<PAGE>
 
                    U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-Q



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


                  For the Quarterly Period Ended May 31, 1998


[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934


              For the Transition Period from    N/A    to    N/A
                                               -------      -------

                           Commission File No. 1-7755


                                Summa Industries

                (Name of registrant as specified in its charter)



                   Delaware                            95-1240978
        (State or other jurisdiction of            (I.R.S. Employer
         incorporation or organization)          Identification Number)


        21250 Hawthorne Boulevard, Suite 500, Torrance, California 90503
          (Address of principal executive offices, including Zip Code)


                 Registrant's Telephone Number:  (310) 792-7024


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 report), and (2) has been subject to such filing
requirements for the past 90 days.  Yes  [X]         No [_]


The number of shares of common stock outstanding as of June 19, 1998 was
4,249,649.
<PAGE>
 
                                Summa Industries
                                        
                                        
                                     INDEX



PART I - FINANCIAL INFORMATION                                              Page

Item 1.  Financial Statements:

         Condensed Consolidated Balance Sheets -
         August 31, 1997 and May 31, 1998 (unaudited)........................  3

         Condensed Consolidated Statements of Income (unaudited) -
         three months and nine months ended May 31, 1997 and 1998............  4

         Condensed Consolidated Statements of Cash Flows (unaudited) -
         nine months ended May 31, 1997 and 1998.............................  5

         Notes to Condensed Consolidated Financial Statements (unaudited)....  6

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations....................  8

PART II - OTHER INFORMATION.................................................. 11

Item 1.  Legal Proceedings................................................... 11
Item 2.  Changes in Securities............................................... 11
Item 5.  Other Information................................................... 12
Item 6.  Exhibits and Reports on Form 8-K.................................... 12

 
Signature Page............................................................... 13

                                       2
<PAGE>

                               Summa Industries
                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE> 
<CAPTION> 
                                                 August 31, 1997    May 31, 1998
                                                                     (unaudited)
                                                 ---------------    ------------
<S>                                              <C>                <C> 
ASSETS
Current assets:
  Cash                                               $ 3,020,000     $    19,000
  Accounts receivable                                  6,603,000      14,030,000
  Inventories                                          2,976,000       9,578,000
  Prepaid expenses and other                           1,598,000       2,483,000
                                                     -----------     -----------
     Total current assets                             14,197,000      26,110,000
                                                                
Property, plant and equipment                         19,998,000      26,594,000
  Less accumulated depreciation                        3,776,000       6,030,000
                                                     -----------     -----------
     Net property, plant and equipment                16,222,000      20,564,000
Other assets                                           2,331,000       2,074,000
Net assets of discontinued operations                  1,273,000       1,499,000
Goodwill and other intangibles, net                    1,628,000      18,709,000
                                                     -----------     -----------
                                                     $35,651,000     $68,956,000
                                                     ===========     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY                            
Current liabilities:                                            
  Accounts payable                                   $ 1,819,000     $ 5,037,000
  Accrued liabilities                                  2,496,000       5,921,000
  Current maturities of long-term debt                 2,673,000       1,956,000
                                                     -----------     -----------
    Total current liabilities                          6,988,000      12,914,000
Long-term debt, net of current maturities              5,571,000      24,394,000
Other long-term liabilities                            2,127,000       5,096,000
                                                     -----------     -----------
    Total liabilities                                 14,686,000      42,404,000
Stockholders' equity:                                           
  Common stock, par value $.001; 10,000,000 shares           
    authorized; issued and outstanding:                 
      4,099,004 at August 31, 1997                     
      4,245,999 at May 31, 1998                       16,226,000      18,434,000
  Retained earnings                                    4,739,000       8,118,000
                                                     -----------     -----------
    Total stockholders' equity                        20,965,000      26,552,000
                                                     -----------     -----------
                                                     $35,651,000     $68,956,000
                                                     ===========     ===========
</TABLE> 

                            See accompanying notes.

                                       3
<PAGE>
                               Summa Industries
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (unaudited)

<TABLE> 
<CAPTION> 
                                              Three months ended                   Nine months ended
                                        --------------- ---------------      --------------- ---------------
                                          May 31, 1997    May 31, 1998         May 31, 1997    May 31, 1998
                                        --------------- ---------------      --------------- ---------------
<S>                                     <C>             <C>                  <C>             <C> 
Net sales                                 $12,023,000     $23,854,000          $26,634,000     $60,698,000   
Cost of sales                               8,329,000      16,377,000           18,438,000      42,121,000   
                                          -----------     -----------          -----------     -----------   
Gross profit                                3,694,000       7,477,000            8,196,000      18,577,000   
Selling, general and administrative         2,595,000       4,565,000            6,115,000      11,917,000   
                                          -----------     -----------          -----------     -----------   
Operating income from continuing                                                                             
  operations                                1,099,000       2,912,000            2,081,000       6,660,000   
Interest expense, net                         105,000         506,000              186,000       1,159,000   
Other expense                                 220,000          84,000              235,000         214,000   
                                          -----------     -----------          -----------     -----------   
Income from continuing operations                                                                            
  before provision for taxes                  774,000       2,322,000            1,660,000       5,287,000   
Provision for income taxes                    316,000         988,000              676,000       2,207,000   
                                          -----------     -----------          -----------     -----------   
Income from continuing operations             458,000       1,334,000              984,000       3,080,000   
Income from discontinued operations                                                                          
  net of the effect of income tax             162,000          66,000              478,000         299,000   
                                          -----------     -----------          -----------     -----------   
Net Income                                $   620,000     $ 1,400,000          $ 1,462,000     $ 3,379,000   
                                          ===========     ===========          ===========     ===========   
Earnings per common share                                                                                    
Income from continuing operations                                                                            
               basic                             $.11            $.32                 $.30            $.74   
               diluted                            .11             .29                  .30             .68   
Income from discontinued operations                                                                          
               basic                             $.04            $.01                 $.15            $.07   
               diluted                            .04             .01                  .14             .06   
Net Income                                                                                                   
               basic                             $.15            $.33                 $.45            $.81   
               diluted                            .15             .30                  .44             .74    
                                                                                                             
Weighted average common shares                                                                               
  outstanding                                                                                                 
               basic                        4,059,000       4,244,000            3,240,000       4,181,000  
               diluted                      4,105,000       4,661,000            3,286,000       4,544,000   
</TABLE> 

                            See accompanying notes.

                                       4
<PAGE>
                               Summa Industries
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                 Nine months ended
                                                                       --------------------------------------
                                                                          May 31, 1997           May 31, 1998
                                                                       ---------------        ---------------
<S>                                                                    <C>                    <C> 
Operating activities:                                                                 
Net income                                                             $     1,462,000        $     3,379,000
                                                                       ---------------        ---------------
Adjustments to reconcile net income to net                                            
      cash provided by operating activities:                                          
      Depreciation and amortization                                          1,510,000              2,720,000
      Loss (gain) on disposition of property, plant and equipment               (2,000)               117,000
      Net change in assets and liabilities                                            
          Accounts receivable                                                  342,000             (1,591,000)
          Inventories                                                           89,000               (474,000)
          Prepaid expenses and other                                           115,000                 73,000
          Accounts payable                                                    (839,000)               130,000
          Accrued liabilities                                                 (587,000)               350,000
                                                                       ---------------        ---------------
Total adjustments                                                              628,000              1,325,000
                                                                       ---------------        ---------------
               Net cash provided by operating activities                     2,090,000              4,704,000
                                                                       ---------------        ---------------
Investing activities:                                                                 
    Purchase of business (Note 3)                                                  ---            (22,859,000)
    Property, plant & equipment                                             (1,246,000)            (2,072,000)
    Proceeds from sale of equipment                                              5,000                  6,000
    Net decrease in unexpended revenue bond proceeds                           204,000                371,000
    Proceeds from cash surrender value of life insurance                       254,000                    ---
                                                                       ---------------        ---------------
               Net cash used in investing activities                          (783,000)           (24,554,000)
                                                                       ---------------        ---------------
Financing activities:                                                                 
    Net proceeds from line of credit                                          (275,000)             6,865,000
    Proceeds from issuance of long-term debt                                  (612,000)            13,500,000
    Payments on long-term debt                                                     ---             (4,380,000)
    Proceeds from exercise of stock options                                     40,000                864,000
    Cash acquired from acquisition of businesses, net of cash paid             318,000                    ---
                                                                       ---------------        ---------------
            Net cash provided by financing activities                         (529,000)            16,849,000
                                                                       ---------------        ---------------
Net decrease in cash                                                           778,000             (3,001,000)
Cash at beginning of period                                                    567,000              3,020,000
                                                                       ---------------        ---------------
Cash at end of period                                                  $     1,345,000        $        19,000
                                                                       ===============        ===============
Supplemental cash flow information:                                                   
    Cash paid during the period for:                                                  
                Interest                                               $       302,000        $     1,196,000
                                                                       ===============        ===============
                Income tax                                             $       857,000        $     2,052,000
                                                                       ===============        ===============
Non-cash investing and financing activities                                           
    Common stock issued and value assigned to stock options                           
        for acquisitions (Note 3)                                      $     9,842,000        $     1,345,000
                                                                       ===============        ===============
Details of acquisitions (Note 3):                                                     
    Fair value of assets acquired                                      $    24,064,000        $    37,317,000
    Liabilities assumed or incurred                                         14,027,000             11,707,000
    Common stock issued and value assigned to stock options                  9,842,000              1,345,000
                                                                       ---------------        ---------------
    Cash paid                                                                  195,000             24,265,000
    Less cash acquired                                                        (513,000)            (1,406,000)
                                                                       ---------------        ---------------
    Net cash (acquired) used in acquisitions                           $      (318,000)       $    22,859,000
                                                                       ---------------        ---------------
</TABLE>
                            See accompanying notes.

                                       5
<PAGE>
 
                                Summa Industries
                                        
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of presentation

     The accompanying condensed consolidated financial statements of Summa
     Industries (the "Company"), some of which are unaudited, have been
     condensed in certain respects and should, therefor, be read in conjunction
     with the audited financial statements and notes related thereto contained
     in the Company's Annual Report on Form 10-K for the year ended August 31,
     1997.  In the opinion of the Company, the accompanying unaudited interim
     consolidated financial statements contain all adjustments necessary for a
     fair presentation for the interim period. (See Notes 3 and 4 below.) The
     results of operations for the three months and nine months ended May 31,
     1998 are not necessarily indicative of the results to be expected for the
     full year ending August 31, 1998.

2.   Inventories

     Inventories of the continuing businesses at August 31, 1997 and May 31,
     1998 were as follows:

<TABLE>
<CAPTION>
                                 August 31, 1997        May 31, 1998
                                                         (unaudited)
                                 ---------------        ------------
      <S>                        <C>                    <C> 
      Finished goods                  $  885,000          $3,703,000
      Work in process                     13,000              70,000
      Material and parts               2,078,000           5,805,000
                                      ----------          ----------
                                      $2,976,000          $9,578,000
                                      ==========          ==========
</TABLE>

3.   Acquisitions

     On May 1, 1998, the Company completed the acquisition of Falcon Belting,
     Inc. ("Falcon")  of Oklahoma City, Oklahoma, a manufacturer of modular
     plastic conveyor belting used in food processing industries. The operations
     of Falcon have been consolidated with the Company's KVP Falcon Plastic
     Belting, Inc. subsidiary (formerly KVP Systems, Inc.).  The total
     acquisition cost was $5,625,000, consisting of  $2,639,000 in cash and the
     present value of obligations to make future payments to the former owner of
     Falcon and liabilities assumed or incurred of $2,986,000.   The acquisition
     has been accounted for using the purchase method of accounting and,
     accordingly, the purchase price has been allocated to identifiable tangible
     and intangible assets purchased and liabilities assumed or incurred based
     upon their fair value at the date of acquisition.  The excess of the
     purchase price over the fair value of the net assets acquired amounted to
     $2,295,000 and has been recorded as goodwill which is being amortized on a
     straight-line basis over 30 years.

     On October 28, 1997, the Company completed the acquisition of Calnetics
     Corporation ("Calnetics").  The total acquisition cost was $31,692,000,
     consisting of cash due to former Calnetics shareholders of $22,335,000,
     acquisition costs of  $50,000, liabilities assumed or incurred of
     $7,962,000 and an estimated fair value of $1,345,000 for options issued in
     conjunction with the transaction, primarily replacement options issued to
     Calnetics employees who continued with the Company.  The acquisition has
     been accounted for using the purchase method of accounting and,
     accordingly, the purchase price has been allocated to identifiable tangible
     and intangible assets purchased and liabilities assumed or incurred based
     upon their fair value at the date of acquisition.  The excess of the
     purchase price over the fair value of the net assets acquired amounted to
     $14,081,000 and has been recorded as goodwill which is being amortized on a
     straight-line basis over 30 years.

                                       6
<PAGE>
 
     As a consequence of the foregoing acquisitions, the consolidated balance
     sheet of the Company at May 31, 1998 includes the balance sheets of
     Calnetics and Falcon along with preliminary purchase accounting
     adjustments.  The results of operations of Calnetics and Falcon have been
     included in the consolidated results of operations and the consolidated
     statements of cash flows of the Company since October 28, 1997 and May 1,
     1998, the respective dates of the acquisitions.  The results of operations
     of LexaLite International Corporation ("LexaLite") have been included in
     the consolidated results of operations and the consolidated statements of
     cash flow since November 22, 1996, the date of the acquisition of LexaLite.

     The following proforma financial information presents the results of
     operations of the continuing businesses of the Company with LexaLite and
     Calnetics as though both acquisitions had been made as of September 1,
     1996.  Proforma adjustments have been made to give the effect to the
     amortization of goodwill and other intangibles, adjustments in depreciation
     and inventory value, a reduction in redundant operating expense, interest
     expense related to acquisition debt, the related tax effects and the effect
     upon basic and diluted earnings per share of the additional shares of stock
     given in exchange for LexaLite stock and of stock options issued in
     conjunction with the acquisitions. The following proforma financial
     information does not include adjustments to give effect to the Falcon
     acquisition as such adjustments would not be material.


<TABLE>
<CAPTION>
                                     Three months ended             Nine months ended
                                 ---------------------------   ---------------------------
                                 May 31, 1997   May 31, 1998   May 31, 1997   May 31, 1998
                                 ------------   ------------   ------------   ------------
<S>                              <C>            <C>            <C>            <C>
Net sales                         $21,284,000    $23,854,000    $61,534,000    $66,416,000
Income from                                                                   
 continuing operations                785,000      1,334,000      1,512,000      3,188,000
                                  ===========    ===========    ===========    ===========
Net income from continuing                      
 operations per common share                    
        basic                            $.19           $.32           $.39           $.76
        diluted                          $.18           $.29           $.37           $.68
</TABLE>   
                                                     
                                                    
     Such proforma results are not necessarily indicative of what the actual
     consolidated results of operations might have been if the acquisitions had
     been effective at the beginning of the periods presented or the results
     which may be achieved in the future.


4.   Divestiture

     On June 26, 1998, the Company completed the previously-announced
     divestiture of GST Industries, Inc. ("GST"), a manufacturer of industrial
     firefighting and defense aerospace equipment located in Santa Ana,
     California. Accordingly, the business of GST is being accounted for as a
     discontinued operation and results of operations are segregated in the
     accompanying consolidated statements of income. The assets and liabilities
     of discontinued operations have been classified in the consolidated balance
     sheets as "Net assets of discontinued operations." Discontinued operations
     have not been segregated in the consolidated statements of cash flows.

                                       7
<PAGE>
 
Statements of Income of the Company, restated for the last three completed
 fiscal years to reflect the divestiture, are:

<TABLE>
<CAPTION>
                                                                                 Fiscal year ended                   
                                                                ---------------------------------------------------  
                                                                August 31, 1995   August 31, 1996   August 31, 1997  
                                                                ---------------   ---------------   ---------------  
     <S>                                                        <C>               <C>               <C>              
     Net sales                                                       $6,567,000        $8,124,000       $39,093,000  
     Cost of sales                                                    3,474,000         4,339,000        27,097,000  
                                                                ---------------   ---------------   ---------------  
       Gross profit                                                   3,093,000         3,785,000        11,996,000  
     Selling, general and administrative expenses                     2,487,000         3,144,000         8,767,000  
                                                                ---------------   ---------------   ---------------  
       Income from operations                                           606,000           641,000         3,229,000  
     Interest (income)                                                        -           (27,000)         (200,000) 
     Interest expense                                                         -            12,000           475,000  
     Other expense                                                            -            30,000           254,000  
                                                                ---------------   ---------------   ---------------  
       Income from continuing operations before                                                                      
       provision for taxes                                              606,000           626,000         2,700,000  
     Provision for income taxes                                         217,000           253,000         1,088,000  
                                                                ---------------   ---------------   ---------------  
       Income from continuing operations                                389,000           373,000         1,612,000  
       Income from discontinued operations, net of the effect                                                        
        of income tax of $253,000 in 1995, $102,000 in 1996                                                          
        and $426,000 in 1997                                            259,000           195,000           640,000  
                                                                ---------------   ---------------   ---------------  
       Net income                                                      $648,000          $568,000        $2,252,000  
                                                                                                                     
     Income per common share:                                                                                        
     Income from continuing operations                                                                              
         basic                                                             $.25              $.24              $.47  
         diluted                                                           $.25              $.23              $.46  
     Income from discontinued operations                                                                             
         basic                                                             $.17              $.12              $.18  
         diluted                                                           $.17              $.12              $.18  
     Net income                                                                                                      
         basic                                                             $.42              $.36              $.65  
         diluted                                                           $.42              $.35              $.64  
                                                                                                                     
     Weighted average common shares outstanding                                                                      
         basic                                                        1,539,000         1,565,000         3,450,000  
         diluted                                                      1,553,000         1,603,000         3,521,000   
</TABLE> 
                                                                       

     The sales from the discontinued operations of GST Industries, Inc. were
     $3,670,000 for fiscal 1995, $4,618,000 for fiscal 1996, $4,144,000 for
     fiscal 1997, and $2,607,000 for the nine months ended May 31, 1998.


5.   Recent Accounting Pronouncement


     The Company has adopted Statement of Financial Accounting Standards
     ("SFAS") No. 128, "Earnings Per Share", issued by the Financial Accounting
     Standards Board ("FASB"), and accordingly has restated prior period
     earnings per share.



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

Statements contained in this Quarterly Report on Form 10-Q that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including but not limited to statements regarding Summa's expectations,
hopes, beliefs, intentions or strategies regarding the future.  Actual results
could differ materially from those projected in any forward-looking statements
as a result of a number of factors, including those detailed in this
"Management's Discussion and Analysis" section (including the potential material
adverse consequences to the Company of the Year 2000 issue) and elsewhere herein
and in the Company's Annual Report on 

                                       8
<PAGE>
 
Form 10-K for the fiscal year ended August 31, 1997. The forward-looking
statements are made as of the date hereof, and the Company assumes no obligation
to update the forward-looking statements, or to update the reasons why actual
results could differ materially from those projected in the forward-looking
statements.

Recent Events
-------------

     Divestiture of GST Industries, Inc. Subsidiary

On June 26,  1998,  the Company completed the previously-announced divestiture
of GST Industries, Inc. ("GST"), a manufacturer of industrial firefighting and
defense aerospace equipment located in Santa Ana, California.   The businesses
operated by GST do not fit the Company's focus on plastic products.
Additionally, while GST is profitable, it is not expected to grow significantly
in the near term.  The total purchase price paid by the buyers was $2,700,000,
consisting of  $1,200,000 in cash and a $1,500,000 seven-year subordinated,
convertible, secured promissory note bearing interest at 10% per annum.  In
addition, the Company may receive a maximum of $2,000,000 in royalty payments
over the next five years based upon a percentage of future sales in excess of a
base amount.  It is expected that the royalties actually received, if any, will
be substantially less than $2,000,000 and the value of the conversion rights of
the note is highly speculative.

     Acquisition of Falcon Belting, Inc.

On May 1, 1998, the Company completed the acquisition of Falcon Belting, Inc.
("Falcon")  of Oklahoma City, Oklahoma, a manufacturer of modular plastic
conveyor belting used in food processing industries.  The operations of Falcon
have been consolidated with the Company's subsidiary KVP Falcon Plastic Belting,
Inc. (formerly KVP Systems, Inc.).  The combined company will continue to
operate in California and Oklahoma.  For the year ended January 31, 1998, Falcon
recorded sales of $4.8 million.  For additional information, see Note 3
"Acquisitions" to the condensed consolidated financial statements of the Company
set forth above.

     Reincorporation in Delaware

Effective April 1, 1998, the Company was reincorporated from the State of
California to the State of Delaware (the "Reincorporation").  The
Reincorporation was previously approved by the requisite vote of the Company's
shareholders at the Annual Meeting of Shareholders held in Torrance, California
on January 26, 1998.  The definitive proxy statement describing the
Reincorporation was filed with the Securities and Exchange Commission on
December 10, 1997.

Results of Operations
---------------------
 
The following table sets forth certain income information for the Company's
continuing operations as a percent of sales for the quarters and nine months
ended May 31, 1997 and 1998.
<TABLE> 
<CAPTION> 

 
                                        Three months ended                      Nine months ended
                                  ---------------------------------     ---------------------------------
                                    May 31,1997       May 31,1998         May 31,1997       May 31,1998                             
<S>                                 <C>               <C>                 <C>               <C> 

Net sales                                  100.0%           100.0%               100.0%            100.0%                           
Cost of sales                               69.3%            68.7%                69.2%             69.4%                           
                                  ---------------   --------------      ---------------   ---------------                           
Gross profit                                30.7%            31.3%                30.8%             30.6%                           
S, G & A                                    21.6%            19.1%                23.0%             19.6%                           
                                  ---------------   --------------      ---------------   ---------------                           
Operating income from continuing             9.1%            12.2%                 7.8%             11.0%                           
 operations                                                                                                                         
Interest expense, net                         .9%             2.1%                  .7%              1.9%                           
Other expense                                1.8%              .4%                  .9%               .4%                           
                                  ---------------   --------------      ---------------   ---------------                           
Income from continuing operations                                                                                                   
 before provision for taxes                  6.4%             9.7%                 6.2%              8.7%
Provision for income taxes                   2.6%             4.1%                 2.5%              3.6%                           
                                  ---------------   --------------      ---------------   ---------------                           
Income from continuing operations            3.8%             5.6%                 3.7%              5.1%                           
                                  ===============   ==============      ===============   ===============                           
Effective tax rate                          40.8%            42.5%                40.7%             41.7%                   
</TABLE>

                                       9
<PAGE>
 
Sales for the third quarter, ended May 31, 1998, increased $11,831,000, or 98%
compared to the same period in the prior year, due primarily to the inclusion of
the sales of recently acquired Calnetics for the quarter, not included in the
prior year third quarter, increases in the sales of the previously owned
businesses and inclusion of one month of sales of newly acquired Falcon.

Sales for the nine months ended May 31, 1998 increased $34,064,000, or 128%
compared to the same period in the prior fiscal year, due primarily to the
inclusion of the sales of recently acquired Calnetics for seven months,
inclusion  of sales of LexaLite for the full nine months in the current year
results compared to six months in the prior year nine month period, increases in
the sales of the previously owned businesses and, to a lesser extent, inclusion
of the sales of recently acquired Falcon for one month.

Consolidated gross profit for the third quarter increased $3,783,000, or 102%
primarily due to inclusion of the results of  recently acquired Calnetics,
growth in the previously owned businesses and, to a lesser extent, inclusion of
Falcon for one month.  The gross profit percentage increased from 30.7% to 31.3%
as a result of blending newly acquired operations with previously owned
operations, management initiatives to reduce costs and the benefit of increased
volumes.

Consolidated gross profit for the nine months ended May 31, 1998 increased
$10,381,000, or 127% due to inclusion of seven month's results of Calnetics,
inclusion of the results of LexaLite for the full nine months in this year's
results compared to six months in the lasts year's nine months, growth in the
previously owned businesses and, to a lesser extent, inclusion of one month's
results of Falcon.

Operating expenses for the third quarter increased $1,970,000, or 76%  from the
comparable prior year quarter, but as a percentage of sales, decreased from
21.6% to 19.1% primarily because of the inclusion of sales and operating
expenses of the newly acquired businesses.  Operating margin increased from 9.1%
to 12.2% as a result of the changes in gross margin and operating expense
discussed above.  The increase in net interest expense incurred in the current
periods related to interest expense on debt acquired with the acquisition of
LexaLite and interest on debt incurred in connection with the acquisitions of
Calnetics and Falcon (see "Liquidity and Capital Resources" below).

Operating expenses for the nine months ended May 31, 1998 increased $5,802,000,
or 95% from the prior year nine month period primarily because of the inclusion
of the operating expenses of Calnetics for seven months, inclusion of the
operating expenses of LexaLite for the full nine months in the current year
compared to six months of the prior year nine month period and inclusion of
Falcon for one month.  Operating margins increased from 7.8% to 11.0% as a
result of the changes in gross margin and operating expense discussed above.

The increase in the effective tax rate in the current three and nine month
periods is primarily associated with the non-deductible amortization of goodwill
related to the recent acquisitions offset by a lower effective combined state
income tax rate.

The Company's backlog of the continuing businesses, believed to be firm,
increased from $6,530,000 at February 28, 1997 to $7,050,000, at May 31, 1998,
primarily as a result of the backlog acquired in the Falcon acquisition.  The
Company's order backlog is not a significant indicator of future sales volumes.


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

The Company's working capital at May 31, 1998 was $13,196,000 compared to
$7,209,000 at August 31, 1997.  The primary reason for the increase was the
inclusion of the balance sheet of newly acquired Calnetics and, to a lesser
extent, Falcon.

In connection with the acquisition of Calnetics, the Company entered into a new
$34 million credit agreement with a bank.  At May 31, 1998, total borrowings
under the credit agreement were $19,865,000, and the Company had additional debt
of  $6,485,000.  The weighted average interest rate for all of the Company's
debt at May 31, 1998 was 7.6%, and unused bank credit totaled $13,135,000.   All
of the Company's assets are pledged to secure the debt described above.

The Company believes that cash flows from operations and available lines of
credit will be sufficient to fund working capital 

                                       10
<PAGE>
 
requirements, planned capital expenditures and debt service for the next twelve
months. Although the effects on liquidity of the divestiture of GST are not yet
known, the Company does not expect the divestiture to materially effect
liquidity in an adverse manner.

The Company has a strategy of growth by acquisition.  In the event an
acquisition plan is adopted which requires funds exceeding the availability
described above, an alternate source of funds to accomplish the acquisition
would have to be developed. The Company has 10,000,000 shares of common stock
authorized, of which 4,245,999 shares were outstanding at May 31, 1998 and
5,000,000 shares of "blank check" preferred stock authorized of which none is
outstanding. The Company could issue additional shares of common or preferred
stock to raise funds.

Year 2000 Compliance
--------------------

The Company is continuing to analyze operations to determine and implement the
procedures necessary to ensure timely Year 2000 compliance. The Company is also
in the process of identifying and contacting key customers, vendors and
suppliers to request confirmation of timely external Year 2000 compliance.

Each of the Company's facilities utilizes and is dependent upon data processing
systems and software to conduct business.  The Company has received confirmation
from vendors of the principal business software used by the Company that such
software is designed to be Year 2000 compliant.  Further, for reasons generally
unrelated to the Year 2000 issue, the Company is in the process of purchasing
and installing new systems for certain operations.  The Company currently
anticipates that all internally used software will be Year 2000 compliant in a
timely manner.  Additionally, various machines and other types of personal
property at each facility have computer controls and/or contain integrated
circuits that may be affected, and the Company is in the process of identifying
and analyzing such property to determine Year 2000 compliance.

Although, the Company currently believes that becoming internally Year 2000
compliant will not have a significant impact on the financial condition or
results of future operations of the Company, the Company remains concerned that
the failure to comply by a relatively small number of large customers and/or
vendors, including banking institutions and transportation companies, could
significantly disrupt operations at one or more of the Company's facilities.


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
--------------------------

The Company encounters lawsuits from time to time in the ordinary course of
business and, at May 31, 1998, the Company or its affiliates were parties to
several civil lawsuits, one of which is described below.  Any losses that the
Company may suffer from current or future lawsuits, and the effect such
litigation may have upon the reputation and marketability of the Company's
products, could have a material adverse impact on the future results of
operations, the financial condition and prospects of the Company.

Laitram, et. al. v. KVP Systems, Inc., et. al. was filed in the U.S. District
----------------------------------------------                               
Court in Eastern Louisiana in September 1993.  The plaintiffs claim KVP has
infringed upon two patents.  The venue was changed to the Federal District Court
in Sacramento, California.  KVP contended the claims were invalid and filed
certain counterclaims.  On April 24, 1997, the District Court ruled that KVP's
products do not infringe plaintiff's patents and also dismissed the
counterclaims.  The parties appealed, and on May 5, 1998, the Court of Appeals
affirmed the District Court's ruling in its entirety.  Both sides have a limited
amount of time remaining to petition for review by the U.S. Supreme Court.
Although the Company believes it has a reasonable expectation of prevailing on
petition, if any, in the absence of applicable insurance, the consequences of an
adverse determination would be borne by the Company.

Item 2.  Changes in Securities
------------------------------


In connection with the shareholder-approved Reincorporation, the Company adopted
a new Certificate of  Incorporation and Bylaws and became subject to Delaware
state law.  As a result, the rights of the holders of outstanding shares of the

                                       11
<PAGE>
 
Company's common stock were materially modified.  For a detailed description of
each material modification, see the "Changes in Summa's Charter to be Effected
by Reincorporation" and "Certain Differences in State Corporation Laws" sections
set forth in the Company's definitive proxy statement describing the
Reincorporation filed with the Securities and Exchange Commission on December
10, 1997.  Such sections to the definitive proxy statement and Appendices II and
III thereto (the Certificate of Incorporation and Bylaws) are incorporated
herein by this reference and made a part hereof.


Item 3.  Default upon Senior Securities
---------------------------------------

None.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

None.

Item 5.  Other Information
--------------------------
 
Prior to October 1986, a previously owned business unit of one of the Company's
subsidiaries operated a facility on property within an area subsequently
designated as a federal Superfund site. The Company learned that hazardous
substances have been identified in the subsurface of the property and that the
current owner has been requested by a state agency to undertake additional
investigation at the property. The Company is also aware that the property has
been subject to a general notice letter issued by the United States
Environmental Protection Agency under the federal Superfund law. The Company, as
the successor to one of several prior operators of the property, may be held
responsible for the contamination at the site regardless of whether its
subsidiary caused the contamination. The Company does not believe it is
responsible for any contamination at the property, and has not been notified or
contacted by any governmental authority in that regard, nor named in any
proceeding relating to the property. However, if the Company were held liable
under federal Superfund law, or other environmental law, or had to defend itself
against such a claim, the consequences could be material to future results of
operations of the Company, but would not be expected to have a material effect
on its financial condition.
 
The Internal Revenue Service ("IRS") previously completed an examination
regarding the tax exempt status of one of the Company's industrial revenue bonds
and informed the Company that its findings indicated that the bond is not tax
exempt. During the quarter ended May 31, 1998, the Company and the IRS
tentatively agreed to a settlement of this matter which will include leaving the
tax exempt bond in place. The consequences of such settlement, if and when
finalized, will not be material to future results of operations or to the
financial condition of the Company.
 
Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------
 
          (a)  Exhibits.
 
               10.1  Stock Purchase Agreement and Amendment No. 1 thereto dated
April 8, 1998 and April 24, 1998, respectively, by and among Mr. William G.
Faulkner, KVP Systems, Inc. and the Company relating to the acquisition by the
Company of Falcon Belting, Inc.
 
               10.2  Stock Purchase Agreement dated June 12, 1998 by and between
P&L Growth Industries, Inc., a California corporation, and the Company relating
to the divestiture by the Company of GST Industries, Inc.
 
               10.3  Subordinated Convertible Promissory Note, Security
Agreement and Guaranty dated June 26, 1998 by and among P&L Growth Industries,
Inc., GST Industries, Inc. and the Company relating to the divestiture by the
Company of GST Industries, Inc.
 
               27.1  Financial Data Schedule
 
               In addition, each of the exhibits previously filed with the
Commission in connection with (i) the 

                                       12
<PAGE>
 
Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997
(File No. 1-7755), (ii) the Company's Registration Statement on Form S-4 (File
No. 333-11571), and (iii) the Calnetics' Annual Report on Form 10-K for the
fiscal year ended June 30, 1997 (File No. 0-08767), as well as Appendix I to the
Calnetics' definitive Proxy Statement on Schedule 14A (File No. 0-08767) for the
Special Meeting of Shareholders held October 28, 1997, and Appendices I, II and
III to the Company's definitive Proxy Statement on Schedule 14A for the Annual
Meeting of Shareholders held on January 26, 1998, are incorporated herein.
 
 
          (b)  Current Reports on Form 8-K.
               --------------------------- 
 
               Current Report on Form 8-K filed with the Securities and Exchange
Commission on April 16, 1998 relating to the Reincorporation.
 
 
 
                                  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 on July 1, 1998.
 
 
 
                               Summa Industries
 
 
/s/ James R. Swartwout                              /s/  Trygve M. Thoresen
----------------------                              ----------------------------
James R. Swartwout                                  Trygve M. Thoresen
President and Chief Financial Officer               Vice President and Secretary

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