FORM 10-QSB

              ________________________________________________


              UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549


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


                  For the quarterly period ended March 31, 1998.

                        Commission File No.  1-8129.


                            US 1 INDUSTRIES, INC.
           ------------------------------------------------------
           (Exact name of registrant as specified in its charter)


             Indiana                                     95-3585609
             -------                                     ----------
   (State of Incorporation)                           (I.R.S. Employer
                                                     Identification No.)



      1000 Colfax, Gary, Indiana                            46406
      --------------------------                            -----
   (Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code: (219) 944-6116
                                                          --------------

   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 ___


   As of May 18, 1998, there were 10,618,224 shares of common stock were
   outstanding.

   <PAGE>  2

   PART I

   ITEM 1. FINANCIAL STATEMENTS.
   ----------------------------


                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
              MARCH 31, 1998 (UNAUDITED) AND DECEMBER 31, 1997
<TABLE>
<CAPTION>

     ASSETS                                               March 31,    December 31,
                                                            1998           1997
                                                            ----           ----
                                                          (Unaudited)    
     <S>                                                 <C>           <C>
     CURRENT ASSETS:                                                               
        Cash                                             $   125,032   $   298,079
        Account receivable--trade less allowance for                              
         doubtful accounts of $237,056 and $195,298        4,416,750     5,066,256
        Other receivables                                    673,785       336,919
        Deposits                                             154,048       154,068
        Prepaid expenses                                     111,458        83,731
                                                         ------------ ------------
           Total current assets                            5,481,073     5,939,053
                                                         ------------ ------------
     FIXED ASSETS:                                                                  
        Equipment                                             58,010       52,996
        Less accumulated depreciation and amortization       (15,275)     (12,682)
                                                         ------------ ------------
           Net fixed assets                                   42,735       40,314
                                                         ------------ ------------
     ASSETS HELD FOR SALE:                                                          
        Land                                                 423,226      423,226
        Valuation allowance                                 (141,347)    (141,347)
                                                         ------------ ------------
           Net assets held for sale                          281,879      281,879  
                                                         ------------ ------------
     TOTAL ASSETS                                        $ 5,805,687  $ 6,261,246
                                                         ============ ============
</TABLE>

   The accompanying notes are an integral part of the consolidated
   financial statements.

   <PAGE>  3

                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
              MARCH 31, 1998 (UNAUDITED) AND DECEMBER 31, 1997

<TABLE>
<CAPTION>

   LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
                                                           March 31,   December 31,
                                                              1998        1997
                                                              ----        ----
                                                          (Unaudited)
     <S>                                                 <C>          <C>
     CURRENT LIABILITIES:                                                          
        Accounts payable                                 $ 2,888,086  $ 2,651,580
        Bank overdraft                                       183,521      530,133
        Accrued expenses                                     125,261      137,454
        Short-term debt                                    2,915,872    3,292,945
        Insurance and claims                                 259,663      241,607
        Accrued interest                                      55,464      140,824
        Accrued compensation                                  41,153       38,302
        Estimated fuel and other taxes                       216,654      273,901
                                                          -----------  -----------
           Total current liabilities                       6,685,674    7,306,746
                                                          -----------  -----------
     LONG-TERM DEBT                                        2,762,939    2,599,815  
      
     REDEEMABLE PREFERRED STOCK,
          authorized 5,000,000 shares; no par value,
          Series A shares outstanding: 1,094,224 
          Liquidation preference $0.3125 per share.          771,254      753,254

     SHAREHOLDERS' EQUITY (DEFICIENCY):                                         

        Common stock authorized 20,000,000 shares;                                 
          no par value; shares outstanding 10,618224      40,844,296   40,844,296
        Accumulated deficit                              (45,034,335) (45,036,724)
        Accumulated other comprehensive loss                (224,141)    (206,141)
                                                         ------------  ----------
           Total shareholders' equity (deficiency)        (4,414,180)  (4,398,569)
                                                         ------------  ----------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 5,805,687  $ 6,261,246
                                                         ============ ===========
</TABLE>

   The accompanying notes are an integral part of the consolidated
   financial statements.

   <PAGE>  4

                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
           THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
                                                         1998            1997
                                                         ----            ----
                                                                        
     <S>                                            <C>           <C>
     OPERATING REVENUES                             $  7,125,645  $   4,484,339
                                                    ------------    -----------
     OPERATING EXPENSES:                                                     
        Purchased transportation                       5,494,135      3,392,279
        Insurance and claims                             252,032        178,847      
        Salaries, wages, and other                       246,564        280,282         
        Commissions                                      681,966        426,100         
        Operating supplies and expense                   213,144        193,010        
        Operating taxes and licenses                      19,181         31,240         
        Communications and utilities                      31,957         28,937          
        Rents                                             21,150         23,171         
        Depreciation and amortization                      2,592          1,349         
                                                    ------------    ------------
          Total operating expenses                     6,962,719      4,555,215       
                                                    ------------    ------------
     OPERATING INCOME                                    162,926        (70,876)      
                                                    ------------    ------------
     NON-OPERATING INCOME (EXPENSE):                                          
        Interest income                                      476          
        Interest expense                                (161,496)       (60,555)       
        Other income                                         485         27,445        
                                                    ------------    ------------
          Total non-operating (expense)                 (160,535)       (33,110)        
                                                    ------------    ------------

     NET INCOME (LOSS)                              $      2,389  $    (103,986)    
     DIVIDENDS ON PREFERRED SHARES                        18,000         15,429 
                                                    ------------    ------------
     NET INCOME (LOSS) AVAILABLE TO COMMON SHARES        (15,611) $    (119,415)
                                                    ============    ============

     INCOME (LOSS) PER COMMON SHARE:
             Net Income:
             Basic                                         $0.00         ($0.01)
             Diluted                                       $0.00         ($0.01) 
                                            
     WEIGHTED AVERAGE COMMON SHARES OUTSTANDING  -
           BASIC AND DILUTED                          10,616,397     10,573,780

                                                                          
</TABLE>
              
   The accompanying notes are an integral part of the consolidated
   financial statements.

   <PAGE>  5

                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                 THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                 (UNAUDITED)
<TABLE>
<CAPTION>
                                                         Three Months Ended March 31, 
                                                         ----------------------------
                                                               1998         1997
                                                               ----         ----
                                                                                
     CASH FLOWS FROM OPERATING ACTIVITIES:                                      
     <S>                                                     <C>       <C>    
     Net Income (loss)                                       $  2,389  $ (103,986)
     Adjustments to reconcile net income (loss) to net
       cash provided from (used for) operations:                    
       Depreciation and amortization                            2,593       1,349
       Changes in operating assets and liabilities:                              
         Accounts receivable - trade                          649,506  (1,047,993)
         Other receivables                                   (336,866)   (314,309)
         Prepaid assets                                       (27,727)      14,047
         Deposits                                                  20        (375)
         Accounts payable                                     236,506     498,559
         Accrued expenses                                     (12,193)     13,363
         Accrued interest                                     (85,360)     38,454
         Insurance and claims                                  18,056      42,643
         Other accrued compensation                             2,851     (24,709)
         Fuel and other taxes                                 (57,247)    (68,728)
                                                             ---------  ----------
       Net Cash provided by (used for) operating activities   392,527    (951,685)
                                                             ---------  ----------
                                                                                    
     CASH FLOWS FROM INVESTING ACTIVITIES:                                          
       Additions to property and equipment                     (5,014)    (18,071)
                                                             ---------  ----------
                                                                                  
        Net cash used in investing activities                  (5,014)    (18,071)
                                                             ---------  ----------
     CASH FLOWS FROM FINANCING ACTIVITIES:                                       
       Net borrowings (repayments) under line of credit      (377,073)    693,930
       Proceeds from other related party loans                163,124     246,849
       Decrease in bank overdraft                            (346,612)          0
                                                             ---------  ----------
       Net cash provided from (used for)financing activities (560,561)    940,779
                                                             ---------  ----------
     NET DECREASE IN CASH AND CASH EQUIVALENTS               (173,047)    (28,977)
     CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD           298,079     225,541
                                                             ---------  ----------
     CASH AND CASH EQUIVALENTS, END OF PERIOD                $125,032     196,564
                                                             =========  ==========
</TABLE>

   The accompanying notes are an integral part of the consolidated
   financial statements.

   <PAGE>  6

                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 THREE MONTHS ENDED MARCH 31, 1998 AND 1997


   1.  BASIS OF PRESENTATION
       ---------------------

   The accompanying consolidated balance sheet as of March 31, 1998 and
   the consolidated statements of operations and cash flows for the three
   month periods ended March 31, 1998 and 1997 are unaudited, but, in the
   opinion of management, include all adjustments (consisting of normal,
   recurring accruals) necessary for a fair presentation of the financial
   position and the results of operations for such periods.  The year-end
   balance sheet data was derived from audited financial statements. 
   These statements should be read in conjunction with the Company's
   audited consolidated financial statements for the year ended December
   31, 1997 and the notes thereto included in the Company's annual report
   on Form 10-KSB.  Certain information and footnote disclosures normally
   included in financial statements prepared in accordance with generally
   accepted accounting principles have been omitted, as permitted by the
   requirements of the Securities and Exchange Commission, although the
   Company believes that the disclosures included in these financial
   statements are adequate to make the information not misleading.  The
   results of operations for the three months ended March 31, 1998 and
   1997 are not necessarily indicative of the results for a full year.


   2.  GOING CONCERN
       -------------
   
   The accompanying consolidated financial statements have been prepared
   assuming that the Company will continue as a going concern.  The
   Company has experienced operating losses and negative cash flows in
   recent years.  At March 31, 1998 and December 31, 1997, the Company's
   current liabilities exceeded its current assets by $1.2 million and
   $1.4 million, respectively.  While this is an improvement, the
   Company's future still depends heavily on raising the capital to fund
   operations until its revenue growth generates sufficient cash flows to
   satisfy its indebtedness.  Revenue growth and the resulting improved
   cash flows would enable the Company to reduce its third party debt and
   improve its working relationships with potential agents and
   independent contractors.  The Company is exploring options to raise
   capital and various other potential transactions.  Recent poor results
   and the inability to remain in compliance with financial covenants
   with its lenders continue to raise substantial doubts about the
   Company's ability to continue as a going concern.  The financial
   statements do not include any adjustments that might result from the
   outcome of this uncertainty.

   <PAGE>  7

                    US 1 INDUSTRIES, INC. AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   3.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT
       ----------------------------------------

   Reporting Comprehensive Income.  Statement of Financial Accounting
   Standards No. 130, "Reporting Comprehensive Income," establishes
   standards for reporting and display of comprehensive income and its
   components in a full set of general-purpose financial statements.  The
   term comprehensive income is defined as the change in the equity of a
   business.  Comprehensive income includes net income as well as other
   components (revenues, expenses, gains, and losses) that under
   generally accepted accounting principles are excluded from net income
   but effect equity.  The statement was effective for fiscal years
   beginning after December 15, 1997.  Comprehensive income (loss) for
   the periods ended March 31, 1998 and 1997 were ($15,611) and
   ($119,415) respectively.

   Disclosure about Segments. Statement of Financial Accounting Standards
   No.131, "Disclosure about Segments of an Enterprise and Related
   Information," changes Statement of Financial Accounting Standards No.
   14 by requiring a new framework for segment reporting and includes the
   disclosure of financial information related to each segment.  The
   statement was effective for fiscal years beginning after December 15,
   1997; however, adoption of this statement is not required in interim
   statements in the initial year of application.  The Company is
   currently evaluating the effects of this pronouncement. 

   Employers' Disclosures About Pensions and Other Postretirement
   Benefits.  Statement of Financial Accounting Standards NO. 132,
   "Employers' Disclosures About Pensions and Other Postretirement
   Benefits", standardized the disclosure requirements for pensions and
   other post retirement benefits, requires additional information on
   changes in the benefit obligation and fair values of plan assets and
   eliminates certain disclosures that are no longer useful.  This
   statement is effective for fiscal years beginning after December 15,
   1997.  The Company believes that the adoption of this statement will
   not have a significant impact on its financial statements.


   4.  EARNINGS PER COMMON SHARE

   The Company calculates earnings per share in accordance with the
   Financial Accounting Standards No. 128 effective for both interim and
   annual financial statement periods.  As required by this statement,
   the company adopted the standards for computing and presenting
   earnings per share (EPS) and for all prior period earnings per share
   data presented.  Following are the reconciliation of the numerators
   and denominators of the basic and diluted EPS.  There were no
   outstanding options during the first quarter of 1997.  The average
   market price of the common stock was greater than the exercise price

   <PAGE>  8

                US 1 INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

   of the outstanding options, however, as the Company had a net loss
   available to shareholders in 1998, the potentially dilutive securities
   (options) were antidilutive.
<TABLE>
<CAPTION>

   Numerator                                                1998            1997  
   <S>       <C>                                        <C>            <C>
             Income (Loss) from continuing operations      $ 2,389       ($103,986)
             Dividends on preferred shares                ($18,000)       ($15,429) 
                                                        ----------    ------------
             Loss available to common shareholders                    
                for basic and diluted EPS                 ($15,611)      ($119,415) 
                                                        ----------    ------------   
             Net income (loss) available to common                    
                Shareholders for basic and diluted EPS    ($15,611)      ($119,415) 

     Denominator
             Weighted average common shares             10,618,224      10,573,780
               Outstanding for basic and diluted EPS
</TABLE>

     5.   SHORT-TERM DEBT

   Short-term debt at March 31, 1998 and December 31, 1997 comprises:
                                               
                                           March 31,        December 31,
                                             1998               1997
                                           ----------         ----------
   Line of credit                          $2,854,260         $3,188,581
   Current portion of long-term debt           61,612             54,364
   Note on Kansas City Property                                   50,000
                                          ----------         ----------
        Total                              $2,915,872         $3,292,945
                                           ==========         ==========

   Under its revolving line of credit agreement the Company may borrow up
   to a maximum of $3,300,000.  Borrowings are limited to 80% of eligible
   accounts receivable and bear interest at the prime rate (8.50% and
   8.25% at March 31, 1998 and December 31, 1997, respectively) plus
   2.75% and 3.25% respectively.  The Company's accounts receivable;
   property and other assets collateralize advances under the line of
   credit agreement.  

   The line of credit is subject to termination upon various events of
   default, including failure to remit timely payments of interest, fees
   and principal, any adverse change in the business of the Company or
   the insecurity of the lender concerning the ability of the Company to
   repay its obligations as and when due or failure to meet certain
   financial covenants.  Financial covenants include: minimum net worth
   requirements, total debt service coverage ratio, capital expenditure
   limitations, restrictions on compensation levels of key officers, and
   prohibition of additional indebtedness without prior authorization. 
   As of December 31, 1997, the Company was in violation of the debt
   service coverage ratio covenant.  At March 31, 1998, it is in
   violation of the debt service coverage ratio and the net worth
   covenants.  As a result, the lender may declare the commitment
   terminated and demand payment.  Management does not expect the lender
   to terminate the agreement before it expires.

   <PAGE>  9

                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   6.  LONG-TERM DEBT

   Long-term debt at March 31, 1998 and December 31, 1997 comprises:

<TABLE>
<CAPTION>
                                                          March 31,   December 31,
                                                            1998          1997
                                                          ---------   ------------ 
     <S>                                                 <C>            <C>
     Mortgage note payable to August Investment
      Partnership collateralized by land, 
      interest at prime + .75%, interest only
      payments required, principal balance due
      July 31, 1999                                       $250,000       $250,000

     Mortgage note payable to Antonson/Kibler
       collateralized by land, interest at 
       prime + .75% interest only payments 
       required, principal balance due
     July 2, 2003                                          500,000        500,000

     Mortgage note payable to AIFE,
      collateralized by land, interest at 9%,
      monthly repayments of $5,000, including
      interest, remaining principal balance
      due July 31, 1999                                    232,293        221,475

     TIP trailer settlement payments on principal
      only of $1,000 per month, principal due
      February, 2003                                        80,899         83,400

     Mortgage note payable to August Investment
      Partnership, interest at prime + .75%, interest
      Only payments required, principal balance due
      January, 1999                                        100,000        100,000

     Due to Antonson/Kibler interest at prime + .75%,
      Interest only payments required, principal
      Balance due January, 1999                          1,661,359      1,499,304   
                                                         ---------      ---------
         Total debt                                      2,824,551      2,654,179       
     Less current portion                                   61,612         54,364
                                                         ---------      --------- 
     Total long-term debt                                2,762,939      2,599,815
                                                         =========      =========
</TABLE>

   <PAGE>  10

                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   7.   COMMITMENTS AND CONTINGENCIES

   Over the past few years, the Company has had a significant number of
   lawsuits instituted or threatened against it as a result of its poor
   financial condition and its inability to meet certain financial
   obligations.  For the most part, these suits have been settled through
   cash payments of a reduced amount or through the institution of
   payment plans.  The undisputed claims that have not been settled are
   reflected as liabilities in the Company's financial statements and are
   included in accrued expenses in the accompanying consolidated balance
   sheets.  The litigation that currently is pending include:

   MCCORMICK V. TRAILBLAZER.  Mr. McCormick, the owner of C.A. White
   Trucking Company ("White"), filed an action on October 1, 1993,
   alleging that Trailblazer failed to make required payments under an
   employment contract.  Trailblazer did not make the payments as a
   result of a dispute related to undisclosed liens on assets purchased
   from White.  The Company has lost this suit; however, Trailblazer was
   closed in 1994 and has no funds to pay the judgment.  The judgement
   was for approximately $59,000.  The suit has since been brought
   against US 1.  The suit has been dismissed from Federal Court during
   the second quarter of 1997.  McCormick has refiled the case in Texas
   State Court during the third quarter of 1997.  Recently that Court
   stayed the action. The Company continues to vigorously defend this
   action.

   SIMPSON V. KEYSTONE LINES--Mr. Simpson, an independent owner-operator
   leased to Keystone Lines, is claiming an amount in excess of $25,000
   for injuries he sustained to his back while working for the Company. 
   The Company is vigorously defending against this claim on the basis
   that Mr. Simpson was not an employee and is not entitled to a workers
   compensation claim.

   CAM REGIONAL TRANSPORT, INC., MILLER, PRY V. TRAILBLAZER, TRANSCON
   INCORPORATED.  Mr. Miller and Mr. Pry owners of Cam Regional
   Transport, Inc., filed an action in 1994, alleging that Trailblazer
   failed to make required payments under an employment contract and
   purchase agreement alleging damages of $293,000.  Trailblazer ceased
   to make the payments as a result of a dispute related to their
   employment and inability to obtain title to the assets purchased.  The
   Company is vigorously defending the action.

   The Company believes it has adequately reserved for the above claims,
   however, additional liability is possible and the ultimate disposition
   of these claims may have a material adverse effect to the Company's
   results of operations, cash flows and financial position.

   The Company carries insurance for public liability and property
   damage, and cargo loss and damage through various programs. The
   Company's insurance liabilities are based upon the best information
   currently available and are subject to revision in future periods as
   additional information becomes available.  Management believes it has
   adequately provided for insurance claims.

   <PAGE>  11

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

   RESULTS OF OPERATIONS

   The financial statements and related notes contained elsewhere in this
   Form 10-QSB and in the Company's Form 10-KSB for its fiscal year ended
   December 31, 1997 are essential to an understanding of the comparisons
   and are incorporated by reference into the discussion that follows.


   PERIOD 1998 COMPARED TO 1997

   The Company's operating revenues increased from $4.5 million for the
   first quarter of 1997 to $7.1 million for the same period in 1998, an
   increase of 58%.  The Company's operating revenues are generated
   principally from two truckload carriers Keystone, and Carolina
   National Transportation.  Sales are generated through independent
   agents who originate shipments that then are transported by
   independent contractors who own their own equipment.  The increase in
   operating revenues resulted from the addition of Carolina National
   Transportation in January 1997, and it's subsequent growth. 

   The company contracts with third parties for most services and as a
   matter of contract agrees to pay certain percentages of revenue for
   services rendered.  The three major items so managed are:

   Item:                                        Average Percent
   Purchased Transportation (PURTRANS)                76.3%
   Commissions to agents                               9.0%
   Insurance (Liability & Cargo)                       4.2%
                      Total                           89.5% 

   These expenses, as a result, remain relatively consistent (as a
   percent of sales)            

                                          (Dollar amounts stated in
   thousands)
   First Quarter results                         1998          1997
   Sales                                       $ 7,125        $4,484
   PURTRANS+ Commissions + Insurance             6,428         3,997
                      Percentage                 90.2%         89.1%

   The rest the of operations expenses have remained relatively fixed:

   First Quarter results                                 1998         
   1997
   Remaining operation expenses 
     (Fixed Expenses)                           $  535       $   558      
     
   <PAGE>  12

   During the first quarter 1998 the increased sales less variable
   expenses reached a point where after subtracting the fixed expenses,
   an operating income of $162,926 was reached.

   Additional funds were borrowed to finance last year's growth and fund
   the start up expenses of Carolina National. As a result, interest
   expense increased from $60,555 to $ 161,496.  Management is exploring
   the possibility of raising additional equity funds in order to retire
   debt and fund growth.  The continued listing of the company's shares
   on the NYSE is essential to those plans. 


   FUTURE PROSPECTS

   The Company's management remains hopeful about its future prospects. 
   Revenue for each month in the first quarter of 1998 has increased over
   revenue in the prior month and operations are beginning to show a
   small profit. However, the Company's future depends on continued
   increases in revenue, and bringing its operations up to greater
   profitability.  Management has been recently informed by the New York
   Stock Exchange that the company no longer meets their listing
   requirements.  The NYSE has asked management to present a business
   plan whereby the company can meet the listing requirements within a
   set time.  Management is currently drafting that plan.  Shareholders
   and Investors are cautioned that delisting from the NYSE is a strong
   possibility. 


   LIQUIDITY AND CAPITAL RESOURCES

   As of March 31, 1998, the Company's financial position remains
   precarious.  The Company had a deficit in shareholders' equity of $4.4
   million and its current liabilities of $6.6 million exceeded its
   current assets by $1.1 million.  As described above, the Company has
   experienced significant revenue declines, and operating losses in
   prior years leaving the Company in its current position.  The
   Company's borrowing from the partners of AIP and the Company's
   president to alleviate the cash shortage has enabled the Company to
   continue in operation.  While the Company's situation is not good,
   management plans to continue to grow the Company and increase profits. 

   The Company reversed its negative cash flows from operations during
   the first quarter of 1998 from a negative $.95 million in 1997 to a
   positive $.4 million during the same period of 1998.  Cash flow was
   provided by borrowing $0.16 million from the Company's president and a
   partner of AIP while net borrowings from FINOVA were reduced by $.4
   million.  This borrowing resulted in the net negative cash flow being
   $0.2 million for the quarter ended March 31, 1998

   The Company's principal source of outside liquidity is its $3.3
   million line of credit with FINOVA.  The availability of the line of
   credit is based on 80% of eligible accounts receivable.  At March 31,

   <PAGE>  13

   1998, the outstanding borrowings were $2.9 million. The Company is
   currently in violation of several covenants of the lender, although as
   part of the extension these covenants are expected to be modified.
    
   Shareholders and potential investors in the Company are cautioned that
   the Company's financial condition remains precarious and that the
   continued listing of the stock on the NYSE, and an increase in
   operating performance, are essential to its long-term survival. 
   Unfortunately, there can be no assurance that these goals will be
   achieved.

   PART II. OTHER INFORMATION
   --------------------------

   ITEM 6(B).  REPORTS ON FORM 8-K

        No Reports on Form 8-K have been filed during the quarter.


   <PAGE>  14

                                 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 there unto duly authorized.


   US 1 Industries, Inc.

                                                                          
   Michael E. Kibler
   President


   Harold E. Antonson
   Chief Financial Officer

   May 18, 1998