<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
---  EXCHANGE ACT OF 1934
     FOR THE QUARTERLY PERIOD ENDED MAY 1, 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 333-38223

                             ARGO-TECH CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


            DELAWARE                                  31-1521125
 (STATE OR OTHER JURISDICTION OF                   (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)                 IDENTIFICATION NO.)


        23555 EUCLID AVENUE
          CLEVELAND, OHIO                               44117
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)              (ZIP CODE)

(216) 692-6000
(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.  X   YES    NO
                                                          ---      ---

     ALL OF THE OUTSTANDING CAPITAL STOCK OF THE REGISTRANT IS HELD BY AT
     HOLDINGS CORPORATION.

     AS OF JUNE 1, 1999, 1 SHARE OF THE REGISTRANT'S COMMON STOCK, $.01 PAR
     VALUE, WAS OUTSTANDING.






<PAGE>   2



                                      INDEX

<TABLE>
<CAPTION>

                                                                                        Page No.
<S>                                                                                     <C>
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

     Consolidated Balance Sheets as of May 1, 1999 and October 31, 1998                      3

     Consolidated Statements of Operations for the 26 weeks and 13 weeks ended
          May 1, 1999 and the 27 weeks and 13 weeks ended May 2, 1998                        4

     Consolidated Statements of Cash Flows for the 26 weeks ended May 1, 1999
         and the 27 weeks ended May 2, 1998                                                  5

     Notes to Consolidated Financial Statements                                          6 - 8

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
               of Operations                                                            8 - 12

Item 3 - Quantitative and Qualitative Disclosure about Market Risk                          12

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings                                                                  13

Item 6 - Exhibits and Reports on Form 8-K                                                   13

Signature                                                                                   14
</TABLE>


<PAGE>   3

PART I - FINANCIAL INFORMATION
ARGO-TECH CORPORATION AND SUBSIDIARIES
(A WHOLLY-OWNED SUBSIDIARY OF AT HOLDINGS CORPORATION)


CONSOLIDATED BALANCE SHEETS
MAY 1, 1999 AND OCTOBER 31, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                      1999              1998
                                                                   ---------         ---------
                                                                  (Unaudited)
<S>                                                                <C>               <C>
ASSETS

CURRENT ASSETS:
     Cash and cash equivalents                                     $   3,629         $  11,578
     Receivables, net                                                 24,242            23,866
     Inventories                                                      34,397            29,528
     Deferred income taxes and prepaid expenses                        5,787             5,353
                                                                   ---------         ---------
                Total current assets                                  68,055            70,325
                                                                   ---------         ---------

PROPERTY AND EQUIPMENT, net of
     accumulated depreciation                                         35,730            35,982

GOODWILL, net of accumulated amortization                            116,028           117,761

INTANGIBLE ASSETS                                                     54,209            56,223

DEFERRED FINANCING AND OTHER ASSETS                                   17,011             7,904
                                                                   ---------         ---------
Total Assets                                                       $ 291,033         $ 288,195
                                                                   =========         =========

LIABILITIES

CURRENT LIABILITIES:
     Current portion of long-term debt                             $   8,236         $   5,946
     Accounts payable                                                  5,310             7,671
     Accrued liabilities                                              19,912            19,791
                                                                   ---------         ---------
                Total current liabilities                             33,458            33,408
                                                                   ---------         ---------

LONG-TERM DEBT, net of current maturities                            269,088           221,440

OTHER NONCURRENT LIABILITIES                                          29,662            30,685
                                                                   ---------         ---------
                Total  Liabilities                                   332,208           285,533
                                                                   ---------         ---------

REDEEMABLE COMMON STOCK                                                                  6,713

REDEEMABLE ESOP STOCK                                                 50,836            41,475
  Unearned ESOP stock                                                 (8,400)           (9,240)
                                                                   ---------         ---------
                                                                      42,436            32,235
SHAREHOLDERS' EQUITY/(DEFICIENCY):
     Common Stock, $.01 par value, authorized 3,000 shares;
       1 share issued and outstanding
     Paid-in capital
     Accumulated deficit                                             (83,611)          (36,286)
                                                                   ---------         ---------
                Total shareholders' equity/(deficiency)              (83,611)          (36,286)
                                                                   ---------         ---------
Total Liabilities and Shareholders' Equity/(Deficiency)            $ 291,033         $ 288,195
                                                                   =========         =========
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of this statement.

<PAGE>   4
ARGO-TECH CORPORATION AND SUBSIDIARIES
(A WHOLLY-OWNED SUBSIDIARY OF AT HOLDINGS CORPORATION)

CONSOLIDATED STATEMENTS OF OPERATIONS


(In thousands)
UNAUDITED

<TABLE>
<CAPTION>

                                           26 Weeks       27 Weeks               13 Weeks Ended
                                            Ended           Ended
                                         May 1, 1999      May 2, 1998      May 1, 1999    May 2, 1998
                                         -----------      -----------      -----------    -----------

<S>                                        <C>              <C>              <C>             <C>
Net revenues                               $ 84,200         $ 85,835         $ 44,057        $ 41,373
Cost of revenues                             45,351           55,500           23,358          28,018
                                           -------------------------         -------------------------
      Gross profit                           38,849           30,335           20,699          13,355
                                           -------------------------         -------------------------
Selling, general and administrative          14,581           11,533            5,785           6,134
Research and development                      4,455            3,091            2,194           1,351
Amortization of intangible assets             3,740            3,755            1,871           1,823
                                           -------------------------         -------------------------
      Operating expenses                     22,776           18,379            9,850           9,308
                                           -------------------------         -------------------------
Income from operations                       16,073           11,956           10,849           4,047
Interest expense                             11,966           11,337            6,296           5,253
Other, net                                     (181)            (319)              41             (65)
                                           -------------------------         -------------------------

Income/(loss) before income taxes             4,288              938            4,512          (1,141)
                                           -------------------------         -------------------------
Income tax provision/(benefit)                2,566              477            1,589            (166)
                                           -------------------------         -------------------------
Net income/(loss)                          $  1,722         $    461         $  2,923        $   (975)
                                           =========================         =========================
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of this statement.

<PAGE>   5
ARGO-TECH CORPORATION AND SUBSIDIARIES
(A WHOLLY-OWNED SUBSIDIARY OF AT HOLDINGS CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED MAY 1, 1999 AND 27 WEEKS ENDED MAY 2, 1998

(In thousands)
UNAUDITED

<TABLE>
<CAPTION>
                                                                  1999             1998
                                                                --------         --------
<S>                                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                   $  1,722         $    461
   Adjustments to reconcile net income to net cash
     provided by operating activities:
   Depreciation                                                    3,304            3,399
   Amortization of goodwill and deferred financing costs           4,684            4,267
   Accretion of bonds from stock repurchase                           78
   Compensation expense recognized in connection with
     employee stock ownership plan                                 2,947            2,057
   Compensation expense recognized in connection with
     stock appreciation rights and stock options                   2,771
   Amortization of inventory step-up                                                8,976
   Deferred income taxes                                          (1,566)          (4,482)


   Changes in operating assets and liabilities:
      Receivables                                                   (376)           1,477
      Inventories                                                 (4,869)          (3,412)
      Prepaid expenses                                              (405)              59
      Accounts payable                                            (2,361)            (423)
      Accrued and other liabilities                                1,306              609
      Other, net                                                                      136
                                                                --------         --------

   Net cash provided by operating activities                       7,235           13,124
                                                                --------         --------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Capital expenditures                                           (3,052)          (1,061)
                                                                --------         --------
   Net cash used in investing activities                          (3,052)          (1,061)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Sale of Senior Subordinated Notes                              52,250
   Repayment of long-term debt                                    (2,390)         (19,131)
   Payment of financing related fees                             (10,044)            (372)
   Dividend                                                      (51,948)
                                                                --------         --------
   Net cash used in financing activities                         (12,132)         (19,503)

CASH AND CASH EQUIVALENTS:
Net decrease for the period                                       (7,949)          (7,440)
Balance, Beginning of period                                      11,578            9,361
                                                                --------         --------

Balance, End of period                                          $  3,629         $  1,921
                                                                ========         ========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of this statement.





<PAGE>   6


ARGO-TECH CORPORATION AND SUBSIDIARIES
(A WHOLLY-OWNED SUBSIDIARY OF AT HOLDINGS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 26 WEEKS ENDED MAY 1, 1999 AND 27 WEEKS ENDED MAY 2, 1998
(UNAUDITED)

1.  BASIS OF PRESENTATION

    The principal operations of Argo-Tech Corporation (A Wholly-Owned Subsidiary
    of AT Holdings Corporation) and its Subsidiaries include the design,
    manufacture and distribution of aviation products, primarily aircraft fuel
    pumps, throughout the world. In addition, Argo-Tech leases a portion of its
    manufacturing facility to other parties. Argo-Tech's fiscal year ends on the
    last Saturday in October. Argo-Tech is obligated to fulfill certain
    obligations of AT Holdings Corporation. As a result, those obligations have
    been reflected in its financial statements. Certain reclassifications have
    been made in the prior years' financial statements to conform to the current
    year presentation.

    Argo-Tech Corporation is a parent, holding company with four wholly-owned
    operating guarantor subsidiaries, Argo-Tech Corporation (HBP), Argo-Tech
    Corporation (OEM), Argo-Tech Corporation (Aftermarket) and J.C. Carter
    Company, Inc. Argo-Tech has no outside assets, liabilities or operations
    apart from its wholly-owned subsidiaries. The Senior Subordinated Notes are
    fully, unconditionally, jointly and severally guaranteed by the guarantor
    subsidiaries, and therefore, separate financial statements of the guarantor
    subsidiaries will not be presented. Management has determined that the
    information presented by such separate financial statements of the guarantor
    subsidiaries is not material to investors. All of Argo-Tech's subsidiaries
    are guarantors except two wholly-owned subsidiaries that have
    inconsequential assets, liabilities and equity. Their only operations are
    the result of intercompany activity which is immediately dividended back to
    Argo-Tech.

2.  UNAUDITED FINANCIAL INFORMATION

    The financial information included herein is unaudited; however, the
    information reflects all adjustments (consisting solely of normal recurring
    adjustments) that are, in the opinion of management, necessary for a fair
    presentation of Argo-Tech's financial position and results of operations and
    cash flows for the interim periods presented. The results of operations for
    the 26 weeks and 13 weeks ended May 1, 1999 are not necessarily indicative
    of the results to be expected for the full year.

3.  INVENTORIES

    Inventories are stated at standard cost which approximates the costs which
    would be determined using the first-in, first-out (FIFO) method. The
    recorded value of inventories is not in excess of market value. Inventories
    consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                          May 1,     October 31,
                                                           1999        1998

<S>                                                     <C>           <C>
         Finished goods                                 $  2,280      $  2,289
         Work-in-process and purchased parts              23,304        18,668
         Raw materials and supplies                       12,298        12,037
                                                        --------      --------
                  Total                                   37,882        32,994
         Reserve for excess and obsolete inventory        (3,485)       (3,466)
                                                        --------      --------

         Inventories - net                              $ 34,397      $ 29,528
                                                        ========      ========
</TABLE>


<PAGE>   7

    Inventory is recorded net of progress payments received of approximately
    $1.2 and $1.4 million at May 1, 1999 and October 31, 1998, respectively.

4.  CONTINGENCIES

    Legal Matters - In October 1996, J.C. Carter Company was named as a
    respondent in a petition filed in federal district court in Santa Ana,
    California by Alsthom, a French shipbuilding concern, to enforce an
    international arbitration award rendered in Paris, France, in favor of
    Alsthom and against an entity identified as J.C. Carter Company. Argo-Tech
    believes that J.C. Carter is not the J.C. Carter Company referenced in the
    arbitration award. On February 23, 1999, the federal district court granted
    Alsthom a Motion for Summary Judgment against Argo-Tech's J.C. Carter
    subsidiary to enforce the international arbitration award, for approximately
    $11.4 million plus interest with respect to a product liability case
    involving industrial marine pump products. The district court has ordered,
    however, that judgment shall not be entered at this time because of the
    claims against the remaining parties to the action. Argo-Tech intends to
    seek reconsideration of the district court's decision, and when and if an
    adverse judgment is entered against it, to appeal the judgment and to
    vigorously pursue its claims for declaratory relief and equitable
    indemnification against the prior owners of assets relating to the
    arbitration. In the opinion of Argo-Tech's management, after reviewing the
    information which is currently available with respect to this matter and
    consulting with its legal counsel, any liability which may ultimately be
    incurred with respect to this matter is not expected to materially affect
    Argo-Tech's financial condition, results of operations or liquidity.

    Environmental Matters - The soil and groundwater at Argo-Tech's Euclid, Ohio
    facility and the Costa Mesa, California facility contain elevated levels of
    certain contaminants which are currently in the process of being removed
    and/or remediated. Because Argo-Tech has certain indemnification rights from
    former owners of the facilities for liabilities arising from these or other
    environmental matters, in the opinion of Argo-Tech's management, the
    ultimate outcome is not expected to materially affect its financial
    condition, results of operations or liquidity.

    Other Matters - Argo-Tech is subject to various legal actions and other
    contingencies. In the opinion of Argo-Tech's management, after reviewing the
    information which is currently available with respect to such matters and
    consulting with Argo-Tech's legal counsel, any liability which may
    ultimately be incurred with respect to these additional matters is not
    expected to materially affect Argo-Tech's financial condition, results of
    operations or liquidity.

5.   RECENT RECAPITALIZATION

     On December 17, 1998, AT Holdings entered into an agreement to repurchase
     639,510 shares of stock from AT Holdings, LLC, the company's largest
     shareholder for $79.4 million plus transaction expenses. The transaction,
     which was consummated on January 4, 1999, was funded by the proceeds of
     Argo-Tech's issuance of $55.0 million in principal amount of 8 5/8% Senior
     Subordinated Notes, issued at a 5% discount, due 2007 in a private offering
     on December 17, 1998, $50.0 million of which was dividended to AT Holdings;
     the proceeds of the issuance by AT Holdings of 30,000 shares of its
     preferred stock to Chase Venture Capital Associates, L.P.; and cash. As a
     result of this recapitalization, Argo-Tech's Employee Stock Ownership Plan
     became AT Holdings' majority stockholder. In addition, AT Holdings amended
     its Certificate of Incorporation to provide for the issuance of the
     preferred stock and Argo-Tech amended its existing credit agreement and
     indenture to permit the issuance of the Notes, payment of the dividend and
     amendment of the Supplemental Employee Retirement Plan and the 1997 Stock
     Appreciation Rights Plan. The Stock Appreciation Rights Plan provided for
     grants of up to 34,450 stock appreciation rights, 17,225 of which were
     granted in fiscal years 1997 and 1998. The remaining 17,225 stock
     appreciation rights were granted in November, 1998. In connection with the
     stock repurchase, all stock appreciation rights became fully vested in
     accordance with their terms and were converted into fully vested stock
     options. In addition, all granted options under the 1991 Performance Stock
     Option Plan and 1991 Management Incentive Stock Option Plan, to the extent
     not vested, became fully vested in accordance with

<PAGE>   8
     their terms on January 4, 1999. The vesting of the stock appreciation
     rights and stock options resulted in a charge to pre-tax earnings of $2.8
     million. In connection with the recapitalization, management's right to
     require Argo-Tech to repurchase shares of redeemable common stock was
     eliminated.



ITEM 2.

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

         Argo-Tech Corporation is a leading designer, manufacturer and servicer
of high performance fuel flow devices for the aerospace industry providing a
broad range of products and services to substantially all commercial and
domestic military engine and airframe manufacturers, to airlines worldwide and
to the U.S. and certain foreign militaries. Argo-Tech is the world's leading
supplier of main engine fuel pumps to the commercial aircraft industry and a
leading supplier of airframe products and aerial refueling systems. Argo-Tech is
also a leading manufacturer of components for ground fueling systems.

         The following is management's discussion and analysis of certain
significant factors which have affected Argo-Tech's financial position and
operating results during the periods presented in the accompanying condensed
consolidated financial statements. Argo-Tech's fiscal year ends on the last
Saturday of October and is identified according to the calendar year in which it
ends.

RESULTS OF OPERATIONS FOR THE 13 WEEK PERIOD ENDED MAY 1, 1999 COMPARED WITH THE
13 WEEK PERIOD ENDED MAY 2, 1998

         Net revenues for the 13 week period ended May 1, 1999 increased $2.7
million, or 6.5%, to $44.1 million from $41.4 million for the 13 week period
ended May 2, 1998. This increase was primarily due to an increase in aerospace
revenues of $2.4 million and a $0.3 million increase in industrial and other
revenues. The increase in aerospace revenues was attributable to an increase of
$2.8 million of commercial revenues and a decrease of $0.4 million in military
revenues. The commercial OEM revenues increased $0.2 million, or 2.0%, to $10.3
million and commercial aftermarket revenues increased $2.6 million, or 14.3% to
$20.8 million in the 13 week period ended May 1, 1999. Commercial aftermarket
revenues were higher primarily due to an increase of overhaul and repair
services of $0.8 million and an increase in the demand for spare parts of $1.8
million. Military revenues decreased $0.4 million primarily due to decreased
F-15 foreign military sales. Industrial revenues included increased ground
fueling revenues of $0.7 million and increased rental revenues at Heritage
Business Park of $0.1 million, offset by a reduction in demand for industrial
marine products of $0.5 million.

         Gross profit for the 13 week period ended May 1, 1999 increased $7.3
million, or 54.5%, to $20.7 million from $13.4 million in the 13 week period
ended May 2, 1998 due to the non-recurrence of $4.5 million of amortization
related to the step-up of inventory to fair market value at J.C. Carter that
occurred in the second quarter of 1998 and increased aerospace aftermarket
revenues offset by higher non-cash Employee Stock Ownership Plan compensation
expense. Gross margin for the 13 week period ended May 1, 1999 increased to
46.9% from 32.3% for the 13 week period ended May 2, 1998 due to the
non-recurrence of the amortization related to the step-up of Carter inventory to
fair value and the higher margin sales mix of aerospace products. Excluding the
$4.5 million charge for amortization related to the step-up of inventory to fair
value in connection with the acquisition, gross margin for the 13 week period
ended May 2, 1998 was 43.2%.

         Operating expenses for the 13 week period ended May 1, 1999 increased
$0.6 million, or 6.5%, to $9.9 million from $9.3 million in the 13 week period
ended May 2, 1998. This increase is primarily attributable to a $0.8 million
increase in research and development expense offset by a $0.2 million decrease
in general and administrative expenses attributable to non-recurring acquisition
and stock appreciation rights plan

<PAGE>   9

expenses offset by higher miscellaneous corporate expenses. Operating expenses
as a percent of revenues were 22.4% for the 13 week periods ended May 1, 1999
and May 2, 1998, respectively.

         Income from operations for the 13 week period ended May 1, 1999
increased $6.7 million, or 163.4%, to $10.8 million from $4.1 million in the 13
week period ended May 2, 1998. This increase was due to higher aerospace
revenues and the non-recurrence of $4.5 million of amortization related to the
step-up of inventory in 1998. As a percent of revenues, income from operations
for the 13 week period ended May 1, 1999 increased to 24.5% from 9.9% for the 13
week period ended May 2, 1998. Excluding the $4.5 million charge for
amortization related to the step-up of inventory to fair value in connection
with the acquisition of Carter, income from operations as a percent of revenues
for the 13 week period ended May 2, 1998 was 20.8%.

         Interest expense for the 13 week period ended May 1, 1999 increased
$1.1 million, or 21.2%, to $6.3 million from $5.2 million for the 13 week period
ended May 2, 1998 primarily due to the issuance of the $55.0 million Senior
Subordinated Notes in connection with the repurchase of common stock of AT
Holdings from its largest shareholder on January 4, 1999 partially offset by a
lower level of term loans.

         The income tax provision for the 13 week period ended May 1, 1999
increased $1.8 million to $1.6 million from a tax benefit of $0.2 million in the
13 week period ended May 2, 1998. This increase is due to a pre-tax income of
$4.5 million for the 13 week period ended May 1, 1999 as compared to a loss of
$1.1 million for the 13 week period ended May 2, 1998.

         Net income for the 13 week period ended May 1, 1999 increased $3.9
million to $2.9 million from a loss of $1.0 million for the 13 week period ended
May 2, 1998 primarily due to the revenue and expense factors discussed above.

RESULTS OF OPERATIONS FOR THE 26 WEEK PERIOD ENDED MAY 1, 1999 COMPARED WITH THE
27 WEEK PERIOD ENDED MAY 2, 1998

         Net revenues for the 26 week period ended May 1, 1999 decreased $1.6
million, or 1.9%, to $84.2 million from $85.8 million for the 27 week period
ended May 2, 1998. This decrease was primarily due to a decrease in aerospace
revenues of $2.2 million offset by a $0.6 million increase in industrial and
other revenues. The decrease in aerospace revenues was attributable to a
decrease of $0.7 million of commercial revenues and a decrease of $1.5 million
in military revenues. The commercial OEM revenues decreased $0.2 million, or
1.0%, to $19.1 million and commercial aftermarket revenues decreased $0.5
million, or 1.2% to $40.2 million in the 26 week period ended May 1, 1999.
Commercial OEM and aftermarket revenues were lower primarily due to one less
week in the period as compared to last year. Military revenues decreased $1.5
million primarily due to decreased F-15 foreign military sales. Industrial
revenues included increased ground fueling revenues of $1.3 million and
increased rental revenues at Heritage Business Park of $0.2 million, offset by a
reduction in demand for industrial marine products of $0.9 million.

         Gross profit for the 26 week period ended May 1, 1999 increased $8.5
million, or 28.1%, to $38.8 million from $30.3 million in the 27 week period
ended May 2, 1998 primarily due to the non-recurrence of $9.0 million of
amortization related to the step-up of inventory to fair market value at J.C.
Carter that occurred in the first half of 1998 offset by higher non-cash
Employee Stock Ownership Plan compensation expense. Gross margin for the 26 week
period ended May 1, 1999 increased to 46.1% from 35.3% for the 27 week period
ended May 2, 1998 primarily due to the non-recurrence of the amortization
related to the step-up of Carter inventory to fair market value. Excluding the
$9.0 million charge for amortization related to the step-up of inventory to fair
market value in connection with the acquisition, gross margin for the 27 week
period ended May 2, 1998 was 45.8%.

         Operating expenses for the 26 week period ended May 1, 1999 increased
$4.5 million, or 24.6%, to $22.8 million from $18.3 million in the 27 week
period ended May 2, 1998. This increase is primarily attributable to non-cash
compensation expense of $2.8 million associated with the vesting of stock
options and stock appreciation rights in connection with the repurchase of
common stock from AT Holdings largest

<PAGE>   10

shareholder on January 4, 1999 and a $1.4 million increase in research and
development expense. Operating expenses as a percent of revenues increased to
27.1% for the 26 week period ended May 1, 1999 from 21.3% for the 27 week period
ended May 2, 1998. Excluding the $2.8 million non-recurring non-cash
compensation expense, operating expenses as a percent of sales were 23.8% for
the 26 week period ended May 1, 1999.

         Income from operations for the 26 week period ended May 1, 1999
increased $4.0 million, or 33.3%, to $16.0 million from $12.0 million in the 27
week period ended May 2, 1998. This increase was due to the non-recurrence of
$9.0 million of amortization related to the step-up of inventory in 1998 offset
by non-cash compensation expense related to the vesting of the stock options and
stock appreciation rights in connection with the stock repurchase and increased
research and development expense. As a percent of revenues, income from
operations for the 26 week period ended May 1, 1999 increased to 19.0% from
14.0% for the 27 week period ended May 2, 1998.

         Interest expense for the 26 week period ended May 1, 1999 increased
$0.7 million, or 6.2%, to $12.0 million from $11.3 million for the 27 week
period ended May 2, 1998 primarily due to the issuance of the $55.0 million
Senior Subordinated Notes in connection with the stock repurchase on January 4,
1999 partially offset by a lower level of term loans.

         The income tax provision for the 26 week period ended May 1, 1999
increased $2.1 million to $2.6 million from $0.5 million in the 27 week period
ended May 2, 1998. This increase is due to a pre-tax income of $4.3 million for
the 26 week period ended May 1, 1999 as compared to $0.9 million for the 27 week
period ended May 2, 1998 and the effect of the non-deductible compensation
expense associated with the vesting of stock options and stock appreciation
rights.

         Net income for the 26 week period ended May 1, 1999 increased $1.2
million to $1.7 million from $0.5 million for the 27 week period ended May 2,
1998 primarily due to the revenue and expense factors discussed above.

FLUCTUATIONS OF OPERATING RESULTS;  LIMITATION OF QUARTERLY COMPARISONS

         Argo-Tech's results of operations are subject to fluctuations from
quarter to quarter due to changes in demand for its products, changes in product
mix and other factors. Demand for its products can vary from quarter to quarter
due to changes in demand for, and timing of deliveries of, OEM, aftermarket and
military products and services. In particular, the timing of Argo-Tech's
aftermarket sales tends not to occur on a predictable schedule and, furthermore,
the sales tend to occur in large quantities which can significantly impact
quarterly comparisons. Accordingly, year-to-year and quarter-to-quarter
comparisons of quarterly results may not be meaningful, and quarterly results
during the year are not necessarily indicative of the results that may be
expected for any future period or for the entire year.

         In addition, on September 26, 1997, Argo-Tech acquired all of the
outstanding shares of J.C. Carter Company, Inc. for $107.6 million, including
acquisition costs. Carter's inventory was increased by $12.2 million to record
inventories at their fair value as of the date of acquisition in accordance with
Accounting Principles Board Opinion No. 16 "Business Combinations." Based on
Carter's inventory turnover rate, $4.5 million, $4.5 million and $1.7 million of
this amount is included in cost of revenues for the first, second and third
quarters of 1998, respectively.


LIQUIDITY AND CAPITAL RESOURCES

         Argo-Tech is a holding company that receives all of its operating
income from its subsidiaries. As a result, Argo-Tech's primary source of
liquidity for conducting business activities and servicing its indebtedness has
been cash flows from operating activities.

<PAGE>   11

         Cash for the period ended May 1, 1999 decreased $7.9 million to $3.6
million, primarily due to the payment of fees associated with the stock
repurchase, the scheduled repayment of term loans, an increase in inventory and
a decrease in accounts payable offset by improved operating results and a
favorable change in accrued and other liabilities.

         Capital expenditures for the 26 weeks ended May 1, 1999 totaled $3.1
million compared to $1.1 million for the 27 weeks ended May 2, 1998. Argo-Tech
expects to incur capital expenditures of approximately $3.2 million for the
remainder of fiscal year 1999, related to the continued maintenance of
facilities, equipment and systems to support current operating activities.

         Long-term debt at May 1, 1999 consisted of $84.9 million principal
amount of term loans and $192.3 million principal amount of Senior Subordinated
Notes. In December 1998, Argo-Tech issued $55.0 million in principal amount of
8-5/8% Senior Subordinated Notes, issued at a 5% discount, due 2007 in a private
offering. The proceeds of the notes were used to pay a dividend of $50.0 million
to AT Holdings. On January 4, 1999, this dividend was used, together with the
proceeds of AT Holdings' sale of its preferred stock and cash on hand, to
finance AT Holdings' repurchase of 639,510 shares of its common stock held by
its largest stockholder, AT Holdings, LLC, and to pay fees and expenses incurred
in connection with those transactions. Scheduled payments of $2.3 million were
made on the term loans. Argo-Tech has available, after $0.3 million of letters
of credit, a $19.7 million revolving credit facility. As of May 1, 1999, there
were no borrowings on the revolving credit facility. The credit facility
contains no restrictions on the ability of Argo-Tech's subsidiaries to make
distributions to Argo-Tech.


YEAR 2000

In June 1997, Argo-Tech initiated activities to identify actions necessary to
become Year 2000 compliant. The major activities included an inventory of
computer related hardware and software, problem identification and solution
definition, implementation and testing. Where necessary, Argo-Tech has
implemented these actions to provide uninterrupted, normal operations of
critical business systems, including non-information technology systems with
embedded technology, before, during and after the Year 2000. For both
information technology and non-information technology systems, inventory
activity is completed and problem identification and solution definition is
approximately 95% complete. Significant progress has been achieved in the
implementation phase and testing has begun. Argo-Tech plans to complete
implementation and testing on approximately 88% of its information technology
systems applications by the end of June 1999. The remaining applicable
information technology systems efforts are scheduled for completion, on or about
September 1999. Argo-Tech plans to complete the effort that it believes is
necessary and prudent to adequately address potential Year 2000 issues on
approximately 50% of its non-information technology systems by the end of June
1999, with the remaining projects scheduled for completion on or about the end
of November 1999. Argo-Tech believes this schedule will allow it adequate time
to assess and correct any significant issues that may materialize or to develop
an appropriate contingency plan, if necessary. To date, no issues have arisen
that would require a contingency plan.

Argo-Tech is utilizing its existing internal resources to make the required
modifications and upgrades necessary to achieve Year 2000 compliance. These
internal costs, which are principally comprised of payroll and related costs for
information systems personnel, are not separately tracked. Substantially all of
the required upgrades are being done in conjunction with normal upgrades and
conversions of Argo-Tech's systems and are being funded by cash generated from
operations. The assignment of internal information system personnel to the Year
2000 problem has not materially delayed or impacted other information system
projects. Purchased hardware and software is being capitalized or expensed in
accordance with normal policy. To date, Argo-Tech has spent $1.0 million on
upgrading its computer and information technology systems, and expects to spend
an additional $0.8 million to complete the project.

Argo-Tech is also actively working with its suppliers to assess their compliance
efforts, as well as Argo-Tech's potential exposure to the failure of such
suppliers to become Year 2000 compliant. Through the use of

<PAGE>   12
questionnaires, Argo-Tech's purchasing department initiated an effort in March
of 1998 to evaluate the Year 2000 readiness of its vendors and suppliers.
Argo-Tech has received responses from 76% of its key suppliers, which include
product and non-product suppliers. A response analysis and follow up effort is
now in progress. While Argo-Tech has not yet identified any potential exposure
to the failure of such suppliers to become Year 2000 compliant, and currently
believes that such exposure is minimal, the reasonably likely worst case
scenario is that the failure of suppliers to become compliant could cause delays
in the receipt of necessary raw materials or supplies. This may result in
interruptions in production of certain products for a period of time, which may
delay shipments by Argo-Tech. The reasonably likely worst case scenario if
Argo-Tech's systems are not Year 2000 compliant would be that operational and
administrative costs could increase if automated functions become limited or
would need to be performed manually.


CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

         From time to time, information provided by Argo-Tech, statements by its
employees or information included in its filings with the Securities and
Exchange Commission (including those portions of the Management's Discussion and
Analysis that refer to the future) may contain forward-looking statements that
are not historical facts. Those statements are "forward-looking" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements, and the Company's future performance, operating
results, financial position and liquidity, are subject to a variety of factors
that could materially affect results. Some, but not necessarily all, of these
factors include: Argo-Tech's dependence on the aerospace industry; government
regulation and oversight; defense spending; competition; product and
environmental liabilities; and risks associated with its workforce, suppliers,
and future acquisitions.



ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         In the ordinary course of operations, Argo-Tech's major market risk
exposure is to changing interest rates. Argo-Tech's exposure to changes in
interest rates relates primarily to its long term debt obligations. At May 1,
1999, Argo-Tech has fixed rate debt totaling $195 million, including $2.75
million of accretion, at 8.625% and variable rate debt under its existing credit
facility of $84.9 million calculated at Argo-Tech's choice using an alternate
base rate (ABR) or LIBOR, plus a supplemental percentage determined by the ratio
of debt to EBITDA. The variable rate is not to exceed ABR plus 1.00% or LIBOR
plus 2.00%. In order to reduce variable interest rate exposure on borrowings
under its existing credit facility, Argo-Tech has three interest rate swap
agreements on a portion of the variable rate debt which fix the rate on the
notional amounts of $10.0 million at 6.08%, 6.10% and 6.805%, respectively.
Argo-Tech does not enter into derivative contracts for trading or speculative
purposes. A 10% fluctuation in interest rates would not materially affect
Argo-Tech's financial condition, results of operations or cash flows.


<PAGE>   13


PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

         In October 1996, J.C. Carter Company was named as a respondent in a
         petition filed in federal district court in Santa Ana, California by
         Alsthom, a French shipbuilding concern, to enforce an international
         arbitration award rendered in Paris, France, in favor of Alsthom and
         against an entity identified as J.C. Carter Company. Argo-Tech believes
         that J.C. Carter is not the J.C. Carter Company referenced in the
         arbitration award. On February 23, 1999, the federal district court
         granted Alsthom a Motion for Summary Judgment against Argo-Tech's J.C.
         Carter subsidiary to enforce the international arbitration award, for
         approximately $11.4 million plus interest with respect to a product
         liability case involving industrial marine pump products. The district
         court has ordered, however, that judgment shall not be entered at this
         time because of the claims against the remaining parties to the action.
         Argo-Tech intends to seek reconsideration of the district court's
         decision, and when and if an adverse judgment is entered against it, to
         appeal the judgment and to vigorously pursue its claims for declaratory
         relief and equitable indemnification against the prior owners of assets
         relating to the arbitration. In the opinion of Argo-Tech's management,
         after reviewing the information which is currently available with
         respect to this matter and consulting with its legal counsel, any
         liability which may ultimately be incurred with respect to this matter
         is not expected to materially affect Argo-Tech's financial condition,
         results of operations or liquidity.


Item 6 - Exhibits and Reports on Form 8-K

         (a) Exhibits - Schedule 27 - Financial Data Schedule

         Reports on Form 8-K - None



<PAGE>   14



                                    SIGNATURE
                                    ---------

      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.


      Date: June 11, 1999   ARGO-TECH CORPORATION



                              By: /s/ Frances S. St. Clair
                                  ------------------------
                                      Frances S. St. Clair
                                      Vice President and Chief Financial Officer
                                      (Duly Authorized Officer)



                              By: /s/ Paul A. Sklad
                                  ------------------
                                      Paul A. Sklad
                                      Controller
                                      (Principal Accounting Officer)