrant)



                                          By  /s/ EDWARD L. STERN
                                             -----------------------------
                                                  Edward L. Stern
                                                President, Treasurer


April 3, 1998


<PAGE>


                                 EXHIBIT INDEX

EXHIBIT                             DESCRIPTION
-------                             -----------

  11        Statement re computation of per share earnings.

  27        Financial Data Schedule.