Page 1 of 10

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

                               FORM 10-QA


(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, 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     1-10105

                          MATLACK SYSTEMS, INC.
         (Exact name of registrant as specified in its charter)


   DELAWARE                                             51-0310173
(State or other jurisdiction of                     (I.R.S. Employer
 incorporation or organization)                    Identification No.)

One Rollins Plaza, Wilmington, Delaware                      19803
(Address of principal executive offices)                   (Zip Code)

                              (302) 426-2700
          (Registrant's telephone number, including area code)


                       (Former name of registrant)

     Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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 _____


     The number of shares of the registrant's common stock outstanding as
of March 31, 1999 was 8,814,434.






FORM 10-QA                                                   Page 2 of 10
                     PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

A.   Basis of Presentation
     The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-QA and do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Certain prior year amounts have been reclassified to conform with the
current period's presentation.  Operating results for the quarter and six
months ended March 31, 1999 are not necessarily indicative of the results
that may be expected for the year ended September 30, 1999.  These
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
year ended September 30, 1998.

B.   Earnings Per Share
     Pursuant to the provisions of Statement of Financial Accounting
Standards No. 128, "Earnings Per Share," the number of weighted average
shares used in computing basic and diluted earnings per share (EPS) are as
follows (in thousands):

                                Quarter Ended        Six Months Ended
                                   March 31,             March 31,
                                1999      1998        1999      1998

Basic EPS                       8,814     8,787       8,814     8,786
Effect of assumed option
 exercises                        -  (1)    151         -  (1)    130
Diluted EPS                     8,814     8,938       8,814     8,916

(1)  The effect of options was not considered as it would have been
     anti-dilutive.

     No adjustments to net income available to common stockholders were
required during the periods presented.

C.   Restatement
     As a result of a fourth quarter review of the Company's operations and
business, it was determined that certain required adjustments of income and
expense items should have been recorded in prior quarters of the current
year.  In connection with these adjustments, the Company has filed this
Form 10-QA.


<PAGE>
FORM 10-QA                                                   Page 3 of 10

Item 1.  Financial Statements

                          MATLACK SYSTEMS, INC.
                   CONSOLIDATED STATEMENT OF EARNINGS
               ($000 Omitted Except for Per Share Amounts)


                                  Quarter          Six Months Ended
                                  March 31,             March 31,
                               1999     1998         1999      1998

Revenues                      $51,388  $61,201     $105,619  $123,710

Operating expenses             45,962   51,863       93,585   104,507
Depreciation and amortization   3,128    3,085        6,329     6,352
Selling and administrative
  expenses                      5,362    5,114       10,774    10,033
Other (income)                   (199)    (505)         (67)     (898)
                               54,253   59,557      110,621   119,994

Operating earnings (loss)      (2,865)   1,644       (5,002)    3,716

Interest expense                  948    1,049        1,882     2,088

Earnings (loss) before
  income taxes (benefit)       (3,813)     595       (6,884)    1,628

Income taxes (benefit)         (1,425)     250       (2,561)      684

Net earnings (loss)           $(2,388) $   345     $ (4,323) $    944

Earnings (loss) per share
          - Basic             $  (.27) $   .04     $   (.49) $    .11

          - Diluted           $  (.27) $   .04     $   (.49) $    .11

Average common shares
  outstanding (000)
          - Basic               8,814    8,787        8,814     8,786
          - Diluted             8,814    8,938        8,814     8,916

Dividends paid per share        None     None         None      None

<PAGE>
FORM 10-QA                                                   Page 4 of 10

                          MATLACK SYSTEMS, INC.
                       CONSOLIDATED BALANCE SHEET
                             ($000 Omitted)

                                                March 31,   September 30,
               ASSETS                             1999          1998
Current assets
  Cash                                          $  2,892      $  5,477
  Accounts receivable, net of allowance for
    doubtful accounts: March-$1,329;
    September-$668                                29,364        29,831
  Inventories                                      5,993         6,382
  Other current assets                             3,505         4,179
  Refundable income taxes                          2,021          -
  Deferred income taxes                            2,014         1,572
      Total current assets                        45,789        47,441

Property and equipment, at cost, net of
  accumulated depreciation of:
  March-$133,579; September-$130,600              91,761        94,382
Other assets                                       1,672         1,440
     Total assets                               $139,222      $143,263

     LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Accounts payable                              $  6,971      $  6,846
  Accrued liabilities                             11,774        13,583
  Income taxes payable                              -            1,393
  Current maturities of long-term debt             2,680         2,588
      Total current liabilities                   21,425        24,410

Long-term debt                                    49,907        47,446
Insurance reserves                                 5,053         5,015
Other liabilities                                  1,860         1,266
Deferred income taxes                              9,633         9,486

Commitments and contingent liabilities
  See Part II Legal Proceedings

Shareholders' equity:
  Preferred stock, $1 par value,
    1,000,000 shares authorized; issued and
    outstanding - None
  Common stock, $1 par value,
    24,000,000 shares authorized;
    issued and outstanding:
    March-8,814,434 and September-8,809,634        8,814         8,809
  Capital in excess of par value                  10,620        10,597
  Retained earnings                               31,910        36,234
      Total shareholders' equity                  51,344        55,640
      Total liabilities and
        shareholders' equity                    $139,222      $143,263


<PAGE>
FORM 10-QA                                                   Page 5 of 10

                          MATLACK SYSTEMS, INC.
                  CONSOLIDATED STATEMENT OF CASH FLOWS
                             ($000 Omitted)

                                                       Six Months Ended
                                                            March 31,
                                                        1999      1998

Cash flows from operating activities:
  Net earnings (loss)                                  $(4,323)  $   944
  Adjustments to reconcile net earnings (loss) to net
    cash (used in) provided by operating activities:
    Depreciation and amortization                        6,329     6,352
    Net gain on sale of property and equipment            (207)     (898)
    Changes in assets and liabilities:
       Accounts receivable                                 467      (723)
       Inventories and other assets                        585      (968)
       Accounts payable and accrued liabilities         (1,684)   (2,566)
       Current and deferred income taxes                (3,712)      163
       Other, net                                          632      (408)
Net cash (used in) provided by operating activities     (1,913)    1,896

Cash flows from investing activities:
  Purchase of property and equipment                    (4,123)   (5,771)
  Proceeds from sale of equipment                          870     3,099
Net cash used in investing activities                   (3,253)   (2,672)

Cash flows from financing activities:
  Proceeds of long-term debt                            26,000    32,081
  Repayment of long-term debt                          (23,447)  (31,529)
  Exercise of stock options                                 28        33
Net cash provided by financing activities                2,581       585

Net decrease in cash                                    (2,585)     (191)
Cash beginning of period                                 5,477     2,524
Cash end of period                                     $ 2,892   $ 2,333

Supplemental and noncash information:
  Interest paid                                        $ 1,441   $ 1,722
  Income taxes paid                                    $ 1,150   $   521


<PAGE>
FORM 10-QA                                                   Page 6 of 10

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

Results of Operations:  Six Months Ended March 31, 1999 vs. Six Months
Ended March 31, 1998
  Revenues for the six months ended March 31, 1999 decreased by $18,091,000
(14.6%) from $123,710,000 to $105,619,000.  The number of loads carried
decreased by 22.5% while the average miles per load increased by 4.2%.
Revenue per load carried increased by 4.9% over the same period of last
year.  Revenues from the Company's non-bulk trucking subsidiaries decreased
slightly when compared with the prior year.

  Operating expenses decreased by $10,922,000 (10.5%) and reflected the
decrease in revenues.  Drivers' wages decreased by $5,723,000, fuel expense
decreased by $2,766,000, purchased transportation decreased by $2,573,000,
equipment maintenance expense decreased by $420,000 and tank cleaning
expense decreased by $391,000, all reflecting the lower level of business.
Operating expenses as a percentage of revenues increased to 88.6% in 1999
from 84.5% in 1998.

  Depreciation expense decreased by $23,000 (.4%) reflecting the
disposition of property and equipment both during fiscal 1998 and the first
six months of fiscal 1999, almost offset by the impact of the capital
program to refurbish trailers.

  Selling and administrative expenses increased by $741,000 (7.4%)
principally as a result of a higher bad debt provision of $515,000 and
increased spending for management information systems enhancements.  As a
percentage of revenue, selling and administrative expenses were 10.2% in
1999 and 8.1% in 1998.

  Other income of $67,000 represents principally the net gain derived from
the disposal of property and equipment during the current fiscal year.

  Interest expense decreased by $206,000 (9.9%) reflecting lower borrowing
rates on a slightly increased level of borrowing when compared with the
same period of last year.

  The rate of income tax benefit for the first six months of fiscal 1999
was 37.2% compared with an effective tax rate last year of 42.0%.

  The net loss for the fist six months of fiscal 1999 was $4,323,000 or
$.49 per diluted share.  The loss reflects the Company's lower level of
business during the first six months of the current fiscal year.

Results of Operations:  Quarter Ended March 31, 1999 vs. Quarter Ended
March 31, 1999
  Revenues for the quarter ended March 31, 1999 were $51,388,000 compared
with $61,201,000 reported in the second quarter last year.  The decrease of
$9,813,000 was principally due to lower demand for transportation services
in the chemical industry.  The number of loads carried decreased by 19.9%.
During the quarter, revenue per load carried increased by 2.3%, while miles
per load and revenue per mile remained essentially unchanged.  Non-bulk
trucking revenues also decreased and reflected the continued weak demand
for the Company's services.

FORM 10-QA                                                   Page 7 of 10

  Operating expenses decreased by $5,901,000 (11.4%) and reflected the
decrease in revenues.  Drivers' wages decreased by $2,586,000, fuel expense
decreased by $1,052,000, purchased transportation decreased by $1,499,000
and tank cleaning expense decreased by $335,000, all reflecting the lower
level of business.  Operating expenses as a percentage of revenues
increased to 89.4% in 1999 from 84.5% in 1998.

  Depreciation expense increased by $43,000 (1.4%) reflecting the
continuation of the modest trailer capital refurbishment program less the
impact of the disposition of property and equipment both during fiscal 1998
and the first six months of fiscal 1999.

  Other income of $199,000 represents the net gain derived from the
disposal of property and equipment during the current quarter.  The Company
sold 10 tractors, 60 trailers and a terminal facility in Marietta, Ohio
during the quarter.

  Selling and administrative expenses increased by $248,000 (4.8%)
reflecting a higher bad debt provision of $323,000 less the impact of lower
sales-related costs due in part to the lower level of business.  As a
percentage of revenue, selling and administrative expenses were 10.4% in
1999 and 8.4% in 1998.

  Interest expense decreased by $101,000 (9.6%) reflecting lower borrowing
rates on a lower level of borrowing when compared with the same period of
last year.

  The rate of income tax benefit for the second quarter of fiscal 1999 was
37.4% compared with an effective income tax rate last year of 42.0%.

  The net loss for the second quarter of fiscal 1999 was $2,388,000 or $.27
per diluted share.  The loss reflects the continued lower level of business
experienced by the Company.

Liquidity and Capital Resources
  During the second quarter of fiscal 1999, the Company's operating
activities produced a positive cash flow of $4,433,000 which, along with
the cash proceeds of $623,000 received from the sale of property and
equipment were used to purchase property and equipment for $2,389,000, to
reduce indebtedness by $181,000 and to increase the Company's cash balance
by $2,486,000.

  The Company had no commitments for equipment or facilities at March 31,
1999.

  On February 12, 1999, the Company modified the terms of its credit
agreement for the quarter ended December 31, 1998 and the next three
quarters.  The Company was in compliance with all the terms of the amended
credit agreement at March 31, 1999.  At March 31, 1999, a total of
$8,853,000 was available under this credit facility.

  Otherwise, there have been no material changes in the Company's financial
condition and its liquidity and capital resources since September 30, 1998.
For further details, see the Company's 1998 Annual Report to Shareholders
on Form 10-K for the year ended September 30, 1998.

FORM 10-QA                                                   Page 8 of 10

Forward-Looking Statements
  The Company may make forward-looking statements relating to anticipated
financial performance, business prospects, acquisitions or divestitures,
new products, market forces, commitments and other matters.  The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements.  In order to comply with the terms of the safe
harbor, the Company notes that a variety of factors could cause the
Company's actual results and experience to differ materially from the
anticipated results or other expectations expressed in the Company's
forward-looking statements.  Forward-looking statements typically contain
words such as "anticipates", "believes", "estimates", "expects",
"forecasts", "predicts", or "projects", or variations of these words,
suggesting that future outcomes are uncertain.

  Various risks and uncertainties may affect the operations, performance,
development and results of the Company's business and could cause future
outcomes to differ materially from those set forth in forward-looking
statements, including the following factors:  general economic conditions,
competitive factors and pricing pressures, shift in market demand, the
performance and needs of industries served by the Company, particularly the
chemical industry, equipment utilization, management's success in
developing and introducing new services and lines of business, potential
increases in labor costs, potential increases in equipment, maintenance and
fuel costs, uncertainties of litigation, the Company's ability to finance
its future business requirements through outside sources or internally
generated funds, the availability of adequate levels of insurance, success
or timing of completion of ongoing or anticipated capital or maintenance
projects, management retention and development, changes in Federal, State
and local laws and regulations, including environmental regulations, as
well as the risks, uncertainties and other factors described from time to
time in the Company's SEC filings and reports.

Year 2000 ("Y2K") Readiness Disclosure

  The Company is aware of the issues related to the approach of the year
2000 and has assessed and investigated what steps must be taken to ensure
that its critical systems and equipment will function appropriately after
the turn of the century.  The Company has completed a review of each of its
core systems to determine their Y2K compliance.  As a result, the Company
is replacing its Service Management System with one designed to be Y2K
compliant from inception.  The remaining core systems are vendor-supplied
and maintained systems where the Company has received Y2K compliant
upgrades and is in various stages of implementation and testing.  The
Company expects to complete its Service Management System replacement by
June 30, 1999 and has taken actions toward making all other non-core
systems Y2K compliant by September 30, 1999.  The Service Management System
replacement is expected to cost approximately $4,400,000 of which
$3,850,000 had been expended as of March 31, 1999.

  The Company relies on Qualcomm to provide the satellite tracking system
necessary to track the location of its transportation equipment and to
provide dispatch and routing information to its drivers.  The Company has
been informed that the software utilized by Qualcomm and the Company is
fully Y2K compliant.  A failure of the satellite communication system could
have a materially adverse effect on the Company's results of operations.
The Company is relying on the contingency plan established by Qualcomm to
FORM 10-QA                                                   Page 9 of 10

prevent the interruption of business.  As an additional backup, the Company
plans to use its existing telephone systems to dispatch its equipment and
provide support to its drivers in the event of a complete satellite system
failure.  In addition, the Company utilizes Comdata to allow drivers to
purchase fuel outside of the Company's terminal locations.  The Company has
been informed that Comdata expects to be fully Y2K compliant by June 30,
1999.  The Company also interacts with many of its vendors through
electronic data interchange (EDI).  Although the Company is Y2K compliant
in its EDI applications, it cannot and does not guarantee the Y2K
compliance of its business partners' systems.  However, as part of the
Company's contingency planning, programs are in place which permit the
Company to deal with its EDI business partners in a non-EDI environment, if
necessary.  Therefore, the failure of any such business partners to achieve
Y2K compliance would not have a material adverse effect upon the Company's
operations.

  The Company is in the process of formulating a contingency plan to deal
with Y2K issues and expects such plan to be completed by June 30, 1999.
However, due to the complexity and widespread nature of such issues, the
contingency planning process of necessity must be an ongoing one requiring
possible further modification as more information becomes known regarding
(1) the Company's own systems and facilities, and (2) the status and
changes therein of the Y2K compliance efforts of outside suppliers and
vendors.  Management believes that the Company's current state of
readiness, the nature of the Company's business, and the availability of
the contingency plan minimizes Y2K risks.  Management does not foresee
significant liability to third parties if one or more of the Company's
systems are not Y2K compliant.  As significant Y2K uncertainties remain
outside the control of the Company, at this time the Company is unable to
determine a most reasonably likely worst case scenario.

  Through March 31, 1999, the Company has incurred, in addition to the
Service Management System costs noted above, $300,000 of internal staff
costs necessary to review and further Y2K compliance of its core operating
systems.  All Y2K costs have been and will continue to be funded from cash
flows from operations.  The Company expects the total costs associated with
its Y2K readiness program to aggregate approximately $400,000.

                       PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
  There are various claims and legal actions pending against the Company.
In the opinion of management, based on the advice of Michael B. Kinnard the
Company's in-house General Counsel, the outcome of such claims and
litigation will not have a material adverse effect upon the Company's
financial position or results of operations.

Item 2.  Changes in Securities
  None.

Item 3.  Defaults Upon Senior Securities
  None.




FORM 10-QA                                                  Page 10 of 10


Item 4.  Submission of Matters to a Vote of Security Holders
  The Company's Annual Meeting of Shareholders was held on January 28,
1999.  With regard to Proposal No. 1 of the NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 28, 1999 to elect two Class I Directors
to the Board of Directors, Patrick J. Bagley and Gerard J. Trippitelli were
elected.  At the meeting, 5,675,685 and 5,670,076 affirmative votes were
cast for Patrick J. Bagley and Gerard J. Trippitelli, respectively.  There
were no votes cast against either nominee and 8,528 and 14,137 votes were
withheld from Patrick J. Bagley and Gerard J. Trippitelli, respectively.

Item 5.  Other Information
  None.

Item 6.  Exhibits and Reports on Form 8-K
  (a)  Exhibits
         Exhibit 27 - Restated Financial Data Schedule

  (b)  Reports on Form 8-K
         None.

                               SIGNATURES

  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.


DATE:    January 18, 2000              MATLACK SYSTEMS, INC.
                                             (Registrant)


                                   /s/ Michael B. Kinnard
                                   Michael B. Kinnard
                                   President and Chief Operating Officer


                                   /s/ Patrick J. Bagley
                                   Patrick J. Bagley
                                   Vice President-Finance and Treasurer
                                   Chief Financial Officer
                                   Chief Accounting Officer