<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 March 31, 2000

                                       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: 0-27860

                              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)

   171 Madison Avenue; New York, N.Y.                  10016
----------------------------------------        -------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)             (ZIP CODE)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 889-7201


               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: 5,693,472 shares of common
stock outstanding at April 30, 2000.





<PAGE>

                              FINANCIAL INFORMATION


  ITEM 1. FINANCIAL STATEMENTS


  Consolidated Balance Sheets                                           Page
  at March 31, 2000                                                     ----
  and December 31, 1999                                                  3

  Consolidated Statements of Operations and Comprehensive Loss
  for the Three Months Ended
  March 31, 2000 and March 31, 1999                                      5

  Consolidated Statement of Cash Flows
  for the Three Months Ended
  March 31, 2000 and March 31, 1999                                      6

  Notes to Consolidated Financial
  Statements                                                             7






                                       2
<PAGE>




                      IIC Industries, Inc. and Subsidiaries

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






                                MARCH 31, DECEMBER 31,
             ASSETS               2000       1999
                                --------   --------

CURRENT ASSETS
    Cash and cash equivalents   $  6,310   $  9,563
    Accounts receivable, net      36,323     38,524
    Inventories, net (Note C)     31,941     32,554
    Other current assets          13,279      9,688
                                --------   --------

         Total current assets     87,853     90,329

DUE FROM AFFILIATE                 3,150      3,150

PROPERTY AND EQUIPMENT, NET       25,255     26,135
INVESTMENTS                       47,441     46,809
OTHER ASSETS                       3,110      6,741
                                --------   --------

                                $166,809   $173,164
                                ========   ========






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)




                                                      MARCH 31,   DECEMBER 31,
     LIABILITIES AND STOCKHOLDERS' EQUITY               2000         1999
                                                     -----------   ---------


CURRENT LIABILITIES
    Accounts payable                                 $  23,681    $  21,564
    Bank loans                                          14,145       19,018
    Current maturities of long-term debt                 2,853        3,005
    Accrued expenses and other payables                  9,443       11,597
    Due to related parties                                 915        1,947
    Advances from customers                              3,875        2,609
                                                     ---------    ---------

         Total current liabilities                      54,912       59,740

LONG-TERM DEBT, less current portion                     1,117        1,197

DUE TO AFFILIATES                                        1,970        2,046

OTHER LIABILITIES AND DEFERRED
    CREDITS                                              6,321        6,434

MINORITY INTERESTS                                      13,994       14,851
                                                     ---------    ---------

                                                        78,314       84,268

CONTINGENCIES (Note D)

STOCKHOLDERS' EQUITY
    Common stock, $0.25 par value per share;
       Authorized 7,200,000 shares; issued
       6,343,224 shares                                  1,586        1,586
    Additional paid-in capital                          22,941       22,941
    Retained earnings                                  108,262      106,816
    Accumulated other comprehensive loss               (41,569)     (39,722)
    Less treasury stock - at cost (649,752 shares)      (2,725)      (2,725)
                                                     ---------    ---------

                                                        88,495       88,896
                                                     ---------    ---------

                                                     $ 166,809    $ 173,164
                                                     =========    =========


The accompanying notes are an integral part of these statements.



                                       4

<PAGE>

                      IIC Industries, Inc. and Subsidiaries

          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                   (UNAUDITED)
                (dollar amounts in thousands, except share data)




                                                   THREE MONTHS ENDED MARCH 31,
                                                   ----------------------------
                                                        2000           1999
                                                        ----           ----

Net sales                                           $    37,071    $    39,922
Cost of sales                                            27,654         28,130
                                                    -----------    -----------

         Gross profit                                     9,417         11,792

Selling, general and administrative expenses              9,435         10,458
                                                    -----------    -----------

         Operating (loss) income                            (18)         1,334
                                                    -----------    -----------

Other income (expenses)
    Interest income                                         432            290
    Equity in (loss) earnings of affiliates                (663)          (710)
    Foreign currency loss (Note B)                         (780)          (882)
    Gain on sale of noncurrent assets, net                2,076             71
    Interest expense                                       (582)          (487)
    Other, net                                              822            118
                                                    -----------    -----------

         Income (loss) before income taxes and
             minority interest                            1,287           (266)

Income taxes                                                  3           (190)
                                                    -----------    -----------
         Income (loss) before minority interests          1,290           (456)

Minority interests                                          156           (265)
                                                    -----------    -----------

         NET INCOME (LOSS)                          $     1,446    $      (721)

Other comprehensive income:
         Foreign currency translation adjustments        (1,847)        (2,119)
                                                    -----------    -----------
           COMPREHENSIVE  (LOSS)                    $      (401)   $    (2,840)
                                                    ===========    ===========

Basic net income (loss) per common share            $      0.25    $     (0.13)
                                                    ===========    ===========

Basic average number of common shares outstanding     5,693,472      5,693,472
                                                    ===========    ===========



The accompanying notes are an integral part of these statements



                                       5
<PAGE>


                      IIC Industries, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                          (dollar amounts in thousands)





<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED MARCH 31,
                                                            ----------------------------
                                                                  2000        1999
                                                                  ----        ----

<S>                                                             <C>         <C>
Net cash  provided by (used in)  operating activities           $  3,188    $ (1,437)
                                                                --------    --------
Cash flows from investing activities
    Purchase of property and equipment                              (640)       (590)
    Purchase of investments                                       (3,645)        (26)
    Advances from affiliates                                         339
    Proceeds on disposal of property and equipment                   104       1,123
    Proceeds on disposal of investments                            2,732
                                                                --------
    Restricted cash                                                              (67)
                                                                            --------
         Net cash (used in) provided by investing activities      (1,110)        440
                                                                --------    --------
Cash flows from financing activities
    Issuance of long-term debt                                                   278
    Principal payments of long term debt                             (21)       (100)
    Net (payments) receipts of short-term bank loans              (5,120)      2,051
                                                                --------    --------
         Net cash  (used in) provided by financing activities     (5,141)      2,229
Effect of exchange rate on cash                                     (190)       (114)
                                                                --------    --------

         Net (decrease) increase in cash and cash equivalents
          during the period                                       (3,253)   $  1,118

Cash and cash equivalents at beginning of period                   9,563      10,957
                                                                --------    --------
Cash and cash equivalents at end of period                      $  6,310    $ 12,075
                                                                ========    ========
Supplemental disclosure of cash flow information:
    Cash paid during the period for
       Interest                                                 $    763    $    477
       Income taxes                                                   65         396
</TABLE>





The accompanying notes are an integral part of these statements.



                                       6
<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 normal recurring accrual nature and
     disclosures necessary to present fairly the financial position of the
     Company as of March 31, 2000 and December 31, 1999 and the results of
     operations and cash flows for the three months ended March 31, 2000 and
     March 31, 1999.


NOTE B - FOREIGN CURRENCY TRANSLATION

     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 year-end 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") and ,
     Balton C.P. Limited ("Balton"), a wholly-owned and a majority-owned
     subsidiary, respectively, use the US dollar as the functional currency,
     since the dollar is the currency in which most of the significant business
     of Israel Tractor and Balton is conducted, or to which it is linked. These
     subsidiaries translate monetary assets and liabilities at year-end exchange
     rates and nonmonetary 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.



                                       7
<PAGE>

                      IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)



NOTE C - INVENTORIES

Inventories are as follows:

                   MARCH 31, December 31,
                    2000        1999
                   -------      -----

Raw materials      $ 4,881     $ 4,950
Work-in-progress       457         517
Finished goods      26,603      27,087
                   -------     -------

                   $31,941     $32,554
                   =======     =======


NOTE D - CONTINGENCIES

     The Company has given a guarantee to the bankers of Balton amounting to
     $2.1 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
     $735,000.

     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 $2 million.


NOTE E - INVESTMENT IN AFFILIATE

     At March 31, 2000, the Company's effective ownership percentage of
     Danubius, Rt. ("Danubius"), a publicly traded company, was approximately
     40% at a cumulative cost of approximately $44 million. Danubius owns a
     number of hotels in Hungary and the Czech Republic, which specialize in spa
     facilities. During April 2000, the Company purchased another 1.4% of
     Danubius shares for approximately $2.5 million.






                                       8
<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 March 31, 2000. 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. (See the Investor section of Management's Discussion and
     Analysis) There were no significant differences between international
     accounting standards and generally accepted accounting standards in the
     United States:

                         MARCH 31,  MARCH 31,
                           2000       1999
                         --------   --------


Current assets           $ 24,597   $ 37,864
Noncurrent assets         127,609    135,077
Current liabilities        15,505     28,771
Noncurrent liabilities     27,150     32,297
Stockholders' equity      109,551    111,873


                                 THREE MONTHS ENDED        THREE MONTHS ENDED
                                   MARCH 31, 2000            MARCH 31, 1999
                                   --------------            --------------


Sales                                 $16,897                    $18,489
Operating (loss) income                  (578)                        71
Net (loss) income                        (546)                    (2,048)






                                       9
<PAGE>


                      IIC Industries, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)




NOTE F- GAIN ON SALE OF INVESTMENTS

     During March 2000, the Company sold an equity interest in an Israeli oil &
     gas exploration venture, which resulted in a gain of approximately $2.1
     million


NOTE G- NEW ACCOUNTING PRONOUNCEMENT

     In June 1998, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for
     Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
     accounting and reporting standards for derivative instruments and for
     hedging activities and, as amended by SFAS No. 137, is effective for all
     fiscal quarters of fiscal years beginning after June 15, 2000. The Company
     does not expect that the adoption of SFAS No. 133 will have a significant
     impact on the Company's results of operations.





                                       10
<PAGE>



ITEM 2.       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.


     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, Uganda and the Cote D'Ivoire.

     The Company has five principal business segments:
     (a)      vehicle sales and service
     (b)      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 corporate.



                                       11
<PAGE>

RESULTS OF OPERATIONS

     The table below sets forth for fiscal quarters ended March 31, 2000 and
1999, certain information with respect to the results of operations of the
Company and its principal subsidiaries.




<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 2000                            NET SALES                 GROSS PROFIT
----------------------------------- -------------------------- --------------------------
                                         AMOUNT          %          AMOUNT          %
                                    ---------------- --------- ---------------- ---------
                                     (IN THOUSANDS)             (IN THOUSANDS)
<S>                                 <C>              <C>       <C>              <C>
IIC Industries Inc.
 (parent company) .................           --          --            --           --
Israel Tractors & Equipment Co.
 (Israel) .........................      $13,133         35.4       $3,500          37.2
Balton CP Group (Africa) ..........       11,959         32.3        3,890          41.3
Investor RT Group
 (Hungary) ........................       11,979         32.3        2,027          21.5
                                         -------        -----       ------         -----
                                         $37,071        100.0       $9,417         100.0
                                         =======        =====       ======         =====



<CAPTION>
                                       INCOME (LOSS) BEFORE
THREE MONTHS ENDED                       INCOME TAXES AND
MARCH 31, 2000                           MINORITY INTERESTS          NET INCOME (LOSS)
----------------------------------- --------------------------- --------------------------
                                         AMOUNT           %          AMOUNT          %
                                    ---------------- ---------- --------------- ----------
                                     (IN THOUSANDS)              (IN THOUSANDS
<S>                                 <C>              <C>        <C>             <C>
IIC Industries Inc.
 (parent company) .................      $1,862          144.7      $1,850          127.9
Israel Tractors & Equipment Co.
 (Israel) .........................         169           13.1         211           14.6
Balton CP Group (Africa) ..........        (355)         (27.6)       (179)         (12.4)
Investor RT Group
 (Hungary) ........................        (389)         (30.2)       (436)         (30.1)
                                         ------         ------      ------         ------
                                         $1,287          100.0      $1,446          100.0
                                         ======         ======      ======         ======
</TABLE>


<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1999                          NET SALES                 GROSS PROFIT
----------------------------------- -------------------------- --------------------------
                                         AMOUNT          %          AMOUNT          %
                                    ---------------- --------- ---------------- ---------
                                     (IN THOUSANDS)             (IN THOUSANDS)
<S>                                 <C>              <C>       <C>              <C>
IIC Industries Inc.
 (parent company) .................           --          --             --          --
Israel Tractors & Equipment Co.
 (Israel) .........................      $14,703         36.8       $ 3,900         33.1
Balton CP Group (Africa) ..........       13,294         33.3         4,219         35.8
Investor RT Group
 (Hungary) ........................       11,925         29.9         3,673         31.1
                                         -------        -----       -------        -----
                                         $39,922        100.0       $11,792        100.0
                                         =======        =====       =======        =====



<CAPTION>
                                       INCOME (LOSS) BEFORE
THREE MONTHS ENDED                       INCOME TAXES AND
MARCH 31, 1999                           MINORITY INTERESTS          NET INCOME (LOSS)
----------------------------------- --------------------------- --------------------------
                                         AMOUNT           %          AMOUNT          %
                                    ---------------- ---------- --------------- ----------
                                     (IN THOUSANDS)              (IN THOUSANDS
<S>                                 <C>              <C>        <C>             <C>
IIC Industries Inc.
 (parent company) .................      $  (44)         (16.5)     $ (145)        ( 20.1)
Israel Tractors & Equipment Co.
 (Israel) .........................         345          129.7         195           27.0
Balton CP Group (Africa) ..........         324          121.8         165           22.9
Investor RT Group
 (Hungary) ........................        (891)        (335.0)       (936)        (129.8)
                                         ------        -------      ------        -------
                                         $ (266)         100.0      $ (721)         100.0
                                         ======        =======      ======        =======
</TABLE>


                                       12
<PAGE>

     Net Sales. Net Sales on a consolidated basis for the three months ended
March 31, 2000 decreased by approximately $2.9 million as compared to the
comparable period in 1999. The decrease is primarily due to a reduction in
demand for the products of Israel Tractor and Balton CP.

     Gross Profit. Gross Profit on a consolidated basis for the three months
ended March 31, 2000 decreased by approximately $2.4 million or approximately
20%, to approximately $9.4 million, or approximately 25% of Net Sales, from
approximately $11.8 million, or approximately 29.5% of Net Sales, in the
corresponding period in 1999. This decrease was mainly attributable to the
reduction in Sales and the de-consolidation of certain Investor subsidiaries.

     Operating income. Operating income on a consolidated basis for the three
months ended March 31, 2000 decreased by approximately $1.34 million, to an
operating loss of $18,000, from approximately $1.33 million, or approximately
3.3% of Net Sales for the corresponding period in 1999. This decrease was
principally due to the reduction in Gross Profit.

     Interest income. Interest income decreased for the three months ended March
31, 2000 increased by $142,000, or approximately 49%, to $432,000.

     Interest expense. Interest expense in the three months ended March 31,
2000, increased by $95,000, or approximately 19.5%, to approximately $582,000.

     Income before Income Taxes and Minority Interests. Income before Income
Taxes and Minority Interests in the first three months ended March 31, 2000 was
approximately $1,287,000, compared to a Loss before Income Taxes and Minority
Interest in the first three months of 1999 of approximately $266,000.

     Minority Interests. The value of the Minority Interests for the first three
months ended March 31, 2000 decreased by $421,000 as compared to the first three
months of 1999.

     Net Income. Net Income for the first three months ended March 31, 2000 was
approximately $1,446,000, compared to a Net Loss in the first three months of
1999 of approximately $721,000.



                                       13
<PAGE>


     The table below sets forth for the three months ended March 31, 2000 and
1999, certain information with respect to the results of operations of the
Company and its five principal business segments.

<TABLE>
<CAPTION>
                                Three Months Ended March 31, 2000                  Three Months Ended March 31, 1999

                                                     Income (Loss) before                             Income (Loss) before
                                                       Income Taxes and                                 Income Taxes and
                                     Net Sales               Minority             Net Sales            Minority Interest
                                                          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)            $2,991       8.0        $75         5.8     $3,304          8.3           $107       40.2

Processing/storage of               7,991      21.6       (219)      (17.0)     6,783         17.0            280      105.3
Other Industries including            997       2.7      1,617       125.7      1,838          4.6         (1.322)    (497.0)
corporate

Tractors and heavy equipment       13,133      35.4        169        13.1     14,703         36.8            345      129.7
(Israel Tractor)

Agricultural, communications       11,959      32.3       (355)      (27.6)    13,294         33.3            324      121.8
and electrical equipment
(Balton CP)
                                  $37,071     100.0     $1,287       100.0    $39,922        100.0          $(266)    (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.

     Vehicle Sales and  Distribution Segment

     o   Net Sales for the three months ended March 31, 2000 decreased by
         approximately $313,000, or approximately 9.5%, as compared to the
         corresponding period in 1999.

     o   There was Income before Minority Interests and Income Taxes for the
         three months ended March 31, 2000 of $75,000 as compared to income of
         $107,000 in the corresponding period in 1999.

     The decrease in Net Sales and in Income before Income Taxes and Minority
Interests was primarily due to the devaluation of the Hungarian forint.


Processing/Storage of Agricultural Products Segment

o        Net Sales for the three months ended March 31, 2000 increased by
         approximately $1.2 million or 18%, as compared to the corresponding
         period in 1999. The increase in Net Sales was primarily due to an
         increase in demand of the Company's products.




                                       14
<PAGE>


     o   The Loss before Income Taxes and Minority Interest for three months
         ended March 31, 2000 , was $219,000 compared to Income before Income
         Taxes and Minority Interest of $280,000 for the corresponding period in
         1999. This decrease in income was primarily due to lower margins.

Other Industries

     o   Net Sales for the three months ended March 31, 2000 decreased by
         approximately $841,000 as compared to the corresponding period in 1999.

     o   The Income before Income Taxes and Minority Interest was approximately
         $1,617,000 for the three months ended March 31, 2000 compared to a loss
         of approximately $1,322,000 for the three months ended March 31, 1999.
         The increase in income arose primarily due to gain on sale of equity
         shares of an oil & gas venture in March 2000, and the reduction of the
         loss in 2000 from the equity investment in Danubius. The higher loss in
         1999 from the Danubius equity investment was due to a non-recurring
         additional depreciation charge of approximately $1.83 million resulting
         from the writing off of all assets with a book value of less than $130.

         ISRAEL TRACTOR: TRACTORS AND HEAVY EQUIPMENT SEGMENT

     o   Net Sales for the three months ended March 31, 2000 decreased by $1.6
         million,or approximately 11% as compared to the corresponding period in
         1999. This decrease was due to a decrease in demand for the Company's
         products.

     o   The Income before Income Taxes and Minority Interest for the three
         months ended March 31, 2000 was $169,000 as compared to $345,000 for
         the corresponding period in 1999 as a result of the reduction in Sales.

         BALTON CP: AGRICULTURAL, COMMUNICATIONS AND ELECTRICAL EQUIPMENT
         SEGMENT

     o   Net Sales for the three months ended March 31, 2000 decreased by
         approximately $1.33 million or approximately 10%, as compared to the
         corresponding period in 1999. This decrease was due to a reduction in
         demand of the Company's products.

     o   Income before Income Taxes and Minority Interests for the three months
         ended March 31, 2000 decreased by approximately $700,000, as compared
         to the corresponding period in 1999, as a result of the reduction in
         Sales.




                                       15
<PAGE>

INCOME TAXES

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%.



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 2000. At
March 31, 2000, IIC Industries Inc., (the "Parent Company"), and its
wholly-owned Israel Tractor subsidiary, had working capital of $21.6 million,
including cash and cash equivalents of $4.5 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 March 31, 2000, Israel Tractor, Investor and Balton had outstanding
short-term indebtedness of approximately $4.5 million, $4.7 million and $5.0
million, respectively.

     At March 31, 2000, Israel Tractor, Investor and Balton had unused lines of
short-term credit of $1.7 million, $5.8 million and $11.7 million, respectively.

     During the first three months of 2000, Israel Tractor, Investor, and Balton
made capital expenditures of $185,000; $372,000 and $83,000 respectively, for
the purchase of equipment and vehicles and improvements to property. Such
expenditures were made from internally generated funds. At March 31, 2000, the
Company had no significant capital commitments.




                                       16
<PAGE>

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 1999 and during the first three months
of 2000, and therefore did not significantly affect operations in that country.
Furthermore, there was a revaluation of the Israeli shekel against the U.S.
Dollar in the first three months of 2000 of 3.6%.

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


NEW ACCOUNTING PRONOUNCEMENT

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and for hedging
activities and, as amended by SFAS No. 137, is effective for all fiscal quarters
of fiscal years beginning after June 15, 2000. The Company does not expect that
the adoption of SFAS No. 133 will have a significant impact on the Company's
results of operations.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

DISCLOSURE ABOUT FOREIGN CURRENCY RISK

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 1999 and the three months ended March 31,
2000, 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 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 15% during 1999. Since the beginning of 2000, the Hungarian currency
has been further devalued by approximately 15% against the U.S. Dollar. Since
the functional currency for Investor is the Forint, these devaluations have
resulted in certain currency translation adjustments directly impacting
stockholders' equity. Furthermore, certain of the African countries such as
Zambia and Uganda operate in hyper-inflationary economies.



                                       17
<PAGE>

Derivative financial instruments are utilized by the Company to reduce foreign
exchange risk and price risk relating to its heavy equipment distribution and
agricultural commodity business. The Company does not hold or issue derivative
financial instruments for trading purposes.

Israel Tractor enters into foreign currency forward contracts and call option
contracts to reduce the impact of fluctuations of certain currencies against the
U.S. dollar. Gains and losses resulting from such transactions are reflected in
the results of operations. These contracts reduce exposure to currency movements
resulting primarily from nondollar-denominated trade receivables and the Israeli
tax effects of dollar-denominated trade purchases.

At March 31, 2000, Israel Tractor had foreign currency forward contracts, with
notional values of $3 million, to purchase and sell Israeli shekels. All of the
contracts mature in the next six months.

Current pricing models were used to estimate the fair values of foreign currency
forward contracts, and call options. The counterparties to these contracts are
creditworthy multinational commercial banks or other financial institutions,
which are recognized market makers.

DISCLOSURE ABOUT INTEREST RATE RISK

          The Company is subject to market risk from exposure to changes in
interest rates based on its financing, investing, and cash management
activities. The Company utilizes a balanced mix of debt maturities along with
both fixed-rate and variable-rate debt to manage its exposures to changes in
interest rates. The Company does not expect changes in interest rates to have a
material effect on income or cash flows in 2000, although there can be no
assurances that interest rates will not significantly change.



                                       18
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                                OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

             None

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

             None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

             None

ITEM 4.    SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

             None

ITEM 5.    OTHER INFORMATION

             None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         On October 28, 1999, the Company filed an 8-K regarding the change in
            the Company's Certifying Accountant.


     EXHIBIT NO.           DESCRIPTION

             27            Financial Data Schedule



                                       19
<PAGE>

                                   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:  May 19, 2000
                                      IIC INDUSTRIES, INC.



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


                                      By: /s/ Michael M. Wreschner
                                         -------------------------
                                           Michael M. Wreschner, Director,
                                           Assistant Secretary and  assisting
                                           on financial matters.