SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549

                          ---------------         
                             FORM 10-Q

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

             For the quarterly period ended  June 25, 1998
                                             ---------------

                                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   0-5485  
                                          ----------
            
                         ENVIRODYNE INDUSTRIES, INC.            
           -----------------------------------------------------
           (Exact name of registrant as specified in its charter)


           Delaware                                95-2677354  
-------------------------------                ----------------
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                 Identification No.)

6855 W. 65th Street, Chicago, Illinois                    60638  
------------------------------------------------       ----------
  (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code:  (708) 496-4200


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

     APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:  Indicate by check
mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.  Yes   X       No        
                                        ------       ------

     As of August 7, 1998, there were 14,851,152 shares outstanding
of the registrant's Common Stock, $.01 par value.
                          Page 1 of 34 Pages
<PAGE>
                 INDEX TO FINANCIAL STATEMENTS



           ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES

        UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS


Unaudited consolidated balance sheets at June 25, 1998
   and December 25, 1997                                        4

Unaudited consolidated statements of operations
   for the three months ended June 25, 1998 and
   June 26, 1997 and for the six months ended
   June 25, 1998 and June 26, 1997                              5

Unaudited consolidated statements of cash flows
   for the six months ended
   June 25, 1998 and June 26, 1997                              6

Notes to consolidated financial statements                      7


      VISKASE HOLDING CORPORATION AND SUBSIDIARIES

  UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Unaudited consolidated balance sheets at
   June 25, 1998 and December 25, 1997                         22

Unaudited consolidated statements of operations
   for the three months ended June 25, 1998 and
   June 26, 1997 and for the six months ended
   June 25, 1998 and June 26, 1997                             23

Unaudited consolidated statements of cash flows
   for the six months ended
   June 25, 1998 and June 26, 1997                             24

Notes to consolidated financial statements                     25
<PAGE>


            PART I.  FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS
        --------------------

The financial information included in this quarterly report has
been prepared in conformity with the accounting principles and
practices reflected in the financial statements included in the
annual report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 25, 1997 (1997 Form 10-K).
These quarterly financial statements should be read in conjunction
with the financial statements and the notes thereto included in the
1997 Form 10-K. The accompanying financial information, which is
unaudited, reflects all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods presented.

The condensed consolidated balance sheet as of December 25, 1997
was derived from the audited consolidated financial statements in
the Company's annual report on Form 10-K.

Reported interim results of operations are based in part on
estimates which may be subject to year-end adjustments. In
addition, these quarterly results of operations are not necessarily
indicative of those expected for the year.

<PAGE>
<PAGE>
          ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                     June 25,                 December 25,
                                                      1998                        1997      
                                                    ---------                 -------------
                                                                (in thousands) 
<S>                                              <C>                         <C>
ASSETS
  Current assets:
    Cash and equivalents                            $   16,574                 $  24,407
    Receivables, net                                    63,291                    75,039
    Inventories                                        110,000                    97,802
    Other current assets                                30,968                    25,286
                                                    ----------                 ---------
      Total current assets                             220,833                   222,534

  Property, plant and equipment,
    including those under capital leases               595,079                   580,981
    Less accumulated depreciation
      and amortization                                 168,930                   145,855
                                                    ----------                 ---------
    Property, plant and equipment, net                 426,149                   435,126
 
  Deferred financing costs, net                          4,206                     4,574
  Other assets                                          36,286                    39,193
  Excess reorganization value, net                     107,392                   112,426
                                                    ----------                 ---------
      Total assets                                    $794,866                  $813,853
                                                    ==========                 =========
LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current portion
      of long-term debt and obligations
      under capital leases                            $206,330                $   12,880
    Accounts payable                                    36,324                    41,734
    Accrued liabilities                                 68,876                    71,589
    Current deferred income taxes                       10,516                    10,516
                                                    ----------                 ---------
      Total current liabilities                        322,046                   136,719

  Long-term debt including obligations
    under capital leases                               336,734                   511,183

  Accrued employee benefits                             48,194                    48,521
  Deferred and noncurrent income taxes                  15,922                    26,510

  Commitments and contingencies

  Stockholders' equity:
    Preferred stock, $.01 par value;
      none outstanding
    Common stock, $.01 par value;
      14,836,444 shares issued and
      outstanding at June 25, 1998 and
      14,753,442 shares at December 25, 1997               148                       148
    Paid in capital                                    136,609                   136,183
    Accumulated (deficit)                              (67,585)                  (48,458)
    Cumulative foreign currency
      translation adjustments                            2,829                     3,098
    Unearned restricted stock issued
      for future service                                   (31)                      (51)
                                                    ----------                 ---------
      Total stockholders' equity                        71,970                    90,920
                                                    ----------                 ---------
      Total liabilities and stockholders' equity      $794,866                  $813,853
                                                    ==========                 =========
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
               ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                     Three Months        Three Months     Six   Months          Six   Months
                                      Ended June          Ended June       Ended June            Ended June
                                       25, 1998            26, 1997         25, 1998               26, 1997   
                                      -----------        ------------     ------------         ---------------
                                           (in thousands, except for number of shares and per share amounts)

<S>                                  <C>                 <C>             <C>                    <C>
NET SALES                               $105,389            $125,156        $ 206,666             $251,605

COSTS AND EXPENSES
  Cost of sales                           78,287              91,659          152,548              184,755
  Selling, general
    and administrative                    22,271              22,927           43,649               46,176
  Amortization of intangibles
    and excess reorganization value        3,471               3,514            6,939                7,032
  Restructuring charges                    1,500                                1,500                     
                                        --------           ---------        ---------             --------
OPERATING INCOME                            (140)              7,056            2,030               13,642

  Interest income                            117                 254              302                  758
  Interest expense                        14,552              14,122           28,027               28,353
  Other expense (income), net               (323)              1,811              466                1,297
                                        --------           ---------        ---------             --------
(LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                    (14,252)             (8,623)         (26,161)             (15,250)

  Income tax (benefit)                    (7,812)             (3,941)          (8,538)              (7,736)
                                        --------           ---------        ---------             --------
NET (LOSS) FROM CONTINUING
  OPERATIONS                              (6,440)             (4,682)         (17,623)              (7,514)

DISCONTINUED OPERATIONS:
  Income from operations
    net of income taxes (Note 5)             263                 177               56                  456
  (Loss) on sale of discontinued
    operations net of income tax
    benefit of $998                       (1,560)                              (1,560)                    
                                        --------           ---------        ---------             --------
  Net (loss)                             $(7,737)            $(4,505)        $(19,127)             $(7,058)
                                        ========           =========        =========             ========

WEIGHTED AVERAGE
  COMMON SHARES - BASIC               14,818,561          14,570,519       14,796,136           14,558,950
                                      ==========          ==========       ==========           ==========
PER SHARE AMOUNTS:

BASIC EARNINGS (LOSS) PER SHARE:
  Continuing operations                    $(.43)              $(.32)          $(1.19)               $(.51)
  
  Discontinued operations:
    Income from operations                   .02                 .01              .01                  .03
    Loss on sale of
      discontinued operations               (.11)                                (.11)                    
                                           -----              ------           ------              -------
Net (loss)                                 $(.52)              $(.31)          $(1.29)               $(.48)
                                           =====               =====           ======              =======
WEIGHTED AVERAGE
  COMMON SHARES - DILUTED             15,053,137          14,868,292       15,030,712           14,856,723
                                      ==========          ==========       ==========           ==========
DILUTED EARNINGS PER SHARE:

  Continuing operations                    $(.43)             $(.32)          $(1.19)                $(.51)
  Discontinued operations:
    Income from operations                   .02                .01              .00                   .03
    Loss on sale of
      discontinued operations               (.11)                               (.11)                     
                                           -----             ------           ------                 -----
NET (LOSS)                                 $(.52)             $(.31)          $(1.30)                $(.48)
                                           =====              =====           ======                 =====
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
              ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                         Six     Months    Ended        
                                                                   -------------------------------------
                                                                      June  25,               June  26,
                                                                        1998                   1997     
                                                                   -------------          --------------
                                                                               (in thousands)
<S>                                                               <C>                     <C>
Cash flows from operating activities:
  Net (loss)                                                         $ (19,127)             $ (7,058)
  Adjustments to reconcile net (loss) to net cash 
    provided by (used in) operating activities:
      Depreciation and amortization under capital lease                 22,613                21,879
      Amortization of intangibles and excess
        reorganization value                                             7,666                 8,098
      Amortization of deferred financing fees and discount                 945                   863
      (Decrease) in deferred and
        noncurrent income taxes                                        (10,407)               (8,471)
      Foreign currency transaction loss (gain)                             (22)                  701
      (Gain) loss on disposition of assets                               2,764                (1,080)
      Bad debt provision                                                   505                    31

      Changes in operating assets and liabilities:
        Accounts receivable                                              9,211                 2,643
        Inventories                                                    (18,070)               (7,629)
        Other current assets                                            (7,440)               (8,060)
        Accounts payable and accrued liabilities                        (7,028)               (7,343)
        Other                                                             (109)                 (962)
                                                                      --------               -------
      Total adjustments                                                    628                   670
                                                                      --------               -------
        Net cash (used in) operating activities                        (18,499)               (6,388)

Cash flows from investing activities:
  Capital expenditures                                                 (26,292)              (25,003)
  Proceeds from disposition of assets                                   18,207                11,895
                                                                      --------               -------
        Net cash (used in) investing activities                         (8,085)              (13,108)

Cash flows from financing activities:
  Issuance of common stock                                                 446                   285
  Deferred financing costs                                                (585)                  (47)
  Proceeds from revolving loan and long-term
    borrowings                                                          31,475
  Repayment of revolving loan, long-term borrowings
    and capital lease obligation                                       (12,454)               (7,933)
                                                                      --------               -------
        Net cash provided by (used in) financing activities             18,882                (7,695)

Effect of currency exchange rate changes on cash                          (131)                 (744)
                                                                      --------               -------
Net (decrease) in cash and equivalents                                  (7,833)              (27,935)
Cash and equivalents at beginning of period                             24,407                41,794
                                                                      --------               -------
Cash and equivalents at end of period                                  $16,574               $13,859
                                                                      ========               =======
                                                                                                                         
--------------------------------------------------------------------------------------------------------

Supplemental cash flow information:
  Interest paid                                                        $33,146               $33,581
  Income taxes paid                                                    $ 3,609               $ 3,907

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
/TABLE
<PAGE>
            ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. INVENTORIES (dollars in thousands)

Inventories consisted of:
                               June             December
                             25, 1998          25, 1997 
                            ----------        ----------
Raw materials                $ 14,474           $ 16,847
Work in process                34,959             29,297
Finished products              60,567             51,658
                             --------           --------
                             $110,000           $ 97,802
                             ========           ========

Approximately 64% of the inventories at June 25, 1998 were valued at
Last-In, First-Out (LIFO).  These LIFO values exceeded current
manufacturing cost by approximately $6.4 million at June 25, 1998.

<PAGE>
2. DEBT OBLIGATIONS (dollars in thousands)

Outstanding short-term and long-term debt consisted of:
<TABLE>
<CAPTION>
                                                           June              December
                                                         25, 1998            25, 1997 
                                                        ----------          ----------
<S>                                                     <C>                 <C>
Short-term debt, current maturity of long-term
  debt, and capital lease obligation:

  Secured revolver                                        $ 30,000
  12% Senior Secured Notes                                 160,000
  Current maturity of Viskase Capital Lease Obligation      13,031              $ 9,675
  Current maturity of Viskase Limited Term Loan (3.2%)       1,639                1,629
  Other                                                      1,660                1,576
                                                          --------             --------
    Total short-term debt                                 $206,330              $12,880
                                                          ========             ========
Long-term debt:


  12% Senior Secured Notes                                                     $160,000
  10.25% Senior Notes due 2001                            $219,262              219,262
  Viskase Capital Lease Obligation                         111,842              124,873
  Viskase Limited Term Loan (3.2%)                           1,633                2,443
  Other                                                      3,997                4,605
                                                          --------             --------
    Total long-term debt                                  $336,734             $511,183
                                                          ========             ========
</TABLE>
<PAGE>
The Company intends to mail a notice of redemption to the holders of its
12% Senior Secured Notes to redeem $105.0 million of aggregate principal
amount of the notes outstanding. Under terms of the Indenture, the
remaining $55.0 million of principal outstanding is due and payable at
par on June 15, 1999. The Company has classified the issue as current
because the entire issue is due within one year.


3.  CONTINGENCIES (dollars in thousands)

In late 1993, Viskase commenced a legal action against American National
Can Company (ANC) in Federal District Court for the Northern District of
Illinois, Eastern Division, 93C7651. Viskase claimed that ANC's use of
two different very low density polyethylene plastic resins in the
manufacture of ANC's multi-layer barrier shrink film products was
infringing various Viskase patents relating to multi-layer barrier
plastic films used for fresh red meat, processed meat and poultry
product applications. In November 1996, after a three-week trial, a jury
found that ANC had willfully infringed Viskase's patents and awarded
Viskase $102.4 million in compensatory damages. The Court also entered
an order permanently enjoining ANC from making or selling infringing
products after December 23, 1996.

On September 29, 1997, the Court set aside the jury verdict in part and
ordered a retrial on certain issues. The Court upheld the jury finding
on the validity of all of Viskase's patents and the jury finding that
ANC had willfully infringed Viskase's patents by ANC's use of Dow
Chemical Company's "Attane" brand polyethylene plastic resin in ANC's
products. However, the Court ordered a new trial on the issue of whether
ANC's use of Dow Chemical Company's "Affinity" brand polyethylene
plastic resin infringed Viskase's patents and whether such conduct was
willful. Because the jury rendered one general damage verdict, the Court
ordered a retrial of all damage issues. By operation of the Court's
order, the injunction in respect of ANC's future use of the "Affinity"
brand resin was removed. The Court has not set a new trial date, but the
Company expects the trial in the fourth quarter of 1998 or first quarter
of 1999. In addition, ANC has challenged two of the five Viskase patents
in suit by filing requests for reexamination with the United States
Patent and Trademark Office (USPTO). With respect to one of the requests
for reexamination, the USPTO initially rejected Viskase's claims, to
which Viskase has filed a response. With respect to the other request
for reexamination the USPTO has not made its determination. If the USPTO
ultimately disallows the claims of the two Viskase patents, the effect
upon the Court action is uncertain.

The Company expects ANC to vigorously contest this matter in the Court
and the USPTO and to appeal any final judgment. No part of the pending
claims has been recorded in the Company's financial statements. Through
June 25, 1998, $4,581 in patent defense costs had been accrued and
capitalized.

In March 1997 Viskase Corporation received a subpoena from the Antitrust
Division of the United States Department of Justice relating to a grand
jury investigation of the sausage casings industry. Viskase Corporation
is cooperating fully with the investigation.

The Company and its subsidiaries are involved in various legal
proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse effect
upon results of operations, cash flows or financial position.


4.  RESTRUCTURING CHARGES

During the second quarter, the Company committed to a plan of
restructuring the corporate office to consolidate these functions within
Viskase. These actions are directly related to lowering the Company's
fixed costs. Restructuring actions identified resulted in a charge to
continuing operations of $1.5 million before tax and includes costs
associated with voluntary and involuntary severance expense. In the
second quarter, there were no charges against the reserve.


5.  DISCONTINUED OPERATIONS (dollars in thousands)

In June 1998 the Company's Board of Directors agreed to sell the Clear
Shield National, Inc. (Clear Shield) and Sandusky Plastics, Inc.
(Sandusky) subsidiaries. Sandusky was sold on June 12, 1998 and the
Company completed the divestiture of Clear Shield on July 24, 1998. A
gain is anticipated on the sale of Clear Shield and is not reflected in
the financial statements. Accordingly, the operating results from both
subsidiaries have been segregated from continuing operations and
reported as a separate line item, Results of Discontinued Operations, on
the Statements of Operations.
<PAGE>
<PAGE>
Operating results from discontinued operations are as follows:
<TABLE>
<CAPTION>
                                                Three Months    Three Months        Six  Months    Six  Months
                                                 Ended June      Ended June         Ended June      Ended June
                                                  25, 1998        26, 1997           25, 1998        26, 1997   
                                                ------------    -------------      ------------   -------------
<S>                                             <C>             <C>                <C>             <C>
Net sales                                          $29,403        $31,373            $56,781          $59,463

Costs and expenses
  Cost of sales                                     24,329         26,070             46,634           48,972
  Selling, general and administrative                4,435          4,198              8,732            8,024
  Amortization of intangibles and
    excess reorganization value                        394            532                727            1,066
                                                   -------        -------           --------          -------
Operating income                                       245            573                688            1,401

  Interest income 
  Interest expense                                      21             27                 43               55
  Other expense (income), net                         (441)            28                103              154
                                                   -------        -------           --------          -------
Income from continuing
  operations before taxes                              665            518                542            1,192
  Income tax provision                                 402            341                486              736
                                                   -------        -------           --------          -------
Net Income from continuing 
  operations                                       $   263        $   177           $     56          $   456
                                                   =======        =======           ========          =======
</TABLE>

The net assets of Clear Shield included in the accompanying
Balance Sheet as of June 25, 1998 and the net assets of the
discontinued operations included in the December 25, 1997 
Balance Sheet consisted of the following:

<TABLE>
<CAPTION>
                                                June 25, 1998        December 25, 1997
                                                --------------       -----------------
<S>                                             <C>                  <C>
Accounts receivable, net                          $ 8,129               $  9,731
Inventories                                        13,488                 17,427
Other current assets                                  851                  2,782
                                                  -------               -------- 
Total current assets                               22,468                 29,940

Property, plant and equipment, net                 54,926                 61,805
Long-term assets                                   14,549                 15,128
                                                  -------               -------- 
Total assets                                       91,943                106,873

Accounts payable and other
  current liabilities                               8,190                  9,802
Short-term debt                                       567                    558
                                                  -------               -------- 
Total current liabilities                           8,757                 10,360

Long-term debt and lease obligations                1,671                  1,956
                                                  -------               -------- 
Total liabilities                                  10,428                 12,316

Net assets                                        $81,515                $94,557
                                                  =======                =======
</TABLE>

An evaluation of excess reorganization included in long-term assets
above was performed in fiscal year 1994 for Fresh Start Accounting.
Excess reorganization was allocated to the subsidiaries based on
sales and cash flows. Based on the evaluation, Clear Shield 
National, Inc. and Sandusky were originally 
allocated $20 million and $0, respectively.
<PAGE>
6.  EARNINGS PER SHARE

In February 1997 the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share," which became effective for both interim and
annual financial statement periods ending after December 15, 1997. As
required by this Statement, the Company adopted the new standards for
computing and presenting earnings per share (EPS) in fiscal 1997, and for all
period earnings per share data presented. Following are the reconciliations
of the numerators and denominators of the basic and diluted EPS.

<TABLE>
<CAPTION>
                                                Three Months    Three Months        Six  Months    Six  Months
                                                 Ended June      Ended June         Ended June      Ended June
                                                  25, 1998        26, 1997           25, 1998        26, 1997   
                                                ------------    -------------      ------------   -------------
                                                 (in thousands, except for weighted average shares outstanding)
<S>                                             <C>             <C>                <C>             <C>
NUMERATOR (in thousands):

Net (loss) available
   to common stockholders:

  From continuing operations:                      $(6,440)         $(4,682)          $(17,623)         $(7,514)

  Discontinued operations:
  Income from discontinued
  operations:                                          263              177                 56              456
  (Loss) on disposal                                (1,560)                             (1,560)
                                                   -------          -------           --------          -------
Net loss available to common
  stockholders for basic and
  diluted EPS                                      $(7,737)         $(4,505)          $(19,127)         $(7,058)
                                                   =======          =======           ========          =======
DENOMINATOR:

Weighted average shares
  outstanding
  for basic EPS                                 14,818,561       14,570,519         14,796,136       14,558,950
Effect of dilutive securities                      234,576          297,773            234,576          297,773
                                                ----------       ----------         ----------       ----------
Weighted average shares
  outstanding
  for diluted EPS                               15,053,137       14,868,292         15,030,712       14,856,723
                                                ==========       ==========         ==========       ==========
</TABLE>
<PAGE>
Common stock equivalents are excluded from the loss per share
calculations as the result is antidilutive. Common stock
equivalents used in computing earnings per share for discontinued
operations relate to stock options which, if exercised, would have
a dilutive effect on earnings per share. As of June 25, 1998, there
were options for 308,200 shares at an average price of $6.83, which
are considered antidilutive. These shares are not included in the
diluted earnings per share calculation.

7.  ACCOUNTING STANDARDS

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131), which will be
effective for fiscal years beginning after December 15, 1997. SFAS
No. 131 specifies revised guidelines for determining an entity's
operating segments and the type and level of financial information
to be disclosed. Management believes that adoption of SFAS No. 131
will not have a significant effect on the Company's financial
statements.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits" (SFAS No. 132), which
will be effective for fiscal years beginning after December 15,
1997. SFAS No. 132 standardizes the disclosure requirements for
pensions and other postretirement benefits, requires additional
information on changes in the benefit obligation and fair values of
plan assets and eliminates certain disclosures that are no longer
useful. Management believes the adoption of SFAS No. 132 will not
have a significant effect on the Company's financial statements.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133), which will be
effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. It
requires recognition of all derivative instruments as either assets
or liabilities in the statement of financial condition and the
measurement of those instruments at fair value. Management believes
the adoption of SFAS No. 133 will not have a significant effect on
the Company's financial statements.

8. SUBSEQUENT EVENTS

On July 24, 1998, the Company completed the divestiture of the
capital stock of Clear Shield. The aggregate purchase price for the
capital stock was $140 million and is subject to a working capital
adjustment. The Company expects an approximate net gain in the
amount of $35 million on the Clear Shield transaction. The gain
will be recorded in the third quarter 1998 results.
Concurrent with the Clear Shield divestiture, the Company mailed a
notice of redemption to holders of its 12% Senior Secured Notes to
redeem $105.0 million of aggregate principal amount of the $160.0
million outstanding together with accrued interest payable and
yield maintenance premium thereon. The date of the redemption will
be August 24, 1998. The Company estimates that $115.8 million of
the proceeds will be used for the redemption of the 12% Senior
Secured Notes. In addition, the remainder of the proceeds, after
deducting taxes and transaction expenses, were used to repay
balances outstanding under the Company's Revolving Credit Facility.

Upon the redemption of the 12% Senior Secured Notes, the Company
will record a pre-tax charge to recognize an extraordinary loss
from the early extinguishment of debt of approximately $10.6
million. The projected extraordinary loss is comprised of a $8.4
million prepayment penalty and $2.2 million write-off of deferred
debt issuance costs. This extraordinary loss will be recorded in
the third quarter of 1998.

9.  SUBSIDIARY GUARANTORS

Envirodyne's payment obligations under the Senior Secured Notes are
fully and unconditionally guaranteed on a joint and several basis
(collectively, Subsidiary Guarantees) by Viskase Corporation,
Viskase Holding Corporation, Viskase Sales Corporation, Clear
Shield (prior to its sale on July 24, 1998), and Viskase Films,
Inc., each a direct or indirect wholly-owned subsidiary of
Envirodyne and each a "Guarantor." These subsidiaries represent
substantially all of the operations of Envirodyne conducted in the
United States. The remaining subsidiaries of Envirodyne generally
are foreign subsidiaries or otherwise relate to foreign operations.

The obligations of each Guarantor under its Subsidiary Guarantee
are the senior obligation of such Guarantor, and are
collateralized, subject to certain permitted liens, by
substantially all of the domestic assets of the Guarantor and, in
the case of Viskase Holding Corporation, by a pledge of 65% of the
capital stock of Viskase Europe Limited. The Subsidiary Guarantees
and security are shared with the lenders under the Amended and
Restated Credit Agreement on a pari passu basis and are subject to
the priority interest of the holders of obligations under the
Letter of Credit Facility, each pursuant to an intercreditor
agreement.

The following consolidating condensed financial data illustrate the
composition of the combined Guarantors. No single Guarantor has any
significant legal restrictions on the ability of investors or
creditors to obtain access to its assets in the event of default on
the Subsidiary Guarantee other than its subordination to senior
indebtedness described above. Separate financial statements of the
Guarantors are not presented because management has determined that
these would not be material to investors. Based on the book value
and the market value of the pledged securities of Viskase
Corporation, Viskase Sales Corporation, Clear Shield and Viskase
Films, Inc., these Subsidiary Guarantors do not constitute a
substantial portion of the collateral and, therefore, the separate
financial statements of these subsidiaries have not been provided.
Separate unaudited interim financial statements of Viskase Holding
Corporation are being filed within this quarterly report.

Investments in subsidiaries are accounted for by the parent and
Subsidiary Guarantors on the equity method for purposes of the
supplemental consolidating presentation. Earnings of subsidiaries
are therefore reflected in the parent's and Subsidiary Guarantors'
investment accounts and earnings. The principal elimination entries
eliminate investments in subsidiaries and intercompany balances and
transactions.<PAGE>
           ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATING BALANCE SHEETS
                       JUNE 25, 1998

<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations (1)      Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
ASSETS
  Current assets:
    Cash and equivalents                  $ 11,018          $ 1,587          $  3,969                          $16,574
    Receivables and advances, net          111,972           53,854            38,329     $ (140,864)           63,291
    Inventories                                              70,225            40,843         (1,068)          110,000
    Other current assets                     2,537           15,948            12,483                           30,968
                                          --------         --------          --------      ---------          --------
      Total current assets                 125,527          141,614            95,624       (141,932)          220,833

Property, plant and equipment including
  those under capital lease                    149          447,193           147,737                          595,079
  Less accumulated depreciation
    and amortization                           133          125,926            42,871                          168,930
                                          --------         --------          --------      ---------          --------
Property, plant and equipment, net              16          321,267           104,866                          426,149

Deferred financing costs                     3,836                                370                            4,206
Other assets                                                 34,429             1,857                           36,286
Investment in subsidiaries                  29,520          120,940                         (150,460)
Excess reorganization value                                  76,000            31,392                          107,392
                                          --------         --------          --------      ---------          --------
      Total assets                        $158,899         $694,250          $234,109      $(292,392)         $794,866
                                          ========         ========          ========      =========          ========
LIABILITIES & STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current 
      portion of long-term debt and 
      obligation under capital lease      $190,000         $ 13,598           $ 2,732                        $ 206,330
    Accounts payable and advances               35          137,917            39,236     $ (140,864)           36,324
    Accrued liabilities                      3,830           42,681            22,363              2            68,876
    Current deferred taxes                                   10,581               (65)                          10,516
                                          --------         --------          --------      ---------          --------
      Total current liabilities            193,865          204,777            64,266       (140,862)          322,046

Long-term debt including obligation
  under capital lease                      219,262          113,513             3,959                          336,734

Accrued employee benefits                                    45,691             2,503                           48,194
Deferred and noncurrent income taxes        11,063          (15,757)           20,616                           15,922
Intercompany loans                        (337,262)         327,994             9,268

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value;
    none outstanding
  Common stock, $.01 par value;
    14,836,444 shares issued and
    outstanding                                148                2            32,739        (32,741)              148
  Paid in capital                          136,610           80,999            88,359       (169,359)          136,609
  Accumulated earnings (deficit)           (67,585)         (65,738)            9,630         56,108           (67,585)
  Cumulative foreign currency
    translation adjustments                  2,829            2,769             2,769         (5,538)            2,829
  Unearned restricted stock issued
    for future services                        (31)                                                                (31)
                                          --------         --------          --------      ---------          --------
    Total stockholders' equity              71,971           18,032           133,497       (151,530)           71,970
                                          --------         --------          --------      ---------          --------
    Total liabilities and
      stockholders' equity                $158,899         $694,250          $234,109      $(292,392)         $794,866
                                          ========         ========          ========      =========          ========
<FN>
(1)  Elimination of intercompany receivables, payables and investment accounts.
</TABLE>
<PAGE>
<PAGE>
                ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                       CONSOLIDATING BALANCE SHEETS
                             DECEMBER 25, 1997

<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations (1)      Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
ASSETS
  Current assets:
    Cash and equivalents                  $ 19,004          $   865           $ 4,538                          $24,407
    Receivables and advances, net           59,223           58,201            44,221      $ (86,606)           75,039
    Inventories                                              63,967            35,029         (1,194)           97,802
    Other current assets                     1,746           12,612            10,928                           25,286
                                          --------         --------          --------      ---------          --------
      Total current assets                  79,973          135,645            94,716        (87,800)          222,534

Property, plant and equipment including
  those under capital lease                    145          442,506           138,330                          580,981
  Less accumulated depreciation
    and amortization                           119          113,672            32,064                          145,855
                                          --------         --------          --------      ---------          --------
Property, plant and equipment, net              26          328,834           106,266                          435,126

Deferred financing costs                     4,100                                474                            4,574
Other assets                                                 36,779             2,414                           39,193
Investment in subsidiaries                  53,619          120,824                         (174,443)
Excess reorganization value                                  79,595            32,831                          112,426
                                          --------         --------          --------      ---------          --------
      Total assets                        $137,718         $701,677          $236,701      $(262,243)         $813,853
                                          ========         ========          ========      =========          ========
LIABILITIES & STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current 
      portion of long-term debt and 
      obligation under capital lease                       $ 10,233            $2,647                        $  12,880
    Accounts payable and advances           $  121           86,514            41,706      $ (86,607)           41,734
    Accrued liabilities                      5,836           46,595            19,158                           71,589
    Current deferred taxes                                   10,581               (65)                          10,516
                                          --------         --------          --------      ---------          --------
      Total current liabilities              5,957          153,923            63,446        (86,607)          136,719

Long-term debt including obligation
  under capital lease                      379,262          126,830             5,091                          511,183

Accrued employee benefits                                    46,018             2,503                           48,521
Deferred and noncurrent income taxes        13,084           (7,396)           20,822                           26,510
Intercompany loans (1)                    (351,505)         339,995            11,510

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value;
    none outstanding
  Common stock, $.01 par value;
    14,753,442 shares issued and
    outstanding                                148                3            32,738        (32,741)              148
  Paid in capital                          136,183           88,816            88,280       (177,096)          136,183
  Accumulated earnings (deficit)           (48,458)         (49,550)            9,273         40,277           (48,458)
  Cumulative foreign currency
    translation adjustments                  3,098            3,038             3,038         (6,076)            3,098
  Unearned restricted stock issued
    for future services                        (51)                                                                (51)
                                          --------         --------          --------      ---------          --------
    Total stockholders' equity              90,920           42,307           133,329       (175,636)           90,920
                                          --------         --------          --------      ---------          --------
    Total liabilities and
      stockholders equity                 $137,718         $701,677          $236,701      $(262,243)         $813,853
                                          ========         ========          ========      =========          ========
<FN>
(1)  Elimination of intercompany receivables, payables and investment accounts.
/TABLE
<PAGE>
<PAGE>
             ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATING STATEMENTS OF OPERATIONS
                  FOR SIX MONTHS ENDED JUNE 25, 1998
<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations          Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
NET SALES                                                  $125,126          $100,252       $(18,712)         $206,666
COSTS AND EXPENSES
  Cost of sales                                              95,319            76,118        (18,889)          152,548
  Selling, general and administrative       $2,124           23,035            18,490                           43,649
  Amortization of intangibles and
    excess reorganization value                               5,431             1,508                            6,939
  Restructuring charge                                        1,500                                              1,500
                                          --------         --------          --------      ---------          --------
OPERATING INCOME (LOSS)                     (2,124)            (159)            4,136            177             2,030

  Interest income                              226                                 76                              302
  Interest expense                          22,199            5,035               793                           28,027
  Intercompany interest expense (income)   (19,271)          18,692               579
  Management fees (income)                  (2,337)           1,730               607        
  Other expense (income), net                   64             (322)              726             (2)              466
  Equity loss (income) in subsidiary        16,011             (355)                         (15,656)                 
                                          --------         --------          --------      ---------          --------

INCOME (LOSS) BEFORE INCOME TAXES          (18,564)         (24,939)            1,507         15,835           (26,161)
  Income tax provision (benefit)              (995)          (8,695)            1,152                           (8,538)
                                          --------         --------          --------      ---------          --------
NET INCOME (LOSS) FROM CONTINUING
  OPERATIONS                               (17,569)         (16,244)              355         15,835           (17,623)

DISCONTINUED OPERATIONS:
Income from operations net of an income
  tax provision of $471                                          56                                                 56
Loss on disposal net of an income tax
  benefit of $998                           (1,560)                                                             (1,560)
                                          --------         --------          --------      ---------          --------

NET INCOME (LOSS)                         $(19,129)        $(16,188)             $355        $15,835          $(19,127)
                                          ========         ========          ========      =========          ========
</TABLE>
<PAGE>
<PAGE>
            ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
              CONSOLIDATING STATEMENTS OF OPERATIONS
               FOR THREE MONTHS ENDED JUNE 25, 1998

<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations          Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
NET SALES                                                   $63,881           $52,373       $(10,865)         $105,389

COSTS AND EXPENSES
  Cost of sales                                              48,562            40,501        (10,776)           78,287
  Selling, general and administrative       $1,135           12,354             8,782                           22,271
  Amortization of intangibles and
    excess reorganization value                               2,717               754                            3,471
  Restructuring charge                                        1,500                                              1,500
                                          --------         --------          --------      ---------          --------
OPERATING INCOME (LOSS)                     (1,135)          (1,252)            2,336            (89)             (140)

  Interest income                               87                                 30                              117
  Interest expense                          11,278            2,828               446                           14,552
  Intercompany interest expense (income)    (9,604)           9,333               271
  Management fees (income)                  (1,153)             863               290
  Other expense (income), net                  144             (389)              (76)            (2)             (323)
  Equity loss (income) in subsidiary         5,133           (1,032)                          (4,101)                  
                                          --------         --------          --------      ---------          --------

INCOME (LOSS) BEFORE INCOME TAXES           (6,846)         (12,855)            1,435          4,014           (14,252)
  Income tax provision (benefit)              (667)          (7,548)              403                           (7,812)
                                          --------         --------          --------      ---------          --------
NET INCOME (LOSS) FROM CONTINUING
  OPERATIONS                                (6,179)          (5,307)            1,032          4,014            (6,440)

DISCONTINUED OPERATIONS:
Income from operations net of an income
  tax provision of $402                                         263                                                263
Loss on disposal net of an income tax
  benefit of $998                           (1,560)                                                             (1,560)
                                          --------         --------          --------      ---------          --------

NET INCOME (LOSS)                          $(7,739)         $(5,044)           $1,032         $4,014          $($7,737)
                                          ========         ========          ========      =========          ========
</TABLE>
<PAGE>
<PAGE>
           ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
             CONSOLIDATING STATEMENTS OF OPERATIONS
               FOR SIX MONTHS ENDED JUNE 26, 1997
<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations          Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
NET SALES                                                  $148,004          $124,806       $(21,205)         $251,605

COSTS AND EXPENSES
  Cost of sales                                             110,685            95,149        (21,079)          184,755
  Selling, general and administrative       $2,415           21,425            22,336                           46,176
  Amortization of intangibles and
    excess reorganization value                               5,467             1,565                            7,032
                                          --------         --------          --------      ---------          --------
OPERATING INCOME (LOSS)                     (2,415)          10,427             5,756           (126)           13,642

  Interest income                              491                                267                              758
  Interest expense                          21,713            5,834               806                           28,353
  Intercompany interest expense (income)   (20,235)          18,700             1,535
  Management fees (income)                  (2,343)           1,761               582
  Other expense (income), net                  863           (1,073)            1,507                            1,297
  Equity loss (income) in subsidiary         5,885             (680)                          (5,205)                 
                                          --------         --------          --------      ---------          --------
INCOME (LOSS) BEFORE INCOME TAXES           (7,807)         (14,115)            1,593          5,079           (15,250)
  Income tax provision (benefit)              (749)          (7,900)              913                           (7,736)
                                          --------         --------          --------      ---------          --------
NET INCOME (LOSS) FROM CONTINUING
  OPERATIONS                                (7,058)          (6,215)              680          5,079            (7,514)

DISCONTINUED OPERATIONS:
Income from discontinued operations
  net of an income tax provision of $736                        456                                                456
                                          --------         --------          --------      ---------          --------
NET INCOME (LOSS)                          $(7,058)         $(5,759)             $680         $5,079           $(7,058)
                                          ========         ========          ========      =========          ========
/TABLE
<PAGE>
<PAGE>
                 ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                   CONSOLIDATING STATEMENTS OF OPERATIONS
                    FOR THREE MONTHS ENDED JUNE 26, 1997
<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations          Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
NET SALES                                                   $74,716           $60,579       $(10,139)         $125,156

COSTS AND EXPENSES
  Cost of sales                                              55,019            46,766        (10,126)           91,659
  Selling, general and administrative       $1,318           10,698            10,911                           22,927
  Amortization of intangibles and
    excess reorganization value                               2,734               780                            3,514
                                          --------         --------          --------      ---------          --------
OPERATING INCOME (LOSS)                     (1,318)           6,265             2,122            (13)            7,056

  Interest income                              108                                146                              254
  Interest expense                          10,686            3,016               420                           14,122
  Intercompany interest expense (income)   (10,129)           9,349               780
  Management fees (income)                  (1,173)             885               288
  Other expense (income), net                 (618)             (20)            2,449                            1,811
  Equity loss (income) in subsidiary         4,512            1,272                           (5,784)                 
                                          --------         --------          --------      ---------          --------
INCOME (LOSS) BEFORE INCOME TAXES           (4,488)          (8,237)           (1,669)         5,771            (8,623)
  Income tax provision (benefit)                17           (3,561)             (397)                          (3,941)
                                          --------         --------          --------      ---------          --------
NET INCOME (LOSS) FROM CONTINUING
  OPERATIONS                                (4,505)          (4,676)           (1,272)         5,771            (4,682)

DISCONTINUED OPERATIONS:
Income from discontinued operations
  net of an income tax provision of $341                        177                                                177
                                          --------         --------          --------      ---------          --------
NET INCOME (LOSS)                          $(4,505)         $(4,499)          $(1,272)        $5,771           $(4,505)
                                          ========         ========          ========      =========          ========
/TABLE
<PAGE>
<PAGE>
                  ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                            CONSOLIDATING CASH FLOWS
                      FOR SIX MONTHS ENDED JUNE 25, 1998
<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations          Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
Net cash provided by (used in)
  operating activities                    $(52,086)         $26,243            $7,344                         $(18,499)
Cash flows from investing activities:
  Capital expenditures                          (4)         (21,762)           (4,526)                         (26,292)
  Proceeds from disposition of assets                        18,194                13                           18,207
                                          --------         --------          --------      ---------          --------
      Net cash provided by (used in)
        investing activities                    (4)          (3,568)           (4,513)                          (8,085)

Cash flows from financing activities:
  Issuance of common stock                     446                                                                 446
  Proceeds from revolving loan and
    long-term borrowings                    30,000                              1,475                           31,475
  Deferred financing costs                    (585)                                                               (585)
  Repayment of revolving loan, 
    long-term borrowings and
    capital lease obligations                                (9,952)           (2,502)                         (12,454)
  Increase (decrease) in
    Envirodyne loan                         14,243          (12,001)           (2,242)                                
                                          --------         --------          --------      ---------          --------
      Net cash provided by (used in)
        financing activities                44,104          (21,953)           (3,269)                          18,882
Effect of currency exchange rate
  changes on cash                                                                (131)                            (131)
                                          --------         --------          --------      ---------          --------
Net (decrease) in cash and equivalents      (7,986)             722              (569)                          (7,833)
Cash and equivalents at
  beginning of period                       19,004              865             4,538                           24,407
                                          --------         --------          --------      ---------          --------
Cash and equivalents at
  end of period                            $11,018          $ 1,587           $ 3,969                          $16,574
                                          ========         ========          ========      =========          ========
</TABLE>
<PAGE>
            ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
                    CONSOLIDATING CASH FLOWS
              FOR SIX MONTHS ENDED JUNE 26, 1997
<TABLE>
<CAPTION>
                                                          Guarantor      Nonguarantor                      Consolidated
                                           Parent        Subsidiaries    Subsidiaries    Eliminations          Total    
                                         ---------       ------------    ------------    ------------      ------------- 
                                                                       (in thousands)
<S>                                      <C>              <C>              <C>           <C>                <C>
Net cash provided by (used in)
  operating activities                     $(9,915)         $23,205          $(19,678)                         $(6,388)

Cash flows from investing activities:
  Capital expenditures                         (11)         (18,611)           (6,381)                         (25,003)
  Proceeds from disposition of assets                         1,173            10,722                           11,895
                                          --------         --------          --------      ---------          --------
      Net cash provided by (used in)
        investing activities                   (11)         (17,438)            4,341                          (13,108)

Cash flows from financing activities:
  Issuance of common stock                     285                                                                 285
  Proceeds from revolving loan and
    long-term borrowings
  Deferred financing costs                     (44)                                (3)                             (47)
  Repayment of revolving loan,
    long-term borrowings and
    capital lease obligations                                (6,911)           (1,022)                          (7,933)
  Increase (decrease) in Envirodyne loan    (5,092)                             5,092                                 
                                          --------         --------          --------      ---------          --------
      Net cash provided by (used in)
        financing activities                (4,851)          (6,911)            4,067                           (7,695)
Effect of currency exchange rate
  changes on cash                                                                (744)                            (744)
                                          --------         --------          --------      ---------          --------
Net (decrease) in cash and equivalents     (14,777)          (1,144)          (12,014)                         (27,935)
Cash and equivalents
  at beginning of period                    25,785             (162)           16,171                           41,794
                                          --------         --------          --------      ---------          --------
Cash and equivalents
  at end of period                         $11,008          $(1,306)          $ 4,157                          $13,859
                                          ========         ========          ========      =========          ========
/TABLE
<PAGE>
<PAGE>

            VISKASE HOLDING CORPORATION AND SUBSIDIARIES

The financial information included in this quarterly report has
been prepared in conformity with the accounting principles and
practices reflected in the financial statements included in the
annual report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 25, 1997 (1997 Form 10-K).
These quarterly financial statements should be read in conjunction
with the financial statements and the notes thereto included in the
1997 Form 10-K. The accompanying financial information, which is
unaudited, reflects all adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the
interim periods presented.

The condensed consolidated balance sheet as of December 25, 1997
was derived from the audited Viskase Holding Corporation's
consolidated financial statements included in Envirodyne
Industries, Inc.'s annual report on Form 10-K.

Reported interim results of operations are based in part on
estimates which may be subject to year-end adjustments. In
addition, these quarterly results of operations are not necessarily
indicative of those expected for the year.

<PAGE>
<PAGE>
        VISKASE HOLDING CORPORATION AND SUBSIDIARIES
                CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>             
                                                  June 25,           December 25,
                                                    1998                1997      
                                               -------------         ------------
                                                         (in thousands) 
<S>                                            <C>                <C>
ASSETS
  Current assets:
    Cash and equivalents                          $   3,969          $   4,538
    Receivables, net                                 32,044             38,081
    Receivables, affiliates                          51,953             51,796
    Inventories                                      40,843             35,029
    Other current assets                             12,483             10,928
                                                  ---------          --------- 
      Total current assets                          141,292            140,372

  Property, plant and equipment                     147,737            138,330
    Less accumulated depreciation                    42,871             32,064
                                                  ---------          --------- 
    Property, plant and equipment, net              104,866            106,266
 
  Deferred financing costs                              370                474
  Other assets                                        1,778              2,414
  Excess reorganization value                        31,392             32,831
                                                  ---------          --------- 
      Total assets                                 $279,698           $282,357
                                                  =========          =========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Short-term debt including current
      portion of long-term debt                     $ 2,732          $   2,647
    Accounts payable                                 11,837             15,438
    Accounts payable and advances, affiliates        33,511             34,210
    Accrued liabilities                              22,363             19,158
    Current deferred income taxes                       (65)               (65)
                                                  ---------          --------- 
      Total current liabilities                      70,378             71,388

  Long-term debt                                      3,959              5,091

  Accrued employee benefits                           2,503              2,503
  Deferred and noncurrent income taxes               20,616             20,822
  Intercompany loans                                 47,278             49,520

  Commitments and contingencies

  Stockholders' equity:
    Common stock, $1.00 par value,
      1,000 shares authorized;
      100 shares issued and outstanding
    Paid in capital                                 103,464            103,463
    Retained earnings                                28,695             26,496
    Cumulative foreign currency
      translation adjustments                         2,805              3,074
                                                  ---------          --------- 
      Total stockholders' equity                    134,964            133,033
                                                  ---------          --------- 
      Total liabilities and
        stockholders' equity                       $279,698           $282,357
                                                  =========           ========
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
/TABLE
<PAGE>
            VISKASE HOLDING CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                     Three Months        Three Months     Six   Months          Six   Months
                                      Ended June          Ended June       Ended June            Ended June
                                       25, 1998            26, 1997         25, 1998               26, 1997   
                                      -----------        ------------     ------------         ---------------
                                                                  (in thousands)
<S>                                  <C>                 <C>             <C>                    <C>
NET SALES                                $52,373            $60,579         $100,252               $124,806

COSTS AND EXPENSES
  Cost of sales                           40,501             46,766           76,118                 95,149
  Selling, general
    and administrative                     7,087              9,600           15,452                 19,463
  Amortization of intangibles
    and excess reorganization value          754                780            1,508                  1,565
                                          ------            -------         --------                -------
OPERATING INCOME                           4,031              3,433            7,174                  8,629

  Interest income                             30                146               76                    267
  Interest expense                           446                420              793                    806
  Intercompany interest expense              271                780              579                  1,535
  Management fees                            290                288              607                    582
  Other expense (income), net                (76)             2,449              726                    507
                                          ------            -------         --------                -------
INCOME (LOSS) BEFORE INCOME TAXES          3,130               (358)           4,545                  5,466

  Income tax provision                     1,069                510            2,347                  2,435
                                          ------            -------         --------                -------
NET INCOME (LOSS)                         $2,061            $  (868)        $  2,198                $ 3,031
                                          ======            =======         ========                =======
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
              VISKASE HOLDING CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                       Six      Months   Ended     
                                                    -----------------------------
                                                      June  25,         June 26,
                                                        1998             1997    
                                                     ----------       ----------
                                                            (in thousands)
<S>                                                   <C>             <C>
Cash flows from operating activities:
  Net income                                            $2,198          $ 3,031
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Depreciation                                       5,617            5,325
      Amortization of intangibles and excess
        reorganization value                             1,508            1,565
      Amortization of deferred financing fees
        and discount                                        96              103
      (Decrease) in deferred and
        noncurrent income taxes                           (197)            (395)
      Loss (Gain) on disposition of assets                 499           (1,000)
      Bad debt provision                                   208              166

      Changes in operating assets and liabilities:
        Accounts receivable                              6,733                2
        Accounts receivable, affiliates                 (5,998)            (893)
        Inventories                                     (4,066)          (3,872)
        Other current assets                              (277)            (506)
        Accounts payable and accrued liabilities          (332)          (5,477)
        Accounts payable, affiliates                     1,355          (18,727)
        Other                                                                  
                                                        ------         --------
      Total adjustments                                  5,146          (23,709)
                                                        ------         --------
        Net cash provided by (used in) 
          operating activities                           7,344          (20,678)

Cash flows from investing activities:
  Capital expenditures                                  (4,526)          (6,381)
  Proceeds from disposition of assets                       13           11,722
                                                        ------         --------
        Net cash provided by (used in)
          investing activities                          (4,513)           5,341

Cash flows from financing activities:
  Proceeds from revolving loan and
    long-term borrowings                                 1,475
  Deferred financing costs                                                   (3)
  Repayment of revolving loan and
    long-term borrowings                                (2,502)          (1,022)
  Increase (decrease) in Envirodyne
    loan and advances                                   (2,242)           5,092
                                                        ------         --------
        Net cash provided by (used in)
          financing activities                          (3,269)           4,067

Effect of currency exchange rate
  changes on cash                                         (131)            (744)
                                                        ------         --------
Net (decrease) in cash and equivalents                    (569)         (12,014)
Cash and equivalents at
  beginning of period                                    4,538           16,171
                                                        ------         --------
Cash and equivalents at
  end of period                                         $3,969         $  4,157
                                                        ======         ========
                                                                                                                         
--------------------------------------------------------------------------------

Supplemental cash flow information:
  Interest paid                                           $112             $ 97
  Income taxes paid                                     $3,349           $3,653

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
            VISKASE HOLDING CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. INVENTORIES (dollars in thousands)

Inventories consisted of:

                               June  25,      December 25,
                                 1998            1997      
                               ----------    --------------
Raw materials                    $ 3,216       $ 4,418
Work in process                   11,099        10,511
Finished products                 26,528        20,100
                                --------       -------
                                 $40,843       $35,029
                                ========       =======

2. CONTINGENCIES (dollars in thousands)

In late 1993, Viskase commenced a legal action against American
National Can Company (ANC) in Federal District Court for the
Northern District of Illinois, Eastern Division, 93C7651. Viskase
claimed that ANC's use of two different very low density
polyethylene plastic resins in the manufacture of ANC's multi-layer
barrier shrink film products was infringing various Viskase patents
relating to multi-layer barrier plastic films used for fresh red
meat, processed meat and poultry product applications. In November
1996, after a three-week trial, a jury found that ANC had willfully
infringed Viskase's patents and awarded Viskase $102.4 million in
compensatory damages. The Court also entered an order permanently
enjoining ANC from making or selling infringing products after
December 23, 1996.

On September 29, 1997, the Court set aside the jury verdict in part
and ordered a retrial on certain issues. The Court upheld the jury
finding on the validity of all of Viskase's patents and the jury
finding that ANC had willfully infringed Viskase's patents by ANC's
use of Dow Chemical Company's "Attane" brand polyethylene plastic
resin in ANC's products. However, the Court ordered a new trial on
the issue of whether ANC's use of Dow Chemical Company's "Affinity"
brand polyethylene plastic resin infringed Viskase's patents and
whether such conduct was willful. Because the jury rendered one
general damage verdict, the Court ordered a retrial of all damage
issues. By operation of the Court's order, the injunction in
respect of ANC's future use of the "Affinity" brand resin was
removed. The Court has not set a new trial date, but the Company
expects the trial in the fourth quarter of 1998 or the first
quarter of 1999. In addition, ANC has challenged two of the five
Viskase patents in suit by filing requests for reexamination with
the United States Patent and Trademark Office (USPTO). With respect
to one of the requests for reexamination, the USPTO initially
rejected Viskase's claims, to which Viskase has filed a response.
With respect to the other request for reexamination the USPTO has
not made its determination. If the USPTO ultimately disallows the
claims of the two Viskase patents, the effect upon the Court action
is uncertain.

The Company expects ANC to vigorously contest this matter in the
Court and the USPTO and to appeal any final judgment. No part of
the pending claims has been recorded in the Company's financial
statements. Through June 25, 1998, $4,581 in patent defense costs
had been accrued and capitalized.

In March 1997 Viskase Corporation received a subpoena from the
Antitrust Division of the United States Department of Justice
relating to a grand jury investigation of the sausage casings
industry. Viskase Corporation is cooperating fully with the
investigation.

The Company and its subsidiaries are involved in various legal
proceedings arising out of their business and other environmental
matters, none of which is expected to have a material adverse
effect upon results of operations, cash flows or financial
position.


3.  ACCOUNTING STANDARDS

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131), which will be
effective for fiscal years beginning after December 15, 1997. SFAS
No. 131 specifies revised guidelines for determining an entity's
operating segments and the type and level of financial information
to be disclosed. Management believes that adoption of SFAS No. 131
will not have a significant effect on the Company's financial
statements.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits" (SFAS No. 132), which
will be effective for fiscal years beginning after December 15,
1997. SFAS No. 132 standardizes the disclosure requirements for
pensions and other postretirement benefits, requires additional
information on changes in the benefit obligation and fair values of
plan assets and eliminates certain disclosures that are no longer
useful. Management believes the adoption of SFAS No. 132 will not
have a significant effect on the Company's financial statements.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133), which will be
effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. It
requires recognition of all derivative instruments as either assets
or liabilities in the statement of financial condition and the
measurement of those instruments at fair value. Management believes
the adoption of SFAS No. 133 will not have a significant effect on
the Company's financial statements.
<PAGE>
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           -------------------------------------------------
           CONDITION AND RESULTS OF OPERATIONS
           -----------------------------------
           (dollars in thousands)
           ----------------------
The accompanying management's discussion and analysis of
financial condition and results of operations should be read
in conjunction with the following table, which reflects
continuing operations:

<TABLE>
<CAPTION>
                                     Three Months        Three Months     Six   Months          Six   Months
                                      Ended June          Ended June       Ended June            Ended June
                                       25, 1998            26, 1997         25, 1998               26, 1997   
                                      -----------        ------------     ------------         ---------------
<S>                                  <C>                 <C>             <C>                    <C>
Net Sales:
  Food packaging products               $105,389            $125,156        $206,666              $251,605
                                        ========            ========        ========              ========
Operating income (loss)
  Food packaging products                $ 1,019              $8,346         $ 4,229               $16,029
  Other                                   (1,159)             (1,290)         (2,199)               (2,387)
                                         -------              ------         -------               -------
                                         $  (140)             $7,056         $ 2,030               $13,642
                                         =======              ======         =======               =======
Depreciation and amortization under
  capital lease and amortization of
  intangible expense:
  Food packaging products                $13,493             $12,661         $27,034               $25,697
  Other                                        7                   7              14                    14
                                         -------             -------         -------               -------
                                         $13,500             $12,668         $27,048               $25,711
                                         =======             =======         =======               =======
Capital expenditures
  Food packaging products                 $8,436             $11,445         $18,478               $20,980
  Other                                                            1               4                    11
                                          ------             -------         -------               -------
                                          $8,436             $11,446         $18,482               $20,991
                                          ======             =======         =======               =======
</TABLE>
<PAGE>
Results of Operations
---------------------

The Company's net sales from continuing operations for the first
six months and second quarter of 1998 were $206.7 million and
$105.4 million, respectively, which represented a decrease of 17.9%
and 15.8%, respectively, from comparable periods of 1997. After
excluding the sales of both the oriented polystyrene (OPS) business
(which was sold in January 1997) and the polyvinyl chloride (PVC)
business (which was sold in December 1997) of $25.7 million and
$12.2 million for the first six months and second quarter of 1997,
respectively, the effective decrease was 8.5% and 6.7%,
respectively. The decline in sales is partially due to declines in
volume in the domestic market as a result of price increases across
product lines. European sales were also negatively affected by
foreign currency translation due to the strengthening of the US
dollar.

Operating income from continuing operations for the first six
months and second quarter of 1998 were $2.0 million and $(.1)
million, respectively. The decrease in operating income resulted
primarily from declines in domestic volumes. The Company's 1998
second quarter operating results included a $1.5 million
restructuring charge relating to the consolidation of the corporate
office staff and the management staff of Viskase.  (See note 4.)

Certain Savings that cannot be currently estimated are contemplated
as a result of consolidation of the Company's corporate office with
Viskase's operations and through an extensive restructuring of
Viskase's manufacturing and general and administration groups.
Savings from these efforts will begin to favorably impact the
Company's earnings during the fourth quarter of 1998.

Net interest expense from continuing operations for the six month
period totaled $28.0 million representing a decrease of $.3 million
from the first six months of l997.

Other income (expense) from continuing operations approximated
$(.5) million and $(1.3) million for the first six months of 1998
and 1997, respectively. The 1998 expense consists primarily of loss
on disposition of assets offset by currency translation gains. The
1997 expense consists principally of foreign exchange losses offset
by a $1.0 million gain recorded on the January 1997 sale of the OPS
business.

The Company has entered into forward foreign exchange contracts to
hedge certain foreign currency transactions on a continuing basis
for periods consistent with its committed foreign exchange
exposures. This practice seeks to minimize the effect of foreign
exchange rate movements on the Company's operating results. The
Company's hedging activities do not subject the Company to
additional exchange risk because gains and losses on these
contracts offset losses and gains on the transactions being hedged.
The cash flows from forward contracts are classified consistent
with the cash flows from the transactions or events being hedged.

The tax benefit for the first six months resulted from the benefit
of US losses partially offset by the provision related to income
from foreign subsidiaries. Due to the permanent differences in the
US resulting from non-deductible amortization and foreign losses
for which no tax benefit is provided, a benefit of $(8.5) million
was provided on a loss from continuing operations of $(26.2)
million. The US tax benefit is recorded as a reduction of the
deferred tax liability and does not result in a refund of income
taxes.

Discontinued operations
-----------------------

On June 8, 1998, the Company's Board of Directors approved the sale
of two of the Company's subsidiaries, Clear Shield and Sandusky.
Accordingly, the operating results of the two subsidiaries have
been segregated from continuing operations and reported as a
separate line item on the income statement under the heading
Discontinued Operations. The Company has restated its prior
financial statements to present the operating results as
discontinued operations.

The sale of Sandusky was completed on June 12, 1998. A $1.6 million
loss, net of taxes, was recognized on the sale. The proceeds were
used for general corporate purposes.

On July 24, 1998, the Company completed the divestiture of the
capital stock of Clear Shield. The aggregate purchase price for the
capital stock was $140 million and is subject to a working capital
adjustment. The net sales proceeds will be used to partially redeem
the 12% Senior Secured Notes and reduce the Company's secured
Revolving Credit Facility. The Company expects an approximate net
gain in the amount of $35 million on the Clear Shield transaction.
The gain will be recorded in the third quarter 1998 results.

Other
-----

In September 1997 the Company announced that it had retained
Donaldson, Lufkin and Jenrette Securities Corporation to assist the
Board of Directors in evaluating the Company's strategic
alternatives. Such alternatives included, among other things, sale
of the entire company, sale of business units or recapitalization.
In June 1998, the Company sold its wholly owned subsidiary
Sandusky, and in July 1998 the Company sold its wholly owned
subsidiary Clear Shield.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS No. 131), which will be
effective for fiscal years beginning after December 15, 1997. SFAS
No. 131 specifies revised guidelines for determining an entity's
operating segments and the type and level of financial information
to be disclosed. Management believes that adoption of SFAS No. 131
will not have a significant effect on the Company's financial
statements.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits" (SFAS No. 132), which
will be effective for fiscal years beginning after December 15,
1997. SFAS No. 132 standardizes the disclosure requirements for
pensions and other postretirement benefits, requires additional
information on changes in the benefit obligation and fair values of
plan assets and eliminates certain disclosures that are no longer
useful. Management believes the adoption of SFAS No. 132 will not
have a significant effect on the Company's financial statements.

The Company will implement the provisions of Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133), which will be
effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. It
requires recognition of all derivative instruments as either assets
or liabilities in the statement of financial condition and the
measurement of those instruments at fair value. Management believes
the adoption of SFAS No. 133 will not have a significant effect on
the Company's financial statements.

Liquidity and Capital Resources
-------------------------------

Cash and equivalents decreased by $7.8 million during the six
months ended June 25, 1998. Cash flows used in operating activities
of $18.5 million and investing activities of $8.1 million exceeded
funds provided by financing activities of $18.9 million. Cash flows
used in operating activities were principally attributable to the
Company's loss from operations and an increase in working capital
offset by the effect of depreciation and amortization. Cash flows
used in investing activities consist principally of capital
expenditures for property, plant and equipment, net of proceeds
from the sale of Sandusky. Cash flows provided by financing
activities were principally due to a $30 million draw under the
Company's domestic revolving credit facility (Revolving Credit
Facility), offset by a $9.7 million principal repayment under the
GECC lease.

The Company finances its working capital needs through a
combination of internally generated cash from operations and
borrowings under its $30 million domestic Revolving Credit
Facility. The availability of funds under the Revolving Credit
Facility is subject to the Company's compliance with certain
covenants (which are substantially similar to those included in the
Indenture), to borrowing base limitations measured by accounts
receivable and inventory of the Company and to reserves that may be
established in the discretion of the lenders.

On July 24, 1998, the Company completed the divestiture of the
capital stock of Clear Shield. The aggregate purchase price for the
capital stock was $140.0 million and is subject to a working
capital adjustment. The Company expects an approximate net gain in
the amount of $35 million on the Clear Shield transaction. The gain
will be recorded in the third quarter 1998 results.

Concurrent with the Clear Shield divestiture, the Company mailed a
notice of redemption to holders of its 12% Senior Secured Notes to
redeem $105.0 million of aggregate principal amount of the $160.0
million outstanding together with accrued interest payable and
yield maintenance premium thereon. The date of the redemption will
be August 24, 1998. The Company estimates that $115.8 million of
the proceeds will be used for the redemption of the 12% Senior
Secured Notes. In adition, the remainder of the proceeds, after
deducting taxes and transaction expenses, were used to repay
balances outstanding under the Company's Revolving Credit Facility.

As of June 25, 1998, the Company had borrowed $30 million under its
Revolving Credit Facility.

The Company used a portion of the proceeds from the sale of Clear
Shield to repay the outstanding Revolving Credit Facility balance.
Currently, there are no drawings under the Revolving Credit
Facility.

The Company's Senior Secured Notes, Revolving Credit Facility and
Letter of Credit Facility contain a number of financial covenants
that, among other things, require the maintenance of a minimum
level of tangible net worth, maximum ratios of debt and senior debt
to total capitalization, and a minimum fixed charge coverage. As
described in more detail below, the Company solicited and has
received the required consents from the holders of Senior Secured
Notes for certain amendments to, and waivers under, the Indenture
effective as of March 27, 1998. In addition, the Company has
amended, and received substantially similar waivers under, the
Amended and Restated Credit Agreement. The Company determined that,
as of June 25, 1998, without the amendment and waivers, it would
not have been in compliance with the covenant levels for the
Limitation on Senior Secured Debt, Limitation on Funded Debt and
Fixed Charge covenants. The Company is currently in compliance with
the amended covenants under the Indenture and Amended and Restated
Credit Agreement.

The Company anticipates that its current cash position, operating
cash flows, proceeds from completed asset sales and the available
borrowings under its Revolving Credit Facility will be sufficient
to meet its operating expenses, the partial redemption of the 12%
Senior Secured Notes, and its debt service. The Company will be
required to satisfy its $55 million mandatory redemption obligation
with respect to the Senior Secured Notes in June 1999. The Company
expects that in order to make the payments it will be required to
pursue a combination of alternative strategies, such as refinancing
of the 12% Senior Secured Notes or selling additional equity
capital. Additionally, the Company's 10.25% Notes, of which $219.3
million principal amount is outstanding, will mature in December
2001. There can be no assurance that any of these strategies will
be effected on satisfactory terms, if at all.

Capital expenditures from continuing operations for the first six
months of 1998 and 1997 totaled $18.5 million and $21 million,
respectively. Capital expenditures from discontinued operations for
the first six months of 1998 and 1997 totaled $7.8 million and $4
million, respectively. Significant 1998 and 1997 capital
expenditures from continuing operations included a new information
technology system at Viskase, costs associated with the Nucel(R)
project, and additional production capacity for specialty films.
Capital expenditures from discontinued operations included the
construction of Clear Shield's Twin Falls, Idaho facility. Capital
expenditures from continuing operations for 1998 are expected to be
approximately $35 million. Capital expenditures from continuing
operations for 1999 are expected to be $25 million.

The Company has spent approximately $7 million to $11 million
annually on research and development programs, including product
and process development, and on new technology development during
each of the past three years. The 1998 research and development and
product introduction expenses are expected to be in the $9 million
range. Among the projects included in the current research and
development efforts is the application of certain patents and
technology licensed by Viskase to the manufacture of cellulosic
casings under the Nucel(R) process. The commercialization of these
applications and the related fixed asset expense associated with
such commercialization may require substantial financial
commitments in future periods.

In January 1996, the Company began a system conversion which
incorporated year 2000 compliance. Approximately 70% of the
Company's systems are compliant, with all systems expected to be
compliant by the end of 1999. The costs associated with the
remaining 30% of systems are not expected to be material.

Subsequent events
------------------

In addition to restructuring the corporate office, the management
of the Company has received approval to formulate a plan of
restructuring its Viskase Corporation subsidiary. The execution of
the restructuring is contemplated during the third quarter. The
holders of the Senior Secured Notes have approved certain covenant
amendments that permit restructuring charges up to $25 million.

Concurrent with the Clear Shield divestiture, the Company mailed a
notice of redemption to holders of its 12% Senior Secured Notes to
redeem $105.0 million of aggregate principal amount of the $160.0
million outstanding together with accrued interest payable and
yield maintenance premium thereon. The date of the redemption will
be August 24, 1998. The Company estimates that $115.8 million of
the proceeds will be used for the redemption of the 12% Senior
Secured Notes. In addition, the remainder of the proceeds, after
deducting taxes and transaction expenses, were used to repay
balances outstanding under the Company's Revolving Credit Facility.

Upon the redemption of the 12% Senior Secured Notes, the Company
will record a pre-tax charge to recognize an extraordinary loss
from the early extinguishment of debt of approximately $10.6
million. The projected extraordinary loss is comprised of a $8.4
million prepayment penalty and $2.2 million write-off of deferred
debt issuance costs. This extraordinary loss will be recorded in
the third quarter of 1998.

Forward-looking statements
--------------------------

Forward-looking statements in this report are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995.  Such forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties that
could cause actual results and Company plans and objectives to
differ materially from those projected. Such risks and
uncertainties include, but are not limited to, general business and
economic conditions; competitive pricing pressures for the
Company's products; changes in other costs; and opportunities that
may be presented to and pursued by the Company; determinations by
regulatory and governmental authorities; and the ability to achieve
synergistic and other cost reductions and efficiencies.

<PAGE>
                 PART II. OTHER INFORMATION

Item 1 - Legal Proceedings
         -----------------

For a description of pending litigation and other contingencies,
see Part 1, Note 3, Contingencies in Notes to Consolidated
Financial Statements for Envirodyne Industries, Inc. and
Subsidiaries.

Item 2 - Changes in Securities
         ---------------------

No reportable events occurred during the quarter ended June 25,
1998.

Item 3 - Defaults Upon Senior Securities
         -------------------------------

None.

Item 4 - Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

None.

Item 5 - Other Information
         -----------------

None.

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

(a)      Exhibits

 2       Stock Purchase Agreement dated June 5, 1998 between
         Envirodyne Industries, Inc. and Solo Cup Company, as
         amended (incorporated herein by reference to Exhibit 2
         to Form 8-K filed August 10, 1998, of Envirodyne
         Industries, Inc.)

 10.14   Amended and Restated Credit Agreement, dated June 1, 1998,
         among Envirodyne Industries, Inc., the Financial
         Institutions identified therein and BT Commercial
         Corporation, as Agent.

 10.20   Amended and Restated Employment Agreement, effective as of
         March 27, 1996, between Envirodyne Industries, Inc. and F.
         Edward Gustafson.

  27     Financial Data Schedules.

(b)      Reports on Form 8-K

  (1)    On June 15, 1998, the Company filed a Form 8-K to report
         that on June 8, 1998 the Company announced that it had
         executed a definitive agreement to sell Clear Shield
         National, Inc. to Solo Cup Company.

  (2)    On June 25, 1998 the Company filed a Form 8-K to report
         that on June 24, 1998 the Company announced that its 1998
         Annual Meeting of Stockholders will be held on Thursday,
         August 27, 1998.
   <PAGE>
                          SIGNATURES
                          -----------


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



                    ENVIRODYNE INDUSTRIES, INC.   
                    ---------------------------
                    Registrant




                    By: /s/                                    
                        --------------------------
                        Gordon S. Donovan
                        Vice President, Chief Financial
                        Officer and Treasurer
                        (Duly authorized officer
                         and principal financial
                         officer of the registrant)



Date:  August 10, 1998