<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


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



   FOR THE QUARTERLY PERIOD ENDED JUNE 25, 1999   or


   / /  Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
   For the transition period from                    to
                                 -------------------   -------------------

   COMMISSION FILE NUMBER 0-16059


                               JASON INCORPORATED
             (Exact name of registrant as specified in its charter)




            WISCONSIN                                    39-1756840
  (State or other jurisdiction of              (IRS Employer Identification No.)
   incorporation or organization)


           411 EAST WISCONSIN AVENUE, SUITE 2120, MILWAUKEE, WI 53202
                  (Address of principal executive offices)


                                 (414) 277-9300
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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
                             ----------           ----------

On June 25, 1999 there were outstanding 20,401,829 shares of the Registrant's
$.10 par value common stock.

                                   Page 1 of 20
<PAGE>   2
                               JASON INCORPORATED

                                    FORM 10-Q

                                  JUNE 25, 1999

                                      INDEX

<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                         PAGE NO.
                                                                       --------
<S>                                                                   <C>
Consolidated Statements of Income for the Three Months
     Ended June 25, 1999 and June 26, 1998...........................      3

Consolidated Statements of Income for the Six Months
     Ended June 25, 1999 and June 26, 1998...........................      4

Consolidated Balance Sheets as at June 25, 1999 and
     December 25, 1998 ..............................................      5

Consolidated Statements of Cash Flows for the Six Months
     Ended June 25, 1999 and June 26, 1998 ..........................      6

Notes to Consolidated Financial Statements ..........................    7 - 11

Management's Discussion and Analysis of
     Results of Operations and Financial Condition ..................   12 - 18


PART II.  OTHER INFORMATION

Item 1        Legal Proceedings .....................................      19

Item 2        Changes in Securities and Use of Proceeds .............      19

Item 3        Defaults Upon Senior Securities .......................      19

Item 4        Submission of Matters to a Vote of
                  Security Holders ..................................      19

Item 5        Other Information .....................................      20

Item 6        (a)  Exhibits .........................................      20

              (b)  Reports on Form 8-K ..............................      20

Signatures ..........................................................      20
</TABLE>

                                  Page 2 of 20
<PAGE>   3
                               JASON INCORPORATED
                        CONSOLIDATED STATEMENTS OF INCOME

                (DOLLARS IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
<TABLE>
<CAPTION>
                                                                                       FOR THE THREE MONTHS ENDED
                                                                                ---------------------------------------
                                                                                   JUNE 25,                 JUNE 26,
                                                                                    1999                      1999
                                                                                ------------             ------------
                                                                                            (UNAUDITED)

<S>                                                                             <C>                        <C>
NET SALES                                                                       $     108,376              $     99,402

COST OF SALES                                                                          81,918                    76,019
                                                                                -------------              ------------

  Gross Profit                                                                         26,458                    23,383

SELLING AND ADMINISTRATIVE EXPENSES                                                    16,763                    15,616
                                                                                -------------              ------------

  Operating Income                                                                      9,695                     7,767

INTEREST EXPENSE                                                                        1,659                     1,942

OTHER (INCOME) EXPENSE                                                                   (100)                     (414)
                                                                                -------------              ------------

  Income Before Income Taxes                                                            8,136                     6,239

PROVISION FOR INCOME TAXES                                                              3,172                     2,434
                                                                                -------------              ------------

  Income From Continuing Operations                                                     4,964                     3,805

  Income From Discontinued Operations - Net Of Applicable Income Taxes                   ----                       531
                                                                                -------------              ------------

NET INCOME                                                                      $       4,964              $      4,336
                                                                                =============              ============


EARNINGS PER SHARE - BASIC

INCOME FROM CONTINUING OPERATIONS                                               $        0.24              $       0.19

INCOME FROM DISCONTINUED OPERATIONS                                                      ----                      0.02
                                                                                -------------              ------------

NET INCOME                                                                      $        0.24              $       0.21
                                                                                =============              ============


EARNINGS PER SHARE - DILUTED

INCOME FROM CONTINUING OPERATIONS                                               $        0.24               $      0.18

INCOME FROM DISCONTINUED OPERATIONS                                                      ----                      0.02

                                                                                -------------              ------------
NET INCOME                                                                      $        0.24              $       0.20
                                                                                =============              ============
</TABLE>


                   The accompanyng notes are an integral part
                         of these financial statements.




                                  Page 3 of 20
<PAGE>   4

                               JASON INCORPORATED
                        CONSOLIDATED STATEMENTS OF INCOME

                (DOLLARS IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

<TABLE>
<CAPTION>


                                                                        FOR THE SIX MONTHS ENDED
                                                                    -------------------------------
                                                                        JUNE 25,        JUNE 26,
                                                                          1999            1998
                                                                    --------------    -------------

                                                                            (UNAUDITED)

<S>                                                                      <C>          <C>
NET SALES                                                                $ 210,576    $ 190,067

COST OF SALES                                                              160,903      147,633
                                                                         ---------    ---------

  Gross Profit                                                              49,673       42,434

SELLING AND ADMINISTRATIVE EXPENSES                                         32,967       28,877
                                                                         ---------    ---------

  Operating Income                                                          16,706       13,557

INTEREST EXPENSE                                                             3,181        3,555

OTHER (INCOME) EXPENSE                                                        (448)        (925)
                                                                         ---------    ---------

  Income Before Income Taxes                                                13,973       10,927

PROVISION FOR INCOME TAXES                                                   5,448        4,263
                                                                         ---------    ---------

  Income From Continuing Operations                                          8,525        6,664

  Income From Discontinued Operations - Net Of Applicable Income Taxes        ----        1,278

                                                                         ---------    ---------
NET INCOME                                                               $   8,525    $   7,942
                                                                         =========    =========


EARNINGS PER SHARE - BASIC

INCOME FROM CONTINUING OPERATIONS                                        $    0.42    $    0.33

INCOME FROM DISCONTINUED OPERATIONS                                           ----         0.06

                                                                         ---------    ---------
NET INCOME                                                               $    0.42    $    0.39
                                                                         =========    =========


EARNINGS PER SHARE - DILUTED

INCOME FROM CONTINUING OPERATIONS                                        $    0.41    $    0.31

INCOME FROM DISCONTINUED OPERATIONS                                           ----         0.06

                                                                         ---------    ---------
NET INCOME                                                               $    0.41    $    0.37
                                                                         =========    =========
</TABLE>


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



                                  Page 4 of 20

<PAGE>   5

                               JASON INCORPORATED
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                            JUNE 25,              DECEMBER 25,
                                                             1999                    1998
                                                      -----------------         --------------
                                                         (Unaudited)
<S>                                                     <C>                       <C>
ASSETS
Current Assets
  Cash And Cash Equivalents                              $  1,402                 $  30,676
  Accounts Receivable - Net                                57,675                    46,558
  Inventories                                              44,056                    46,368
  Deferred Income Taxes                                     5,663                     5,663
  Other Current Assets                                      5,886                     4,732
                                                        ---------                 ---------
    Total Current Assets                                  114,682                   133,997
                                                        ---------                 ---------

Property, Plant and Equipment
  Cost                                                    182,906                   172,965
  Less - Accumulated Depreciation                         (86,733)                  (80,268)
                                                        ---------                 ---------
    Net Property, Plant and Equipment                      96,173                    92,697
                                                        ---------                 ---------


Intangible Assets - Net                                    85,621                    70,421
Other Assets                                                1,275                     2,066
                                                        ---------                 ---------
                                                        $ 297,751                 $ 299,181
                                                        =========                 =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Current Portion of Long-Term Debt                     $  10,906                 $  29,947
  Accounts Payable                                         30,241                    26,557
  Accrued Compensation & Employee Benefits                 16,193                    15,942
  Accrued Interest                                            898                     1,059
  Accrued Income Taxes                                      2,674                     1,551
  Other Current Liabilities                                14,557                    13,849
                                                        ---------                 ---------

    Total Current Liabilities                              75,469                    88,905

Revolving Loan                                             17,875                       ---
Other Long-Term Debt                                       53,284                    62,849
Deferred Income Taxes                                      11,638                    15,345
Other Long-Term Liabilities                                 1,462                     1,802
Postretirement Health And Other Benefits                    6,286                     6,337
                                                        ---------                 ---------
    Total Liabilities                                     166,014                   175,238
                                                        ---------                 ---------

Commitments and Contingencies                                 ---                       ---

SHAREHOLDERS' EQUITY
Common Stock & Additional
  Contributed Capital                                      35,828                    35,556
Retained Earnings                                          96,628                    88,103
Accumulated Other Comprehensive Income (Loss)                (719)                      284
                                                        ---------                 ---------

    Total Shareholders' Equity                            131,737                   123,943
                                                        ---------                 ---------
                                                        $ 297,751                 $ 299,181
                                                        =========                 =========
</TABLE>


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


                                  Page 5 of 20


<PAGE>   6
                               JASON INCORPORATED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                               For The Six Months Ended
                                                                             ----------------------------
                                                                               June 25,         June 26,
                                                                                 1999             1998
                                                                             -----------      -----------
                                                                                      (UNAUDITED)
<S>                                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Income From Continuing Operations                                           $  8,525          $  6,664
  Adjustments To Reconcile Income From Continuing Operations To Net Cash
   Provided By Operating Activities Of Continuing Operations:
      Depreciation                                                               8,051             6,505
      Amortization                                                               1,715             1,725
      Deferred Income Taxes                                                     (3,707)           (1,408)
    Increase (Decrease) In Cash, Excluding Effects Of
    Acquisitions, Due To Changes In:
      Accounts Receivable                                                      (11,188)           (5,508)
      Inventories                                                                1,760            (1,301)
      Other Current Assets                                                      (1,163)           (3,460)
      Accounts Payable                                                           4,284            (4,898)
      Accrued Compensation & Employee Benefits                                     724             1,004
      Accrued Interest                                                            (161)              (22)
      Accrued Income Taxes                                                       1,123               602
      Other, Net                                                                    58             8,641
                                                                              --------          --------
        Total Adjustments                                                        1,496             1,880
                                                                              --------          --------

Net Cash Provided By Operating Activities Of Continuing Operations              10,021             8,544

Net Cash Provided By Operating Activities Of Discontinued Operations              ----            12,239
                                                                              --------          --------

Net Cash Provided By Operating Activities                                       10,021            20,783
                                                                              --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES

      Acquisition Of Property, Plant And Equipment                              (9,758)           (6,586)
      Net Proceeds From Sale Of Discontinued Operations                           ----            31,224
      Disposal Of Property, Plant And Equipment, Net                                 8             1,401
      Other, Net                                                                     6               (17)
                                                                              --------          --------
Net Cash Provided (Used) For Investing Activities, Excluding Acquisitions       (9,744)           26,022
                                                                              --------          --------

Net Cash Provided (Used) Before Financing Activities, Excluding Acquisitions       277            46,805

Acquisition Of Net Assets, Net Of Cash Acquired                                (20,605)          (16,513)
                                                                              --------          --------

Net Cash Provided (Used) Before Financing Activities                           (20,328)           30,292
                                                                              --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES

      Proceeds From Revolving Loan                                              48,560            59,762
      Repayments Of Revolving Loan                                             (30,685)          (62,082)
      Repayments Of Other Long-Term Debt, Net                                  (27,093)           (1,671)
      Proceeds From Issuance Of Common Stock                                       272               239
                                                                              --------          --------
Net Cash (Used) Provided By Financing Activities                                (8,946)           (3,752)
                                                                              --------          --------

Net Increase (Decrease) In Cash And Cash Equivalents                           (29,274)           26,540
      Cash And Cash Equivalents, Beginning of Period                            30,676             3,835
                                                                              --------          --------

      Cash And Cash Equivalents, End of Period                                $  1,402          $ 30,375
                                                                              ========          ========

      Cash Paid For:
        Interest                                                                 3,132             4,044
        Income Taxes                                                             7,911             5,952
</TABLE>

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

                                  Page 6 of 20

<PAGE>   7


                               JASON INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF FINANCIAL STATEMENTS

Jason Incorporated (the "Company" or "Jason") operates in two primary business
segments: motor vehicle products and industrial products. Motor vehicle products
include the manufacture and marketing of nonwoven needled fiber insulation,
dielectric padding and other interior trim products primarily for the automotive
industry but also for furniture and industrial uses, plus seating products for
motorcycles, construction, agricultural and lawn/turf care equipment. Industrial
products include the manufacture and marketing of industrial brushes, buffing
wheels and compounds used by manufacturers to finish a wide variety of
manufactured products, plus the manufacture and marketing of precision
components such as precision stampings, wire form components and expanded metal
products.

The financial statements at June 25, 1999 and June 26, 1998 and for the three
and six month periods then ended are unaudited, however, in the opinion of
management, all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the financial position at these dates and
the results of operations and cash flows for these periods have been included.
The results for the three and six month periods ended June 25, 1999 are not
necessarily indicative of the results that may be expected for the full year or
any other interim period.


NOTE 2 - ACQUISITIONS / DIVESTITURES

On February 9, 1999, the Company completed the acquisition of Sealeze
Corporation for approximately $18.6 million. Sealeze is a major producer of
strip brushes for industrial and consumer applications and has been integrated
into the Company's industrial products segment.

On February 3, 1999, the Company completed the acquisition of the acoustical
insulation manufacturing and molding operations of Lear Corporation based in
Colne, England for approximately $2 million. This acquisition further expands
Jason's European automotive capabilities.

On June 5, 1998, the Company completed the sale of its power generation business
to a management led group backed by Saw Mill Capital L.L.C. As such, the
accompanying consolidated financial statements and related notes have been
reclassified to reflect the power generation businesses as discontinued
operations. Net cash proceeds from the sale approximated $30 million; there was
no gain or loss on the sale. Sales and operating income of the power generation
businesses for the period December 27, 1997 through June 5, 1998 were $61.0
million and $2.6 million, respectively. Sales and operating income for the
period March 28, 1998 through June 5, 1998 were $30.8 million and $1.0 million,
respectively.



                                  Page 7 of 20
<PAGE>   8
On October 25, 1998, the Company acquired the remaining 49% minority interest in
Suroflex GmbH, a German manufacturer of acoustical insulation products for the
automotive industry, for approximately $2.5 million. In October 1996, the
Company made its initial majority investment in Suroflex. This acquisition
allows Jason and Suroflex to serve their U.S. and European customers on a
worldwide basis.

On March 13, 1998, the Company completed the acquisition of Power Brushes Ltd.
for approximately $16.9 million, including cash and acquisition costs, plus the
assumption of approximately $10.3 million of debt. Brushes International Ltd., a
wholly-owned subsidiary of Power Brushes Ltd., is one of the largest producers
of industrial power brushes in Europe. This business has been combined with the
Company's industrial brush business, Osborn Manufacturing, to form Osborn
International, the largest producer of industrial power brushes in the world.

NOTE 3 - INVENTORIES

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

<TABLE>
<CAPTION>

                       JUNE 25,                 DECEMBER 25,
                         1999                       1998
                      ----------                -----------
                      (Unaudited)
<S>                   <C>                       <C>
Raw materials         $   21,055                $    19,881
Work in process            6,412                      5,817
Finished goods            16,589                     20,670
                      ----------                -----------
                      $   44,056                $    46,368
                      ==========                ===========
</TABLE>

                                  Page 8 of 20


<PAGE>   9



NOTE 4 - EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income available to common
shareholders by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share is computed by giving effect to all
dilutive potential common shares. A reconciliation of the income (numerator) and
shares (denominator) used in the computations of basic and diluted earnings per
common share from continuing operations, respectively, is as follows
(unaudited):

<TABLE>
<CAPTION>
                                                 FOR THE THREE MONTHS ENDED
                                                       JUNE 25, 1999
                                      --------------------------------------------

                                         Income             Shares      Per Share
                                       (Numerator)       (Denominator)    Amount
                                      -------------      -------------  ----------
<S>                                    <C>                <C>           <C>
BASIC EARNINGS PER COMMON SHARE
   Income from continuing operations  $ 4,964,000         20,391,644    $      .24
                                                                        ----------
EFFECT OF DILUTIVE SECURITIES
   Options                                  --               311,646
                                      -----------        -------------
DILUTED EARNINGS PER COMMON SHARE
   Income from continuing operations
     plus assumed conversions         $ 4,964,000         20,703,290    $      .24
                                      -----------        -------------  ----------
</TABLE>

<TABLE>
<CAPTION>


                                                 FOR THE THREE MONTHS ENDED
                                                        JUNE 26, 1998
                                         -------------------------------------------

                                            Income         Shares         Per Share
                                          (Numerator)   (Denominator)      Amount
                                         ------------   -------------    -----------
<S>                                       <C>             <C>             <C>
BASIC EARNINGS PER COMMON SHARE
   Income from continuing operations      $3,805,000      20,258,571      $   .19
                                                                          -------
EFFECT OF DILUTIVE SECURITIES
   Options                                    --             586,967
   Convertible notes                         184,220       1,516,182
                                          ----------      ----------
DILUTED EARNINGS PER COMMON SHARE
   Income from continuing operations
     plus assumed conversions             $3,989,220      22,361,720      $   .18
                                          ----------      ----------      -------

</TABLE>
                                  Page 9 of 20



<PAGE>   10

<TABLE>
<CAPTION>
                                                                    FOR THE SIX MONTHS ENDED
                                                                          JUNE 25, 1999
                                                      -----------------------------------------------------

                                                        Income             Shares              Per Share
                                                      (Numerator)       (Denominator)           Amount
                                                      -----------       -------------          ---------
<S>                                                   <C>                 <C>                      <C>
BASIC EARNINGS PER COMMON SHARE
   Income from continuing operations                  $8,525,000          20,375,969             $  .42
                                                                                                 ------
EFFECT OF DILUTIVE SECURITIES
   Options                                                 --                326,144
                                                      ----------          ----------
DILUTED EARNINGS PER COMMON SHARE
   Income from continuing operations
     plus assumed conversions                         $8,525,000          20,702,113             $  .41
                                                      ----------          ----------             ------
</TABLE>

<TABLE>
<CAPTION>

                                                                    FOR THE SIX MONTHS ENDED
                                                                          JUNE 26, 1998
                                                     ------------------------------------------------------

                                                        Income             Shares              Per Share
                                                      (Numerator)       (Denominator)           Amount
                                                     ------------       -------------          --------
<S>                                                   <C>                 <C>                     <C>
BASIC EARNINGS PER COMMON SHARE
  Income from continuing operations                   $6,664,000         20,248,644             $  .33
                                                                                                ------
EFFECT OF DILUTIVE SECURITIES
   Options                                                    --            556,285
   Convertible notes                                     368,440         1, 516,182
                                                      ----------        -----------
DILUTED EARNINGS PER COMMON SHARE
   Income from continuing operations
     plus assumed conversions                         $7,032,440         22,321,111             $  .31
                                                      ----------         ----------             ------
</TABLE>

The impact of the assumed conversion of the $17,057,000 convertible notes was
included within the earnings per share calculations only for the 1998 periods as
these notes were repaid on January 3, 1999.


NOTE 5 - COMPREHENSIVE INCOME

Total Comprehensive Income amounted to $4,326,000 and $4,394,000 for the three
months ended June 25, 1999 and June 26, 1998, respectively. Total Comprehensive
Income for the three months ended June 25, 1999 is comprised of net income of
$4,964,000 and Other Comprehensive Income (Loss) of ($638,000). Total
Comprehensive Income for the three months ended June 26, 1998 is comprised of
net income of $4,336,000 and Other Comprehensive Income (Loss) of $58,000. Other
Comprehensive Income (Loss) is comprised entirely of foreign currency
translation adjustments.



                                 Page 10 of 20
<PAGE>   11
Total Comprehensive Income amounted to $7,522,000 and $7,920,000 for the six
months ended June 25, 1999 and June 26, 1998, respectively. Total Comprehensive
Income for the six months ended June 25, 1999 is comprised of net income of
$8,525,000 and Other Comprehensive Income (Loss) of $(1,003,000). Total
Comprehensive Income for the six months ended June 26, 1998 is comprised of net
income of $7,942,000 and Other Comprehensive Income (Loss) of $(22,000). Other
Comprehensive Income (Loss) is comprised entirely of foreign currency
translation adjustments.


NOTE 6 - SEGMENT INFORMATION


The Company's seven business units have separate management teams and
infrastructures that offer different products and services. The business units
have been aggregated into two reportable segments (motor vehicle products and
industrial products) since the long term financial performance of these segments
is affected by similar economic conditions. The Company evaluates performance
based on operating earnings of the respective business units. Segment detail is
summarized as follows (in thousands of dollars):

<TABLE>
<CAPTION>



                                     SIX MONTHS ENDED         THREE MONTHS ENDED
                                 ------------------------   ----------------------
                                   JUNE 25,    JUNE 26,     JUNE 25,    JUNE 26,
                                     1999        1998         1999        1998
                                 ----------  ----------   -----------  -----------
                                                 (Unaudited)
<S>                              <C>          <C>          <C>          <C>
Net Sales:
  Motor vehicle products         $ 115,615    $ 106,272    $  59,648    $  53,298
  Industrial products               94,961       83,795       48,728       46,104
                                 ---------    ---------    ---------    ---------
                                 $ 210,576    $ 190,067    $ 108,376    $  99,402
                                 =========    =========    =========    =========
Operating Income:
  Motor vehicle products         $  12,938    $  10,361    $   7,369    $   5,636
  Industrial products                5,165        4,734        3,020        2,896
                                 ---------    ---------    ---------    ---------
                                    18,103       15,095       10,389        8,532
  Corporate and other expenses      (1,397)      (1,538)        (694)        (765)
                                 ---------    ---------    ---------    ---------
                                 $  16,706    $  13,557    $   9,695    $   7,767
                                 =========    =========    =========    =========
<CAPTION>

                                 JUNE 25,        JUNE 26,
                                  1999            1998
                             --------------- --------------
                                     (Unaudited)
<S>                         <C>                <C>
Identifiable Assets:
  Motor vehicle products          $132,017     $119,294
  Industrial products              158,093      142,100
  Corporate                          7,641       44,032
                                  --------     --------
                                  $297,751     $305,426
                                  ========     ========

</TABLE>

                                 Page 11 of 20

<PAGE>   12


                               JASON INCORPORATED
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On June 5, 1998, the Company completed the sale of its power generation business
to a management led group backed by Saw Mill Capital L.L.C. As such, the
accompanying consolidated financial statements and related notes have been
reclassified to reflect the power generation businesses as discontinued
operations. Net cash proceeds from the sale approximated $30 million; there was
no gain or loss on the sale. Sales and operating income of the power generation
businesses for the period December 27, 1997 through June 5, 1998 were $61.0
million and $2.6 million, respectively. Sales and operating income for the
period March 28, 1998 through June 5, 1998 were $30.8 million and $1.0 million,
respectively.



RESULTS OF OPERATIONS

Three months ended June 25, 1999 compared to the three months ended June 26,
1998:

Sales from continuing operations for the three months ended June 25, 1999
increased by 9% from $99,402,000 for the three months ended June 26, 1998 to
$108,376,000. Sales of motor vehicle products increased by 12% from $53,298,000
to $59,648,000. Sales of industrial products increased by 6% from $46,104,000 to
$48,728,000.

The higher motor vehicle products sales resulted from increases in the
automotive products business. The Company's automotive products sales were up
13% in the second quarter of 1999 compared to the prior year. The U.S.
automobile industry built 11% more vehicles in the second quarter of 1999
compared to the same quarter last year. Additionally, automotive products sales
were favorably impacted by an increase in the Company's content per vehicle
resulting from improved sales of the Marabond(R) moldable insulation product
compared to the prior year. The inclusion of the recently acquired Colne,
England acoustical insulation manufacturing and molding operations had the
effect of increasing automotive products sales by 3% for the second quarter of
1999. The Company's second quarter 1999 seating products sales were about equal
to the sales level realized in the second quarter of 1998.

The increase in industrial products sales in the second quarter of 1999 compared
with last year was primarily the result of the February 1999 acquisition of
Sealeze Corporation. Additionally, second quarter 1999 sales for the Osborn
International brush businesses and the components businesses were up
approximately 2% from the prior year, while sales for the JacksonLea buff and
compound business were down slightly.


                                 Page 12 of 20
<PAGE>   13
Operating income from continuing operations increased in the second quarter of
1999 from $7,767,000 in the second quarter of 1998 to $9,695,000.

Operating income for the motor vehicle products segment improved from $5,636,000
in the second quarter of 1998 to $7,369,000 due primarily to higher volume in
the automotive businesses, as discussed above. Second quarter 1999 operating
income also improved in the seating business as second quarter 1998 results
included one time costs incurred in the conversion to cellular manufacturing.

Operating income for the industrial products segment improved from $2,896,000 in
the second quarter of 1998 to $3,020,000. This increase was principally the
result of operating income generated by Sealeze Corporation which was acquired
in February 1999.

Corporate expenses decreased from $765,000 in the second quarter of 1998 to
$694,000. This decrease is primarily due to a decrease in management incentive
compensation.

Interest expense from continuing operations decreased from $1,942,000 in the
second quarter of 1998 to $1,659,000 due to lower average domestic debt levels
which is a result of cash flow from operations generated during the past year
and the proceeds received from the sale of the power generation businesses in
June 1998; cash received from these sources more than offset cash used in the
purchases of Sealeze Corporation and the Colne, England acoustical insulation
and molding operations. The decrease in other income in the second quarter of
1999 compared to last year is primarily due to a decrease in the minority
interest in losses at Suroflex as the Company purchased the minority share in
October 1998.

Six months ended June 25, 1999 compared to the six months ended June 26, 1998:

Sales for the six months ended June 25, 1999 increased by 11% from $190,067,000
for the six months ended June 26, 1998 to $210,576,000. Sales of motor vehicle
products increased by 9% from $106,272,000 to $115,615,000. Sales of industrial
products increased by 13% from $83,795,000 to $94,961,000.

The higher motor vehicle products sales were entirely the result of an increase
in automotive products business sales. Automotive products sales increased by
13%. The U.S. automobile industry built 11% more vehicles in the first half of
1999 compared to the same period last year. Additionally, automotive products
sales were favorably impacted by an increase in the Company's content per
vehicle resulting from improved sales of the Marabond(R) moldable insulation
product compared to the prior year. The February 1999 acquisition of the Colne,
England acoustical insulation manufacturing and molding operation had the effect
of increasing automotive products sales by 2% for the first half of 1999. The
Company's seating products business was down 3% in the first half of 1999
compared to the prior year. This was primarily the result of a decrease in
Harley-Davidson parts and accessories business due to an adjustment of their
inventory levels.


                                 Page 13 of 20
<PAGE>   14

Industrial products sales in the first half of 1999 were up compared to last
year due primarily to the acquisitions of Brushes International in March 1998
and Sealeze Corporation in February 1999; slight increases were also achieved by
the Company's components businesses. First half 1999 sales for the JacksonLea
buff and compound business were down slightly from the same period in the prior
year.

Operating income from continuing operations increased in the first half of 1999
from $13,557,000 in the first half of 1998 to $16,706,000.

Operating income for the motor vehicle products segment improved from
$10,361,000 in the first half of 1998 to $12,938,000 due primarily to higher
volume in the automotive businesses, as discussed above. These results more than
offset reduced profitability in the seating business caused by lower volume in
the first half of 1999 as compared to the prior year and a higher mix of lower
margin products.

Operating income for the industrial products segment increased from $4,734,000
in the first half of 1998 to $5,165,000 due to increased operating income at
Osborn International resulting from the acquisition of Brushes International in
March 1998 and from the acquisition of Sealeze Corporation in February 1999.

Corporate expenses decreased from $1,538,000 in the first half of 1998 to
$1,397,000. This decrease is primarily due to management incentive compensation.

Interest expense from continuing operations decreased from $3,555,000 in the
first half of 1998 to $3,181,000 due to lower average domestic debt levels which
is a result of cash flow from operations and the proceeds received from the sale
of the power generation businesses. The decrease in other income in the first
half of 1999 compared to the first half of 1998 is primarily a result of a one
time gain on the sale of assets last year and a decrease in the minority
interest in losses at Suroflex as the Company purchased the minority share in
October 1998.

The Company's effective income tax rate for the second quarter and first half of
1999 was 39% which is the same as the rate for the second quarter and first half
of 1998.

FUTURE ACCOUNTING CHANGES

In June, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as part of
a hedge transaction and, if it is, the type of hedge transaction. Management of
the Company anticipates that, due to its limited use of derivative instruments,
the adoption of SFAS No. 133 will not have a significant effect on the Company's
results of operations or its financial position. This Statement is effective for
fiscal years beginning after June 15, 2000.


                                 Page 14 of 20
<PAGE>   15


LIQUIDITY AND CAPITAL RESOURCES

During the first half of 1999, the Company satisfied the capital requirements of
its operations with internally generated funds. For the foreseeable future, the
Company believes it will generate funds from operations to meet the capital
requirements of its existing operations. In March 1999, the Company entered into
a new $50 million credit agreement with its two banks. As of June 25, 1999, the
Company had available unused borrowing capacity of $30.2 million under this bank
revolving loan facility. During the first half of 1998, the Company also
satisfied the capital requirements of its operations with internally generated
funds; it also used the net proceeds from the sale of the power generation
businesses to pay off the balance outstanding under the revolving loan facility
in June 1998.

During the first half of 1999, working capital decreased by $5,879,000 from
$45,092,000 at December 25, 1998, to $39,213,000 at June 25, 1999. This decrease
in working capital was the result of a decrease in cash and cash equivalents
which were used to partially fund the 1999 acquisitions of the Colne, England
acoustical insulation manufacturing and molding operations and Sealeze
Corporation.

During the first half of 1999, the Company generated $10,021,000 in cash from
continuing operations. The Company anticipates generating additional cash flow
from operations during the balance of the year.

In the first half of 1999 and 1998, the Company made capital expenditures of
$9,758,000 and $6,586,000, respectively. The major first half 1999 expenditures
were in the motor vehicle products segment for equipment at Janesville Products
and Sackner to support new programs and to improve efficiency. The major first
half 1998 expenditures were in the motor vehicle products segment for equipment
at Milsco to support the conversion to cellular manufacturing, at Janesville
Products to support new programs and to improve efficiency, and in the
industrial products segment for equipment to support new programs. No
significant commitments are outstanding as of June 25, 1999.


SEASONALITY

U.S. auto makers traditionally shut down for the annual model changeover in the
third quarter. In addition, adjustments to production schedules are made
throughout the year based on retail auto sales and the level of dealer
inventories. These seasonal patterns affect the Company's motor vehicle products
operations most significantly but also have somewhat of an impact on industrial
products due to the effect on automotive suppliers which use the Company's
precision components and finishing products.

                                 Page 15 Of 20
<PAGE>   16



YEAR 2000 ISSUES

The Company's State of Readiness - The Company's main financial and
manufacturing hardware and software systems have been tested and are now
believed to be year 2000 compliant. This was accomplished primarily through
systems upgrades and maintenance performed over the last few years to enhance
functionality of the systems, not solely to achieve year 2000 compliance. The
only systems that remain to be upgraded for year 2000 are certain ancillary,
mostly PC based, interface systems used for payroll, shop floor control and
report writing functions. Year 2000 compliance for these systems is ongoing and
is expected to be completed by mid to late 1999. Major customers and suppliers
have been surveyed and to date the Company has not been made aware of
significant year 2000 issues that would materially affect its business.

Costs to Address the Company's Year 2000 Issues - The majority of the Company's
year 2000 issues were corrected either through systems upgrades required for
other business purposes or normal maintenance contracts. Therefore, these
improvements have not resulted in costs significantly incremental to non-year
2000 planned information systems activities. The estimated costs to correct the
remaining ancillary systems still not compliant are not expected to exceed
$200,000.

Risks to the Company for Year 2000 Issues - With regard to systems under the
Company's control, management does not believe that the Company has significant
exposure to the year 2000 issue since, if necessary, systems are capable of
accepting manually entered data. The believed worst case scenario is that the
Company would have to revert back to certain manual systems for a small portion
of its systems, for example, shop floor labor collection and certain internal
reporting functions. Our customers and vendors are at various stages of
compliance, but management is not aware of significant year 2000 issues that
would materially affect the Company's business with them. The Company will
continue to monitor year 2000 compliance with its customers and vendors
throughout 1999, but will be unable to achieve the same degree of certainty that
it has achieved with internal systems.

The Company's Contingency Plans - Within the next several months, the Company
expects to be fully year 2000 compliant. To the extent that it has minor
internal systems that are not year 2000 compliant by that time, the Company will
have time to implement manual systems by year end 1999 which management believes
will significantly reduce the financial risk to the Company.


                                 Page 16 of 20

<PAGE>   17

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk stemming from changes in foreign exchange
rates, interest rates and commodity prices. Changes in these factors could cause
fluctuations in earnings and cash flows. In the normal course of business,
exposure to interest rates is managed by fixing interest rates on the majority
of the Company's long-term debt. Fluctuation in commodity prices, for example
steel and cotton cloth, are managed by strategic purchasing which generally
provides the time necessary to allow for price increases to customers, where
appropriate. In rare situations where commitments are made for extended periods
(more than 60 days), outside of functional currencies, for example, a commitment
to purchase European equipment for use in a U.S. plant which will take six
months to deliver, exposure is managed by entering into hedging transactions
authorized under Company policies that place controls on these activities.
Hedging transactions involve the use of derivative financial instruments and are
used only where there is an underlying exposure and not for trading or
speculative purposes. At June 25, 1999 there were no outstanding hedging
transactions.

Foreign Operations - The Company has significant foreign operations, for which
the functional currencies are denominated primarily in German Marks and British
Pounds and to a lesser extent, Canadian Dollars, Swedish Kronor, French Francs,
Mexican Pesos, Brazilian Reals, Chinese Renminbi, and Portuguese Escudos. As the
values of the currencies of the foreign countries in which the Company has
operations increases or decreases relative to the U.S. Dollar, the sales,
expenses, profits, assets and liabilities of the Company's foreign operations,
as reported in the Company's Consolidated Financial Statements, increase or
decrease, accordingly. The Company's primary method of reducing this exposure is
to approximately balance current assets and liabilities within each functional
currency. The Company does not use derivative financial instruments to hedge
this exposure. Because the Company has significant operations across member
countries of the European Monetary Union, the introduction of the Euro on
January 1, 1999 simplified the management of foreign exchange exposure by
aggregating the assets and liabilities of several currencies that previously had
to be managed individually.

EURO CONVERSION

On January 1, 1999, member countries of the European Monetary Union (EMU) began
a three-year transition from their national currencies to a new common currency,
the "Euro". In the first phase, the permanent rates of exchange between the
members' national currency and the Euro has been established and monetary,
capital, foreign exchange, and interbank markets will be converted to the Euro.
National currencies will continue to exist as legal tender and may continue to
be used in commercial transactions. By January 2002, Euro currency will be
issued and by July 2002, the respective national currencies will be withdrawn.
The Company has operations in member countries of the EMU and, accordingly, has
established action plans that are continuing to be implemented to address the
Euro's impact on information systems, currency exchange rate risk, taxation,
contracts, competition and pricing. Based on its current assessment,


                                 Page 17 of 20
<PAGE>   18
management believes that the costs of the Euro conversion will not have a
material impact on the operations, cash flows or financial condition of the
Company.

FORWARD-LOOKING STATEMENTS

This report contains certain statements as to the Company's belief, expectation
or anticipation regarding future developments. Such statements constitute
forward-looking statements and are subject to certain risks and uncertainties
that could cause actual future results and developments to differ materially
from those currently projected. Such risks and uncertainties include, but are
not limited to, changes in capital expenditure requirements, the ability of the
Company and its suppliers and customers to address Year 2000 issues and general
economic conditions in the Company's market segments.

                                 Page 18 of 20


<PAGE>   19


                                     PART II

                                OTHER INFORMATION

ITEM 1   Legal Proceedings - None

ITEM 2   Changes in Securities and Use of Proceeds - None

ITEM 3   Defaults Upon Senior Securities - None

ITEM 4   Submission of Matters to a Vote of Security Holders

          (a) The Annual Meeting of Shareholders was held on April 21, 1999.

          (b) Not Applicable.

          (c) At the Annual Meeting the shareholders:

              (i)   Voted to elect six directors to serve until the
                    2000 Annual Meeting of Shareholders. Each nominee
                    was elected by a vote of the shareholders as follows:

<TABLE>
<CAPTION>

        DIRECTOR                         FOR                      WITHHELD
        --------                         ---                      --------
<S>                                  <C>                         <C>
     Vincent L. Martin               18,788,329                    2,145
     Mark Train                      18,788,324                    2,150
     Frank Jones                     18,784,284                    6,190
     Wayne Oldenburg                 18,768,289                   22,185
     Wayne Fethke                    18,784,440                    6,034
     David Drury                     18,784,440                    6,034

              (ii)  Voted to ratify the appointment of PricewaterhouseCoopers
                    LLP as independent auditors of the Corporation for the 1999
                    fiscal year as follows:
                    FOR:                 18,785,461
                    AGAINST:                  4,425
                    ABSTAINED:                  588

        (d)    Not Applicable.

</TABLE>

                                 Page 19 of 20


<PAGE>   20


ITEM 5 Other Information:
                   On April 21, 1999, the Board of Directors appointed John
                   Hengel as a Vice President of the Company, effective July 1,
                   1999.

ITEM 6   (a)      Financial Data Schedule
         (b)      Reports on Form 8-K - None


                           SIGNATURES

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

                           JASON INCORPORATED (Registrant)


                           by
                             -----------------------------------------
                           John J. Hengel
                           Vice President - Finance
                           (Chief Financial Officer)










                                 Page 20 of 20