<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 September 30, 1996 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 November 1, 1996, the registrant had an aggregate of 13,131,819  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 September 30, 1996 and 
         December 31, 1995.                                         2

         Statements of Income for the three months and nine 
         months ended September 30, 1996 and 1995.                  4

         Statements of Cash Flows for the nine months ended 
         September 30, 1996 and 1995.                               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

                SEPTEMBER 30, 1996 AND DECEMBER 31, 1995


                                              September 30,    December 31,
                                                  1996             1995
                                              -------------    ------------
                                               (Unaudited)

                        ASSETS

CURRENT ASSETS:                             
  Cash and cash equivalents                    $ 1,078,767      $ 2,264,594
  Short-term investments                         4,473,558        3,549,717
  Receivables                                   46,380,807       49,351,240
  Inventories                                    7,434,642        5,494,974
  Prepaid expenses & deposits                    2,322,112        1,225,793
                                              -------------    ------------
    Total current assets                        61,689,886       61,886,318
                                              -------------    ------------

PROPERTY AND EQUIPMENT, net                      9,317,784        7,674,505
                                              -------------    ------------

OTHER ASSETS:     

  Intangible assets relating to acquired 
   businesses, net                               6,862,162        7,887,243
  Samples                                        1,165,617        1,026,588
  Other                                            835,357          865,592
                                              -------------    ------------
    Total other assets                           8,863,136        9,779,423
                                              -------------    ------------
                                               $79,870,806      $79,340,246
                                              -------------    ------------
                                              -------------    ------------



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



                                       2

<PAGE>

                        HA-LO INDUSTRIES, INC.

                       CONSOLIDATED BALANCE SHEETS

                SEPTEMBER 30, 1996 AND DECEMBER 31, 1995







                                                    September 30,   December 31,
                                                         1996          1995
                                                    ------------  -----------
                                                     (Unaudited)
              LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term debt                $         -  $   755,000
Book overdraft                                          671,702    2,161,161
Accounts payable                                     11,004,261   16,269,312
Accrued expenses                                     13,749,465   11,808,089
Due to related parties                                  250,000      123,910
Deferred taxes - current                                941,996      941,996
                                                    ------------ ------------
  Total current liabilities                          26,617,424   32,059,468
                                                    ------------ ------------
LONG-TERM DEBT                                        4,170,197       81,336

DEFERRED LIABILITIES                                  1,818,936    2,416,689

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Preferred stock, no par value; 10,000,000
  shares authorized and none issued                          -             -
Common stock, no par value: 25,000,000
  shares authorized and 13,090,200 issued
  and outstanding in 1996 and 12,945,409 in 1995     42,318,538   42,737,806
Unearned compensation-restricted stock                 (820,000)  (1,000,000)
Cumulative Translation Adjustment                        14,507       22,249
Deferred marketing costs                             (1,448,000)  (1,448,000)
Retained earnings                                     7,199,204    4,470,698
                                                    ------------ ------------
  Total shareholders' equity                         47,264,249   44,782,753
                                                    ------------ ------------
                                                    $79,870,806  $ 79,340,246
                                                    ------------ ------------
                                                    ------------ ------------



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

                          SEPTEMBER 30, 1996 AND 1995
                                  (Unaudited)

<TABLE>
<CAPTION>
                                               Three Months Ended            Nine Months Ended
                                        ----------------------------  -----------------------------
                                         September 30,  September 30,  September 30,  September 30,
                                             1996           1995         1996             1995
                                        -------------- -------------  -------------   -------------
<S>                                     <C>            <C>            <C>             <C>
NET SALES                               $65,110,406    $57,997,188    $175,816,137    $ 142,057,465

COST OF SALES                            46,577,220     42,175,632     126,323,400      101,407,708
                                        -------------- -------------  -------------   -------------
  Gross profit                           18,533,186     15,821,556      49,492,737       40,649,757

SELLING EXPENSES                          7,314,474      6,701,795      20,889,099       17,836,285
GENERAL AND ADMINISTRATIVE EXPENSES       8,426,742      5,963,191      21,134,668       16,843,739
                                        -------------- -------------  -------------   -------------
  Income from operations                  2,791,970      3,156,570       7,468,970        5,969,733

INTEREST EXPENSE                             96,908        424,461         128,419        1,089,703

INTEREST INCOME                             107,931         15,858         406,093           38,499
                                        -------------- -------------  -------------   -------------
  Income before taxes                     2,802,993      2,747,967       7,746,644        4,918,529

PROVISION FOR TAXES                       1,120,303        947,397       3,098,068        1,403,017
                                        -------------- -------------  -------------   -------------
NET INCOME FOR THE PERIOD               $ 1,682,690    $ 1,800,570    $  4,648,576     $  3,515,512
                                        -------------- -------------  -------------   -------------
                                        -------------- -------------  -------------   -------------
PRO FORMA INCOME DATA (unaudited):
  Net income as reported                               $ 1,800,570                    $  3,515,512
  Pro forma adjustment to income taxes                     151,802                         564,395
                                                       ------------                   ------------
PRO FORMA NET INCOME                                   $ 1,648,768                    $  2,951,117
                                                       ------------                   ------------
                                                       ------------                   ------------
EARNINGS PER SHARE (Pro forma for 1995)
  Primary                                   $  0.12        $  0.15        $  0.34         $  0.28
  Fully diluted                             $  0.12        $  0.15        $  0.34         $  0.28
                                        -------------- -------------  -------------   -------------
                                        -------------- -------------  -------------   -------------

WEIGHTED AVERAGE SHARES
  OUTSTANDING
  Primary                                13,827,996     10,673,424     13,703,855       10,486,413
  Fully diluted                          13,919,510     10,841,336     13,780,793       10,617,288
                                        -------------- -------------  -------------   -------------
                                        -------------- -------------  -------------   -------------

</TABLE>


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

                                      4

<PAGE>
                              HA-LO INDUSTRIES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                           FOR THE NINE MONTHS ENDED
                          SEPTEMBER 30, 1996 and 1995
                                (Unaudited)


                                                  September 30,    September 30,
                                                       1996            1995
                                                  -------------  --------------
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income for the period                         $  4,648,576    $ 3,515,512
Adjustments to reconcile net income to net
 cash used for operating activities-
Depreciation and amortization                        2,932,695      2,311,210
Increase in deferred liabilities - other                12,507        128,673
Changes in assets and liabilities, net 
 of effects of acquired companies -
  Receivables                                        2,970,430     (6,690,249)
  Inventories                                       (1,939,668)      (386,165)
  Prepaid expenses and deposits                     (1,103,473)      (843,921)
  Accounts payable, accrued expenses and
    due to related parties                          (2,094,625)       907,697
                                                  -------------  --------------
  Net cash provided by (used for) operating 
   activities                                        5,426,442     (1,057,243)
                                                  -------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                 (3,123,096)    (2,160,981)
Purchases of samples                                  (398,549)      (345,593)
Increase in short-term investments                    (923,841)           -
Decrease (increase) in other assets                     37,300        (72,322)
Cash paid for acquisition, including deferred 
 payments                                             (604,981)    (2,186,117)
                                                  -------------  --------------
  Net cash used for investing activities            (5,013,167)    (4,765,013)
                                                  -------------  --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on long term debt                                 -      3,000,000
Net payments on long-term debt                        (540,454)    (1,669,932)
Net borrowings under line of credit                  3,874,315      6,788,133
Advances to shareholder/officer                              -       (124,263)
Increase(decrease) in book overdraft                (1,489,459)       781,007
Net proceeds from issuance of common stock             717,245      1,148,900
Dividend payments of acquired companies             (3,573,822)      (757,829)
Repurchase of common stock                            (579,185)           -
                                                  -------------  --------------
  Net cash provided by (used for) financing 
   activities                                       (1,591,360)     9,166,016
                                                  -------------  --------------
EFFECT OF EXCHANGE RATE CHANGES ON
   CASH AND CASH EQUIVALENTS                           (7,742)           (155)
                                                  -------------  --------------
NET INCREASE (DECREASE) IN CASH AND                
  EQUIVALENTS                                       (1,185,827)     3,343,605
CASH AND EQUIVALENTS, beginning of period            2,264,594      1,919,379
                                                  -------------  --------------
CASH AND EQUIVALENTS, end of period               $  1,078,767   $  5,262,984
                                                  -------------  --------------
                                                  -------------  --------------

        The accompanying notes are an integral part of these statements.

                                        5
<PAGE>


                            HA-LO INDUSTRIES, INC.
                         NOTES TO FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1996

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, 1996 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 1995 Annual Report to shareholders.

NOTE 2. CAPITAL STOCK:

In the third quarter of 1996, options to acquire an aggregate of 136,466
shares of the Company's common stock were issued under the Company's Stock Plan
at exercise prices ranging from $22.50 to $30.75 per share. Additionally, 28,814
options were exercised in the third quarter at prices ranging from $2.75 to
$6.67 per share.

The difference in the outstanding common shares as of September 30, 1996 and
the common shares used in computing earnings per share for the third quarter of
1996 is shown in the following table:

                                                1996
                                             ----------
    Common shares outstanding per balance    
    sheet                                    13,090,200

  Effect of shares issuable under stock              
    options after applying the 
    "treasury stock" method                   1,003,292
                                              
  Effect of using weighted average common            
    shares outstanding during the year          (62,950)
 
  Other                                        (111,032)
                                             ----------
  Common shares used in computing fully              
    diluted earnings per share               13,919,510
                                             ----------
                                             ----------

NOTE 3. SIGNIFICANT CUSTOMERS:

Approximately 18.3% and 14.1% of the Company's net sales for the three months
and nine months ended September 30, 1996, respectively, were obtained from
Montgomery Ward & Co., Inc.  Approximately, 23.0% and 11.5% of the Company's
net sales for the same periods in 1995, respectively, were also obtained from
Montgomery Ward & Co., Inc.

                                     6
<PAGE>

NOTE 4. STATEMENTS OF CASH FLOWS:

The supplemental schedule of noncash activities for the nine months ended
September 30, 1996 and 1995 includes the following:



                                                1996           1995
                                             ----------     ----------

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

Recognition of tax benefits from options   $  1,102,960             --

Issuance of common shares in connection
  with acquisition of certain businesses             --      $ 550,000

Issuance of common stock recorded as
  unearned compensation                              --    $ 1,200,000

NOTE 5. 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 third
quarter of 1996, the director earned approximately $250,000 and was granted
37,500 options at fair value at the date of grant related to the acquisition
discussed below.

NOTE 6. BUSINESS COMBINATIONS

On June 14, 1996 the Company signed an agreement to acquire two teleservices
companies, Market USA, Inc. and Marusa Marketing, Inc. (together "MUSA") for an
aggregate of 2,550,000 shares of its common stock.  The acquisitions received
approval from the Company's shareholders on September 25, 1996 and were
completed on September 30, 1996.  The 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 MUSA.

In connection with the acquisitions, the Company incurred approximately
$1,693,000 of non-recurring expenses.

A reconciliation of previously reported sales and earnings follows:

                                  Three Months Ended   Nine Months Ended
                                  September 30, 1995  September 30, 1995
                                  ------------------  ------------------
   Sales-
   Previously Reported                  $48,005,000   $114,320,000
   MUSA                                   9,992,000     27,738,000
                                  ------------------  ------------------
        Net Sales                       $57,997,000   $142,057,000
                                  ------------------  ------------------
                                  ------------------  ------------------
   
   Pro Forma Net Income-
   Previously Reported                   $1,080,000     $1,693,000
   MUSA                                     569,000      1,258,000
                                  ------------------  ------------------
        Pro Forma Net Income             $1,649,000     $2,951,000
                                  ------------------  ------------------
                                  ------------------  ------------------

                                     7

<PAGE>

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

NOTE 7: SUBSEQUENT EVENTS

On October 29, 1996, the Company signed an agreement to purchase all of the
outstanding stock of two distributors of promotional products for 2,250,000
shares of its common stock. The acquisitions will be accounted for under the
pooling-of-interest accounting method and are expected to close in the first
quarter of 1997.

On November 7, 1996 the Company's board of directors declared a 25% stock
dividend. The dividend will be paid on December 11, 1996 to shareholders of
record as of November 21, 1996.
























                                     8
<PAGE>

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Net sales for the third quarter of 1996 increased 12.3% to $65.1 million
compared to $58.0 million in the corresponding quarter of 1995.  Of the $7.1
million increase in sales, approximately $1.2 million was due to acquisitions.
The remainder was primarily due to internal growth.

Gross profit for the third quarter of 1996 increased 17.1% to $18.5 million
compared to $15.8 million in the corresponding quarter of 1995. This is
primarily due to the increase in sales and a change in sales mix to higher
margin products.

Selling expenses as a percentage of net sales decreased slightly to 11.2% in
the third quarter of 1996 ($7.3 million) compared to 11.5% in the third quarter
of 1995 ($6.7 million).  The increase of $600,000 is attributable primarily to
the increase in commissions related to higher sales.

General and administrative ("G&A") expenses as a percentage of net sales
increased to 12.9% in the third quarter of 1996 ($8.4 million) compared to
10.3% in the third quarter of 1995 ($6.0 million). This increase is
attributable to $1,693,000 of non-recurring expenses incurred to complete the
acquisition of MUSA and higher payroll costs necessary to support the increase
in net sales.

In the third quarter of 1996 the Company had net interest income of $11,000
compared to $409,000 of expense in the third quarter of 1995. This change is
due to the Company paying off its debt with the proceeds from the public sale
of its common stock in the fourth quarter of 1995 and investments made with the
remaining proceeds.

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Net sales for the first nine months of 1996 increased 23.8% to $175.8 million
compared to $142.1 million in the corresponding period of 1995.  Of the $33.7
million increase in sales, approximately $8.5 million resulted from additional
sales under the Company's exclusive agreement with Montgomery Ward and $3.4
million was due to acquisitions. The remainder was primarily due to internal
growth.

Gross profit for the first nine months of 1996 increased 21.8% to $49.5 million
compared to $40.6 million in the corresponding period of 1995. This is due to
the increase in sales.

Selling expenses as a percentage of net sales decreased to 11.9% in the first
nine months of 1996 ($20.9 million) compared to 12.6% in the first nine months
of 1995 ($17.8 million).  The $3.1 million increase relates to increased sales.
The .7% decrease as a percentage of net sales relates to a greater proportion
of sales to Montgomery Ward & Co., Inc., which are non-commissionable.

                                     9
<PAGE>

General and administrative expenses as a percentage of net sales increased to 
12.0% in the first nine months of 1996 ($21.1 million) compared to 11.9% in 
first nine months of 1995 ($16.8 million). The $4.3 million increase is due 
primarily to the non-recurring expenses discussed above and additional costs 
necessary to support the increase in sales.  Before the effect of the 
non-recurring expenses, G&A costs as a percent of net sales would have 
decreased .8% compared with the same period for the prior year. The decrease 
is reflective of more efficient leverage of G&A expenses (i.e. increased 
sales without proportionate increases in G&A expenses).

Net interest income for the first nine months of 1996 was $278,000 compared to
$1,051,000 of expense in the first nine months of 1995.  This change is
attributable to the same reason discussed during the three month period above.

LIQUIDITY AND CAPITAL RESOURCES

The Company's current ratio increased from 1.9 to 1 at December 31, 1995 to
2.3 to 1 as of September 30, 1996. Working capital was $35.1 million at
September 30, 1996 compared to $29.8 million at December 31, 1995.

Capital expenditures for property and equipment were approximately $3.1 million
for the first nine months of 1996, and management expects capital expenditures
to be approximately $3.75 million for the full year of 1996, excluding
acquisitions.  The Company has a credit facility with a bank that provides for
borrowings of up to $16.0 million.  The Company is in the process of
refinancing the facility to increase its maximum borrowing level. Nonetheless,
the Company anticipates that the available funds from the Company's credit
facility together with the remaining funds from its public offering, will be
adequate to satisfy any of the 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
          September 25, 1996 to approve the acquisition of Market USA, Inc. and
          Marusa Marketing, Inc. A total of 10,509,055 shares were eligible to
          vote of which 8,621,961 were represented in person or by proxy. A
          total of 8,606,276 votes were cast in favor of the acquisition.

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

    (a)   Exhibits

          27 - Financial Data Schedule

    (b)   Reports on Form 8-K - None























                                     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: November 13, 1996           /s/ Gregory J. Kilrea
                                   ---------------------------
                                   Gregory J. Kilrea
                                   Duly Authorized Officer
                                   and Chief Financial Officer




















                                     12