SECURITIES AND EXCHANGE COMMISSION
                  Washington, D.C. 20549
                             


                         FORM 10-Q
                             
        QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
          OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended               Commission File No. 0-5940
November 30, 1998


                 TEMTEX INDUSTRIES, INC.
-----------------------------------------------------------
  (Exact name of Registrant as specified in its Charter)



         Delaware                       75-1321869
-------------------------------    ---------------------
(State or other jurisdiction of      (I.R.S. Employer
incorporation or organization)      Identification No.)




5400 LBJ Freeway, Suite 1375
      Dallas, Texas                         75240
-------------------------------         --------------
(Address of principal executive           (Zip Code)
         offices)



      972/726-7175
----------------------------
(Registrant's telephone number
     including area code)



Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15 (d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days.

                   Yes   X      No
                       -----       -----

The Registrant had 3,477,141 shares of common stock, par
value $.20 per share, outstanding as of the close of the
period covered by this report.




<PAGE>
   
   
                    PART I.  FINANCIAL INFORMATION
   
               TEMTEX INDUSTRIES, INC. AND SUBSIDIARIES
     Condensed Consolidated Statements of Operations (Unaudited)
                 (In Thousands Except Share Amounts)
   
                                                3 Months Ended
                                                  November 30,
                                           ------------------------
                                              1998          1997
                                           ----------    ----------
   
   Net sales                               $   10,317    $   10,426
   Cost of goods sold                           7,539         7,266
                                           ----------    ----------
                                                2,778         3,160
   
   Cost and expenses:
     Selling, general and administrative        2,345         2,391
     Interest                                     121           123
   Other (income) expense                         (23)            4
                                           ----------    ----------
                                                2,443         2,518
                                           ----------    ----------
        INCOME FROM OPERATIONS BEFORE
           INCOME TAXES                           335           642
   
   State and federal income taxes--Note A         134           257
                                           ----------    ----------
          NET INCOME                       $      201    $      385
                                           ==========    ==========
   
   Income per common share--Note B
   
     Basic and diluted income per
       common share                              $.06          $.11
                                           ==========    ==========
     Basic weighted average common
       shares outstanding                   3,477,141     3,477,141
                                           ==========    ==========
   
     Diluted weighted average common
      and common equivalent shares
      outstanding                           3,528,300     3,529,195
                                           ==========    ==========
   
   See notes to condensed consolidated financial statements.


<PAGE>

               TEMTEX INDUSTRIES, INC. AND SUBSIDIARIES
          Condensed Consolidated Balance Sheets (Unaudited)
                November 30, 1998 and August 31, 1998
                            (In Thousands)


                                              November 30,      August 31,
                                                 1998             1998
                                              -----------      -----------
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                   $       540      $       407
  Accounts receivable, less allowance
   for doubtful accounts of $286,000 at
   November 30, 1998 and $292,000 at
   August 31, 1998                                  5,694            5,598
  Inventories                                      10,845            9,077
  Prepaid expenses and other assets                   323              227
  Income taxes recoverable                             --               35
  Deferred taxes                                      607              607
                                              -----------      -----------

          TOTAL CURRENT ASSETS                     18,009           15,951

DEFERRED TAXES                                        138              138

OTHER ASSETS                                          463              392

PROPERTY, PLANT AND EQUIPMENT
  Land and clay deposits                              566              566
  Buildings and improvements                        3,491            3,491
  Machinery, equipment, furniture
   and fixtures                                    25,037           24,753
  Leasehold improvements                            1,077            1,059
                                              -----------      -----------
                                                   30,171           29,869
  Less allowances for depreciation,
    depletion and amortization                     23,076           22,703
                                              -----------      -----------
                                                    7,095            7,166

                                              -----------      -----------
                                              $    25,705      $    23,647
                                              ===========      ===========


                                       -3-
                                        
<PAGE>


                                                November 30,    August 31,
                                                    1998           1998
                                                -----------    -----------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Notes payable-Note C                          $     1,600    $       700
  Accounts payable                                    4,038          2,674
  Accrued expenses                                    1,129          1,591
  Income taxes payable                                   99             --
  Current maturities of indebtedness to
    related parties                                      11             11
  Current maturities of long-term
    obligations--Note C                                 118            137
                                                -----------    -----------
     TOTAL CURRENT LIABILITIES                        6,995          5,113

INDEBTEDNESS TO RELATED PARTIES,
  less current maturities                             1,590          1,593

LONG-TERM OBLIGATIONS,
  less current maturities--Note C                       631            653

COMMITMENTS AND CONTINGENCIES--Note D

STOCKHOLDERS' EQUITY--Note E
  Preferred stock - $1 par value; 1,000,000
    shares authorized, none issued                       --             --
  Common stock - $.20 par value; 10,000,000
    shares authorized, 5,278,625
     shares issued                                      718            718
  Additional capital                                  9,246          9,246
  Retained earnings                                   6,852          6,651
                                                -----------    -----------
                                                     16,816         16,615
Less:
    Treasury stock:
      At cost - 113,696 shares                          327            327
      At no cost - 1,687,788 shares                      --             --
                                                -----------    -----------
                                                     16,489         16,288
                                                -----------    -----------
                                                $    25,705    $    23,647
                                                ===========    ===========

See notes to condensed consolidated financial statements.


                                       -4-


<PAGE>


                  TEMTEX INDUSTRIES, INC. AND SUBSIDIARIES
        Condensed Consolidated Statements of Cash Flows (Unaudited)
                               (In Thousands)

                                                             3 Months Ended
                                                               November 30,
                                                        ----------------------
                                                          1998          1997
                                                        ---------    ---------
OPERATING ACTIVITIES
  Net income                                            $     201    $     385
  Adjustments to reconcile net income to net cash
      provided by operating activities:
    Depreciation, depletion and amortization                  373          406
    Provision for doubtful accounts                            24           57
    Changes in operating assets and liabilities:
      Accounts receivable                                    (120)      (1,051)
      Inventories                                          (1,768)        (472)
      Prepaid expenses and other assets                      (167)          69
      Accounts payable and accrued expenses                   902          872
      Income taxes payable                                    134          225
                                                        ---------    ---------
        NET CASH (USED IN) PROVIDED BY OPERATING
            ACTIVITIES                                       (421)         491

INVESTING ACTIVITIES
  Purchases of property, plant and equipment                 (302)        (175)
                                                        ---------    ---------
        NET CASH USED IN INVESTING ACTIVITIES                (302)        (175)

FINANCING ACTIVITIES
  Proceeds from revolving line of credit and
       long-term borrowings                                   900          300
  Principal payments on revolving line of credit,
    long-term obligations and indebtedness to
       related parties                                        (44)         (54)
                                                        ---------    ---------
        NET CASH PROVIDED BY FINANCING ACTIVITIES             856          246
                                                        ---------    ---------
INCREASE IN CASH AND CASH EQUIVALENTS                         133          562

Cash and cash equivalents at beginning of year                407          575
                                                        ---------    ---------

       CASH AND CASH EQUIVALENTS AT END OF PERIOD       $     540    $   1,137
                                                        =========    =========

See notes to condensed consolidated financial statements.


                                       -5-
                                        

<PAGE>

   
   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   (UNAUDITED)
   
   NOTE A--INCOME TAXES
   
   Income taxes have been provided using the liability
   method for providing deferred taxes.  Income for the
   first three months of fiscal 1999 reflects an
   estimated annualized tax rate of approximately 40%.
   
   NOTE B--INCOME PER COMMON SHARE
   
   Basic income per common share is based upon the
   weighted average number of shares of common stock
   outstanding during each period.  Diluted income per
   share is based upon the weighted average number of
   shares of common stock and common stock equivalents
   outstanding during each period.  Common stock
   equivalents include options granted to key employees
   and outside directors.  The number of common stock
   equivalents was based on the number of shares
   issuable on the exercise of options reduced by the
   number of shares that are assumed to have been
   purchased at the average price of common stock
   during each quarter with the proceeds from the
   exercise of the options.
   
   All periods presented have been restated to reflect
   the adoption of Statement of Financial Accounting
   Standard No. 128 (SFAS 128), "Earnings Per Share".
   
   NOTE C--NOTES PAYABLE AND LONG-TERM DEBT
   
   In May 1996, the Company entered into a two-year
   credit agreement with a bank whereby the Company may
   borrow a maximum of $4,000,000 under a revolving
   credit facility.  At the option of the Company,
   borrowings under the demand note may bear interest
   at the lending bank's prime commercial interest rate
   or at the London Interbank Offered Rate ("LIBOR")
   plus 1.25 percentage points.  Interest is payable on
   a monthly basis.  The Company's obligation to the
   bank is secured by accounts receivable and
   inventory.  In April 1998, the credit agreement was
   amended whereby the maximum amount available under
   the revolving credit facility was reduced to
   $3,000,000 and the expiration date was extended for
   an additional two year period.  The loan agreement
   contains covenants that require the maintenance of a
   specified ratio of quick assets to current
   liabilities, as defined, and a specified ratio of
   total liabilities to tangible net worth, as defined,
   both ratios to be measured on a quarterly basis.  At
   November 30, 1998, the Company is in compliance with
   these covenants.  At November 30, 1998, $1,600,000
   was outstanding under the revolving credit note.
   
   NOTE D--COMMITMENTS AND CONTINGENCIES
   
   Due  to  the complexity of the Company's operations,
   disagreements occasionally occur.
   
   In the opinion of management, the Company's ultimate
   loss from such disagreements and potential resulting
   legal action, if any, will not be significant.
   
                            -6-
                             
   <PAGE>
   
   On October 22, 1998, the Company entered into an
   Agreement for the sale of its Texas Clay division
   for approximately $12.9 million subject to final
   adjustment.  The Agreement is subject to final
   approval by the Company's stockholders.
   
   NOTE E--CAPITAL STOCK
   
   At November 30, 1998 and August 31, 1998, there were
   1,000,000 shares of preferred stock, with a par
   value of $1 authorized.  None have been issued.
   
   At November 30, 1998 and August 31, 1998, there were
   10,000,000 shares of par value $.20 common stock
   authorized of which 5,278,625 shares were issued.
   Of the shares issued, 3,477,141 were outstanding.
   The remainder of the issued stock is comprised of
   113,696 shares of treasury stock at cost and
   1,687,788 shares of treasury stock at no cost.












   
                            -7-
                             
                             
<PAGE>


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

The following discussion and analysis of the financial
condition and results of operations of the Company should
be read in conjunction with the unaudited condensed
consolidated financial statements and related notes of the
Company included elsewhere in this report.  This
Management's Discussion and Analysis of Financial Condition
and Results of Operations and other parts of this Quarterly
Report on Form 10-Q contain forward-looking statements that
involve risks and uncertainties.  Among the risks and
uncertainties to which the Company is subject are the risks
inherent in the cyclical and unpredictable nature of the
housing and home products business generally, fluctuations
in interest rates, geographic concentration of the
Company's primary market, the fact that the Company has
experienced fluctuations in revenues and operating results,
and the highly competitive nature of the industries in
which the Company competes, together with each of those
other factors set forth in the Company's filings made with
the Securities & Exchange Commission.  As a result, the
actual results realized by the Company could differ
materially from the results discussed in the forward-
looking statements made herein.  Words or phrases such as
"will," "anticipate," "expect," "believe," "intend,"
"estimate," "project," "plan" or similar expressions are
intended to identify forward-looking statements.  Readers
are cautioned not to place undue reliance on the forward-
looking statements made in this Quarterly Report on Form 10-Q.

Net Sales
---------

Consolidated net sales for the first quarter of fiscal 1999
were $10,317,000 versus $10,426,000 for the same quarter in
fiscal 1998, a decrease of 1%.

FIREPLACE PRODUCTS.  Sales in the fireplace products
segment for the first quarter of fiscal 1999 decreased by
7% compared to the first quarter of 1998.  The sales
decrease was attributed to a decrease in the quantity of
wood burning fireplaces and gas log sets delivered in the
first quarter of 1999.

FACE BRICK PRODUCTS. Sales in the face brick products
segment increased by 23% in the first quarter of 1999
compared to the first quarter of 1998.  A strong demand
from the construction industry in the area served by the
brick manufacturing facility was mainly responsible for the
increase in sales.  A new size of face brick introduced in
the first quarter of fiscal 1998 has proved to be very
popular.

Gross Profit
------------

FIREPLACE PRODUCTS.  Gross profit decreased approximately
33% in the first quarter of fiscal 1999 compared to the
first quarter of fiscal 1998.  The decrease in sales volume
was the major factor contributing to the decrease in gross
profit.

FACE BRICK PRODUCTS.  Gross profit increased approximately
51% in the first quarter of fiscal 1999 compared with the
prior year. The increase resulted from production
efficiencies realized in the manufacturing process in
addition to the increase in sales volume.


                            -8-


<PAGE>

Selling, General and Administrative Expenses
--------------------------------------------

Selling, general and administrative expenses decreased by
$46,000 or approximately 2% in the first quarter of fiscal
1999 compared to the first quarter of fiscal 1998.
Expenses were 22.7% of sales in 1999 compared to 22.9% of
sales in 1998.

Interest Expense
----------------

Interest expense decreased $2,000 in the first quarter of
1999 compared to the first quarter of 1998.  A slight
decrease in interest rates was responsible for the decrease
in interest expense.


Income Taxes
------------

Income tax expense of $134,000 for the first quarter of
fiscal 1999 includes the provision for both federal and
state income taxes.  An estimated annualized effective tax
rate of 40% was applied to pre-tax income for the first
quarter of 1999.


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

Net cash used in operating activities was $421,000 for the
first three months of 1999.  The decreased cash flow from
operations was due primarily to changes in working capital,
principally an increase in inventories.

Working capital increased from $10,838,000 at August 31,
1998 to $11,014,000 at November 30, 1998.  The current
ratio decreased from 3.1 at August 31, 1998 to 2.6 at
November 30, 1998.

Capital expenditures and capitalized lease obligations for
the first quarter of 1999 were $302,000.  Expenditures
include amounts for tooling, dies, replacement items and
major repairs to manufacturing equipment.

In May 1996, the Company entered into a two-year credit
agreement with a bank whereby the Company may borrow a
maximum of $4,000,000 under a revolving credit facility.
The outstanding principal balance may bear interest at a
variable or fixed rate, at the Company's option, at the
time funds are requested.  Interest is payable on a monthly
basis and also at the end of the borrowing period if
borrowing at a fixed rate.  In April 1998, the credit
agreement was amended whereby the maximum amount available
under the revolving credit facility was reduced to
$3,000,000 and the expiration date was extended for an
additional two-year period.  The revolving credit facility
had an outstanding balance of $1,600,000 at November 30,
1998.

In October 1998, the Company entered into an agreement for
the sale of its face brick products division.  The
agreement is subject to approval of the stockholders of the
Company.  The cash proceeds, estimated to be approximately
$12,000,000, will be available to pay down certain
indebtedness and enhance the Company's remaining business
operations through strategic acquisitions or other
appropriate uses.

The Company anticipates that cash flow from operations
together with funds available from the revolving credit
facility should provide the Company with adequate funds to
meet its working capital requirements as well as
requirements for capital expenditures for at least the next
twelve months.



                            -9-

                             
<PAGE>


Year 2000 Issue
---------------

Many existing computer systems and applications and other
control devices use only two digits to identify a year in
the date field, without considering the impact of the
upcoming change in the century.  As a result, as year 2000
approaches, computer systems and applications used by many
companies may need to be upgraded to comply with "Year
2000" requirements.  The Company relies on its systems in
operating and monitoring many significant aspects of its
business, including financial systems (such as general
ledger, accounts payable, accounts receivable, inventory
and order management), customer services, infrastructure
and network and telecommunications equipment.  The Company
also relies directly and indirectly on the systems of
external business enterprises such as customers, suppliers,
creditors and financial organizations.

Based on various assessments during the past year, the
Company determined that only minor modifications of its
information and production software systems would be
necessary in order to properly utilize dates beyond the
year 1999.  Most of the changes have already been made.
Although the Company anticipates all remaining
modifications to be completed in early 1999, if such
modifications were not made, management believes the year
2000 issue will not have a material impact on the
operations of the Company.

The cost for system modifications was approximately $11,000
and any further modification expenses are expected to be
insignificant.

At this date, the Company is not aware of any customer,
vendor, or supplier (external agents) with a year 2000
issue that would materially affect the Company's results of
operations, liquidity or capital resources.  However, the
Company has no means of ensuring that external agents will
be Year 2000 ready.  The inability of external agents to
complete their Year 2000 resolution process in a timely
fashion could materially impact the Company.  The effect of
non-compliance by external agents is not determinable.

Management is of the opinion that all significant year 2000
issues have been identified and addressed.  Accordingly,
the Company has no developed year 2000 contingency plans
for continuing operations.



                           -10-

<PAGE>


The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and
Rule 10-01 of Regulation S-X.  Accordingly, they do not
include all of the information and notes required by
generally accepted accounting principles for complete
financial statements.  In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included.  Operating results for the three-month period
ended November 30, 1998 are not necessarily indicative of
the results that may be expected for the year ending August
31, 1999.  For further information, refer to the
consolidated financial statements and notes thereto
included in the Company's annual report on Form 10-K for
the year ended August 31,1998.









                           -11-
                             

<PAGE>

                    PART II.  OTHER INFORMATION


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

      (a).   Exhibits
             --------

              Exhibit
                No.         Description
             --------       -----------

               27.1         Financial Data Schedule (filed herewith)


     (b).    Report on Form 8-K
             ------------------

             The Registrant filed one report on Form 8-K during
             the quarter for which this report is filed.











                           -12-


<PAGE>



                             SIGNATURES


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

                                   TEMTEX INDUSTRIES, INC.



DATE: 12/23/98                     BY:  /s/  E.R.BUFORD
      --------                        ------------------------
                                        E. R. Buford
                                        President


DATE: 12/23/98                     BY:  /s/  R. N. STIVERS
      --------                        ------------------------
                                        R. N. Stivers
                                        Vice President-Finance




                           -13-