FORM 10-Q

                    SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON, DC  20549


                Quarterly Report under Section 13 or 15(d)

                  of the Securities Exchange Act of 1934

For Quarter Ended June 30, 1999        Commission File Number 2-36877


                             IREX CORPORATION

Pennsylvania                                              23-1712949

120 North Lime Street, Lancaster                               17603

Registrant's Telephone Number, Including Area Code, (717) 397-3633



     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

            Common Shares Outstanding (Single Class) 432,202




                   IREX CORPORATION AND SUBSIDIARIES

                    PART I:   FINANCIAL INFORMATION


Item 1.   Financial Statements.

     The condensed financial statements included herein have been
prepared by Irex Corporation (the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations.

     The financial information presented herein reflects all adjustments
(consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the results
for the interim periods presented.  Certain prior period amounts have
been reclassified to conform with the current presentation.  The results
for interim periods are not necessarily indicative of the results to be
expected for the full year.



                                 IREX CORPORATION AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF INCOME
                                            (Unaudited)

                                                        Six Months
                                 Second Quarter        Ended June 30
                                 1999      1998       1999       1998

                          (In Thousands Except Per Common Share Amounts)

Contracting Revenues           $ 36,672  $ 35,621   $ 65,733   $ 66,054

Distribution and
  Other Revenues                     39    45,476        119     86,334

    Total Revenues               36,711    81,097     65,852    152,388

Cost of Revenues                 30,020    63,240     53,294    119,350

    Gross Profit                  6,691    17,857     12,558     33,038

Selling, General and
  Administrative Expenses         6,232    13,615     11,973     27,622

  Operating Income                  459     4,242        585      5,416

Interest (Income) Expense, Net     (193)      520       (417)     1,010

    Income Before Income Taxes      652     3,722      1,002      4,406

Income Tax Provision                221     1,547        322      1,817

Net Income                     $    431  $  2,175   $    680   $  2,589

  Less:  Dividend Requirements
         for Preferred Stock       (244)     (245)      (489)      (490)

  Less:  Premium Paid for Redemption
         of Preferred Stock        (125)      -         (125)       -

NET INCOME APPLICABLE
  TO COMMON STOCK              $     62  $  1,930   $     66   $  2,099


Average Common Shares
  Outstanding - Basic           432,202   416,709    432,102    403,697

Stock Options Issued to
  Employees and Directors          -        1,851        -        4,498

Average Common Shares
  Outstanding - Diluted         432,202   418,560    432,102    408,195

Income per Common Share
  - Basic                      $   0.14  $   4.63   $   0.15   $   5.20

Income per Common Share
  - Diluted                    $   0.14  $   4.61   $   0.15   $   5.14




                IREX CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                           (Unaudited)

                                          June 30         December 31
                                           1999               1998
                                                (In Thousands)
ASSETS:

Cash and Cash Equivalents               $  19,725          $  10,485
Receivables, Net                           29,452             29,719
Inventories                                   459                512
Actual Costs and Estimated
  Earnings on Contracts in
  Process in Excess of Billings             4,015              3,750
Prepaid Income Taxes                        2,201              2,398
Other Prepaid Expenses                        595                194
Deferred Income Taxes                       2,543              2,543

  Total Current Assets                     58,990             49,601

Property and Equipment, Net                   978                999
Note Receivable                             3,500              3,500
Non-Current Deferred Income Taxes           3,147              3,147
Other Assets                                  624                624

  TOTAL ASSETS                          $  67,239          $  57,871


LIABILITIES AND SHAREHOLDERS' INVESTMENT:

Notes Payable to Banks                  $     -            $     629
Accounts Payable                            8,482              6,649
Billings in Excess of Actual Costs
  and Estimated Earnings on
  Contracts in Process                      4,174              2,647
Accrued Workers' Compensation Insurance     2,627              2,342
Accrued Liabilities                        19,635             10,340

  Total Current Liabilities                34,918             22,607

Non-Current Liabilities                     9,248              9,246

Redeemable Preferred Stock                  7,362             10,490

Capital Stock                               1,028              1,028
Paid-in Surplus                               533                537
Retained Earnings                          32,007             31,942
Cumulative Translation Adjustments           (234)              (292)
Notes Receivable                             (320)              (372)
Treasury Stock at Cost                    (17,303)           (17,315)

  Total Shareholders' Investment           15,711             15,528

  TOTAL LIABILITIES AND
  SHAREHOLDERS' INVESTMENT             $   67,239          $  57,871





                   IREX CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Unaudited)

                                              Six Months Ended June 30
                                                   1999         1998
                                                    (In Thousands)

Cash Flows from Operating Activities:

Net income                                       $   680     $  2,589
Reconciliation of net income to net cash
provided by (used for) operating activities
  Depreciation and amortization                      186          678
  Provision for losses on accounts receivable         92          497

Decrease (increase) in current assets
  Receivables                                        175       (5,462)
  Inventories                                         53         (195)
  Prepaid income taxes and other prepaid expenses   (204)        (259)
  Actual costs and estimated earnings on contracts
    in process in excess of billings, net          1,262         (968)

Increase (decrease) in current liabilities
  Accounts payable                                 1,970        4,699
  Accrued income taxes                                -           484
  Accrued liabilities and other liabilities        9,445       (3,527)

  Net cash provided by (used for)
    operating activities                          13,659       (1,464)


Cash Flows from Investing Activities:

  Net additions to property and equipment           (165)        (310)
  Acquisitions of certain businesses,
  net of cash acquired
      Assets                                          -        (5,640)
      Intangibles                                     -          (930)
  Decrease (increase) in other assets                 58          (30)

    Net cash used for investing activities          (107)      (6,910)


Cash Flows from Financing Activities:

  Net (repayments on) borrowings from
    revolving lines of credit                       (629)      12,184
  Payments on long-term debt                          -        (1,875)
  Dividends paid                                    (489)        (490)
  Exercise of stock options                           -         1,084
  Payment on notes receivable                         52           -
  Reissuance of common stock                           8           -
  Repurchase of common stock                          -           (59)
  Repurchase of preferred stock                   (3,254)          -

    Net cash (used for) provided by
     financing activities                         (4,312)      10,844

Net Increase in Cash and Cash Equivalents          9,240        2,470

Cash and Cash Equivalents at Beginning of Period  10,485          374

Cash and Cash Equivalents at End of Period       $19,725     $  2,844




                  IREX CORPORATION AND SUBSIDIARIES
                        June 30, 1999 and 1998

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              (Unaudited)

(1)  The consolidated financial statements include the accounts of Irex
     Corporation (the Company) and its subsidiaries, all of which are wholly
     owned.  All significant intercompany accounts and transactions have been
     eliminated in consolidation.

     Prior to 1999, the Company consisted of two business units.  The
     distribution unit, which the Company spun off on December 31, 1998 (see
     Note 5 for further discussion), was primarily a distributor and
     fabricator of mechanical insulation, architectural/acoustical products
     and specialty products.  Subsequent to the spin-off, the Company
     continues to operate only within the specialty contracting industry.
     The subsidiaries in the specialty contracting unit primarily engage in
     mechanical insulation, abatement, fire protection and interior finish
     contracting.

(2)  The Company has authorization for 2,000,000 shares of its common
     stock with a par value of $1.00 per share.  At June 30, 1999 1,028,633
     shares were issued, 432,202 shares were outstanding and 596,431 shares
     were held, at cost, in Treasury stock.

(3)  All highly liquid investments with a maturity of three months or
     less at the time of purchase are considered to be cash equivalents.  The
     Company's income tax and interest payments for the first six months of
     1999 and 1998 were:

                                  1999        1998
               Income Taxes:  $ 125,000  $ 1,332,000
               Interest:      $  72,000  $ 1,090,000

(4)  On January 1, 1998, the Company adopted Statement of Financial
     Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS No.
     130).  SFAS No. 130 establishes standards for reporting and displaying
     comprehensive income and its components.  Comprehensive income, as
     defined by SFAS No. 130, is the total of net income and all other
     non-owner changes in equity.  Total comprehensive income for the quarters
     ended June 30, 1999 and 1998 was $468,000 and $2,134,000, respectively.
     Total comprehensive income for the six months ended June 30, 1999 and
     1998 was $738,000 and $2,559,000, respectively.  The difference between
     net income and comprehensive income for the above periods is due to
     cumulative translation adjustments.

(5)  On January 19, 1998, the Company announced its intention to spin
     off one of its subsidiaries, Specialty Products & Insulation Co. (SPI).
     The Company's Board of Directors (the Board), at its February 26, 1998
     meeting, approved in principle the proposed transaction in which
     shareholders of Irex common stock would receive a dividend of SPI common
     stock through a pro rata distribution of 100% of SPI's capital stock
     (the Distribution).  On December 16, 1998, the Board granted final
     approval of the spin-off to the Irex shareholders of all the common
     stock of SPI (the Spin-off).

     The Spin-off was effected on December 31, 1998 (the Closing Date)
     through the Distribution to the Company shareholders of record at the
     close of business on December 28, 1998.  SPI distributed these shares on
     the basis of one share of SPI Stock for every fifty Irex shares held.
     SPI did not issue certificates for fractional shares in the
     distribution.  Instead, it canceled such shares and issued cash in lieu
     of fractional shares at a rate of $2,698.09 per SPI share.  No
     consideration was paid by the Irex shareholders for shares of SPI Stock.

     The Company received an opinion of counsel to the effect that the
     Distribution is not taxable to Irex and its shareholders for federal
     income tax purposes.  However, cash paid in lieu of fractional shares of
     SPI Stock is taxable to the shareholders.

     Immediately prior to the Spin-off, SPI declared a dividend of
     $10.5 million, which was paid to the Company as the sole shareholder of
     SPI.  The dividend was paid by means of $7.0 million in cash and $3.5
     million of junior subordinated notes of SPI.  The pay-in-kind notes bear
     interest at 10.5% and mature April 1, 2003. At the Closing Date,
     immediately prior to the Distribution, total assets of SPI were $66.3
     million and total liabilities were $64.6 million.  The net investment of
     the Company in SPI was $1.7 million at the Closing Date, immediately
     prior to the Distribution.  Additionally, SPI repaid intercompany debt
     in the amount of $34.3 million immediately after the Spin-off.

     On the Closing Date, immediately following the Distribution,
     Evercore Capital Partners L.P., Evercore Capital Partners (NQ) L.P. and
     Evercore Capital Offshore Partners L.P. (collectively, Evercore),
     invested approximately $15.4 million in SPI in exchange for 7,113 shares
     of newly-issued SPI Common Stock at the purchase price of $2,158.46 per
     share.  In addition, certain officers of SPI acquired 109 shares of
     newly-issued Common Stock.  As a result of the Distribution and
     subsequent new investment, approximately 55% of SPI's Common Stock is
     owned by Irex shareholders and by SPI's management, and approximately
     45% is owned by Evercore.

     As a result of the Spin-off, SPI is now a separate company,
     primarily concentrating on specialty product distribution/fabrication in
     the construction industry. The Company and its wholly owned subsidiaries
     will continue to operate within the specialty contracting industry.

     The following pro forma unaudited condensed consolidated
     statements of income for the six months ended June 30, 1998 and the
     three months ended June 30, 1998 give effect to the Spin-off of SPI, and
     are presented as if the Spin-off had occurred as of January 1, 1997.

     The "Pro Forma" amounts represent the pro forma results of
     operations of the Company after giving effect to the dividend received
     from SPI and SPI's repayment of intercompany debt immediately after the
     Spin-off and the elimination of operating results attributable to SPI
     for the period presented.  The pro forma unaudited condensed
     consolidated statement of income may not be indicative of the results
     that would have been obtained had the Spin-off actually occurred on the
     date assumed nor is it necessarily indicative of the future consolidated
     results of operations.

     The Company's consolidated statements of income for the six-month
     and three-month periods ended June 30, 1999 and consolidated statement
     of cash flows for the six months ended June 30, 1999 do not include
     SPI's operating results.  In addition, the Company's consolidated
     balance sheets at June 30, 1999 and December 31, 1998, respectively, do
     not include the balance sheet of SPI.




                 IREX CORPORATION AND SUBSIDIARIES
   PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
                FOR THE QUARTER ENDED JUNE 30, 1998

                                         Unaudited
                                         Pro Forma     Unaudited
                           Historical   Adjustments    Pro Forma

                    (In Thousands Except Share and Per Share Amounts)

Revenues                   $  81,097   $ (45,345)(a)   $ 35,752

Cost of Revenues              63,240     (34,649)(a)     28,591

  Gross Profit                17,857     (10,696)         7,161

Selling, General, and
  Administrative Expenses     13,615      (8,315)(b)      5,300

  Operating Income             4,242     ( 2,381)         1,861

Interest Expense, Net            520        (520)(c)        -

  Income Before Income Taxes   3,722      (1,861)         1,861

Income Tax Provision           1,547        (763)           784

Net Income                  $  2,175     $(1,098)      $  1,077

  Dividend Requirements
   for Preferred Stock          (245)        -             (245)

NET INCOME APPLICABLE TO
  COMMON STOCK              $  1,930     $(1,098)      $    832

Average Common Shares
  Outstanding - Basic        416,709                    416,709

Effect of Stock Options
  Issued to Employees
  and Directors                1,851                      1,851

Average Common Shares
  Outstanding - Diluted      418,560                    418,560

Income Per Common Share
  - Basic                   $   4.63                   $   2.00

Income Per Common Share
  - Diluted                 $   4.61                   $   1.99






                    IREX CORPORATION AND SUBSIDIARIES
     PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
                 FOR THE SIX MONTHS ENDED JUNE 30, 1998

                                         Unaudited
                                         Pro Forma     Unaudited
                            Historical  Adjustments    Pro Forma

                     (In Thousands Except Share and Per Share Amounts)

Revenues                    $ 152,388   $ (86,072)(a)  $ 66,316

Cost of Revenues              119,350     (66,016)(a)    53,334

  Gross Profit                 33,038     (20,056)       12,982

Selling, General, and
  Administrative Expenses      27,622     (16,037)(b)    11,585

  Operating Income              5,416      (4,019)        1,397

Interest Expense, Net           1,010      (1,010)(c)       -

  Income Before Income Taxes    4,406      (3,009)        1,397

Income Tax Provision            1,817      (1,234)          583

Net Income                  $   2,589   $  (1,775)     $    814

  Dividend Requirements
  for Preferred Stock            (490)        -            (490)

NET INCOME APPLICABLE TO
  COMMON STOCK              $   2,099   $  (1,775)     $    324

Average Common Shares
  Outstanding - Basic         403,697                   403,697

Effect of Stock Options
  Issued to Employees
  and Directors                 4,498                     4,498

Average Common Shares
  Outstanding - Diluted       408,195                   408,195

Income Per Common Share
  - Basic                   $    5.20                  $   0.80

Income Per Common Share
  - Diluted                 $    5.14                  $   0.79


      (a)  This adjustment includes only SPI's activity with respect to
           third parties because intercompany sales and costs were eliminated
           in the Company's consolidated statement of income.  SPI's net sales
           to affiliates were approximately $4.0 million for the six months
           ended June 30, 1998 and $2.0 million for the second quarter ended
           June 30, 1998.

      (b)  This adjustment includes the elimination of the costs,
           approximating $206,000 for the six months ended June 30, 1998,
           associated with Irex corporate personnel who became employees of
           SPI prior to April 1, 1998.  The amount also reflects fee income
           from the computer services agreement under which SPI will pay a fee,
           approximating $610,000 on an annualized basis, to continue
           utilizing Irex's computer hardware, software and systems personnel
           for a period of three years.  SPI has the option to terminate the
           computer services agreement after 18 months by notifying Irex six
           months prior to the date of termination.

      (c)  This adjustment reflects the repayment of the Company's long-term
           debt and paydown of its borrowings under short-term credit
           facilities with funds received from SPI immediately after the
           Spin-off.


(6)  The Company adopted SFAS No. 131, "Disclosures About Segments of an
     Enterprise and Related Information", during the fourth quarter of 1998.
     SFAS No. 131 establishes standards for public companies to report
     certain information about operating segments in annual financial
     statements and also requires that selected information about operating
     segments be included in interim financial reports to shareholders.  It
     also establishes standards for related disclosures about products and
     services, including the geographic areas in which business is conducted.

     Operating segments are defined as components of an enterprise about
     which discrete financial information is available, and whose operating
     results are regularly evaluated by the chief operating decision maker
     (or group that functions in such capacity) in assessing performance and
     deciding how to allocate resources.  The Company's chief operating
     decision-making group is the Management Council which, prior to the spin
     off of its distribution subsidiary, consisted of the Company's president
     (Chief Executive Officer), two senior vice presidents (General
     Counsel/Secretary and Finance/Administration) and the presidents of each
     of the Company's operating subsidiaries.  After the spin-off, a senior
     vice president of the contracting group replaced the president of the
     Company's former distribution subsidiary as a member of the Management
     Council.

     Prior to the spin-off of SPI, the Company consisted of two distinct
     strategic business units: a specialty contracting group and a
     distribution/fabrication group.  Subsequent to the December 31, 1998
     spin-off, the Company's only business unit is the specialty contracting
     group.

     The Company's reportable operating segments for the six months and
     quarter ended June 30, 1998 include Distribution, Contracting and Other.
     The Distribution segment consists of SPI, which is primarily a
     distributor and fabricator of mechanical insulation,
     architectural/acoustical products and specialty products.  The
     Contracting segment includes  wholly owned subsidiaries, which primarily
     engage in mechanical insulation, abatement, fire protection and interior
     finish contracting.  The Other segment consists of the parent company
     which provides various administrative and management services to the
     Distribution and Contracting segments and a Delaware investment company.
     As a result of the spin-off of the distribution unit on December 31,
     1998, the Company no longer has reportable segments.

     The accounting policies of the operating segments are consistent
     with those described in the summary of significant accounting policies
     except that the separate financial results for the operating segments
     have been prepared using a management approach, which is consistent with
     the basis and manner in which management internally allocates costs
     associated with the Company's central administration and support.
     Central administrative costs are allocated for the purpose of assisting
     in making internal operating decisions.  The Company evaluates
     performance based on net income of the operating segments and generally
     accounts for intersegment sales as if the sales were made to third
     parties at current market prices.


    (in thousands)     Distrib. Contract.   Other   Elimin.     Total

Quarter Ended June 30, 1998:

Net revenues from
 external customers    $45,346   $35,751   $  -    $   -       $81,097
Intersegment
 net revenues            2,022       -        -     (2,022)        -
Total net revenues     $47,368   $35,751   $  -    $(2,022)    $81,097

Depreciation and
 amortization              222       115       39      -           376
Interest and
 dividend income            15        19      331     (330)(a)      35
Interest expense           572       189      124     (330)(a)     555
Income tax expense         695       424      428      -         1,547
Net income               1,044       505      626      -         2,175
Capital expenditures        75        39        8      -           122



    (in thousands)     Distrib. Contract.   Other   Elimin.     Total

Six Months Ended June 30, 1998:

Net revenues from
 external customers    $86,073   $66,315   $  -    $   -      $152,388
Intersegment net
 revenues                3,964       -        -     (3,964)        -
Total net revenues     $90,037   $66,315   $  -    $(3,964)   $152,388

Depreciation and
 amortization              404       191       83      -           678
Interest and
 dividend income            32        19      835     (834)(a)      52
Interest expense         1,104       394      398     (834)(a)   1,062
Income tax expense       1,008       207      602      -         1,817
Net income               1,450       177      962      -         2,589
Segment assets          57,645    48,558   24,263   26,716)(b) 103,750
Capital expenditures       205        90       15      -           310

       (a)  The Distribution and Contracting segments, in addition to
            the parent company, have indebtedness with Irex Financial
            Corporation (IFC) in the form of long-term unsecured notes.
            SPI's note was repaid December 31, 1998 as a condition of the
            spin-off discussed earlier.  The parent company also provides a
            borrowing facility for the Distribution and Contracting segments,
            which receive credit for cash deposited or charges for working
            capital needed.  Based upon activity within the intercompany
            account, the Distribution and Contracting segments are charged
            interest expense.

       (b)  The elimination of segment assets consists primarily of
            intercompany receivables.

(7)  During 1992 the Company offered to exchange one share of $2.80
     Cumulative Preferred Stock with a par value of $1 per share (Preferred
     Stock) for each share of the Company's outstanding common stock up to a
     maximum of 350,000 common shares (the Offer).  A total of 349,864 common
     shares were exchanged on December 22, 1992 in accordance with the Offer.

     The Company's Board, at its April 29, 1999 meeting, authorized a
     call of up to 160,256 shares of Preferred Stock at a call price of
     $31.20 per share, plus accrued but unpaid dividends on such stock
     through June 30, 1999.  The Company redeemed 104,269 shares as a result
     of the call, and the transaction was recorded in the quarter ended June
     30, 1999.

     All shares of Preferred Stock held of record as of May 14, 1999
     were subject to the call, except that the Company did not have the right
     to redeem shares of Preferred Stock which had been continuously and
     beneficially owned by the holder since the issuance of the Preferred
     Stock in connection with the Offer, if such holder elected to prohibit
     the redemption.

     The shares purchased by the Company pursuant to this call will
     count against the Company's obligation to repurchase 1/15th of the
     outstanding shares of Preferred Stock each year upon the request of
     preferred shareholders.  The price for future calls for redemption
     declines to $30.90 on February 1, 2000 and by $0.30 each February 1
     thereafter until it reaches $30.00 on February 1, 2003.

(8)  Shareholders approved, via proxy vote at the Company's April 29,
     1999 Annual Meeting, a Board resolution for a new Non-Qualified Stock
     Option Plan for Outside Directors (the New Plan).

     The New Plan granted 2,500 options for each non-employee director
     and 3,750 options for the Chairman of the Board on January 1, 1999.  The
     options carry an exercise price of $35.96, the Company's book value as
     of that date.  Options vest over a five-year period on January 1 of each
     year from January 1, 1999 to January 1, 2004 in 500 share increments
     providing the Director is a director as of that date; or they vest in
     total in the event of a major corporate transaction.  New non-employee
     directors or a new chairman of the board would receive options for the
     balance of the five-year program consistent with their position and
     offset by a reduction in their predecessors' vested shares.  These later
     options would be granted at no less than the original strike price (i.e.
     $35.96) or such higher strike price as may be determined by the Board.

(9)   On June 24, 1999, the Company received approximately $11.2 million
      which was obtained through a settlement of certain obligations on
      insurance policies providing coverage for asbestos-related bodily injury
      claims.  The Company anticipates that, in accordance with the insurance
      settlement agreements concerning asbestos-related bodily injury claims,
      the funds received in the settlement will be paid to Travelers Property
      Casualty Corp. during 1999.  The settlement does not impact the
      Company's income statement because the payment is being passed to the
      Company's lead insurer for the payment of claims and defense costs.




                  IREX CORPORATION AND SUBSIDIARIES
                       June 30, 1999 and 1998

               Management's Discussion and Analysis of
            Financial Condition and Results of Operations


As a result of the spin-off of Specialty Products & Insulation Co. (SPI)
on December 31, 1998 (see Note 5 of the accompanying financial
statements), the Company's consolidated operating results for the six
months ended June 30, 1999 do not include SPI;  however, SPI's operating
results are included in the consolidated statement of income for both
the quarter and six months ended June 30, 1998.  The following
discussion compares the Company's performance in the quarter and
year-to-date periods ended June 30, 1999 with the pro forma results of
operations for the respective periods in 1998 as presented in Note 5.
The pro forma amounts represent the Company's results of operations
after giving effect to the dividend received from SPI and SPI's
repayment of intercompany debt immediately after the spin-off and the
elimination of operating results attributable to SPI for the three
months and six months ended June 30, 1998.  Subsequent to the spin-off,
the Company and its subsidiaries continue to operate within the
specialty contracting industry.

The Company achieved operating income of $459,000 in the second quarter
of 1999, a decrease of $1.4 million from the $1,861,000 achieved in last
year's comparable quarter.  The weaker second quarter has led to
operating income of $585,000 for the six months ended June 30, 1999,  or
a 58% decrease from the $1,397,000 in last year's similar period.  The
six-month shortfall is primarily attributable to an approximate $800,000
gain, recorded in the second quarter of 1998, resulting from the
curtailment of the Company's pension plan.

Net income applicable to common shareholders, after the dividend
requirement for preferred stock and  premium paid for the preferred
stock redemption (see Note 7 of the accompanying financial statements),
was $62,000, or $0.14 per share for the second quarter of 1999.  The
second quarter of 1998 showed net income of $832,000, or $2.00 per
share.

For the six-month period ended June 30, 1999, net income applicable to
common shareholders was $66,000, or $0.15 per common share.  Exclusive of
the premium paid for the preferred stock redemption, net income applicable
to common shareholders was $191,000, or $0.44 per common share as compared
to net income applicable to common shareholders of $324,000, or $0.80 per
common share in the comparable six months of 1998.  Higher selling, general
and administrative expenses (SG&A) were offset by interest earned on invested
cash and the note receivable.  A decrease in gross profit contributed to the
remaining decrease in net income.


Revenues

Total revenues for the three months ended June 30, 1999 increased 2.7%
to $36,711,000 from $35,752,000 in last year's comparable quarter.
Year-to-date revenues of $65,852,000 decreased less than 1% from the
$66,316,000 recognized for the first six months of 1998.  Stronger
revenue performance from the Company's Northeast region has mostly
offset a weaker start by many of the Company's other regional
operations.  The changes, both positive and negative, generally reflect
conditions in localized markets within each region.  In markets where a
significant backlog of work does not exist, a lack of contracts
available to bid and competitive pricing in bid opportunities, may lead
to fluctuations in revenue performance.  The Company does not follow a
single-focus strategy to be the low-cost provider of specialty
contracting services in each of the markets it serves.  Thus, the
Company recognizes that it may not secure work in localized markets
where the competition is bidding contracts at prices that will not
afford the Company an opportunity to earn acceptable gross profit
margins.


Gross Profit

Gross profit for the quarter ended June 30, 1999 decreased 6.6% to
$6,691,000 from $7,161,000 in last year's comparable three months.
Workers' compensation and insurance claims experience has not been as
favorable as in the prior year, which accounts for approximately half of
the decrease in the comparable second quarters of 1999 and 1998.  For
the six months ended June 30, 1999, gross profit decreased to
$12,558,000 from $12,982,000 in last year's comparable period.  Although
the revenue base was down by $464,000, the decrease was mostly
attributable to lower gross profit margins as discussed earlier.  The
gross profit margin was 19.1% through six months in 1999 as compared to
19.6% in 1998.  A significant factor in the margin decrease is the
higher proportion of revenues generated from time and material (cost
plus) contracts in 1999 as compared to 1998.  Lump-sum basis contracts
generally produce higher gross profit margins than cost-plus contracts.


Selling, General and Administrative Expenses

SG&A amounted to $6,232,000, or 17.0% of revenues, for quarter ended
June 30,1999.  The comparable totals for last year's first three months
were $5,300,000 and 14.8%, respectively.  Exclusive of the approximate
$800,000 curtailment gain previously noted, SG&A represented 17.1% of
revenues for the second quarter of 1998.  Therefore, after adjusting for
the one-time gain in 1998, SG&A as a percentage of revenues is virtually
unchanged for the quarter.

In comparing the year-to-date period ended June 30, 1999 to the similar
period of 1998, SG&A decreased by $412,000, or 3.3%, net of the
curtailment gain noted above. Expressed as a percentage of revenues and
exclusive of the curtailment gain, SG&A decreased to 18.2% in 1999 from
18.7% in 1998 for the six-month period.  The Company has embraced a
strategy of continual improvement to administrative processes and
systems as the cornerstone in its ability to effectively manage costs.
This strategy is critical in enabling the Company to offer
competitively-priced services to its customers.


Financial Condition and Liquidity

The Company's consolidated balance sheets at June 30, 1999 and December
31, 1998 do not include the balance sheet of SPI.  At June 30, 1999, the
Company has working capital of $24.1 million and shareholders'
investment (excluding redeemable preferred stock) of $15.7 million.
Working capital at December 31, 1998 was $27.0 million and stockholders'
equity was $15.5 million.  The increase in both cash and accrued
liabilities is attributable to the receipt of the approximate $11.2
million insurance settlement as discussed in Note 9 of the accompanying
financial statements.

The Company has no outstanding debt at June 30, 1999 as compared to $0.6
million at December 31, 1998.  The Company was required to repay
long-term debt as a result of the spin-off of SPI.  The Company used
proceeds from SPI's repayment of intercompany debt to pay down existing
lines of credit.  At June 30, 1999 and December 31, 1998, the Company
had unsecured credit facilities with several banks totaling $22.5
million.  There was availability under these unsecured credit facilities
for additional borrowings of $14.6 million and $14.0 million at June 30,
1999 and December 31, 1998, respectively.  The Company expects that
funds from operations and available lines of credit will continue to
provide sufficient liquidity to meet its working capital requirements.

The Company's consolidated statements of cash flows do not include SPI
activity for the six months ended June 30, 1999;  however, SPI's
activity is included in the cash flows reported for the six months ended
June 30, 1998.  Excluding SPI's operations for the six months ended June
30, 1998, approximately $4.2 million net cash was used for operating
activities.  The $17.9 change in cash position from operations is
largely influenced by the $11.2 million insurance settlement noted
earlier.  Net cash used in the acquisition of certain businesses is
entirely attributable to SPI for the six months ended June 30, 1998.
Finally, excluding the need for funding SPI's business operation, net
cash provided by financing activities was approximately $6.7 million.


Year 2000 Issue

The Company's ability to conduct its day-to-day operations is dependent
in part on an integrated software program and data-based system
(collectively, the System).  The System serves as a critical tool in
carrying out functions in several key areas of the business, including
contract management, sales, financial reporting and personnel
administration.

The Company has assessed the System with respect to the Year 2000 (Y2K)
issue.  The Company believes that all of the relevant System
applications are Y2K compliant following the installation of an upgrade
to the System software in November 1998.  On July 17, 1998, the Company
began an outsourcing arrangement under which it contracted to lease
AS400 and related data communications services from an off-site
provider.  Thus, the Company is now operating on mainframe hardware
which has been certified as fully Y2K compliant by the off-site
provider.

Additional Y2K work is now concentrated on testing older PCS  and making
inquiries to determine the extent of embedded chip issues in equipment
and property that is leased by the Company. The Company has completed
its efforts with respect to embedded chip issues in property that it
owns. Less than $50,000 has been spent to date by the Company on Y2K
compliance.  The Company projects that additional Y2K compliance costs
will not exceed $75,000.  These costs will be expensed when incurred and
will be funded through the Company's operations.

The Company's most likely worst case scenario for Y2K is widespread
failure of external systems on which the Company relies, such as
telephone, heat and other utilities.  Such failures could materially
lower the volume of the Company's revenues until these failures are
corrected.  The Company has sent questionnaires to major suppliers
requesting information on their Y2K compliance.  Responses received to
date indicate no interruption of service based on slightly more than
half of the questionnaires having been returned as of this writing.
Customers have not yet been surveyed concerning Y2K readiness.  The
Company believes that any Y2K problems encountered with suppliers and
customers can be resolved through substitution of vendors, or through
reliance on manual systems.



     (a)  Quantitative and Qualitative Disclosures Regarding Market Risk

The Company is subject to market risk associated with changes in
interest rates.  The Company has not entered into any derivative
financial instruments to manage the above risks and the Company has not
entered into any market risk sensitive instruments for trading purposes.
The Company's debt consists of working capital lines of credit, with
various banks, having interest rates that float based on market rates.
Therefore, the outstanding balances recorded on the balance sheet at
December 31, 1998 approximate fair value.  These lines of credit are
renegotiated annually.



                     PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings

The Company's ACandS, Inc. subsidiary is one of a number of defendants
in pending lawsuits filed by approximately 130,000 individual claimants
seeking damages for injuries allegedly caused by exposure to asbestos
fibers in insulation products used at one time by ACandS in its
business.  ACandS has defenses to these actions, including defenses
based on the fact it is primarily a contracting company in the business
of installing products manufactured by others.

During the first half of 1999, ACandS was served with cases involving
19,079 individual plaintiffs.  In 1998, ACandS was served with cases
involving 33,154 individual plaintiffs.  There were 31,489 new
plaintiffs in 1997, 37,777 new plaintiffs in 1996; 44,904 new plaintiffs
in 1995, and 18,122 new plaintiffs in 1994.  The filing of multiple
asbestos-related bodily injury claims against ACandS began in
approximately 1978/1979, but new filings in any single year did not
exceed 16,000 until 1993.

The bulk of the litigation against ACandS is centered in a relatively
small number of jurisdictions.  In 1998, over 60 percent of new claims
filed against ACandS came from Ohio, Texas and Mississippi.  Over 80
percent were filed in these three states together with New York,
Maryland and West Virginia.  These jurisdictions have consistently
produced heavy filings in recent years.  It would appear that court
rules and rulings favorable to claimants in these states encourage the
filing of asbestos-related lawsuits.

The great majority of the filings are apparently the result of
screenings and other mass solicitation efforts.  The lawsuits which
result from such efforts are often filed with little investigation as to
whether the claimants had any causative exposure to asbestos-containing
products associated with any particular defendant.  As the scope of the
screening programs has increased, the degree of illness of the claimants
seems to have diminished.

Since the beginning of 1981, approximately 184,000 individual claims
against ACandS have been settled, dismissed or otherwise resolved.
ACandS's average cost for resolving those claims has been low.  Over
half of the claims were closed without any liability payment by ACandS.
In recent years, however, the courts in many states have given priority
to the resolution of more serious cases, such as claims by individuals
diagnosed with mesothelioma, a cancer of the lining of the lung.  This
has resulted in some large settlements of individual claims in states
such as New York and Maryland.  In addition, the litigation risk in
jurisdictions which are difficult for defendants had lead ACandS to
block settle large numbers of claims in Texas, West Virginia and other
states.

Asbestos-related bodily injury cases filed against ACandS in federal
court have been transferred since July, 1991 to the United States
District Court for the Eastern District of Pennsylvania for coordinated
or consolidated pretrial handling.  Efforts toward a national solution
of the asbestos litigation problem have been undertaken in this
multidistrict proceeding, but none has been successful.  ACandS is not
aware of any serious current effort toward a national solution.

The defense of the cases pending against ACandS is now being handled by
the Travelers Property Casualty Corp. with the participation of other
insurers that wrote coverage for ACandS.  Virtually all of ACandS's
liability and defense costs for these cases are being paid by ACandS's
insurance carriers.

ACandS through final settlement agreements has secured the commitment of
a substantial amount of the considerable insurance coverage it has for
asbestos-related bodily injury claims.  ACandS believes it will secure
additional coverage, if needed, from those insurers which have not to
date settled with ACandS.  Two insurers which wrote significant
applicable coverage for ACandS have encountered financial difficulties
in recent years, in part because of asbestos and environmental
liabilities, but ACandS does not believe these difficulties will affect
the adequacy of the coverage available to it.

It has been more than 25 years since ACandS adopted the policy that it
would not resell, use or install asbestos-containing insulation
products.  Given the length of time since this policy was established,
the increased numbers of new claims in the last several years, together
with the recent high cost of settling certain individual claims in some
jurisdictions, are troubling developments.  In addition, the complexity
of the asbestos-related disease litigation makes prediction difficult.
Nevertheless, ACandS continues to effectively defend asbestos-related
bodily injury cases, and anticipates that its average disposition costs
will remain low.  Management, therefore, believes that ACandS's
insurance coverage is adequate to ensure that these actions will not
have a material adverse effect on the long-term business or financial
position of the Company.

ACandS is one of a number of defendants in three actions by the owners
of buildings to recover costs associated with the replacement or
treatment of installed asbestos-containing products, one of which is an
alleged class action.  One hundred three such cases against ACandS have
been dismissed and 17 have been settled.  No new building-related cases
have been served on ACandS since 1994.  ACandS believes that its
exposure in the three remaining cases is limited.

Insurance for the asbestos in building cases is being provided by
Travelers Property Casualty Corp.  Although that part of the coverage
for these cases obtained from policies written by Aetna Casualty and
Surety Co. (now part of Travelers) has been provided under a reservation
of rights as to the availability and amount of its coverage, necessary
insurance payments have been and continue to be made.  Based on the
rulings to date of courts which have considered the availability of
insurance coverage for asbestos in building claims, ACandS does not
anticipate significant problems concerning insurance for settled or
pending claims.  Accordingly, ACandS believes that the asbestos in
building claims will not have a material adverse effect on the long-term
business or financial condition of the Company.

From time to time, the Company and its subsidiaries are also parties as
both plaintiff and defendant to various claims and litigation arising in
the normal course of business, including claims concerning work
performed under various contracts.  In the opinion of management, claims
and litigation resulting in the normal course of business, will not
materially affect the Company's long-term business, financial position
or results of operations.



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.


                                                IREX CORPORATION


Date:    August 13, 1999

                                                  B. C. Werner
                                                   Controller
                                            Duly Authorized Signer