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           December 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 December 31, 1999 was 8,814,434.
FORM 10-QA                                               Page 2 of 10

PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements

                        MATLACK SYSTEMS, INC.
                CONSOLIDATED STATEMENT OF OPERATIONS
               In Thousands, Except Per Share Amounts


                                                    Quarter Ended
                                                     December 31,
                                                  1999        1998

Revenues                                        $51,793      $54,231
Expenses
  Operating                                      43,545       47,623
  Depreciation and amortization                   2,561        3,201
  Selling and administrative                      4,923        5,412
  Other (income) expense                           (118)         132
                                                 50,911       56,368

Operating earnings (loss)                           882       (2,137)

Interest expense                                  1,417          934

Loss before income tax benefit                     (535)      (3,071)
Income tax benefit                                 (144)      (1,136)

Net loss                                        $  (391)     $(1,935)

Loss per share
  Basic                                         $  (.04)     $  (.22)
  Diluted                                       $  (.04)     $  (.22)

Average common shares outstanding
  Basic                                           8,814        8,813
  Diluted                                         8,814        8,813

Dividends paid per share                          None         None

The Notes to the Consolidated Financial Statements are an integral part
of these statements.













FORM 10-QA                                               Page 3 of 10

                        MATLACK SYSTEMS, INC.
                     CONSOLIDATED BALANCE SHEET
          In Thousands, Except Share and Per Share Amounts

                                             December 31, September 30,
               ASSETS                          1999         1999
Current assets
  Cash                                       $    635     $  2,837
  Accounts receivable, net of allowance for
    doubtful accounts: December-$1,432;
    September-$1,284                           39,929       34,330
  Inventories                                   5,916        6,007
  Other current assets                          2,083        1,592
  Refundable income taxes                       2,631        2,631
  Deferred income taxes                         2,928        3,752
      Total current assets                     54,122       51,149

Property and equipment, at cost, net of
  accumulated depreciation of:
  December-$131,260; September-$131,296        81,974       86,074
Other assets                                    1,983        1,958
     Total assets                            $138,079     $139,181

     LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Accounts payable                           $  5,913     $ 11,035
  Accrued liabilities                          17,042       19,583
  Current maturities of long-term debt         58,292        5,309
      Total current liabilities                81,247       35,927

Long-term debt                                  5,448       51,189
Self-insurance reserves                         5,265        5,265
Other liabilities                               3,106        2,429
Deferred income taxes                           3,803        4,770

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: December-8,814,434 and
    September-8,814,434                         8,814        8,814
  Capital in excess of par value               10,620       10,620
  Retained earnings                            19,776       20,167
      Total shareholders' equity               39,210       39,601
      Total liabilities and
        shareholders' equity                 $138,079     $139,181

The Notes to the Consolidated Financial Statements are an integral part
of these statements.
FORM 10-QA                                               Page 4 of 10

                        MATLACK SYSTEMS, INC.
                CONSOLIDATED STATEMENT OF CASH FLOWS
                            In Thousands

                                                    Quarter Ended
                                                     December 31,
                                                    1999     1998

Cash flows from operating activities:
  Net loss                                        $  (391) $(1,935)
  Adjustments to reconcile net earnings (loss)
    to net cash used in operating activities:
    Depreciation and amortization                   2,561    3,200
    Net gain on sale of property and equipment       (120)     (16)
    Changes in assets and liabilities:
       Accounts receivable                         (5,599)     (45)
       Inventories and other assets                  (556)  (1,824)
       Accounts payable and accrued liabilities    (7,663)  (4,467)
       Current and deferred income taxes             (143)  (2,170)
       Other, net                                     677      911
Net cash used in operating activities             (11,234)  (6,346)

Cash flows from investing activities:
  Purchase of property and equipment               (1,946)  (1,734)
  Proceeds from the sale of property
   and equipment                                    3,736      247
Net cash provided by (used in)
   investing activities                             1,790   (1,487)

Cash flows from financing activities:
  Proceeds of long-term debt                       18,900   16,300
  Repayment of long-term debt                     (11,658) (13,566)
  Exercise of stock options                          -          28
Net cash provided by financing activities           7,242    2,762

Net decrease in cash                               (2,202)  (5,071)
Cash beginning of period                            2,837    5,477
Cash end of period                                $   635  $   406

Supplemental and noncash information:
  Interest paid                                   $ 1,312  $   936
  Income taxes paid                               $  -     $ 1,034









The Notes to the Consolidated Financial Statements are an integral part
of these statements.


FORM 10-QA                                               Page 5 of 10

                        MATLACK SYSTEMS, INC.
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Restatement
     The financial statements for the first fiscal quarter of 2000 have
been restated to correct an accounting error related to the recording
of revenues that was discovered during the closing process for the
second fiscal quarter.  The effect of this restatement reduced revenues
by $1,465,000 and net earnings by $531,000 or $.06 per diluted share.

Basis of Presentation
     The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q 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.  Operating results for the quarter ended December 31,
1999 are not necessarily indicative of the results that may be expected
for the year ended September 30, 2000.  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, 1999.

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):
                                      Three Months Ended
                                         December 31,
                                     1999           1998

     Basic EPS                       8,814          8,813
     Effect of options                 -  (1)         -  (1)
     Diluted EPS                     8,814          8,813

(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.

Segment Information
     The Company's operations are classified into two reportable
business segments based on differences in their operations.  The
Company's principal business is the transportation of bulk commodities
in tank trailers and tank containers for chemical and dry bulk
shippers.  In connections with this transportation service, the Company
may provide, when required, intermodal transportation services and tank
cleaning.  The Company is also in the business of leasing tank
trailers, tank containers and other associated specialized equipment
primarily to customers in the chemical and food industries and its
suppliers.

FORM 10-QA                                               Page 6 of 10

     Following is a tabulation of business segment information for the
first quarter of fiscal 1999 and 2000, respectively.

                         Bulk                 Corporate
(In thousands)      Transportation  Leasing   and Other  Consolidated

Quarter ended
 December 31, 1998
Revenues
 External customers    $ 51,057     $ 3,148    $    26     $ 54,231
 Intersegment                88          45       (133)         -
   Total revenues        51,145       3,193       (107)      54,231
Segment profit (loss)
 before income taxes     (3,643)        820       (248)      (3,071)
Total assets            131,428      15,144     (7,013)     139,559
Capital expenditures        739         986          9        1,734
Depreciation and
 amortization             2,864         328          9        3,201
Interest expense            894          40        -            934

Quarter ended
 December 31, 1999
Revenues
 External customers    $ 49,694     $ 2,062    $    37     $ 51,793
 Intersegment                30          97       (127)        -
   Total revenues        49,724       2,159        (90)      51,793
Segment profit (loss)
 before income taxes     (1,215)        750        (70)        (535)
Total assets            129,638      16,390     (7,949)     138,079
Capital expenditures      1,916          30        -          1,946
Depreciation and
 amortization             2,069         487          5        2,561
Interest expense          1,309         108        -          1,417

Item  2.  Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations:  Quarter Ended December 31, 1999 vs. Quarter
Ended December 31, 1998
   Revenues for the quarter ended December 31, 1999 decreased by
$2,438,000 (4.5%) to $51,793,000 compared with $54,231,000 during the
same quarter last year.  The Company's decision to substantially reduce
its international presence accounted for $2,203,000 of the quarter-to-
quarter decrease in revenues.  In addition, leasing revenues from
external customers declined by $1,086,000 during the first fiscal
quarter of 2000.  This decline resulted from the fact that leasing
revenues in the quarter ended December 31, 1998 included the benefit of
approximately $1,200,000 of opportunity revenues, which resulted from
bad weather in Puerto Rico.  After considering the effects of lost
revenues when compared with the same quarter of last year, overall
revenues from the remaining base level of the bulk transportation
business have increased.

   Operating expenses decreased by $4,078,000 (8.6%) and reflected the
results of decisions made by the Company's management to shut down
FORM 10-QA                                                Page 7 of 10

marginal and unprofitable operations and to reduce overall operating
expenses.  All major operating cost categories, except fuel, were lower
in the first quarter of fiscal 2000 when compared with the same quarter
of the prior year.  As a percentage of revenue, operating expenses were
84.1% in 1999 and 87.8% in 1998.

   Depreciation and amortization expense decreased by $640,000 (20.0%)
reflecting both the disposition of property and equipment during fiscal
1999 and the first quarter of fiscal 2000 and the fact that a larger
portion of the Company's assets have become fully depreciated.

   Selling and administrative expenses decreased by $489,000 (9.0%)
principally as a result of cost containment measures recently
implemented to more properly align the Company's infrastructure with the
level and mix of business currently available.  As a percentage of
revenue, selling and administrative expenses were 9.5% in 1999 and 10.0%
in 1998.

   Interest expense increased by $483,000 reflecting higher borrowing
rates and an increased level of indebtedness when compared with the same
period of last year.

   The effective rate of income tax benefit in the first quarter of
fiscal 2000 was 26.9% compared with an effective rate of benefit last
year of 37.7%.  Non-deductible expenses caused the lower effective rate
of benefit for the first quarter of fiscal 2000.

   Net loss for the quarter was $391,000 or $.04 per diluted share.  The
lower net loss, when compared with the prior year, reflect management's
efforts to contain costs and generate additional profitable business.

Liquidity and Capital Resources
   During the first quarter of fiscal 2000, the Company's operating
activities required a cash outflow of $11,234,000.  Historically, the
Company incurs a net cash outflow from operating activities during the
first quarter due to the inclusion of annual payments for insurance
premiums and certain other operating expenses.  During the first quarter
of fiscal 2000, slower than normal collections of accounts receivable
also adversely affected cash provided by operating activities.  During
the first quarter, the Company reached agreement with several insurance
companies in which the Company sought coverage for environmental costs
associated with certain Company-owned sites.  As a result of this
settlement, the Company received $4,108,000 of which $1,148,000 was
received in December and $2,960,000 was received in early January.

   Capital expenditures in the first quarter of fiscal 2000 were
$1,946,000 compared with $1,734,000 last year.  Proceeds from the sale
of property and equipment were $3,736,000, primarily the result of
selling three terminals.  The Company anticipates purchasing equipment
in 2000 to replace older fully depreciated equipment.  It is expected
that total capital expenditures for transportation equipment in 2000
will be between $5,000,000 and $6,000,000.  The Company also expects to
make modest capital expenditures for transportation service facilities
in fiscal 2000.

FORM 10-QA                                                Page 8 of 10

   The Company anticipates that its currently available funds, cash
generated from operations, cash realized from the sale of property and
equipment, income tax refunds, insurance settlements and available
borrowing capacity under its amended credit agreement will be sufficient
to meet cash and working capital requirements, including anticipated
capital expenditures, through the end of fiscal 2000.

   The source of the available borrowing capacity is the Company's
$75,000,000 bank credit facility, which had $56,900,000 outstanding at
December 31, 1999.  Under this facility, borrowings are restricted to
the net book value of available equipment and eligible accounts
receivable less outstanding letters of credit.  At December 31, 1999, a
total of $3,851,000 was available to the Company under this facility.

   On December 20, 1999, the bank group amended the credit facility and
reset ratios and modified the requirements on certain covenants for the
four quarters beginning with the quarter ended December 31, 1999 through
the quarter ending September 30,2000.  This amendment also limits
capital expenditures, prohibits quarterly losses and increases the cost
to the Company for outstanding borrowings.  Due to the requirement to
restate the first fiscal quarter of 2000, the Company was not in
compliance with the revised covenants at December 31, 1999.
Accordingly, the Company has classified all amounts due under the credit
facility as current obligations.  The amendment permits additional
advances for working capital and other corporate needs.  The credit
agreement expires on August 19, 2000, but may be renewed on a year-to-
year basis thereafter upon agreement of the parties thereto.
Termination of the agreement would result in the repayment of the
outstanding balance over a period of 48 months in equal monthly
installments.

   The Company had commitments for transportation equipment purchases of
$1,097,000 at December 31, 1999.

   Otherwise, there were no material changes in the Company's financial
condition and its liquidity and capital resources since September 30,
1999.

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.


FORM 10-QA                                                Page 9 of 10

   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") Issues
   As of the filing date of this Form 10-Q, the Company's business
operations have not been materially impacted by Y2K matters.  The
Company will continue to monitor its operations for possible Y2K
information technology programming issues.

                      PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
   There are various ordinary routine claims and legal actions pending
against the Company.  In the opinion of management, based on the advice
of in-house counsel, the likelihood that the ultimate resolution of
these claims and actions will be material is remote.

Item 2.  Changes in Securities
   None.

Item 3.  Defaults Upon Senior Securities
   None.

Item 4.  Submission of Matters to a Vote of Security Holders
   None.

Item 5.  Other Information
   None.

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

   (b)  Reports on Form 8-K
          None.




FORM 10-QA                                               Page 10 of 10



                              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:   May 15, 2000                  MATLACK SYSTEMS, INC.
                                       (Registrant)

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

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