<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   ----------


                                  FORM 10-Q/A

                                   (Mark One)

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

       For the quarterly period ended March 31, 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 of             (I.R.S. Employer Identification No.)
incorporation or organization)

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 20,121,153 shares of the Registrant's Common Stock, $.001 par value
per share, outstanding as of May 6, 1998.




<PAGE>   2
EXPLANATORY NOTE

This Form 10-Q/A 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 also reflects changes in
the presentation of discontinued operations and special charges. In addition,
certain exhibits have been added, completed and/or renumbered. 

This Form 10-Q/A replaces in its entirety the Form 10-Q for the quarterly 
period ended March 31, 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 -- March 31, 1998
                           and June 30, 1997.......................................................       2

                      Condensed Consolidated Statements of Operations -- Three months and 
                           nine months ended March 31, 1998 and 1997..............................        3

                      Condensed Statement of Consolidated Shareholders' Equity --
                           Nine months ended March 31, 1998.......................................        4

                      Condensed Consolidated Statements of Cash Flows -- Nine
                           months ended March 31, 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..............................................         13


PART II           OTHER INFORMATION

Item 2.           Changes in Securities and Use of Proceeds....................................          22

Item 6.           Exhibits and Reports on Form 8-K.............................................          23


SIGNATURES.....................................................................................          25

EXHIBIT INDEX..................................................................................          26
</TABLE>






<PAGE>   3
                      ADVANCED LIGHTING TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                               (Unaudited)
                                                                 MARCH 31,      JUNE 30,
                                                                  1998           1997
                                                                 ---------      --------
                                                                    (In thousands)
 ASSETS
 Current assets:
<S>                                                             <C>             <C>     
  Cash and cash equivalents                                     $  30,621       $  4,198
  Short-term investments                                            4,075          4,075
  Trade receivables, less allowances of $397 and $315              38,433         28,916
  Receivables from related parties                                  1,087            346
  Inventories:
    Finished goods                                                 28,599         21,143
    Raw materials and work-in-process                              12,862          7,982
                                                                ---------       --------
                                                                   41,461         29,125
  Prepaid expenses                                                  3,018          l,363
  Deferred taxes                                                    5,995          2,566
                                                                ---------       --------
Total current assets                                              124,690         70,589

Property, plant and equipment:
  Land and buildings                                               27,816          6,143
  Machinery and equipment                                          49,731         32,712
  Furniture and fixtures                                           15,119          7,704
                                                                ---------       --------
                                                                   92,666         46,559
  Less accumulated depreciation                                    10,869          8,558
                                                                ---------       --------
                                                                   81,797         38,001
Deferred taxes                                                      2,050            535
Receivables from related parties                                    2,532          1,209
Net assets associated with discontinued operations -- Note K        2,358           --
Investments in affiliates                                          21,902          7,565
Intangible assets                                                  34,485          4,737
Other assets                                                        7,445          4,217
Excess of cost over net assets of businesses acquired, net         48,262          7,985
                                                                ---------       --------
                                                                $ 325,521       $134,838
                                                                =========       ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Short-term debt and current portion of long-term debt         $   2,247       $  3,731
  Accounts payable                                                 15,761         15,773
  Payables to related parties                                         731            699
  Employee-related liabilities                                      3,670          2,674
  Accrued income and other taxes                                    3,377          1,689
  Other accrued expenses                                           11,258          3,643
                                                                ---------       --------
Total current liabilities                                          37,044         28,209

Long-term debt                                                    117,520         35,908
Other liabilities                                                     866            463
Deferred taxes                                                      4,491          4,226

Shareholders' equity
  Common stock                                                         20             13
  Paid-in-capital                                                 188,782         59,087
  Retained earnings (deficit)                                     (23,202)         6,932
                                                                ---------       --------
                                                                  165,600         66,032
                                                                ---------       --------
                                                                $ 325,521       $134,838
                                                                =========       ========

</TABLE>


See notes to condensed consolidated financial statements.

                                        2


<PAGE>   4

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                 (In thousands, except per share dollar amounts)
<TABLE>
<CAPTION>

                                                                      THREE MONTHS ENDED      NINE MONTHS ENDED
                                                                           MARCH 31,               MARCH 31,
                                                                    --------------------    ---------------------
                                                                       1998       1997        1998         1997
                                                                    --------    --------    ---------    --------
<S>                                                                 <C>         <C>         <C>          <C>     
Net sales                                                           $ 49,075    $ 22,034    $ 110,891    $ 60,291
Costs and expenses:
    Cost of sales -- Note I                                           30,448      11,801       66,241      32,299
    Marketing and selling                                              7,523       3,784       16,854      10,299
    Research and development                                           2,848       1,291        6,069       3,851
    General and administrative                                         3,087       1,855        7,307       5,378
    Fiber optic joint venture formation costs                           --          --            212        --
    Purchased in-process research & development--Note I               18,220        --         18,220        --  
    Special charges -- Note I                                         15,700                   15,700        --
    Settlement of claim                                                 --          --           --           771
    Amortization of intangible assets                                    611         101        1,036         195
                                                                    --------    --------      -------    --------
Income (loss) from operations                                        (29,362)      3,202      (20,748)      7,498

Other income (expense):
    Interest expense                                                  (1,325)       (392)      (1,649)       (749)
    Interest income                                                      274         283        1,079         610
    Loss from equity investment                                           (2)       --             (2)        --
                                                                    --------    --------      -------    --------
Income (loss) from continuing operations before income
    taxes and extraordinary charge                                   (30,415)      3,093      (21,320)      7,359
Income taxes                                                          (2,356)      1,123          918       2,616
                                                                    --------    --------      -------    --------
Income (loss) from continuing operations before
    extraordinary charge                                             (28,059)      1,970      (22,238)      4,743
Discontinued operations
    Loss from operations of discontinued
     business (net of income tax benefits of
     $416, $49, $719 and $135, respectively)                            (739)        (88)      (1,278)       (241)
    Loss from disposal of discontinued business, including
     provision of $9,100 for operating losses during the
     phase-out period (net of income tax benefits of $3,086)          (6,014)       --         (6,014)        --
                                                                    --------    --------      -------    --------
Income (loss) before extraordinary charge                            (34,812)      1,882      (29,530)      4,502
Extraordinary charge from early extinguishment
    of debt, net of income tax benefits - Note E                        (604)       --           (604)        --
                                                                    --------    --------      -------    --------
Net income (loss)                                                   $(35,416)   $  1,882    $ (30,134)   $  4,502
                                                                    ========    ========     ========    ========

Earnings per share - Basic:
    Income (loss) from continuing operations                        $  (1.41)   $    .15    $   (1.27)   $    .36
    Loss from discontinued operations                                   (.34)       (.01)        (.42)       (.02)
    Extraordinary charge                                                (.03)       --           (.03)        --  
                                                                    --------    --------      -------    --------
Earnings per share - Basic                                          $  (1.78)   $    .14    $   (1.72)   $    .34
                                                                    ========    ========     ========    ========

Earnings per share - Diluted
    Income (loss) from continuing operations                        $  (1.41)   $    .14    $   (1.27)   $    .35
    Loss from discontinued operations                                   (.34)       --           (.42)       (.02)
    Extraordinary charge                                                (.03)       --           (.03)        --
                                                                    --------    --------      -------    --------
Earnings per share - Diluted                                        $  (1.78)   $    .14    $   (1.72)   $    .33
                                                                    ========    ========     ========    ========

Weighted average shares outstanding      
    Basic                                                             19,917      13,438       17,540      13,205
                                                                    ========    ========     ========    ========
    Diluted                                                           19,917      13,802       17,540      13,503
                                                                    ========    ========     ========    ========

</TABLE>

See notes to consolidated financial statements.

                                        3


<PAGE>   5

                                  ADVANCED LIGHTING TECHNOLOGIES, INC.
            CONDENSED STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY (UNAUDITED)
                                   NINE MONTHS ENDED MARCH 31, 1998

<TABLE>
<CAPTION>
                                               ------------------------------------------------------------------
                                                   COMMON STOCK
                                               ----------------------      PAID-IN       RETAINED
                                               SHARES        PAR VALUE      CAPITAL      EARNINGS        TOTAL
                                                ------          -----     ---------      ---------     -----------
                                                                        (In thousands)

<S>                                           <C>               <C>     <C>            <C>           <C>       
    Balance at July 1, 1997                     13,435          $  13    $   59,087     $   6,932     $   66,032

    Net loss                                      -               -             -         (30,134)       (30,134)

    Net proceeds from public offering
      of common shares                           3,000              3        69,317           -           69,320

    Issuance of shares in connection
      with purchases of businesses               3,600              4        59,547           -           59,551

    Stock options exercised                         70              -           831           -              831
                                                ------          -----     ---------     ---------     ----------
    BALANCE AT MARCH 31, 1998                   20,105          $  20     $ 188,782     $ (23,202)    $  165,600
                                                ======          =====     =========     =========     ==========

</TABLE>








                                       4


<PAGE>   6

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                  NINE-MONTHS ENDED
                                                                                      MARCH 31,
                                                                                 ------------------
                                                                                 1998          1997
                                                                                 ----          ----
                                                                               (In thousands)
OPERATING ACTIVITIES
<S>                                                                             <C>           <C>
  Net income (loss)                                                             $ (30,134)    $ 4,5O2
  Adjustments to reconcile net income (loss) to net cash used in
    operating activities:
       Purchased in-process research and development                               18,220        --
       Depreciation and amortization                                                3,441       1,829
       Provision for discontinued operations                                        9,100        --
       Special charges                                                             18,500        --
       Deferred income taxes                                                       (5,750)      1,782
       Extraordinary loss                                                             604        --
       Changes in operating assets and liabilities:
         Trade receivables                                                         (8,063)     (9,400)
         Inventories                                                               (5,673)     (5,612)
         Prepaids and other assets                                                (15,008)     (2,430)
         Accounts payable and accrued expenses                                     (3,384)      2,869
         Other liabilities                                                             84         (74)
                                                                                ---------     -------
                                        Net cash used in operating activities     (18,063)     (6,534)
INVESTING ACTIVITIES
  Capital expenditures                                                             (7,058)    (11,589)
  Purchase of short-term investments                                                 --       (10,229)
  Purchases of businesses                                                         (50,441)     (6,595)
  Investments in affiliates                                                        (4,343)     (1,023)
  Use of net proceeds from public offering:
       Capital expenditures                                                       (14,507)       --
       Investment in joint venture with Rohm & Haas Company                        (2,000)       --
       Acquisition of minority interest in Fiberstars, Inc.                        (4,780)       --
                                                                                ---------     -------
                                        Net cash used in investing activities     (83,129)    (29,436)
FINANCING ACTIVITIES
  Proceeds from revolving credit facility                                         313,196      65,189
  Payments of revolving credit facility                                          (305,237)    (47,344)
  Proceeds from long-term debt                                                    104,353      14,822
  Payments of long-term debt and capital leases                                   (21,848)     (5,896)
  Issuance of common stock                                                            831         434
  Net proceeds from public offering                                                69,320      30,091
  Use of net proceeds from public offering (excluding $11,199
    used for working capital purposes for the nine months ended
    March 31, 1998):
       Payment of long-term debt                                                   (7,400)       --
       Payment of revolving credit facility                                       (25,600)    (16,800)
                                                                                ---------     -------
                                  Net cash provided by financing activities       127,615      40,496
                                                                                ---------     -------
Increase in cash and cash equivalents                                              26,423       4,526
Cash and cash equivalents, beginning of period                                      4,198       l,682
                                                                                ---------     -------
                               CASH AND CASH EQUIVALENTS, END OF PERIOD         $  30,621    $  6,208
                                                                                =========    ========

SUPPLEMENTAL CASH FLOW INFORMATION
    Interest paid                                                               $   1,673    $    684
    Income taxes paid                                                               2,280          81
    Capitalized interest                                                              680         206
    Noncash transactions:
       Equipment acquired through capital leases                                      376       1,004
       Property acquired by assuming mortgage                                       4,807        --
       Stock issued for purchases of businesses                                    59,551       1,537
    Detail of acquisitions:
       Assets acquired                                                          $ 137,900    $ 14,212
       Liabilities assumed                                                        (26,149)     (5,688)
       Stock issued                                                               (59,551)     (1,537)
                                                                                ---------     -------
       Cash paid                                                                   52,200       6,987
          Less cash acquired                                                       (1,759)       (392)
                                                                                ---------     -------
       Net cash paid for acquisition                                            $  50,441     $ 6,595 
                                                                                =========     =======
</TABLE>


See notes to condensed consolidated financial statements.

                                       5


<PAGE>   7


                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 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 the special charges
described in Note I. 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, 1997. Operating results for the three
months or nine months ended March 31, 1998 are not necessarily indicative of the
results that may be expected for the full-year ending June 30, 1998.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions in
certain circumstances that affect amounts reported in the consolidated financial
statements and notes. 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 (though earlier application is
encouraged) 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.





                                        6

<PAGE>   8


                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 1998
                          (Dollar amounts in thousands)



C.  ISSUANCE OF COMMON STOCK

In July 1997, the Company issued three million shares of its Common Stock in a
public offering, resulting in net proceeds of $69,320. Approximately $33,000 of
the net proceeds from this offering were used to repay substantially all amounts
outstanding under its Revolving Credit and Security Agreement and its Term Note
(the "Loan Agreement"). Of the remaining net proceeds, $14,507 was used for
capital expenditures, primarily production equipment and leasehold improvements,
$4,780 was used to purchase 29% of Fiberstars, Inc., a company specializing in
the marketing and distribution of fiber optic lighting products, $2,000 was
contributed to Unison Fiber Optics Lighting Systems LLC, the Company's joint
venture with Rohm and Haas Company, and $11,199 was used for working capital
purposes for the nine months ended March 31, 1998.



D.  ACQUISITIONS

During the nine months ended March 31, 1998, the Company completed the
following business combinations, both of which were accounted for by the
purchase method and, accordingly, results of operations for the acquired
businesses have been included in the condensed consolidated statement of
operations from their respective dates of acquisition. Assets acquired and
liabilities assumed have been recorded at fair value based on appraisals and
the best estimates available.

On January 2, 1998, the Company acquired all of the capital stock outstanding
(the "Stock") of Ruud Lighting, Inc. ("Ruud"), located in Racine, Wisconsin.
Ruud manufactures and directly markets high-intensity discharge ("HID") lighting
systems, with a strong focus on metal halide installations, for commercial,
industrial, outdoor, and related lighting applications. The purchase price
consisted of $35,500 in cash and three million shares of the Company's Common
Stock (valued at $49,950). The excess of the purchase price over the net
tangible assets acquired was allocated as $29,928 to various intangible assets
such as trade name and customer service infrastructure and $45,959 to the
excess of cost over net assets acquired ("goodwill"), which are being amortized
over 40 years.

The following unaudited pro forma results of operations give effect to the
acquisition of Ruud Lighting as if it had occurred on July 1, 1996. These pro
forma results have been prepared for comparative purposes only and do not
purport to be indicative of the results of operations which would have
resulted had the acquisition occurred on July 1, 1996, or which may result in
the future.

<TABLE>
<CAPTION>

                                                                     Nine months ended
                                                                     -----------------
                                                               March 31, 1998     March 31, 1997
                                                               --------------     --------------
<S>                                                           <C>                 <C>
         Net sales                                            $147,052             $111,681
         Income (loss) before extraordinary charge             (28,868)               5,921
         Net income (loss)                                     (29,472)               5,921
         Earnings (loss) per share - diluted:
              Before extraordinary charge                       $(1.48)                $.36
              Net income                                        $(1.51)                $.36

</TABLE>






                                        7
<PAGE>   9

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 1998
                          (Dollar amounts in thousands)



D.  ACQUISITIONS (CONTINUED)

On January 28, 1998, the Company completed the acquisition of Deposition
Sciences, Inc.("DSI"), of Santa Rosa, California. DSI is the leader in the
development of sophisticated thin film deposition systems (equipment) and
coatings for lighting applications, with particular emphasis on coatings for
metal halide lighting systems. The purchase price consisted of $14,500 in cash
and 599,717 shares of the Company's Common Stock (valued at $9,600). The excess
of the purchase price over the net tangible assets acquired was allocated as
$18,220 to in-process research and development ("R&D") and $3,840 to intangible
assets. Intangibles consist of trade names, assembled workforce and goodwill,
and are amortized over 10 years. Purchased in-process R&D includes the value of
products in the development stage and not considered to have reached
technological feasibility and, in accordance with generally accepted accounting
principles, was capitalized but immediately written-off subsequent to the
acquisition of DSI.

E.  REVOLVING BANK CREDIT FACILITY

On January 2, 1998, the Company replaced its existing Loan Agreement and other
borrowings in North America with an $85,000 revolving credit facility provided
by several North American financial institutions ("Bank Credit Facility").
Proceeds from this facility were partially used to finance the $35,500 cash
portion of the Ruud purchase price and the $14,500 cash portion of the DSI
purchase price. Proceeds were also used to repay $19,200 of existing and
outstanding North American bank borrowings of ADLT, Ruud and DSI.

The 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 .625% to 1.75%) 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.

The early extinguishment of debt under the Loan Agreement resulted in a noncash
write-off of deferred financing costs and an extraordinary charge amounting to
$604, net of applicable income tax benefits of $311, in the three months ended
March 31, 1998.







                                        8
<PAGE>   10

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 1998
                          (Dollar amounts in thousands)



F.  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 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.

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 only,
engage in mergers and consolidations.

Approximately $76,300 of the net proceeds from the Senior Notes were used to
repay amounts outstanding under the Bank Credit Facility, thereby lengthening
the term of the Company's debt, most of which had been incurred to finance the
acquisitions of Ruud Lighting and DSI.



G.  PURCHASE OF CORPORATE HEADQUARTERS

During March 1998, the Company purchased land and building in Solon, Ohio for
$7,758, which includes the assumption of an existing mortgage of approximately
$4,800. The mortgage has a 9.39% interest rate, a prepayment penalty that
approximates $1,000, requires monthly amortizing payments and a final term
payment of $4,100 due in June 2006. Prior to the purchase, a portion of the
property was leased and used by the Company for system components manufacturing
and office space. Subsequent to the purchase, the Company relocated its world
headquarters to the facility. The Company has invested and intends to invest
additional amounts for expanded manufacturing, sales and training facilities.



H.  ADDITIONAL INVESTMENT IN FIBERSTARS, INC.

During July 1997, the Company purchased an equity interest in Fiberstars, Inc.,
a marketer and distributor of fiber optic lighting products. At December 31,
1997, the Company owned approximately 669,000 common shares, or 19.6% of
Fiberstars' shares outstanding. On February 11, 1998, the Company increased its
equity ownership to approximately 1,023,000 common shares, or 29% of Fiberstars'
shares outstanding. Accordingly, the Company has changed its method of carrying
the investment to equity from cost in the quarter ended March 31, 1998. The
Company can not purchase additional shares of Fiberstars without the consent of
the board of directors of Fiberstars.





                                        9
<PAGE>   11

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 1998
                          (Dollar amounts in thousands)


I.  SPECIAL CHARGES

During the three months ended March 31, 1998, the Company recorded special
charges related to the purchase price allocation for Deposition Sciences Inc.
("DSI") and an assessment of the Company's global power supply operations.

The Company completed the acquisition of DSI in January 1998. The special
charges include $18,220 for purchased in-process research and development,
determined by an independent valuation, relating to the DSI acquisition.

The special charges also include $18,500 principally relating to the Company's
decision to refocus and restructure its recently acquired global power supply
operations to focus exclusively on opportunities in metal halide. With the
January 1998 acquisition of Ruud Lighting, Inc., the Company accelerated this
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 (a) the discontinuance of
certain power supply products at the Company's power supply facilities and (b)
the write-down of certain intangible and fixed assets.

In addition, the charges cover the consolidation and rationalization cost of
distribution activities and facilities, the write-down of assets in connection
with the implementation of new information systems and a reassessment of
investments resulting from a change in expansion strategy arising from the Ruud
Lighting acquisition.

The special charges were determined in accordance with formal plans developed by
the Company's management using the best information available to it at the time
and, subsequently, approved by the Company's Board of Directors. The amounts the
Company may ultimately incur may change as the plans are executed.

The amounts are classified in the March 31, 1998 statement of operations as:
cost of sales--$2,800; purchased in-process research and development--$18,220;
and, special charges--$15,700. Details of the special charges are summarized in
the following table:

<TABLE>
<CAPTION>
                                          Charged to      Charges     Balance as of
Description                Cash/Noncash   Operations      Utilized    March 31, 1998
-----------                ------------   ----------      --------    --------------
<S>                        <C>              <C>            <C>            <C>   
Asset write-downs:
  Inventories              Noncash          $ 2,800        $ 2,800           --
  Intangibles              Noncash            8,942          8,942           --
  Fixed assets             Noncash            2,650          2,650           --
  Other assets             Noncash            2,393          2,393           --
Contractual commitments
  and other accruals       Cash               1,600            473        $1,127
Other                      Cash                 115            115           --
                                            -------        -------        ------
                                            $18,500        $17,373        $1,127
                                            =======        =======        ======
</TABLE>



                                       10
<PAGE>   12

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 1998
                          (Dollar amounts in thousands)


I.  SPECIAL CHARGES (CONTINUED)

Intangible assets primarily represent the excess of the purchase price of
acquisition over the fair market value of the net assets acquired ("goodwill")
and other costs allocated to tradenames, know-how, and other specifically
identifiable intangibles arising from business acquisitions. Asset writedowns
for the impairment of long-lived intangibles and fixed assets were determined in
accordance with Financial Accounting Standards No. 121.

Actions required by the plans are expected to be completed by June 30, 1999.

The March 31, 1998 balance of the accrual for special charges of $1,127 is 
classified within the condensed consolidated balance sheet as other accrued 
expenses.

After an income tax benefit of $4,664, these special charges reduced net income
by $32,056, or $1.61 diluted earnings per share for the three months ended 
March 31, 1998.


J.   INCOME TAXES

The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to loss before income taxes as a result of the
difference between the financial reporting and tax bases of (a) the net assets
of Deposition Sciences, Inc. reflected in the March 31, 1998 statement of
operations as purchased in-process research and development and (b) a portion of
the special charges related asset write-downs.















                                       11
<PAGE>   13

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 1998
                          (Dollar amounts in thousands)


K.  DISCONTINUED OPERATIONS, SPIN-OFF OF MICROSUN BUSINESS

In March 1998, the Company approved a plan to distribute to its shareholders 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, in a spin-off
transaction which is expected to be tax-free. The Company believes the creation
of two separate companies will enable the Company and Microsun to devote the
resources necessary to develop their core strategies in pursuit of their growth
objectives.

Summary operating information for Microsun for the three month and nine month
periods ended March 31, 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              Nine Months
                                 Ended March 31,           Ended March 31,
                                 ---------------           ---------------
                                1998        1997           1998         1997
                                ----        ----           ----         ----
<S>                           <C>           <C>         <C>           <C>    
Sales                         $ 1,610       $ 300       $ 2,764       $   485
Costs and expenses              2,765         437         4,761           861
                              -------       -----       --------      -------
Loss before income taxes       (1,155)       (137)       (1,997)         (376)
Income tax benefit             (  416)       ( 49)       (  719)         (135)
                              -------       -----       --------      -------
Net loss                      $(  739)      $( 88)      $(1,278)      $(  241)
                              =======       =====       ========      =======
</TABLE>

Operating losses through the intended date of the spin-off follow:

<TABLE>
<CAPTION>
                                                   Before
                                                   Income     Income
                                                   Taxes      Taxes        Net
                                                   -----      -----        ---

<S>                                              <C>          <C>         <C>   
Operating losses for the nine
     months ended March 31, 1998                 $ 1,997      $  719      $1,278
Estimated operating losses from
     April 1, 1998 to December 31, 1998            9,100       3,086       6,014
                                                 -------      ------      ------
Operating losses through spin-off                $11,097      $3,805      $7,292
                                                 =======      ======      ======
</TABLE>

The estimated date of disposition extends to December 31, 1998 pending the
determination of the spin-off as tax-free. As a result of the Board of
Directors' approval to spin-off the Microsun business, the consolidated
financial statements of ADLT have been adjusted and restated to reflect the
results of operations of Microsun as a discontinued operation in accordance with
generally accepted accounting principles.






                                       12


<PAGE>   14

                      ADVANCED LIGHTING TECHNOLOGIES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 1998
                          (Dollar amounts in thousands)


NOTE L -- 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 D), 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 March 31, 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       $  48,262           $  31,440
       Paid-in-capital                        188,782             171,854         
       Retained earnings (deficit)            (23,202)            (23,096)

Statement of Operations
Nine months ended March 31, 1998
       Amortization of intangible assets    $   1,036           $     930
       Loss before extraordinary charge        29,530              29,424 
       Net loss                                30,134              30,028

       Per share loss--basic and diluted
              Before extraordinary charge        1.69                1.68
              Net Loss                           1.72                1.71

Statement of Operations
Three months ended March 31, 1998
       Amortization of intangible assets    $     611           $     505 
       Loss before extraordinary charge        34,812              34,706
       Net loss                                35,416              35,310
     
       Per share loss--basic and diluted       
              Before extraordinary charge        1.75                1.74
              Net Loss                           1.78                1.77

</TABLE>
 
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, 1997 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.








                                      13
<PAGE>   15



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 Operations for the indicated
periods:

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED   NINE MONTHS ENDED
                                                       ------------------   -----------------
                                                            MARCH 31,           MARCH 31,
                                                         --------------      ---------------
                                                         1998      1997      1998       1997
                                                         ----      ----      ----       ----
<S>                                                      <C>        <C>       <C>       <C> 
Net sales ............................................  100.0     100.0     100.0     100.0

Costs and expenses:
   Cost of sales .......................................  62.0      53.5      59.7      53.6
   Marketing and selling ...............................  15.3      17.2      15.2      17.1
   Research and development ............................   5.8       5.9       5.5       6.4
   General and administrative ..........................   6.3       8.4       6.6       8.9
   Fiber optic joint venture formation costs ...........  --        --         0.2      --
   Purchased in-process R & D ..........................  37.1      --        16.4      --
   Special charges .....................................  32.0      --        14.2      --
   Settlement of claim .................................  --        --        --         1.3
   Amortization of intangible assets ...................   1.3       0.5       0.9       0.3
                                                    ------------------------------------------
Income (loss) from operations .........................  (59.8)     14.5     (18.7)     12.4

Other income (expense):
   Interest expense ...................................   (2.7)     (1.8)     (1.5)     (1.2)
   Interest income ....................................    0.5       1.3       1.0       1.0
   Loss from equity investment ........................   (0.0)     --        (0.0)     --
                                                    ------------------------------------------
Income (loss) from continuing operations
   before income taxes and extraordinary charge .......  (62.0)     14.0     (19.2)     12.2
Income taxes ..........................................   (4.8)      5.1       0.8       4.3
                                                    ------------------------------------------
Income (loss) from continuing operations
   before extraordinary charge ........................  (57.2)      8.9     (20.0)      7.9
Loss from discontinued residential portable 
   fixture operations, net of income taxes ............  (13.7)     (0.4)     (6.6)     (0.4)
                                                    ------------------------------------------

Income (loss) before extraordinary charge .............  (70.9)      8.5     (26.6)      7.5
Extraordinary charge, net of applicable
   income tax benefits ................................   (1.3)     --        (0.6)     --
                                                    ------------------------------------------
Net income ............................................  (72.2)      8.5     (27.2)      7.5
                                                    ------------------------------------------
</TABLE>


Factors which have affected the results of operations for the third quarter of
fiscal 1998 as compared to the third quarter of fiscal 1997 and the comparison
of the first nine months of fiscal years 1998 and 1997 are discussed below.





                                       14




<PAGE>   16

QUARTER ENDED MARCH 31, 1998 COMPARED WITH QUARTER ENDED MARCH 31, 1997

Net sales. Net sales increased 122.7% to $49,075 for the third quarter of fiscal
1998 from $22,034 for the third quarter of fiscal 1997. The increase in system
components, materials, and systems ($24,473) was primarily attributable to
increased unit volume, including a $14,913 increase from the Company's Ruud
Lighting subsidiary, which was acquired on January 2, 1998. The increase in
equipment sales ($2,568) was primarily attributable to the acquisition of
Deposition Sciences, Inc., which was acquired on January 28, 1998.

Cost of Sales. Cost of sales increased 158.0% to $30,448 in the third quarter of
fiscal 1998 from $11,801 in the third quarter of fiscal 1997. As a percentage of
net sales, cost of sales increased to 62.0% in the third quarter of fiscal 1998
from 53.5% in the third quarter of fiscal 1997. Cost of sales included $2,800
write-down of inventory related to the rationalization of the Company's global
power supply operations and the elimination of certain nonfocus product lines.
After excluding this write-down, cost of sales increased 134.3% for the quarter
to $27,648, or 56.3% of net sales. The increase was primarily attributable to
increased unit volume, but also reflects a change in the product mix, whereby
lower-margin power supplies products represented a larger component of total
sales in fiscal 1998.

Marketing and Selling Expenses. Marketing and selling expenses increased 98.8%
to $7,523 in the third quarter of fiscal 1998 from $3,784 in the third quarter
of fiscal 1997. Marketing and selling expenses, as a percentage of net sales,
decreased to 15.3% in the third quarter of fiscal 1998 from 17.2% in the third
quarter of fiscal 1997. This decrease reflects the leveraging of certain fixed
marketing and selling expenses as sales levels increase and relatively lower
marketing expenses associated with the sale of power supplies.

Research and Development Expenses. Research and development expenses increased
120.6% to $2,848 in the third quarter of fiscal 1998 from $1,291 in the third
quarter of fiscal 1997. This increase arose from increased spending for the: (i)
expansion of the line of new lamps intended to replace many first generation
metal halide lamps in industrial and commercial applications; (ii) development
and testing of electronic power supply systems; and (iii) development of new
materials for the world's major lighting manufacturers. As a percentage of net
sales, research and development expenses decreased slightly to 5.8% in the third
quarter of fiscal 1998 from 5.9% in the third quarter of fiscal 1997.

General and Administrative Expenses. General and administrative expenses
increased 66.4% to $3,087 in the third quarter of fiscal 1998 from $1,855 in the
third quarter of fiscal 1997. As a percentage of net sales, general and
administrative expenses decreased to 6.3% in the third quarter of fiscal 1998
from 8.4% in the third quarter of fiscal 1997. The decrease as a percentage of
net sales primarily reflects a spending growth rate considerably lower than
sales increases through the leveraging of fixed costs as sales levels increase.

Purchased In-Process Research & Development. In connection with its acquisition
of Deposition Sciences, Inc. in January 1998, the Company acquired in-process
research and development valued at $18,220. In accordance with generally
accepted accounting principles, the entire amount has been recorded as an
expense in the third quarter of fiscal 1998.

Special Charges. During the third quarter of fiscal 1998, the Company recorded
special charges related to the rationalization of the Company's global power
supply businesses. Additionally, the special charges, which total $18,500
(including the $2,800 write-down of inventory discussed above), cover the
elimination of certain nonfocus product lines, the consolidation and

                                       15




<PAGE>   17
rationalization cost of distribution activities and facilities, the write-down
of assets in connection with the implementation of new information systems and a
reassessment of the Company's prospective investments.

Income (Loss) from Operations. As a result of the aforementioned factors, during
the third quarter of fiscal 1998, the Company incurred a loss from operations of
$29,362, as compared to income from operations of $3,202 during the third
quarter of fiscal 1997. Excluding the total special charges and the purchased
in-process R&D, income from operations increased 129.8% to $7,358, or 15.0% of
net sales, from $3,202, or 14.5% of net sales in the third quarter of fiscal
1997.

Interest Expense. Interest expense increased to $1,325 during the third quarter
of fiscal 1998 as compared to $392 for the third quarter of fiscal 1997. This
increase resulted primarily from the higher average debt outstanding during the
third quarter of fiscal 1998 as compared to the third quarter of fiscal 1997.

Interest Income. Interest income of $274 during the third quarter of fiscal 1998
was comparable to the $283 earned in the third quarter of fiscal 1997.

Loss from Equity Investment. During the third quarter of fiscal 1998, the
Company increased its equity ownership in Fiberstars, Inc. to approximately 29%
of total shares outstanding. Accordingly, the Company changed its method of
carrying the investment to equity from cost in the quarter ended March 31, 
1998, and recognized a loss of $2 from this investment.

Income (Loss) from Continuing Operations before Income Taxes and Extraordinary
Charge. As a result of the aforementioned factors, during the third quarter of
fiscal 1998, the Company incurred a loss from continuing operations before
income taxes and extraordinary charge of $30,415, as compared to income from
continuing operations before income taxes and extraordinary charge of $3,093
during the third quarter of fiscal 1997. Excluding the total special charges and
the purchased in-process R&D, income from continuing operations before income
taxes and extraordinary charge increased 103.8% to $6,305, or 12.8% of net
sales, from $3,093, or 14.0% of net sales in the third quarter of fiscal 1997.

Income Taxes. The Company recorded an income tax benefit of $2,356 in the third
quarter of fiscal 1998, as compared to income tax expense of $1,123 in the third
quarter of fiscal 1997. The income tax benefit consists of a tax benefit of
$4,664 related to the tax-deductible portion of the special charges, and income
tax expense of $2,308 related to income from continuing operations (excluding
the special charges and the purchased in-process R&D). The income tax expense of
$2,308 results in an effective tax rate of 36% on income from continuing
operations, which is comparable to the tax rate of 36% incurred in fiscal 1997.

Loss from Discontinued Operations. In March 1998, the Company approved a plan to
distribute to its shareholders 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, in a spin-off transaction which is expected to be tax-free. The Company
believes the creation of two separate companies will enable the Company and
Microsun to devote the resources necessary to develop their core strategies in
pursuit of their growth objectives. The loss from discontinued operations of
$6,753 represents the total of Microsun's loss from operations in the third
quarter of fiscal 1998 and operating losses through the intended date of the
spin-off.

Extraordinary Charge. The Company recorded a $604 extraordinary charge (net of
applicable income taxes of $311) during the third quarter of fiscal 1998,
representing costs associated with the early extinguishment of debt.

                                       16


<PAGE>   18

NINE MONTHS ENDED MARCH 31, 1998 COMPARED WITH NINE MONTHS ENDED MARCH 31, 1997

Net sales. Net sales increased 83.9% to $110,891 for the first nine months of
fiscal 1998 from $60,291 for the first nine months of fiscal 1997. The increase
in system components, materials, and systems ($46,381) was primarily
attributable to increased unit volume, including a $22,011 increase from the
Company's power supply subsidiaries acquired in the second half of fiscal 1997
and a $14,913 increase from the Company's Ruud Lighting subsidiary, which was
acquired on January 2, 1998. The increase in equipment sales ($4,218) resulted
from an increase in equipment contracts-in-progress, as compared with the number
of contracts-in-progress during the first nine months of fiscal 1997, due in
part to the acquisition of Deposition Sciences, Inc. in January 1998.

Cost of Sales. Cost of sales increased 105.1% to $66,241 in the first nine
months of fiscal 1998 from $32,299 in the first nine months of fiscal 1997. As a
percentage of net sales, cost of sales increased to 59.7% in the first nine
months of fiscal 1998 from 53.6% in the first nine months of fiscal 1997. Cost
of sales included a $2,800 write-down of inventory related to the
rationalization of the Company's global power supply operations and the
elimination of certain nonfocus product lines. After excluding this write-down,
cost of sales increased 96.4% to $63,441, or 57.2% of net sales. The increase
was primarily attributable to increased unit volume, but also reflects a change
in the product mix, whereby lower-margin power supply products represented a
larger component of total sales in fiscal 1998.

Marketing and Selling Expenses. Marketing and selling expenses increased 63.7%
to $16,854 in the first nine months of fiscal 1998 from $10,299 in the first
nine months of fiscal 1997. Marketing and selling expenses, as a percentage of
net sales, decreased to 15.2% in the first nine months of fiscal 1998 from 17.1%
in the first nine months of fiscal 1997. This decrease as a percentage of net
sales reflects the leveraging of certain fixed marketing and selling expenses as
sales levels increase and relatively lower marketing expenses associated with
the sale of power supplies.

Research and Development Expenses. Research and development expenses increased
57.6% to $6,069 in the first nine months of fiscal 1998 from $3,851 in the first
nine months of fiscal 1997. This increase arose from increased spending for the:
(i) expansion of the line of new lamps intended to replace many first generation
metal halide lamps in industrial and commercial applications; (ii) development
and testing of electronic power supply systems; and, (iii) development of new
materials for the world's major lighting manufacturers. As a percentage of net
sales, research and development expenses decreased to 5.5% in the first nine
months of fiscal 1998 from 6.4% in the first nine months of fiscal 1997.

General and Administrative Expenses. General and administrative expenses
increased 35.9% to $7,307 in the first nine months of fiscal 1998 from $5,378 in
the first nine months of fiscal 1997. As a percentage of net sales, general and
administrative expenses decreased to 6.6% in the first nine months of fiscal
1998 from 8.9% in the first nine months of fiscal 1997. The decrease as a
percentage of net sales primarily reflects a spending growth rate considerably
lower than sales increases through the leveraging of fixed costs as sales levels
increase.

Fiber Optic Joint Venture Formation Costs. On May 6, 1997, the Company entered
into a joint development agreement with Rohm and Haas Company ("Rohm and Haas")
for the development of advanced fiber optic cable systems using metal halide
lamps. On December 31, 1997, the Company and Rohm and Haas completed a series of
agreements that resulted in the formation of Unison Fiber Optics Lighting
Systems LLC ("Unison"), a joint venture that focuses on the manufacture and sale
of fiber optic lighting systems to the worldwide lighting market. In

                                       17
<PAGE>   19
connection with this joint venture, the Company incurred $212 of formation and
development costs which were charged to operations during the first quarter of
fiscal 1998.

Purchased In-Process Research & Development. In connection with its acquisition
of Deposition Sciences, Inc. in January 1998, the Company acquired in-process
research and development valued at $18,220. In accordance with generally
accepted accounting principles, the entire amount has been recorded as an
expense in the third quarter of fiscal 1998.

Special Charges. During the third quarter of fiscal 1998, the Company recorded
special charges related to the rationalization of the Company's global power
supply businesses. Additionally, the special charges, which total $18,500
(including the $2,800 write-down of inventory discussed above), cover the
elimination of certain nonfocus product lines, the consolidation and
rationalization cost of distribution activities and facilities, the write-down
of assets in connection with the implementation of new information systems and a
reassessment of the Company's prospective investments.

Settlement of Claim. During the second quarter of fiscal 1997, the Company paid
$475 in an out-of-court settlement of a claim brought by certain former common
shareholders of a predecessor of the Company. The charge of $771 ($.06 per
share) represents the $475 settlement plus legal and other directly-related
costs, net of anticipated insurance recoveries.

Income (Loss) from Operations. As a result of the aforementioned factors, during
the first nine months of fiscal 1998, the Company incurred a loss from
operations of $20,748, as compared to income from operations of $7,498 during
the first nine months of fiscal 1997. Excluding the fiber optic joint venture
formation costs, total special charges, purchased in-process R & D, and the
settlement of claim, income from operations increased 95.7% to $16,184, or
14.6% of net sales, from $8,269, or 13.7% of net sales in the first nine months
of fiscal 1997.

Interest Expense. Interest expense increased to $1,649 during the first nine
months of fiscal 1998 as compared to $749 for the first nine months of fiscal
1997. This increase resulted primarily from the higher average debt outstanding
during the first nine months of fiscal 1998 as compared to the first nine months
of fiscal 1997.

Interest Income. Interest income increased to $1,079 during the first nine
months of fiscal 1998 as compared to $610 in the first nine months of fiscal
1997. This increase is attributable to higher average cash equivalents and
short-term investments during the first nine months of fiscal 1998 as compared
to the first nine months of fiscal 1997.

Income (Loss) from Continuing Operations before Income Taxes and Extraordinary
Charge. As a result of the aforementioned factors, during the first nine months
of fiscal 1998, the Company incurred a loss from continuing operations before
income taxes and extraordinary charge of $21,320, as compared to income from
continuing operations before income taxes and extraordinary charge of $7,359
during the first nine months of fiscal 1997. Excluding the fiber optic joint
venture formation costs, total special charges, purchased in-process R&D, and
the settlement of claim, income from continuing operations before income taxes
and extraordinary charge increased 92.0% to $15,612, or 14.1% of net sales, from
$8,130, or 13.5% of net sales in the first nine months of fiscal 1997.

Income Taxes. The Company recorded income tax expense of $918 for the first nine
months of fiscal 1998, as compared to $2,616 in the first nine months of fiscal
1997. The income tax expense for the first nine months of fiscal 1998 was
reduced by a tax benefit of $4,664 related to 



                                       18
<PAGE>   20
the tax-deductible portion of the special charges. Without this reduction, the
income tax expense would have been $5,582, resulting in an effective tax rate of
36% on income from continuing operations, which is comparable to the tax rate of
36% incurred in fiscal 1997.

Loss from Discontinued Operations. In March 1998, the Company approved a plan to
distribute to its shareholders 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, in a spin-off transaction which is expected to be tax-free. The Company
believes the creation of two separate companies will enable the Company and
Microsun to devote the resources necessary to develop their core strategies in
pursuit of their growth objectives. The loss from discontinued operations of
$7,292 represents the total of Microsun's loss from operations in the first nine
months of fiscal 1998 and operating losses through the intended date of the
spin-off.

Extraordinary Charge. The Company recorded a $604 extraordinary charge (net of
applicable income taxes of $311) during the third quarter of fiscal 1998,
representing costs associated with the early extinguishment of debt.


LIQUIDITY AND CAPITAL RESOURCES

The Company's principal capital 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 (including the remaining
proceeds from the July 1996 and July 1997 issuances of common stock currently
invested in cash equivalents).

During July 1997, the Company received $74,250 of proceeds from the sale of
three million shares of its common stock in connection with a public offering.
Underwriting fees amounted to $3,720 and additional costs associated with the
public offering, primarily for legal, accounting, consulting and printing fees,
amounted to $1,210. The net proceeds were $69,320, of which $33,000 was used to
reduce debt outstanding under the Company's domestic Revolving Credit and
Security Agreement and its Term Note (the "Loan Agreement"). Of the remaining
net proceeds, $14,507 was used for capital expenditures, primarily production
equipment and leasehold improvements, $4,780 was used to purchase a 29% interest
in Fiberstars, Inc., a company specializing in the marketing and distribution of
fiber optic lighting products, $2,000 was contributed to Unison Fiber Optics
Lighting Systems LLC, the Company's joint venture with Rohm and Haas Company,
and $11,199 was used for working capital purposes for the nine months ended
March 31, 1998.

The Company's working capital (current assets less current liabilities) at March
31, 1998 was $87,646, resulting in a working capital ratio of current assets to
current liabilities of 3.4 to 1.0, as compared to $42,380 or 2.5 to 1.0 at June
30, 1997. As of March 31, 1998, the Company had approximately $34,696 in cash
and cash equivalents and short-term investments.

On January 2, 1998, the Company replaced its existing Loan Agreement and other
borrowings in North America with an $85,000 revolving credit facility provided
by several North American financial institutions ("Bank Credit Facility").
Proceeds from this facility were also used to finance the $35,500 cash portion
of the Ruud Lighting purchase price and the $14,500 cash portion of the DSI
purchase price (see Note D to the condensed consolidated financial statements
for a description of these acquisitions). Proceeds were also used 

                                       19


<PAGE>   21
to repay $19,200 of existing and outstanding North American bank borrowings of
ADLT, Ruud Lighting and DSI.

The early extinguishment of debt under the Loan Agreement resulted in a noncash
write-off of deferred financing costs and an extraordinary charge of $604 (net
of applicable income tax benefits of $311) in the quarter ended March 31, 1998.

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
Bank Credit Facility, thereby lengthening the term of the Company's debt, most
of which has been incurred to finance the acquisitions of Ruud Lighting and DSI.

Net cash used in operating activities during the nine months ended March 31,
1998 amounted to $20,569, primarily as a result of higher accounts receivable
arising from increased sales, an increase in inventory levels to support higher
sales service levels, an increase in prepaids and other assets, and a reduction
in accounts payable.

For the nine months ended March 31, 1998, the Company invested approximately
$26,372 in capital expenditures as compared with $11,589 for the first nine 
months of fiscal 1997. Over the next twelve months the Company intends to spend
approximately $20,000 on capital expenditures, primarily production equipment,
and $14,400 on the expansion and upgrading of distribution, training center,
lighting demonstration and office facilities at the Company's world
headquarters.

The Company believes that the successful completion of the July 1997 stock
offering and the March 1998 senior note offering has strengthened its financial
position and enhanced its ability to obtain additional financing. In addition,
the Company believes that the acquisition of Ruud will favorably impact its cash
flow from operations, as Ruud has historically achieved significant positive
cash flows from its operations.

The Company believes that the combination of its anticipated cash flows from
Ruud's operations, available cash, current borrowing facilities and strengthened
financial position will be sufficient for the Company to fund its operations for
at least the next 12 months. In addition, 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.



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 first quarter of fiscal 1999. 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 (though earlier application is
encouraged) 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.











                                       20
<PAGE>   22

YEAR 2000 COMPLIANCE

The Company utilizes and is dependent upon data processing systems and software
to conduct its business. The data processing systems and software include those
developed and maintained by the Company and purchased software which is run on
in-house computer networks. The Company has initiated a review and assessment of
all hardware and software to confirm that it will function properly in the year
2000. To date, those vendors which have been contacted have indicated that their
hardware or software is or will be Year 2000 compliant in time frames that meet
the Company's requirements. The Company presently believes that costs associated
with the compliance efforts will not have a significant impact on the Company's
ongoing results of operations.



















































                                       21

<PAGE>   23


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

         (a) On January 2, 1998, the Company acquired all of the capital stock 
outstanding of Ruud Lighting, Inc. ("Ruud"), located in Racine, Wisconsin.
Under the terms of the agreement, Ruud's shareholders received, in the
aggregate, $35.5 million in cash and 3 million shares of Company Common Stock,
par value $.001 per share ("Common Stock"). The transaction was exempt from
registration under the Act pursuant to Section 4(2) and Regulation D. The Common
Stock was issued to the five existing shareholders of Ruud, who certified
themselves to be "accredited investors," as defined in Rule 501 under the
Securities Act of 1933, as amended (the "Act"). Each shareholder agreed to
contractual restrictions on the transfer of the Common Stock for a period of two
years, the shareholders made customary representations and warranties and the
share certificates bear restrictive legends.

         (b) On January 28, 1998 the Company acquired Deposition Sciences, Inc.
("DSI"), located in Santa Rosa, California. The acquisition was accomplished by
a merger of DSI into a wholly-owned subsidiary of the Company. DSI shareholders
received, in the aggregate, $14.5 million in cash and 599,717 shares of Common
Stock. The transaction was exempt from registration under the Act pursuant to
Section 4(2) and Regulation D. The Common Stock was issued to 33 of the 34
existing shareholders of DSI, at least nine of whom certified themselves to be
"accredited investors," as defined in Rule 501 under the Act. Each DSI
shareholder made customary representations and warranties, including
acknowledgment of the requirements of Rule 144 and their ability to evaluate the
investment and bear the economic risk, and the share certificates bear
restrictive legends.




















                                       22


<PAGE>   24

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits

<TABLE>
<CAPTION>
                                                                                             SEQUENTIAL
                                                                                             PAGE NUMBER/
EXHIBIT                                                                                      INCORPORATED
NUMBER            TITLE                                                                      BY REFERENCE
------            -----                                                                      ------------
<S>              <C>                                                                          <C>
2.1              Stock Purchase Agreement among Advanced Lighting Technologies,
                 Inc., Ruud Lighting, Inc. and Alan J. Ruud, Theodore O. Sokoly,
                 Donald Wandler, Christopher A. Ruud and Cynthia A. Johnson,
                 dated December 19, 1997.                                                        ___

3.1              Amended and Restated Articles of  Incorporation.                                *

3.2              Code of Regulations.                                                            **

10.1             [Renumbered as 2.1 above]

10.2             Credit Agreement between Advanced Lighting Technologies, Inc.,
                 The Lending Institutions Named Therein and National City Bank,
                 as Administrative Agent, dated as of January 2, 1998.                           ___

10.3             Amendment No. 1 dated as of February 26, 1998 to Credit
                 Agreement between Advanced Lighting Technologies, Inc., The
                 Lending Institutions Named Therein and National City Bank,
                 as Administrative Agent, dated as of January 2, 1998.                           ___

10.4             Indenture between Advanced Lighting Technologies, Inc., and
                 The Bank of New York, as Trustee dated March 18, 1998.                          ___

10.5             Employment Agreement dated as of February 12, 1998 between
                 Advanced Lighting Technologies, Inc. and Nicholas R. Sucic.                     ___

11               Statement Re: Computation of Earnings Per Share                                 ___

27               Financial Data Schedule                                                         ___

*      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>





                                       23

<PAGE>   25


        (b) Reports on Form 8-K. During the third quarter of fiscal 1998, the
Company filed the following Reports on Form 8-K:

1.      Report on Form 8-K dated January 2, 1998, filed January 14, 1998,
        reporting under Item 2 the acquisition of Ruud Lighting, Inc., and under
        Item 5 the replacement to the Company's credit agreement. The report
        includes a Pro Forma Condensed Balance Sheet (unaudited) of Advanced
        Lighting Technologies, Inc., as at September 30, 1997, Pro Forma
        Consolidated Combined Statements of Income (unaudited) of Advanced
        Lighting Technologies, Inc., for the year ended June 30, 1997 and the
        three months ended September 30, 1997, Balance Sheets of Ruud Lighting,
        Inc., as at November 30, 1997 and 1996 and Statements of Income of Ruud
        Lighting, Inc., for the years ended November 30, 1997, 1996 and 1995.

2.      Report on Form 8-K dated February 27, 1998, filed March 4, 1998,
        reporting under Item 5 the offering of Senior Notes and the Company's
        press release regarding special charges. The Report includes Selected
        Financial Data of Advanced Lighting Technologies, Inc., for the years
        ended June 30, 1997, 1996, 1995, 1994 and 1993 and Earnings per Share
        Calculations of Advanced Lighting Technologies, Inc., for the years
        ended June 30, 1997, 1996 and 1995.




























                                       24



<PAGE>   26


                                   SIGNATURES

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


                    
                                    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








                                       25

<PAGE>   27


                                EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT
NUMBER           DESCRIPTION OF EXHIBITS
------           -----------------------
                                                                                               PAGE NO.
<S>              <C>                                                                           <C>
2.1              Stock Purchase Agreement among Advanced Lighting Technologies,
                 Inc., Ruud Lighting, Inc. and Alan J. Ruud, Theodore O. Sokoly,
                 Donald Wandler, Christopher A. Ruud and Cynthia A. Johnson,
                 dated December 19, 1997.                                                        ___

3.1              Amended and Restated Articles of  Incorporation.                                *

3.2              Code of Regulations.                                                            **

10.1             [Renumbered as 2.1 above]

10.2             Credit Agreement between Advanced Lighting Technologies, Inc.,
                 The Lending Institutions Named Therein and National City Bank,
                 as Administrative Agent, dated as of January 2, 1998.                           ___

10.3             Amendment No. 1 dated as of February 26, 1998 to Credit
                 Agreement between Advanced Lighting Technologies, Inc., The
                 Lending Institutions Named Therein and National City Bank,
                 as Administrative Agent, dated as of January 2, 1998.                           ___

10.4             Indenture between Advanced Lighting Technologies, Inc., and
                 The Bank of New York, as Trustee dated March 18, 1998.                          ___

10.5             Employment Agreement dated as of February 12, 1998 between
                 Advanced Lighting Technologies, Inc. and Nicholas R. Sucic.                     ___

11               Statement Re: Computation of Earnings Per Share                                 ___

27               Financial Data Schedule                                                         ___
</TABLE>

*    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.









                                       26