==============================================================================


                     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, 1998


                         COMMISSION FILE NO. 1-3920


                             KINARK CORPORATION
          (Exact name of the registrant as specified in its charter)

           DELAWARE                                   71-0268502
    (State of Incorporation)              (I.R.S. Employer Identification No.)

                            2250 EAST 73RD STREET
                         TULSA, OKLAHOMA 74136-6832
                  (Address of principal executive offices)

            Registrant's telephone number:           (918) 494-0964


     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 and 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 September 30, 1998.

                  Common Stock $ .10 Par Value . . . . . 6,778,345

==============================================================================

<TABLE>
                      KINARK CORPORATION AND SUBSIDIARIES

                     INDEX TO QUARTERLY REPORT ON FORM 10-Q
<CAPTION>

                                                                     PAGE
<S>                                                                 <C>
PART  I. FINANCIAL INFORMATION
     
         Forward Looking Statements or Information                     2

         Item 1. Financial Statements

                 Independent Accountants' Review Report                3

                 Condensed Consolidated Balance Sheets as
                 of September 30, 1998 (unaudited), and
                 December 31, 1997                                     4

                 Condensed Consolidated Statements of
                 Earnings for the three and nine months
                 ended September 30, 1998 and 1997
                 (unaudited)                                           5

                 Condensed Consolidated Statements of
                 Cash Flows for the nine months ended
                 September 30, 1998 and 1997 (unaudited)               6

                 Notes to Condensed Consolidated Financial
                 Statements for the three and nine months
                 ended September 30, 1998 and 1997
                 (unaudited)                                          7-10

         Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of
                 Operations                                           11-16

         Item 3. Quantitative and Qualitative Disclosures
                 About Market Risks                                     17

PART II. OTHER INFORMATION                                            18-19

SIGNATURES                                                              20
</TABLE>


FORWARD LOOKING STATEMENTS OR INFORMATION

     Certain statements in this Form 10-Q, including information set forth 
under the caption "Management's Discussion and Analysis of Financial Condition 
and Results of Operations", constitute "Forward-Looking Statements" within the 
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 
21E of the Securities Exchange Act of 1934, as amended. The Company cautions 
investors that forward-looking statements included in this Form 10-Q, or 
hereafter included in other publicly available documents filed with the 
Securities and Exchange Commission, reports to the Company's stockholders and 
other publically available statements issued or released by the Company 
involve significant risks, uncertainties, and other factors which could cause 
the Company's actual results, performance (financial or operating) or 
achievements to differ materially from the future results, performance 
(financial or operating) or achievements expressed or implied by such 
forward-looking statements.  The Company believes that the important factors 
set forth in the Company's cautionary statements at Exhibit 99 to this Form 
10-Q could cause such a material difference to occur and investors are 
referred to Exhibit 99 for such cautionary statements.



INDEPENDENT ACCOUNTANTS' REVIEW REPORT

To the Board of Directors and Stockholders of
Kinark Corporation:

We have reviewed the accompanying condensed consolidated balance sheet of 
Kinark Corporation and subsidiaries (the "Company") as of September 30, 1998, 
and the related condensed consolidated statements of earnings for the three- 
and nine-month periods ended September 30, 1998 and 1997  and the condensed 
consolidated cash flow statements for the nine-months ended September 30, 1998 
and 1997.  These financial statements are the responsibility of the Company's 
management.

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

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

We have previously audited, in accordance with generally accepted auditing 
standards, the consolidated balance sheet of Kinark Corporation and 
subsidiaries as of December 31, 1997, and the related consolidated statements 
of operations, stockholders' equity, and cash flows for the year then ended 
(not presented herein); and in our report dated February 20, 1998 (except as 
to the first paragraph of the Contingencies footnote, for which the date is 
March 6, 1998) we expressed an unqualified opinion on those consolidated 
financial statements.  In our opinion, the information set forth in the 
accompanying condensed consolidated balance sheet as of December 31, 1997 is 
fairly stated, in all material respects, in relation to the consolidated 
balance sheet from which it has been derived.


/s/Deloitte & Touche LLP
Tulsa, Oklahoma
November 6, 1998



<TABLE>
                      KINARK CORPORATION AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                              Unaudited
                                            SEPTEMBER 30       Dec 31
(Dollars in Thousands)                          1998            1997 
----------------------------------------------------------------------
<S>                                            <C>            <C>
ASSETS     
Cash                                           $   152        $    259 
Accounts receivable, net                         7,706           7,094 
Inventories                                      4,129           3,503 
Prepaid expenses and other current assets          626             360 
Deferred tax asset, net                            717             717 
                                                ------          ------
   TOTAL CURRENT ASSETS                         13,330          11,933 
                                                ------          ------

PROPERTY, PLANT AND EQUIPMENT, AT COST
Land                                               707             707 
Chemical storage facilities and 
 warehousing equipment                          11,224          11,253 
Galvanizing plants and equipment                19,319          20,793 
Other                                              306             336 
                                                ------          ------
                                                31,556          33,089 
  Less:  Allowance for depreciation             16,278          18,199 
                                                ------          ------
     TOTAL PROPERTY, PLANT & EQUIPMENT, NET     15,278          14,890 
                                                ------          ------

INVESTMENTS, AT FAIR VALUE                         443             --- 
DEFERRED TAX ASSET, NET                            425             667 
GOODWILL, NET                                    3,863           4,009 
OTHER ASSETS                                       417             456 
                                                ------          ------  
           TOTAL ASSETS                        $33,756         $31,955 
                                                ======          ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable                         $ 1,799         $ 1,672 
Accrued payroll and employee benefits            1,069           1,176 
Other taxes                                      1,036             818 
Other accrued liabilities                        1,884           1,187 
Current maturities of long-term obligations        928             916 
                                                ------          ------
   TOTAL CURRENT LIABILITIES                     6,716           5,769 
                                                ------          ------     
PENSION AND RELATED LIABILITIES                    790             928 
LONG-TERM OBLIGATIONS                            8,348           8,131 
COMMITMENTS AND CONTINGENCIES                      ---             --- 
STOCKHOLDERS' EQUITY
Common stock                                       819             819 
Additional paid-in capital                      17,364          17,364 
Minimum pension liability                         (197)           (197)
Retained earnings                                5,728           4,953 
Less:  Treasury stock at cost                   (5,812)         (5,812)
                                                ------          ------
  TOTAL STOCKHOLDERS' EQUITY                    17,902          17,127 
                                                ------          ------

      TOTAL LIABILITIES & 
         STOCKHOLDERS' EQUITY                  $33,756         $31,955
                                                ======          ====== 
</TABLE>
See notes to condensed consolidated financial statements.



<TABLE>
                        KINARK CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                    Unaudited
<CAPTION>
                                    Three Months Ended   Nine Months Ended
                                       September 30         September 30
                                     -------------------   ----------------
(Dollars in Thousands Except 
   per Share Amounts)                 1998      1997      1998      1997
---------------------------------------------------------------------------- 
<S>                                 <C>       <C>        <C>      <C>
SALES                               $12,206   $12,206    $37,280  $36,465  

COSTS AND EXPENSES
  Cost of sales                       9,511     9,766     28,382   28,630 
  Selling, general & 
   administrative                     1,665     1,547      5,065    4,285 
  Depreciation and amortization         779       684      2,217    2,007
                                     ------    ------     ------   ------
  TOTAL COSTS AND EXPENSES           11,955    11,997     35,664   34,922 
                                     ------    ------     ------   ------
OPERATING EARNINGS                      251       209      1,616    1,543 

OTHER (INCOME) EXPENSE
  Interest expense, net                 159       189        485      603
  Other income                          ---       ---       (309)     ---
                                     ------    ------     ------   ------
  TOTAL OTHER EXPENSE                   159       189        176      603

EARNINGS BEFORE INCOME TAXES             92        20      1,440      940 

Income Tax Expense                       40        18        665      403 
                                     ------   -------     ------   ------
NET EARNINGS                        $    52   $     2    $   775  $   537
                                     ======   =======     ======   ======

BASIC EARNINGS PER COMMON SHARE     $   .01   $   ---    $   .11  $   .08
DILUTED EARNINGS PER 
 COMMON SHARE                       $   .01   $   ---    $   .11  $   .08
</TABLE>
See notes to condensed consolidated financial statements.


<TABLE>
                        KINARK CORPORATION AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    Unaudited
<CAPTION>
                                                  Nine Months Ended
                                                     September 30
                                               -----------------------
(Dollars in Thousands)                           1998           1997
------------------------------------------------------------------------------
<S>                                            <C>            <C>
OPERATING ACTIVITIES
Net Earnings                                   $   775        $   537 
Adjustments to reconcile net earnings to net
cash provided by operating activities:
  Depreciation and amortization                  2,217          2,007 
  Gain on involuntary conversion of assets        (309)           ---  
  Loss on sale of assets                             4            --- 
  Deferred income taxes                            242            265 
  Change in assets and liabilities:
    Accounts receivable                           (612)           (54)
    Inventories and other                         (853)          (118)
    Accounts payable, accrued liabilities 
     and other                                     797          1,585
                                                ------         ------ 
  NET CASH PROVIDED BY OPERATING ACTIVITIES      2,261          4,222 
                                                ------         ------
INVESTING ACTIVITIES
  Capital expenditures                          (2,493)        (2,340)
  Proceeds from involuntary conversion 
   of assets                                       325            ---  
  Proceeds from sale of assets                      14            ---  
  Purchase of investments                         (443)           ---
  Acquisition of galvanizing business              ---         (2,236)
                                                ------         ------
  NET CASH USED FOR INVESTING ACTIVITIES        (2,597)        (4,576)
                                                ------         ------
FINANCING ACTIVITIES
  Proceeds from sale of common stock               ---              2 
  Proceeds from long-term obligations           13,995         13,126 
  Payments on long-term obligations            (13,766)       (14,326)
                                                ------         ------
  NET CASH PROVIDED BY (USED FOR) 
   FINANCING ACTIVITIES                            229         (1,198)
                                                ------         ------
DECREASE IN CASH                                  (107)        (1,552)
CASH AT BEGINNING OF PERIOD                        259          2,041
                                                ------         ------ 
CASH AT END OF PERIOD                          $   152        $   489 
                                                ======         ======
</TABLE>
See notes to condensed consolidated financial statements.




                       KINARK CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                                   UNAUDITED

NOTE 1.  BASIS OF PRESENTATION
         ---------------------
         The condensed consolidated financial statements included in this 
         report have been prepared by Kinark Corporation (the "Company") 
         pursuant to the rules and regulations of the Securities and Exchange
         Commission for interim reporting and include all normal and recurring 
         adjustments which are, in the opinion of management, necessary for 
         a fair presentation.  These financial statements have not been  
         audited by an independent accountant. The condensed consolidated
         financial statements include the accounts of the Company and its       
         subsidiaries.

         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 for interim reporting.  The Company 
         believes that the disclosures are adequate to make the information 
         presented not misleading.  However, these financial statements 
         should be read in conjunction with the financial statements and 
         notes thereto included in the Company's Annual Report on Form 10-K, 
         for the year ended December 31, 1997.  The financial data for the 
         interim periods presented may not necessarily reflect the results 
         to be anticipated for the complete year.

NOTE 2.  EARNINGS PER COMMON SHARE
         -------------------------
         Diluted earnings  per common share for the periods presented has 
         been computed based upon the weighted average number of shares 
         outstanding, adjusted for the dilutive effect of stock options, of 
         6,790,751 and 6,799,898 for the three months ended September 30, 1998
         and 1997 respectively, and 6,807,756 and 6,802,584 for the nine 
         months ended September 30, 1998 and 1997 respectively.  Basic 
         earnings per common share for these same periods has been computed 
         based upon the average number of shares outstanding of 6,778,345 for 
         each period.

NOTE 3.  INVENTORIES
         -----------
         Inventories consist primarily of raw zinc "pigs," molten zinc in 
         galvanizing kettles and other chemicals and materials used in the 
         hot dip galvanizing process.  All inventories are stated at the 
         lower of cost or market with market value based on ultimate 
         realizable value from the galvanizing process.  Zinc cost is 
         determined on a last-in-first-out (LIFO) basis.  Other inventories 
         are valued primarily on an average cost basis.

NOTE 4.  INVESTMENT SECURITIES
         ---------------------
         The Company accounts for investment securities under the           
         provisions of Statement of Financial Accounting Standards
         No. 115 ("SFAS No. 115"), "Accounting for Certain instruments in 
         Debt and Equity Securities."  Accordingly, the Company has 
         classified its marketable equity securities as available-for-sale.  
         Securities classified as available-for-sale securities are reported 
         at fair market value.  At September 30, 1998, the securities 
         carrying value approximated fair market value.  The Company's 
         unrealized or realized gains or losses for the quarter ended 
         September 30, 1998 are immaterial. Realized gains and losses and 
         declines in value of securities judged to be other-than-temporary are 
         included in income. 

NOTE 5.  DEBT OBLIGATIONS
         ----------------
         In 1997, the Company entered into a two-year bank credit agreement 
         which provides a $8,500,000 maximum revolving line of credit, a 
         $1,250,000 advancing term loan for expansion of galvanizing plants 
         and a $3,500,000 term loan, that was scheduled to expire May 1999.  
         In June 1998, the bank extended the expiration date of this 
         agreement to May 1, 2000, with all other terms and conditions 
         remaining the same.

         Substantially all of the Company's accounts receivable,            
         inventories and fixed assets are pledged as collateral under the 
         credit agreement, and the credit agreement is secured by a guaranty 
         from each of the Company's subsidiaries.  Amounts borrowed under the 
         credit agreement bear interest at the prime rate of Chase          
         Manhattan Bank minus or plus a spread ranging from minus 25 basis 
         points to plus 50 basis points, determined by a coverage ratio of 
         defined earnings to debt service.  

         Term loan payments are based on a five year amortization schedule 
         with equal monthly payments of principal and interest.  The 
         advancing term loan, once funded, will require equal monthly 
         payments of principal and interest based on a seven year 
         amortization schedule.

         The revolver may be paid down without penalty, or additional funds 
         may be borrowed up to the revolver limit. The term loan and 
         advancing term loan may be pre-paid without penalty.  The credit 
         agreement provides for capital expenditures related to a 
         minimum coverage ratio  of defined earnings to debt service plus 
         capital expenditures, limits the pledging of assets for new debt, 
         and requires the Company to maintain a minimum net worth.  The 
         Company was in compliance with all such covenants at September 30, 
         1998.

NOTE 6.  NEW ACCOUNTING STANDARDS
         ------------------------
         Effective January 1, 1998, the Company adopted Statement of 
         Financial Accounting Standards ("SFAS") No. 130, "Comprehensive 
         Income", and SFAS No. 131, "Disclosure About Segments of an 
         Enterprise", for the year ending December 31, 1998.

         SFAS No. 130 provides for a disclosure of the components of 
         comprehensive income necessary to reconcile reported net earnings 
         with the net change in retained earnings for the current reporting 
         period.  At September 30, 1998, there was no difference 
         between net earnings and comprehensive income.  SFAS No. 131 
         modifies current segment reporting requirements and established 
         criteria for reported disclosures about a company's products and 
         services, geographic areas and major customers in annual and 
         interim financial statements.  The Company does not believe that 
         there will be significant reporting changes resulting from 
         adoption of SFAS No. 131.

NOTE 7.  INVOLUNTARY CONVERSION OF ASSETS
         --------------------------------
         During the first quarter of 1998, fire destroyed an acid recycling 
         system at one of the Company's galvanizing plants.  The acid 
         recycling system was covered by insurance for its current 
         replacement value.  As a result of the expected receipt of insurance 
         proceeds, the Company recorded a pre-tax gain of $309,000 for the 
         first quarter of 1998, and has purchased a new acid recovery system 
         for $410,000.  Installation of the new acid recovery system was 
         completed during the third quarter of 1998. 
 
NOTE 8.  COMMITMENTS AND CONTINGENCIES
         -----------------------------
         In 1995 the Company's galvanizing subsidiary participated  with the 
         United States Environmental Protection Agency ("EPA") in the removal
         of soil from a former galvanizing site in Philadelphia, PA sold in 
         1981.  In 1995, the Company was notified by the EPA that all 
         requirements relating to the performance of the Response Action Plan 
         had been completed.  Subsequently in November 1997, the Company was 
         advised by the EPA that it would seek recovery of response costs of 
         approximately $480,000 associated with the environmental cleanup 
         that had been performed at the former Philadelphia site.  On March 6, 
         1998, the Company was informed that the Department of Justice 
         ("DOJ") had filed a lawsuit naming North American Galvanizing 
         Company ("NAG") and Boyles Galvanizing Company (a former subsidiary 
         company merged into North American Galvanizing Company in 1997) 
         in a Comprehensive Environmental Response, Compensation, and 
         Liability Act ("CERCLA") Cost Recovery Action for approximately 
         $480,000, in connection with the cleanup of the Philadelphia site.  
         The Company had been holding discussions on the matter with DOJ, and 
         in May 1998, the parties reached an agreement to settle the EPA's 
         claims.  As a result, the Company recorded a charge to cost of sales
         of $158,000 for the quarter ended March 31, 1998 for the estimated 
         net impact of the settlement.  During the third quarter of 1998, the
         parties executed a Consent Decree that resolves all of the claims 
         brought by the EPA against NAG.

         NAG received notice on April 21, 1997 from the Illinois 
         Environmental Protection Agency ("IEPA") that it was a potentially 
         responsible party under the Comprehensive Environmental Response, 
         Compensation, and Liability Information System ("CERCLIS") in 
         connection with cleanup of an abandoned site formerly owned by 
         Sandoval Zinc Co.  Sandoval had operated a secondary zinc 
         smelter at the site until it closed in 1985.  The IEPA notice  
         includes NAG as one of 59 organizations which arranged for the 
         treatment and disposal of hazardous substances at Sandoval.  The 
         Company is in the process of determining the proportional share of 
         substances that NAG shipped to Sandoval, and does not believe based  
         on current information that the ultimate resolution of this matter 
         will have a material adverse impact on the Company's financial 
         position or results of operations.

         Various litigation matters arising in the ordinary course of 
         business are pending against the Company.

         Management believes that resolution of the Company's litigation and 
         environmental matters should not materially affect the Company's 
         consolidated financial position or liquidity.  Should future 
         developments cause the Company to record an additional liability
         for environmental evaluation or cleanup or litigation, the recording
         of such a liability could have a material impact on the results of 
         operations for the period involved.

         As previously reported, on April 13, 1998, the Company received 
         notice from the Internal Revenue Service that Rogers Galvanizing 
         Company and its subsidiaries ("Rogers") for the year ended 
         September 30, 1996 had been selected for examination.  The IRS 
         examination was completed during the second quarter of 1998, and the 
         resultant determination of a nominal tax assessment was paid by the 
         Company in the second quarter.  In 1997, Rogers was merged into NAG.

NOTE 9.  UNION CONTRACT
         --------------
         On July 18, 1998, NAG signed a new two-year labor agreement with the
         United Steelworkers covering approximately 125 production workers at
         three of its Tulsa plants.  The previous labor agreement had expired 
         in 1997 and had been extended, without modification, by mutual 
         agreement between the union and NAG.

NOTE 10. LOSS OF MAJOR CUSTOMERS
         -----------------------
         On July 1, 1998, NAG decided to discontinue galvanizing
         services to one of its largest customers which accounted for 
         approximately 7% of Kinark's consolidated 1997 sales and 8% of NAG's
         1997 sales.  This action was based on NAG's decision not to provide 
         galvanizing services to this customer who plans to compete directly 
         with NAG in the hot dip galvanizing market.

         In the third quarter of 1998, North American Warehousing Company's 
         largest customer terminated its account.  This account represented 
         approximately 5% of Kinark's 1997 consolidated sales and 55% of 
         NAW's 1997 sales.

NOTE 11. TREASURY STOCK
         --------------
         In July 1998, the Board of Directors authorized management to 
         repurchase up to $1,000,0000 of the Company's common stock in open 
         market transactions.  Shares repurchased by the Company will be 
         recorded as "Treasury Stock" and will result in a reduction of 
         "Stockholders' Equity."  As of September 30,1998, the Company had 
         not activated the stock repurchase program.





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

<TABLE>
RESULTS OF OPERATIONS

REVENUES
<CAPTION>
   Quarter Ended September 30          1998             1997
                                  ---------------  ---------------
                                            % of            % of
                                  $  (000)  Sales  $ (000)  Sales
                                   -------------------------------
<S>                               <C>       <C>     <C>     <C>
     Galvanizing                  $ 10,091   82.7%  $ 9,729  79.7%
     Chemical Storage                1,222   10.0%    1,431  11.7%
     Warehousing                       893    7.3%    1,046   8.6%
                                    ------   ----    ------  ---- 
     Total                        $ 12,206  100.0%  $12,206 100.0%
                                    ======  =====    ====== ===== 
</TABLE>
<TABLE>
<CAPTION>
   Nine Months Ended September 30       1998              1997
                                    --------------   --------------
                                             % of             % of
                                  $  (000)   Sales  $ (000)   Sales
                                   --------------------------------
<S>                               <C>       <C>     <C>      <C>
     Galvanizing                  $ 30,102   80.8%  $29,091   79.8%
     Chemical Storage                4,003   10.7%    4,282   11.7%
     Warehousing                     3,175    8.5%    3,092    8.5%
                                    ------   ----    ------   ---- 
     Total                        $ 37,280  100.0%  $36,465  100.0%
                                    ======  =====    ======  ===== 
</TABLE>
     Kinark's consolidated sales of $12,206,000 for the third quarter of 1998 
were even with sales reported for the same quarter in 1997.  Consolidated 
sales for the nine months ended September 30, 1998 increased 2.2% to 
$37,280,000 compared to $36,465,000 for the same period in 1997.  Kinark 
continues to focus its primary resources on opportunities to achieve 
significant, long-term growth in the hot dip galvanizing business.  During 
1998, higher sales contributed by the galvanizing subsidiary have increased to 
83% of the Company's total sales.  Concurrently, Kinark is evaluating certain 
strategic realignments at its chemical storage and warehousing subsidiaries to 
strengthen its competitive position and enhance the value of these businesses.

     NORTH AMERICAN GALVANIZING COMPANY ("NAG").   Galvanizing sales for the 
quarter and year-to-date increased 3.7% and 3.5%, respectively, over the same 
periods in 1997. Sustained improvement in average prices for hot dip 
galvanizing has resulted in higher sales for all periods of 1998.  Despite 
moderately lower tonnage throughput compared to 1997, NAG's galvanizing plants 
located in the central and southwestern regions are benefitting from a 
continued high level of construction in those areas.  In other areas served by 
NAG, production of galvanized specialty components for the transportation and 
highway sector is up 37% in the first nine months of 1998 compared to 1997.

     LAKE RIVER CORPORATION ("LAKE RIVER").   Chemical storage sales declined 
in both the third quarter and first nine months of 1998 compared to the same 
periods last year, as a result of lower activity in bulk liquid storage and 
custom drumming of chemicals.  Sales of $1,222,000 in the third quarter of 
1998 declined 14.6% from $1,431,000 in the third quarter of 1997.  For the 
first nine months of 1998, sales of $4,003,000 were down 6.5% from the 
$4,282,000 for the same period last year.  The slowing of bulk liquid storage 
throughput primarily reflects the continuing excess of tanks available in the 
greater-Chicago area.  The downturn in custom drumming, which began in the 
second quarter of 1998,  resulted from reduced orders for export shipment for 
a major account.

     NORTH AMERICAN WAREHOUSE COMPANY ("NAW").  For the third quarter of 1998 
warehousing sales decreased 14.6% to $893,000 compared to $1,046,000 for the 
prior year.  Year-to-date dales were $3,175,000, an increase of 2.7% over the 
$3,092,000 posted in the same period of 1997.  The downturn in warehousing 
revenue in the third quarter of 1998 resulted from the termination of NAW's 
largest account.  As previously reported, this account represented 
approximately 5% of Kinark's consolidated sales and 55% of NAW's annual 
sales.  Management is undertaking certain steps to realign its warehousing 
business and to partially offset the impact of the loss of this major account, 
including termination of excess leased warehouse space.

<TABLE>
COSTS AND EXPENSES
<CAPTION>
   Quarter Ended September 30             1998               1997
                                     --------------    ---------------
                                             % of                % of
                                    $  (000) Sales    $ (000)    Sales
                                     ---------------------------------
<S>                                 <C>      <C>      <C>       <C>
   Cost of sales                    $ 9,511   77.9%   $ 9,766    80.0%
   Selling, general &   
    administrative                    1,665   13.6%     1,547    12.7%
   Depreciation and amortization        779    6.4%       684     5.6%
                                     ------   ----     ------    ----
   Total                            $11,955   97.9%   $11,997    98.3%
                                     ======  =====     ======    ====
</TABLE>
<TABLE>
<CAPTION>
   Nine months Ended September 30         1998               1997
                                     --------------     --------------
                                              % of               % of
                                    $  (000)  Sales    $ (000)   Sales
                                     ---------------------------------
<S>                                 <C>      <C>       <C>       <C> 
   Cost of sales                    $28,382   76.2%    $28,630    78.6%
   Selling, general & 
    administrative                    5,065   13.6%      4,285    11.7%
   Depreciation and amortization      2,217    5.9%      2,007     5.5%
                                     ------   ----      ------    ----
   Total                            $35,664   95.7%    $34,922    95.8%
                                     ======   ====      ======    ====
</TABLE>
     
     Consolidated gross profit of $2,695,000 in the third quarter of 1998 
increased 10.5% over the $2,440,000 reported for the same quarter of 1997.  
Year-to-date, gross profit of $8,898,000 was up 13.6% from $7,835,000 in 
1997.  Gross profit as a percent of sales also improved in all periods of 1998 
compared to 1997.  For the third quarter of this year, gross profit was 22.1% 
of sales compared to 20.0% in 1997.  For the first nine months of this year, 
gross profit was 23.8% compared to 21.4% in 1997. 

     Galvanizing gross profit, in dollars and as a percent of sales, improved 
in both the third quarter and year-to-date, compared to the same periods for 
1997.  For the year-to-date 1998, NAG has improved profitability per ton over 
1997 through a combination of pricing and control of direct production costs.  
Underlying this year-to-year improvement in profitability, NAG's aggregate 
gross profit rate declined in the third quarter of 1998 compared to the first 
half of 1998.  This was due primarily to higher raw material costs and 
disrupted supplier deliveries incurred by NAG's specialty components 
subsidiary, Reinforcing Services, Inc.  The Company is evaluating alternate 
long-term sources of steel supply for this unit, which it expects will 
contribute to lower raw material costs and production stability during future 
periods.

     Following strong first-half 1998 performances, both the Chemical Storage 
and Warehousing units in Chicago reported a downturn in gross profit for the 
third quarter of 1998 on lower sales.  For the first nine months of 1998, 
gross profit for each of these units was well-above the same period of 1997, 
reflecting higher sales levels and profit contribution achieved during the 
first half of 1998. 

     Selling, general and administrative ("SG&A") expenses were $1,665,000, or 
13.6% of sales, in the third quarter of 1998 compared to $1,547,000, or 12.7%, 
in the same quarter of 1997. Year-to-date, SG&A is $5,065,000, or 13.9% of 
sales, compared to $4,285,000, or 11.8% of sales, in the same period of 1997.  
Increases in recruiting, travel and marketing were the principal reasons for 
the higher SG&A in 1998.

     Interest expense for the third quarter decreased from $189,000 last year 
to $159,000 in 1998.  Year-to-date interest expense decreased from $603,000 in 
1997 to $485,000 this year.  The decrease in interest expense in 1998 is due 
to lower average debt levels compared to 1997.
     
     In the first quarter of 1998, the Company reported other income of 
$309,000 from expected insurance proceeds covering the loss of an acid 
recycling system at one of its galvanizing plants.  

     The Company's effective income tax rates for the first nine months of 
1998 and 1997 were 46.2% and 42.9%, respectively, and reflect the 
non-deductible amortization of goodwill. 


     The above operating factors and business conditions affecting Kinark's 
diverse operations resulted in higher net earnings in 1998 compared to 1997.  
Net earnings for the third quarter of 1998 were $52,000 versus $2,000 in the 
same period a year ago.  For the first nine months of 1998, net earnings were 
$775,000 versus $537,000 in 1997.  Diluted earnings per share were $.01 and no 
cents for the third quarter of 1998 and 1997, respectively and $.11 and $.08 
for the first nine months of 1998 and 1997, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash provided by operating activities was $2,261,000 for the first 
nine months of 1998 compared to $4,222,000 for the same period of 1997. The 
decrease in net cash provided by operations for the first nine months of 1998, 
compared to 1997, was due to increases in trade accounts receivable and 
inventory, and lower additions to accounts payable.  These changes primarily 
reflected higher sales in 1998 and zinc inventory expenditures for added 
kettle capacity and replenishment of floor stock.  Net working capital on 
September 30, 1998 was $6,614,000 versus $6,164,000 at December 31, 1997.

     Capital expenditures for plant and operating equipment were $2,493,000 
for the first nine months of 1998 compared to $2,340,000 for the same period 
last year.  The galvanizing operation accounted for 84% of the capital 
expenditures to date in 1988.  Depreciation and amortization was $2,217,000 
for the first nine months of 1998 compared to $2,007,000 for the same period 
in 1997. 

     The Company has a revolving line of credit of $8,500,000 and an advancing 
term loan of $1,250,000, of which approximately $2,400,000 was available at 
September 30, 1998.  As discussed in Note 5 to the Company's Condensed 
Consolidated Financial Statements, the Company entered into a two-year bank 
credit agreement in 1997, which provides a $8,500,000 revolving line of 
credit, a $1,250,000 advancing term loan and a $3,500,000 term loan.  In June 
1998, the bank extended the expiration date of this credit agreement to May 1, 
2000, with all other terms and conditions remaining the same.

     The Company believes that it has the ability to continue to generate cash 
from operations and has available borrowing capacity to meet its foreseeable 
needs for working capital and planned capital expenditures.


ENVIRONMENTAL MATTERS

     As previously reported in 1995, the Company's Boyles Galvanizing 
subsidiary participated in the final clean-up of a former galvanizing plant 
site in Philadelphia, Pennsylvania (the "Philadelphia site") and received 
notification from the EPA that it had demonstrated to the satisfaction of the 
EPA that all requirements relating to the performance of the Response Action 
Plan had been completed.  Cleanup of this site consisted primarily of soil 
removal at a cost of approximately $85,000 to Boyles, at that time.

     In November of 1997, the EPA informed the Company that it would seek to 
recover from the Company its costs associated with the 1995 cleanup of the 
Philadelphia site, in the amount of $480,000.  On March 6, 1998, the Company 
was informed that the Department of Justice ("DOJ") had filed a lawsuit naming 
NAG and Boyles (a former subsidiary company merged into NAG in 1997) in a 
CERCLA Cost Recovery Action for approximately $480,000, in connection with the 
cleanup of the Philadelphia site.  The Company had been holding discussions on 
the matter with DOJ, and in May 1998, the parties reached an agreement to 
settle the EPA's claims.  As a result, the Company recorded a pre-tax charge 
of $158,000 against earnings for the quarter ended March 31, 1998 for the 
estimated net impact of the settlement. During the third quarter of 1998, the 
parties executed a Consent Decree that resolves all of the claims brought by 
the EPA against NAG.

     NAG received notice on April 21, 1997 from the Illinois Environmental 
Protection Agency ("IEPA") that it was a potentially responsible party under 
CERCLIS in connection with cleanup of an abandoned site formerly owned by 
Sandoval Zinc Co.  Sandoval had operated a secondary zinc smelter at the site 
until it closed in 1985.  The IEPA notice includes NAG as one of 59 
organizations which arranged for the treatment and disposal of hazardous 
substances at Sandoval.  The Company is in the process of determining the 
proportional share of substances that NAG shipped to Sandoval, and does not 
believe based on current information that the ultimate resolution of this 
matter will have a material impact on the Company's financial position or 
results of operations.

     The Company's facilities are subject to extensive environmental 
legislation and regulations affecting their operations and the discharge of 
wastes.  NAG's cost of compliance with such regulations in the first nine 
months of 1998 and 1997 were $601,000 and $664,000, respectively, with the 
disposal and recycling of waste acids generated by the galvanizing operations 
representing a major expenditure in this area.  

     Environmentally related expenditures at Lake River represent a relatively 
small percentage of the Company's total costs.  The majority of waste disposal 
costs at Lake River are incurred on behalf of customers and are reimbursable.  
Lake River does not take title to the chemicals stored, blended, drummed or 
bagged in its facilities and thus is responsible only for the proper handling 
of these materials while under its care, custody, and control.  As previously 
reported, Kinark has escrowed proceeds from the sale of the assets of Kinpak, 
Inc. (a former subsidiary sold in 1996) for possible environmental 
remediation.

     The Company is committed to complying with all federal, state and local 
environmental laws and regulations and using its best management practices to 
anticipate and satisfy future requirements.  As is typical in the galvanizing 
and chemicals businesses, the Company will have additional environmental 
compliance costs associated with past, present, and future operations. 
Management has committed resources to discovering and eliminating 
environmental issues as they arise.  Because of the frequent changes in 
environmental technology, laws and regulations management cannot reasonably 
attempt to quantify the Company's potential costs in this area.  However, such 
costs are expected to increase above their current levels as discussed above.

CURRENT DEVELOPMENTS - YEAR 2000 ISSUES

     STATE OF READINESS.  Like many companies that rely on computer 
technology, Kinark Corporation is preparing for the year 2000 by taking steps 
to insure that its computers can recognize and use years after 1999 correctly. 
If such a situation were to exist and not be corrected, Year 2000 errors could 
affect Kinark's ability to invoice customers and pay vendors in a timely 
manner and to maintain accurate financial records.  Kinark has been working on 
the resolution of Year 2000 issues since 1996.  Kinark has determined that its 
primary computer systems serving the corporate headquarters and its 
galvanizing operations are structured to accommodate the Year 2000 and beyond, 
and the operation of these systems will not be affected by the millennium 
change.  Galvanizing contributes approximately 83% of Kinark's consolidated 
sales.  Computer systems serving Kinark's chemical storage and warehousing 
operations are not Year 2000 compliant and these systems are scheduled to be 
renovated during the first half of 1999.

     COST OF ADDRESSING YEAR 2000 ISSUES.  Kinark's cost to date of addressing 
Year 2000 issues is approximately $120,000, and the on-going assessment and 
resolution of such issues should not exceed an additional $100,000.  Future 
expenditures to make Kinark's computer systems Year 2000 compliant are not 
expected to have, a material impact on the results of the Company's 
operations, liquidity, and capital resources.

     RISKS OF YEAR 2000 ISSUES.  Kinark has not fully determined the state of 
Year 2000 compliance by its key suppliers of zinc, the primary commodity 
required for its hot dip galvanizing operations.  Kinark historically has not 
relied on a sole-source supply for its zinc requirements and expects to 
continue that practice.  Going forward, Kinark will be monitoring the progress 
of its key vendors, as well as its major customers and service providers in 
addressing their Year 2000 issues, and expects this assessment to be completed 
by June 1999.  An assessment of the "most reasonably likely worst case Year 
2000 scenarios" for Kinark would consider (a) the failure of the Company's 
computer systems and (b) disruption of production operations due to computer 
failures encountered by a customer or supplier.  With respect to failure of 
the Company's computers, the worst case impact would be the additional cost to 
manually process daily business operations and attendant delays in completing 
those operations.  Kinark does not believe such additional costs would have a 
material impact on its operations.  With respect to a disruption of Kinark's 
production operations due to a customer's or supplier's failure to be Year 
2000 compliant, the extent of such disruption is not reasonably estimable.  Kina
rk's operations are conducted in widely-disbursed facilities, serving more 
than 1,500 commercial and industrial accounts, and the Company believes this 
diversity of its operations will help mitigate the risk of a customer's or 
supplier's Year 2000 failure.

     CONTINGENCY PLANS.  Kinark expects to establish a contingency plan to 
handle "the most reasonably likely worst case scenarios" as discussed above.  
The anticipated date for completing the contingency plan is  April 1999, and 
will involve independent verification by information technology consultants 
and computer service providers.




QUANTITATIVE AND QUALITATIVE 
DISCLOSURES ABOUT MARKET RISKS


     Not Applicable.






PART II

OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS
        -----------------
        Not applicable.
     
ITEM 2. CHANGES IN SECURITIES
        ---------------------
        Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
        -------------------------------
        Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        ---------------------------------------------------
        Not applicable.

ITEM 5. OTHER INFORMATION
        -----------------
        Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
        --------------------------------
        (a) Exhibits

            3.1 The Company's Restated Certificate of Incorporation 
                (incorporated by reference to Exhibit 3.1 to the Company's 
                Pre-Effective Amendment No. 1 to Registration Statement on 
                Form S-3 (Reg. No. 333-4937) filed on June 7, 1996).

            3.2 The Company's Amended and Restated Bylaws (incorporated by 
                reference to Exhibit 3.2 to the Company's Quarterly Report 
                on Form 10-Q dated March 31, 1996).

            27  Financial Data Schedule

            99  Cautionary Statements by the Company Related to 
                Forward-Looking Statements

        (b) Reports on Form 8-K

            The Company did not file any reports on Form 8-K during the 
            quarter ended September 30, 1998.




                                  EXHIBIT INDEX


Ex. No.   Description

3.1       The Company's Restated Certificate of Incorporation incorporated by
          reference to Exhibit 3.1 to the Company's Pre-Effective Amendment 
          No. 1 to Registration Statement on Form S-3 (Reg. No. 333-4937) 
          filed on June 7, 1996).

3.2       The Company's Amended and Restated Bylaws (incorporated by 
          reference to Exhibit 3.2 to the Company's Quarterly 
          Report on Form 10-Q dated March 31, 1996).

27        Financial Data Schedule.

99        Cautionary Statements by the Company Related to 
          Forward-Looking Statements.





SIGNATURES

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



                                      KINARK CORPORATION      
                                ------------------------------
                                          Registrant
 


                                      /s/Paul R. Chastain 
                                ------------------------------
                                       Paul R. Chastain
                                      Vice President and
                                    Chief Financial Officer
                                 (Principal Financial Officer)


Date:   November 10, 1998
       ------------------




EXHIBIT 99

CAUTIONARY STATEMENTS BY THE COMPANY REGARDING 
     FORWARD LOOKING STATEMENTS


     Certain statements in this Form 10-Q, including information set forth 
under the caption "Management's Discussion and Analysis of Financial Condition 
and Results of Operations", constitute "forward-looking statements" within the 
meaning of Section 27A of the Securities Act of 1933, as amended and Section 
21E of the Securities Exchange Act of 1934, as amended (together, the 
"Securities Acts").  The Securities Acts provide certain "safe harbor" 
provisions for forward-looking statements.  The Company desires to take 
advantage of the "safe harbor" provisions of the Securities Acts and is 
including these cautionary statements ("Cautionary Statements") pursuant to 
the Provisions of the Securities Acts with the intention of obtaining the 
benefits of the "safe harbor" provisions.  In order to comply with the terms 
of the "safe harbor" in the Securities Acts, the Company cautions investors 
that forward-looking statements included in this Form 10-Q, or hereafter 
included in other publicly available documents filed with the Securities and 
Exchange Commission, reports to the Company's stockholders and other publicly 
available statements issued or released by the Company involve substantial 
risks, uncertainties, and other factors which could cause the Company's actual 
results, performance (financial or operating) or achievements to differ 
materially from the future results, performance (financial or operating) or 
achievements expressed or implied by such forward-looking statements.  The 
Company believes the following important factors could cause such a material 
difference to occur:

1.  The Company's ability to grow through the acquisition and development of 
    galvanizing, chemical storage and warehousing operations or the 
    acquisition of ancillary businesses.

2.  The Company's ability to identify suitable acquisition candidates, to 
    consummate or complete construction projects, or to profitably operate or 
    successfully integrate enterprises into the  Company's other operations.

3.  The Company's ability to secure the capital and the related cost of such 
    capital necessary to fund its future growth through acquisition and 
    development, as well as internal growth.

4.  The level of competition in the Company's industries and the possible 
    entry of new, well-capitalized competitors into the Company's markets.

5.  Uncertainties and changes in environmental compliance costs associated 
    with past, present and future operations.

6.  Uncertainties and changes related to federal, state and local regulatory 
    policies, including environmental laws related to the galvanizing, 
    chemicals and warehousing industries.

7.  The Company's ability to staff its galvanizing, chemical storage and 
    warehousing operations appropriately with qualified personnel, including 
    in times of shortages of such personnel and to maintain a satisfactory 
    relationship with labor unions.

8.  The pricing and availability of equipment, materials and inventories, 
    including zinc "pigs", the major component used in the hot dip galvanizing 
    industry. 

9.  Uncertainties and changes in general economic conditions.

10. Uncertainties and changes in several industries to which the company's 
    businesses are closely tied, such as highway and transportation, 
    communications and energy.

11. Performance issues with key suppliers and subcontractors.

12. Uncertainties related to the retention of key customers in each of the 
    Company's business segments.

13. Uncertainties regarding the effect of Year 2000 issues on suppliers and 
    service providers in each of the Company's business segments.

The words "believe," "expect," "anticipate," "project," "plan" and similar 
expressions identify forward-looking statements.  Investors are cautioned not 
to place undue reliance on these forward-looking statements, which speak only 
as of the date the statement was made.

The foregoing review of significant factors should not be construed as 
exhaustive or as an admission regarding the adequacy of disclosures previously 
made by the Company.