United States
                     Securities and Exchange Commission
                           Washington, D.C. 20549

                                  FORM 10-Q

                      Quarterly Report Under Section 13
               or 15(d) of the Securities Exchange Act of 1934


  For Quarter Ended: September 30, 2000        Commission File Number 1-5558


                            Katy Industries, Inc.
           (Exact name of registrant as specified in its charter)



   Delaware                                                 75-1277589
(State of Incorporation)             (I.R.S. Employer Identification No.)


 6300 S. Syracuse Way, Suite 300, Englewood, Colorado              80111
          (Address of Principal Executive Offices)       (Zip Code)


      Registrant's telephone number, including area code: (303)290-9300



  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



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


    Class                              Outstanding at November 13, 2000
    Common stock, $1 par value              8,396,933



                                    INDEX



   PART I       FINANCIAL INFORMATION                                   Page

                Item 1. Financial Statements:

                        Condensed Consolidated Balance Sheets
                        September 30, 2000 and December 31, 1999
                        (unaudited)                                     2,3

                        Condensed Consolidated Statements of Operations
                        Three and Nine Months Ended September 30, 2000
                        and 1999 (unaudited)                              4

                        Condensed Consolidated Statements of Cash Flows
                        Nine Months Ended September 30, 2000 and 1999
                        (unaudited)                                       5

                        Notes to Condensed Consolidated Financial
                        Statements (unaudited)                            6

                Item 2. Management's Discussion and Analysis of
                Financial
                        Condition and Results of Operations              11


  PART II       OTHER INFORMATION

                Item 1. Legal Proceedings                                16

                Item 6. Exhibits and Reports on Form 8-K                 16

  Signatures                                                             16


                        PART I FINANCIAL INFORMATION

                        Item 1.  Financial Statements


                   KATY INDUSTRIES, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                        (Thousands of Dollars)
                                 (Unaudited)

                                   ASSETS

                                               September 30,    December 31,
                                                  2000            1999
  CURRENT ASSETS:

        Cash and cash equivalents               $ 6,231         $ 9,988
        Accounts receivable, net                 99,765          95,153
        Inventories                             118,477         117,400
        Deferred income taxes                     8,497           8,497
        Other current assets                      2,773           6,017
        Net current assets of operations
          to be disposed of                         692             737
                                                 ______          ______
                Total current assets            236,435         237,792


  OTHER ASSETS:

        Cost in excess of net assets acquired    37,821          40,037
        Other intangibles                        50,343          52,491
        Miscellaneous                             6,252           6,831
        Net noncurrent assets of operations to
        be disposed of                           16,788          15,898
                                                 ______          ______
                Total other assets               111,204        115,257


  PROPERTIES:
        Land and improvements                     3,764           4,077
        Buildings and improvements               23,204          24,074
        Machinery and equipment                 164,304         156,485
                                                _______         _______
        Accumulated depreciation                (57,961)        (45,849)

          Net properties                        133,311         138,787
                                                _______         _______
                                               $480,950        $491,836


See Notes to Condensed Consolidated Financial Statements.





                   KATY INDUSTRIES, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Thousands of Dollars)
                                 (Unaudited)

                    LIABILITIES AND STOCKHOLDERS' EQUITY


                                               September 30,    December 31,
                                                  2000            1999


  CURRENT LIABILITIES:

        Accounts payable                        $58,063          $56,874
        Accrued compensation                      6,782            3,902
        Accrued expenses                         41,284           52,538
        Accrued interest and taxes                1,426            2,887
        Other current liabilities                   696              698
                                                _______          _______
          Total current liabilities             108,251          116,899

  LONG TERM DEBT, less current maturities       155,789          150,835

  OTHER LIABILITIES                               7,278            7,359

  EXCESS OF ACQUIRED NET ASSETS OVER COST         2,218            3,495

  DEFERRED INCOME TAXES                          21,636           20,037

  COMMITMENTS AND CONTINGENCIES - Note 2

  PREFERRED INTEREST OF SUBSIDIARY               32,900           32,900

  STOCKHOLDERS' EQUITY:
    Common stock, $1 par value; authorized
    25,000,000 shares; issued 9,822,204 shares    9,822            9,822
    Additional paid-in capital                   51,127           51,127
    Accumulated other comprehensive income       (3,027)            (434)
    Other adjustments                              (629)          (1,010)
    Retained earnings                           115,602          120,689
    Treasury stock, at cost, 1,425,271
     and 1,408,346 shares, respectively         (20,017)         (19,883)
                                                ________         ________
          Total stockholders' equity            152,878          160,311

                                               $480,950         $491,836


  See Notes to Condensed Consolidated Financial Statements.


                            KATY INDUSTRIES, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           (Thousands of Dollars, Except Share and Per Share Data)
                                 (Unaudited)

                                      Three Months            Nine Months
                                    Ended September 30,   Ended September 30,
                                     2000        1999       2000        1999

  Net sales                       $ 144,973   $ 145,548   $413,466   $401,371

  Cost of goods sold                106,165      98,978    294,599    273,357

  Gross profit                       38,808      46,570    118,867    128,014

  Selling, general and
    administrative expenses          38,081      36,520    110,426    107,536

  Operating income                      727      10,050      8,441     20,478

   Equity in loss of operations
    to be disposed of                  (270)        (32)      (897)      (922)

  Interest and other, net            (3,701)     (2,675)   (10,457)    (8,401)

       (Loss) income before
        income taxes and
        distributions on
        preferred interest of
        subsidiary                   (3,244)      7,343     (2,913)    11,155

  Benefit from (provision for)
  income taxes                        1,128      (2,570)     1,011     (3,904)
                                      _____       _____      _____      _____
 (Loss) income before distributions
  on preferred interest of
  subsidiary                         (2,116)      4,773     (1,902)     7,251

  Distributions on preferred
  interest of subsidiary
  (net of tax)                         (430)       (465)    (1,281)    (1,255)

 (Loss) income from continuing
  operations                         (2,546)      4,308     (3,183)     5,996

  Income from operations of discontinued
  businesses (net of tax)                -           -          -          -


        Net (loss) income            $(2,546)   $ 4,308  $  (3,183)  $  5,996

  Earnings per share - Basic
      (Loss) income from continuing
      operations                     $ (0.30)   $  0.52  $  (0.38)   $  0.72
      Discontinued operations             -          -         -          -
                                        ____       ____      ____       ____
      Net (loss) income              $ (0.30)   $  0.52  $  (0.38)   $  0.72

Earnings per share - Diluted
      (Loss) income from continuing
      operations                     $ (0.30)   $  0.48  $  (0.38)   $  0.71
      Discontinued operations             -          -         -          -
                                        ____       ____      ____       ____
      Net (loss) income              $ (0.30)   $  0.48  $  (0.38)   $  0.71

Average shares outstanding (thousands)
        Basic                          8,399      8,351     8,406      8,349
        Diluted                        8,399      9,960     8,406      8,412
Dividends paid per share -
        common stock                 $ 0.075    $ 0.075  $  0.225    $ 0.225

See Notes to Condensed Consolidated Financial Statements.


                     KATY INDUSTRIES, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                           (Thousands of Dollars)
                                 (Unaudited)

                                                                2000      1999
  Cash flows from operating activities:
        Net (loss) income                                   $ (3,183)  $ 5,996
        Depreciation and amortization                         18,056    14,491
  Net changes in assets and liabilities, other               (10,708)    1,100
                                                              ______    ______
Net cash flows provided by operating activities                4,165    21,587

  Cash flows from investing activities:
        Payments for purchase of subsidiaries,
         net of cash acquired                                     -   (135,821)
        Capital expenditures                                 (11,728)  (11,256)
        Proceeds from sale of assets                             850       187
        Collections of notes receivable                          167       647
        Proceeds from sale of subsidiaries                        -      7,222
                                                              ______   _______
  Net cash flows used in investing activities                (10,711) (139,021)

  Cash flows from financing activities:
        Proceeds from issuance of long-term debt,
          net of repayments                                    4,948   117,937
        Payment of dividends                                  (1,892)   (1,880)
        Purchase of treasury shares                             (262)     (160)
        Other                                                     83        -
                                                               _____   _______
  Net cash flows provided by financing activities              2,877   115,897

  Net decrease in cash and cash equivalents                   (3,669)   (1,537)

  Cash and cash equivalents, beginning of period              10,643    13,883
                                                              ______    ______
  Cash and cash equivalents, end of period                     6,974    12,346

  Cash of discontinued operations and operations
    to be disposed of                                           (743)     (873)
                                                              ______    ______
  Cash and cash equivalents of continuing operations       $   6,231  $ 11,473



  See Notes to Condensed Consolidated Financial Statements.



                            KATY INDUSTRIES, INC.
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             SEPTEMBER 30, 2000
                                 (Unaudited)

  (1)  SIGNIFICANT ACCOUNTING POLICIES

  Consolidation Policy

        The condensed financial statements include, on a consolidated basis,
  the accounts of Katy Industries, Inc. and subsidiaries in which it has a
  greater than 50% interest, collectively "Katy" or the "Company".  All
  significant intercompany accounts, profits and transactions have been
  eliminated in consolidation. Investments in affiliates that are not majority
  owned and where the Company does exercise significant influence are reported
  using the equity method.  The condensed consolidated financial statements at
  September 30, 2000 and December 31, 1999 and for the three and nine months
  ended September 30, 2000 and September 30, 1999 are unaudited and reflect
  all adjustments (consisting only of normal recurring adjustments) which are,
  in the opinion of management, necessary for a fair presentation of financial
  condition and results of operations. Interim figures are subject to year-end
  audit adjustments and may not be indicative of results to be realized for
  the entire year. The condensed consolidated financial statements and notes
  thereto, should be read in conjunction with management's discussion and
  analysis of financial condition and results of operations, contained in
  the Company's Annual Report on Form 10-K for the year ended December 31,
  1999.

  Use of Estimates

        The preparation of financial statements in conformity with
  generally accepted accounting principles requires management to make
  estimates and assumptions that affect the reported amounts of assets and
  liabilities and disclosure of contingent assets and liabilities at the
  date of the financial statements and the reported amounts of revenues and
  expenses during the reporting period. Actual results may differ from
  those estimates.

  Reclassifications

        Certain amounts from prior years have been reclassified to conform
  to the 2000 financial statement presentation.

  Discontinued Operations and Operations to be Disposed Of

        The historical operating results for "Discontinued Operations" have
  been segregated as "Income from operations of discontinued businesses
  (net of tax)" on the accompanying condensed consolidated statements of
  operations for the three and nine months ended September 30, 1999.
  Discontinued Operations have not been segregated on the condensed
  consolidated statements of cash flows, except for cash and cash
  equivalents.  The net income from these operations during the three and
  nine months ended September 30, 1999 was deferred and recognized during
  the fourth quarter of 1999.

    The historical operating results for "Operations to be Disposed Of"
  have been segregated as "Equity in income (loss) of operations to be
  disposed of" on the accompanying condensed consolidated statements of
  operations for all periods presented. The related assets and
  liabilities have been separately identified on the condensed
  consolidated balance sheets as "Net current assets of operations to
  be disposed of" and "Net noncurrent assets of operations to be disposed
  of". Operations to be disposed of have not been segregated on the
  condensed consolidated statements of cash flows.



  Inventories

  The components of inventories are as follows:


                                          September 30,       December 31,
                                             2000                1999
                                              (Thousands of Dollars)

        Raw materials                     $ 47,004             $ 37,878
        Work in process                      4,426                5,911
        Finished goods                      67,047               73,611
                                            ______               ______
                                          $118,477             $117,400

        At September 30, 2000 and December 31, 1999, 33% and 36% respectively,
   of the Company's inventories were accounted for using the last-in,
  first-out ("LIFO") method. The remaining inventories are accounted for
  using the first-in, first-out ("FIFO") method. Current cost, as determined
  using the FIFO method, exceeded LIFO cost by $1.9 million at September 30,
  2000, and by $1.0 million as of December 31, 1999.

  Earnings Per Share

        Basic and diluted earnings per share were arrived at using the
  calculations outlined below.  Potentially dilutive securities, in the
  form of stock options and convertible preferred shares, have been
  included in the calculation of weighted average shares outstanding
  under the treasury stock method. There was no dilutive impact on earnings
  for the three and nine months ended September 30, 2000 as a result of net
  losses reported for those periods. Stock options were the only securities
  that had a dilutive impact on earnings per share for the three and nine
  months ended September 30, 1999. For the quarter ended September 30,
  1999 stock options and convertible preferred shares had a dilutive impact
  on earnings per share.

                                         Three Months           Nine Months
                                     Ended September 30,    Ended September 30,
                                  (Thousands of Dollars, Except Per Share Data)
                                                   2000    1999    2000   1999

(Loss) income from continuing operations- Basic $(2,546) $4,308 $(3,183) $5,996
Income from discontinued operations                  -       -       -       -
                                                  _____   _____   _____   _____
Net (loss) income - Basic                       $(2,546) $4,308 $(3,183) $5,996

(Loss) income from continuing operations-
    Diluted                                     $(2,546) $4,308 $(3,183) $5,996
Income from discontinued operations                  -       -       -       -
Distributions on preferred interest of subsidiary
   (net of tax)                                      -      465      -       -
                                                 _____   _____   _____    _____
Net (loss) income - Diluted                     $(2,546) $4,773 $(3,183)  $5,996


Earnings Per Share - Basic
  Weighted average shares (thousands)            8,399   8,351   8,406    8,349

  Per share amount
     Continuing operations                      $(0.30)  $0.52  $(0.38)   $0.72
     Discontinued operations                        -       -       -        -
                                                  ____    ____    ____     ____
                                                $(0.30)  $0.52  $(0.38)   $0.72

Effect of potentially dilutive securities
     Options (thousands)                            -       43      -        63
     Convertible preferred shares (thousands)       -    1,566      -        -

Earnings Per Share - Diluted
     Weighted average shares (thousands)         8,399   9,960   8,406    8,412

  Per share amount
    Continuing operations                       $(0.30)  $0.48  $(0.38)   $0.71
    Discontinued operations                         -       -       -        -
                                                  ____    ____    ____     ____
                                                $(0.30)  $0.48  $(0.38)   $0.71


(2) Commitments and Contingencies

        In December 1996, Banco del Atlantico, a bank located in Mexico, filed
  a lawsuit against Woods Industries, Inc. ("Woods"), a subsidiary of the
  Company, and against certain past and then present officers and directors
  and former owners of Woods, alleging that the defendants participated in
  a violation of the Racketeer Influenced and Corrupt Organizations Act
  involving allegedly fraudulently obtained loans from Mexican banks,
  including the plaintiff, and "money laundering" of the proceeds of the
  illegal enterprise.  All of the foregoing is alleged to have occurred prior
  to the Company's purchase of Woods. The plaintiff also alleges that it made
  loans to an entity controlled by certain officers and directors based upon
  fraudulent representations.  The plaintiff seeks to hold Woods liable for
  its alleged damage under principles of respondeat superior and successor
  liability.  The plaintiff is claiming damages in excess of $24.0 million and
  is requesting treble damages under the statutes. The defendants have filed
  a motion, which has not been ruled on, to dismiss this action on
  jurisdictional grounds.  Because the litigation is in preliminary stages,
  it is not possible at this time for the Company to determine an outcome or
  reasonably estimate the range of potential exposure.  The Company may have
  recourse against the former owner of Woods and others for, among other
  things, violations of covenants, representations and warranties under the
  purchase agreement through which the Company acquired Woods, and under
  state, federal and common law.  In addition, the purchase price under the
  purchase agreement may be subject to adjustment as a result of the claims
  made by Banco del Atlantico.  The extent or limit of any such recourse
  cannot be predicted at this time.


(3) Industry Segment Information

        The Company is a manufacturer and distributor of a variety of
  industrial and consumer products, including sanitary maintenance supplies,
  coated abrasives, stains, electrical and electronic components, and
  nonpowered hand tools.  Principal markets are in the United States,
  Canada and Europe, and include the sanitary maintenance, restaurant
  supply, retail, electronic, automotive, and computer markets.  These
  activities are grouped into two industry segments:
  Electrical/Electronics and Maintenance Products.

        The tables below summarize the key factors in the year-to-year
  changes in operating results.



                             Three Months Ended        Nine  Months Ended
                           September 30,September 30,September 30,September 30,
                                   2000       1999       2000        1999
                                            (Thousands of Dollars)

Electrical/Electronics
   Net external sales           $51,782    $49,682    $131,752    $134,637
   Net intercompany sales        22,383     12,348      43,886      40,235
   Operating Income               2,615      3,795       5,087       4,636
   Operating margin                5.0%      7.64%       3.86%       3.44%
   Depreciation & amortization      722        454       2,162       1,848
   Identifiable assets          127,963    143,917     127,963     143,917
   Capital expenditures             208        479       1,393       2,086

Maintenance Products
  Net external sales             93,191     95,866     281,714     266,734
  Net intercompany sales          2,295      3,422       6,844       8,106
  Operating Income                1,181      8,565      10,811      24,026
  Operating margin                1.27%      8.93%       3.84%       9.01%
  Depreciation & amortization     4,957      4,380      15,358      12,316
  Identifiable assets           314,808    314,757     314,808     314,757
  Capital expenditures            3,051      2,638       9,575       8,756

Discontinued Operations
  Net external sales                 -       1,565          -        9,391
  Net intercompany sales             -          -           -           -
  Operating Income                   -         (43)         -          338
  Operating margin                   -      (2.75)%         -        3.60%
  Depreciation & amortization        -          34          -          249
  Identifiable assets                -       3,559          -        3,559
  Capital expenditures               -          12          -           80

Operations to be Disposed Of

  Net external sales                838        961       2,474       2,606
  Net intercompany sales             -          -           -           -
  Operating Loss                   (172)      (178)     (1,191)       (706)
  Operating margin              (20.53)%   (18.52)%    (48.14)%    (27.09)%
  Depreciation & amortization        39          1          76           1
  Identifiable assets            18,610     16,843      18,610      16,843
  Equity investments              7,204      6,779       7,204       6,779
  Capital expenditures               -         140         755         147




                            Three Months Ended        Nine  Months Ended
                           September 30,September 30,September 30,September 30,
                                   2000       1999       2000        1999
                                            (Thousands of Dollars)

Corporate
  Corporate expenses            $(3,069)   $(2,310)    $(7,457)    $(8,184)
  Depreciation & amortization       432         39         460          77
  Identifiable assets            20,700     19,412      20,700      19,412
  Capital expenditures                5         -            5         187

Company
  Net external sales [a]        145,811    148,074     415,940     413,368
  Net intercompany sales         24,678     15,770      50,730      48,341
  Operating Income[a]               555      9,829       7,250      20,110
  Operating margin [a]            0.38%      6.64%       1.74%       4.86%
  Depreciation & amortization [a] 6,150      4,908      18,056      14,491
  Identifiable assets [a]       482,081    498,488     482,081     498,488
  Capital expenditures            3,264      3,269      11,728      11,256

[a] Company balances include amounts from both "Discontinued Operations" and
"Operations to be Disposed of", whereas the Condensed Consolidated Financial
Statements separately classify such amounts as "Discontinued Operations" and
"Operations to be Disposed of".

        The following tables reconcile the Company's total revenues, operating
income and assets to the Company's condensed consolidated statements of
operations and condensed consolidated balance sheets.



                            Three Months Ended        Nine  Months Ended
                           September 30,September 30,September 30,September 30,
                                   2000       1999       2000        1999
                                            (Thousands of Dollars)

Revenues
  Total net sales for
    reportable segments        $170,489   $163,844    $466,670    $461,709
  Elimination of net
    intercompany sales          (24,678)   (15,770)    (50,730)    (48,341)
  Net sales included in
    equity in income of
    operations to be disposed of   (838)      (961)     (2,474)     (2,606)
  Net sales included in
    discontinued operations          -      (1,565)         -       (9,391)
                                _______    _______     ________     _______
Total consolidated net sales   $144,973   $145,548    $413,466    $401,371

Operating income
  Total income from
    operations for
    reportable segments            $555     $9,829      $7,250     $20,110
  Operating loss included in
    equity in income of
    operations to be disposed of    172        178       1,191         706
  Operating income included in
    discontinued operations          -          43         -          (338)
                                 _______    _______     ________     _______
Total consolidated operating
    income                         $727    $10,050      $8,441     $20,478


Assets
  Total assets for reportable
    segments                   $482,081   $498,488    $482,081    $498,488
  Liabilities included in net
    assets from operations to
    be disposed of               (1,131)    (1,230)     (1,131)     (1,230)
  Liabilities included in net
    assets from discontinued
    operations                       -        (237)         -         (237)
                                _______    _______     ________     _______
Total consolidated assets      $480,950   $497,021    $480,950    $497,021

(4) Comprehensive (Loss) Income

        Comprehensive (loss) income for the nine months ended
           September 30, 2000 and 1999 are as follows:


                                                September 30,    September 30,
                                                   2000              1999
                                                    (Thousands of Dollars)
  Net (loss) income                             $ (3,183)         $ 5,996
  Foreign currency translation adjustments        (2,521)           1,714
  Comprehensive (loss) income                   $ (5,704)         $ 7,710


(5) Indebtedness

    On October 27, 2000, the Company amended its unsecured revolving credit
  agreement (the "Credit Agreement").  The Credit Agreement provides for
  borrowings of up to $16,750,000 under its Facility A commitment expiring
  June 30, 2001 and $161,160,000 under its Facility B commitment expiring
  December 11, 2001. As a part of the amendment, compliance with certain
  covenants required by the Credit Agreement was waived as of September 30,
  2000, and new ratio levels for certain covenants were established for
  measurement at December 31, 2000.  Also as part of the amendment, the
  Company agreed to grant the lenders under the Credit Agreement a security
  interest in all of its and its subsidiaries' assets on March 31, 2001,
  if certain events do not occur before that date.  A security interest
  will not be required to be granted if (1) on or before February 28, 2001,
  a letter of intent (satisfactory to the bank group) exists for the sale
  of the Company as a whole or (ii) one or more of its material
  subsidiaries if (in the case of clause (ii)) the Company demonstrates
  that following such sale the Company would be in compliance with a
  specified leverage ratio, or (2) the Company is in compliance with
  certain covenants at pre-amendment ratio levels.


(6) Supplemental Cash Flow Information

    A portion of the net assets included in the condensed consolidated
  financial statements as a result of the acquisition of the business of
  Contico International, Inc, ("Contico") which occurred during the first
  quarter of 1999, was financed through a preferred membership interest
  in the acquiring company, held by the former owners of the business.
  This interest has a stated value of $32.9 million.

(7) Restructuring Charge

    During the third quarter of 2000, the Company implemented a workforce
  reduction that reduced headcount by approximately 90. Employees affected
  were primarily in general and administrative functions, with the largest
  number of affected employees coming from the Maintenance Products
  Segment.

    The workforce reduction included severance and related costs for
  certain employees. Total severance and related costs was $2.1 million
  pre-tax, which are included as selling, general and administrative
  expenses in the condensed consolidated statements of operations.
  Approximately 64% of these costs were paid during the third quarter
  of 2000.

    In the second quarter of 1999, the Company undertook a restructuring
  of the Electrical/Electronics businesses. Approximately 22 employees
  accepted severance packages.  Total severance and related costs were
  $600,000.  Substantially all of these costs were paid during the third
  quarter of 1999.

(8) Subsequent Event

    On November 6, 2000, the Company announced that it is exploring
  strategic alternatives, including the possible sale of the Company.
  The Company indicated that it is in discussions with one potential
  purchaser relating to a transaction that would involve the purchase
  of the Company at a premium to its current market price.  Katy
  indicated, however, that there can be no assurance that an agreement
  will be reached, or if reached, that a sale will be completed.


              Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

Three months Ended September 30, 2000

   Following are summaries of sales and operating income (loss) for the
     three months ended September 30, 2000 and 1999 by industry segment
     (thousands of dollars):


Net Sales                                                Increase   (Decrease)

                                       2000      1999      Amount      Percent

Electrical/Electronics              $51,782   $49,682      $2,100        4.2%

Maintenance Products                 93,191    95,866      (2,675)     (2.8)%

Operations to be Disposed Of            838       961        (123)    (12.8)%

Discontinued Operations                  -      1,565      (1,565)   (100.0)%



Operating Income (Loss)                                  Increase   (Decrease)

                                      2000       1999      Amount      Percent

Electrical/Electronics             $  2,615  $  3,795      $(1,180)   (31.1)%

Maintenance Products                  1,181     8,565       (7,384)   (86.2)%

Operations to be Disposed Of           (172)     (178)          (6)    (3.4)%

Discontinued Operations                  -        (43)          43    100.0)%

    The Electrical/Electronics Group's sales increased $2.1 million or 4.2%
  primarily because of higher volumes in the precision metals and consumer
  electric corded businesses.

    The Electrical/Electronics Group's operating income decreased $1.2 million
  or 31.1% mainly as a result of decreased margins in the consumer electric
  corded products business and the non-powered hand tools business.  Operating
  results were also negatively impacted by a $0.8 million product recall in
  the consumer electric corded products business during the three months
  ended September 30, 2000.

    Sales from the Maintenance Products Group decreased $2.7 million or
  2.8% primarily as a result of decreased volumes in the mop and broom and
  abrasive businesses. .

    The Maintenance Products Group's operating income decreased $7.4 million
  or 86.2%.  The decrease is partially attributable to decreased margins in
  the plastic maintenance and storage products business resulting from
  increased resin costs. The Company estimates that resin costs negatively
  impacted third quarter operating income versus prior year by $2.9 million.
  In addition, unusual items including a $0.9 million increase to a LIFO
  inventory reserve and a $1.2 million charge for severance and restructuring
  costs also impacted the decrease. Excluding the aforementioned factors,
  operating income decreased $2.3 million, primarily as a result of poor
  performance in the mop and broom operations.

     Sales from Operations to be Disposed Of decreased $0.1 million, or
  12.8%, primarily as a result of lower volumes in the waste-to-energy
  business. Operating income for this group remained flat for the three
  months ended September 30, 2000.

  All Discontinued Operations were disposed of during 2000.

    Selling, general and administrative expenses for the Company's
  continuing segments increased as a percentage of sales to 26.3% in the third
  quarter of 2000 from 25.1% for the same period in 1999.  The increase was
  primarily attributed to unusual items associated with severance and a product
  recall both previously mentioned.  Excluding these unusual items, selling,
  general and administrative costs decreased as a percentage of sales to
  24.2%.

    Interest and other, net increased $1.0 million for the third quarter of
  2000 compared to the third quarter of 1999.  The increase is primarily due
  to higher variable interest rates on the Company's long-term debt.

  Nine months Ended September 30, 2000

    Following are summaries of sales and operating income for the nine months
  ended September 30, 2000 and 1999 by industry segment (In thousands):




Net Sales                                                Increase   (Decrease)

                                       2000      1999      Amount      Percent

Electrical/Electronics              $ 131,752  $134,637  $ (2,885)     (2.1)%

Maintenance Products                  281,714   266,734    14,980       5.6 %

Operations to be Disposed Of            2,474     2,606      (132)     (5.1)%

Discontinued Operations                    -      9,391    (9,391)   (100.0)%


Operating Income (Loss)                                  Increase   (Decrease)

                                       2000      1999      Amount      Percent


Electrical/Electronics              $   5,087   $ 4,636   $   451        9.7%

Maintenance Products                   10,811    24,026   (13,215)    (55.0)%

Operations to be Disposed Of           (1,191)     (706)     (485)    (68.7)%

Discontinued Operations                    -        338      (338)   (100.0)%

    The Electrical/Electronics Group's sales decreased $2.9 million or 2.1%
  primarily due to decreased volumes in the consumer non-powered hand tools
  and electrical and electronic parts and accessories businesses, partially
  offset by increased volumes in the precision metals and the electric corded
  businesses.

    The Electrical/Electronics Group's operating income increased $0.5 million
  or 9.7%, mainly as a result of higher gross margins at the precision metals
  and electrical and electronic parts businesses. Operating results were
  reduced in 2000 by a $0.8 million product recall in the consumer electric
  corded products business.

    The Maintenance Products Group's sales increased $15.0 million or 5.6%
  due primarily to higher sales volumes in the plastic maintenance and storage
  business. Sales in 1999 were lower also as a result of the exclusion of one
  week of pre-acquisition Contico activity.

    The Maintenance Products Group's operating income decreased $13.2 million
  or 55.0%. The decrease is partially attributable to reduced margins in
  plastic maintenance and storage products resulting from increased resin
  costs. The Company estimates that resin costs negatively impacted the nine
  months ended operating income by $8.9 million. In addition, unusual items
  including a $0.9 million inventory LIFO adjustment and a $1.2 million
  charge for severance and restructuring also impacted the decrease.
  Excluding these factors, operating income decreased $2.2 million or 9.2%,
  primarily as a result of the poor performance in the mop and broom business.

    Sales from Operations to be Disposed Of were comparable to prior year
  while operating income for this group declined $0.5 million or 68.7%
  primarily due to higher plant maintenance costs.

All Discontinued Operations were disposed of during 1999.

    Selling, general and administrative expenses as a percentage of sales
  for the Company's continuing segments remained unchanged, 26.9% for the
  first nine months of 2000 and 26.7% for the same period in 1999.  Excluding
  third quarter restructuring charges of $2.9 million in 2000, sales, general
  and administrative expenses as a percentage of sales were 26.0%. The
  decrease was primarily attributable to reduced costs in the consumer
  electric corded business and the cleaning and specialty food service
  products.

    Interest and other, net increased $2.0 million for the first nine months
  of 2000 compared to the same period of 1999.  The increase is primarily
  due to higher interest rates on the Company's long-term debt.

    Accumulated other comprehensive income was negatively impacted during
  the first nine months of 2000 by adjustments resulting from the
  translation of results and financial position of operations in the
  United Kingdom and Canada.

LIQUIDITY AND CAPITAL RESOURCES

    Combined cash and cash equivalents from continuing operations decreased
  37.6% to $6.2 million on September 30, 2000 compared to $10.0 million on
  December 31, 1999 primarily due to an effort to operate on lower cash
  balances to minimize outstanding borrowings on the Company's unsecured
  revolving credit agreement (the "Credit Agreement").  Current ratios
  were 2.7 to 1.0 at September 30, 2000 compared to 2.0 to 1.0 at
  December 31, 1999.  Working capital increased $9.0 million to $128.2 at
  September 30, 2000 from $120.9 million on December 31, 1999, primarily as
  a result of, increased accounts receivable and settlements of customer
  sales and allowance plans (accrued expenses).

    Katy expects to commit an additional $3.9 million for capital projects
  in the continuing businesses during the remainder of the year for a total
  of $15.6 million during 2000. Funding for these expenditures and for
  working capital needs is expected to be accomplished through the use of
  available cash and internally generated funds.

    At September 30, 2000, Katy had short and long-term indebtedness for money
  borrowed of $155.9 million, substantially all of which was outstanding under
  the Credit Agreement. On October 27, 2000, the Company amended its unsecured
  revolving credit agreement (the "Credit Agreement"). The Credit Agreement
  provides for borrowings of up to $16,750,000 under its Facility A commitment
  expiring June 30, 2001 and $161,160,000 under its Facility B commitment
  expiring December 11, 2001. As a part of the amendment, compliance with
  certain covenants required by the Credit Agreement was waived as of
  September 30, 2000, and new ratio levels for certain covenants were
  established for measurement at December 31, 2000.  Also as part of the
  amendment, the  Company agreed to grant the lenders under the Credit
  Agreement a security interest in all of its and its subsidiaries' assets
  on March 31, 2001, if certain events do not occur before that date.  A
  security interest will not be required to be granted if (1) on or before
  February 28, 2001, a letter of intent (satisfactory to the bank group)
  exists for the sale of the Company as a whole or (ii) one or more of its
  material subsidiaries if (in the case of clause (ii)) the Company
  demonstrates that following such sale the Company would be in compliance
  with a specified leverage ratio, or (2) the Company is in compliance with
  certain covenants at pre-amendment ratio levels. Total debt was 45.6% of
  total capitalization at September 30, 2000.


     If the Company does grant the lenders such security interest by
  March 31, 2001, then the new ratio levels will continue to apply for
  the quarter ending March 31. If not, then the Company would either have
  to be in compliance with the pre-amendment ratios or seek a new waiver for
  lack of compliance at March 31, 2001. The Company believes that the financing
  available to it under the Credit Agreement is sufficient for its purposes
  through March 31, 2001 and, assuming it either grants the lenders thereunder
  such security interest or otherwise comes into compliance with the
  pre-amendment ratios or obtains further waivers of compliance thereunder,
  until June 30, 2001, when the Company will need to refinance the Facility A
  revolving loan facility under its Credit Agreement and, unless it is then
  in compliance with the ratios thereunder, the Facility B facility as well.



RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

    In December 1999, the Securities and Exchange Commission staff released
  Staff Accounting Bulletin No. 101, "Revenue Recognition" ("SAB 101").
  SAB 101 provides interpretive guidance on the recognition, presentation
  and disclosure of revenue in financial statements.  The Company is required
  to determine the impact of SAB 101 no later than the end of the fourth
  quarter of fiscal 2000.  Depending on the results of the evaluation, the
  implementation of SAB 101 may require the Company to restate its current
  year results to reflect any cumulative effect of change in accounting
  principal as if SAB 101 had been implemented on January 1, 2000.  The
  Company is currently reviewing SAB 101 to determine what impact, if any,
  the adoption of  SAB 101 will have on its financial position or results of
  operations.  However, based upon a preliminary review, the Company does not
  believe that the adoption of SAB 101 will have a material impact.


ENVIRONMENTAL AND OTHER CONTINGENCIES

    The Company and certain of its current and former direct and indirect
  corporate predecessors, subsidiaries and divisions have been identified by
  the United States Environmental Protection Agency, state environmental
  agencies and private parties as potentially responsible parties ("PRPs")
  at a number of hazardous waste disposal sites under the Comprehensive
  Environmental Response, Compensation and Liability Act ("Superfund") or
  equivalent state laws and, as such, may be liable for the cost of cleanup
  and other remedial activities at these sites.  Responsibility for cleanup
  and other remedial activities at a Superfund site is typically shared
  among PRPs based on an allocation formula.  Under the federal Superfund
  statute, parties could be held jointly and severally liable, thus
  subjecting them to potential individual liability for the entire cost of
  cleanup at the site.  Based on its estimate of allocation of liability
  among PRPs, the probability that other PRPs, many of whom are large,
  solvent, public companies, will fully pay the costs apportioned to them,
  currently available information concerning the scope of contamination,
  estimated remediation costs, estimated legal fees and other factors, the
  Company has recorded and accrued for indicated environmental liabilities
  in the aggregate amount of approximately $3.2 million at September 30, 2000.
  The ultimate cost will depend on a number of factors and the amount
  currently accrued represents management's best current estimate of the
  total cost to be incurred.  The Company expects this amount to be
  substantially paid over the next one to four years.


    Katy also has a number of product liability and workers' compensation
  claims pending against it and its subsidiaries.  Many of these claims
  are proceeding through the litigation process and the final outcome will
  not be known until a settlement is reached with the claimant or the case
  is adjudicated.  It can take up to 10 years from the date of the injury
  to reach a final outcome for such claims.  With respect to the product
  liability and workers' compensation claims, Katy has provided for its
  share of expected losses beyond the applicable insurance coverage,
  including those incurred but not reported, which are developed using
  actuarial techniques. Such accruals are developed using currently
  available claim information, and represent management's best estimates.
  The ultimate cost of any individual claim can vary based upon, among
  other factors, the nature of the injury, the duration of the disability
  period, the length of the claim period, the jurisdiction of the claim
  and the nature of the final outcome.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company's exposure to market risk associated with changes in
  interest rates relates primarily to its debt obligations and temporary
  cash investments.  The Company currently does not use derivative financial
  instruments relating to either of these exposures.  The Company's debt
  obligations are generally indexed from short-term LIBOR rates, and its
  temporary cash investments earn rates of interest available on securities
  with maturities of three months or less.  Book value approximates fair
  value for both the debt obligations and temporary cash investments.  The
  holder of the preferred interest has a put option which allows, at certain
  times beginning on January 8, 2001, or upon the occurrence of certain events,
  the preferred interest to be exchangeable for Katy common stock.

OUTLOOK

    Net sales are expected to be relatively flat for the full year 2000
  versus 1999, due mainly to the introduction of new products and core growth
  in the Maintenance Products Group offset by lower sales in the electrical
  segment and mop and broom businesses.

    Cost of goods sold are expected to continue to be negatively impacted in
  2000 by higher costs for polyethylene, polypropylene, and other
  thermoplastic resins that are used in the Company's production processes,
  especially at Contico. Katy estimates the full-year (1999 to 2000) impact
  on earnings of increased resin prices to be approximately $12.0 million,
  pre-tax. The Company's mop and broom business, Wilen Products, has also
  under-performed significantly during 2000, which is expected to have a
  negative pre-tax impact on 2000 earnings compared to 1999 of $3.0 million.

    Selling, general and administrative costs as a percentage of sales in
  the aggregate are expected to improve from 1999 levels, excluding the
  impact of a $2.2 million third quarter charge for restructuring and a
  $0.8 million product recall.

    Interest expense is expected to increase in 2000 by approximately $2.5
  million, due mainly to higher short-term interest rates.

    The above factors indicate that full year results from continuing
  segments for 2000 will not meet prior expectations and will fall well
  short of 1999's results.  While many factors will impact the eventual
  results, an important component will certainly be the impact of plastic
  resin costs.  Improved results for 2000 and beyond will depend on
  softening resin prices and/or the Company achieving price increases on
  resin-based and other products.  Also, the Company expects increased
  efficiencies through its plans to reorganize plant assets, implement
  further workforce reductions, outsourcing of some manufacturing through
  partnering, and the consolidation of certain operating systems and
  financial functions. The results are expected to have a significant
  impact on Katy's effectiveness and ability to control costs going
  forward.

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995

    This report contains "forward-looking statements" within the meaning
  of the federal securities laws.  The forward-looking statements include,
  among others, statements concerning the Company's outlook for 2000, cost
  reduction strategies and their results, the Company's expectations for
  funding its 2000 capital expenditures and operations and other statements
  of expectations, beliefs, future plans and strategies, anticipated events
  or trends, and similar expressions concerning matters that are not
  historical facts.  These forward-looking statements are subject to risks
  and uncertainties that could cause actual results to differ dramatically
  from those expressed in or implied by the statements.

    To improve its financial performance, the Company must reduce its cost
  structure and improve its production efficiency, improve its management
  of working capital, and grow its existing base of retail and distribution
  customers.  The most important factors that could influence the achievement
  of these goals, and cause actual results to differ materially from those
  expressed in the forward-looking statements, include, but are not limited
  to the following:

        - Increases in the cost of plastic resins, copper, and other raw
        materials.

        - The Company's inability to reduce manufacturing costs.

        - The inability of the Company to achieve product price increases,
        especially as they relate to potentially higher raw material costs.

        - The potential impact of losing lines of business at large retail
         outlets in the discount and do-it-yourself markets.

        - Competition from foreign competitors.

        - The potential impact of new distribution channels, such as
        e-commerce, negatively impacting the Company and its existing channels.

        - The potential impact of rising interest rates on the Company's
        LIBOR-based credit facility.

        - The Company's inability to negotiate a new credit facility on
        favorable terms.

        - Labor issues, including union activities that require an increase
        in production costs or lead to a strike, thus impairing production
        and decreasing sales.

        - Changes in significant laws and government regulations affecting
        environmental compliance and income taxes.

        - The potential impact of the strategic alternatives now under
        consideration by the Company or any failure to reach agreement on
        a possible sale of the company or to consummate such a transaction
        if an agreement is reached.



    These and other risks and uncertainties affecting the Company are discussed
  in greater detail in this report and in the Company's other filings with the
  Securities and Exchange Commission.



PART II - OTHER INFORMATION


Item 1. LEGAL PROCEEDINGS

    During the quarter for which this report is filed, there have been no
  material developments in previously reported legal proceedings, and no
  other cases or legal proceedings, other than ordinary routine litigation
  incidental to the Company's business and other nonmaterial proceedings,
  have been brought against the Company.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Reports on Form 8-K

None

(b) Exhibits

4.1 First Amendment to Amended and Restated Credit Agreement dated as of
    November 18, 1999.

4.2 Second Amendment to Amended and Restated Credit Agreement dated as of
    March 22, 2000

4.3 Waiver and Third Amendment to Credit Agreement dated as of
    October 27, 2000.


 27. Financial Data Schedule














      Signatures

    Pursuant to the requirements of the Securities and Exchange Act of 1934,
  the registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.



                            KATY INDUSTRIES, INC.
                                 Registrant


DATE: November 11, 2000                           By  /s/ Stephen P. Nicholson
                                                          Stephen P. Nicholson
                                                     Vice President, Finance &
                                                     Chief Financial Officer