<PAGE>
                          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 March 31, 1997 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 May 7, 1997, the registrant had an aggregate of 20,164,864 shares of its
common stock outstanding.
                                           
                                           
<PAGE>

                             HA-LO INDUSTRIES, INC.
                                     INDEX

Part I.     FINANCIAL INFORMATION                           PAGE NUMBER

            Item 1. Financial Statements.

            Balance Sheets as of March 31, 1997 and 
            December 31, 1996.                                   2

            Statements of Income for the three months 
            ended March 31, 1997 and 1996.                       4

            Statements of Cash Flows for the three 
            months ended March 31, 1997 and 1996.                5

            Notes to Financial Statements.                       6

            Item 2. Management's Discussion and
                    Analysis of Financial Condition
                    and Results of Operations.                   9

PART II.    OTHER INFORMATION

            Item 4. Submission of Matters to a Vote
                    of Security Holders.                        11

            Item 6. Exhibits and Reports on Form 8-K.           11

Signatures                                                      12

                                      1



<PAGE>

                         PART 1. FINANCIAL INFORMATION


                            HA-LO INDUSTRIES, INC.

                         CONSOLIDATED BALANCE SHEETS

                      MARCH 31, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
                                                March 31,     December 31,
                                                  1997            1996
                                              --------------  -------------
                                              (Unaudited)      (Restated)
<S>                                         <C>              <C>
              ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                   $  4,540,319      $ 4,687,275
 Short-term investments                            --            2,908,370
 Receivables                                   65,352,280       71,929,031
 Related party receivable                       1,530,159            --
 Inventories                                   13,445,585       11,270,122
 Prepaid expenses & deposits                    3,503,272        4,142,199
                                              -------------    ------------
   Total current assets                        88,371,615       94,936,997
                                              -------------    ------------

PROPERTY AND EQUIPMENT, net                    14,370,940       13,920,903
                                              -------------    ------------

OTHER ASSETS:
 Intangible assets relating to acquired
  businesses, net                              10,526,439       10,906,275
 Samples                                        1,279,340        1,216,429
 Other                                          1,913,080        1,975,632
                                              -------------    ------------
  Total other assets                           13,718,859       14,098,336
                                              -------------    ------------
                                             $116,461,414     $122,956,236
                                              -------------    ------------
                                              -------------    ------------

</TABLE>








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

                                          2

<PAGE>

                            HA-LO INDUSTRIES, INC.

                         CONSOLIDATED BALANCE SHEETS

                       MARCH 31, 1997 AND DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                              March 31,         December 31,
                                                 1997               1996
                                           --------------      -------------- 
                                             (Unaudited)         (Restated)
<S>                                         <C>                <C>
    LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Current maturities of long-term debt      $    300,000         $    --
 Book overdraft                               2,802,746           1,218,122
 Accounts payable                            17,199,576          21,903,921
 Accrued expenses                            11,398,605          12,555,719
 Due to related parties                          --                 138,120
 Deferred taxes - current                     1,058,087           1,058,087
                                           --------------      -------------- 
  Total current liabilities                  32,759,014          36,873,969
                                           --------------      -------------- 

LONG-TERM DEBT                               23,351,124          26,693,173
                                           --------------      -------------- 

DEFERRED LIABILITIES                          1,712,380           1,755,335
                                           --------------      -------------- 

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 19,821,651 issued
 and outstanding in 1997 and 19,843,827 
 in 1996                                     49,196,746          48,788,272
Other                                        (2,144,174)         (2,208,471)
Retained earnings                            11,586,324          11,053,958
                                           --------------      -------------- 
 Total shareholders' equity                  58,638,896          57,633,759
                                           --------------      -------------- 
                                           $116,461,414        $122,956,236
                                            -------------      -------------- 
                                            -------------      -------------- 
</TABLE>







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

                                       3

<PAGE>


                              HA-LO INDUSTRIES, INC.

                        CONSOLIDATED STATEMENTS OF INCOME
 
                             FOR THE PERIODS ENDED
                           MARCH 31, 1997 AND 1996
                                 (UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended
                                                ------------------------------
                                                  March 31,         March 31,
                                                    1997        1996 (Restated)
                                                -------------   ---------------
<S>                                             <C>              <C>
NET SALES                                       $  78,587,413    $  65,745,892

COST OF SALES                                      54,305,206       48,165,545
                                                -------------    -------------
 Gross profit                                      24,282,207       17,580,347

SELLING EXPENSES                                    9,914,761        7,609,566
GENERAL AND ADMINISTRATIVE EXPENSES                11,081,875        8,836,136
NON RECURRING CHARGE RELATED TO
 ACQUISITIONS                                       2,056,000             -
                                                -------------    -------------                                        
 Income from operations                             1,229,571        1,134,645

INTEREST EXPENSE                                      341,757          253,871

INTEREST INCOME                                           -            132,717
                                                -------------    -------------
 Income before taxes                                  887,814        1,013,491

PROVISION FOR TAXES                                   355,448          565,966
                                                -------------    -------------
NET INCOME FOR THE PERIOD                       $     532,366    $     447,525
                                                -------------    -------------
                                                -------------    -------------

PRO FORMA INCOME DATA:
 Net income as reported                                          $     447,525
 Pro forma adjustment to income taxes                                 (160,582)
                                                                 -------------

PRO FORMA NET INCOME                                             $     608,107
                                                                 -------------
                                                                 -------------

EARNINGS PER SHARE (Pro forma for 1996)
 Primary                                        $        0.03    $        0.03
 Fully diluted                                  $        0.03    $        0.03
                                                -------------    -------------
                                                -------------    -------------

WEIGHTED AVERAGE SHARES
 OUTSTANDING
 Primary                                           20,704,755       19,992,754
 Fully diluted                                     20,704,755       20,081,167
                                                -------------    -------------
                                                -------------    -------------
</TABLE>
             The accompanying notes are an integral part of these statements.

                                       4

<PAGE>


                              HA-LO INDUSTRIES, INC.

                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                           FOR THE THREE MONTHS ENDED
                            MARCH 31, 1997 AND 1996
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                               March 31,           March 31,
                                                 1997                1996
                                             -------------       -------------
                                              (Unaudited)         (Restated)
<S>                                           <C>                <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period                     $  532,366         $  447,525
Adjustments to reconcile net income to net
  cash used for operating activities-
Depreciation and amortization                  1,406,826          1,060,804
Increase in cash surrender value                  26,431               --
Increase in deferred liabilities - other          30,320             28,632
Changes in assets and liabilities, net of 
  effects of acquired companies -
Receivables                                    5,046,592         10,183,227
Inventories                                   (2,175,463)          (323,428)
Prepaid expenses and deposits                    638,927         (1,143,492)
Accounts payable, accrued expenses and
  due to related parties                      (5,351,389)        (7,937,864)
                                             ------------        -----------
Net cash provided by 
  operating activities                           154,610          2,315,404
                                             ------------        -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment           (1,300,831)        (1,025,080)
Purchases of samples                            (174,810)           (88,645)
Increase (decrease) in short-term investments  2,908,370           (913,457)
Decrease (increase) in other assets               36,121            (30,284)
Cash paid for acquisition, including 
  deferred payments                              (73,275)          (233,604)
                                             -------------       -------------
 Net cash provided by (used for) investing 
  activities                                   1,395,575         (2,291,070)
                                             -------------       -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on long-term debt                     -               (160,323)
Net borrowings under line of credit           (3,042,049)           254,789
Increase(decrease) in book overdraft           1,584,624         (1,215,977)
Net proceeds from issuance of common stock       661,340            344,796
Dividend payments of acquired companies            -                (68,626)
Repurchase of common stock                      (901,056)          (579,185)
                                             -------------       -------------
 Net cash used for 
  financing activities                        (1,697,141)        (1,424,526)
                                             -------------       -------------

NET DECREASE IN CASH AND                        (146,956)        (1,400,192)
 EQUIVALENTS
CASH AND EQUIVALENTS, beginning of period      4,687,275          3,095,073
                                             -------------       -------------
CASH AND EQUIVALENTS, end of period           $4,540,319         $1,694,881
                                             -------------       -------------
                                             -------------       -------------
</TABLE>

           The accompanying notes are an integral part of these statements.

                                      5
<PAGE>

                                HA-LO INDUSTRIES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                                    MARCH 31, 1997
                                           
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 months ended March 31, 1997 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 1996 Annual Report on
Form 10-K.

NOTE 2. CAPITAL STOCK:

The Articles of Incorporation of the Company were amended in the first quarter
of 1997 increasing the number of common shares authorized from 25,000,000 to
100,000,000.

In the first quarter of 1997, options to acquire an aggregate of 1,166,649
shares of the Company's common stock were issued under the Company's Stock Plans
at exercise prices ranging from $13.38 to $25.25 per share.  Additionally,
97,883 options and warrants were exercised in the first quarter at prices
ranging from $2.20 to $13.67 per share.

The difference in the outstanding common shares as of March 31, 1997 and the
common shares used in computing earnings per share for the first quarter of 1997
is shown in the following table:

                                                                  1997
                                                                  ----
             Common shares outstanding per balance sheet       19,821,651
             Effect of shares issuable under stock options
               after applying the "treasury stock" method         908,278
             Effect of using weighted average common shares 
               outstanding during the year                        (25,174)
                                                              ------------
             Common shares used in computing fully diluted 
               earnings per share                              20,704,755
                                                              ------------
                                                              ------------

                                        6
<PAGE>

NOTE 3. STATEMENTS OF CASH FLOWS:

The supplemental schedule of noncash activities for the three months ended March
31, 1997 and 1996 includes the following:

                                                  1997            1996
                                                  ----            ----
Issuance of common shares in connection 
  with bonus                                   $   -            $   31,250

Recognition of tax benefits from options 
  and restricted stock                         $  648,190       $1,102,960

Conversion of non-operating assets to note 
  receivable                                   $1,530,159       $  -

NOTE 4. RELATED-PARTY TRANSACTIONS:

A member of the Board of Directors renders acquisition consulting services to
the Company pursuant to an agreement.  The director's compensation is directly
contingent upon the successful completion of an acquisition.  During the first
quarter of 1997, the director earned approximately $653,400 and was granted
3,350 options at fair value at the date of grant related to acquisitions.

Creative Concepts in Advertising, Inc., a wholly owned subsidiary of the
Company, leases its corporate headquarters from its Chief Executive Officer and
Vice Chairman of the Board of the Company.  Rental payments under this lease are
$25,000 per month.  The Company believes that the lease terms are no more or
less favorable than otherwise could be obtained from unaffiliated third parties.

In connection with the merger of the Company and CCA (see Note 5), the  Chief
Executive Officer of CCA and Vice Chairman of the Board of the Company 
converted certain non-operating assets from CCA to a $1,530,159 note
receivable.  The note bears interest at 7.0% and is due no later than December
31, 1997. 

NOTE 5. BUSINESS COMBINATIONS:

On January 3, 1997, the Company completed the acquisitions of two  distributors
of promotional products , Creative Concepts in Advertising, Inc. and Creadis
Group, Inc.(together "CCA") for an aggregate of 2,841,415 shares of its common
stock.  On February 28, 1997, the Company acquired a telemarketing company,
Entertel, Inc. ("Entertel") for an aggregate of 246,303 shares of its common
stock. Both acquisitions have been accounted for using the pooling-of-interests
accounting method.  Accordingly, the consolidated financial statements for all
periods presented have been restated to include the results of CCA and Entertel.


                                  7
<PAGE>

In connection with the acquisitions, the Company incurred approximately
$2,056,000 of non-recurring expenses for the first quarter of 1997.

A reconciliation of previously reported sales and earnings follows:

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED
                                                      ------------------
                                                        MARCH 31, 1996
                                                        --------------
          <S>                                           <C>
          Sales-  
          Previously Reported                           $49,912,000
          Acquired Companies                             15,834,000
                                                        --------------
             Net Sales                                  $65,746,000
                                                        --------------
                                                        --------------
          Pro Forma Net Income-
          Previously Reported                           $   943,000
          Acquired Companies                               (335,000)
                                                        --------------
             Pro Forma Net Income                       $   608,000
                                                        --------------
                                                        --------------
</TABLE>

Prior to its acquisition, CCA elected to be treated as an S Corporation for
Federal income tax purposes.  Pro forma net income above includes an unaudited
tax benefit for Federal and state income taxes of CCA at an effective rate of
40%.

NOTE 6:  SUBSEQUENT EVENTS

On May 7, 1997, the Company completed the acquisition of a Detroit-based 
distributor of promotional products for approximately $5 million, payable in 
shares of its common stock. The acquisition will be accounted for as a 
pooling-of-interest. As the acquisition closed after March 31, 1997, the 
consolidated financial statements for all periods presented exclude the 
effects of this acquisition. The effect of this acquisition would not have 
been material for the three month periods presented.

NOTE 7:  ACCOUNTING PRONOUNCEMENTS

In February 1997, the Financial Accounting Standards board (FASB) issued
Statement No. 128, EARNINGS PER SHARE, which establishes standards for computing
and presenting earnings per share for publicly held common stock or potential
common stock.  Statement No. 128 supersedes the standards for computing earnings
per share previously found in APB Opinion No. 15, EARNINGS PER SHARE and
simplifies the standards for computing earnings per share.  In addition,
Statement no. 128 replaces the presentation of primary earnings per share with a
presentation of basic earnings per share, requires dual presentation of basic
and diluted earnings per share for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic
earnings per share computation to the numerator and denominator of the diluted
earnings per share computation.  The statement is effective for financial
statements for both interim and annual periods ending after December 15, 1997. 
Management believes that the adoption of the standard would not have a material
effect on the quarters presented. 



                                     8
<PAGE>

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

THREE MONTHS ENDED MARCH 31, 1997 AND 1996

Net sales for the first quarter of 1997 increased 19.6% to $78.6 million 
compared $65.7 million in the corresponding quarter of 1996.  The increase 
was primarily due to internal growth. 

Sales under the Company's exclusive agreement with Montgomery Ward & Co., 
Inc. (MW) were insignificant in the first quarter of 1997 compared with $6.4 
million for the same period a year earlier. In February, 1997, MW informed 
the Company that it could not forecast its anticipated purchases for 1997 and 
there can be no assurances that sales volume from MW will return to previous 
levels. The loss of all or a significant portion of sales to MW will 
adversely effect the Company's 1997 operating results. Nonetheless, 
management does not believe the success of the Company is dependent upon any 
one customer.

Gross profit increased 38.1% to $24.3 million (30.9% of net sales) in the first
quarter of 1997 from $17.6 million (26.7% of net sales) in the first quarter of
1996.  As a percentage of net sales, the increase is due to increased margins 
in the promotional products business and a change in sale mix toward 
promotional products.  Additionally, the gross profit percentage increased in 
the first quarter of 1997 as sales to MW contributed to a lower gross profit 
percentage in the first quarter of 1996.

Selling expenses as a percentage of net sales increased slightly to 12.6% in the
first quarter of 1997 ($9.9 million) compared to 11.6% in the first quarter of
1996 ($7.6 million).  The 1% increase as a percentage of net sales is
attributable primarily to the decrease in sales in 1997 under the exclusive
agreement discussed above, which are not subject to payment of the Company's
standard commissions, and an increase in gross profit as a percentage of net
sales.

General and administrative ("G&A") expenses, including the non recurring 
charge related to acquisitions as a percentage of net sales increased to 
16.7% in the first quarter of 1997 ($13.1 million) compared to 13.4% in the 
first quarter of 1996 ($8.8 million).  Approximately $2.1 million of the $4.3 
increase in G&A expenses is  attributable to non-recurring expenses incurred 
in the first quarter of 1997 to complete the acquisitions of CCA and 
Entertel.  Excluding these non-recurring expenses, G&A as a percentage of net 
sales were 14.1% in 1997. Additionally, increased personnel and facilities 
costs were necessary to support the Company's sales growth.

In the first quarter of 1997 the Company had net interest expense of $342,000,
compared to $121,000 of net interest expense in the first quarter of 1996.  The
increase is due to increased borrowings at CCA resulting from an acquisition in
the third quarter of 1996 and additional working capital needs necessary to fund
growth.


                                       9
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company's current ratio increased to 2.69 to 1 as of March 31, 1997 from
2.57 to 1 at December 31, 1996.  Working capital was $55.6   million at March
31, 1997 compared to $58.1 million at December 31, 1996.  Capital expenditures
for property and equipment were approximately $1.3 million for the first three
months of 1997, and management expects capital expenditures to be approximately
$5.0 million for the full year of 1997, excluding acquisitions. 

In the first quarter of 1997, the Company refinanced its line of credit. The new
agreement provides for an unsecured credit facility totaling $65 million,
consisting of a $45 million revolving line of credit (the "Revolver") and $20
million term acquisition loan (the "Term").  The Revolver matures on January 31,
1999 and Term borrowings mature on the sooner of five years from the date of
borrowing or June 30, 2003.  The facility bears interest at either prime less
 .25% or LIBOR plus between .375% and 1% based on a defined ratio.  The agreement
contains certain financial covenants which the Company must meet, including
minimum tangible net worth, maximum leverage, and minimum cash flow coverages.
The Company anticipates that the available funds from this facility will be
adequate to satisfy its operating cash needs for the foreseeable future.

INFLATION

Management does not believe that inflation had a significant impact on the
Company's results of operations for the periods presented.


                                       10
<PAGE>

PART II.  OTHER INFORMATION

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

               A special meeting of the shareholders of the Company was held 
               on February 18, 1997 to approve an amendment to the Company's 
               Articles of Incorporation increasing the number of shares of 
               Common Stock authorized from 25,000,000 to 100,000,000 and to 
               amend the Company's Articles of Incorporation by adding an 
               Article to reduce the affirmative vote of shareholders 
               required to approve certain corporate actions. A total of 
               19,627,066 shares were eligible to vote of which 1,994,398 
               were unvoted on each matter presented at the special meeting.

               In connection with the proposal to amend the Company's 
               Articles of Incorporation increasing the number of shares of 
               common stock authorized, 14,508,325 shares voted in favor of such
               amendment, 3,114,229 shares voted against such amendment and 
               10,114 shares abstained.

               With respect to the proposal to amend the Company's Articles 
               of Incorporation adding an Article to reduce the affirmative 
               vote of shareholders required to approve certain corporate 
               actions, 16,439,788 shares voted in favor of such amendment, 
               174,207 shares voted against such amendment, 19,137 shares 
               abstained and 999,536 shares were not voted.
                    

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

    (a)        Exhibits - None

    (b)        The company filed one report on Form 8-K dated January 17, 1997 
               with respect to the acquisition of Creative Concepts in 
               Advertising, Inc. and Creadis Group, Inc. (together "CCA") and 
               amended this filing on Form 8-K/A on March 19, 1997.  


                                       11
<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: May 14, 1997              /S/ GREGORY J. KILREA
                                 ----------------------
                                       Gregory J. Kilrea
                                       Duly Authorized Officer
                                       and Chief Financial Officer






                                       12