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 September 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)

                                                      Nine Months
                                 Third Quarter     Ended September 30
                                 1999      1998      1999      1998
                         (In Thousands Except Per Common Share Amounts)


Contracting Revenues           $ 35,737  $ 32,516  $101,470  $ 98,570

Distribution and Other Revenues      52    48,622       171    34,956

      Total Revenues             35,789    81,138   101,641    33,526

Cost of Revenues                 28,501    62,979    81,795   182,329

      Gross Profit                7,288    18,159    19,846    51,197

Selling, General and
 Administrative Expenses          6,197    16,310    18,170    43,932

      Operating Income            1,091     1,849     1,676     7,265

Interest (Income) Expense Net      (282)      524      (699)    1,534

      Income Before Income Taxes  1,373     1,325     2,375     5,731

Income Tax Provision                519       669       841     2,486

Net Income                     $    854  $    656  $  1,534  $  3,245

    Less: Dividend Requirements
          for Preferred Stock      (171)     (245)     (660)     (734)

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

NET INCOME APPLICABLE
  TO COMMON STOCK              $    683  $    411  $    749  $   2,51

Average Common Shares
   Outstanding - Basic          432,202   426,242   432,135   411,192

Stock Options Issued to
   Employees and Directors          -         -         -       3,481

Average Common Shares
   Outstanding - Diluted        432,202   426,242   432,135   414,673

Income per Common Share
   - Basic                     $   1.58  $   0.96  $   1.73  $   6.11

Income per Common Share
   - Diluted                   $   1.58  $   0.96  $   1.73  $   6.06




                  IREX CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                          (Unaudited)

                                            September 30    December 31
                                               1999             1998
                                                    (In Thousands)
ASSETS:
Cash and Cash Equivalents                    $ 20,065        $ 10,485
Receivables, Net                               27,460          29,719
Inventories                                       479             512
Actual Costs and Estimated Earnings
  on Contracts in Process
  in Excess of Billings                         5,300           3,750
Prepaid Income Taxes                            1,684           2,398
Other Prepaid Expenses                            623             194
Deferred Income Taxes                           2,543           2,543

   Total Current Assets                        58,154          49,601

Property and Equipment, Net                       994             999
Note Receivable                                 3,500           3,500
Non-Current Deferred Income Taxes               3,147           3,147
Other Assets                                      624             624

   TOTAL ASSETS                              $ 66,419        $ 57,871

LIABILITIES AND SHAREHOLDERS' INVESTMENT:
Notes Payable to Banks                       $    -          $    629
Accounts Payable                                7,972           6,649
Billings in Excess of Actual Costs
   and Estimated Earnings on
   Contracts in Process                         3,212           2,647
Accrued Workers' Compensation Insurance         2,618           2,342
Accrued Liabilities                            18,876          10,340

   Total Current Liabilities                   32,678          22,607

Non-Current Liabilities                         9,998           9,246

Redeemable Preferred Stock                      7,341          10,490

Capital Stock                                   1,028           1,028
Paid-in Surplus                                   533             537
Retained Earnings                              32,689          31,942
Cumulative Translation Adjustments               (229)           (292)
Notes Receivable                                 (316)           (372)
Treasury Stock at Cost                        (17,303)        (17,315)

   Total Shareholders' Investment              16,402          15,528

TOTAL LIABILITIES AND
SHAREHOLDERS' INVESTMENT:                    $ 66,419        $ 57,871



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

                                        Nine Months Ended September 30
                                             1999            1998
                                                (In Thousands)
Cash Flows from Operating Activities:

Net income                                   $  1,534     $  3,245
Reconciliation of net income to net
   cash provided by operating activities
    Depreciation and amortization                 285        1,011
    Deferred income taxes                         -              1
    Provision for losses on accounts receivable   127          885

Decrease (increase) in current assets
   Receivables                                  2,132       (9,141)
   Inventories                                     33         (113)
   Prepaid income taxes and other
     prepaid expenses                             285          270
   Actual costs and estimated earnings
     on contracts in process in excess
     of billings, net                            (985)         (54)

Increase (decrease) in current liabilities
   Accounts payable                            1,460         3,526
   Accrued income taxes                          -            (926)
   Accrued liabilities and other liabilities   9,427         1,922

      Net cash provided by
      operating activities                    14,298           626

Cash Flows from Investing Activities:
   Net additions to property and equipment      (280)         (292)
   Acquisitions of certain businesses,
    net of cash acquired
      Assets                                     -          (5,640)
      Intangibles                                -            (930)
   Decrease (increase) in other assets            63           (63)

      Net cash used for investing activities    (217)       (6,925)

Cash Flows from Financing Activities:
   Net (repayments on) borrowings
    from revolving lines of credit              (629)        9,592
   Payments on long-term debt                    -          (1,877)
   Dividends paid                               (660)         (734)
   Exercise of stock options                     -           1,331
   Payment on notes receivable                    56           -
   Reissuance of common stock                      8           -
   Repurchase of common stock                    -             (88)
   Repurchase of preferred stock              (3,276)          -

      Net cash (used for) provided
        by financing activities               (4,501)        8,224

Net Increase in Cash and Cash Equivalents      9,580         1,925

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

Cash and Cash Equivalents
at End of Period                             $20,065      $  2,299




                     IREX CORPORATION AND SUBSIDIARIES
                       September 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  September 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 nine months
of 1999 and 1998 were:
                                      1999             1998
              Income Taxes:         $127,000        $3,412,000
              Interest:             $ 72,000        $1,488,000

   (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 September 30, 1999 and 1998 was $859,000 and $623,000,
respectively.  Total comprehensive income for the nine months ended
September 30, 1999 and 1998 was $1,597,000 and $3,182,000, 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's 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 nine months ended September 30, 1998 and
the three months ended September 30, 1998 give effect to the Spin-off of
SPI, and are presented as if the Spin-off had occurred as of January 1,
1998.

         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 nine-
month and three-month periods ended September 30, 1999 and consolidated
statement of cash flows for the nine months ended September 30, 1999 do
not include SPI's operating results.  In addition, the Company's
consolidated balance sheets at September 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 SEPTEMBER 30, 1998


                                                  Unaudited
                                                  Pro Forma   Unaudited
                                    Historical   Adjustments  Pro Forma
                       (In Thousands Except Share and Per Share Amounts)

Revenues                             $ 81,138   $(48,581)(a)  $ 32,557

Cost of Revenues                       62,979    (37,223)(a)    25,756

   Gross Profit                        18,159    (11,358)        6,801

Selling, General, and
  Administrative Expenses              16,310     (9,849)(b)     6,461

   Operating Income                     1,849     (1,509)          340

Interest Expense, Net                     524       (524)(c)       -

   Income Before Income Taxes           1,325       (985)          340

Income Tax Provision                      669       (498)          171

Net Income                           $    656   $  ( 487)     $    169

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

NET INCOME (LOSS) APPLICABLE
TO COMMON STOCK                      $    411   $   (487)     $    (76)

Average Common Shares
  Outstanding-Basic                   426,242                  426,242

Effect of Stock Options Issued to
  Employees and Directors                 -                        -

Average Common Shares Outstanding
  -Diluted                            426,242                  426,242

Income Per Common Share
  -Basic                             $   0.96                 $  (0.18)

Income Per Common Share
  -Diluted                           $   0.96                 $  (0.18)


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

                                                 Unaudited
                                                 Pro Forma    Unaudited
                                    Historical  Adjustments   Pro Forma
                       (In Thousands Except Share and Per Share Amounts)

Revenues                             $233,526   $(134,653)(a)  $ 98,873

Cost of Revenues                      182,329     103,240)(a)    79,089

   Gross Profit                        51,197     (31,413)       19,784

Selling, General, and
 Administrative Expenses               43,932     (25,680)(b)    18,252

   Operating Income                     7,265      (5,733)        1,532

Interest Expense, Net                   1,534      (1,534)(c)       -

   Income Before Income Taxes           5,731      (4,199)        1,532

Income Tax Provision                    2,486      (1,852)          634

Net Income                           $  3,245   $  (2,347)     $    898

   Dividend Requirements for
     Preferred Stock                     (734)        -            (734)

NET INCOME APPLICABLE
TO COMMON STOCK                      $  2,511   $  (2,347)     $    164

Average Common Shares Outstanding
  -Basic                              411,192                   411,192

Effect of Stock Options Issued to
  Employees and Directors               3,481                     3,481

Average Common Shares Outstanding
  -Diluted                            414,673                   414,673

Income Per Common Share-Basic       $    6.11                  $   0.40

Income Per Common Share-Diluted     $    6.06                  $   0.40


   (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 $5.3 million
        for the nine months ended September 30, 1998 and $1.3 million
        for the third quarter ended September 30, 1998.


   (b)  This adjustment includes the elimination of the costs,
        approximating $206,000 for the nine months ended September 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 nine months
and quarter ended September 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. Contr.  Other    Elim.     Total

Quarter Ended
September 30, 1998:

Net revenues from
  external customers        $ 48,581 $32,557  $  -   $(1,322)  $ 81,138
Intersegment net revenues      1,322     -       -       -          -
Total net revenues          $ 49,903 $32,557  $  -   $(1,322)  $ 81,138

Depreciation and amortization    317     (23)    39      -          333
Interest and dividend income      12      10    468     (449)(a)     41
Interest expense                 588     220    206     (449)(a)    565
Income tax expense (credit)      599     318   (248)     -          669
Net income (loss)                585     275   (204)     -          656
Capital expenditures             111    (148)    19      -          (18)




   (in thousands)            Distrib. Contr.  Other    Elim.     Total

Nine Months Ended
September 30, 1998:

Net revenues from
  external customers        $134,654 $98,872$   -    $(5,286)  $233,526
Intersegment net revenues      5,286     -      -        -          -
Total net revenues          $139,940 $98,872  $ -    $(5,286)  $233,526

Depreciation and amortization    721     168    122      -        1,011
Interest and dividend income      44      29  1,303   (1,283)(a)     93
Interest expense               1,692     614    604   (1,283)(a)  1,627
Income tax expense             1,607     525    354      -        2,486
Net income                     2,035     452    758      -        3,245
Segment assets                59,810  50,823 34,344  (39,111)(b)105,866
Capital expenditures             316     (58)    34      -          292



   (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 ot 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 104,953 shares as a result
of the call.  The redemption of 104,269 shares was recorded in the
second quarter and the redemption of an additional 684 shares was
recorded in the quarter ended September 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. (Travelers) during 1999.  Through
September 30, 1999, approximately $2.2 million of the settlement has
been paid to Travelers and the remaining $9.0 million is included as an
accrued liability on the Company's consolidated balance sheets.  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
                      September 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 nine
months ended September 30, 1999 do not include SPI;  however, SPI's
operating results are included in the consolidated statement of income
for both the quarter and nine months ended September 30, 1998.  The
following discussion compares the Company's performance in the quarter
and year-to-date periods ended September 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 nine months ended September 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 $1,091,000 in the third
quarter of 1999, an increase of $0.8 million from the $340,000 achieved
in last year's comparable quarter.  The stronger third quarter has led
to operating income of $1,676,000 for the nine months ended September
30, 1999,  or a 9.4% increase from the $1,532,000 in last year's similar
period.  Exclusive of an approximate $800,000 gain recorded in the
second quarter of 1998, resulting from the curtailment of the Company's
pension plan, 1999 year-to-date operating results are nearly $950,000
ahead of 1998.

   Net income applicable to common shareholders, after the dividend
requirement for preferred stock, was $683,000, or $1.58 per share for
the third quarter of 1999.  The third quarter of 1998 showed a net loss
$76,000, or $(0.18) per share.

   For the nine-month period ended September 30, 1999, net income was
$749,000, or $1.73 per common share.  Exclusive of the premium paid for
the preferred stock redemption (see Note 7 of the accompanying financial
statements), net income was $874,000, or $2.02 per common share as
compared to net income of $164,000, or $0.40 per common share in the
comparable nine months of 1998.  Exclusive of the pension curtailment
gain noted earlier, selling, general and administrative expenses (SG&A)
decreased approximately $900,000 in 1999 as compared to last year's
first nine months.  Interest earned on invested cash and the note
receivable also contributed to the increase in net income.


Revenues:

   Total revenues for the three months ended September 30, 1999
increased 9.9% to $35,789,000 from $32,557,000 in last year's comparable
quarter.  The strong third quarter has led to year-to-date revenues of
$101,470,000,  a 2.8% increase from the $98,873,000 recognized for the
first nine months of 1998.  The Company typically secures few contracts
that are priced in excess of one million dollars.  In 1999, however, the
Company's northeast region has executed a few contracts priced between
$2 million and $10 million.  This strong revenue performance for the
nine months ended September 30, 1999 has 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 September 30, 1999 increased 7.2%
to $7,288,000 from $6,801,000 in last year's comparable three months.
The increase is attributable to higher revenues since gross profit
margins were slightly lower in 1999's third quarter.  For the nine
months ended September 30, 1999, gross profit of $19,846,000 was mostly
unchanged from $19,784,000 in last year's comparable period.    The
gross profit margin was 19.5% through nine months in 1999 as compared to
20.1% 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, which traditionally have
lower margins associated with them.  Contributing to this situation is
the fact that the Company has earned two percentage points lower gross
profit margin on cost plus contracts versus the prior year.


Selling, General and Administrative Expenses:

   SG&A amounted to $6,197,000, or 17.3% of revenues, for quarter ended
September 30,1999.  The comparable totals for last year's third quarter
were $6,461,000 and 19.8%, respectively.

   In comparing the year-to-date period ended September 30, 1999 to the
similar period of 1998, SG&A decreased by $882,000, or 4.6%, net of the
approximate $800,000 pension curtailment gain noted earlier.  The
decrease is attributable to both property-related and personnel-related
costs, including approximately $0.5 million lower accrual for incentive
compensation.  Expressed as a percentage of revenues and exclusive of
the curtailment gain, SG&A decreased to 17.9% in 1999 from 19.3% in 1998
for the nine-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 September 30, 1999 and
December 31, 1998 do not include the balance sheet of SPI.  At September
30, 1999, the Company has working capital of $25.5 million and
shareholders' investment (excluding preferred stock) of $16.4 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 approximately $11.2
million on June 24, 1999 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 its insurance settlement agreements concerning
asbestos-related bodily injury claims, the funds received in the
settlement will be paid to Travelers Property Casualty Corp. (Travelers)
during 1999.  Through September 30, 1999, approximately $2.2 million of
the settlement has been paid to Travelers and the remaining $9.0 is
included as an accrued liability on the Company's consolidated balance
sheets.

   The Company has no outstanding debt at September 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 September 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 September 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 nine months ended September 30, 1999;  however,
SPI's activity is included in the cash flows reported for the nine
months ended September 30, 1998.  Excluding SPI's operations for the
nine months ended September 30, 1998, approximately $2.0 million net
cash was used for operating activities.  The $16.2 million 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 nine months
ended September 30, 1998.  Finally, excluding the need for funding SPI's
business operation, net cash provided by financing activities was
approximately $3.9 million.


Income Taxes:

   The Company's effective income tax rate for the nine months ended
September 30, 1999 is 35.4%.  The significant decrease as compared to
the 41.4% reflected in the pro forma consolidated statement of income
for the nine months ended September 30, 1998 is primarily attributable
to interest income that is not subject to state income taxes.


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 imbedded 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. Approximately $65,000 has been spent to date by the Company on
Y2K compliance.  The Company projects that total Y2K compliance
costs will not exceed $100,000.  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 137,000 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 three quarters of 1999, ACandS was served with cases
involving 28,748 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.  The pattern in 1999 has been similar, with
the same six states again accounting for over 80 percent of the filings
to date.  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.  However, the number of claims by individuals
diagnosed with mesothelioma, a cancer of the lining of the lung
associated with asbestos exposure, has remained relatively constant.

   Since the beginning of 1981, approximately 187,000 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.  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.  ACandS's average
disposition cost per claim increased significantly in 1998, and has
increased again in 1999, largely as a result of sums paid in settlement
of mesothelioma cases.

   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. Currently,
certain asbestos defendants are supporting national legislation which
would establish a comprehensive administrative program to handle
asbestos-related claims.  ACandS has been informed passage of such
legislation is unlikely at this time.

   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 and the
increase in disposition cost averages in 1998 and 1999 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 in
the context of the litigation.  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 the 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:   November 15, 1999

                                                   B. C. Werner
                                                    Controller
                                              Duly Authorized Signer