<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                      
                                   ----------
                                 FORM 10-Q/A
                                     No. 2
                                      
(Mark One)

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

For the quarterly period ended SEPTEMBER 30, 1998
                               ------------------

                                       or

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
-------
EXCHANGE ACT OF 1934

  For the transition period from                       to 
                                 ---------------------    ---------------------

                      Commission File Number: 0-27202
                                      
                    ADVANCED LIGHTING TECHNOLOGIES, INC.
           ------------------------------------------------------
           (Exact name of registrant as specified in its charter)

               OHIO                                              34-1803229
--------------------------------------------------------------------------------
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

     32000 AURORA ROAD, SOLON, OHIO                                     44139
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

                                 440 / 519-0500
--------------------------------------------------------------------------------
              (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 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 
                                       ------     ------

There were 20,214,663 shares of the Registrant's Common Stock, $.001 par value
per share, outstanding as of October 31, 1998.

<PAGE>   2
EXPLANATORY NOTE

This Form 10-Q/A No.2 reflects an increase of $16.9 million in the valuation of
three million shares of restricted common stock issued in connection with the
acquisition of Ruud Lighting, Inc. This Form 10-Q/A No. 2 also reflects changes
in the presentation of discontinued operations and special charges. An
additional exhibit has been added. In addition, this Form 10-Q/A No. 2 contains
clarifying revisions to Part I, Item 2.

This Form 10-Q/A No. 2 replaces in its entirety the Form 10-Q/A for the
quarterly period ended September 30, 1998 previously filed.

                                      INDEX

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
                                                                                         PAGE NO.

PART I            FINANCIAL INFORMATION

<S>               <C>                                                                      <C> 
Item 1.           Financial Statements (Unaudited)

                      Condensed Consolidated Balance Sheets - September 30, 1998
                           and June 30, 1998..............................................  2

                      Condensed Consolidated Statements of Income -- Three months
                           ended September 30, 1998 and 1997 .............................  3

                      Condensed Statement of Consolidated Shareholders' Equity --
                           Three months ended September 30, 1998..........................  4

                      Condensed Consolidated Statements of Cash Flows -- Three
                           months ended September 30, 1998 and 1997.......................  5

                      Notes to Condensed Consolidated Financial Statements................  6

Item 2.           Management's Discussion and Analysis of Financial Condition
                      and Results of Operations........................................... 11

Item 3.           Quantitative and Qualitative Disclosures about Market Risk.............. 18


PART II           OTHER INFORMATION

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

Item 5.           Other Information....................................................... 19

Item 6.           Exhibits and Reports on Form 8-K........................................ 21


SIGNATURES................................................................................ 23

EXHIBIT INDEX............................................................................. 24

</TABLE>

<PAGE>   3
                      ADVANCED LIGHTING TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                                                                         (Unaudited)           (Audited)
                                                                                         SEPTEMBER 30,          JUNE 30,
                                                                                             1998                 1998
                                                                                        ---------------      --------------
<S>                                                                                     <C>                  <C>           
ASSETS
Current assets:
   Cash and cash equivalents                                                            $        22,738      $       21,917
   Short-term investments                                                                           350                 350
   Trade receivables, less allowances of $442 and $397                                           46,852              40,779
   Receivables from related parties                                                               1,620               1,034
   Inventories:
      Finished goods                                                                             32,322              29,556
      Raw materials and work-in-process                                                          18,679              15,184
                                                                                        ---------------      --------------
                                                                                                 51,001              44,740
   Prepaid expenses                                                                               3,586               3,200
   Deferred taxes                                                                                 2,192               2,192
                                                                                        ---------------      --------------
Total current assets                                                                            128,339             114,212

Property, plant and equipment:
   Land and buildings                                                                            35,048              31,429
   Machinery and equipment                                                                       57,827              52,235
   Furniture and fixtures                                                                        19,512              18,316
                                                                                        ---------------      --------------
                                                                                                112,387             101,980
   Less accumulated depreciation                                                                 13,421              11,952
                                                                                        ---------------      --------------
                                                                                                 98,966              90,028

Deferred taxes                                                                                    4,332               2,892
Receivables from related parties                                                                  4,276               3,157
Net assets associated with discontinued operations                                                3,724               5,193
Investments in affiliates                                                                        25,250              20,591
Other assets                                                                                      8,242               8,878
Intangible assets                                                                                34,162              34,377
Excess of cost over net assets of businesses acquired, net                                       51,064              49,241
                                                                                        ---------------      --------------
                                                                                        $       358,355      $      328,569
                                                                                        ===============      ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Short-term debt and current portion of long-term debt                                $         1,998      $        1,960
   Accounts payable                                                                              14,187              14,967
   Payables to related parties                                                                      369                 618
   Employee-related liabilities                                                                   3,693               3,259
   Accrued income and other taxes                                                                   914               2,729
   Other accrued expenses                                                                         9,808              13,042
                                                                                        ---------------      --------------
Total current liabilities                                                                        30,969              36,575

Long-term debt                                                                                  152,045             117,332
Other liabilities                                                                                   507                 766
Deferred taxes                                                                                    3,213               3,059

Shareholders' equity
   Preferred stock, $.001 par value, 1,000 shares authorized, no shares issued                        -                   -
   Common stock, $.001 par value, 80,000 shares authorized, 20,210 shares
       issued and outstanding as of September 30, 1998 and 20,189 shares issued
       and outstanding as of June 30, 1998                                                           20                  20
   Paid-in-capital                                                                              190,164             189,828
   Accumulated other comprehensive income                                                           266                   -
   Retained earnings (deficit)                                                                  (18,829)            (19,011)
                                                                                        ---------------      --------------
                                                                                                171,621             170,837
                                                                                        ---------------      --------------
                                                                                        $       358,355      $      328,569
                                                                                        ===============      ==============
</TABLE>

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                        2

<PAGE>   4

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                 (IN THOUSANDS, EXCEPT PER SHARE DOLLAR AMOUNTS)
<TABLE>
<CAPTION>

                                                                             THREE MONTHS ENDED
                                                                                SEPTEMBER 30,
                                                                        ------------------------------
                                                                            1998            1997
                                                                        -------------   --------------

<S>                                                                     <C>              <C>     
Net sales                                                                 $ 50,358         $ 29,937

Costs and expenses:
   Cost of sales                                                            29,636           17,326
   Marketing and selling                                                     8,859            4,416
   Research and development                                                  3,748            1,399
   General and administrative                                                4,321            2,214
   Fiber optic joint venture formation costs                                     -              212
   Amortization of intangible assets                                           665              214
                                                                        -------------   --------------
Income from operations                                                       3,129            4,156

Other income (expense):
   Interest expense                                                         (2,727)            (327)
   Interest income                                                             238              527
   Loss from equity investments                                               (189)               -
                                                                        -------------   --------------

Income from continuing operations before income taxes                          451            4,356
Income taxes                                                                   269            1,568
                                                                        -------------   --------------

Income from continuing operations                                              182            2,788
Discontinued operations
  Loss from operations of discontinued business
    (net of income tax benefits of $168)                                         -             (298)
  Loss on disposal of discontinued business                                      -                -
                                                                        -------------   --------------

Net income                                                                $    182         $  2,490
                                                                        =============   ==============

Earnings per share -- Basic:
  Income from continuing operations                                       $    .01         $    .17
  Loss from discontinued operations                                              -             (.02)
                                                                        -------------   --------------
Earnings per share -- Basic                                               $    .01         $    .15
                                                                        =============   ==============

Earnings per share -- Diluted:
  Income from continuing operations                                       $    .01         $    .17
  Loss from discontinued operations                                              -             (.02)
                                                                        -------------   --------------
Earnings per share -- Diluted                                             $    .01         $    .15
                                                                        =============   ==============

Weighted average shares outstanding:
    Basic                                                                   20,205           16,260
                                                                        =============   ==============

    Diluted                                                                 20,573           16,625
                                                                        =============   ==============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                        3

<PAGE>   5
                      ADVANCED LIGHTING TECHNOLOGIES, INC.
      CONDENSED STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED SEPTEMBER 30, 1998
                                    ----------------------------------------------------------------------------------------
                                                                                  ACCUMULATED
                                           COMMON STOCK                              OTHER
                                    ---------------------------     PAID-IN      COMPREHENSIVE     RETAINED
                                      SHARES       PAR VALUE        CAPITAL         INCOME         EARNINGS        TOTAL
                                    ------------  -------------   ------------  ---------------- -------------  ------------

<S>                                 <C>           <C>             <C>            <C>               <C>           <C>      
Balance at July 1, 1998                  20,189           $ 20      $ 189,828               $ -     $ (19,011)    $ 170,837

Net income                                    -              -              -                 -           182           182

Foreign currency
  translation adjustment                      -              -              -               266             -           266

Stock options exercised                      18              -            279                 -             -           279

Stock purchases by employees                  3              -             57                 -             -            57
                                    ------------  -------------   ------------  ---------------- -------------  ------------

BALANCE AT SEPTEMBER 30, 1998            20,210           $ 20       $190,164             $ 266     $ (18,829)     $171,621
                                    ============  =============   ============  ================ =============  ============
</TABLE>

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                       4

<PAGE>   6

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                  THREE MONTHS ENDED
                                                                                     SEPTEMBER 30,
                                                                            ---------------------------------
                                                                                1998                1997
                                                                            --------------      -------------
<S>                                                                         <C>              <C>    
OPERATING ACTIVITIES
   Net income                                                                       $ 182            $ 2,490
   Adjustments to reconcile net income to net cash used in
      operating activities:
         Depreciation                                                               1,469                649
         Amortization                                                                 665                214
         Deferred income taxes                                                          -                443
         Changes in operating assets and liabilities:
            Trade receivables                                                      (6,060)            (3,743)
            Inventories                                                            (4,492)            (3,343)
            Prepaids and other assets                                                (171)            (1,100)
            Net assets associated with discontinued operations                     (1,970)                 -
            Accounts payable and accrued expenses                                  (5,369)            (3,994)
            Other                                                                     160               (378)
                                                                            --------------      -------------
                                 Net cash used in operating activities            (15,586)            (8,762)

INVESTING ACTIVITIES
   Capital expenditures                                                            (9,066)                 -
   Purchases of businesses                                                         (3,257)                 -
   Investments in affiliates                                                       (4,659)              (671)
   Use of net proceeds from public offering:
      Capital expenditures                                                              -             (5,095)
      Acquisition of minority interest in Fiberstars, Inc.                              -             (2,835)
                                                                            --------------      -------------
                                 Net cash used in investing activities            (16,982)            (8,601)

FINANCING ACTIVITIES
   Proceeds from revolving credit facility                                         88,306             17,457
   Payments of revolving credit facility                                          (54,681)           (15,107)
   Proceeds from long-term debt                                                       868              1,387
   Payments of long-term debt and capital leases                                   (1,440)              (882)
   Issuance of common stock                                                           336                314
   Net proceeds from public offering                                                    -             69,335
   Use of net proceeds from public offering:
      Payment of long-term debt and revolving credit facility                           -            (35,500)
                                                                            --------------      -------------
                             Net cash provided by financing activities             33,389             37,004
                                                                            --------------      -------------

Increase in cash and cash equivalents                                                 821             19,641
Cash and cash equivalents, beginning of period                                     21,917              4,198
                                                                            --------------      -------------

                              CASH AND CASH EQUIVALENTS, END OF PERIOD           $ 22,738           $ 23,839
                                                                            ==============      =============

SUPPLEMENTAL CASH FLOW INFORMATION
     Interest paid                                                                $ 4,510              $ 362
     Income taxes paid                                                                 60                213
     Capitalized interest                                                             209                126
     Equipment acquired through capital leases                                          -                376

     Detail of acquisitions:
         Assets acquired                                                          $ 7,078                  -
         Liabilities assumed                                                       (3,756)                 -
                                                                            --------------      -------------
         Cash paid                                                                  3,322                  -
             Less cash acquired                                                       (65)                 -
                                                                            --------------      -------------
         Net cash paid for acquisition                                            $ 3,257                  -
                                                                            ==============      =============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                       5

<PAGE>   7

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 1998
                          (Dollar amounts in thousands)

A.    ORGANIZATION

Advanced Lighting Technologies, Inc. (the "Company" or "ADLT") is an innovation-
driven designer, manufacturer and marketer of metal halide lighting products,
including materials, system components, systems, and production equipment.


B. BASIS OF PRESENTATION

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 Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
disclosures required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the financial statements
include all material adjustments necessary for a fair presentation, including
adjustments of a normal and recurring nature as well as adjustments to the
accrual for special charges described in Note F. 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 June 30, 1998. Operating
results for the three months ended September 30, 1998 are not necessarily
indicative of the results that may be expected for the full-year ending June 30,
1999.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts and related disclosures. Actual results could differ
from those estimates.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up
Activities." SOP 98-5 provides authoritative guidance on accounting for and
financial reporting of start-up costs and organization costs. The Company is
required to adopt the SOP on July 1, 1999 and, upon adoption, expense all
previously capitalized start-up costs and organization costs as a cumulative
effect of a change in accounting principle. Management is reviewing its
capitalization policies and determining the impact that the adoption of this SOP
is expected to have on its consolidated results of operations and financial
position. At September 30, 1998, the Company estimates that it had approximately
$2,650 of start-up costs included in its consolidated balance sheet.


C.  COMPREHENSIVE INCOME

During the first quarter of fiscal 1999, the Company adopted Statement of
Financial Accounting Standards (FAS) No. 130, "Reporting Comprehensive Income,"
which requires disclosure of comprehensive income and its components. FAS No.
130 requires companies to report, in addition to net income, other components of
comprehensive income, which for the Company includes foreign currency
translation adjustments.

                                        6

<PAGE>   8
                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 1998
                          (Dollar amounts in thousands)



C.  COMPREHENSIVE INCOME (CONT.)

For the three months ended September 30, 1998 and 1997, the Company's
comprehensive income was $448 and $2,490 , respectively. The Company's adoption
of FAS No. 130 had no effect on the Company's reported results of operations or
financial position.


D.  REVOLVING BANK CREDIT FACILITY

On October 19, 1998, the Company voluntarily reduced the maximum committed
availability under its revolving credit facility provided by several North
American financial institutions ("Credit Facility") to $65,000 from $85,000.
Based on the terms of the Credit Facility, the Company had $12,600 in available
borrowings as of September 30, 1998.

The Credit Facility has a three-year term expiring in December 2000, extendable
annually for a three-year term. Interest rates on loans outstanding are based,
at the Company's option, on LIBOR (plus 1.0% to 2.25%) or the agent bank's prime
rate. The Company is also obligated to pay commitment fees of between .20% and
 .375% on the unused portion of the facility. The facility contains certain
affirmative and negative covenants customary for this type of agreement,
prohibits cash dividends, and includes financial covenants with respect to
interest coverage, cash flow and tangible net worth. The principal security for
the facility is substantially all of the personal property of the Company and
each of its North American subsidiaries and a pledge of stock of each of the
Company's principal subsidiaries.


E.  SENIOR NOTES OFFERING

On March 13, 1998, the Company sold $100,000 of Senior Notes due March 15, 2008,
resulting in net proceeds of approximately $96,150. The Notes have an annual
coupon rate of 8% and are redeemable at the Company's option, in whole or in
part, on or after March 15, 2003 at certain preset redemption prices. In
addition, at any time prior to March 15, 2001, the Company may redeem up to 35%
of the aggregate principal amount of the Notes at 108% of par with the proceeds
of one or more public equity offerings. Interest on the Senior Notes is payable
semiannually on March 15 and September 15 of each year beginning on September
15, 1998. There are no sinking fund requirements.

From September 14, 1998 until completion of a registered exchange offer to
existing noteholders, the Senior Notes bear interest at 8.5%. The offer is
expected to be completed within 45 days following the effectiveness of the
Company's related registration statement.

The Indenture contains covenants that, among other things, limit the ability of
the Company and its Restricted Subsidiaries (as defined therein) to incur
indebtedness, pay dividends, prepay subordinated indebtedness, repurchase
capital stock, make investments, create liens, engage in transactions with
stockholders and affiliates, sell assets and, with respect to the Company,
engage in mergers and consolidations.

                                        7

<PAGE>   9
                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 1998
                          (Dollar amounts in thousands)


F.  SPECIAL CHARGES

During the fiscal year ended June 30, 1998, the Company recorded special charges
related to an assessment of the Company's global power supply operations. The
special charges of $17,984 principally related to the Company's decision to
refocus and restructure its recently acquired global power supply operations to
concentrate exclusively on opportunities in metal halide. With the January 1998
acquisition of Ruud Lighting, Inc., the Company accelerated the rationalization
of its existing power supply manufacturing operations and distribution
activities in order to capitalize on new opportunities not previously available.
This assessment resulted in the discontinuance of certain power supply products
at the Company's power supply facilities and the write-down of certain 
intangible, fixed and other assets.  The actions required by the plans related
to the global power supply operations are expected to be completed by March 31,
1999.

Details of the activity related to the fiscal 1998 special charges for the
three months ended September 30, 1998 are summarized as follows:

<TABLE>
<CAPTION>

                                                            BALANCE AS OF       CHARGES         BALANCE AS OF
           DESCRIPTION                   CASH/NONCASH       JUNE 30, 1998       UTILIZED     SEPTEMBER 30, 1998
----------------------------------    -------------------   -------------       --------     ------------------
<S>                                       <C>               <C>                 <C>                <C>   
     Severance                            Cash                $     460          $  417             $   43
     Lease/contract cancellation          Cash                      253             112                141
                                                            -------------       --------        --------------
                                                              $     713          $  529             $  184
                                                            =============       ========        ==============
</TABLE>

The balance of the accrual related to the special charges as of September 30, 
1998, was classified in the consolidated balance sheet as other accrued
expenses.

                                       8
<PAGE>   10
                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 1998
                          (Dollar amounts in thousands)


G.  DISCONTINUED OPERATIONS, MICROSUN BUSINESS

In March 1998, the Company approved a plan to distribute to its shareholders, as
a tax-free spin-off transaction estimated to be completed by December 31, 1998,
all of the ownership of Microsun Technologies, Inc., the subsidiary primarily
responsible for development, design, assembly and marketing of metal halide
portable fixtures for residential and hospitality uses. As a result, the
consolidated financial statements of ADLT were reclassified to reflect the
results of operations of Microsun as a discontinued operation in accordance with
generally accepted accounting principles.

Because of the deterioration of the capital markets subsequent to June 30, 1998
and the inability to raise capital necessary to spin-off the Microsun business,
management is presently re-evaluating the manner of disposal of the Microsun
business, with the objective of minimizing near-term costs and cash outflow. The
re-evaluation is intended to be all-inclusive and modifications to the plan of
disposal, expected to be completed by December 31, 1998, will consider
winding-down or liquidating the Microsun operations.

Summary operating information for Microsun for the three month periods ended
September 30, 1998 and 1997, is presented below for informational purposes only
and does not necessarily reflect what the results of operations would have been
had Microsun operated as a stand-alone entity.
<TABLE>
<CAPTION>

                                                                  Three Months Ended
                                                                     September 30,
                                                                ----------------------
                                                                1998            1997
                                                              --------        --------
<S>                                                           <C>              <C>    
                  Sales                                       $    929         $   305
                  Costs and expenses                             2,225             771
                                                              --------        --------
                  Loss before income taxes                       1,296             466
                  Income tax benefit                               443             168
                                                              --------        --------
                  Net loss                                    $    853         $   298
                                                              ========        ========
</TABLE>

Operating losses from the measurement date (March 31, 1998) through the intended
date of disposal (December 31, 1998) follow:
<TABLE>
<CAPTION>

                                                              Before
                                                              Income            Income
                                                              Taxes             Taxes                 Net
                                                             --------          --------             -------
<S>                                                          <C>                <C>                 <C>    
        Operating losses for the six
              months ended September 30, 1998                $  8,373           $ 2,837             $ 5,536
         Estimated operating losses from
              October 1 to December 31, 1998                      727               249                 478
                                                             --------          --------             -------
         Operating losses through disposal                   $  9,100           $ 3,086             $ 6,014
                                                             ========          ========             =======
</TABLE>

                                       9

<PAGE>   11


                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 1998
                          (Dollar amounts in thousands)



H.  RELATED PARTY TRANSACTION

Pursuant to a loan agreement dated October 8, 1998, between the Company and its
Chairman and Chief Executive Officer ("the CEO"), the Company has loaned $9,000
to its CEO for a one-year term at an interest rate of 8%. The loan was made
following approval by the Company's Board of Directors. The proceeds of the loan
were used by the Company's CEO to reduce the outstanding principal balance of a
margin account loan, which is secured by 2,053,070 shares of the Company's
Common Stock owned by the CEO and a related entity. In connection with the loan,
the Company's Board of Directors asked for and received the CEO's agreement to
extend the term of his employment agreement to December 31, 2003. The loan
agreement prohibits the CEO from encumbering his shares of the Company's Common
Stock in any manner except pursuant to the existing agreements governing the
CEO's margin account, without the consent of the Company's Board of Directors.
The loan is partially secured by certain real estate owned by the CEO.


I.  SUBSEQUENT EVENTS

On November 11, 1998, the Company announced actions to implement a plan to
modify its Pacific Rim expansion strategy, including an evaluation of existing
equipment contracts with affiliated companies in the Pacific Rim; revise its
global lamp manufacturing strategy; consolidate several lamp manufacturing
facilities; consolidate marketing operations in North America and in Europe;
exit noncore product lines; reduce corporate overhead, including a reduction of
its workforce; reduce capital equipment expansion plans; and defer facilities
expansion.

The Company anticipates recording pretax charges of between $10,000 to $21,000
as a result of implementing these changes.

NOTE J -- VALUATION ADJUSTMENT OF RESTRICTED COMMON STOCK ISSUED

During 1999, the Company received a comment letter from the Securities and
Exchange Commission ("SEC") related to the Company's Form 10-K for the year
ended June 30, 1998. In response to the SEC's view related to the valuation of
the three million shares of restricted common stock issued in connection with
the acquisition of Ruud Lighting, Inc. (as described in Note C in the Company's
Form 10-K/A for the year ended June 30, 1998), the value of the shares was
restated and increased to $49,950, which resulted in an increase in the excess
of cost over net assets of businesses acquired of $16,928. The effect of the
restatement on the September 30, 1998 financial statements follows:

<TABLE>
<CAPTION>
                                              As Restated                   As Previously Reported
                                           -----------------              -------------------------
<S>                                          <C>                                <C>
Balance Sheet                                                             
    Excess of cost over net assets            
      of businesses acquired, net             $  51,064                          $  34,453
    Paid-in-capital                             190,164                            173,236
    Retained earnings (deficit)                 (18,829)                           (18,512)

Statement of Income
    Amortization of intangible assets         $     665                          $     559
    Net income                                      182                                288
    Earnings per share--basic and diluted           .01                                .01
</TABLE>
                                 
                                         

                                       10
<PAGE>   12

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

(DOLLAR AMOUNTS IN THOUSANDS)

This report on Form 10-Q may contain forward-looking statements. For this
purpose, any statement contained herein that is not a statement of historical
fact may be deemed to be a forward-looking statement. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," and similar
expressions are intended to identify forward-looking statements. There are a
number of factors that could cause the Company's actual results to differ
materially from those indicated by such forward-looking statements. Such factors
are detailed in the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998 filed with the Securities and Exchange Commission.

The following is management's discussion and analysis of certain significant
factors which have affected the results of operations and should be read in
conjunction with the accompanying unaudited Condensed Consolidated Financial
Statements and notes thereto.


GENERAL

The Company designs, manufactures and markets metal halide lighting products,
including materials, systems and components and production equipment. Metal
halide lighting is currently used primarily in commercial and industrial
applications such as factories and warehouses, outdoor site and landscape
lighting, sports facilities and large retail spaces such as superstores. Systems
and components and materials revenue is recognized when products are shipped,
and production equipment revenue is recognized under the percentage of
completion method.

Consistent with the Company's strategy for new product introductions, the
Company invests substantial resources in research and development to engineer
materials and system components to be included in customers' specialized
lighting systems. Over the last three fiscal years, the Company has spent an
aggregate of $17,310 on research and development, representing 5.7% of aggregate
net sales from continuing operations over that period. Such expenditures have
enabled the Company to introduce new specialized products, develop new
applications for metal halide lighting and improve the quality of its materials.
The Company has spent additional amounts for manufacturing process and
efficiency enhancements, which were charged to cost of goods sold when incurred.
The Company expects to continue to make substantial expenditures on research and
development to enhance its position as the leading innovator in the metal halide
lighting industry.

The Company also has invested substantial resources in acquisitions and
strategic investments. In January 1998, the Company acquired Ruud Lighting, Inc.
and Deposition Sciences, Inc. From January 1997 through March 1998, the
Company's investment in notable acquisitions and strategic investments
aggregated approximately 3.6 million shares of Common Stock and approximately
$74,700 in cash, plus certain additional contingent amounts and shares.


DISCONTINUED OPERATIONS, MICROSUN BUSINESS

In March 1998, the Company approved a plan to distribute to its shareholders, as
a tax-free spin-off transaction estimated to be completed by December 31, 1998,
all of the ownership of Microsun

                                       11

<PAGE>   13
Technologies, Inc., the subsidiary primarily responsible for development,
design, assembly and marketing of metal halide portable fixtures for residential
and hospitality uses. As a result, the consolidated financial statements of ADLT
were reclassified to reflect the results of operations of Microsun as a
discontinued operation in accordance with generally accepted accounting
principles.

Because of the deterioration of the capital markets subsequent to June 30, 1998
and the inability to raise capital necessary to spin-off the Microsun business,
management is presently re-evaluating the manner of disposal for the Microsun
business, with the objective of minimizing near-term costs and cash outflow. The
re-evaluation is intended to be all-inclusive and modifications to the plan of
disposal, expected to be completed by December 31, 1998, will consider
winding-down or liquidating the operations.


FUTURE STRATEGIC DIRECTION

The current uncertainty in the international markets has affected the Company's 
sales outlook for fiscal 1999. Recent experience in the systems component 
business confirms a general deceleration of international metal halide growth 
near-term. The Company is currently estimating that these conditions could 
result in relatively flat sales during the second half of the fiscal year.

This outlook does not include any incremental sales from the Uni-Form(R) pulse
start line, which was introduced in the first quarter of fiscal 1999. The
Uni-Form(R) pulse start line is a new generation of metal halide systems which
permit (a) increased light output with lower power utilization, (b) faster
starting, (c) a quicker restart of lamps which have been recently turned off,
and (d) better color uniformity. Based on current forecasts, the Company
believes sales of the Uni-Form(R) pulse start line could reach $10,000 in fiscal
1999. Pulse start lamp sales totaled 20,000 units in the first quarter and are
on a 30,000 unit run rate in the second quarter. Pulse start fixture sales are
expected to begin to accelerate in the second quarter.

As a response to uncertainty in the international markets and a revised sales
outlook, the Company is taking a number of positive steps internally to reduce
operating expenses and enhance cash flow. On November 11, 1998, the Company
announced the following cost reduction and cash flow enhancement initiatives:

-    Consolidation of equipment and lamp-making operations. ADLT plans to
     consolidate its metal halide lamp-making operations into its primary
     facility in Solon, Ohio. As part of this effort the company will close its
     Bellevue, Ohio facility, which manufactures both specialty metal halide
     lamps and equipment to manufacture metal halide lamps. Additionally, ADLT
     is re-evaluating its joint venture/equipment sales. The Pacific Rim is
     currently facing serious economic difficulties, so the company is
     considering diverting this same equipment to ADLT's own Solon lamp factory,
     thereby increasing productivity and delaying the need for substantial
     capital expenditures for approximately three years.

-    Reduced facilities expenditures. ADLT will put on hold approximately
     $15,000 to $20,000 in planned facilities expenditures. These expenditures 
     included headquarters build-out and the completion of certain facilities 
     designed to highlight and promote metal halide lighting. Additionally, the
     company will postpone for approximately nine months the outfitting of its 
     recently expanded metal halide materials production operations. ADLT 
     believes it has adequate existing capacity to meet near-term materials 
     demand.

-    Consolidation of international operations. ADLT will exit its Canadian lamp
     distribution operations, a business acquired as part of a previous
     acquisition. These Canadian operations generated approximately $8,000
     in annual sales but were too focused on non-metal halide products and
     became unprofitable. ADLT's Canadian power supply operations will remain
     intact. ADLT anticipates significant growth for this operation based on the
     need to supply new products for the accelerating roll-out of Uniform Pulse
     Start systems. Secondly, ADLT reported that it will significantly reduce
     expenditures for its branch operations on the European continent, which are
     performing below expectations. ADLT's UK operations continue to perform
     well and will be unaffected by these actions.

The Company believes that when fully-implemented, these announced actions are
expected to reduce quarterly cash operating expenses by approximately $4,500
through the elimination of approximately 220 positions (including approximately
50 mid- and senior-level managers) and a 60% reduction in corporate overhead
(approximately $750 quarterly). The Company believes that the expected reduction
in cash operating expenses will contribute to cash flow in the last half of
fiscal 1999 without impeding the Company's ability to meet demand.

The Company anticipates recording pretax charges of between $10,000 to $21,000
as a result of implementing these changes.

UPDATE ON IN-PROCESS RESEARCH AND DEVELOPMENT

As discussed in previous filings, in connection with the purchase of Deposition
Sciences, Inc. ("DSI"), the Company allocated $18,200 of the $25,400 purchase   
price to in-process research and development projects. This allocation
represented the estimated fair value based on risk-adjusted cash flows related
to the incomplete research and development projects. At the date of
acquisition, the development of these projects had not yet reached
technological feasibility and had no alternative future uses. Accordingly,
these costs were expensed as of the acquisition date. DSI's in-process research
and development value is comprised of five primary research and development
programs, which were in process at the time of the acquisition.

At September 30, 1998, significant progress had been achieved on each of the
primary in-process research and development efforts that were underway at DSI as
of the acquisition date (January 28, 1998). In general, the Company believes
that DSI's research and development efforts are on track with management's plans
at the time the transaction occurred. DSI is continuing to invest heavily in the
development of new technologies and projects that were underway at the
consummation of the transaction. Through September 30, 1998, no significant
adjustments have been made in the economic assumptions or expectations which
underlie the Company's acquisition decision and related purchase accounting. All
of the cited in-process R&D projects are active, and DSI is advancing the
science and technology at a rate consistent with both DSI and ADLT expectations.

                                       12
<PAGE>   14
RESULTS OF OPERATIONS - SELECTED ITEMS AS A PERCENTAGE OF NET SALES

The following table sets forth, as a percentage of net sales, certain items in
the Company's Condensed Consolidated Statements of Income for the indicated
periods:
<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                                                              September 30,
                                                                       ----------------------------
                                                                          1998            1997
                                                                       ------------    ------------

<S>                                                                    <C>             <C> 
Net sales                                                                   100%            100%

Costs and expenses:
   Cost of sales                                                            58.9            57.9
   Marketing and selling                                                    17.6            14.7
   Research and development                                                  7.4             4.7
   General and administrative                                                8.6             7.4
   Fiber optic joint venture formation costs                                   -             0.7
   Amortization of intangible assets                                         1.3             0.7
                                                                       ------------    ------------
Income from operations                                                       6.2            13.9

Other income (expense):
   Interest expense                                                         (5.4)           (1.1)
   Interest income                                                           0.5             1.8
   Loss from equity investment                                              (0.4)              -
                                                                       ------------    ------------

Income from continuing operations before income taxes                        0.9            14.6
Income taxes                                                                 0.5             5.3
                                                                       ------------    ------------

Income from continuing operations                                            0.4             9.3
Loss from discontinued operations, net of income tax benefits                  -            (1.0)
                                                                       ------------    ------------

Net income                                                                   0.4%            8.3%
                                                                       ============    ============
</TABLE>

Factors which have affected the results of operations for the first quarter of
fiscal 1999 as compared to the first quarter of fiscal 1998 are discussed below.

QUARTER ENDED SEPTEMBER 30, 1998 COMPARED WITH QUARTER ENDED SEPTEMBER 30, 1997

NET SALES. Net sales increased 68.2% to $50,358 for the first quarter of fiscal
1999 from $29,937 for the first quarter of fiscal 1998. The increase in system
components, materials, and systems ($19,966) was primarily attributable to
increased unit volume, including $17,450 from the Company's Ruud Lighting
subsidiary, which was acquired on January 2, 1998. The increase in equipment
sales ($456) was primarily attributable to the acquisition of Deposition
Sciences, Inc., which was acquired on January 28, 1998.

The growth in net sales is comprised of an increase of 81% in sales of metal
halide products including Ruud Lighting and DSI, including 16% on an internal
growth basis. These increases were offset by a sales decline of 36% in non-metal
halide sales, excluding Ruud Lighting and DSI. The increase in metal halide
sales is reflective of the Company's focus on the metal halide market segment
and the overall growth of the metal halide market, which is estimated to be
approximately 15% per year. The decrease in non-metal halide sales, excluding
Ruud Lighting and DSI, is a result of the Company's efforts to strategically
reduce its presence in non-metal halide products. The Company's Canadian
distribution operations exited certain nonfocus product lines and its power
supply operations ceased production of certain nonfocus product lines during
fiscal 1998.

As noted above, fiscal 1999 first quarter sales reflect continued growth in the
sales of the Company's core U.S. metal halide operations, which generated 16%
internal sales growth over the year-ago period, including 34% growth in lamp
sales. The growth in lamp sales is largely a result of the new marketing channel
which was obtained through the acquisition of Ruud Lighting. These increases 
were offset by reductions in international sales and in non-metal halide 
products.

International sales decreased 1% in the first quarter while sales of non-metal
halide lamps decreased 38% in the first quarter. The Company attributes the soft
international market to the current international economic environment, which
the Company believes is causing its largest purchasers to adjust their inventory
levels. Sales of non-metal halide products, an area where the Company has been
strategically reducing its presence through the elimination of non-metal halide
lamps and power supplies, also declined at a faster rate than originally
anticipated.

Finally, domestic sales of metal halide materials decreased 7% in the first
quarter, while international sales of metal halide materials decreased 11% in 
the first quarter. This decline in metal halide materials seems to confirm a
general deceleration of international metal halide growth near-term, and the
Company has estimated that these conditions could result in relatively flat
sales during the second half of the fiscal year.



                                      13
<PAGE>   15

COST OF SALES. Cost of sales increased 71.0% to $29,636 in the first quarter of
fiscal 1999 from $17,326 in the first quarter of fiscal 1998. The increase was
primarily attributable to increased unit volume. As a percentage of net sales,
cost of sales increased to 58.9% in the first quarter of fiscal 1999 from 57.9%
in the first quarter of fiscal 1998.

MARKETING AND SELLING EXPENSES. Marketing and selling expenses increased 100.6%
to $8,859 in the first quarter of fiscal 1999 from $4,416 in the first quarter
of fiscal 1998. Marketing and selling expenses, as a percentage of net sales,
increased to 17.6% in the first quarter of fiscal 1999 from 14.7% in the first
quarter of fiscal 1998. This increase is primarily a result of increased
expenses incurred in connection with the launch of the Company's Pulse Start(TM)
products.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased
167.9% to $3,748 in the first quarter of fiscal 1999 from $1,399 in the first
quarter of fiscal 1998. This increase arose from increased spending for the:
(i) expansion of the new line of Uni-Form(R) pulse start products (with
improved energy efficiency, quicker starting and restarting and a more compact
arc source, which improves the light and reduces material costs) intended to
replace many first generation metal halide lamps in industrial and commercial   
applications; (ii) development and testing of electronic power supply systems;
(iii) development of new materials for the world's major lighting
manufacturers; and (iv) research and development efforts aimed at improving the
coating process of optical thin-films to broaden the applications, developing
new thin-film materials, and using coatings to develop improvements to lighting
and telecommunications technologies. As a percentage of net sales, research and
development expenses increased to 7.4% in the first quarter of fiscal 1999 from
4.7% in the first quarter of fiscal 1998. 

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased 95.2% to $4,321 in the first quarter of fiscal 1999 from $2,214 in
the first quarter of fiscal 1998. As a percentage of net sales, general and
administrative expenses increased to 8.6% in the first quarter of fiscal 1999
from 7.4% in the first quarter of fiscal 1998. The increase as a percentage of  
net sales was primarily a result of the inability to slow the growth of these
expenses quickly enough in light of the slower than expected growth in sales
experienced in the first quarter. The increase in general and administrative
expenses of $2,107 from the first quarter 1997 relates to an overall increase
in the size and complexity of the business and relates primarily to an increase
in personnel and related costs, travel, equipment depreciation and rent, and
communications costs.

AMORTIZATION OF INTANGIBLE ASSETS. Amortization expense increased to $665 in
the first quarter of fiscal 1999 from $214 in the first quarter of fiscal 1998
due to the amortization of goodwill and other intangible assets related to the
acquisitions of Ruud Lighting and Deposition Sciences which were completed in
January 1998.

INCOME FROM OPERATIONS. Income from operations in the first quarter of fiscal
1999 decreased to $3,129 from $4,156 in the first quarter of fiscal 1998. As a
percentage of net sales, income from operations decreased to 6.2% in the first
quarter of fiscal 1999 from 13.9% in the first quarter of fiscal 1998.

INTEREST EXPENSE. Interest expense increased to $2,727 in the first quarter of
fiscal from $327 in the first quarter of fiscal 1998. This increase resulted
primarily from the higher average debt outstanding during the first quarter of
fiscal 1999 as compared to the first quarter of fiscal 1998.

INTEREST INCOME. Interest income decreased to $238 in the first quarter of
fiscal 1999 from $527 earned in the first quarter of fiscal 1998. This decrease
is attributable to lower average cash equivalents and short-term investments in
the first quarter of fiscal 1999 as compared to the first quarter of fiscal
1998.

LOSS FROM EQUITY INVESTMENT. The loss from equity investments represents $53 of
earnings from the Company's investment in Fiberstars, Inc., a marketer and
distributor of fiber optic lighting products, offset by a $242 loss from the
Company's investment in Venture Lighting Japan, a manufacturer and marketer of
metal halide lamps in Japan.

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES. Income from continuing   
operations before income taxes during the first quarter of fiscal 1999
decreased to $451 from $4,356 during the first quarter of fiscal 1998. As a     
percentage of net sales, income from continuing operations before income taxes
decreased to 0.9% during the first quarter of fiscal 1999 from 14.6% during the
first quarter of fiscal 1998.

                                       14
<PAGE>   16

INCOME TAXES. Income tax expense decreased to $269 in the first quarter of
fiscal 1999 from $1,568 in the first quarter of fiscal 1998. The decrease was
caused by reduced profitability in the first quarter of fiscal 1999. Excluding
the loss from equity investments, the effective income tax rate was 36% in the
first quarters of both fiscal 1999 and fiscal 1998.

LOSS FROM DISCONTINUED OPERATIONS. In March 1998, the Company approved a plan to
distribute to its shareholders, as a tax-free spin-off transaction estimated to
be completed by December 31, 1998, all of the ownership of Microsun
Technologies, Inc., the subsidiary primarily responsible for development,
design, assembly and marketing of metal halide portable fixtures for residential
and hospitality uses. The loss from discontinued operations of $298 in the first
quarter of fiscal 1998 represents the total of Microsun's loss from operations,
net of tax benefits, in the first quarter of fiscal 1998.


LIQUIDITY AND CAPITAL RESOURCES

The Company's principal financial requirements are for developing manufacturing
equipment, market development activities, research and development efforts,
investments in business acquisitions, joint ventures and working capital. These
requirements have been, and the Company expects they will continue to be,
financed through a combination of cash flow from operations, borrowings under
various credit facilities and the sale of Common Stock.

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES. Net cash used in operating
activities totaled $15,586 in the first quarter of fiscal 1999 as compared to
$8,762 in the first quarter of fiscal 1998.

Trade receivables increased $6,060 and inventories increased $4,492, excluding
those acquired through the purchase of businesses. The increase in receivables
includes an increase of approximately $2,345 in accounts receivable related to
production equipment contracts. Production equipment contracts affect cash flow
because production equipment revenues are recognized under the percentage of
completion method of accounting while cash payments are received in accordance
with contract terms. The remaining increase in receivables resulted from an
increase in days sales outstanding as compared to the fourth quarter of fiscal
1998.

Inventory also increased as a result of the Company's efforts to introduce new
products which are accepted slowly into the marketplace, but must be initially
stocked. Inventory levels across the Company increased as a result of the
Company's efforts to improve customer service levels, e.g., minimizing
out-of-stock items. Efforts were concentrated at units abroad where shipping
time to distribution centers causes longer delays in the shipping process.

NET CASH USED IN INVESTMENT ACTIVITIES. Capital expenditures, primarily for
production equipment and leasehold and facility improvements, totaled $9,066 in
the first quarter of fiscal 1999 as compared to $5,095 in the first quarter of
fiscal 1998. Capital expenditures in fiscal 1999 related to additional machinery
and equipment to improve production processes, resulting in increased
productivity and capacity in the production of lamps, power supplies and other
lighting system products.

The Company has modified its current growth and capital expansion plans due to
the changes in the business environment. Specifically, the Company intends to
limit its capital expenditures for at least the next twelve months. As a result,
the Company has postponed certain capital equipment and facilities expenditures
until economic conditions and the market for metal halide products significantly
improves.

                                       15
<PAGE>   17

To expand the Company's ability to develop and market new metal halide products
and systems, the Company has made a number of acquisitions and strategic
investments, the most notable of which, completed in fiscal 1998, are described
below.

On January 28, 1998, the Company completed the acquisition of Deposition
Sciences, Inc. ("DSI"), of Santa Rosa, California. DSI is a leader in the
development of sophisticated thin film deposition systems and coatings for
lighting applications, with particular emphasis on coatings for metal halide
lighting systems, and other applications, including aerospace, defense and
automotive applications. The stock of DSI was acquired in a privately-negotiated
transaction. The purchase price consisted of 599,717 shares of the Company's
Common Stock and approximately $14.5 million in cash.

On January 2, 1998, the Company acquired all of the capital stock outstanding of
Ruud Lighting (the "Ruud Stock"), located in Racine, Wisconsin. Ruud Lighting
manufactures and directly markets HID lighting systems, principally focusing on
metal halide installations for commercial, industrial and outdoor lighting
applications. The Ruud Stock was acquired from the five shareholders of Ruud
Lighting in a privately negotiated purchase transaction. The purchase price for
the Ruud Stock consisted of three million shares of the Company's Common Stock
and approximately $35.5 million in cash.

NET CASH USED IN FINANCING ACTIVITIES. On January 2, 1998, the Company replaced
the Loan Agreement and other borrowings in North America with the Credit
Facility. Proceeds from this facility were used to finance the $35,500 cash
portion of the Ruud Lighting acquisition and the $14,500 cash portion of the
Deposition Sciences acquisition. Proceeds were also used to repay $19,200 of
existing and outstanding North American bank borrowings of ADLT, Ruud Lighting
and DSI. As a growth company, the Company may need to amend or replace the
Credit Facility prior to its maturity on December 31, 2000.

On March 13, 1998, the Company sold $100,000 of 8% Senior Notes due March 15,
2008, resulting in net proceeds of $96,150. Approximately $76,300 of the net
proceeds of the Senior Notes were used to repay amounts outstanding under the
Credit Facility, thereby lengthening the average term of the Company's debt,
most of which had been incurred to finance the acquisitions of Ruud Lighting and
DSI. From September 14, 1998 until completion of a registered exchange offer to
existing noteholders, the Senior Notes bear interest at 8.5%. The offer is
expected to be completed within 45 days following effectiveness of the Company's
related registration statement.

ABILITY TO ADVANCE FUTURE OPERATIONS. The Company's working capital (current
assets less current liabilities) at September 30, 1998 was $97,370, resulting in
a working capital ratio of current assets to current liabilities of 4.1 to 1.0,
as compared to $77,637 or 3.1 to 1.0 at June 30, 1998. As of September 30, 1998,
the Company had approximately $23,000 in cash and cash equivalents and
short-term investments and had $12,600 available to it under its Bank Credit
Facility.

The Company believes that the acquisition of Ruud Lighting will favorably impact
its cash flow from operations, as Ruud Lighting has historically achieved
significant positive cash flows from its operations. In addition, the Company
intends to implement a number of cost reduction and cash flow enhancement
initiatives including consolidation of equipment and lamp-making operations,
reductions in facilities expenditures, consolidation of international
operations, reduction of corporate expenses, and workforce reductions.

The Company believes that the combination of its anticipated cash flows from
Ruud Lighting's operations, available cash, current borrowing facilities and the
initiatives outlined above

                                       16

<PAGE>   18

will enable the Company to fund its operations for at least the next 12 months.
However, it is the Company's intention to avail itself of appropriate financing
alternatives to ensure that growth opportunities, including those arising from
acquisitions and additional investments in existing relationships, are realized.
If the Company engages in significant acquisition or strategic investment
activity in the near to medium term, it may need to obtain additional capital.

The Company is re-evaluating its international joint ventures and the related
equipment sales due to the serious economic difficulties facing the Pacific Rim
region. As a result, the Company may divert this manufacturing equipment to the
Company's Solon, Ohio factory, thereby increasing productivity and delaying the
need for substantial capital expenditures for approximately three years.
Although total capital expenditures for the remainder of fiscal 1999 are
estimated to be $12,000, the Company estimates its maintenance level for capital
expenditures will approximate $7,500 over the next twelve months. Future capital
expenditures beyond this level will be discretionary, as the Company presently
has sufficient capacities to support several years of sales growth at its
historical rates.


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board issued FAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information". The
statement requires a "management" approach to reporting financial and
descriptive information about a Company's operating segments. The Company must
adopt this statement in the annual financial statements for fiscal 1999, however
FAS No. 131 need not be applied to interim financial statements in the initial
year of application. Management is currently studying the potential effect of
adopting this statement.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up
Activities." SOP 98-5 provides authoritative guidance on accounting for and
financial reporting of start-up costs and organization costs. The Company is
required to adopt the SOP on July 1, 1999 and, upon adoption, expense all
previously capitalized start-up costs and organization costs as a cumulative
effect of a change in accounting principle. Management is reviewing its
capitalization policies and determining the impact that the adoption of this SOP
is expected to have on its consolidated results of operations and financial
position. At September 30, 1998, the Company estimates that it had approximately
$2,650 of start-up costs included in its consolidated balance sheet.

YEAR 2000 COMPLIANCE

STATE OF READINESS. During the past two fiscal years, the Company has been
actively involved in finding and correcting Year 2000 problems within its
information technology structure. The information system correction process is
essentially complete. The Company maintains its critical information technology
systems in close cooperation with its suppliers. The Company is not currently
operating any legacy systems which are no longer being supported by the original
supplier.

The most critical non-information technology systems, such as robots and other
numerically controlled equipment, are relatively new and are being upgraded and
maintained with the help of the Company's various suppliers. To date, the
Company's investigation of these systems has not revealed any Year 2000
problems; however, investigation in this area continues.

                                       17
<PAGE>   19


Each operating unit's purchasing and production control departments are in the
process of analyzing the unit's key third-party dependencies and working with
each of these key suppliers to determine the suppliers' Year 2000 status. Since
the Company's key suppliers are in the process of conducting similar
investigations with their key suppliers, and so on, the Company has had limited
success in obtaining reliable Year 2000 compliance certifications.

COSTS. The Company has had only limited expenditures related to Year 2000
issues, consisting principally of personnel costs incurred in the scope of
normal operations. In addition, software replacements and upgrades in the
ordinary course of business have enhanced the Company's Year 2000 readiness
without incremental costs. The Company does not anticipate that the future Year
2000 costs related to information technology that are beyond the scope of normal
operations will be significant.

The Company is in the process of developing contingency plans to protect it from
Year 2000 failures. These plans will likely result in some expenditures,
primarily increased inventory costs to assure adequate supplies, the exact
amount of which is not known at this time.

RISKS. In the early weeks of 2000, the Company may experience some random supply
chain disruptions that may affect its ability to produce and distribute key
products. These disruptions will be material if the U.S. experiences significant
interruptions in basic services, such as the electric power grid, telephone
service or the banking system.

CONTINGENCY PLANS. The Company, through its various purchasing and production
control departments, is in the early stages of developing contingency plans at
each of its worldwide operations. These plans will be particularly focused on
preparing the operation for the inability of key third-party suppliers to
perform their normal functions. Of critical importance will be the development
of alternative suppliers, the enhancements of on-hand materials and the
augmentation of the most critical finished goods.

COMPLETION. Based on management's assessment of current progress, the Company
believes it will complete necessary Year 2000 modifications and contingency
plans by mid-1999. The Company can give no assurance that the Company's Year
2000 preparations will prevent disruptions in its business resulting from Year
2000 problems of the Company, its suppliers or its customers or that the costs
to the Company of its preparations or any disruptions will not be material.


FOREIGN CURRENCY

Approximately 28% of the Company's net sales in fiscal 1998, on a pro forma
basis adjusted for the acquisition of Ruud Lighting, were denominated in
currencies other than U.S. dollars, principally Pounds Sterling, Australian
dollars and Canadian dollars. A weakening of such currencies versus the U.S.
dollar could have a material adverse effect on the Company. The Company
currently does not hedge its foreign currency exposure.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the three months ended September 30, 1998, there have been no material
changes in the reported market risks presented in the Company's Annual Report on
Form 10-K for the year ended June 30, 1998.

                                       18

<PAGE>   20

PART II.  OTHER INFORMATION


Except as noted below, the items in Part II are inapplicable or, if applicable,
would be answered in the negative. These items have been omitted and no other
reference is made thereto.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

(c) On December 23, 1996, a newly-organized subsidiary of the Company, Advanced
Cable Lite Corporation, acquired all of the assets (and assumed certain
liabilities) of Cable Lite Corporation (the "Seller"). A portion of the
consideration for the assets was the contingent obligation to issue additional
shares of Common Stock to the Seller's shareholders pursuant to a formula fixed
at the time of the original acquisition agreement. Pursuant to this formula, the
Company issued 5,933 shares of Common Stock to the Seller's former shareholders
on July 8, 1998. The Common Stock was issued to former shareholders of Cable
Lite Corporation in a negotiated purchase of assets. Cable Lite and its four
shareholders signed an investment representation and agreed to transfer
restrictions. The certificates representing the shares bear a restrictive
legend. The sale of the shares was exempt pursuant to Sections 4(1) and 4(2) of
the Securities Act.

ITEM 5.  OTHER INFORMATION

(a) As previously reported in the Company's Proxy Statement, pursuant to a loan
agreement dated October 8, 1998, between the Company and Mr. Hellman, its
Chairman and Chief Executive Officer (the "Hellman Loan Agreement"), the Company
has loaned $9,000,000 to Mr. Hellman for a one-year term at the rate of 8%. The
loan was made following approval by the Company's Board of Directors (Messrs.
Hellman and Fisi, Executive Vice President and a director of the Company, did
not participate in the deliberations). The proceeds of the loan were used to
reduce the outstanding principal balance of a loan from Prudential Securities
Incorporated ("PSI"), which is secured by 2,053,070 shares of the Company Common
Stock owned by Mr. Hellman and Hellman Ltd. (the "Hellman Personal Shares"). In
connection with the loan, the Board asked for and received Mr. Hellman's
agreement to extend the term of his employment agreement to December 31, 2003.
The Hellman Loan Agreement prohibits Mr. Hellman from encumbering the Hellman
Personal Shares in any manner except pursuant to existing agreements governing
Mr. Hellman's margin account at PSI, without consent of the Board's
representative. The loan is partially secured by certain real estate owned by
Mr. Hellman.

(b) The Company entered into a Consolidated Amendment No. 1 (the "Consolidated
Amendment"), dated as of September 10, 1998, to its Credit Agreement, dated as
of January 2, 1998, with the original lenders and National City Bank, as
administrative agent. The purpose of the Consolidated Amendment was to
consolidate prior amendments and to amend the pricing provisions and financial
covenants in the Credit Agreement. The Company is currently discussing an
additional amendment to the Credit Agreement with the lenders and the
administrative agent.

(c) On November 11, 1998, the Company issued a press release concerning the
results of the first quarter of its 1999 fiscal year and certain cost reduction
and cash flow enhancement initiatives to be taken by the Company. The Company's
press release, dated November 11, 1998, is attached hereto as Exhibit 99.

                                       19
<PAGE>   21
(d) The following Earnings Statement (Unaudited) for the twelve month period
ended September 30, 1998 covers a period of twelve months beginning 85 days
after the effective date of the Company's Registration Statement (File No.
333-05953) for its July 1997 public offering, and is hereby made available to
security holders pursuant to Rule 158 of the Securities Act of 1933, as amended.


                      ADVANCED LIGHTING TECHNOLOGIES, INC.
                         Earnings Statement (Unaudited)
                Twelve month period ended September 30, 1998 (In
                   thousands, except per share dollar amounts)
<TABLE>
<CAPTION>
<S>                                                                                              <C>      
Net sales                                                                                        $ 184,314

Costs and expenses:
   Cost of sales                                                                                   107,651
   Marketing and selling                                                                            30,189
   Research and development                                                                         11,668
   General and administrative                                                                       12,958
   Fiber optic joint venture formation costs                                                             -
   Purchased research and development                                                               18,220
   Special charges                                                                                  15,918
   Amortization of intangible assets                                                                 2,116
                                                                                              -------------
Income (loss) from operations                                                                      (14,406)

Other income (expense):
   Interest expense                                                                                 (6,201)
   Interest income                                                                                   1,147
   Loss from equity investments                                                                       (690)
                                                                                              -------------

Income (loss) from continuing operations before income taxes and extraordinary charge              (20,150)
Income taxes                                                                                           503
                                                                                              -------------

Income (loss) from continuing operations before extraordinary charge                               (20,653)
Loss from discontinued operations, net of income tax benefits                                       (6,994)
                                                                                              -------------

Income (loss) before extraordinary charge                                                          (27,647)
Extraordinary charge from early extinguishment of debt, net of income tax benefits                    (604)
                                                                                              -------------

Net income (loss)                                                                                $ (28,251)
                                                                                              =============

Earnings per share -- Basic:
   Income (loss) from continuing operations                                                      $   (1.08)
   Loss from discontinued operations                                                                  (.36)
   Extraordinary charge                                                                               (.03)
                                                                                              -------------
Earnings (loss) per share -- Basic:                                                              $   (1.47)
                                                                                              =============

Earnings per share -- Diluted:                                                        
   Income (loss) from continuing operations                                                      $   (1.08)
   Loss from discontinued operations                                                                  (.36)
   Extraordinary charge                                                                               (.03)
                                                                                              -------------
Earnings (loss) per share -- Diluted:                                                            $   (1.47)
                                                                                              =============

Weighted average shares outstanding:
   Basic                                                                                            19,189
                                                                                              =============

   Diluted                                                                                          19,189
                                                                                              =============
</TABLE>

                                       20

<PAGE>   22
<TABLE>
<CAPTION>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)   EXHIBITS

                                                                                            SEQUENTIAL
                                                                                            PAGE NUMBER/
EXHIBIT                                                                                     INCORPORATED
NUMBER            TITLE                                                                     BY REFERENCE
-------          -------
<S>              <C>                                                                        <C>
3.1              Amended and Restated Articles of Incorporation.                                 *

3.2              Code of Regulations.                                                            **

4.1              First Supplemental Indenture dated September 25, 1998 between
                 Advanced Lighting Technologies, Inc. and The Bank of New York
                 amending the Indenture dated March 18, 1998.                                    ___

10.1             Consolidated Amendment No. 1 to Credit Agreement dated
                 September 10, 1998 among Advanced Lighting Technologies, Inc.,
                 National City Bank, and other financial institutions amending the
                 Credit Agreement dated January 2, 1998.                                         ___

10.2             Letter Amendment, dated as of September 1, 1998, among Advanced 
                 Lighting Technologies, Inc., National City Bank and other 
                 financial institutions, to the Credit Agreement dated as of
                 January 2, 1998.                                                                ___

11               Statement Re: Computation of Earnings Per Share                                 ___

12               Statement Re: Computation of Ratio of Earnings to Fixed Charges                 ___

27               Financial Data Schedule                                                         ___

99               Press Release of Advanced Lighting Technologies, Inc., dated
                 November 11, 1998                                                               ___

*      Incorporated by reference to Exhibit of same number in Company's
       Quarterly Report on Form 10-Q for the Quarterly Period ended December 31,
       1996.

**     Incorporated by reference to Company's Registration Statement on Form S-1,
       Registration No. 33-97902, effective December 11, 1995.
</TABLE>

                                       21
<PAGE>   23


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K (CONT.)

(B)  REPORTS ON FORM 8-K.

During the quarter ended September 30, 1998, the Company filed one report on
Form 8-K. The Report on Form 8-K was filed on July 7, 1998, reporting under Item
5 certain financial and other information which was included in the Company's
registration statement on Form S-4 (Registration No. 333-58609) relating the
Company's proposed exchange offer of 8% Senior Notes due 2008. The Form 8-K
included the following financial statements:

         Consolidated Balance Sheets as of June 30, 1997 and 1996.

         Consolidated Statements of Operations for the years ended June 30,
         1997, 1996 and 1995.

         Statements of Consolidated Shareholders' Equity for the years ended
         June 30, 1997, 1996 and 1995.

         Consolidated Statements of Cash Flows for the years ended June 30,
         1997, 1996 and 1995.

         Pro Forma Condensed Combined Statements of Operations for the Company
         and Ruud Lighting, Inc. for the year ended June 30, 1997 and for the
         nine months ended March 31, 1998.

         Selected Financial Data for the years ended June 30, 1997, 1996, 1995,
         1994 and 1993, and for the nine months ended March 31, 1998 and 1997.

                                       22

<PAGE>   24

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the        
registrant has duly caused this amendment to its report on Form 10-Q to be
signed on its behalf by the undersigned hereunto duly authorized.


                                            ADVANCED LIGHTING TECHNOLOGIES, INC.


Date:  March 15, 1999                                By: /s/ Wayne R. Hellman
                                                         ----------------------
                                                         Wayne R. Hellman
                                                         Chief Executive Officer

Date:  March 15, 1999                                By: /s/ Nicholas R. Sucic
                                                         ----------------------
                                                         Nicholas R. Sucic
                                                         Chief Financial Officer

                         

                                       23

<PAGE>   25

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT
NUMBER      DESCRIPTION OF EXHIBITS                                                     PAGE NO.
-------     -----------------------                                                     --------

<S>              <C>                                                                        <C>
3.1              Amended and Restated Articles of Incorporation.                            *

3.2              Code of Regulations.                                                       **

4.1              First Supplemental Indenture dated September 25, 1998 between
                 Advanced Lighting Technologies, Inc. and The Bank of New York
                 Amending the Indenture dated March 18, 1998.                               ___

10.1             Consolidated Amendment No. 1 to Credit Agreement dated
                 September 10, 1998 among Advanced Lighting Technologies, Inc.,
                 National City Bank, and other financial institutions amending the
                 Credit Agreement dated January 2, 1998.                                    ___

10.2             Letter Amendment, dated as of September 1, 1998, among Advanced 
                 Lighting Technologies, Inc., National City Bank and other 
                 financial institutions, to the Credit Agreement dated as of
                 January 2, 1998.                                                           ___

11               Statement Re: Computation of Earnings Per Share                            ___

12               Statement Re: Computation of Ratio of Earnings to Fixed Charges            ___

27               Financial Data Schedule                                                    ___

99               Press Release of Advanced Lighting Technologies, Inc., dated
                 November 11, 1998.                                                         ___

*      Incorporated by reference to Exhibit of same number in Company's
       Quarterly Report on Form 10-Q for the Quarterly Period ended December 31,
       1996.

**     Incorporated by reference to Company's Registration Statement on Form S-1,
       Registration No. 33-97902, effective December 11, 1995.
</TABLE>


                                       24