UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q
                Quarterly report pursuant to section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

For the quarter ended March 31, 1999             Commission file number 0-13875


                               LANCER CORPORATION
             (Exact name of registrant as specified in its charter)


            Texas                                                74-1591073
(State or other jurisdiction of                                (IRS employer
 incorporation or organization)                             identification no.)

6655 Lancer Blvd., San Antonio, Texas                               78219
(Address of principal executive offices)                          (Zip Code)

       Registrant's telephone number, including area code: (210) 310-7000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 14(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
                               --------                   --------


Indicate the number of shares  outstanding  of each of the issuers of classes of
common stock, as of the latest practicable date.

       Title                                           Shares outstanding as of
                                                               May 7, 1999

Common stock, par value $.01 per share                          9,121,482

                                       1

<PAGE>


Part I - Financial Information

Item 1 - Financial Statements

                       LANCER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                     ASSETS


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

Current assets:
<S>                                                   <C>                   <C>               
     Cash                                             $        1,686,919    $        1,118,848
     Receivables:
         Trade accounts and notes                             19,795,534            20,866,928
         Other                                                   609,216               565,254
                                                        -----------------     -----------------
                                                              20,404,750            21,432,182
         Less allowance for doubtful accounts                   (298,000)             (326,000)
                                                        -----------------     -----------------
            Net receivables                                   20,106,750            21,106,182
                                                        -----------------     -----------------
     Inventories                                              47,733,926            46,128,697
     Prepaid expenses                                            580,151               559,472
     Income taxes receivable                                           -               211,760
     Deferred tax asset                                          121,339               117,241
                                                        -----------------     -----------------
            Total current assets                              70,229,085            69,242,200
                                                        -----------------     -----------------

Property, plant and equipment, at cost:
     Land                                                      1,259,938             1,259,938
     Buildings                                                21,867,166            21,769,690
     Machinery and equipment                                  19,363,914            19,699,040
     Tools and dies                                            7,221,467             7,017,936
     Leaseholds, office equipment and vehicles                 8,187,760             8,148,299
     Assets in progress                                        1,752,686             1,200,506
                                                        -----------------     -----------------
                                                              59,652,931            59,095,409
     Less accumulated depreciation and amortization          (25,256,443)          (24,596,773)
                                                        -----------------     -----------------
         Net property, plant and equipment                    34,396,488            34,498,636
                                                        -----------------     -----------------

Long-term receivables ($371,370 and $370,569 due
     from affiliates, respectively)                              628,480               619,800
Long-term investments                                          3,933,730             3,317,131
Intangibles and other assets, at cost, less
     accumulated amortization                                  4,459,143             5,162,200
                                                        -----------------     -----------------

                                                      $      113,646,926    $      112,839,967
                                                        =================     =================
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       2

<PAGE>

<TABLE>
<CAPTION>

                       LANCER CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (continued)

                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                                          March 31,                     December 31,
                                                                            1999                           1998
                                                                     -------------------            -------------------
                                                                        (Unaudited)
Current liabilities:
<S>                                                                <C>                             <C>                
  Accounts payable                                                 $         13,368,606            $         8,854,438
  Current installments of long-term debt                                      3,997,200                      4,794,400
  Line of credit with bank                                                   20,000,000                     22,300,000
  Deferred licensing and maintenance fees                                       608,601                        466,327
  Accrued expenses and other liabilities                                      4,836,177                      5,528,425
  Income taxes payable                                                          577,301                              -
                                                                     -------------------            -------------------
    Total current liabilities                                                43,387,885                     41,943,590

Deferred  tax liability                                                       3,101,121                      2,938,628
Long-term debt, excluding current installments                               16,768,150                     17,568,150
Deferred licensing and maintenance fees                                       1,903,277                      2,131,624
                                                                     -------------------            -------------------

    Total liabilities                                                        65,160,433                     64,581,992
                                                                     -------------------            -------------------

Commitments and contingencies                                                         -                              -

Shareholders' equity:

  Preferred stock, without par value:
   5,000,000 shares authorized; none issued                                           -                              -

  Common stock, $.01 par value:
   50,000,000 shares authorized; 9,121,482
   issued and outstanding                                                        91,215                         91,215

  Additional paid-in capital                                                 11,912,993                     11,912,993

  Accumulated other comprehensive loss                                       (3,805,191)                    (2,581,558)

  Retained earnings                                                          40,287,476                     38,835,325
                                                                     -------------------            -------------------

    Total shareholders' equity                                               48,486,493                     48,257,975
                                                                     -------------------            -------------------

                                                                   $        113,646,926           $        112,839,967
                                                                     ===================            ===================
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       3

<PAGE>


                       LANCER CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                          Three Months Ended
                                                                    March 31,                March 31,
                                                                      1999                     1998
                                                             --------------------       -------------------

<S>                                                                 <C>                       <C>         
Net sales                                                           $ 36,227,944              $ 36,192,255
Cost of sales                                                         27,700,597                26,849,615
                                                             --------------------       -------------------
    Gross profit                                                       8,527,347                 9,342,640

Selling, general and
   administrative expenses                                             5,193,180                 4,997,909
                                                             --------------------       -------------------

    Operating income                                                   3,334,167                 4,344,731
                                                             --------------------       -------------------

Other (income) expense:
  Interest expense                                                       907,952                   932,033
  Other (income) expense, net                                            (81,935)                   67,341
                                                             --------------------       -------------------
                                                                         826,017                   999,374
                                                             --------------------       -------------------

    Income before income taxes                                         2,508,150                 3,345,357
                                                             --------------------       -------------------

Income tax expense:
  Current                                                                952,506                   941,496
  Deferred                                                               103,493                   278,233
                                                             --------------------       -------------------
                                                                       1,055,999                 1,219,729
                                                             --------------------       -------------------
                                                          

    Net earnings                                                    $  1,452,151              $  2,125,628
                                                             ====================       ===================

Common Shares and Equivalents Outstanding:
Basic                                                                  9,121,482                 8,910,029
Diluted                                                                9,344,485                 9,252,927
                                                                    
Earnings Per Share:
Basic                                                                 $     0.16                $     0.24
Diluted                                                               $     0.16                $     0.23
</TABLE>


          See accompanying notes to consolidated financial statements.
                                       4


<PAGE>


                       LANCER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                             Three Months Ended
                                                                                    March 31,                   March 31,
                                                                                      1999                        1998
                                                                              ----------------------    ----------------------

Cash flow from operating activities:
<S>                                                                                   <C>                       <C>          
     Net earnings                                                                     $   1,452,151             $   2,125,628
     Adjustments to reconcile net earnings to net cash
       provided (used) by operating activities :
         Depreciation and amortization                                                      939,956                   791,135
         Deferred licensing and maintenance fees                                            (86,073)                 (273,690)
         Deferred income taxes                                                              (20,827)                   (6,227)
         Gain on sale and disposal of assets                                                 (8,904)                   13,327
         (Earnings) loss on investments in affiliates                                      (459,825)                   (7,035)
         Changes in assets and liabilities:
            Receivables                                                                     755,541                (6,905,595)
            Prepaid expenses                                                                (20,679)                  133,826
            Income taxes receivable                                                         211,760                         -
            Inventories                                                                  (1,986,132)                 (654,305)
            Other assets                                                                   (186,249)                   32,485
            Accounts payable                                                              4,591,565                 3,042,906
            Accrued expenses                                                               (444,554)                   37,141
            Income taxes payable                                                            694,658                 1,033,339
            Other long-term liabilities                                                           -                   272,233
                                                                              ----------------------    ----------------------
     Net cash provided (used) by operating activities                                     5,432,388                  (364,832)
                                                                              ----------------------    ----------------------

Cash flow from investing activities:
         Proceeds from sale of assets                                                        11,610                         -
         Acquisition of property, plant and equipment                                    (1,042,252)               (1,729,727)
         Proceeds from sale of long-term investments                                         16,226                    34,571
                                                                              ----------------------    ----------------------
     Net cash used in investing activities                                               (1,014,416)               (1,695,156)
                                                                              ----------------------    ----------------------
                                                                            
Cash flow from financing activities:
         Net borrowings (retirement) under line of credit agreements                     (2,300,000)                2,500,000
         Retirement of long-term debt                                                    (1,597,200)               (1,347,200)
         Proceeds from exercise of stock options                                                  -                    91,731
                                                                              ----------------------    ----------------------
Net cash provided (used) by financing activities                                         (3,897,200)                1,244,531
                                                                              ----------------------    ----------------------

Effect of exchange rate changes on cash                                                      47,299                    68,597
                                                                              ----------------------    ----------------------

Net increase (decrease) in cash                                                             568,071                  (746,860)
Cash at beginning of year                                                                 1,118,848                 1,850,779
                                                                              ----------------------    ----------------------
Cash at end of period                                                                 $   1,686,919             $   1,103,919
                                                                              ======================    ======================
</TABLE>
                           
          See accompanying notes to consolidated financial statements.
                                       5

<PAGE>


                       LANCER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



1.       Basis of Presentation

All  adjustments  (consisting of normal  recurring  adjustments)  have been made
which are necessary for a fair presentation of financial position and results of
operations.  All intercompany  balances and transactions have been eliminated in
consolidation.  It is suggested that the  consolidated  financial  statements be
read in conjunction with the consolidated financial statements and notes thereto
included in the December 31, 1998 Annual Report on Form 10-K.

Certain amounts in the  consolidated  financial  statements for prior years have
been reclassified to conform with the current year's presentation.




2.       Inventory Components

The  Company  uses the  gross  profit  method  to  determine  cost of sales  and
inventory for interim  periods.  Inventory  components  are  estimated  based on
various factors including historical  percentages and price increases.  Year end
inventory  adjustments are based upon valuation of ending  inventory.  Inventory
components are as follows (dollars in thousands):
<TABLE>
<CAPTION>



                                             March 31,            December 31,
                                                1999                  1998
                                           ---------------       ----------------
<S>                                      <C>                    <C>             
Raw material and supplies                $         17,241       $         13,107
Work in process                                    13,365                 11,371
Finished Goods                                     17,128                 21,651
                                           ---------------       ----------------
                                         $         47,734       $         46,129
                                           ===============       ================
</TABLE>



3.       Earnings Per Share

The Company  calculates  earnings per share in accordance  with the Statement of
Financial  Accounting  Standards  (SFAS) No. 128.  Basic  earnings  per share is
calculated  using the weighted  average number of common shares  outstanding and
diluted earnings per share is calculated  assuming the issuance of common shares
for all  potential  dilutive  common  shares  outstanding  during the  reporting
period.  The dilutive effect of stock options  approximated  223,003 and 342,898
shares for the three months ended March 31, 1999 and 1998, respectively.


4.       Comprehensive Income

As of January  1,  1998,  the  Company  has  adopted  SFAS No.  130,  "Reporting
Comprehensive  Income."  SFAS 130  established  new rules for the  reporting and
display  of  comprehensive  income  and its  components.  The  adoption  of this
statement, however, has no impact on the Company's net income.

                                       6
<PAGE>




The following are the components of comprehensive income:
<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                       March 31,                March 31,
                                                          1999                    1998
                                                   -------------------     --------------------

<S>                                                     <C>                      <C>          
Net earnings                                            $   1,452,151            $   2,125,628
Foreign currency translation loss                          (1,337,633)                    (470)
Unrealized gain on investment (net of tax)                    114,000                        -
                                                   -------------------     --------------------
Comprehensive income                                     $    228,518            $   2,125,158
                                                   ===================     ====================
</TABLE>

Accumulated other  comprehensive loss on the accompanying  Consolidated  Balance
Sheets includes foreign currency translation  adjustments and unrealized gain on
investment.


5.       Segment and Geographic Information

The Company and its subsidiaries are engaged in the manufacture and distribution
of beverage dispensing equipment and related parts and components. The Company's
reportable  segments are based on the  geographic  area of the final customer as
indicated by the following (dollars in thousands):
<TABLE>
<CAPTION>

                                              Latin                           All
                                 Domestic    America    Pacific    Brazil    Other    Corporate   Total
                                ------------------------------------------------------------------------
Quarter ended March 31, 1999
<S>                              <C>          <C>        <C>         <C>     <C>       <C>       <C>    
Total revenues                   $23,203      3,810      3,273       345     5,597          -    $36,228
Operating income (loss)            4,844        417        303      (403)    1,038     (2,865)     3,334


Quarter ended March 31, 1998
Total revenues                   $17,772      6,442      3,639     2,189     6,150          -    $36,192
Operating income (loss)            4,076      1,382        421       109     1,197     (2,840)     4,345
</TABLE>

All  intercompany  revenues are  eliminated in computing  revenues and operating
income. The corporate component of operating income represents corporate general
and administrative expenses.


Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations

This  document  contains  certain  "forward-looking"  statements as such term is
defined in the Private Securities  Litigation Reform Act of 1995 and information
relating to the Company  and its  subsidiaries  that are based on the beliefs of
the  Company's  management.  When used in this report,  the words  "anticipate,"
"believe,"  "estimate,"  "expect," "forecast," "plan," and "intend" and words or
phrases of similar import,  as they relate to the Company or its subsidiaries or
Company management,  are intended to identify forward-looking  statements.  Such
statements reflect the current risks,  uncertainties and assumptions which exist
or must be made as a result of certain factors  including,  without  limitation,
competitive   factors,   general  economic   conditions,   customer   relations,
relationships  with  vendors,   the  interest  rate  environment,   governmental
regulation  and  supervision,   seasonality,   distribution  networks,   product
introductions and acceptance, one-time events and other factors described herein
and in other  filings  made by the  Company  with the  Securities  and  Exchange
Commission.  Based  upon  changing  conditions,  should any one or more of these
risks or uncertainties  materialize,  or should any underlying assumptions prove
incorrect,  actual results may vary materially  from those  described  herein as
anticipated,  believed, estimated,  expected, forecast, planned or intended. The
Company does not intend to update these forward-looking statements.

                                       7
<PAGE>

Results of Operations

Comparison of the Three-Month Periods Ended March 31, 1999 and 1998

Net sales for the quarter ended March 31, 1999 were $36.2  million,  up slightly
from net  sales in the  first  quarter  of 1998.  Sales in the  Company's  North
America  region rose 31%,  led by strong  sales of frozen  beverage  dispensers.
Latin America sales  (excluding  sales by the  Company's  Brazilian  subsidiary)
declined 41% from sales in the first quarter last year. Sales in Brazil fell 84%
in the quarter.  These sales  declines  reflect the poor economic  conditions in
Brazil and several other key markets in South and Central America.

Gross  margin in the first  quarter of 1999 was 23.5%,  compared to 25.8% in the
first quarter of 1998. Increased sales of frozen beverage dispensers contributed
to the decline in gross margin.  The Company earns a lower gross margin on sales
of frozen beverage dispensers because the manufacturing  profit on the equipment
is shared with a joint venture  partner.  The poor financial  performance of the
Company's Brazilian subsidiary further reduced gross margin.

Selling,  general and  administrative  expenses for the quarter  ended March 31,
1999 were $5.2 million,  up 4% from $5.0 million in the first quarter last year.
The Company is managing  expenses  carefully in response to weak  conditions  in
many of its markets.

Interest  expense for the first quarter of 1999 was $0.9 million,  down slightly
from the 1998 quarter because of lower debt levels.  The Company's first quarter
effective tax rate  increased to 42.1% in 1999 from 36.5% in 1998. The increased
rate was caused  primarily by the  nondeductibility  of losses at the  Company's
Brazilian subsidiary.  Net earnings for the first three months of 1999 were $1.5
million, down from $2.1 million in the first quarter last year.

Liquidity and Capital Resources

The Company's  principal sources of liquidity are cash flows from operations and
amounts available under the Company's  existing lines of credit. The Company has
met, and currently  expects that it will continue to meet,  substantially all of
its working capital and capital  expenditure  requirements,  as well as its debt
service requirements, with funds provided by operations and borrowings under its
credit  facilities.  The Company is in compliance  with, or has obtained waivers
of, the financial  covenants  contained in the credit agreement that governs the
Company's primary credit facilities.

Cash provided from operating activities was $5.4 million in the first quarter of
1999,  compared  with $0.3 million of cash used by operating  activities  in the
1998  quarter.  Capital  spending was $1.0  million,  primarily  for  production
tooling and equipment.


Accounting Matters

The  Company  maintains  a DISC in order to defer  income  taxes on its  foreign
sales. The Company continues to evaluate the benefit of converting the DISC to a
Foreign Sales Corporation.  At the time of such conversion,  the Company will be
required to provide for federal  income taxes on $2.4  million of  undistributed
earnings of the DISC. See 1998 Form 10-K.

The Internal  Revenue  Service is examining the Company's U.S. income tax return
for 1995.  Management does not believe that any significant  adjustments will be
required.

In April 1998,  the AICPA issued SOP 98-5,  "Reporting  on the Costs of Start-Up
Activities,"  which  requires  that  costs  of  start-up  activities,  including
organizational  costs, be expensed as incurred.  Adoption of this SOP during the
three  months  ended  March  31,  1999  has not  had a  material  effect  on the
consolidated financial statements of the Company.

                                       8
<PAGE>

Year 2000

The Year 2000 ("Y2K") issue arose  because some computer  programs use two-digit
date fields to designate a year.  Some of these  programs  with  two-digit  date
fields will not  recognize  the year 2000, or may confuse it with the year 1900.
This date recognition problem could cause erroneous calculations, or could cause
entire systems to malfunction.

The Company has adopted a  two-phase  approach to the Year 2000  threat.  In the
Assessment  Phase,  the  Company  generates  a  comprehensive  inventory  of the
Company's date-oriented systems, and determines which are not Y2K compliant. The
Renovation/Replacement  Phase  involves  correcting  or replacing  non-compliant
systems.  The Company has completed  substantially  all of the Assessment Phase.
The Renovation/Replacement  Phase is being executed as non-compliant systems are
identified.  The  Company  expects  that it will  have  corrected  high-priority
non-compliant systems by June 30, 1999 and medium-priority non-compliant systems
by September 30, 1999.

In the second quarter of 1998,  the Company  initiated  correspondence  with its
suppliers to determine  their Y2K  readiness.  The Company  plans to monitor the
readiness of its key suppliers throughout 1999. The Company intends to determine
the Y2K readiness of its key customers  during 1999.  The Coca-Cola  Company was
the Company's largest customer in 1998, accounting for 23% of sales.

The Company's primary information  technology ("IT") system is a BaaN ERP system
that was installed in 1996, and upgraded in 1998. The Company  believes the BaaN
system, and other major IT systems, are Y2K compliant. Among non-IT systems, the
Company  has  replaced  a  non-compliant  payroll  system,  and  expects to have
upgraded or replaced its non-compliant  timekeeping  system by June 30, 1999. As
of March 31, 1999,  the Company has committed  more than half of the $200,000 it
expects to spend on all of the Company's Y2K issues.

The Company believes there is low risk of any internal critical system not being
Y2K-compliant  by the end of 1999.  The  Company  continues  to assess  its risk
exposure  attributable to external  factors and suppliers.  Although the Company
has no reason to conclude that any specific supplier represents a risk, the most
likely  worst-case  Y2K  scenario  would  entail  production  disruption  due to
inability  of  suppliers  to deliver  critical  parts.  The Company is unable to
quantify such a scenario,  but it could potentially result in a material adverse
impact on the results of  operations,  liquidity  or  financial  position of the
Company.  The Company does not now have a formal  contingency  plan to deal with
non-performance by suppliers.  The Company intends,  however, to monitor the Y2K
readiness of key suppliers  throughout  1999, and to develop a contingency  plan
for any  supplier  whose  lack of  preparedness  may  jeopardize  the  Company's
operations.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

There have been no  significant  changes in the  Company's  market risk  factors
since December 31, 1998.

                                       9
<PAGE>

Part II - Other Information

Item 1 - Legal Proceedings

The Company is a party to various  lawsuits and claims  generally  incidental to
its business.  In the opinion of management and independent  legal counsel,  the
ultimate  disposition  of these  matters is not  expected to have a  significant
adverse effect on the Company's financial position or results of operations.

Item 5 - Other Information

                  None
Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibits:

                  None

         (b)      Reports on Form 8-K

                  None


SIGNATURES

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

LANCER CORPORATION
(Registrant)



May 14, 1999                         By:  /s/ George F. Schroeder       
                                          --------------------------------------
                                          George F. Schroeder
                                          President and CEO



May 14, 1999                         By:  /s/ David E. Green        
                                          --------------------------------------
                                          David E. Green
                                          Chief Financial Officer

                                       10