<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q


 X                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
---                  OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended      January 31, 1999     
                              --------------------------
                                       OR

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

For the transition period from                 to               
                              ----------------    ----------------
Commission file number     0-13940    
                        -------------
                          CENTRAL SPRINKLER CORPORATION
                          -----------------------------
             (Exact name of registrant as specified in its charter)

         Pennsylvania                                            23-2328106    
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer 
incorporation or organization)                               Identification No.)

                   451 North Cannon Avenue, Lansdale, PA 19446
                   ------------------------------------------- 
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (215) 362-0700
                                 --------------
              (Registrant's telephone number, including area code)

     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 ___ 
           
     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                  Class                  Outstanding at March 15, 1999
                  -----                  -----------------------------
      Common Stock, $.01 Par Value                3,845,637


                                        1



<PAGE>

                          PART I. FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                 CENTRAL SPRINKLER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                                      January 31,   October 31,
                                                         1999         1998   
                                                      -----------   ----------- 
                                                       (Amounts in thousands,
                                                         except per share)
ASSETS
Current Assets:
  Cash and cash equivalents                              $ 12,566    $ 18,801
  Accounts receivable, less allowance
        for doubtful receivables of $6,775
        in 1999 and $6,688 in 1998                         40,932      45,315
  Inventories                                              44,481      43,319
  Deferred income taxes                                    10,893      11,117
  Prepaid expenses and other assets                         4,787       4,968
                                                         --------    --------
        Total current assets                              113,659     123,520
                                                         --------    --------
Property, Plant and Equipment                              76,387      74,984
    Less - Accumulated depreciation                       (32,040)    (29,989)
                                                         --------    --------
                                                           44,347      44,995
                                                         --------    --------
Goodwill, less accumulated amortization of
    $3,828 in 1999 and $3,765 in 1998                       2,194       2,257
                                                         --------    --------
Other Assets                                                6,006       6,332
                                                         --------    --------
                                                         $166,206    $177,104
                                                         ========    ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
    Short-term borrowings                                  $  600    $    297
    Current portion of long-term debt                       4,058       4,064
    Accounts payable                                       19,231      21,353
    Accrued expenses                                       20,732      20,379
                                                         --------    --------
        Total current liabilities                          44,621      46,093
                                                         --------    --------
Long-Term Debt                                             69,410      76,807
                                                         --------    --------
Long-Term Omega Liabilities                                20,226      23,141
                                                         --------    --------
Other Noncurrent Liabilities                                  264         296
                                                         --------    --------
Commitments and Contingent Liabilities (Note 5)

Shareholders' Equity:
    Common stock, $.01 par value; shares
        authorized - 15,000; issued -
        5,568 in 1999 and 1998                                 56          56
    Additional paid-in capital                             31,180      31,179
    Retained earnings                                      22,481      21,556
    Cumulative translation adjustments                         35         145
    Deferred cost - Employee Stock Ownership
           Plan ("ESOP")                                   (5,158)     (5,260)
                                                         --------    --------
                                                           48,594      47,676

    Less - Common stock in treasury, at
           cost - 1,722 shares in 1999 and 1998           (16,909)    (16,909)
                                                         --------    --------
                                                           31,685      30,767
                                                         --------    --------
                                                         $166,206    $177,104
                                                         ========    ========
See accompanying notes to financial statements.

                                        2



<PAGE>



                 CENTRAL SPRINKLER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                         Three Months Ended
                                                             January 31,
                                                            1999       1998 
                                                         -------------------
                                                        (Amounts in thousands,
                                                           except per share)

     Net Sales                                             $50,728    $53,452

     Cost of Sales                                          36,672     38,230
                                                           -------    -------
                Gross profit                                14,056     15,222
                                                           -------    -------
     Operating Expenses:

        Selling, general
             and administrative                              9,908     11,511

        Research and development                             1,457      1,876
                                                           -------    -------
                                                            11,365     13,387
                                                           -------    -------
                Operating income                             2,691      1,835
                                                           -------    -------
     Interest Expense (Income):

         Interest expense                                    1,501      1,469

         Interest income                                      (136)      (176)
                                                           -------    -------
                                                             1,365      1,293
                                                           -------    -------
                Income before income taxes                   1,326        542

     Income Taxes                                              401        176
                                                           -------    -------
     Net Income                                            $   925    $   366
                                                           =======    =======
     Net Income Per Common Share:

           Basic                                           $  .28     $   .11
                                                           =======    =======
           Diluted                                         $  .28     $   .11
                                                           =======    =======

      See accompanying notes to financial statements.

                                        3


<PAGE>

                 CENTRAL SPRINKLER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                         Three Months Ended
                                                             January 31,
                                                            1999       1998 
                                                         -------------------
                                                        (Amounts in thousands)
Operating activities:
    Net income                                             $   925    $   366
    Noncash items included in income:
        Depreciation and amortization                        2,114      1,974
        Deferred income taxes                                  269         39
        Deferred costs                                          95        151
    Decrease (increase) in -
        Accounts receivable, net                             4,383      1,058
        Inventories                                         (1,162)    (3,559)
        Prepaid expenses and other assets                      181        218
    Increase (decrease) in -
        Accounts payable                                    (2,122)    (1,274)
        Accrued expenses and other
           noncurrent liabilities                           (2,586)    (2,066)
                                                           -------     ------
Cash provided by (used for) operating activities             2,097     (3,093)
                                                           -------     ------
Investing activities:
    Acquisition of property, plant and equipment            (1,403)    (1,853)
    Sales of short-term investments                              -      3,840
    Purchase of short-term investments                           -     (2,794)
    Other long-term assets                                     281        (77)
                                                           -------     ------
Cash used for investing activities                          (1,122)      (884)
                                                           -------     ------
Financing activities:
    Short-term borrowings, net                                 303       (551)
    Repayments of long-term debt                            (9,001)    (8,639)
    Proceeds from long-term debt                             1,598      7,500
    Other - net                                               (110)      (173)
                                                           -------     ------
Cash used for financing activities                          (7,210)    (1,863)
                                                           -------     ------
Decrease in cash and cash equivalents                       (6,235)    (5,840)

Cash and cash equivalents at beginning of period            18,801      6,568
                                                           -------     ------
Cash and cash equivalents at end of period                 $12,566     $  728
                                                           =======     ======
See accompanying notes to financial statements.

                                        4





<PAGE>

                 CENTRAL SPRINKLER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                   (continued)
                                                         Three Months Ended
                                                             January 31,
                                                            1999       1998 
                                                         -------------------
                                                        (Amounts in thousands)

Supplemental disclosures of cash flow
  information:-

Cash paid (received) during the period for:

Interest expense                                           $ 1,426     $1,496
                                                           =======     =======
Income taxes                                               $     -     $   20
                                                           =======     =======
Interest income                                            $   (61)    $ (239)
                                                           =======     =======

See accompanying notes to financial statements.

                                        5



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                 CENTRAL SPRINKLER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Amounts in thousands, except per share)

(1)  Basis of Presentation:
     ----------------------

     The condensed financial statements included herein have been prepared by
the Company without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. These statements include all adjustments that, in the
opinion of management, are necessary to provide a fair statement of the results
for the periods covered. These financial statements should be read in
conjunction with the audited financial statements and the notes thereto included
in the Company's Form 10-K for the fiscal year ended October 31, 1998. The
results of operations for the interim periods presented are not necessarily
indicative of the results for the full year.

(2)  Inventories:
     ------------    

     Inventories  are stated at the lower of cost  (first-in,  first-out) or
market, and consist of the following:

                                                    January 31,   October 31,
                                                       1999          1998   
                                                    -----------   ----------
Raw Materials and Work in Process                    $15,361       $15,605
Finished Goods                                        29,120        27,714
                                                     -------       -------
                                                     $44,481       $43,319
                                                     =======       =======
(3)  Net Income Per Common Share:
     ----------------------------

     Basic net income per common share is computed using the weighted average
number of shares of common stock outstanding. Diluted net income per common
share is computed using the weighted average number of shares of common stock
and common stock equivalents outstanding (dilutive stock options)unless the
inclusion of common stock equivalents would have an antidilutive impact.
Unreleased shares of the Company's stock in the ESOP are excluded from the
average number of common shares


                                        6

<PAGE>

outstanding when computing basic and diluted net income per share. The net
income and weighted average common and common equivalent shares outstanding for
purposes of calculating net income per common share are computed as follows:

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

Net income used for basic and
   diluted net income per common share                    $  925     $  366
                                                          ======     ======
Weighted average number of common
   shares outstanding                                      3,846      3,846

Adjustment to exclude average
   unreleased common shares in ESOP                         (540)      (580)
                                                          ------     ------
Weighted average common shares
 outstanding used for basic net
 income per common share                                   3,306      3,266

Dilutive effect of common stock
 options outstanding                                          10         73
                                                          ------     ------
Weighted average common and
 common equivalent shares
 outstanding used for diluted net
 income per common share                                   3,316      3,339
                                                          ======     ======

(4)  New Accounting Pronouncement:
     ----------------------------

     The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130").
SFAS No. 130 established standards for the reporting and display of
comprehensive income in financial statements. Comprehensive income is the change
in net assets during a period from transactions generated from non-owner
sources. It includes all changes in equity during a period except those
resulting from investments by owners and distribution to owners. The Company
adopted SFAS No. 130 as of November 1, 1998 and a reconciliation of
comprehensive income follows. 

                                                         Three Months Ended
                                                             January 31,
                                                            1999       1998 
                                                         -------------------
       Net Income                                          $ 925      $ 366
       Cumulative Translation Adjustments                   (110)      (173)
                                                           -----      -----
       Comprehensive Income                                $ 815      $ 193
                                                           =====      =====

                                        7

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(5)  Commitments and Contingent Liabilities: 
     ---------------------------------------
   
     The Company has been involved in seven class action lawsuits as well as an
administrative lawsuit filed on March 4, 1998, by the United States Consumer
Product Safety Commission ("Commission") related to the Company's Omega
sprinklers. The Company has reached a settlement of the Omega litigation with
the Commission as well as a definitive settlement agreement with the plaintiffs
in the Hart and Santa Clara class actions. The court granted final approval to
the settlement on February 19, 1999. The agreements with the Commission and
Class Action litigants generally provide for replacement of the Omega sprinkler
heads with free replacement sprinklers and parts, the establishment of a
separate trust account for payments to the owners of Omega sprinklers,
administration of the recall program and a notification program related to the
Omega sprinkler product recall.

     In accordance with Statement of Financial Accounting Standards No. 5,
"Accounting for Contingencies" and based on current information, the Company 
revised its estimate of the probable future cost of settling these matters and
recorded a $38 million ($26.6 million net of tax) charge in third quarter of
fiscal 1998 to reflect the total estimated additional future cost.

     In an effort to recover a portion of the cost of the Omega settlement, the
Company filed suit on August 19, 1998 against twelve product liability insurance
carriers with which the Company had coverage over the last 15 years. No
insurance or third party recoveries have been considered in the Company's
accrual analysis and the amount of such recoveries, if any, is uncertain at this
time.

     The Company presently believes that the remaining reserve balance totaling
$32.2 million ($12.0 million of which is included in accrued expenses) as of
January 31, 1999 will be adequate to cover the total estimated future costs of
the Omega sprinkler matters. It is possible that additional litigation may
ensue. In the event additional information becomes available in the future which
may change management's estimates, future additional provisions may be 
necessary.

                                        8


<PAGE>

                 CENTRAL SPRINKLER CORPORATION AND SUBSIDIARIES
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                       OPERATIONS AND FINANCIAL CONDITION
                    (Amounts in thousands, except per share)

                              RESULTS OF OPERATIONS

Net Sales. Net sales for the first quarter of fiscal 1999 decreased 5.1% to
$50,728. Such sales were $2,724 less than the $53,452 recorded in the first
quarter of fiscal 1998. The new construction market and the retrofit of existing
buildings are the primary drivers in determining the worldwide demand for the
Company's fire sprinklers and related products. The sales decreases in the first
quarter of fiscal 1999 from the comparable period in fiscal 1998 were due, in
part, to the discontinuance of the Omega sprinkler products (2%), stiff market
competition on virtually all product lines and unfavorable publicity surrounding
litigation and governmental investigations into the Company's Omega sprinkler
products. The Company experienced sales increases in CPVC plastic pipe and
fittings and grooved couplings and fittings. Unit sales results of fire
sprinkler heads were mixed with Optima, Attic, ESFR, and K-25/K-17 leading the
increases. Sales increases were realized in most international markets. The
Company continues to experience very competitive conditions worldwide in the
sprinkler market through stiff price competition which has depressed sales
prices and overall sales.

Cost of Sales and Gross Profit. Cost of sales, in terms of dollars of expense,
for the first quarter of fiscal 1999 decreased 4.1% to $36,672. Cost of sales
were $1,558 below the $38,230 in the first quarter of fiscal 1998. The Company's
cost of sales for the first quarter of fiscal 1999 was 72.3% of net sales
compared to 71.5% of net sales for the first quarter of fiscal 1998. This
resulted in a gross margin percentage of 27.7% in the first quarter of fiscal
1999 compared to 28.5% in the first fiscal quarter of 1998. The decrease in cost
of sales, in terms of dollars of expense, is due to lower sales volume. The 
fiscal 1999 first quarter gross profit margin percentage did increase to 27.7%,
however, from the fourth quarter of fiscal 1998 amount of 25.0% due to a first
quarter sales price increase and certain production efficiencies.

Operating Expenses. Operating expenses for the first quarter of fiscal 1999
decreased 15.1% from the first quarter of fiscal 1998. Total operating expenses
decreased $2,022 to $11,365 for the first quarter of fiscal 1999 compared to
$13,387 for the same period for fiscal 1998. Operating expenses were 22.4% of
net sales in the first quarter of fiscal 1999. Selling, general and
administrative expenses decreased 13.9%, or $1,603, from the


                                        9

<PAGE>



first quarter of fiscal 1998. The primary decrease in selling, general and
administrative expenses was in selling and distribution expenses which decreased
$1,559 or 18.0% from the first quarter of fiscal 1998. The lower expenses
primarily are due to the Company's cost reduction programs initiated in fiscal
1998. The Company opened a new distribution center in Kansas City, Missouri late
in the first quarter of fiscal 1999. General and Administrative expenses
increased 4.2% due to higher financial and other fees partially offset by cost
reductions in other expenses. Research and development expenses decreased 22.3%,
or $419, to $1,457 in the first quarter of fiscal 1999 as compared to the same
period in fiscal 1998. Research and development expenses were unusually high in
the first quarter of fiscal 1998 in connection with the development and final
approvals of a new line of fire sprinklers.

Interest Expense (Income). Interest expense of $1,501 was incurred in the first
quarter of fiscal 1999 compared to interest expense of $1,469 in the comparable
quarter of fiscal 1998. The higher interest expense primarily was due to a
higher effective borrowing rate. Total debt was $74,068 at January 31, 1999 as
compared to $83,485 at January 31, 1998. The Company repaid borrowings, net by
$7,100 in the first quarter of fiscal 1999. Interest income for the three months
ended January 31, 1999 and 1998 was $136 and $176, respectively. The lower
interest income level was the result of a lower average investment balance in
fiscal 1999.

Income Taxes. The Company's effective tax rate for the first quarter of fiscal
1999 was 30.2% compared to 32.5% in the comparable period of 1998. The decrease
in the overall effective income tax rate results from the estimated income tax
rate used to record the tax benefit of prior year's unusual charges, a lower
state income tax rate, tax credits and the impact of deductible expenses.

Seasonal Aspects of Business. The Company's sales are affected by seasonal
factors and the weather as well as the level of new construction activity and
the remodeling and retrofitting of older properties in the industrial,
commercial, residential and institutional real estate markets. The Company's
sales tend to increase the most when there is a high level of new construction
activity in all such real estate markets. In addition, as a result of relatively
higher levels of new construction during the warmer spring and summer months,
the demand for sprinkler system components tends to be greater during the summer
and fall than during other seasons.

                                       10


<PAGE>



                               FINANCIAL CONDITION
                  January 31, 1999 Compared to October 31, 1998

Cash and Cash Equivalents. Cash and cash equivalents were $12,566 as of January
31, 1999 as compared to $18,801 at October 31, 1998. This decrease was primarily
a result of the use of funds in investing and financing activities and normal
fluctuation in operating activities.


Inventories. Inventories were $44,481 at January 31, 1999 as compared to $43,319
at October 31, 1998. The $1,162 increase in inventories was comprised of a
decrease of $244 in raw materials and work in process and an increase of $1,406
in finished goods. The decrease in raw materials and work in process primarily
was due to decreased material requirements. The increase in finished goods was
due to a replenishment of certain fire sprinkler system products in the
Company's distribution centers which had fallen below optimum levels.

Property, Plant and Equipment. The Company's property, plant and equipment rose
by $1,403 to $76,387 at January 31, 1999. The increase is due to continuing
manufacturing automation and expanding certain manufacturing capabilities for
fire sprinklers, as well as associated components and grooved fittings product
lines.

Total Debt. The Company's total debt decreased to $74,068 at January 31, 1999
compared to $81,168 at October 31, 1998. The Company made voluntary net
repayments of long-term debt during the first fiscal quarter of 1999.

Liquidity and Capital Resources. The Company's primary sources of long-term and
short-term liquidity are its current financial resources, projected cash flow
from operations and its borrowing capacity. The Company believes that these
sources are sufficient to fund the programs necessary for future operations,
growth and expansion, and the Omega settlements. As of January 31, 1999, after
considering cash and cash equivalents and the available borrowing capacity,
based on the borrowing base formulas, including subjective elements, as defined
in the agreements, the Company has approximately $3,300 of availability under
the Revolving Credit Facility and a line of credit. Under the terms of the
Revolving Credit Facility, the Company must maintain minimum balances of net
borrowing availability. Should the net balance of borrowing availability fall
below such level, the bank may require the Company to apply its lockbox receipts
to its loan balances.

Cash provided by operating activities in the first quarter of fiscal 1999 was
$2,097 as compared to cash used for operating activities of $3,093 in the same
period of 1998. Net income plus noncash items generated $3,403 of cash in the
first

                                       11


<PAGE>

quarter of fiscal 1999 as compared to $2,530 in the first quarter of fiscal
1998. The increase was due to higher net income. Cash used for working capital
purposes decreased to $1,306 in the first quarter of fiscal 1999 from $5,623 in
the same period of fiscal 1998. Net cash used for working capital purposes in 
the first quarter of fiscal 1999 was comprised of an increase in inventories, a
decrease in accounts payable and cash used to fund Omega programs. These were
partially offset by a decrease in accounts receivable. Net cash used for working
capital in the first quarter of fiscal 1998 was for increased levels of
inventories and reduced levels of accounts payable and accrued expenses
including the funding of Omega programs.


Cash used in investing activities was $1,122 in the first quarter of fiscal 1999
as compared to $884 in the comparable period of fiscal 1998. The primary use of
cash was for the acquisition of property, plant and equipment during these
periods. The capital expenditures in the first quarters of fiscal 1999 and
fiscal 1998 were primarily for machinery and equipment to increase manufacturing
automation, expand the manufacturing capacity and for the operations of the
Company's various product lines. In the first quarter of fiscal 1998, a net
amount of $1,046 was provided from the net sales of short-term investments.

Cash used for financing activities in the first quarter of fiscal 1999 was
$7,210 as compared to $1,863 in the comparable prior year period. The primary
use of cash in the first quarters of fiscal 1999 and fiscal 1998 was net
repayments of debt of $7,100 and $1,690, respectively.

The Company purchases property, plant and equipment from time to time as
required to maintain and expand its offices, manufacturing and research
facilities and distribution centers. The Company has expanded and improved its
operations over the years with such purchases. The Company presently intends to
continue this policy in the future. The Company has commitments in the ordinary
course of business for such expansions of facilities and equipment and for
research and other contracts.

The Company's cash and cash equivalents, along with the Company's future
earnings and borrowing capacity are expected to provide adequate liquidity to
meet the Company's obligations, to fund future growth and expansion and fund the
Omega settlements.

The Company has been involved in seven class action lawsuits as well as an
administrative lawsuit filed on March 4, 1998, by the 

                                       12

<PAGE>

United States Consumer Product Safety Commission ("Commission") related to the
Company's Omega sprinklers. The Company has reached a  settlement of the
Omega litigation with the Commission as well as a definitive settlement
agreement with the plaintiffs in the Hart and Santa Clara class actions. The
court granted final approval to the settlement on February 19, 1999. The
agreements with the Commission and Class Action litigants generally provide for
replacement of the Omega sprinkler heads with free replacement sprinklers and
parts, the establishment of a separate trust account for payments to the owners
of Omega sprinklers, administration of the recall program and a notification
program related to the Omega sprinkler product recall.

In accordance with Statement of Financial Accounting Standards No. 5,
"Accounting for Contingencies" and based on current information, the Company
revised its estimate of the probable future cost of settling these matters and
recorded a $38,015 ($26,610 net of tax) charge in third quarter of fiscal 1998
to reflect the total estimated additional future cost.

In an effort to recover a portion of the cost of the Omega settlement, the
Company filed suit on August 19, 1998, against twelve product liability
insurance carriers with which the Company had coverage over the last 15 years.
No insurance or third party recoveries have been considered in the Company's
accrual analysis and the amount of such recoveries, if any, is uncertain at this
time.

The Company presently believes that the remaining balance totaling $32.2 million
($12 million of which is included in accrued expenses) as of January 31, 1999
will be adequate to cover the total estimated future costs of the Omega
sprinkler matters. It is possible that additional litigation may ensue. In the
event additional information becomes available in the future which may change
management's estimates, future additional provisions may be necessary.

This document contains certain forward-looking statements that are subject to
risks and uncertainties. Forward-looking statements include certain information
relating to the Company's product recall and litigation regarding its Omega
sprinklers (including the adequacy of charges taken to cover future costs),
general business strategy, the expansion and improvement of operations and
facilities, the growth expected in the construction market, the effects of the
Year 2000 matter on the Company, the effects of new products on the gross profit
margin, liquidity, availability of funds and the effect that certain litigation
could have on the Company as well as information contained elsewhere in this
document where

                                       13

<PAGE>


statements are preceded by, followed by or include the words "believes",
"expects", "estimates", "anticipates", "intends", or similar expressions. For
such statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995. Actual events or results may differ materially from those discussed
in forward-looking statements as a result of various factors, including without
limitation, those discussed elsewhere in this document.

Year 2000
---------

At midnight on December 31, 1999, all computer systems that use two digits to
represent the year are at risk of malfunction or failure. Many systems will
continue to run, but may interpret any data in the year '00 to be prior to any
date in the year '99. Businesses and systems that use a four-digit format to
report and process dates later than December 31, 1999 are often denoted as "Year
2000 compliant". While many systems have no date comparison functions and
operate in a date-independent mode, they may have a date function. If full
system operation and correct display of dates subsequent to January 1, 2000 are
possible, these systems may be denoted as "Year 2000 operationally ready". Many
systems and subsystems using two digit dates will operate smoothly until the end
of their technological or economic life without regard to the actual date. These
systems are unaffected by whether it is 2000 or 1900, make no "real-time" date
comparisons and have no date to display features. At the other extreme are
systems that will cease functioning or malfunction when an unacceptable date is
perceived (which in some cases could be during 1999).

The Company is committed to the operation of our business without interruption.
The Company has been and continues to be in the process of evaluating and
modifying both its information technology and non-information technology
infrastructures for Year 2000 compliance. The Company believes its primary
operating systems and software are Year 2000 compliant. In the normal course of
business, the Company has upgraded certain systems and software and these
upgrades are Year 2000 compliant. The Company has also modified certain systems
to be Year 2000 compliant. It is anticipated that the full assessment of all
potential issues will be completed in the third quarter of fiscal 1999 and the
issues tested and resolved, through modification or replacement, by the end of
the fourth quarter of fiscal 1999. The Company does not expect that the cost to
modify or replace infrastructure affected by the Year 2000 issue will be
material to its financial condition or results of operations. The Company does
not anticipate any material disruption in its operations as a result

                                       14


<PAGE>

of any failure by the Company to be in compliance. The Company is in the
preliminary stages of ascertaining the Year 2000 compliance actions and efforts
by its suppliers and vendors and the potential impact on the Company's
operations should they not achieve Year 2000 compliance. In the event that any
of the Company's significant suppliers or customers do not successfully and
timely achieve Year 2000 compliance, the Company's business or operations could
be adversely affected. Throughout the assessment, the Company will be developing
contingency plans.

There can be no assurances that the Company will not experience serious
unanticipated negative consequences and/or material costs caused by undetected
errors or defects in technology used in its products or internal systems which
are comprised predominantly of third party software and hardware, or by the
inability of third parties to adequately disclose and correct their Year 2000
issues. While the Company presently believes that the ultimate outcome of its
efforts to be Year 2000 compliant will not have a material effect on the
Company's current financial position, liquidity, or operations, there can be no
assurances that unanticipated increased costs could have a material effect on
its results of operations. Readers should be cautioned that forward-looking
statements contained in the Year 2000 disclosure should be read in conjunction
with the Company's disclosure regarding forward-looking Statements.

Qualitative Disclosure About Market Risk
----------------------------------------

Interest Rate Sensitivity

The Company's interest rate exposure relates primarily to its long-term debt
obligations. All debt obligations and the interest rate swap are entered into
for purposes other than trading. A significant portion of the Company's interest
expense is based upon variable interest rates of its banks' prime rate or
Eurodollar rate.

The table below provides annual information about the Company's debt obligations
and interest rate swap agreement. All of the Company's debt obligations have
been classified as variable rate. The table presents principal cash flows and
related weighted average interest rates by expected maturity dates. For the
interest rate swap, the table presents the notional amounts and weighted average
interest rates by contractual maturity date. Notional amounts are used to
calculate the contractual payments to be made under the contract. Dollar amounts
are in thousands.

Expected      Variable Rate     Average     Interest     Average
Maturity        Long-Term       Interest      Rate         Pay
  Date            Debt            Rate        Swap         Rate
--------      -------------     --------    --------     --------      
1999           $   725            6.72%     $    0        1.175%
2000             4,618            6.68%        550        1.175
2001            52,939            6.58%        550        1.175
2002             1,368            6.23%        550        1.175
2003             1,345            6.22%        550        1.175
Thereafter      12,473            6.18%      7,150        1.175
               -------                      ------        
Total          $73,468            6.60%     $9,350        1.175%
               =======                      ======
Fair Value     $73,468                      $ (535)
               -------                      ------

Exchange Rate Sensitivity

The Company conducts business on a global basis in several major international
currencies. As such, it is exposed to adverse or beneficial movements in foreign
currency exchange rates. Fluctuations in foreign currency exchange rates have
not had, and are not anticipated to have, a material impact on the Company's
current financial condition, liquidity, or operations.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

See Note 5 of the Notes to Consolidated Financial Statements (included herein),
relating to litigation regarding the Company's Omega sprinklers.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits
         The following Exhibits are filed as an Exhibit and attached as follows:

         10(a) Class Action Order, Final Judgment & Decree; Superior Court of 
         the State of California, County of Los Angeles dated February 19, 1999.

         27 -- Financial Data Schedule

     (b) Reports on Form 8-K
         No report on Form 8-K was filed during the quarter.

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<PAGE>


                                   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.




                                          CENTRAL SPRINKLER CORPORATION
                                          --------------------------------
                                                  (Registrant)



                                             /s/ E. Talbot Briddell 
                                          --------------------------------
                                                 E. Talbot Briddell
                                                    Chairman and
                                               Chief Executive Officer

DATE:     March 15, 1999
-----     --------------   
                                                 /s/ Albert T. Sabol
                                          --------------------------------
                                                     Albert T. Sabol
                                          Executive Vice President-Finance
                                              (Principal Financial and
                                                 Accounting Officer)



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