<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                   FORM 10-Q

(MARK ONE)

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

For the quarterly period ended September 30, 1997

                                       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: 811-854

                              IIC Industries, Inc.
-------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                  Delaware                                 13-567594
----------------------------------------------     ---------------------------
       (STATE OF OTHER JURISDICTION OF                (IRS IDENTIFICATION
       INCORPORATION OR ORGANIZATION)                       NUMBER)

    420 Lexington Avenue; New York, N.Y.                     10170
----------------------------------------------     ---------------------------
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 297-6132


-------------------------------------------------------------------------------
              FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT.

Indicate by check 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: 1,423,368 shares of common
stock outstanding at October 31, 1997.

<PAGE>

                             FINANCIAL INFORMATION


  FINANCIAL STATEMENTS


                                                                    Page
                                                                    ----

         Consolidated Balance Sheets
         at September 30, 1997
         and December 31, 1996                                        3

         Consolidated Statements of Income
         for the Nine Months Ended
         September 30, 1997 and September 30, 1996                    5

         Consolidated Statements of Income
         for the Three Months Ended
         September 30, 1997 and September 30, 1996                    6

         Consolidated Statements of Cash Flows
         for the Nine Months Ended
         September 30, 1997 and September 30, 1996                    7

         Notes to Consolidated Financial
         Statements                                                   8

                                      -2-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                (dollar amounts in thousands, except share data)


                                               SEPTEMBER 30,   December 31,
                        ASSETS                     1997           1996
                                                 --------        --------

CURRENT ASSETS
   Cash and cash equivalents                     $ 18,541        $ 17,211
   Accounts receivable, net                        43,759          43,400
   Advances to subcontractors                         275             282
   Inventories (Note C)                            48,964          61,178
   Other current assets                             7,822          10,561
                                                 --------        --------

      Total current assets                        119,361         132,632

RESTRICTED CASH                                     1,327           8,356

PROPERTY AND EQUIPMENT, NET                        31,684          33,630

INVESTMENTS IN AND ADVANCES TO AFFILIATES          27,418          26,525

OTHER INVESTMENTS                                     362             555

OTHER ASSETS                                        2,109           1,858
                                                 --------        --------
                                                 $182,261        $203,556
                                                 ========        ========
       The accompanying notes are an integral part of these statements.

                                      -3-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

                    CONSOLIDATED BALANCE SHEETS (CONTINUED)
                                  (UNAUDITED)

                (dollar amounts in thousands, except share data)


                                                   SEPTEMBER 30,  December 31,
         LIABILITIES AND STOCKHOLDERS' EQUITY          1997           1996
                                                     --------      -------
CURRENT LIABILITIES
   Accounts payable                                  $ 27,777       $ 20,554
   Bank loans                                          27,608         35,750
   Current maturities of long-term debt                    14             88
   Accrued expenses and other payables                  8,515         18,083
   Advances from customers                              2,567         10,693
                                                     --------       --------
      Total current liabilities                        66,481         85,168

LONG-TERM DEBT, less current portion                    3,059          2,160

DUE TO AFFILIATES                                       1,447          1,850

OTHER LIABILITIES AND DEFERRED
   CREDITS                                              5,289          5,854

MINORITY INTEREST IN SUBSIDIARIES                      16,680         20,494
                                                     --------       --------
                                                       92,956        115,526

CONTINGENCIES (Note D)

STOCKHOLDERS' EQUITY
   Common stock, $1.00 par value per share;
     authorized 1,800,000 shares; issued
     1,585,806 shares                                   1,586          1,586
   Additional paid-in capital                          22,941         22,941
   Retained earnings                                   98,181         92,053
   Foreign translation adjustment                     (30,678)       (25,825)
   Less treasury stock - at cost (162,438 shares)      (2,725)        (2,725)
                                                     --------       --------
                                                       89,305         88,030
                                                     --------       --------
                                                     $182,261       $203,556
                                                     ========       ========

       The accompanying notes are an integral part of these statements.

                                      -4-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)

                (dollar amounts in thousands, except share data)

<TABLE>
<CAPTION>
                                                    NINE MONTHS ENDED SEPTEMBER 30,
                                                    -------------------------------
                                                          1997           1996
                                                          ----           ----
<S>                                                    <C>             <C>     
Net sales                                              $178,582        $196,971
Cost of sales                                           141,872         149,006
                                                        -------         -------
      Gross profit                                       36,710          47,965

Selling, general and administrative expenses             32,635          37,007
                                                         ------          ------
      Operating income                                    4,075          10,958
                                                          -----          ------

Other income (expenses)
   Interest income                                        1,639           2,413
   Dividend income                                            6              14
   Equity in earnings  of affiliates                      3,950           4,669
   Foreign currency (loss) gain (Note B)                 (1,938)           (152)
   Gain on sale of noncurrent assets, net                 1,907             186
   Interest expense                                      (3,590)         (2,655)
   Other, net                                               721             716
                                                           ----            ----
      Income before income taxes and
         minority interest                                6,770          16,149

Income taxes                                               (753)         (2,556)
                                                          ------        --------
      Income before minority interest                     6,017          13,593

Minority Interest                                           110          (3,817)
                                                            ---          -------
      NET INCOME                                        $ 6,127         $ 9,776
                                                         ======          ======
Net income per common share                              $ 4.30          $ 6.87
                                                         ======          ======
Weighted average number of common shares outstanding  1,423,368       1,423,368
                                                      =========       =========

       The accompanying notes are an integral part of these statements.

                                      -5-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)

                (dollar amounts in thousands, except share data)


</TABLE>
<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED SEPTEMBER 30,
                                                    --------------------------------
                                                          1997            1996
                                                          ----            ----
<S>                                                     <C>             <C>    
Net sales                                               $58,161         $69,761
Cost of sales                                            46,059          51,926
                                                         ------          ------
      Gross profit                                       12,102          17,835

Selling, general and administrative expenses             10,369          14,161
                                                         ------          ------
      Operating income                                    1,733           3,674
                                                          -----           -----

Other income (expenses)
   Interest income                                          598             884
   Dividend income                                                            6
   Equity in earnings  of affiliates                      2,069           2,141
   Foreign currency (loss) gain (Note B)                   (542)            (23)
   Gain (Loss) on sale of noncurrent assets, net             80             (51)
   Interest expense                                      (1,117)         (1,113)
   Other, net                                               293             318
                                                           ----            ----
      Income before income taxes and
         minority interest                                3,114           5,836

Income taxes                                                439            (932)
                                                           ----           -----
      Income before minority interest                     3,553           4,904

Minority Interest                                           (60)         (1,260)
                                                            ---          ------
      NET INCOME                                         $3,493          $3,644
                                                         ======          ======
Net income per common share                              $ 2.45          $ 2.56
                                                         ======          ======
Weighted average number of common shares outstanding  1,423,368       1,423,368
                                                      =========       =========
</TABLE>

       The accompanying notes are an integral part of these statements.

                                      -6-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                         (dollar amounts in thousands)


<TABLE>
<CAPTION>
                                                      NINE MONTHS ENDED SEPTEMBER 30,
                                                      -------------------------------
                                                           1997            1996
                                                           ----            ----

<S>                                                    <C>              <C>
Net cash provided by operating activities                 $4,002          $6,366
                                                          ------          ------
Cash flows from investing activities
   Purchase of subsidiary shares, net of cash 
   acquired                                                 (325)
   Purchase of property and equipment                     (3,413)         (5,553)
   Purchase of investments                                (2,159)         (3,287)
   Purchase of other assets                                  (26)             (4)
   Proceeds on disposal of property and equipment          1,987             807
   Proceeds on disposal of investments                       203             214
   Change in restricted cash                               7,029           1,578
                                                           -----           -----
      Net cash provided by (used in) investing    
      activities                                           3,296          (6,245)
                                                           -----           -----
Cash flows from financing activities
   Payments to acquire share capital of subsidiary           (35)          (192)
   Issuance of long-term debt                              1,096           
   Payments of long-term debt                                              (141)
   Net  (payments) receipts of short-term bank loans      (6,389)         5,383
                                                          -------         -----

      Net cash  (used in) provided by financing 
      activities                                          (5,328)         5,050
Effect of exchange rate on cash                             (640)          (869)
                                                            -----          -----
      Net increase (decrease) in cash and cash
      equivalents during the period                        1,330          4,302
Cash and cash equivalents at beginning of period          17,211         19,414
                                                          ------        -------
Cash and cash equivalents at end of period               $18,541       $ 23,716
                                                         =======        =======
Supplemental disclosure of cash flow information:
   Cash paid during the period for
     Interest                                            $ 3,417       $  2,526
     Income taxes                                          2,614          2,960
</TABLE>

       The accompanying notes are an integral part of these statements.

                                      -7-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


NOTE A - BASIS OF PRESENTATION

   The consolidated financial statements included herein which have been
   prepared by the Company, without audit, pursuant to the rules and
   regulations of the Securities and Exchange Commission, include the accounts
   of IIC Industries Inc. and all material majority-owned subsidiaries
   (collectively the "Company"). All material intercompany transactions and
   balances have been eliminated. Certain information and footnote disclosures
   normally included in financial statements prepared in accordance with
   generally accepted accounting principles have been condensed or omitted
   pursuant to such rules and regulations.

   In the opinion of management, the consolidated financial statements contain
   all adjustments which are those of a recurring nature and disclosures
   necessary to present fairly the financial position of the Company as of
   September 30, 1997 and December 31, 1996 and the results of operations and
   cash flows for the nine months ended September 30, 1997 and September 30,
   1996.


NOTE B - FOREIGN CURRENCY EXCHANGE

   Investor Rt ("Investor"), a majority-owned subsidiary, uses the local
   currency, the Hungarian forint, as its functional currency and translates
   all assets and liabilities at balance sheet exchange rates, all income and
   expense accounts at average rates and records adjustments resulting from the
   translation in a separate component of shareholders' equity.

   The Israel Tractors and Equipment Company Limited ("Israel Tractor"), a
   wholly-owned subsidiary, uses the US dollar as the functional currency,
   since the dollar is the currency in which most of the significant business
   of Israel Tractor is conducted, or to which it is linked. Balton C.P.
   Limited ("Balton"), a majority-owned subsidiary, uses the US dollar as the
   functional currency, since the African subsidiaries operate in
   hyperinflationary economies. These subsidiaries translate monetary assets
   and liabilities at historical rates. Income and expense accounts are
   translated at the rate of exchange prevailing at the date of transaction,
   except that depreciation is translated at historical rates. Adjustments
   resulting from the translation of these entities are included in results of
   operations.

   Transactions arising in a foreign currency are translated into the
   functional currency at the rate of exchange effective at the date of the
   transaction and gains or losses are included in results of operations.

                                      -8-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)


NOTE C - INVENTORIES

   Inventories are as follows:

                                          SEPTEMBER 30,   December 31,
                                              1997            1996
                                              ----            ----

       Raw materials                        $10,688        $  23,127
       Work-in-progress                       1,501              452
       Finished goods                        36,775           37,599
                                             ------           ------

                                            $48,964          $61,178
                                            =======          =======


NOTE D - CONTINGENCIES

   The Company has given a guarantee to the bankers of Balton amounting to $1.6
   million. The guarantee is in respect of various outstanding letters of
   credit given by the bankers of certain of Balton's creditors. The Company
   has also agreed to indemnify a co-guarantor for any losses accumulating to
   $510,000.

   Balton has given guarantees to third parties in the amount of approximately
   $1,250,000.

   Investor and certain subsidiaries are potentially liable with respect to
   certain guarantees of debt and other financial instruments of other related
   and nonrelated companies to the extent of approximately $ 21 million.


NOTE E - INVESTMENT IN AFFILIATE

   At September 30, 1997, the Company's effective ownership percentage of
   Danubius, Rt. ("Danubius"), a publicly traded company, was approximately 30%
   at a cumulative cost of approximately $25 million. Danubius owns a number of
   hotels in Hungary and specializes in spa facilities.

                                      -9-
<PAGE>

                     IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)


NOTE E (CONTINUED)

   Accordingly, the Company accounted for this investment under the equity
   method at September 30, 1997. Under this method, the investment is carried
   at cost plus the Company's share of earnings or losses less distributions.
   Since the Company's share of the underlying net assets of Danubius exceeded
   the cost at the various purchase dates, the excess of the fair value of the
   net assets acquired over the cost is amortized over a period of forty years.


   The following is summarized financial information of Danubius (in
   thousands), which was prepared in accordance with international accounting
   standards. There were no significant differences between international
   accounting standards and generally accepted accounting standards in the
   United States:


                                  SEPTEMBER 30, 1997    September 30, 1996
                                  ------------------    ------------------


      Current assets                         $38,045              $27,797
      Noncurrent assets                      153,136               123,024
      Current liabilities                     19,241                12,426
      Noncurrent liabilities                  52,953                11,128
      Stockholders' equity                   118,987               127,267




                                   NINE MONTHS ENDED    NINE MONTHS ENDED
                                  SEPTEMBER 30, 1997   SEPTEMBER 30, 1996
                                  ------------------   ------------------


      Sales                                  $84,469               $51,655
      Operating income                        17,492                13,963
      Net income                              14,523                12,539

                                     -10-
<PAGE>

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

GENERAL

   The Company is presently operated as a holding company with subsidiaries in
three principal operating geographic areas: (1) Investor RT, a Hungarian
holding company ("Investor" or "Investor Group"), which through its
subsidiaries, engages in a variety of commercial activities in Hungary; (2) The
Israel Tractors and Equipment Company Limited ("Israel Tractor"), an Israeli
corporation, which distributes tractors and related heavy machinery in Israel
and (3) Balton C.P. Limited, an English holding company with African
subsidiaries ("Balton CP") engaged in trading activities in several African
countries.

   Substantially all of the Company's revenues are derived from foreign
operations. As such, its income is significantly affected by fluctuations in
currency exchange rates and by currency controls. Most of the countries where
the Company operates such as Hungary and several African countries do not have
freely convertible currencies and their currencies have been subject to
devaluations in recent years. In particular, during 1997, the income from the
Company's Hungarian and African subsidiaries was significantly reduced by
losses arising from foreign exchange transactions due to significant currency
devaluations against the U.S. dollar. The Hungarian currency which is not
freely convertible and which floats against a basket of two currencies (the
U.S. Dollar and the European Currency Unit) underwent devaluations against the
U.S. Dollar at the rate of 21% during 1996. Since the beginning of 1997, the
Hungarian currency has been further devalued by approximately 19% against the
U.S. Dollar. Since the functional currency for Investor is the Hungarian
Forint, these devaluations have resulted in certain currency translation
adjustments directly impacting stockholders' equity. See Notes A(8) and P of
Notes to Registrant's Consolidated Financial Statements on Form 10-K for the
year ended December 31, 1996.

   The Company may be subject to tax in some or all of the foreign countries in
which it has operations. However, foreign taxes imposed on the Company's income
may qualify as a foreign income tax and therefore be eligible for credit
against the Company's United States income tax liability subject to certain
limitations set out in the Internal Revenue Code of 1986, as amended (or
alternatively, for deduction against income in determining such liability). The
limitations set out in the Code include, among others, computation rules under
which foreign tax credits allowable with respect to specific classes of income
cannot exceed the United States federal income taxes otherwise payable with
respect to each class of income. Foreign income taxes exceeding the credit
limitation for the year of payment or accrual can be carried back for two
taxable years and forward for five taxable years, in order to reduce United
States federal income taxes, subject to the credit limitations applicable in
each of such years. Other restrictions on the foreign tax credit include a
prohibition on the use of the credit to reduce liability for the United States
corporate alternative minimum taxes by more than 90%.

                                      11
<PAGE>

   The Company has three primary areas of operation with respect to its
   subsidiaries:

   (a)   Investor and its subsidiaries in Hungary
   (b)   Israel Tractor in Israel
   (c)   Balton CP and its subsidiaries in Nigeria, Ghana, Zambia, Tanzania,
         Kenya and Uganda.

   The Company has five principal business segments:

   (a)   vehicle sales and service
   (b)   export/import and processing/storage of agricultural products
   (c)   the distribution of tractors and other heavy equipment
   (d)   the sale of agricultural, communications and electrical equipment
   (e)   other industries including retail and wholesale consumer products
         and Hungarian corporate.

RESULTS OF OPERATIONS

         The table below sets forth for the nine months ended September 30,
1997 and 1996 certain information with respect to the results of operations of
the Company and its principal subsidiaries.

<TABLE>
<CAPTION>
Nine Months Ended             Net Sales         Gross Profit   Income (Loss) before  Net Income (Loss)
September 30, 1997            ---------         ------------     Income Taxes and    -----------------
------------------                                              Minority Interests
                                                                ------------------
                             Amount     %       Amount     %       Amount     %       Amount     %
                             ------     -       ------     -       ------     -       ------     -
                            (In thousands)     (In thousands)     (In thousands)     (In thousands)
<S>                          <C>      <C>      <C>      <C>         <C>     <C>       <C>      <C>
IIC Industries Inc.  
(parent company)                  --     --         --     --          $56    0.8        $24     0.4
                                                        
                                                        
Israel Tractors &                                       
Equipment Co. (Israel)       $52,011   29.1    $14,391   39.2        1,676   24.8      1,271    20.7
                                                        
Balton CP                                               
Group (Africa)                36,552   20.5     11,333   30.9        1,955   28.9        768    12.5
                                                        
Investor RT Group             90,019   50.4     10,986   29.9        3,083   45.5      4,064    66.4
(Hungary)                   --------  -----    -------  -----       ------  -----     ------   -----
                            $178,582  100.0    $36.710  100.0       $6,770  100.0     $6,127   100.0
                            ========  =====    =======  =====       ======  =====     ======   =====
</TABLE>

<TABLE>
<CAPTION>
Nine Months Ended             Net Sales         Gross Profit   Income (Loss) before  Net Income (Loss)
September 30, 1996            ---------         ------------     Income Taxes and    -----------------
------------------                                              Minority Interests
                                                                ------------------
                             Amount     %       Amount     %       Amount     %       Amount     %
                             ------     -       ------     -       ------     -       ------     -
                            (In thousands)     (In thousands)     (In thousands)     (In thousands)
<S>                          <C>      <C>      <C>      <C>         <C>     <C>       <C>      <C>
IIC Industries Inc.               --     --         --     --         $991    6.1       $983    10.1
(parent company)

Israel Tractors &      
Equipment Co. (Israel)       $63,315   32.1    $18,060   37.7        4,447   27.5      3,454    35.3

Balton CP     
Group (Africa)                31,925   16.2      9,846   20.5        3,345   20.7      1,200    12.3

Investor RT Group            101,731   51.7     20,059   41.8        7,366   45.7      4,139    42.3
(Hungary)                   --------  -----    -------  -----      -------  -----     ------   -----
                            $196,971  100.0    $47,965  100.0      $16,149  100.0     $9,776   100.0
                            ========  =====    =======  =====      =======  =====     ======   =====
</TABLE>

                                      12
<PAGE>

CONSOLIDATED RESULTS OF OPERATIONS

   Net Sales. Net Sales on a consolidated basis for the nine months ended
September 30, 1997 decreased by approximately $18.4 million or approximately
9.3%, as compared to the comparable period in 1996. This decrease was mainly
attributable to a reduction in demand for Israel Tractor's products.

   Gross Profit. Gross Profit on a consolidated basis for the nine months ended
September 30, 1997 decreased by approximately $11.3 million or approximately
23%, to approximately $36.7 million, or approximately 20.6% of Net Sales, from
approximately $48 million, or approximately 24.3% of Net Sales, in the
corresponding period in 1996. This decrease was mainly attributable to
depressed market conditions, and reductions of margins in the Investor group,
primarily in the agricultural sector. Furthermore, the legacy of the irregular
activities of the previous management of Agrimill, who were removed from their
posts in February 1997 contributed to the decrease. Agrimill operates in the
agricultural sector of the Investor group. (See Note O to the Notes of the 1996
Consolidated Financial Statements.)

   Operating income. Operating income on a consolidated basis for the nine
months ended September 30, 1997 decreased by approximately $6.9 million, or
approximately 63%, to approximately $4.1 million, or approximately 2.3% of net
sales, from approximately $10.9 million, or approximately 5.6% of Net Sales for
the corresponding period in 1996. This decrease was principally due to the
reasons stated in the Gross Profits section.

   Interest income. Interest income decreased for the nine months ended
September 30, 1997 by approximately $800,000, or approximately 32 %, from the
corresponding period in 1996, to approximately $1.6 million due to the
investment of its cash by Interag in shares in Danubius Hotel & Spa Rt. (the
"Hotel Company" or the "Danubius").

   Interest expense. Interest expense for the nine months ended increased by
approximately $900,000 or approximately 35% from the corresponding period in
1996, to approximately $3.6 million due to an increase in bank loans.

   Income before Income Taxes and Minority Interest. Income before Income Taxes
and Minority Interest for the first nine months ended decreased by
approximately $9.4 million, or approximately 58 %, to approximately $6.8
million in the first nine months (representing approximately 3.8 % of Net Sales
for that period) from approximately $16.1 million for the corresponding period
in 1996 (representing 8.2 % of Net Sales for that period).

   Minority Interests.  Minority Interests for the nine months ended
decreased by approximately $3.9 million, from the corresponding period in
1996, as a result of lower income.

   Net Income. Net Income for the nine months ended September 30, 1997
decreased by approximately $3.6 million (or approximately 37%) to approximately
$6.1 million (representing approximately 3.4 % of Net Sales for that period)
from approximately $9.8 million for the corresponding period in 1996
(representing approximately 5% of Net Sales for that period).

                                      13
<PAGE>

   The table below sets forth for the nine months ended September 30, 1997 and
1996 certain information with respect to the results of operations of the
Company and its five principal business segments.

<TABLE>
<CAPTION>
                 Nine Months Ended September 30, 1997          Nine Months Ended September 30, 1996
                 ------------------------------------          ------------------------------------
                                            
                                       Income before                                 Income before
                                      Income Taxes and                              Income Taxes and
                    Net Sales         Minority Interest         Net Sales           Minority Interest
                    ---------         -----------------         ---------           -----------------

                    Amount   %           Amount   %             Amount   %             Amount   %
                  (In thousands)       (In thousands)         (In thousands)         (In thousands)
-----------------------------------------------------------------------------------------------------
<S>                <C>        <C>     <C>          <C>         <C>        <C>        <C>         <C>
Vehicle sales
and distribution
(Investor)         $ 8,368    4.7     $    49      0.7         $ 8,135    4.1        $  136      0.8
                                                                                    
Export and                                                                          
import of                                                                           
agricultural                                                                        
products                                                                            
(Investor)          80,535   45.1      (2,146)   (31.7)         91,270   46.3         4,629     28.7
                                                                                    
Other Industries                                                                    
(Investor)           1,116    0.6       5,236     77.3           2,326    1.2         3,592     22.2
                                                                                    
Tractors and                                                                        
heavy equipment                                                                     
(Israel Tractor)    52,011   29.1       1,676     24.8          63,315   32.1         4,447     27.5
                                                                                    
Agricultural,                                                                       
communications                                                                      
and electrical                                                                      
equipment                                                                           
(Balton CP)         36,552   20.5       1,955     28.9          31,925   16.3         3,345     20.8
                  --------  -----      ------    -----        --------  -----       -------    -----
                  $178,582  100.0      $6,770    100.0        $196,971  100.0       $16,149    100.0
                  ========= =====      ======    =====        ========  =====       =======    =====
</TABLE>

      INVESTOR

   The operations of three of the Company's segments are conducted in Hungary
through Investor. Investor's business is significantly affected by general
conditions in Hungary. General economic difficulties have contributed to a
recession in Hungary, which has had a negative effect on Investor's business.
Despite such conditions, because of management's actions in reducing overhead
costs and closing unprofitable operations, Investor has remained profitable for
the first nine months of 1997.

   Vehicle Sales and Service Segment

   o  Net Sales for the nine months ended September 30, 1997 increased by
      approximately $233,000, or approximately 2.9%, as compared to the
      corresponding period in 1996.

   o  There was a Profit before Minority Interests and Income Taxes for the
      nine months ended September 30, 1997 of $49,000 as compared to a profit
      of $136,000 in the corresponding period in 1996.

                                      14
<PAGE>

   The increase in Net Sales and the decrease in Income before Income Taxes and
Minority Interests was primarily due to increased demand and competition
throughout the motor trade business, resulting in lower margins.

   Export/Import and Processing/Storage of Agricultural Products Segment

   o  Net Sales for the nine months ended September 30, 1997 decreased by
      approximately $10.7 million, or approximately 11.8%, as compared to the
      corresponding period in 1996. The decrease in Net Sales was primarily due
      to lower export activity and a competitive domestic market.

   o  Income before Income Taxes and Minority Interest for the nine months
      ended June 30, 1997 decreased by approximately $6.8 million, or
      approximately 146% as compared to the corresponding period in 1996. This
      decrease was mainly attributable to depressed market conditions in the
      domestic and export markets, a reduction of margins due to fierce
      competition, and the legacy of the irregular activities of the previous
      management of Agrimill, who were removed from their posts in February
      1997. (See Note O to the Notes of the 1996 Consolidated Financial
      Statements.)


   Other Industries

   o  Net Sales for the nine months ended September 30, 1997 decreased by
      approximately $1.2 million, or approximately 52%, as compared to the
      corresponding period in 1996 due to the disposal of businesses in late
      1996.

   o  There was a Profit before Income Taxes and Minority Interest of
      approximately $5.2 million for the nine months ended September 30, 1997,
      compared to a profit of approximately $3.6 million for the nine months
      ended September 30, 1996 as a result of the increased equity in earnings
      of Danubius.

      ISRAEL TRACTOR: TRACTORS AND HEAVY EQUIPMENT SEGMENT

   o  Net Sales for the nine months ended September 30, 1997 decreased by
      approximately $11.3 million or approximately 17.9% as compared to the
      corresponding period in 1996, due to a reduction in demand for the
      Company's products.

   o  Income before Income Taxes and Minority Interest for the nine months
      ended September 30, 1997 decreased by approximately $2.8 million, or
      approximately 62.30% as compared to the corresponding period in 1996 as a
      result of lower trading activity.

      BALTON CP: AGRICULTURAL, COMMUNICATIONS AND ELECTRICAL EQUIPMENT SEGMENT

   o  Net Sales for the nine months ended September 30, 1997 increased by
      approximately $4.6 million, or approximately 14.5%, as compared to the
      corresponding period in 1996. This was due to increased demand for the
      Company's products and the consolidation of Dizengoff W.A.Nigeria Limited
      ("Dizengoff"), which was previously accounted for under the equity
      method.

                                      15
<PAGE>

   o  Income before Income Taxes and Minority Interests for the nine months
      ended September 30, 1996 decreased by approximately $1.4 million, or
      approximately 41.6 % as compared to the corresponding period in 1996.
      This decrease was due to a reduced level of activity in Nigeria. .

LIQUIDITY AND CAPITAL RESOURCES

   The Company has financed its operations through funds generated internally
and through cash and cash equivalents available at the beginning of 1997. At
September 30, 1997, IIC Industries Inc., the parent company (the "Parent
Company"), and its wholly-owned Israel Tractor subsidiary, had working capital
of $39.9 million, including cash and cash equivalents of $16.1 million. Cash of
subsidiaries that are not wholly-owned (including the Investor Group and the
Balton CP Group) is generally not available for use by the Parent Company or
other subsidiaries (except to the extent paid to the Parent Company as
reimbursement for general overhead paid by the Parent Company or as management
fees) other than in the form of dividends, if and when declared. Dividends to
the Parent Company from its Israel Tractor subsidiary are subject to a
withholding tax of 15% to 25%. The Parent Company does not expect to receive
cash dividends or other distributions in the foreseeable future from any of its
subsidiaries.

   At September 30, 1997, Investor, Israel Tractor and Balton had outstanding
short-term indebtedness of approximately $21.1 million, $1.8 million, and $4.7
million, respectively.

   At September 30, 1997, Investor, Israel Tractor and Balton had unused lines
of short-term credit of $10.9 million, $3 million, and $7.8 million,
respectively.

   During the first nine months of 1997, Investor, Israel Tractor, and Balton
made capital expenditures of $200,000; $650,000; and $1,834,000 , respectively,
for the purchase of equipment and vehicles and improvements to property. Such
expenditures were made from internally generated funds. At September 30, 1997,
the Company had no significant capital commitments.

INFLATION

   Inflation has been a persistent aspect of the Hungarian economy in recent
years, although the annual rate of inflation has been predictable and has
therefore been taken into account by the government and private businesses.
Inflation has contributed to the devaluation of the Hungarian currency and has
therefore had an effect on Investor's financial condition.

   Inflation in Israel was moderate in 1996 and during the first nine months of
1997, and therefore did not significantly affect operations in that country.
Furthermore, the devaluation of the Israeli shekel against the U.S. Dollar for
the first nine months of 1997 was at an annual rate of 10.25%.

   Significant rates of inflation persisted in the African countries where
Balton CP operates, triggering significant devaluations of local currencies.

                                      16
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                               OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         No reports on Form 8-K were filed during the period covered by this
         report.


EXHIBIT NO.        DESCRIPTION
-----------        -----------

    27             Financial Data Schedule

                                      17
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                                   SIGNATURES

   In accordance with 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.


Date:  November 13, 1997
                                            IIC INDUSTRIES, INC.


                                            By: /s/ Fortunee F. Cohen
                                               --------------------------------
                                               Fortunee F. Cohen, Secretary