<PAGE>   1
--------------------------------------------------------------------------------


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
       [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                          OF THE SECURITIES ACT OF 1934

For quarterly period ended December 31, 1997

                                       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:  0-23335

                       MPW INDUSTRIAL SERVICES GROUP, INC.
             (Exact name of registrant as specified in its charter)

              Ohio                                       31-1567260
(State or other jurisdiction of                       (I.R.S. employer
 incorporation or organization)                     identification no.)

9711 Lancaster Road, S.E., Hebron, Ohio                    43025
(Address of principal executive offices)                 (Zip code)

                                 (740) 927-8790
              (Registrant's telephone number, including area code)

                                 Not Applicable
   (Former name, former address and former fiscal year, if changed since last
                                    report)

--------------------------------------------------------------------------------

         Indicate by check mark whether the registrant: (1) has filed all
         reports required to be filed by Section 13 or 15(d) of the Securities
         Exchange Act of 1934 during the preceding 12 months (or for such
         shorter period that the registrant was required to file such reports),
         and (2) has been subject to such filing requirements for the past 90
         days. Yes     No X
                   ---   ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

         As of January 31, 1998, 10,321,167 shares of the issuer's common stock,
         without par value, were outstanding.

--------------------------------------------------------------------------------


<PAGE>   2


                       MPW INDUSTRIAL SERVICES GROUP, INC.

                                      INDEX
<TABLE>
<CAPTION>


PART I.    FINANCIAL INFORMATION                                                                     PAGE

<S>        <C>                       
Item 1.    Financial Statements

           Consolidated Balance Sheets as of June 30, 1997 and December 31, 1997 (unaudited)............3

           Consolidated Statements of Operations for the three and six months ended December 31,
           1996 and 1997 (unaudited)....................................................................4

           Consolidated Statements of Cash Flows for the six months ended December 31, 1996 and
           1997 (unaudited).............................................................................5

           Notes to Consolidated Financial Statements (unaudited).......................................6

Item 2.    Management's Discussion and Analysis of Consolidated Financial Condition
           and Results of Operations...................................................................10

Item 3.    Quantitative and Qualitative Disclosures About Market Risk..................................15


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings...........................................................................15

Item 2.    Changes in Securities and Use of Proceeds...................................................15

Item 3.    Defaults Upon Senior Securities.............................................................16

Item 4.    Submission of Matters to a Vote of Security Holders.........................................16

Item 5.    Other Information...........................................................................17

Item 6.    Exhibits and Reports on Form 8-K............................................................17


SIGNATURES.............................................................................................18

EXHIBIT INDEX..........................................................................................19
</TABLE>
                                                                          Page 2

<PAGE>   3


                        PART I. -- FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS.

                       MPW INDUSTRIAL SERVICES GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>

                                                                                                   JUNE 30,     DECEMBER 31,
                                                                                                     1997            1997
                                                                                                  -----------    ------------
                                                                                                                  (UNAUDITED)
                                            ASSETS
<S>                                                                                                 <C>             <C>     
Current assets:
   Cash and cash equivalents                                                                        $    489        $    788
   Accounts receivable, net of allowances                                                             13,560          17,744
   Inventories                                                                                         3,361           3,784
   Deferred income taxes                                                                                --             2,216
   Prepaid expenses                                                                                      960           1,069
   Other current assets                                                                                  596             437
                                                                                                    --------        --------
                                                                                                      18,966          26,038

Property and equipment, net                                                                           23,400          23,326

Noncurrent assets:
   Costs in excess of net assets of acquired businesses, net                                           2,518           7,202
   Other assets                                                                                          401             377
                                                                                                    --------        --------

Total assets                                                                                        $ 45,285        $ 56,943
                                                                                                    ========        ========

                             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                                 $  3,414        $  4,638
   Accrued compensation and related taxes                                                              3,052           2,223
   Current maturities of noncurrent liabilities                                                          965           8,110
   Other accrued liabilities                                                                           4,466           4,790
                                                                                                    --------        --------
                                                                                                      11,897          19,761
Noncurrent liabilities:
   Long-term debt                                                                                     11,719           1,587
   Capital leases                                                                                      2,048            --
   Deferred income taxes                                                                                --             1,853
   Deferred stock option compensation                                                                  2,764            --
                                                                                                    --------        --------
                                                                                                      16,531           3,440

Minority interest                                                                                        379            --

Shareholders' equity:
   Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued and
     outstanding                                                                                        --              --
   Common stock, no par value; 30,000,000 shares authorized; 6,200,000 and 10,083,667 shares
     issued and outstanding at June 30, 1997 and December 31, 1997, respectively                          62             101
   Additional paid-in capital                                                                            837          33,990
   Retained earnings (deficit)                                                                        15,579            (349)
                                                                                                    --------        --------
                                                                                                      16,478          33,742
                                                                                                    ========        ========

Total liabilities and shareholders' equity                                                          $ 45,285        $ 56,943
                                                                                                    ========        ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                                                          Page 3

<PAGE>   4


                       MPW INDUSTRIAL SERVICES GROUP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)


<TABLE>
<CAPTION>

                                                                   THREE MONTHS ENDED           SIX MONTHS ENDED
                                                                       DECEMBER 31,               DECEMBER 31,
                                                                --------------------------  -------------------------
                                                                   1996          1997          1996         1997
                                                                ------------  ------------  ------------ ------------
                                                                       (UNAUDITED)                (UNAUDITED)

<S>                                                                 <C>         <C>          <C>         <C>     
Revenues                                                            $ 18,157    $ 24,199     $ 37,579    $ 46,064

Costs and expenses:
   Cost of services                                                   11,925      16,358       24,566      30,738
   Selling, general and administrative expenses                        3,299       4,216        6,504       7,761
   Depreciation and amortization                                         912         864        1,815       1,730
   Deferred stock option compensation                                    221       3,255        2,410       3,415
                                                                    --------    --------     --------    --------
   Total costs and expenses                                           16,357      24,693       35,295      43,644
                                                                    --------    --------     --------    --------

Income (loss) from operations                                          1,800        (494)       2,284       2,420
Interest expense, net                                                    336         216          550         551
Minority earnings                                                         88          20          213         119
                                                                    --------    --------     --------    --------
Income (loss) before taxes                                             1,376        (730)       1,521       1,750
Provision (benefit) for income taxes                                     349      (1,418)         393      (1,269)
                                                                    --------    --------     --------    --------

Net income                                                          $  1,027    $    688     $  1,128    $  3,019
                                                                    ========    ========     ========    ========

Pro forma information:

   Historical income (loss) before taxes                            $  1,376    $   (730)    $  1,521    $  1,750

   Pro forma taxes on income                                             550        (292)         608         700
                                                                    --------    --------     --------    --------

   Pro forma net income (loss)                                      $    826    $   (438)    $    913    $  1,050
                                                                    ========    ========     ========    ========

   Pro forma net income (loss) per share                            $   0.13    $  (0.06)    $   0.15    $   0.15
                                                                    ========    ========     ========    ========

   Pro forma net income (loss) per share, assuming dilution         $   0.12    $  (0.06)    $   0.14    $   0.14
                                                                    ========    ========     ========    ========

   Weighted average common shares outstanding                          6,200       7,531        6,200       6,866
   Weighted average common shares outstanding, assuming dilution       6,811       7,531        6,719       7,550
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                                                          Page 4

<PAGE>   5


                       MPW INDUSTRIAL SERVICES GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                          SIX MONTHS ENDED
                                                                                            DECEMBER 31,
                                                                                     --------------------------
                                                                                        1996          1997
                                                                                     ------------  ------------
                                                                                            (UNAUDITED)

<S>                                                                                  <C>          <C>     
CASH FLOW FROM OPERATING ACTIVITIES:
Net income                                                                           $  1,128     $  3,019
Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation                                                                         1,434        1,585
   Amortization                                                                           381          145
   Gain on disposals of assets                                                            (22)          (5)
   Minority interest                                                                      213          119
   Deferred stock option compensation                                                   2,410        3,415
   Cumulative deferred taxes                                                             --           (702)
   Changes in operating assets and liabilities:
     Accounts receivable                                                               (1,231)      (3,502)
     Inventories                                                                         (423)         167
     Prepaid expenses and other assets                                                   (257)          98
     Accounts payable                                                                     222          411
     Deferred income taxes                                                               --            339
     Other accrued liabilities                                                            193       (2,223)
                                                                                     --------     --------
Net cash provided by operating activities                                               4,048        2,866

CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                                    (2,347)      (2,538)
Purchase of business, net of acquired cash                                               --         (2,738)
Purchase of minority interests                                                           --           (339)
Proceeds from disposal of property and equipment                                          145           66
                                                                                     --------     --------
Net cash used in investing activities                                                  (2,202)      (5,549)

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from initial public offering, net                                               --         30,250
Proceeds from revolving credit facility                                                15,069       17,949
Payments on revolving credit facility                                                 (14,686)     (24,484)
Proceeds from notes payable                                                                13        3,000
Payments on notes payable                                                                (440)      (9,297)
Payments on AAA Notes                                                                    --        (13,400)
Payments on capital lease obligations                                                    (370)         (27)
Proceeds from capital contributions                                                       773          233
Distributions to shareholders                                                          (2,103)      (1,242)
                                                                                     --------     --------
Net cash provided by (used in) financing activities                                    (1,744)       2,982
                                                                                     --------     --------
Increase in cash and cash equivalents                                                     102          299
Cash and cash equivalents at beginning of year                                            508          489
                                                                                     --------     --------

Cash and cash equivalents at end of year                                             $    610     $    788
                                                                                     ========     ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                                                          Page 5

<PAGE>   6


                       MPW INDUSTRIAL SERVICES GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997
                                   (Unaudited)

NOTE 1.  BASIS OF PRESENTATION

         MPW Industrial Services Group, Inc. (the "Company") is an industrial
services firm that provides industrial cleaning and facility support services,
industrial process water purification, industrial air filtration services and
other specialized services. Such services are typically provided at customer
facilities. The Company also operates a process facility for industrial
container cleaning. The Company's principal customers are large industrial
facilities in the automotive, electric power, chemical, pulp and paper, steel,
transportation, aerospace and other heavy manufacturing industries. The Company
provides services primarily in the Midwestern and Southeastern United States.

         The unaudited consolidated financial statements include the accounts of
the Company including, but not limited to, (i) MPW Industrial Services, Inc.
("MPW"), (ii) Weston Engineering, Inc. ("Weston"), (iii) ESI International, Inc.
and ESI North, Limited (collectively "ESI International") from the effective
date of acquisition, October 1, 1997 and (iv) Aquatech Environmental, Inc.
("Aquatech"), which was 70% owned by the Company until December 5, 1997, at
which time the Company purchased the remaining minority shareholders' interests
of Aquatech, and it became wholly-owned. The minority shareholders' interests in
the equity and net income of Aquatech are presented separately in the
accompanying unaudited consolidated financial statements for the period through
December 4, 1997. All material intercompany transactions and balances have been
eliminated in consolidation.

         The accompanying unaudited consolidated financial statements presented
herein have been prepared by the Company and reflect all adjustments of a normal
recurring nature that are, in the opinion of management, necessary for a fair
presentation of financial results for the three and six months ended December
31, 1996 and 1997, in accordance with generally accepted accounting principles
for interim financial reporting and pursuant to Article 10 of Regulation S-X.
Certain 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 interim consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements contained in the Company's Registration Statement on Form
S-1 (File No. 333-36887) ("Registration Statement"). The results of operations
for the three and six months ended December 31, 1996 and 1997 are not
necessarily indicative of the results for the full year (see Note 9 for further
information regarding fluctuations in quarterly results).

         The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the accompanying
consolidated financial statements. Actual results could differ from those 
estimates.

NOTE 2.  ACQUISITION OF ESI INTERNATIONAL

         Effective October 1, 1997, the Company acquired all of the outstanding
stock of ESI International, Inc., a Tennessee corporation ("ESI") and purchased
all of the members' interests in ESI North, Limited, an Ohio limited liability
company, ("ESIN" and collectively with ESI, "ESI International") for an
aggregate purchase price of $4,903,000 and $1,043,000 of assumed liabilities.
The purchase price was paid as follows: (i) $2,824,000 in cash; (ii) unsecured
promissory notes in the aggregate of $1,119,000, bearing interest at 6.5%, due
in twenty equal, consecutive, quarterly installments, with the first such
installment due on January 31, 1998; and (iii) 96,000 shares of common stock of
the Company. The number of shares of the Company's common stock issued as part
of the purchase price is subject to adjustments based on changes in the market
price of the Company's common stock during the 90-day period following the
Company's initial public offering of its common stock. The purchase price may be
increased by a maximum of $600,000 contingent upon the achievement of certain
revenue and operating objectives over the three-year period following the date
of acquisition. The acquisition has been accounted for using the purchase method
of accounting and, accordingly, the acquired assets and assumed liabilities have
been recorded at their estimated fair values as of October 1, 1997. The
accompanying unaudited consolidated financial statements include the results of
operations of ESI International from the effective acquisition date.

                                                                          Page 6

<PAGE>   7


NOTE 3.  INITIAL PUBLIC OFFERING OF COMMON STOCK

         On December 1, 1997, the Registration Statement related to the
Company's initial public offering of its common stock (the "Offering") was
declared effective by the Securities and Exchange Commission and its stock began
trading on the NASDAQ national market system on December 2, 1997. Pursuant to
the terms of the Offering, on December 5, 1997, the Company issued 3,750,000
shares of common stock that were sold at $9.00 per share, the net proceeds of
which were $31,388,000 before deducting expenses of $1,138,000.

         On January 2, 1998, the over-allotment option in connection with the
Offering was partially exercised and on January 6, 1998, the Company issued an
additional 237,500 shares at $9.00 per share. The net proceeds of the partial
exercise of the over-allotment option were $1,988,000.

NOTE 4.  OFFERING RELATED TRANSACTIONS

         Restructuring of the Company and Termination of MPW's S Corporation
Status

         In connection with the Offering, effective October 30, 1997, the 
Company was restructured resulting in the creation of a new holding company,
MPW Industrial Services Group, Inc., an Ohio corporation. In connection with
this reorganization, MPW's S Corporation status was terminated. Prior to this
termination, MPW made a distribution to the S Corporation shareholders in the
amount of $21,200,000 for undistributed earnings associated with MPW's S
Corporation status. These distributions were made through the Company's
issuance of promissory notes to such shareholders (the "AAA Notes"), of which
$13,400,000 was subsequently paid off with the Offering proceeds. The remaining
$7,800,000 will be paid as follows: (i) $4,200,000 in cash on April 15, 1998
and (ii) $3,600,000 to be redeemed in connection with the sale of a corporate
aircraft to a holder of the AAA Notes.

         Deferred Stock Option Compensation Expense

         In connection with the Offering, the Company recorded a non-cash,
non-recurring charge of $1,869,000, net of tax, associated with certain of its
stock option plans. This charge resulted in a concurrent increase in paid-in
capital. The Company also eliminated the related deferred stock option 
compensation liabilities previously recorded because, effective with the
Offering, the Company's repurchase obligations for stock options exercised
under these stock option plans were eliminated.

         Related Party Lease Agreements

         In connection with the Offering, the Company restructured certain lease
agreements with its principal shareholder for facilities that the Company uses
in its business operations. Additionally, subsequent to December 31, 1997, the
Company will redeem $3,600,000 of the AAA Notes as consideration for the sale of
a corporate aircraft at its fair market value to an entity controlled by the
Company's principal shareholder. In connection with this transaction, the
Company will enter into a lease agreement with this entity for the lease of this
corporate aircraft.

         Purchase of Remaining Minority Shareholders' Interests

         In connection with the Offering, on December 5, 1997, the Company
purchased the remaining minority shareholders' interests in the equity and net
income of Aquatech for an aggregate purchase price of $678,000, at which time
Aquatech became a wholly-owned subsidiary of the Company. The purchase price was
paid as follows: (i) $339,000 in cash and (ii) 37,667 shares of common stock of
the Company.

NOTE 5.  LONG-TERM DEBT

         Prior to the Offering, the Company had various credit arrangements with
its principal banks, including term notes and a revolving credit line with
outstanding balances totaling $8,948,000 and $6,935,000, respectively, of which
$3,000,000 was associated with the Company's acquisition of ESI International.
On December 5, 1997, the entire outstanding balance under these arrangements,
$15,883,000, was repaid.

         Effective December 10, 1997, the Company entered into a new credit
agreement with its principal banks (the "Credit Facility") to replace the
existing agreement. The Credit Facility provides the Company with $50,000,000 of
unsecured credit availability for a three-year period. Under the Credit
Facility, $15,000,000 is available for working capital 

                                                                          Page 7

<PAGE>   8

needs, of which $5,000,000 may be used for letters of credit, and the remaining
$35,000,000 is available for the Company's growth initiatives, including
acquisitions. Borrowing under the Credit Facility currently bears interest at
the prime rate less 0.75% or, at the Company's option, the Eurodollar market
rate plus 0.75%. The interest rate is subject to change based on interest rate
formulas tied to financial performance as measured by debt service coverage and
by the ratio of funded debt to equity. The Credit Facility also provides
covenants that impose minimum levels for interest coverage and tangible net
worth and ceiling levels for funded debt to equity. As of December 31, 1997, no
balances had been drawn on the Credit Facility. The Company pays a commitment
fee for unused portions of the Credit Facility of 0.25%.

NOTE 6.  INCOME TAXES

         Prior to October 31, 1997, MPW's income was taxed under the provisions
of Subchapter S of the Internal Revenue Code of 1986, as amended, which provides
that in lieu of corporate income taxes, the shareholders of the S Corporation
are taxed on their proportionate share of MPW's taxable income. Therefore, no
provision or liability for federal income tax has been included in historical
financial statements related to MPW prior to October 31, 1997. The accompanying
financial statements do, however, include provisions for income taxes for
federal, state, provincial and local tax purposes for the other members of the
Company that are subject to corporate income taxes.

         Effective October 30, 1997, MPW terminated its S Corporation status and
became subject to corporate income taxes. The Company recorded a current
deferred tax asset and a noncurrent deferred tax liability of $2,111,000 and
$1,409,000, respectively, to recognize the cumulative deferred income taxes
attributable to MPW's change in tax status (from an S Corporation to a C
Corporation). The Company also recorded an additional current deferred tax asset
and noncurrent deferred tax liability of $105,000 and $444,000, respectively,
related to its results of operations since October 31, 1997. Deferred income
taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. Significant components of the Company's
deferred tax asset and liability as of December 31, 1997 are related to the use
of accelerated depreciation rates on property and equipment for tax purposes and
the carryforward of tax adjustments related to the termination of MPW's S
Corporation status.

         The pro forma income taxes presented in the Consolidated Statements of
Operations for the three and six months ended December 31, 1996 and 1997
represent the estimated income taxes that would have been reported had MPW been
subject to federal and state income taxes for each of the periods presented.

NOTE 7.  EARNINGS PER SHARE

         In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("SFAS No. 128"), Earnings per Share,
effective for periods ending after December 15, 1997. SFAS No. 128 replaced the
previously reported primary and fully diluted earnings per share with basic and
diluted earnings per share. Unlike primary earnings per share, basic earnings
per share excludes any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share is similar to the previously reported
fully diluted earnings per share. All earnings per share amounts for all periods
have been presented to conform to the SFAS No. 128 requirements.

                                                                          Page 8

<PAGE>   9


         The following table sets forth the computation of pro forma basic and
diluted earnings per share (in thousands, except per share data):

<TABLE>
<CAPTION>

                                                       THREE MONTHS ENDED      SIX MONTHS ENDED
                                                          DECEMBER 31,           DECEMBER 31,
                                                       ------------------     ------------------
                                                        1996        1997       1996        1997
                                                       ------------------     ------------------
                                                                            
<S>                                                    <C>        <C>         <C>        <C>    
Numerator for basic and diluted earnings per share:
   Pro forma net income (loss)                         $   826    $  (438)    $   913    $ 1,050
                                                       =======    =======     =======    =======

Denominator for basic earnings per share -
  weighted average common shares                         6,200      7,531       6,200      6,866
   Effect of dilutive employee stock options               611       --           519        684
                                                       -------    -------     -------    -------

Denominator for diluted earnings per share -
  adjusted weighted average common shares and
  assumed conversions                                    6,811      7,531       6,719      7,550
                                                       =======    =======     =======    =======

Pro forma net income (loss) per share                  $  0.13    $ (0.06)    $  0.15    $  0.15
                                                       =======    =======     =======    =======

Pro forma net income (loss) per share,
   assuming dilution                                   $  0.12    $ (0.06)    $  0.14    $  0.14
                                                       =======    =======     =======    =======
</TABLE>

         Options to purchase 1,311,500 shares of the Company's common stock at a
weighted average price per share of $4.29 were outstanding during the three
months ended December 31, 1997, but were not included in the computation of
diluted earnings per share because the Company reported a pro forma net loss
and, therefore, the effect would be antidilutive.

         On January 2, 1998, the over-allotment option in connection with the
Offering was partially exercised and on January 6, 1998, the Company issued an
additional 237,500 shares at $9.00 per share.

NOTE 8.  1997 STOCK OPTION PLAN

         On November 15, 1997, the Company adopted a new stock option plan (the
"1997 Plan") and subsequently granted 362,500 stock options to certain
employees. The purpose of the 1997 Plan is to attract and retain directors,
officers and key employees of the Company, to enhance their interest in the
Company's continued success and to allow associates an opportunity to have an
ownership in the Company through stock options, stock awards and a stock
purchase plan. The maximum number of common shares available to be issued under
the 1997 Plan is 700,000 shares of common stock.

NOTE 9.  FLUCTUATIONS IN QUARTERLY RESULTS

         The Company's revenues and results of operations tend to vary
seasonally as a result of a number of factors over which the Company has no
control, including its customers' budgetary constraints, the timing and duration
of its customers' planned maintenance activities and shutdowns, changes in its
competitors' pricing policies and general economic conditions. Also, certain
operating and fixed costs remain relatively constant throughout the fiscal year,
which when offset by differing levels of revenues may result in fluctuations in
quarterly operating results. Because of these factors, the Company typically
generates the least amount of revenues in the third quarter, higher revenues in
the second quarter and the greatest amount of revenues in the first and fourth
quarters. Although the Company believes that the historical trend in quarterly
revenue for the first and fourth quarters are generally higher than the second
and third quarters, there can be no assurance that this will occur in future
periods. Accordingly, quarterly or other interim results should not be
considered indicative of results to be expected for any quarter or for the full
year.


                                                                          Page 9

<PAGE>   10


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.

         Except for historical information, certain statements in this
Management's Discussion and Analysis of Consolidated Financial Condition and
Results of Operations are forward looking. These forward looking statements are
based on current expectations that are subject to a number of uncertainties and
risks, and actual results may differ materially. The uncertainties and risks
include, but are not limited to, competitive and other market factors, customer
purchasing behavior, general economic conditions and other facets of the
Company's business operations as well as other risk factors identified in the
Company's Registration Statement. The Company undertakes no obligation and does
not intend to update, revise or otherwise publicly release the result of any
revisions to these forward looking statements that may be made to reflect future
events or circumstances.

         The following information should be read in conjunction with the
Unaudited Consolidated Financial Statements and Notes included in Part I, Item
1. The following information should also be read in conjunction with the Audited
Consolidated Financial Statements and Notes, and Management's Discussion and
Analysis of Financial Condition and Results of Operations for the year ended
June 30, 1997 as contained in the Company's Registration Statement.

OVERVIEW

         Effective October 1, 1997, the Company completed the acquisition of ESI
International for an aggregate purchase price of $4.9 million and $1.0 million
of assumed liabilities. The purchase price was paid with $2.8 million in cash,
96,000 shares of common stock of the Company and $1.1 million in unsecured
promissory notes which bear interest at 6.5% payable over five years.

         On December 1, 1997, the Registration Statement related to the
Company's initial public offering of its common stock was declared effective by
the Securities and Exchange Commission and its stock began trading on the NASDAQ
national market system on December 2, 1997. Pursuant to the terms of the
Offering, on December 5, 1997, the Company issued 3,750,000 shares of common
stock that were sold at $9.00 per share. On January 2, 1998, the over-allotment
option in connection with the Offering was partially exercised and on January 6,
1998, the Company issued an additional 237,500 shares at $9.00 per share. The
net proceeds to the Company in connection with the Offering, including the
partial exercise of the over-allotment option, were $33.4 million before
deducting expenses of $1.1 million.

         During the three month period ended December 31, 1997, numerous events
occurred and certain transactions were recorded that were directly related to
the Offering. These events and transactions were:

         1.   Effective October 30, 1997, MPW terminated its S Corporation
              election under subchapter S of the Internal Revenue Code of 1986,
              as amended, for federal income tax purposes and under comparable
              state tax laws. In connection therewith, MPW declared a dividend
              of $21.2 million evidenced by the AAA Notes and the Company
              recorded a net non-recurring tax benefit of $702,000 and a related
              current deferred tax asset and noncurrent deferred tax liability
              of $2.1 million and $1.4 million, respectively.

         2.   In connection with the Offering, the Company recorded a non-cash,
              non-recurring charge associated with certain of its stock option
              plans. This charge resulted in a concurrent increase in paid-in
              capital. The Company also eliminated the related deferred stock 
              option compensation liabilities previously recorded because, 
              effective with the Offering, the Company's repurchase obligations
              for stock options exercised under these stock option plans were 
              eliminated.

         3.   Effective with the Offering, the Company adjusted the historical
              lease costs for certain facilities leased by the Company from
              related parties and recharacterized such leases from capital to
              operating as a result of restructured lease agreements.

         4.   On December 5, 1997, the Company purchased certain minority stock
              ownership interests with cash in the amount of $339,000 and by the
              issuance of 37,667 shares of the Company's common stock.

         5.   On December 5, 1997 the Company used a portion of the net proceeds
              from the offering to repay $15.9 million of outstanding
              liabilities to its principal banks, including $3.0 million of
              long-term liabilities associated with the Company's acquisition of
              ESI International during the three months ended December 31, 1997.

                                                                         Page 10

<PAGE>   11

         6.   During December 1997, the Company used a portion of the net
              proceeds from the Offering to repay $13.4 million of the
              outstanding balance of the AAA Notes.

         As a result of the events discussed above and the related transactions
recorded during the three month period ended December 31, 1997, the
comparability of the results of operations for the Company for the three and six
month periods ended December 31, 1997 with the same periods in the prior year
has been affected. For purposes of this Management's Discussion and Analysis of
Consolidated Financial Condition and Results of Operations, the following
adjusted pro forma information is being presented as supplemental information to
the Consolidated Financial Statements contained in Part I, Item 1. Management's
analysis under the heading of Results of Operations below utilizes this
supplemental information.

                         ADJUSTED PRO FORMA INFORMATION
                      (in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                             THREE MONTHS ENDED         SIX MONTHS ENDED
                                                                                DECEMBER 31,              DECEMBER 31,
                                                                           ------------------------  ------------------------
                                                                              1996        1997          1996        1997
                                                                           ------------------------  ------------------------
                                                                     

<S>                                                                          <C>         <C>          <C>         <C>     
         Income (loss) before taxes as reported                              $  1,376    $   (730)    $  1,521    $  1,750

         Adjustments other than income taxes:

            Reduction of historical lease costs for certain facilities
              leased by the Company from related parties pursuant to
              restructured lease agreements which took effect in connection
              with the Offering                                                    64          22          130          90

            Elimination of interest expense, net related to
              repayment of existing debt from the proceeds of the     
              Offering                                                            248         188          404         438

            Elimination of minority earnings as a result of the
              Company's purchase of certain minority shareholders'
              interests effective with the Offering                                88          20          213         119

            Elimination of deferred stock option compensation expense             221       3,255        2,410       3,415
                                                                             --------    --------     --------    --------
         Adjusted pro forma income before income taxes                          1,997       2,755        4,678       5,812

         Taxes on income (1)                                                      799       1,102        1,871       2,325
                                                                             --------    --------     --------    --------

         Adjusted pro forma net income                                       $  1,198    $  1,653     $  2,807    $  3,487
                                                                             ========    ========     ========    ========

         Adjusted pro forma net income per share                             $   0.12    $   0.16     $   0.28    $   0.35
                                                                             ========    ========     ========    ========

         Adjusted pro forma net income per share, assuming dilution          $   0.11    $   0.15     $   0.26    $   0.33
                                                                             ========    ========     ========    ========

         Weighted average common shares outstanding (2)                         9,988      10,084        9,988      10,036
         Weighted average common shares outstanding, assuming
            dilution (2)                                                       10,669      10,774       10,669      10,726
<FN>
         ------------------

         (1)  Based on an assumed effective rate of 40%.

         (2)  Based on the assumption that the sale of 3,750,000 shares of the
Company's common stock in the Offering and the issuance of 37,667 shares of the
Company's common stock in exchange for certain minority shareholders' interests
occurred at the beginning of each period presented.
</TABLE>


                                                                         Page 11

<PAGE>   12


RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, selected
adjusted pro forma consolidated statement of income data as a percentage of
revenues:

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED         SIX MONTHS ENDED
                                                                          DECEMBER 31,              DECEMBER 31,
                                                                     ------------------------  ------------------------
                                                                        1996        1997          1996        1997
                                                                     ------------------------  ------------------------

<S>                                                                      <C>        <C>            <C>         <C>   
         Revenues                                                        100.0%     100.0%         100.0%      100.0%
         Costs and expenses
            Cost of services                                              65.7       67.6           65.5        66.7
            Adjusted pro forma selling, general and administrative
              expenses                                                    19.1       17.5           18.2        17.0
            Adjusted pro forma depreciation and amortization               4.2        3.5            3.9         3.7
                                                                     -----------   ----------  ----------    ----------
            Adjusted pro forma total costs and expenses                   89.0       88.6           87.6        87.4
                                                                     -----------   ----------  ----------    ----------
         Adjusted pro forma income before taxes                           11.0       11.4           12.4        12.6
         Adjusted pro forma provision for income taxes                     4.4        4.6            5.0         5.0
                                                                     -----------   ----------  ----------    ----------

         Adjusted pro forma net income                                     6.6%       6.8%           7.4%        7.6%
                                                                     ===========   ==========  ==========    ==========
</TABLE>


     THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THREE MONTHS ENDED 
     DECEMBER 31, 1996

         Basis of Presentation. Management's analysis of the three months ended
December 31, 1997 ("fiscal 1998 quarter") compared to the three months ended
December 31, 1996 ("fiscal 1997 quarter") utilizes the supplemental adjusted pro
forma information as provided in the tables on pages 11 and 12, herein.

         Revenues. Revenues increased by $6.0 million, or 33.3%, to $24.2
million for the fiscal 1998 quarter from $18.2 million for the fiscal 1997
quarter. The internal rate of growth in revenues in the fiscal 1998 quarter was
23.2% as a result of significant growth in each of the Company's principal
services lines. Revenues also increased in the fiscal 1998 quarter as a result
of the acquisition of ESI International that contributed $1.8 million of
revenues.

         Cost of Services. Cost of services increased by $4.5 million, or 37.2%,
to $16.4 million for the fiscal 1998 quarter from $11.9 million for the fiscal
1997 quarter. Cost of services as a percentage of revenues increased to 67.6%
for the fiscal 1998 quarter from 65.7% for the fiscal 1997 quarter. Projects
performed by the Company, primarily industrial cleaning projects, and work
performed for certain of the Company's industrial customers experienced lower
margins in the fiscal 1998 quarter as compared to the fiscal 1997 quarter. These
lower margin activities were partially offset by improved margins in the fiscal
1998 quarter in the Company's complementary service lines as compared to the
fiscal 1997 quarter.

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $754,000, or 21.7%, to $4.2 million for the
fiscal 1998 quarter from $3.5 million for the fiscal 1997 quarter. This increase
is primarily due to the acquisition of ESI International, infrastructure
investments to support growth in Weston since its acquisition in April 1996 and
other investments in the Company's infrastructure to support overall growth.
Selling, general and administrative expenses decreased as a percentage of
revenues to 17.5% for the fiscal 1998 quarter from 19.1% for the fiscal 1997
quarter.

         Depreciation and Amortization. Depreciation and amortization increased
by $97,000, or 12.8%, to $856,000 for the fiscal 1998 quarter from $759,000 for
the fiscal 1997 quarter. This increase is a result of additional capital
expenditures during the current fiscal year. Depreciation and amortization
decreased as a percentage of revenues to 3.5% for the fiscal 1998 quarter from
4.2% for the fiscal 1997 quarter. This decrease as a percentage of revenues is
primarily due to revenue growth in the container cleaning and industrial water
service lines for which capital investments were made in prior years and to
growth in revenues in service lines that require less capital than industrial
cleaning.

         Income from Operations. Income from operations increased $758,000, or
38.0%, to $2.8 million for the fiscal 1998 quarter from $2.0 million for the
fiscal 1997 quarter. Income from operations also increased as a percentage of

                                                                         Page 12

<PAGE>   13

revenues to 11.4% for the fiscal 1998 quarter from 11.0% for the fiscal 1997
quarter. The increase in income from operations and the improved operating
margin are due to the factors discussed above.

         Interest Expense, net. Following the Offering, the Company had no
borrowing under the Credit Facility with its banks. For this reason, interest
expense, net has been eliminated in the adjusted pro forma information to give
effect as if the repayment of the Company's debt obligations from the proceeds
of the Offering had occurred as of the beginning of each of the periods
presented. Actual interest expense before the adjusted pro forma elimination
declined to $216,000 for the fiscal 1998 quarter from $336,000 for the fiscal
1997 quarter due primarily to the repayment discussed above.

         Provision for Income Taxes. Prior to October 31, 1997, MPW was an S
Corporation for income tax purposes and did not record a provision for federal
and certain state income taxes. The provision for income taxes in the adjusted
pro forma information has been assumed to be at an effective rate of 40.0% for
each of the periods presented.

         Net Income and Net Income per Share. Net income increased $455,000, or
38.0%, to $1.7 million for the fiscal 1998 quarter from $1.2 million for the
fiscal 1997 quarter. Assuming dilution, net income per share increased to $0.15
for the fiscal 1998 quarter from $0.11 for the fiscal 1997 quarter. These
increases are due to the factors discussed above. Weighted average common shares
outstanding used in the calculation of net income per share assumes that the
Offering and repurchase of minority interests had occurred at the beginning of
each of the periods presented.

     SIX MONTHS ENDED DECEMBER 31, 1997 COMPARED TO SIX MONTHS ENDED 
     DECEMBER 31, 1996

         Basis of Presentation. Management's analysis of the six months ended
December 31, 1997 ("six month fiscal 1998 period") compared to the six months
ended December 31, 1996 ("six month fiscal 1997 period") utilizes the
supplemental adjusted pro forma information as provided in the tables on pages
11 and 12, herein.

         Revenues. Revenues increased by $8.5 million, or 22.6%, to $46.1
million for the six month fiscal 1998 period from $37.6 million for the six
month fiscal 1997 period. The internal rate of growth in revenues in the six
month fiscal 1998 period was 17.7% as a result of growth of more than 11.0% in
industrial cleaning and facility support along with significant growth in each
of the Company's complementary services lines. Revenues also increased in the
six month fiscal 1998 period as a result of the acquisition of ESI International
that contributed $1.8 million of revenues.

         Cost of Services. Cost of services increased by $6.1 million, or 25.1%,
to $30.7 million for the six month fiscal 1998 period from $24.6 million for the
six month fiscal 1997 period. Cost of services as a percentage of revenues
increased to 66.7% for the six month fiscal 1998 period from 65.5% for the six
month fiscal 1997 period. Projects and work performed by the Company for certain
of the Company's industrial customers experienced lower margins in the six month
fiscal 1998 period as compared to the six month fiscal 1997 period. Improved
margins in the Company's complementary service lines in the six month fiscal
1998 period as compared to six month fiscal 1997 period partially offset the
lower margins discussed above.

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $959,000, or 14.0%, to $7.8 million for the
six month fiscal 1998 period from $6.9 million for the six month fiscal 1997
period. This increase is primarily due to the acquisition of ESI International
and investments in the Company's infrastructure to support its overall growth.
Selling, general and administrative expenses decreased as a percentage of
revenues to 17.0% for the six month fiscal 1998 period from 18.2% for the six
month fiscal 1997 period.

         Depreciation and Amortization. Depreciation and amortization increased
by $220,000, or 14.9%, to $1.7 million for the six month fiscal 1998 period from
$1.5 million for the six month fiscal 1997 period. This increase is primarily a
result of additional capital expenditures during the current fiscal year.
Depreciation and amortization decreased as a percentage of revenues to 3.7% for
the six month fiscal 1998 period from 3.9% for the six month fiscal 1997 period.
This decrease as a percentage of revenues is primarily due to revenue growth in
service lines for which less capital is required.

         Income from Operations. Income from operations increased $1.1 million,
or 24.2%, to $5.8 million for the six month fiscal 1998 period from $4.7 million
for the six month fiscal 1997 period. Income from operations also increased as a
percentage of revenues to 12.6% for the six month fiscal 1998 period from 12.4%
for the six month fiscal 1997 period. The increase in income from operations and
the improved operating margin are due to the factors discussed above.

                                                                         Page 13

<PAGE>   14

         Interest Expense, net. Following the Offering, the Company had no
borrowing under the Credit Facility with its banks. For this reason, interest
expense, net has been eliminated in the adjusted pro forma information to give
effect as if the repayment of the Company's debt obligations from the proceeds
of the Offering had occurred as of the beginning of each of the periods
presented. Actual interest expense before the adjusted pro forma elimination was
$551,000 for the six month fiscal 1998 period compared to $550,000 for the six
month fiscal 1997 period.

         Provision for Income Taxes. Prior to October 31, 1997, MPW was an S
Corporation for income tax purposes and did not record a provision for federal
and certain state income taxes. The provision for income taxes in the adjusted
pro forma information has been assumed to be at an effective rate of 40.0% for
each of the periods presented.

         Net Income and Net Income per Share. Net income increased $680,000, or
24.2%, to $3.5 million for the six month fiscal 1998 period from $2.8 million
for the six month fiscal 1997 period. Assuming dilution, net income per share
increased to $0.33 for the six month fiscal 1998 period from $0.26 for the six
month fiscal 1997 period. These increases are due to the factors discussed
above. Weighted average common shares outstanding used in the calculation of net
income per share assumes that the Offering and repurchase of minority interests
had occurred at the beginning of each of the periods presented.


QUARTERLY RESULTS AND SEASONALITY

         The Company's results of operations tend to vary seasonally, with the
least amount of revenues generated in the third quarter, higher revenues in the
second quarter and the greatest amount of revenues in the first and fourth
quarters. The Company's quarterly results of operations may fluctuate
significantly as a result of a number of factors over which the Company has no
control, including its customers' budgetary constraints, the timing and duration
of its customers' planned maintenance activities and shutdowns, changes in its
competitors pricing policies and general economic conditions. Also, certain
operating and fixed costs remain relatively constant throughout the fiscal year
that, when offset by differing levels of revenues, may result in fluctuations in
quarterly results.


LIQUIDITY AND CAPITAL RESOURCES

         The proceeds of the Offering received by the Company on December 5,
1997 were $30.3 million, net of underwriting discounts and other costs
associated with the Offering of $3.5 million. Of the proceeds, the Company used
$15.9 million to repay all of the outstanding debt under the Company's various
credit arrangements with its principal banks. The amount repaid included $3.0
million relating to the acquisition of ESI International that occurred during
the fiscal 1998 quarter. Additionally, $13.4 million was used to satisfy a
portion of the AAA Notes. As a result of these payments, and as of December 31,
1997, the Company had no borrowing from its principal banks.

         On January 6, 1998, the Company received an additional $2.0 million,
net of underwriting discounts of $150,000 from the exercise of a portion of the
underwriters' over-allotment option for 237,500 shares.

         The Company's total debt as of December 31, 1997, including current
maturities, was $9.7 million. Of this amount, $4.2 million is the amount of AAA
Notes due April 15, 1998, which the Company intends to satisfy primarily with
its cash on hand, including the proceeds from the partial exercise of the
over-allotment option. The remaining amount of AAA Notes is $3.6 million that 
will be redeemed by an entity controlled by the Company's principal shareholder
for the sale of a certain aircraft. The remaining amount of the Company's debt
of $1.9 million is related to the acquisition of ESI International.

         As of December 31, 1997, the Company had cash and cash equivalents of
$788,000 and working capital of $6.3 million. During the six month fiscal 1998
period, the Company had net cash provided by operating activities of $2.9
million, made capital investments of $2.5 million and made cash payments for the
acquisition of ESI International of $2.7 million, net of cash received.

         Effective December 10, 1997, the Company entered into the Credit
Facility with its principal banks. This Credit Facility provides the Company
with $50.0 million of credit availability for a three-year period. Under the
Credit Facility, $15.0 million is to be used for working capital needs, of which
$5.0 million may be used for letters of credit. The remaining $35.0 million is
available for use by the Company in growth initiatives such as capital
expenditure programs and 

                                                                         Page 14

<PAGE>   15

acquisitions. Borrowing under the Credit Facility is at rates, based on the
prime rate or LIBOR, that the Company believes to be very favorable.
Availability of borrowing is subject to the maintenance of a minimum level of
tangible net worth, certain levels of debt service coverage and maintenance of
a certain ratio of funded debt to equity that the Company believes are very
achievable. As of December 31, 1997, no amounts had been drawn on the Credit
Facility.

         The Company believes that cash on hand as of December 31, 1997, cash
received from the partial exercise of the over-allotment option, cash flow from
operations and available borrowing under the Credit Facility will be sufficient
to fund its currently planned capital projects and operations for at least the
next 24 months. The Company actively seeks opportunities to expand its business
operations. If acquisition opportunities develop, the Company believes that it
has adequate financing capacity in the Credit Facility. If acquisition
opportunities of significant size develop that would extend the Company's
borrowing beyond the capacity of the Credit Facility, the Company may be
required to seek additional financing.


INFLATION

         The effects of inflation on the Company's operations were not
significant during the periods presented in the Consolidated Financial
Statements.


ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

                  Not Applicable.


                          PART II. -- OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS.

                  None.

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS.

                  (a)      Not Applicable.

                  (b)      Not Applicable.

                  (c)      On October 30, 1997, each of the shareholders of MPW,
                           Monte R. Black, Susan K. Black and the Monte R. Black
                           and Susan K. Black 1994 Irrevocable Trust contributed
                           to the Company their shares of MPW for shares in the
                           Company on a one to one basis. The shareholders of
                           MPW received an aggregate of 1,550,000 shares of
                           common stock of the Company (subsequently subject to
                           a four to one stock split) reflecting their ownership
                           interests in the Company. The sale of the Company's
                           common stock to the shareholders of MPW was pursuant
                           to Section 4(2) of the Securities Act of 1933, as
                           amended (the "Act").

                           On October 31, 1997, pursuant to a Merger and
                           Purchase Agreement dated as of October 1, 1997 (the
                           "Agreement") among ESI and ESIN, the owners of ESI
                           and ESIN, the Company and MPW Filtration Acquisition
                           Corp. ("Filtration"), ESI merged with and into
                           Filtration (the "Merger"), and the Company and
                           Filtration purchased membership interests of ESIN. As
                           partial consideration for the Merger, the Company
                           issued 96,000 shares of its common stock to certain
                           of the owners of ESI as follows: 40,000 shares to Mr.
                           Barry Thiel, 24,100 shares to Mr. Jerry Broyles,
                           11,900 shares to Mr. Dan Jones and 10,000 shares to
                           each of Mr. George Sullivan and Mr. Kelly Six. Each
                           of the owners were officers and directors of ESI and
                           have entered into employment and non-competition
                           agreements with the Company and the surviving
                           corporation in the Merger. The number of shares of
                           the Company's common stock issued to such owners is
                           subject to adjustment upon completion of the Offering
                           based on an average trading price of the Company's
                           common

                                                                         Page 15

<PAGE>   16

                           stock during the 90-day period following the
                           Offering. Pursuant to an Escrow Agreement entered
                           into in connection with the consummation of the
                           transaction contemplated by the Agreement, each of
                           the owner's shares are held in escrow for a minimum  
                           period of at least one year, will be subject to
                           repurchase rights of the Company on certain events   
                           and will be available for satisfaction of certain
                           indemnity claims that the Company may have against
                           such owners. The issuance of the shares of common
                           stock pursuant to the Agreement was made pursuant to
                           Rule 504 of Regulation D of the Act.

                           On December 5, 1997, the Company purchased the
                           remaining minority shareholders' interests in
                           Aquatech for an aggregate purchase price of $678,000,
                           at which time Aquatech became a wholly-owned
                           subsidiary of the Company. Pursuant to an agreement
                           between the Company and Robert C. Greenwood, the
                           President and Chief Executive Officer of Aquatech
                           ("Greenwood") and an agreement between the Company
                           and James A. Leonard, the Vice President of Aquatech
                           ("Leonard"), the purchase price was paid as follows:
                           (i) $339,000 in cash to Leonard and (ii) 37,667
                           shares of common stock of the Company to Greenwood.
                           The issuance of the Company's common stock to
                           Greenwood was pursuant to Section 4(2) of the Act.

                  (d)      In connection with the Offering, the Company filed a
                           Registration Statement on Form S-1 (File No.
                           333-36887) whereby the Company registered shares of
                           its common stock, without par value. The Registration
                           Statement was declared effective by the Securities
                           and Exchange Commission on December 1, 1997 (the
                           "Effective Date"). The Offering commenced on December
                           2, 1997 and was terminated on January 2, 1998. All of
                           the shares registered in connection with the
                           Offering, excluding 325,000 shares of the
                           underwriters' over-allotment, have been sold. The
                           managing underwriters for the Offering were Raymond
                           James & Associates, Inc. and Robert W. Baird & Co.
                           Incorporated.

                           In connection with the Offering, the Company issued
                           3,987,500 shares (including the partial exercise of
                           the underwriters' over-allotment option) of its
                           common stock to the public at a price of $9.00 per
                           share. The Company received net proceeds from the
                           Offering of $32,238,000 after deducting expenses of
                           $1,138,000. Since the Effective Date, the Company has
                           (i) repaid all of the outstanding debt of $15,883,000
                           under the Company's various credit arrangements with
                           its principal banks, (ii) satisfied a portion of the
                           AAA Notes equal to $13,400,000 and (iii) paid
                           $339,000 as partial consideration for the purchase of
                           the remaining minority shareholders' interests in
                           Aquatech. The payments used to partially repay the 
                           AAA Notes were made to Monte R. Black, the Company's
                           Chairman and Chief Executive Officer, Susan K. 
                           Black, Mr. Black's wife, and a trust for the benefit
                           of Mr. Black's children.

                           The Credit Facility entered into by the Company
                           includes certain covenants that, among other things,
                           (i) restrict dividend or other distributions by the
                           Company, (ii) limit the Company's ability to become
                           liable on certain forms of indebtedness generally
                           outside the normal course of the Company's business,
                           (iii) provide that the Company's consolidated
                           tangible net worth (as defined in the Credit
                           Facility) will not be less than certain specified
                           amounts and (iv) provide that the Company's annual
                           capital expenditures will not exceed certain
                           specified amounts.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES.

                  Not Applicable.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

                  (a)      On December 1, 1997, a special meeting of the
                           shareholders of the Company was held at the corporate
                           offices of the Company.

                  (b)      Not Applicable.


                                                                         Page 16

<PAGE>   17


                  (c)      At the special meeting of shareholders, the
                           shareholders voted to approve the Company's 1997
                           Stock Option Plan and to approve the indemnification
                           agreements between the Company and its directors and
                           executive officers. The voting was as follows:

<TABLE>
<CAPTION>

                                                                   Votes         Votes
                                                                    For         Against     Abstentions
                                                                ------------- ------------- -------------

                                <S>                              <C>                     <C>           <C>        
                                 1997 Stock Option Plan           5,116,216              0             0

                                 Indemnification agreements       5,116,216              0             0
</TABLE>

                  (d)      Not Applicable.

ITEM 5.           OTHER INFORMATION.

                  None.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits.

                           3(a)     Amended and Restated Articles of
                                    Incorporation of the Company effective
                                    October 30, 1997 (filed as Exhibit 3(a) to
                                    the Company's Registration Statement, and
                                    incorporated herein by reference)

                           3(b)     Amended and Restated Code of Regulations of
                                    the Company effective October 30, 1997
                                    (filed as Exhibit 3(b) to the Company's
                                    Registration Statement and incorporated
                                    herein by reference)

                           4(a)     Revolving Credit and Term Loan Agreement
                                    among the Company and its subsidiaries and
                                    affiliates, Bank One, NA, and National City
                                    Bank of Columbus

                           4(b)     First Amendment to Revolving Credit and Term
                                    Loan Agreement among the Company and its
                                    subsidiaries and affiliates, Bank One, NA,
                                    and National City Bank of Columbus

                           10(a)    1997 Stock Option Plan

                           10(b)    Lease for Hebron, Ohio facility

                           10(c)    Lease for Newark, Ohio facility

                           10(d)    First Lease Amendment for Chesterfield,
                                    Michigan facility

                           10(e)    Aircraft Purchase Agreement

                           10(f)    Aircraft Lease 

                           27       Financial Data Schedule

                  (b)      No reports on Form 8-K were filed during the period.

                                                                         Page 17

<PAGE>   18


                                   SIGNATURES

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

                            MPW INDUSTRIAL SERVICES GROUP, INC.,
                            an Ohio corporation


Dated: February 11, 1998    By: /s/ Daniel P. Buettin
      ------------------       ---------------------------
                                Daniel P. Buettin
                                Vice President, Chief Financial Officer and
                                Secretary
                                (on behalf of the Registrant and as Principal
                                    Financial Officer)

                                                                         Page 18


<PAGE>   19


                                  EXHIBIT INDEX


   Exhibit
    Number      Description of Exhibit
    ------      ----------------------

     3(a)       Amended and Restated Articles of Incorporation of the Company
                effective October 30, 1997 (filed as Exhibit 3(a) to the
                Company's Form S-1 (File No. 333-36887) ("Registration
                Statement"), and incorporated herein by reference)

     3(b)       Amended and Restated Code of Regulations of the Company
                effective October 30, 1997 (filed as Exhibit 3(b) to the
                Company's Registration Statement and incorporated herein by
                reference)

     4(a)       Revolving Credit and Term Loan Agreement among the Company and
                its subsidiaries and affiliates, Bank One, NA, and National City
                Bank of Columbus

     4(b)       First Amendment to Revolving Credit and Term Loan Agreement
                among the Company and its subsidiaries and affiliates, Bank One,
                NA, and National City Bank of Columbus

     10(a)      1997 Stock Option Plan

     10(b)      Lease for Hebron, Ohio facility

     10(c)      Lease for Newark, Ohio facility

     10(d)      First Lease Amendment for Chesterfield, Michigan facility

     10(e)      Aircraft Purchase Agreement 

     10(f)      Aircraft Lease

     27         Financial Data Schedule


                                                                         Page 19