FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended    June 30, 1999
                              --------------------------------------------------
                                       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               0-24900
                       ---------------------------------------------------------

                             ITI Technologies, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                                  06-1340453
-------------------------------------       ------------------------------------
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)

               2266 North Second Street, North St. Paul, MN 55109
--------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (651) 777-2690
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
--------------------------------------------------------------------------------
      (Former name, former address and former fiscal year, if changed since
                                  last report)

         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 ___

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

         As of July 30, 1999, there were 8,430,342 shares of common stock
outstanding.

<PAGE>


                             ITI TECHNOLOGIES, INC.

                                    FORM 10-Q

                           QUARTER ENDED JUNE 30, 1999


                                      INDEX                                 PAGE
                                      -----                                 ----

PART I --   FINANCIAL INFORMATION

            Item 1 --   Financial Statements                                   3

            Item 2 --   Management's Discussion and Analysis                  10
                        of Financial Condition and Results
                        of Operations

PART II --  OTHER INFORMATION

            Item 1 --   Legal Proceedings                                     14

            Item 4 --   Submission of Matters to a Vote of Security Holders   15

            Item 5 --   Other Information                                     15

            Item 6 --   Exhibits and Reports on Form 8-K                      15

            Signatures                                                        16


                                        2
<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements



                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Stockholders of ITI Technologies, Inc.

We have reviewed the accompanying consolidated balance sheet of ITI
Technologies, Inc. and Subsidiaries as of June 30, 1999, and the related
consolidated statement of operations for the three-month and six-month periods
ended June 30, 1999 and 1998, and the consolidated statement of cash flows for
the six-month periods ended June 30, 1999 and 1998. These financial statements
are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the consolidated financial statements for them to be in conformity
with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of ITI Technologies, Inc. and
Subsidiaries as of December 31, 1998, and the related consolidated statements of
operations, cash flows and stockholders' equity for the year then ended (not
presented herein); and in our report dated March 23, 1999, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated financial statements
is fairly stated, in all material respects, in relation to the consolidated
financial statements from which it has been derived.



/s/ PricewaterhouseCoopers LLP

PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
August 5, 1999



                                       3
<PAGE>


                             ITI TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                      FOR THE THREE                 FOR THE SIX
                                                       MONTHS ENDED                 MONTHS ENDED
                                                         JUNE 30,                     JUNE 30,
                                                -------------------------    ------------------------
                                                    1999          1998          1999          1998
                                                ----------     ----------    ----------    ----------
                                                                     (UNAUDITED)
<S>                                             <C>            <C>           <C>           <C>
Net sales ..................................    $   29,462     $   27,139    $   57,291    $   51,053
Cost of goods sold .........................        15,671         14,721        30,500        27,771
                                                ----------     ----------    ----------    ----------
Gross profit ...............................        13,791         12,418        26,791        23,282
Operating expenses:
    Marketing, general and administrative ..         5,366          4,973        10,646         9,767
    Research and development ...............         2,115          1,980         4,098         3,994
    Patent litigation costs ................         4,104                        4,104
    Amortization of intangible assets ......           353            353           706           706
                                                ----------     ----------    ----------    ----------
Operating income ...........................         1,853          5,112         7,237         8,815
Other income (expense):
    Interest, net ..........................           357            213           613           393
    Other, net .............................                          (16)            5            63
                                                ----------     ----------    ----------    ----------
Income before income tax expense ...........         2,210          5,309         7,855         9,271
Income tax expense .........................           796          1,911         2,830         3,339
                                                ----------     ----------    ----------    ----------
Net income .................................    $    1,414     $    3,398    $    5,025    $    5,932
                                                ==========     ==========    ==========    ==========
Per share amounts:
Basic ......................................    $      .17     $      .40    $      .60    $      .70
Weighted average common shares
    outstanding ............................         8,430          8,525         8,425         8,506
Diluted ....................................    $      .16     $      .38    $      .57    $      .67
Weighted average common and common
    equivalent shares outstanding ..........         8,750          8,969         8,802         8,916
</TABLE>



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


                                       4
<PAGE>


                             ITI TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEET
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                         JUNE 30,       DECEMBER 31,
                                                                           1999             1998
                                                                       ------------     ------------
                                                                       (UNAUDITED)
                                     ASSETS
<S>                                                                          <C>           <C>
Current assets:
    Cash and cash equivalents .....................................    $      2,019     $      5,594
    Accounts receivable ...........................................          19,741           19,037
    Notes receivable-dealer financing, current portion ............           1,576            1,096
    Inventories ...................................................          26,725           25,201
    Deferred income taxes .........................................           1,223            1,223
    Other current assets ..........................................           2,460            1,738
                                                                       ------------     ------------
         Total current assets .....................................          53,744           53,889
Notes receivable, net of current portion ..........................          10,849            3,948
Property and equipment ............................................          12,411           10,647
Excess of cost over net assets acquired ...........................          27,174           27,576
Other intangible assets ...........................................          15,770           19,897
                                                                       ------------     ------------
         Total assets .............................................    $    119,948     $    115,957
                                                                       ============     ============
                       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable ..............................................    $      5,187     $      6,874
    Accrued wages .................................................           2,227            2,045
    Other accrued expenses ........................................           2,330            1,955
                                                                       ------------     ------------
         Total current liabilities ................................           9,744           10,874
Income taxes ......................................................           6,199            7,676
                                                                       ------------     ------------
         Total liabilities ........................................          15,943           18,550
                                                                       ------------     ------------

Commitments and contingencies

Stockholders' equity:
    Common stock ($.01 par value; 30,000 shares authorized;
          9,387 shares issued, 8,430 shares outstanding at
          June 30, 1999; 9,304 shares issued, 8,347 shares
          outstanding at December 31, 1998) .......................              94               93
    Additional paid-in capital ....................................          77,940           76,368
    Retained earnings .............................................          41,350           36,325
    Treasury stock, at cost (957 shares at June 30, 1999
          and December 31, 1998) ..................................         (15,379)         (15,379)
                                                                       ------------     ------------
          Total stockholders' equity ..............................         104,005           97,407
                                                                       ------------     ------------
          Total liabilities and stockholders' equity ..............    $    119,948     $    115,957
                                                                       ============     ============
</TABLE>



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


                                       5
<PAGE>


                             ITI TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    FOR THE SIX
                                                                    MONTHS ENDED
                                                                      JUNE 30,
                                                             -------------------------
                                                                 1999          1998
                                                                 ----          ----
<S>                                                          <C>            <C>
OPERATING ACTIVITIES:                                               (UNAUDITED)
Net income ..............................................    $    5,025     $    5,932
Adjustments to reconcile net income to net cash
     provided by operating activities:
     Amortization of intangible assets ..................           754            757
     Depreciation and amortization ......................         1,238          1,080
     Provision for doubtful accounts ....................           320            170
     Patent litigation costs ............................         4,104
     Deferred income taxes ..............................        (1,477)
     Changes in operating assets and liabilities:
         Accounts receivable ............................        (1,024)        (2,672)
         Inventories ....................................        (1,524)          (412)
         Notes receivable-dealer financing ..............        (6,472)          (413)
         Other current assets ...........................          (395)            94
         Accounts payable ...............................        (1,687)           (43)
         Income taxes payable ...........................          (327)           427
         Accrued wages and other accrued expenses .......           557            337
                                                             ----------     ----------
Net cash (used in) provided by operating activities .....          (908)         5,257
                                                             ----------     ----------

INVESTING ACTIVITIES:
Additions to property and equipment .....................        (3,002)        (1,804)
Additions to other intangible assets ....................          (329)        (1,574)
Issuance of notes receivable ............................          (909)
                                                             ----------     ----------
Net cash used in investing activities ...................        (4,240)        (3,378)
                                                             ----------     ----------

FINANCING ACTIVITIES:
Proceeds from exercise of common stock options ..........         1,573            893
                                                             ----------     ----------
Net cash provided by financing activities ...............         1,573            893
                                                             ----------     ----------

NET (DECREASE) INCREASE IN CASH AND
  CASH EQUIVALENTS ......................................        (3,575)         2,772

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF PERIOD ................................         5,594          5,838
                                                             ----------     ----------

CASH AND CASH EQUIVALENTS
  AT END OF PERIOD ......................................    $    2,019     $    8,610
                                                             ==========     ==========
</TABLE>



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


                                       6
<PAGE>

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

         The unaudited consolidated financial statements for the three-month and
         six-month periods ended June 30, 1999 and 1998, reflect, in the opinion
         of management of ITI Technologies, Inc. (the "Company" or "ITI"), all
         normal, recurring adjustments necessary for a fair statement of the
         results of operations for the interim periods. The results of
         operations for any interim period are not necessarily indicative of
         results for the full year. The consolidated balance sheet data as of
         December 31, 1998, was derived from audited consolidated financial
         statements but does not include all disclosures required by generally
         accepted accounting principles. The unaudited consolidated financial
         statements should be read in conjunction with the consolidated
         financial statements and notes thereto included in the Company's Annual
         Report on Form 10-K for the year ended December 31, 1998.
         PricewaterhouseCoopers LLP, the Company's independent accountants, have
         performed limited reviews of the interim financial information included
         herein. Their report on such reviews accompanies this filing.

         The unaudited consolidated financial statements include the accounts of
         the Company and its wholly owned subsidiaries. All significant
         intercompany accounts and transactions have been eliminated.

2.       PATENT LITIGATION COSTS

         On August 17, 1995, the Company commenced an action for patent
         infringement against Pittway Corporation and its subsidiary, Ademco
         Distribution Inc., in the United States District Court for the District
         of Minnesota. On March 9, 1998, the jury found that the Ademco VISTA
         Plus/5800 family of wireless security systems infringed the Company's
         Learn Mode patent. The Court awarded the Company damages of
         approximately $36 million for lost profits and royalties as well as
         prejudgment interest of approximately $3 million, bringing the total
         judgment to approximately $39 million. Pittway Corporation appealed the
         verdict.

         On June 1, 1999, the United States Court of Appeals for the Federal
         Circuit upheld the patent's validity but reversed the jury's finding of
         infringement. The United States Court of Appeals has also denied the
         Company's request for a rehearing of the case. As a result, the Company
         recorded in the second quarter of 1999 a non-cash write-off of $4.1
         million for certain litigation costs incurred in connection with the
         patent litigation against Pittway that were previously capitalized.




--------------------------------------------------------------------------------

                                       7

<PAGE>


2.       LITIGATION (CONTINUED)

         Pittway announced that in 1997 it had "introduced an improved method of
         enrolling transmitters in its Vista series of control panels." Pittway
         calls this new method "QED." While the Company has maintained that
         Pittway's QED products also infringe the Company's Learn Mode patent,
         the judge would not allow the Company to add Pittway's QED products to
         the action commenced in August of 1995 to avoid any additional
         complication and delay. Accordingly, the Company commenced a second
         patent infringement lawsuit against Pittway and Ademco Distribution,
         Inc. on August 3, 1998, for infringement of the Company's Learn Mode
         patent. The suit was also filed in the United States District Court for
         the District of Minnesota and is currently pending. The Company is in
         the process of consulting with its legal advisors and technical experts
         regarding the impact the reversal of the verdict in the first suit may
         have on this suit.

3.       EARNINGS PER SHARE

         The difference in the weighted average shares outstanding for
         calculating basic and diluted earnings per share is attributable to the
         assumed exercise of stock options under the Company's Stock Option
         Incentive Plan.

         The dilutive effect of all stock options outstanding during the
         three-month and six-month periods ended June 30, 1999 and 1998, were
         included in the calculation of the diluted per share earnings. Stock
         options with exercise prices greater than the average market value of
         the Company's common stock were excluded from the computation of
         dilutive earnings per share for the three-month and six-month periods
         ended June 30, 1999 and 1998. The number of excluded stock options were
         as follows:

                                                       1999        1998
                                                       ----        ----
         Three months ended June 30                   418,000     265,000
         Six months ended June 30                     210,000     150,000

4.       NOTES RECEIVABLE-DEALER FINANCING

         The Company provides financing to qualified dealers for their business
         needs. Activity related to loans to dealers that finance the cost of
         equipment and other costs of the dealer are treated as cash flows from
         operations on the accompanying consolidated statement of cash flows.
         Activity related to loans to dealers to purchase account portfolios in
         an effort to expand their business are treated as investing activities
         on the accompanying consolidated statement of cash flows. In both
         cases, the Company receives a perfected security interest in the
         dealers monitoring contacts as well as other collateral considerations.
         All notes are made at market interest rates adjusted for credit and
         collateral factors with varied repayment terms between 36 to 72 months.




--------------------------------------------------------------------------------

                                       8
<PAGE>


5.       SIGNIFICANT CUSTOMER

         As of June 30, 1999, one customer participating in the Company's dealer
         financing program had a note receivable balance due to the Company of
         $6.5 million.

6.       OTHER FINANCIAL STATEMENT DATA (IN THOUSANDS):

<TABLE>
<CAPTION>
                                                            June 30,    December 31,
                                                              1999         1998
                                                           -----------   --------
                                                           (UNAUDITED)
<S>                                                         <C>          <C>
         Accounts receivable:
              Accounts receivable ......................    $ 21,079     $ 20,182
              Allowance for doubtful accounts ..........      (1,338)      (1,145)
                                                            --------     --------
                        Total ..........................    $ 19,741     $ 19,037
                                                            ========     ========
         Inventories:
              Raw materials ............................    $ 13,275     $ 12,600
              Allowance for obsolescence ...............      (1,360)      (1,360)
                                                            --------     --------
                                                              11,915       11,240
              Work-in-process ..........................       5,784        5,615
              Finished goods ...........................       9,026        8,346
                                                            --------     --------
                        Total ..........................    $ 26,725     $ 25,201
                                                            ========     ========

         Property and equipment:
              Machinery and equipment ..................    $ 14,110     $ 12,433
              Furniture and fixtures ...................       4,798        4,545
              Building and improvements ................       2,857        1,786
                                                            --------     --------
                                                              21,765       18,764
              Accumulated depreciation and amortization       (9,354)      (8,117)
                                                            --------     --------
                        Total ..........................    $ 12,411     $ 10,647
                                                            ========     ========

         Other intangible assets:
              Trademarks and trade names ...............    $ 13,829     $ 13,829
              Technology and patents ...................       1,561        5,336
              Customer lists ...........................       3,007        3,007
              Other ....................................         626          626
                                                            --------     --------
                                                              19,023       22,798
              Accumulated amortization .................      (3,253)      (2,901)
                                                            --------     --------
                        Total ..........................    $ 15,770     $ 19,897
                                                            ========     ========

         Other accrued expenses:
              Warranty .................................    $    650     $    650
              Professional fees ........................         431          432
              Other ....................................       1,249          873
                                                            --------     --------
                        Total ..........................    $  2,330     $  1,955
                                                            ========     ========
</TABLE>




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                                       9
<PAGE>


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

         When used in this discussion, the words "believes," "anticipates" and
     similar expressions are intended to identify forward-looking statements.
     Such statements are subject to certain risks and uncertainties which could
     cause actual results to differ materially from those projected. Readers are
     cautioned not to place undue reliance on these forward-looking statements
     which speak only as of the date hereof. The Company undertakes no
     obligation to publish revised forward-looking statements to reflect events
     or circumstances after the date hereof or to reflect the occurrence of
     unanticipated events. Readers are also urged to carefully review and
     consider the various disclosures made by the Company which attempt to
     advise interested parties of the factors which affect the Company's
     business, not only in this report, but also in the Company's periodic
     reports filed with the Securities and Exchange Commission.

RESULTS OF OPERATIONS:

         NET SALES. Net sales increased by $2.3 million, or 8.6%, from $27.1
     million for the three months ended June 30, 1998, to $29.5 million for the
     three months ended June 30, 1999. Net sales increased by $6.2 million, or
     12.2%, from $51.1 million for the six months ended June 30, 1998, to $57.3
     million for the six months ended June 30, 1999. Sales into the utility
     markets increased 34.4% in the second quarter of 1999 over the second
     quarter of 1998. International and commercial product sales were flat to
     slightly down from the second quarter of 1998. Sales into the domestic
     distributor channel increased 19.2% while sales to the Company's
     traditional large and small dealers increased 8.6% from the second quarter
     of 1998. The increases in sales are primarily attributable to volume
     increases.

         GROSS PROFIT. Gross profit increased from $12.4 million for the second
     quarter of 1998 to $13.8 million for the second quarter of 1999, and
     increased as a percentage of net sales from 45.8% to 46.8%. Gross profit
     increased from $23.3 million for the first six months of 1998 to $26.8
     million for the first six months of 1999, and increased as a percentage of
     net sales from 45.6% to 46.8%. The increase in gross margin is due
     primarily to the leveraging of fixed manufacturing costs over the increased
     sales volume. Margins were also favorably impacted by an increased volume
     of higher margin wireless products being incorporated with the NX-hybrid
     product offerings.

         MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES. Marketing, general and
     administrative expenses increased from $5.0 million for the second quarter
     of 1998 to $5.4 million for the second quarter of 1999, and increased from
     $9.8 million for the first six months of 1998 to $10.7 million for the
     first six months of 1999. As a percentage of net sales, marketing, general
     and administrative expenses for the second quarter decreased from 18.3% in
     1998 to 18.2% in 1999. For the first six months of the year, marketing,
     general and administrative expenses decreased as a percentage of sales from
     19.1% in 1998 to 18.6% in 1999. The dollar increases are primarily due to
     increased employment costs associated with the increased sales




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                                       10
<PAGE>


     volume and with the anticipated introduction in the second half of 1999 of
     the new Advent(R) and Concord(TM) Express product lines.

          RESEARCH AND DEVELOPMENT EXPENSE. Research and development expense
     increased $135,000 to $2.1 million for the second quarter of 1999, and
     increased $104,000 to $4.1 million for the first six months of 1999. As a
     percentage of net sales, research and development expense for the second
     quarter decreased from 7.3% in 1998 to 7.2% in 1999. For the first six
     months of the year, research and development expense decreased as a
     percentage of sales from 7.8% in 1998 to 7.2% in 1999. The Company
     continues its emphasis on research and new product development. The Company
     is expecting to release the Concord Express, a low cost hardwire panel
     targeted to the hardwire mass market installers, in the third quarter of
     1999. The Company also continues development on its Advent platform, which
     is designed for the commercial burglary and fire market. Expenditures for
     research and development activities for the year ended December 31, 1999,
     are anticipated to be between 7% and 8% of net sales.

         PATENT LITIGATION COST. During the second quarter of 1999, the Company
     recorded a non-cash charge of $4.1 million related to certain litigation
     costs incurred in connection with the patent litigation against Pittway
     that were previously capitalized. This one-time charge, net of applicable
     income tax benefits, impacted the earnings of the Company approximately
     $2.6 million or $0.30 per diluted share.

         AMORTIZATION OF INTANGIBLE ASSETS. Amortization of acquisition-related
     intangible assets remained constant for both the second quarter of 1999 and
     1998 and for the six-month periods ended June 30, 1999 and 1998 at $353,000
     and $706,000, respectively.

         NET INTEREST INCOME. Net interest income increased from $213,000 for
     the second quarter of 1998 to $357,000 for the second quarter of 1999.
     During the first six months of 1999, net interest income totaled $613,000
     compared to $393,000 for the first six months of 1998. The increases are
     the result of additional participation in the Company's dealer financing
     program. Interest earned under this program increased from $84,000 in the
     second quarter of 1998 to $314,000 in the second quarter of 1999 and
     increased from $147,000 to $520,000 in the six-month periods ended June 30,
     1998 and 1999, respectively.

         INCOME TAX EXPENSE. Income tax expense decreased from $1.9 million for
     the second quarter of 1998 to $796,000 million for the second quarter of
     1999 and decreased from $3.3 million for the first six months of 1998 to
     $2.8 million for the first six months of 1999. The Company's effective tax
     rate remained constant for these periods and varied from the federal
     statutory rate primarily due to state income taxes, net of federal benefit,
     and the non-deductibility for income tax purposes of the amortization of
     excess of cost over net assets acquired.




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                                       11
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

          The Company has funded its operations primarily with cash from
     operations. For the six months ended June 30, 1999, cash was provided by
     net income, adjusted for the $2.6 million non-cash patent litigation
     charge, including the related tax benefit, and $2.0 million of non-cash
     depreciation and amortization charges. Cash used in operations during the
     six-month period consisted primarily of $6.5 million for funding of the
     Company's dealer financing program and $4.4 million used from changes in
     other operating assets and liabilities, principally increased accounts
     receivable and inventory and a reduction in accounts payable.

         During the first six months of 1999, the Company has invested $3.0
     million in property and equipment, $1.6 million of which related to the
     plant and equipment expansion at the Company's Gladewater, Texas facility.
     For the year ended December 31, 1999, the Company expects that purchases of
     property and equipment will be approximately $4.0 million. The Company has
     also invested $909,000 in notes receivable related to dealer financing for
     account acquisitions.

         For the first six months of 1999, cash provided by the exercise of
     stock options, including the related tax benefit, was $1.6 million.

         A substantial amount of the Company's working capital is invested in
     accounts and notes receivable and inventories. The Company periodically
     reviews accounts and notes receivable for noncollectibility and inventories
     for obsolescence and establishes allowances it believes are appropriate.

         On June 18, 1998, the Board of Directors of the Company authorized the
     repurchase, from time to time, of up to 1,000,000 shares of the Company's
     common stock in the open market or in private transactions. Total
     repurchases under this authorization of 245,200 shares at a total cost of
     $6.3 million occurred during the third quarter of 1998.

         The Company believes that its current cash position, along with cash
     flows from operations and funds available through the Company's credit
     facility, will be adequate to fund its working capital and capital
     expenditure requirements along with any activity related to its stock
     repurchase program at least through the end of 1999.

EFFECT OF INFLATION AND FOREIGN CURRENCY TRANSACTIONS

          The Company believes that inflation and foreign currency fluctuations
     have not had a significant effect on its operations. Currently, the Company
     does not conduct any transactions or maintain any accounting records in any
     European currency. As such, the Company has not incurred and does not
     anticipate that there will be a material effect on its operations as a
     result of the conversion by eleven member states of the European Union to a
     common currency which occurred on January 1, 1999.




--------------------------------------------------------------------------------

                                       12
<PAGE>


IMPACT OF THE YEAR 2000 ISSUE

         The Year 2000 issue is the inability of many computer programs to
     correctly identify dates occurring after December 31, 1999, because they
     use two digits rather than four digits to identify years. This could cause
     a computer system failure or miscalculations, resulting in disruptions of
     operations including, among other things, a temporary inability to process
     transactions or engage in similar normal business activities.

         The Company's assessment of the Year 2000 issue is substantially
     complete. The Company believes that with modifications to existing software
     and conversions to new software, the Year 2000 issue will not pose
     significant operational problems for its computer systems or the Company
     and the cost of such modifications to be immaterial.

         In addition to internal Year 2000 remediation activities, the Company
     is in contact with key suppliers and customers to ensure no interruption in
     the relationship between the Company and these important third parties from
     the Year 2000 issue. A comprehensive survey of all vendors and customers
     has not been, nor will one be, undertaken. All efforts thus far have been
     focused on key vendors and customers. If these third parties do not convert
     their systems in a timely manner and in a way that is compatible with the
     Company's systems, the Year 2000 issue could have a material adverse effect
     on Company operations. The Company believes that its actions with key
     suppliers and customers will minimize these risks.

         The vast majority of the Company's products are not date-sensitive. The
     Company has collected information on current and discontinued
     date-sensitive products. This information is available to customers as of
     the date of this filing.

         At this time, the Company does not have in place a comprehensive,
     global contingency plan relative to potential Year 2000 disruptions.
     Rather, each significant system either has been repaired and tested, or is
     being reworked. For systems currently being reworked, contingency plans
     exist to address unforeseen problems.




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<PAGE>



                           PART II - OTHER INFORMATION

Item 1.       Legal Proceedings.

                  On August 17, 1995, the Company commenced an action for patent
                  infringement against Pittway Corporation and its subsidiary,
                  Ademco Distribution Inc., in the United States District Court
                  for the District of Minnesota. On March 9, 1998, the jury
                  found that the Ademco VISTA Plus/5800 family of wireless
                  security systems infringed the Company's Learn Mode patent and
                  awarded the Company damages of approximately $36 million for
                  lost profits and royalties. On April 9, 1998, the Court
                  entered an injunction prohibiting Pittway Corporation from
                  manufacturing and marketing the Ademco 5800 series wireless
                  products that infringe ITI's Learn Mode patent and awarded the
                  Company prejudgment interest of approximately $3 million,
                  bringing the total judgment to approximately $39 million.
                  Pittway Corporation appealed the verdict.

                  On June 1, 1999, the United States Court of Appeals for the
                  Federal Circuit upheld the patent's validity but reversed the
                  jury's finding of infringement. The United States Court of
                  Appeals has also denied the Company's request for a rehearing
                  of the case. As a result, the Company recorded in the second
                  quarter of 1999 a non-cash write-off of $4.1 million for
                  certain litigation costs incurred in connection with the
                  patent litigation against Pittway that were previously
                  capitalized.

                  Pittway announced that in 1997 it had "introduced an improved
                  method of enrolling transmitters in its Vista series of
                  control panels." Pittway calls this new method "QED." While
                  the Company has maintained that Pittway's QED products also
                  infringe the Company's Learn Mode patent, the judge would not
                  allow the Company to add Pittway's QED products to the action
                  commenced in August of 1995 to avoid any additional
                  complication and delay. Accordingly, the Company commenced a
                  second patent infringement lawsuit against Pittway and Ademco
                  Distribution, Inc. on August 3, 1998, for infringement of the
                  Company's Learn Mode patent. The suit was also filed in the
                  United States District Court for the District of Minnesota and
                  is currently pending. The Company is in the process of
                  consulting with its legal advisors and technical experts
                  regarding the impact the reversal of the verdict in the first
                  suit may have on this suit.

                  In addition, the Company experiences routine litigation in the
                  normal course of its business. The Company does not believe
                  that any of this routine litigation will have a material
                  adverse effect on the financial condition or results of
                  operations of the Company.




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

                  The registrant held its Annual Meeting of Stockholders on May
                  12, 1999, at which the following actions were taken:

                  (a)      The re-election of five directors, consisting of
                           Thomas L. Auth, W. Wallace McDowell, Jr., Perry J.
                           Lewis, Sangwoo Ahn and Walter R. Barry, Jr., and the
                           election of Joe Hurst to fill the director's position
                           being vacated by William C. Ughetta, Jr. The proposal
                           to elect management's slate of directors described in
                           the proxy statement prepared in connection with the
                           Annual Meeting was carried by a margin of at least
                           99% of the shares voted on Proposal 1. Thus, the
                           proposal to elect the members of the Board of
                           Directors as proposed in the Proxy Statement was
                           approved.

                  (b)      Shareholders ratified the appointment of
                           PricewaterhouseCoopers LLP, independent accountants,
                           to audit the Company's books and accounts for the
                           fiscal year ending December 31, 1999. The proposal
                           was carried by over 99% of the shares voted on
                           proposal 2.

Item 5.       Other Information.

              None.

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

                  (a)      The following exhibits are filed as part of this
                           Quarterly Report on Form 10-Q:

                           15.    Letter regarding unaudited interim financial
                                  information.

                           27.1   Financial data schedule (for electronic filing
                                  purposes only).

                  (b)      No Current Reports on Form 8-K were filed by the
                           Company during the quarter ended June 30, 1999, or
                           during the period from June 30, 1999, to the date of
                           this Quarterly Report on Form 10-Q.



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                                   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.


Dated:  August 10, 1999                 ITI TECHNOLOGIES, INC.



                                        By   /s/ Jack A. Reichert
                                          --------------------------------------
                                               Jack A. Reichert
                                               Vice President of Finance
                                               (Chief Accounting Officer)



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