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



                       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 JUNE 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 June 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 June 30, 1998 (unaudited), and
               December 31, 1997                                         4

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

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

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

     Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations                                              11-15

     Item 3.   Quantitative and Qualitative Disclosures
               About Market Risks                                        16

PART II.   OTHER INFORMATION                                            17-18

SIGNATURES                                                               19
</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 the Private Securities Litigation Reform Act of 1995.  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 (the "Company") and subsidiaries as of June 30, 1998, and 
the related condensed consolidated statements of earnings for the three and 
six-month periods ended June 30, 1998 and 1997, and the condensed consolidated
statements of cash flows for the six months ended June 30, 1998 and 1997. 
These financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the 
American Institute of Certified Public Accountants.  A review of interim 
financial information consists principally of applying analytical procedures 
to financial data and 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 reviews, 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
August 14, 1998



<TABLE>
                        KINARK CORPORATION AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                              Unaudited
                                               JUNE 30          Dec 31
(Dollars in Thousands)                           1998            1997  
-------------------------------------------------------------------------------
<S>                                           <C>            <C>
ASSETS     
Cash                                          $     304      $      259 
Trade receivables, net                            7,400           7,094 
Inventories                                       4,469           3,503 
Prepaid expenses and other assets                   727             360 
Deferred tax asset, net                             717             717 
                                                 ------          ------
   TOTAL CURRENT ASSETS                          13,617          11,933 
                                                 ------          ------
PROPERTY, PLANT AND EQUIPMENT, AT COST
Land                                                707             707 
Chemical storage facilities and 
   warehousing equipment                         11,369          11,253 
Galvanizing plants and equipment                 21,667          20,793 
Other                                               314             336
                                                 ------          ------ 
                                                 34,057          33,089 
     Less:  Allowance for depreciation           19,057          18,199
                                                 ------          ------ 
       TOTAL PROPERTY, PLANT & EQUIPMENT, NET    15,000          14,890 
                                                 ------          ------
DEFERRED TAX ASSET, NET                             450             667 
GOODWILL, NET                                     3,921           4,009 
OTHER ASSETS                                        485             456 
                                                 ------          ------
           TOTAL ASSETS                        $ 33,473        $ 31,955 
                                                 ======          ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable                         $  2,014        $  1,672 
Accrued payroll and employee benefits             1,479           1,176 
Other taxes                                       1,122             818 
Other accrued liabilities                         1,181           1,187 
Current maturities of long-term obligations         919             916
                                                 ------          ------ 
   TOTAL CURRENT LIABILITIES                      6,715           5,769 
                                                 ------          ------
PENSION AND RELATED LIABILITIES                     846             928 
LONG-TERM OBLIGATIONS                             8,062           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                                 5,676           4,953 
Less:  Treasury stock at cost                    (5,812)         (5,812)
                                                 ------          ------
  TOTAL STOCKHOLDERS' EQUITY                     17,850          17,127 
                                                 ------          ------
      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 33,473        $ 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     Six Months Ended
                                           June 30               June 30
                                     ------------------     ----------------
(Dollars in Thousands 
   Except per Share Amounts)            1998     1997         1998     1997
-------------------------------------------------------------------------------
<S>                                   <C>      <C>          <C>      <C>
SALES                                 $12,910  $12,535      $25,074  $24,259  

COSTS AND EXPENSES
     Cost of sales                      9,516    9,697       18,871   18,864 
     Selling, general & administrative  1,755    1,452        3,400    2,738 
     Depreciation and amortization        737      691        1,438    1,323 
                                       ------   ------       ------   ------
       TOTAL COSTS AND EXPENSES        12,008   11,840       23,709   22,925 
                                       ------   ------       ------   ------
OPERATING EARNINGS                        902       69        1,365    1,334 

OTHER (INCOME) EXPENSE
     Interest expense, net                150      211          326      414 
     Other income                         ---      ---         (309)     --- 
                                       ------   ------       ------   ------
        TOTAL OTHER (INCOME) EXPENSE      150      211           17      414 

EARNINGS BEFORE INCOME TAXES              752      484        1,348      920 

     Income tax expense                   369      201          625      385 
                                       ------   ------       ------   ------
NET EARNINGS                          $   383  $   283      $   723  $   535
                                       ======   ======       ======   ======

BASIC EARNINGS PER COMMON SHARE       $   .06  $   .04      $   .11  $  0.08

DILUTED EARNINGS PER COMMON SHARE     $   .06  $   .04      $   .11  $  0.08
</TABLE>     
See notes to condensed consolidated financial statements.



<TABLE>
                       KINARK CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  Unaudited
<CAPTION>
                                                   Six Months Ended            
                                                       June 30
                                                  -----------------
(Dollars in Thousands)                            1998           1997
-------------------------------------------------------------------------------
<S>                                            <C>            <C>
OPERATING ACTIVITIES
Net Earnings                                   $     723      $     535 
Adjustments to reconcile net earnings to 
net cash provided by operating activities:
  Depreciation and amortization                    1,438          1,323 
  Gain on involuntary conversion of assets          (309)           ---
  Loss on sale of assets                              10            --- 
  Deferred income taxes                              217            355 
  Change in assets and liabilities:
    Accounts receivable                             (306)           (98)
    Inventories and other                         (1,362)           235 
    Accounts payable, accrued liabilities 
      and other                                      861            134
                                                  ------         ------ 
NET CASH PROVIDED BY OPERATING ACTIVITIES          1,272          2,484 

INVESTING ACTIVITIES
  Capital expenditures                            (1,490)        (1,762)
  Proceeds from involuntary conversion of assets     325            ---
  Proceeds from sale of assets                         4            ---  
  Acquisition of galvanizing business                ---         (2,236)
                                                  ------         ------
  NET CASH USED FOR INVESTING ACTIVITIES          (1,161)        (3,998)     
                                                  ------         ------
FINANCING ACTIVITIES
  Proceeds from sale of common stock                 ---              2 
  Proceeds from long-term obligations              9,024          9,286 
  Payments on long-term obligations               (9,090)         (9,297)
                                                  ------         ------
  NET CASH USED FOR FINANCING ACTIVITIES             (66)            (9)
                                                  ------         ------
INCREASE (DECREASE) IN CASH                           45         (1,523)
CASH AT BEGINNING OF PERIOD                          259          2,041
                                                  ------         ------ 
CASH AT END OF PERIOD                            $   304        $   518 
                                                  ======         ======
</TABLE>
See notes to condensed consolidated financial statements.




                          KINARK CORPORATION AND SUBSIDIARIES
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE THREE AND SIX MONTHS ENDED JUNE 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 
         6,816,689 and 6,795,601 for the three months ended June 30, 1998 and
         1997 respectively, and 6,810,677 and 6,797,321 for the six months 
         ended June 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.  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 the credit facility and 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 agreement, and 
         the agreement is secured by a guaranty from each of the Company's 
         subsidiaries.  Amounts borrowed under the agreement bear interest at
         prime 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 limits. The term loan and advancing term
         loan may be pre-paid without penalty.  The 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 
         such covenants at June 30, 1998.

NOTE 5.  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 June 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 6.  INVOLUNTARY CONVERSION OF ASSETS
         --------------------------------
         During the first quarter of 1998, fire destroyed an acid recycling 
         system at one of the Company's galvanizing plants.  Production at 
         the facility was not significantly affected by the incident and no 
         personal injuries were sustained.  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 is scheduled for completion during the
         third quarter of 1998. 
 
NOTE 7.  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
         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. The parties are now in the process of 
         drafting a Consent Decree to finalize agreement on the terms and 
         conditions of that decree, and expect to file the Consent Decree 
         with the U.S. District Court in the third quarter of 1998.

         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, 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 8.  UNION CONTRACTS
         ---------------
         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 9.  LOSS OF MAJOR GALVANIZING CUSTOMER
         ----------------------------------
         On July 1, 1998, NAG decided to discontinue galvanizing services to 
         one of its largest customers which accounted for approximately 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.

NOTE 10. 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 
         private or 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 August 12, 1998, the 
         Company has not repurchased any of its common stock, under this 
         program.



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

<TABLE>
RESULTS OF OPERATIONS

REVENUES
<CAPTION>
     Quarter Ended June 30             1998                   1997            
                               ------------------      -----------------
                                             % of                    % of
                              $   (000)     Sales     $   (000)     Sales
                               ------------------------------------------
<S>                           <C>          <C>        <C>          <C> 
          Galvanizing         $ 10,387      80.5%     $ 10,022      79.9%
          Chemical Storage       1,358      10.5%        1,440      11.5%
          Warehousing            1,165       9.0%        1,073       8.6%
                               -------     -----       -------     -----
          Total               $ 12,910     100.0%     $ 12,535     100.0%
                               =======     =====       =======     =====
</TABLE>
<TABLE>
<CAPTION>
     Six Months Ended June 30          1998                    1997        
                               ------------------      ------------------
                                             % of                    % of
                              $   (000)     Sales     $   (000)     Sales
                               ------------------------------------------
<S>                           <C>         <C>         <C>          <C> 
          Galvanizing         $ 20,011     79.8%      $ 19,362      79.8%
          Chemical Storage       2,781     11.1%         2,852      11.8%
          Warehousing            2,282      9.1%         2,045       8.4%
                                ------    -----         ------     -----
          Total               $ 25,074    100.0%      $ 24,259     100.0%
                               =======    =====        =======     =====
</TABLE>

        Kinark's consolidated sales for the second quarter of 1998 were 
     $12,910,000, an increase of  3.0% from the $12,535,000 for the same 
     quarter in 1997.  Consolidated sales for the first six months of 1998 
     were also higher than the comparable period in 1997, increasing 3.4% to 
     $25,074,000 compared to $24,259,000 in 1997.

        NORTH AMERICAN GALVANIZING COMPANY ("NAG").  Galvanizing sales for the 
     quarter and year-to-date increased 3.6% and 3.4%, respectively, over the
     same periods in 1997.  Despite lower order volume from manufacturers of 
     communications towers, sales increases reflected continued strength in 
     the central and southwestern markets served by NAG's galvanizing 
     facilities in Texas, Oklahoma and Missouri.  NAG also benefitted from 
     higher activity in the transportation and highway sector resulting in 
     sales increases in the second quarter and year-to-date above last year's
     levels. 

        LAKE RIVER CORPORATION ("LAKE RIVER").   Sales declined in both the 
     second quarter and first six 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 $1,358,000 in the second quarter
     of 1998 declined 5.7% from $1,440,000 in the second quarter of 1997.  
     For the first six months of 1998, sales of $2,781,000 were down 2.5% 
     from the $2,852,000 for the same period last year.  The slowing of bulk 
     liquid storage throughput primarily reflects an excess of tanks 
     available in the greater-Chicago area.  The downturn in custom drumming 
     in the second quarter of 1998 resulted from reduced orders from a major 
     account.

        NORTH AMERICAN WAREHOUSE COMPANY ("NAW").   For the second quarter of 
     1998 warehousing sales increased 8.6% to $1,165,000 compared to 
     $1,073,000 in the prior year.  Year-to-date sales were $2,282,000, an 
     increase of 11.6% over the $2,045,000 posted in the first half of 1997. 
     As previously reported, NAW's business will be impacted in the last half
     of 1998 due to the loss of its largest customer.  In 1997, this 
     customer's account represented 4.7% of the Company's consolidated sales 
     and 55% of NAW's sales.  The loss of this account reflects a decision by
     the customer to realign its distribution network.  NAW will not renew a 
     warehouse lease scheduled to expire August 31, 1998 as part of its 
     planned cost reduction measures to partially offset the loss of this 
     major account.     

<TABLE>
COSTS AND EXPENSES
<CAPTION>
     Quarter Ended June 30                   1998                1997
                                      ----------------     ----------------
                                                   % of                 % of
                                     $  (000)     Sales   $  (000)     Sales
                                      -------------------------------------
<S>                                  <C>          <C>     <C>          <C>
     Cost of sales                   $ 9,516      73.7%   $ 9,697      77.4%
     Selling, general & 
      administrative                   1,755      13.6%     1,452      11.6%
     Depreciation and amortization       737       5.7%       691       5.5%
                                      ------      ----     ------      ----
     Total                           $12,008      93.0%   $11,840      94.5%
                                      ======      ====     ======      ====
</TABLE>
<TABLE>
<CAPTION>
     Six Months Ended June 30                1998                 1997
                                      -----------------    ----------------
                                                   % of                 % of
                                     $  (000)     Sales   $  (000)     Sales
                                      --------------------------------------
<S>                                  <C>          <C>     <C>          <C>
     Cost of sales                   $18,871      75.3%   $18,864      77.7%
     Selling, general & 
      administrative                   3,400      13.6%     2,738      11.3%
     Depreciation and amortization     1,438       5.7%     1,323       5.5%
                                      ------      ----     ------      ----
     Total                           $23,709      94.6%   $22,925      94.5%
                                      ======      ====     ======      ====
</TABLE>
     
     Consolidated gross profit of $3,394,000 in the second quarter of 1998 
increased 19.6% over the $2,838,000 reported for the same quarter of 1997.  
Year-to-date, gross profit of $6,203,000 was up 15.0% from $5,395,000 in 
1997.  Gross profit as a percent of sales also improved in all periods of 1998 
compared to 1997.  For the second quarter of this year, gross profit was 26.3% 
of sales compared to 22.6% in 1997.  For the first half of this year, gross 
profit was 24.7% compared to 22.2% in 1997.  Every subsidiary reported 
increases in gross profit and profit margins for the second quarter and first 
half of 1998 compared to the same periods in 1997.  At NAG's multi-plant 
operation, the net improvement in gross profit primarily resulted from higher
sales volume at its larger facilities and improved pricing levels at 
virtually every facility.  Despite lower sales in 1998, Lake River generated 
increased gross profit over 1997 as a result of reductions in the labor force,
real estate taxes and other controllable costs.  NAW reported an increase in 
gross profit as a result of increased sales and improved space utilization.

     Selling, general and administrative ("SG&A") expenses increased to 
$1,755,000, or 13.6% of sales, in the second quarter of 1998 from $1,452,000, 
or 11.6%, in the second quarter of 1997.  SG&A also increased year-to-date to 
$3,400,000, or 13.6% of sales, from $2,738,000, or 11.3% 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 second quarter decreased from $211,000 last year 
to $150,000 in 1998.  Year-to-date interest expense decreased from $414,000 in 
1997 to $326,000 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.  Production at the facility 
was not significantly affected by the incident and the Company is proceeding 
to replace the lost system.

     The Company's effective income tax rates for the first two quarters of 
1998 and 1997 were 46.4% and 41.8%, respectively.  Goodwill amortization and 
state income taxes resulted in an effective income tax rate greater than the 
statutory rate.

     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 second quarter of 1998 were $383,000 versus $283,000 in 
the same period a year ago.  For the first six months of 1998, net earnings 
were $723,000 versus $535,000 in 1997.  Diluted earnings per share were $.06 
and $.04 for the second quarter of 1998 and 1997, respectively and $.11 and 
$.08 for the first six months of 1998 and 1997, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash provided by operating activities was $1,272,000 for the first 
six months of 1998 compared to $2,484,000 for the same period of 1997.  During 
the first six months of 1998, zinc inventory expenditures for added kettle 
capacity and replenishment of floor stock primarily accounted for the net 
change in cash provided from operations compared to 1997.  Net working 
capital on June 30, 1998 was $6,902,000 versus $6,164,000 at December 31, 1997.

     Capital expenditures for plant and operating equipment were $1,490,000 
for the first six months of 1998 compared to $1,762,000 for the same period 
last year.  The galvanizing operation accounted for 89% of the capital 
expenditures this year.  Depreciation and amortization was $1,438,000 for the 
first six months of 1998 compared to $1,323,000 in the first half of 1997. 

     The Company has an available line of credit of $8,500,000 and an 
advancing term loan of $1,250,000, of which approximately $5,075,000 was 
unused at June 30, 1998.  As discussed in Note 4 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 agreement to May 1, 2000, 
with the credit facility and 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, Boyles 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.

     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.  The parties are now in 
the process of drafting a Consent Decree to finalize agreement on the terms 
and conditions of that decree, and expect to file the Consent Decree with the 
U. S. District Court in the third quarter of 1998.

     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 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.  The cost of compliance with such regulations during 1997 approximated 
$1,000,000 with the disposal and recycling of waste acids generated by the 
galvanizing operations representing the major expenditure in this area.  
Comparable expenditures for the first six months of 1998 were approximately 
$488,000. The Company operates on-site sulphuric acid recovery systems at 
three of its galvanizing plants.  Recovered acid is returned to production, 
thereby eliminating the substantial expense associated with the alternative of 
waste treatment and removal to an off-site location.  The recovery process 
generates a non-hazardous dry ferrous sulphate crystal by-product which the 
Company sells commercially.  

     The Company's other galvanizing plants use hydrochloric acid, which 
requires the off-site disposal of waste acids.  Due to the increasing cost of 
waste disposal and decreasing availability of approved disposal methods, 
alternative waste hydrochloric acid recycling methods have been evaluated over 
recent years.  While it appears that the technology for an economically 
feasible system is available, no proven system for the recycling of 
hydrochloric acid used in hot dip galvanizing is currently on the market.  
Hydrochloric acid recycling systems will be further evaluated as new systems 
become available.  Future capital expenditures in this area are expected to 
increase, but such expenditures should significantly reduce waste acid 
disposal expense.

     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 some 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

     The Company has determined that its primary computer systems are 
structured to accommodate the Year 2000 and beyond, and the operation of these 
systems will not be affected by the upcoming change in the millennium.  The 
Company's operations are highly dependent on the reliable performance of its 
computer-based information, control and accounting systems.  For this reason, 
during 1997 Kinark undertook a review of its company-wide computer support 
facilities to assess the extent of Year 2000 issues, if any.  Going forward, 
in addition to monitoring the Year 2000 compliance readiness of its own 
computer systems, the Company will continue to assess the compliance readiness 
of its major customers, key suppliers and service providers.  The Company 
believes that the cost of this ongoing assessment should not exceed $100,000 
and will not have a material impact on the results of its operations, 
liquidity, and capital resources.        



                          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
         ---------------------------------------------------
         The 1998 Annual Meeting of the Company's stockholders was held on 
         Wednesday, May 8, 1998 in New York City, NY.  At the meeting, the 
         stockholders elected seven directors.

         The votes for the election of directors were as follows:
         Richard C. Butler                       6,152,693 For
                                                    99,315 Against

         Paul R. Chastain                        6,145,368 For
                                                   106,640 Against

         Michael T. Crimmins                     6,129,008 For
                                                   123,000 Against
        
         Ronald J. Evans                         6,131,108 For
                                                   120,900 Against

         Joseph J. Morrow                        6,152,108 For
                                                    99,900 Against

         John H. Sununu                          6,154,858 For
                                                    97,150 Against

         Mark E. Walker                          6,155,993 For
                                                    96,015 Against

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 June 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 Satement 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:   August 14, 1998