<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

         For the Quarterly Period Ended September 30, 1999 or

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

         For the Transition Period from ______to______

                         Commission file number: 0-20758

                             HA-LO INDUSTRIES, INC.
                             ----------------------
             (Exact name of registrant as specified in its charter)

          Illinois                               36-3573412
          --------                               ----------
(State or other jurisdiction of                 (IRS Employer
 incorporation or organization)               Identification No.)


                    5980 TOUHY AVENUE, NILES, ILLINOIS 60714
                    ----------------------------------------
               (Address of principal executive offices, Zip Code)


Registrant's telephone number, including area code: (847)647-2300

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes[X] No[ ].

As of October 31, 1999, the registrant had an aggregate of 48,718,186 shares of
its common stock outstanding.



<PAGE>

                             HA-LO INDUSTRIES, INC.
                                    INDEX

<TABLE>
<CAPTION>
Part I.    FINANCIAL INFORMATION                                          Page Number
                                                                          -----------
<S>        <C>                                                            <C>
           Item 1. Financial Statements.

           Consolidated Balance Sheets as of September 30, 1999 and
           December 31, 1998.                                                   2

           Consolidated Statements of Operations for the three months
           and nine months ended September 30, 1999 and 1998.                   3

           Consolidated Statements of Cash Flows for the nine months
           ended September 30, 1999 and 1998.                                   4

           Notes to Financial Statements.                                       5

           Item 2. Management's Discussion and
                   Analysis of Financial Condition
                   and Results of Operations.                                   8

PART II.   OTHER INFORMATION

           Item 4. Submission of Matters to a Vote
                   of Security Holders.                                        13

           Item 6. Exhibits and Reports on Form 8-K.                           13

Signatures                                                                     14
</TABLE>

                                       1

<PAGE>

PART 1. FINANCIAL INFORMATION

                             HA-LO INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1999 AND DECEMBER 31, 1998


<TABLE>
<CAPTION>

                                                         September 30,      December 31,
(in thousands, except share amounts)                          1999             1998
                                                         ---------------    -------------
                                                          (Unaudited)
<S>                                                      <C>                 <C>
                            ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                $  14,028           $   7,276
  Short term investments                                         845              50,922
  Receivables                                                176,359             168,806
  Inventories                                                 37,650              29,637
  Prepaid expenses & deposits                                 12,984              15,139
                                                          -----------         ------------
     Total current assets                                    241,866             271,780
                                                          -----------         ------------

PROPERTY AND EQUIPMENT, net                                   37,218              42,225

                                                          -----------         ------------
OTHER ASSETS:
  Intangible assets, net                                      69,091              26,621
  Other                                                        6,441               6,391
                                                          -----------         ------------
     Total other assets                                       75,532              33,012
                                                          -----------         ------------
                                                           $ 354,616           $ 347,017
                                                          ===========         ============

             LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt                     $   1,681           $   3,423
  Book overdraft                                                 801                 287
  Accounts payable                                            52,521              63,591
  Accrued expenses
     Other                                                    34,802              41,528
     Restructuring                                             9,459                   -
  Due to related parties                                           -                 200
                                                          -----------         ------------
    Total current liabilities                                 99,264             109,029
                                                          -----------         ------------

LONG-TERM DEBT                                                 5,900                   -
ACCRUED RESTRUCTURING EXPENSES                                12,530                   -
DEFERRED LIABILITIES                                           3,208               2,497

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Preferred stock, no par value; 10,000,000
  shares authorized and none issued                                -                   -
Common stock, no par value; 100,000,000
  shares authorized and 48,696,940 issued
  and outstanding in 1999 and 47,780,742 in 1998             213,936             198,228
Other                                                         (4,462)             (2,508)
Retained earnings                                             24,240              39,771
                                                          -----------         ------------
  Total shareholders' equity                                 233,714             235,491
                                                          -----------         ------------
                                                           $ 354,616           $ 347,017
                                                          ===========         ============
</TABLE>

      The accompanying notes are an integral part of these balance sheets.

                                        2

<PAGE>

                               HA-LO INDUSTRIES, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                               FOR THE PERIODS ENDED
                            SEPTEMBER 30, 1999 AND 1998
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                           Three Months Ended                 Nine Months Ended
                                                    --------------------------------    ------------------------------
                                                     September 30,     September 30,    September 30,    September 30,
(in thousands, except per share amounts)                 1999              1998             1999              1998
                                                    --------------     --------------   --------------   -------------
<S>                                                 <C>                <C>              <C>              <C>
NET SALES                                             $ 147,306         $ 150,670        $ 464,584         $ 413,722

COST OF SALES                                            98,737            96,390          306,171           268,355
RESTRUCTURING CHARGES                                     2,653                 -            2,653                 -
                                                    --------------     --------------   --------------   -------------
  Gross profit                                           45,916            54,280          155,760           145,367

SELLING EXPENSES                                         21,721            19,489           66,676            54,160
GENERAL AND ADMINISTRATIVE EXPENSES                      31,370            21,937           88,118            59,987
NON-RECURRING CHARGES:
  POOLING ACQUISITION EXPENSES                                -             2,656                -             5,636
  RESTRUCTURING AND OTHER                                27,347                 -           27,347             1,500
                                                    --------------     --------------   --------------   -------------
  Income (loss) from operations                         (34,522)           10,198          (26,381)           24,084

INTEREST INCOME, NET                                        217             1,219              496               493
                                                    --------------     --------------   --------------   -------------
  Income (loss) before taxes                            (34,305)           11,417          (25,885)           24,577

PROVISION (BENEFIT) FOR TAXES                           (13,722)            4,569          (10,354)            9,601
                                                    --------------     --------------   --------------   -------------
NET INCOME (LOSS)                                     $ (20,583)        $   6,848        $ (15,531)        $  14,976
                                                    ==============     ==============   ==============   =============
PRO FORMA INCOME DATA:
  Pro forma provision for taxes                                                 -                                229
                                                                       ---------------                    ------------
PRO FORMA NET INCOME:                                                   $   6,848                          $  14,747
                                                                       ===============                    ============
EARNINGS (LOSS) PER SHARE (Pro forma in 1998):
  Basic                                               $   (0.42)        $    0.15        $   (0.32)        $    0.34
  Diluted                                             $   (0.42)        $    0.14        $   (0.32)        $    0.32
                                                    ==============     ==============   ==============   =============
WEIGHTED AVERAGE SHARES
  OUTSTANDING:
  Basic                                                  48,685            47,126           48,559            43,793
  Diluted                                                48,834            48,618           49,032            45,595
                                                    ==============     ==============   ==============   =============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3

<PAGE>


                             HA-LO INDUSTRIES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            FOR THE NINE MONTHS ENDED
                           SEPTEMBER 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             September 30,      September 30,
(in thousands)                                                   1999               1998
                                                            ---------------     --------------
<S>                                                       <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) for the period                             $ (15,531)          $  14,976
Adjustments to reconcile net income (loss) to net
    cash provided (used) by operating activities-
Depreciation and amortization                                   10,570               6,367
Increase in cash surrender value                                  (150)               (227)
Increase in deferred liabilities - other                           343                  67
Loss on disposal of property and equipment                         132                  97
Changes in assets and liabilities, net of effects
     of acquired companies -
  Receivables                                                    3,473               4,224
  Inventories                                                   (2,690)             (6,558)
  Prepaid expenses and deposits                                  1,981              (3,829)
  Accounts payable, accrued expenses and
    accrued restructuring expenses                              (4,753)              1,725
                                                            ---------------     --------------
  Net cash provided (used) by operating activities              (6,625)             16,842
                                                            ---------------     --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                            (11,298)            (16,919)
Proceeds on sale of property and equipment                       9,374                 154
Decrease (increase) in short-term investments                   50,077             (57,672)
Increase in other assets                                        (3,200)               (271)
Cash paid for acquisitions, net of cash acquired               (35,334)             (4,289)
                                                            ---------------     --------------
  Net cash provided (used) for investing activities              9,619             (78,997)
                                                            ---------------     --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) on long-term obligations               1,412             (49,627)
Increase (decrease) in book overdraft                              515              (6,626)
Net proceeds from issuance of common stock                       3,964             124,735
Dividend payments of acquired companies                              -              (8,378)
Repurchase of common stock                                           -                (450)
                                                            ---------------     --------------
  Net cash provided by financing activities                      5,891              59,654
                                                            ---------------     --------------

EFFECT OF EXCHANGE RATE CHANGES ON
  CASH AND CASH EQUIVALENTS                                     (2,133)                631
                                                            ---------------     --------------

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS                  6,752              (1,870)

CASH AND EQUIVALENTS, beginning of period                        7,276               4,717
                                                            ---------------     --------------
CASH AND EQUIVALENTS, end of period                          $  14,028           $   2,847
                                                            ===============     ==============
</TABLE>

    The accompanying notes are an integral part of these statements.

                                        4

<PAGE>

                             HA-LO INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

NOTE 1. BASIS OF PRESENTATION:

The accompanying financial statements have been prepared by the Company, without
audit, in accordance with generally accepted accounting principles for interim
financial information and in conjunction with the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring matters) considered necessary for a fair
presentation have been included.

The results of operations for the three month and nine month periods ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the full year. These financial statements should be read in
conjunction with the Company's financial statements and related notes in the
Company's 1998 Annual Report on Form 10-K.


NOTE 2. CAPITAL STOCK:

During the first nine months of 1999, options to acquire an aggregate of
2,376,953 shares of the Company's common stock were granted under the
Company's Stock Plans at exercise prices ranging from $5.94 to $24.00 per
share. Additionally, 471,481 options were exercised during the same period at
prices ranging from $1.51 to $19.17 per share.

Basic earnings per share is calculated using the average number of common shares
outstanding. Diluted earnings per share is computed on the basis of the average
number of common shares outstanding plus the effect of outstanding stock options
and warrants using the "treasury stock" method.


<TABLE>
<CAPTION>

(in thousands)                                     Three months ended                        Nine Months Ended
                                                       September 30,                           September 30,
                                                       -------------                           -------------
                                                1999               1998               1999                 1998
                                                ----               ----               ----                 ----
<S>                                          <C>                <C>                <C>                <C>
Net income(loss) (pro forma in 1998)
     available to common
     shareholders'(A)                         $(20,583)          $  6,848           $(15,531)          $   14,747

Average outstanding
    Common stock (B)                           48,685             47,126             48,559               43,793
Effect of stock options and warrants              149              1,492                473                1,802
                                             ----------         ----------         ----------          -----------

Common stock and common stock
    equivalents (C)                             48,834             48,618             49,032               45,595
                                             ==========         ==========         ==========          ===========

Earnings per share:
    Basic (A/B)                               $  (0.42)          $   0.15           $  (0.32)          $     0.34
                                             ==========         ==========         ==========          ===========
    Diluted (A/C)                             $  (0.42)          $   0.14           $  (0.32)          $     0.32
                                             ==========         ==========         ==========          ===========
</TABLE>


                                      5

<PAGE>


NOTE 3. STATEMENTS OF CASH FLOWS:

The supplemental schedule of non-cash activities for the nine months ended
September 30, 1999 and 1998 includes the following:


<TABLE>
<CAPTION>
(in thousands)                                                                     1999            1998
                                                                                   ----            ----
<S>                                                                              <C>              <C>
Issuance of common shares in connection with business acquisitions, net          $ 9,895          $  219


Liabilities assumed in connection with business acquisitions                     $20,579          $1,730

Recognition of tax benefits from options and restricted stock                    $ 1,903          $7,231


Write-off of assets in connection with restructuring                             $ 7,136          $    -

</TABLE>


NOTE 4: RESTRUCTURING AND OTHER CHARGES:

In July 1999, the Company adopted a plan to restructure its promotional product
operations and to a lesser extent its telemarketing and marketing service
divisions. The focus of the restructuring is to centralize back office
functions, consolidate distribution capabilities and information systems and
streamline the management reporting structure. The restructuring will result in
the elimination of approximately 200 positions and the consolidation and closing
of over 20 offices/warehouses.

During the third quarter of 1999, the Company recorded a charge to operations
of $30.0 million. Major components of the charge related to lease buyouts and
accruals, asset write-downs, severance and termination costs and other
charges. As of September 30, 1999, approximately 35 of the anticipated
employee terminations have occurred. This charge has had the effect of
reducing after tax earnings by $18.0 million or $0.37 per share. The Company
anticipates the restructuring will be completed by September 30, 2000.

<TABLE>
<CAPTION>

(in thousands)                                                                        9/30/99
                                                      Expensed        Utilized        Accrual
                                                      --------        --------        -------
<S>                                                   <C>             <C>             <C>

Facility consolidation                                 $14,994         $  267         $14,727
Asset write-downs                                        8,954          4,928           4,026
Severance and termination costs                          3,528            601           2,927
Other charges                                            2,524          2,215             309
                                                      --------       --------         -------
  Total                                                $30,000         $8,011         $21,989
                                                      ========       ========         =======
</TABLE>

                                       6


<PAGE>


NOTE 5: BUSINESS SEGMENTS:

The Company's reportable segments are strategic business units that offer
different products and services. Summarized financial information by business
segment follows:

<TABLE>
<CAPTION>
                                         Three months ended                     Nine months ended
                                            September 30,                         September 30,
(in thousands)                       1999                1998               1999                1998
                                  ---------------------------------------------------------------------
<S>                               <C>                 <C>                <C>                 <C>
Net Sales:
Promotional products              $ 112,781           $ 115,476          $ 355,505           $ 322,798
Marketing services                   20,696              20,520             62,690              46,844
Telemarketing                        13,829              14,674             46,389              44,080
                                  ---------           ---------          ---------           ---------
  Total                           $ 147,306           $ 150,670          $ 464,584           $ 413,722
                                  =========           =========          =========           =========

Operating income(loss):*
Promotional products              $ (35,610)          $   5,135          $ (32,297)          $  19,295
Marketing services                      570               4,360              3,823               3,292
Telemarketing                           518                 703              2,093               1,497
                                  ---------           ---------          ---------           ---------
 Total                            $ (34,522)          $  10,198          $ (26,381)          $  24,084
                                  =========           =========          =========           =========
</TABLE>


* includes the effect of the non-recurring charges.

NOTE 6: COMPREHENSIVE INCOME (LOSS):

The Company's comprehensive income (loss) includes net income (loss) and
unrealized gains and losses from currency translation. The calculation of total
comprehensive income (loss) for the three month and nine month periods ending
September 30, 1999 and 1998 is as follows:


<TABLE>
<CAPTION>

(in thousands)                                  Three months ended                    Nine months ended
                                                   September 30,                         September 30,
                                          ------------------------------------------------------------------
                                              1999            1998               1999               1998
                                              ----            ----               ----               -----
<S>                                       <C>                <C>                <C>                <C>

Net income(loss) (pro forma in 1998)      $(20,583)          $  6,848           $(15,531)          $ 14,747

Other comprehensive gain (loss),
net of taxes                                  (544)               654             (1,280)               378
                                          ----------        ----------         ----------         ----------
Comprehensive income (loss)
                                          $(21,127)          $  7,502           $(16,811)          $ 15,125
                                          ==========        ==========         ==========         ==========
</TABLE>


                                        7


<PAGE>


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

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

Net sales for the third quarter of 1999 decreased 2.2% to $147.3 million
compared to $150.7 million in the corresponding quarter of 1998. Approximately
77%, 14% and 9% of net sales were attributed to the promotional product,
marketing services and telemarketing segments, respectively in both 1999 and
1998. Revenues from acquired companies were approximately $20 million in the
third quarter of 1999. The internal sales decline for the quarter compared to
prior year was slightly greater than 15%. The primary reasons for the internal
sales decline were an unexpected shifting of some marketing services revenue
from the third to the fourth quarter of 1999 and certain consumer premium sales
which did not materialize as expected.

Recurring gross profit decreased to 33.0% of net sales ($48.6 million) in the
third quarter of 1999 compared to 36.0%($54.3 million) in the third quarter
of 1998. The decreased percentage is primarily due to a change in promotional
products sales mix. In the third quarter of 1999, a greater proportion of
sales was generated from lower margin European subsidiaries than a year ago.
Also affecting the comparison is some higher margin consumer premium business
included in the third quarter of 1998, which did not recur in 1999. Including
the $2.7 million non-recurring cost of sales charge, gross profit decreased
to 31.2% ($45.9 million). This charge relates to inventory write-downs
associated with the Company's warehouse consolidation plan.

Selling expenses as a percentage of net sales increased to 14.7% in the third
quarter of 1999 ($21.7 million) compared to 12.9% in the third quarter of 1998
($19.5 million). The increase in the percentage is again due to mix in the
promotional products segment. In 1999, a greater percentage of sales were
subject to commissions compared to the same period last year. In addition, a
larger portion of selling expenses is fixed in 1999 compared to 1998.

General and administrative expenses as a percentage of net sales were 21.3% in
the third quarter of 1999 ($31.4 million) compared to 14.6% in the third quarter
of 1998 ($21.9 million). The increase in the percentage is reflective of fixed
cost investments, primarily people, facilities and computer systems, necessary
to support projected sales levels that were not achieved.

The Company reported an operating loss of $34.5 million in 1999 compared to
operating income of $10.2 million in 1998. Excluding the non-recurring
restructuring charge of $30 million in 1999 (see Note 4) and the
non-recurring acquisition charge of $2.7 million in 1998, the Company
recorded a recurring operating loss of $4.5 million for the third quarter of
1999 versus recurring operating income of $12.9 million for the same period
last year.

In the third quarter of 1999 the Company had net interest income of $217,000
compared to $1.2 million in net interest income during the third quarter of
1998. In 1998 the Company had short term investments of over $50 milliion.
These funds have subsequently been used primarily to fund business expansion.

                                       8


<PAGE>

NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

Net sales for the first nine months of 1999 increased 12.3% to $464.6 million
compared to $413.7 million in the corresponding period of 1998. Approximately
77%, 13% and 10% of net sales were attributed to the promotional product,
marketing services and telemarketing segments, respectively. This compares to
78%, 11% and 11%, respectively for the same period last year. Revenues from
acquired companies were approximately $60 million in the first nine months of
1999. This translates into an internal sales decline for the first nine
months of approximately 2%.

Recurring gross profit as a percentage to net sales decreased to 34.1% ($158.4
million) in the first nine months of 1999 compared to 35.1% ($145.4 million) in
the corresponding period of 1998. The decrease in the percentage relates
primarily to a change in the promotional products sales mix as discussed above.
Including the $2.7 million non-recurring cost of sales charge discussed in the
quarterly analysis, gross profit decreased to 33.5% ($155.8 million) in 1999.

Selling expenses as a percentage of net sales increased to 14.4% in the first
nine months of 1999 ($66.7 million) compared to 13.1% in the corresponding
period of 1998 ($54.2 million). The increase was due to the same reasons
discussed during the three month period.

General and administrative expenses as a percentage of net sales increased to
19.0% in the first nine months of 1999 ($88.1 million) compared to 14.5% in the
corresponding period of 1998 ($60.0 million). The increase is due to the same
reasons discussed during the three month period above.

The Company recorded an operating loss of $26.4 million in 1999 compared to
operating income of $24.1 million in 1998. Excluding the non-recurring charges
described in the paragraph above, the Company recorded recurring operating
income of $3.6 million for the first nine months of 1999 versus recurring
operating income of $31.2 million for the same period last year.

In the first nine months of 1999 the Company had net interest income of
$496,000, compared to $493,000 of net interest expense in the corresponding
period of 1998.


LIQUIDITY AND CAPITAL RESOURCES

The Company has an unsecured revolving line of credit (the "Revolver")
totaling $75 million which matures on March 1, 2000. The facility bears
interest at either prime less .25% or LIBOR plus between .5% and 1.5% based
on a defined ratio. The agreement contains certain financial covenants that
the Company must meet, including current ratio, minimum tangible net worth,
maximum leverage and a fixed charge ratio. The Company is currently either in
compliance or has obtained waivers for these covenants. The Company has
started the process of negotiating a new credit facility to replace the
current Revolver when it expires. Management believes that a new credit
facility can be obtained at terms materially similar to the current Revolver.

In addition to the facility discussed above, one of the Company's European
subsidiaries has revolving credit facilities with several

                                       9

<PAGE>

banks. These facilities provide for borrowings of up to $5 million at rates
ranging from 8-13% and are generally unsecured.

As of September 30, 1999, the Company's working capital was $142.6 million
compared to $162.8 million at December 31, 1998. Capital expenditures for
property and equipment were approximately $11.2 million for the first nine
months of 1999, and management expects capital expenditures to be approximately
$15 million for the full year of 1999, excluding acquisitions.

The Company anticipates that approximately half of the $30 million restructuring
charge will result in cash expenditures in the future. The Company anticipates
its current level of cash and cash equivalents as well as future operating cash
flows and funds available under its credit facilities will be adequate to
satisfy its cash needs for the foreseeable future.


YEAR 2000 READINESS DISCLOSURE

Certain computer programs written with two digits rather than four to define the
applicable year may experience problems handling dates near the end of and
beyond the year 1999 (Year 2000 failure dates). This may cause computer
applications to fail or create erroneous results unless corrective measures are
taken. The Year 2000 problem can arise at any point in the Company's supply,
distribution and financial chains.

At the direction of its Board of Directors, the Company formed a Year 2000
Committee in 1998 to assess its state of Year 2000 readiness and address Year
2000 issues that may affect its business. In determining whether a system is
Year 2000 compliant, the Company has adopted The British Standards
Institution "Definition of Year 2000 Conformity Requirements", contained in
BSI Publication PD2000-1.

The Company's Year 2000 program has been conducted in phases, described as
follows:

         Inventory Phase. Identify hardware, software, processes or devices that
         use or process date information.

         Assessment Phase. Identify Year 2000 date processing deficiencies and
         related implications.

         Planning Phase. Determine for each deficiency an appropriate solution
         and budget. Schedule resources and develop testing plans.

         Implementation Phase. Implement designed solutions. Conduct appropriate
         systems testing.

The Company has substantially completed all phases. Virtually all of business
critical systems are considered Year 2000 ready by virtue of being engineered
with four digit century fields or having already completed a process of
modification and testing.

During the assessment phase, the Company identified several computer systems and
voice telecommunications switches that were not Year 2000 compliant. With the
exception of a small number of voice telecommunications systems, remediation for
which is scheduled for the fourth quarter, the Company has implemented Year 2000
modifications on all non-compliant systems. The Company currently believes that
Year

                                        10

<PAGE>


2000 compliance will be achieved in all material respects prior to any
anticipated Year 2000 failure date.

The Company has initiated communications with its product suppliers and other
key business partners to determine their Year 2000 readiness. The Company
believes that due to its large and diverse promotional product supplier base,
the risks resulting from potential problems of any such supplier are minimal.
However, the failure of any one key business partner (including providers of
transportation, electricity, telephone, water or gas services) to modify or
replace their affected systems could have materially adverse impacts on the
Company's business, operations or financial condition in the future.

Based on the information gathered during the assessment and planning phases, the
Company believes that the costs of achieving Year 2000 compliance, including
costs to modify, convert and test systems, will be less than $750,000. Costs
incurred during 1998 and the first nine months of 1999 were less than $600,000.
All costs relating to the Year 2000 Issue will be funded through operating cash
flow. The cost of conversions and project completion dates are based on
management's best estimates and are updated periodically as additional
information becomes available.

The Company is continuing to prepare contingency plans to minimize the impact of
operational or product supply chain disruptions resulting from the Year 2000
problem. Contingency plans for all of the Company's operations will be finalized
during the fourth quarter of 1999 and may include securing alternate sources of
product supply, adopting workaround procedures, and other appropriate measures.

In addition to key business partner and product supply chain risks, the Company
is aware that it may face unanticipated Year 2000 problems as a result of any
business or company acquired in 1999 or 2000 that is not already Year 2000
compliant. The Company believes these risks can be mitigated through conversion
of non-compliant systems to Year 2000 compliant systems as part of overall
acquisition integration plans.


FORWARD-LOOKING STATEMENTS

Statements contained in this Management's Discussion and Analysis of
Financial Condition and the Results of Operations regarding the amount and
nature of planned capital expenditures, the seasonality of the Company's
future business, the Company's belief that available cash will be sufficient
to satisfy its future needs, expected costs to be incurred in relation to
Year 2000 issues, estimated restructuring charges, obtaining new credit
facility at terms materially similar to current Revolver and HA-LO'S
anticipated profitability in 1999 are forward-looking statements that involve
substantial risks and uncertainties. Following are important factors that
could cause the Company's actual results to differ materially from those
implied by such forward-looking statements: The Company's growth will be
dependent, in large part, upon its ability to hire, motivate and retain high
quality sales representatives. The Company does not maintain its own
manufacturing facilities and is dependent upon domestic and foreign
manufacturers for its supply of promotional products. The promotional
products, marketing services and telemarketing industries are very
competitive. The Company has experienced and may continue to experience rapid
growth, which growth has placed and may place significant demands on its
management and resources. Increased profitability will depend upon the
Company's ability to manage its growth and to integrate acquired companies
into its existing operations. Readers are encouraged to review HA-LO'S 1998


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<PAGE>

Annual Report on Form 10-K and quarterly reports on Form 10-Q for other
important factors that may cause actual results to differ materially
from those implied in these forward looking-statements.















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<PAGE>

PART II.  OTHER INFORMATION


Item 4. Submission of matters to a Vote of Security Holders

        None


Item 6. Exhibits and Reports on Form 8-K

(a)     Exhibits

        27.0 - Financial Data Schedule for the nine month period ended
        September 30, 1999.

(b)     Reports on Form 8-K

        No reports on Form 8-K have been filed during the quarter ended
        September 30, 1999.





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<PAGE>


                                    SIGNATURE

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

                                  HA-LO INDUSTRIES, INC.


Dated: November 15, 1999          /s/ GREGORY J. KILREA
                                  ------------------------------
                                  Gregory J. Kilrea
                                  Duly Authorized Officer
                                  and Chief Financial Officer



















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