SECURITIES AND EXCHANGE COMMISSION
     WASHINGTON, D.C.  20549

     --------------------


     FORM 10-Q


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

For quarter ended June 30, 1998      Commission File Number 33-24317

     JORDAN INDUSTRIES, INC.
     (Exact name of registrant as specified in charter)

            Illinois                          36-3598114
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification No.)

      ArborLake Centre, Suite 550                60015
        1751 Lake Cook Road,                   (Zip Code)
        Deerfield, Illinois
(Address of Principal Executive Offices)

     Registrant's telephone number, including Area Code:

     (847) 945-5591

Former name, former address and former fiscal year, if changed since last 
report:  Not applicable.

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 twelve (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 ninety (90) days.

Yes  X            No     

The aggregate market value of voting stock held by non-affiliates of the 
Registrant is not determinable as such shares were privately placed and there 
is currently no public market for such shares.

The number of shares outstanding of Registrant's Common Stock as of August 14, 
1998: 98,501.0004.

<PAGE>




     PAGE 2

     JORDAN INDUSTRIES, INC.

     INDEX

Part I.                                                 Page No.
                             
     Financial Information                                   

     Condensed Consolidated Balance Sheets
     at June 30, 1998, and December 31, 1997                 3

     Condensed Consolidated Statements of Operations
     for the Three Months and Six Months Ended
     June 30, 1998 and 1997                                  4

     Condensed Consolidated Statements of Cash Flows
     for the Six Months Ended June 30, 1998 and 1997         5

     Notes to Condensed Consolidated Financial
     Statements                                              6

     Management's Discussion and Analysis of
     Financial Condition and Results of Operations          17


Part II.

     Other Information                                      25

     Signatures                                             26

<PAGE>


     PAGE 3

     JORDAN INDUSTRIES, INC.
     CONDENSED CONSOLIDATED BALANCE SHEETS
     (ALL DOLLAR AMOUNTS IN THOUSANDS)
                                                                        
                                                June 30,     December 31,
                                                  1998           1997    
                                               (unaudited) 
ASSETS
Current Assets:
  Cash and cash equivalents                  $   24,573        $ 52,500
  Accounts receivable, net                      160,923         134,177 
  Inventories                                   152,195         124,000
  Prepaid expenses and other current assets      19,080          12,706
     Total Current Assets                       356,771         323,383

Property, plant and equipment, net              123,196         105,070
Investments in and advances to affiliates         1,722           1,722
Goodwill, net                                   498,265         433,294 
Other assets                                     71,320          66,762
     Total Assets                            $1,051,274        $930,231

LIABILITIES AND NET CAPITAL DEFICIENCY
Current Liabilities:
  Notes payable                              $      396        $  2,650
  Accounts payable                               69,126          58,781
  Accrued liabilities                            67,746          70,473
  Advance deposits                                6,953           5,424
  Current portion of long-term debt              10,214           9,547
     Total Current Liabilities                  154,435         146,875

Long-term debt                                1,048,848         921,871
Other non-current liabilities                     9,271          13,403
Deferred income taxes                             1,444           1,444
Minority interest                                 1,662              88
Preferred stock                                  23,717          21,835
Net Capital Deficiency:
  Common stock                                        1               1
  Additional paid-in capital                      2,116           2,116
  Accumulated comprehensive income               (2,491)           (504)
  Accumulated deficit                          (187,729)       (176,898)
     Total Net Capital Deficiency              (188,103)       (175,285)
     Total Liabilities and Net Capital  
      Deficiency                             $1,051,274        $930,231


     See accompanying notes to condensed consolidated financial statements.

<PAGE>     

     PAGE 4

     JORDAN INDUSTRIES, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (unaudited)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)

                                                        SIX MONTHS ENDED
                                      SECOND QUARTER        June 30,        
                                      1998      1997     1998      1997

Net sales                           $245,516  $173,346 $453,218 $324,889
Cost of sales, excluding
 depreciation                        154,449   107,367  288,156  203,059
Selling, general and administra-
 tive expenses, excluding deprecia-
 tion                                 45,851    34,707   89,315   67,802
Depreciation                           5,862     4,651   11,226    9,027
Amortization of goodwill and other 
  intangibles                          5,411     3,654   10,431    6,906
Stock appreciation rights expense          -    15,418        -   15,418
Management fees and other              2,297       348    4,068    1,500

Operating income                      31,646     7,201   50,022   21,177

Other (income) and expenses:
  Interest expense                    27,248    19,199   53,559   37,775
  Interest income                       (634)     (894)  (1,432)  (1,606)
  Loss (gain) on sale of
    subsidiary and other               5,045   (18,275)   5,048  (18,012)
     Total other expenses             31,659        30   57,175   18,157
Income (loss) before income taxes,   
 minority interest, equity in
 investee, and extraordinary items       (13)    7,171   (7,153)   3,020 
Provision (benefit) for income taxes    (561)      923    1,561    1,200 
Income (loss) before minority
  interest, equity in investee,
  and extraordinary items                548     6,248   (8,714)   1,820 
Minority interest                        (70)     (376)    (219)    (764)
Equity in investee                         -    (3,383)       -   (4,168)
Income (Loss) before extraordinary
   items                                 478     2,489   (8,933)  (3,112)
Extraordinary items                        -    (9,044)       -   (9,363)
Net income (loss)                    $   478   $(6,555)$ (8,933)$(12,475)
 


     See accompanying notes to condensed consolidated financial statements.

     
<PAGE>

     PAGE 5
     JORDAN INDUSTRIES, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     (unaudited)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)
                                                       SIX MONTHS ENDED 
                                                           June 30,     
                                                      1998        1997   
Cash flows from operating activities:
 Net loss                                          $ (8,933)   $(12,475)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
     Depreciation and amortization                   21,657      15,813
     Provision for deferred income taxes                  -         163 
     Amortization of deferred financing fees          2,273       1,864
     Minority interest                                  219         764 
     Non-cash interest                               12,951       6,776
     Equity in investee                                   -       4,168
     Extraordinary item                                   -       9,363
     Loss (gain) on sale of subsidiary                5,000     (18,508)
     Changes in operating assets and 
      liabilities net of effects from 
      acquisitions:
        Increase in current assets                  (32,703)    (13,328)
        Increase (decrease) in current liabilities    9,566      (3,199)
        Decrease (increase) in non-current assets     1,212      (6,000)
        Decrease (increase) in non-current
         liabilities                                 (3,113)      3,630
        Net cash provided by (used in)
         operating activities                         8,129     (10,969)

Cash flows from investing activities:
   Net proceeds from sale of a subsidiary                 -      35,218
   Capital expenditures, net                         (9,872)     (5,758)
   Advances to affiliates                                 -      (1,335)
   Acquisition of subsidiaries                     (114,044)    (70,913)
   Additional purchase price payments and
    SARA payments                                    (9,913)          -
   Net cash acquired in purchase of subsidiaries      2,222         456
   Other                                                  -        (446)   
        Net cash used in investing activities      (131,607)    (42,778)

Cash flows from financing activities:
   Proceeds from Motors and Gears, Inc.
    common stock issuance                                 -       1,100 
   Proceeds from revolving credit facilities, net    99,500      56,000
   Repayment of long-term debt                       (6,554)     (5,263)
   Other borrowing                                    1,898           -
   Other                                                 51           - 
     Net cash provided by financing activities       94,895      51,837 

Foreign currency translation                            656           - 
Net decrease in cash and cash equivalents           (27,927)     (1,910)
Cash and cash equivalents at beginning of period     52,500      32,797
Cash and cash equivalents at end of period         $ 24,573    $ 30,887

See accompanying notes to condensed consolidated financial statements.

<PAGE>

     PAGE 6

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (unaudited)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)



A.  Organization

The unaudited condensed consolidated financial statements, which reflect all 
adjustments that management believes necessary to present fairly the results 
of interim operations and are of a normal recurring nature, should be read in 
conjunction with the Notes to the Consolidated Financial Statements (including 
the Summary of Significant Accounting Policies) included in the Company's 
audited consolidated financial statements for the year ended December 31, 
1997, which are included in the Company's Annual Report filed on Form 10-K for 
such year (the "1997 10-K").  Results of operations for the interim periods 
are not necessarily indicative of annual results of operations.

B.  Inventories

Inventories are summarized as follows:
                                                 June 30,    December 31,
                                                   1998           1997   
     Raw materials                                $ 53,619      $ 45,324 
     Work-in-process                                15,016        15,897 
     Finished goods                                 83,560        62,779
                                                  $152,195      $124,000


C.  Accounting for Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences 
between the carrying amounts of assets and liabilities for financial reporting 
purposes and the amounts used for income tax purposes.  Significant components 
of the Company's deferred tax liabilities and assets as of June 30,1998 and 
December 31, 1997, are as follows:

                                           June 30,          December 31,
                                            1998                 1997   
Deferred tax liabilities

Intangibles                               $ 4,711                $ 4,393
Tax over book depreciation                  7,260                  7,260
Basis in subsidiary                           798                    798
Lifo reserve                                   62                     83
Intercompany tax gain                       7,289                  7,289
Other                                         610                    531
Total deferred tax liabilities             20,730                 20,354



<PAGE>


     PAGE 7

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (unaudited)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)


Deferred tax assets

NOL carryforwards                          39,914            37,482
Accrued interest on discount debentures    13,510            13,510
Stock Appreciation Rights Agreements        2,682             3,772
Pension obligation                            143               444
Vacation accrual                              625               891
Uniform capitalization of inventory         1,712             1,501
Allowance for doubtful accounts             1,243             1,125
Foreign NOL's                               5,372             3,582
Deferred financing fees                       711               814
Intangibles                                 1,311             1,242
Tax asset basis over book basis at
  subsidiary                                7,289             7,289
Other                                         214               484
Total deferred tax assets                  74,726            72,136
Valuation allowance for deferred
 tax assets                               (55,440)          (53,226)
Net deferred tax assets                    19,286            18,910
Net deferred tax         
 liabilities                              $ 1,444          $  1,444 

D.  Comprehensive Income

As of January 1, 1998, the Company adopted the Financial Accounting Standards 
Board's Statement of Financial Accounting Standards No. 130, "Reporting 
Comprehensive Income."  Statement 130 establishes new rules for the reporting 
and display of comprehensive income and its components; however, the adoption 
of this Statement had no impact on the Company's net income or shareholders' 
equity.  Statement 130 requires foreign currency translation adjustments, 
which prior to adoption were reported separately in shareholders' equity, to 
be included in other comprehensive income.  Prior year financial statements 
have been reclassified to conform to the requirements of Statement 130.

Total comprehensive income was $1,391 and ($5,274) for the three months ended 
June 30, 1998 and 1997, respectively, and ($6,946) and ($14,058) for the six 
months ended June 30, 1998 and 1997, respectively.








<PAGE>



     PAGE 8

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)




E.  Sale of Subsidiaries

On May 15, 1997, the Company sold its subsidiary, Hudson Lock, Inc. 
("Hudson"), for approximately $39,100.  Hudson is a leading designer, 
manufacturer, and marketer of highly engineered medium-security custom and 
specialty locks for original equipment manufacturer customers.  A gain of 
$17,081 was recorded in 1997 relating to this sale.

On July 31, 1997, the Company sold its subsidiary, Paw Print Mailing List 
Services, Inc. ("Paw Print"), for approximately $12,500 to an affiliate.  As 
the transaction was among entities under common control, the proceeds received 
in excess of the net assets of Paw Print of $1,084 were recorded as an 
adjustment to Shareholder's Equity in 1997.  Paw Print is a value-added 
provider of direct mail services.

F.  Acquisition and Formation of Subsidiaries

On January 20, 1998, the Company through a newly created subsidiary K&S Sheet 
Metal Holdings ("K&S Holdings"), a subsidiary of 80% owned Bond Technologies, 
purchased the stock of K&S Sheet Metal ("K&S").  K&S is a manufacturer of 
precision metal enclosures for electronic original equipment manufacturers.  
K&S is located in Huntington Beach, California.

The purchase price of $15,500, including estimated costs incurred directly 
related to the transaction, has been preliminarily allocated to working 
capital of $2,257, property, plant and equipment of $1,002, non-compete 
agreements of $1,545 and other assets of $91 resulting in an excess purchase 
price over net identifiable assets of $10,605.  The acquisition was financed 
with $14,000 of borrowings from JTP's revolving credit agreement and $1,500 of 
a subordinated seller note.

On February 9, 1998, the Company completed the formation of Jordan Specialty 
Plastics, Inc. ("JSP").  JSP was formed as a Restricted Subsidiary under the 
Company's Indenture.  The Company sold the stock of Beemak and Sate-Lite to 
JSP for $11,500 of Preferred Stock, which will accrete at plus or minus 97.5% 
of the cumulative JSP net income or net loss, as the case may be, through the 
earlier of an Early Redemption Event (as defined) or the end of year five.  
The Company will also keep its intercompany notes with Sate-Lite ($1.2 million 
at January 31, 1998) and Beemak ($9.8 million at January 31, 1998).  The 
Company has sold these subsidiaries in order to establish them as more 
independent, stand-alone, industry-focused companies, and to allow the 
Company's stockholders and employees to invest directly in JSP.





<PAGE>


     PAGE 9

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)


On February 11, 1998, JSP purchased all of the common stock of Deflecto 
Corporation ("Deflecto").  Deflecto designs, manufactures and markets plastic 
injection molded products such as office supplies, hardware products and 
houseware products.

The purchase price of $43,000, including costs directly related to the 
transaction, was preliminarily allocated to working capital of $8,598, 
property, plant, and equipment of $6,346, other long term assets and 
liabilities of ($1,941), and resulted in an excess purchase price over net 
identifiable assets of $29,997.  The acquisition was financed with cash from 
the Jordan Industries, Inc. credit line and a $5,000 subordinated seller note.

On February 26, 1998, JSP purchased all of the net assets of Rolite Plastics, 
Inc.  Rolite is a manufacturer of extruded vinyl chairmats for the office 
products industry.

The purchase price of $6,000 including costs directly related to the 
transaction, was allocated to working capital of $483, property, plant, and 
equipment of $754, and resulted in an excess purchase price over net 
identifiable assets of $4,763.  The acquisition was financed with cash and a 
$900 subordinated seller note.

On May 15, 1998, the Company acquired all of the outstanding stock of Advanced 
D.C. Motors, Inc. and its affiliated corporations (collectively "ADC") for 
$55,500.  The purchase price, including costs incurred directly related to the 
transaction, was allocated to working capital of $9,247; property and 
equipment of $4,088; covenants not to compete of $662; other long-term assets 
and liabilities of $53; and resulted in an excess purchase price over net 
identifiable assets of $41,450.  ADC designs and manufactures special purpose, 
custom designed motors for use in electric lift trucks, power sweepers, 
electric utility vehicles, golf carts, electric boats, and other niche 
products.  ADC also designs and manufactures its own production equipment as 
well as electric motor components know as commutators.

On January 8, 1997, Beemak purchased the net assets of Arnon-Caine, Inc. 
("ACI"), a designer and distributor of modular storage systems primarily for 
sale to wholesale home centers and hardware stores.  Beemak now serves as 
ACI's primary supplier.  The integration of ACI into Beemak's operations has 
provided for manufacturing cost savings as well as synergistic marketing 
efforts.

The purchase price of $4,600, including costs incurred directly related to the 
acquisition, was allocated to working capital of $300, property, plant and 
equipment of $82, and excess purchase price over net identifiable assets of 
$4,218.  The acquisition was financed with cash.

On May 30, 1997, JTP purchased the assets of LoDan West, Inc. ("LoDan"), 
which designs, engineers and manufactures high-quality custom electronic cable 
assemblies, sub-assemblies and electro-mechanical assemblies for original 
equipment manufacturers in the data and telecommunications markets of the 
electronics industry.

<PAGE 10>

     PAGE 10

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)



The purchase price of $17,000, including estimated costs incurred directly 
related to the transaction, was allocated to working capital of $5,066,  
property, plant and equipment of $783, a non-compete agreement of $250, 
noncurrent assets of $41, and resulted in an excess purchase price over net 
identifiable assets of $10,860.  The acquisition was financed with cash and a 
$1,500 subordinated seller note.

On June 12, 1997, Motors and Gears Industries, Inc. ("Motors and Gears"), 
through its newly formed wholly-owned subsidiary, FIR Group Holdings, Inc. and 
its wholly-owned subsidiaries, Motors and Gears Amsterdam, B.V. and FIR Group 
Holdings Italia, SrL, purchased all of the common stock of the FIR Group 
Companies, consisting of CIME S.p.A., SELIN S.p.A., and FIR S.p.A.  The FIR 
Group Companies are manufacturers of electric motors and pumps for niche 
applications such as pumps for catering dishwashers, motors for industrial 
sewing machines, and motors for industrial fans and ventilators.

The purchase price of $50,496, including costs directly related to the 
transaction, was allocated to working capital of $16,562, property, plant, and 
equipment of $4,918, other long term assets and liabilities of ($3,442), and 
resulted in an excess of purchase price over net identifiable assets of 
$32,458.  The cash was provided from borrowings under the Motors and Gears 
Industries, Inc. Credit Agreement established on November 7, 1996 among Motors 
and Gears Industries, Inc., various banks, and Bankers Trust Company, as 
agent.

On September 2, 1997 JTP purchased the assets of Engineered Endeavors Inc. 
("EEI").  EEI designs, manufactures and installs custom cellular personal 
communication systems and radio/broadcasting towers.  

The purchase price of $41,500, including estimated costs incurred directly 
related to the transaction, was allocated to working capital of $2,068, 
property, plant, and equipment of $799, a non-compete agreement of $2,500, 
other long-term assets of $14, and resulted in an excess purchase price over 
net identifiable assets of $36,119.  The acquisition was financed with $21,500 
of cash and $20,000 of borrowings under the JTP credit facility.  

On September 11, 1997 the Company purchased the net assets of Cho-Pat, Inc. 
("Cho-Pat").  Cho-Pat is a leading designer and manufacturer of orthopedic 
supports and patented preventive and pain reducing medical devices.  Cho-Pat 
currently produces nine different products primarily for reduction of pain 
from injuries and the prevention of injuries resulting from overuse of the 
major joints.  

The purchase price of $1,200, including estimated costs incurred directly 
related to the transaction, was allocated to working capital of $17, property, 
plant and equipment of $23, and other long-term assets of $34 which resulted 
in an excess purchase price over net identifiable assets of $1,126.  The 
acquisition was financed with cash.

<PAGE 11>

     PAGE 11

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)


On October 27, 1997 Motors and Gears acquired all of the outstanding stock of 
Electronic Design and Control Company ("ED&C").  ED&C is a full service 
electrical engineering company which designs, engineers and manufactures 
electrical control systems and panels for material handling systems and other 
like applications.  ED&C provides comprehensive design, build and support 
services to produce electronic control panels which regulates the speed of 
movement of conveyor systems used in a variety of automotive plants and other 
industrial applications.  

The purchase price of $20,000, including costs incurred directly related to 
the transaction, was preliminarily allocated to working capital of $3,514, 
property, plant, and equipment of $132, covenants not to compete of $120, and 
resulted in an excess purchase price over net identifiable assets of $16,234.  
The acquisition was financed through a $16,000 borrowing on the Motors and 
Gears line of credit and a $4,000 subordinated seller note.  

On October 31, 1997 JTP purchased the stock of Telephone Services, Inc. of 
Florida ("TSI").  TSI designs, manufactures and provides customer cable 
assemblies, terminal strips and terminal blocks and other connecting devices 
primarily to the telephone operating companies and major telecommunication 
manufacturers.  

The purchase price of $53,303, including estimated costs incurred directly 
related to the transaction, has been allocated to working capital of $3,864, 
property, plant, and equipment of $1,528, a non-compete agreement of $2,000, 
and non current assets of $107, resulting in an excess purchase price over net 
identifiable assets of $45,804.  The acquisition was financed with a $48,000 
borrowing under the JTP credit facility, a $5,000 subordinated seller note and 
the assumption of a $303 deferred purchase agreement.

On December 10, 1997, Motors and Gears, through its newly formed wholly-owned 
subsidiary, Motion Holdings, Inc., purchased all of the common stock of Motion 
Control Engineering, Inc. ("MCE").  MCE is the leading independent supplier of 
electronic motion and logic control products to the elevator industry.

The purchase price of $53,600, including costs directly related to the 
transaction, was preliminarily allocated to working capital of $10,071, 
property and equipment of $1,428, non-compete agreements of $1,005, other 
long-term assets and liabilities of ($12), and resulted in an excess of 
purchase price over net identifiable assets of $41,108.  The cash was provided 
from the issuance of $100 million of 10 3/4% bonds by Motors and 
Gears, Inc.





<PAGE 12>


     PAGE 12

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)


Unaudited pro forma information with respect to the Company as if the 1998 and 
1997 acquisitions had occurred on January 1, 1997 is as follows:

                                                      SIX MONTHS ENDED
                                                           June 30,    
                                                       1998      1997  

Net sales                                             $461,647  $425,868
Net income (loss) before taxes                          (1,613)      298 
Net income (loss)                                       (5,350)   (5,317)

G.  Welcome Home Chapter 11 Filing

On January 21, 1997, Welcome Home filed a voluntary petition for relief under 
Chapter 11 ("Chapter 11") of title 11 of the United States code in the United 
States Bankruptcy Court for the Southern District of New York ("Bankruptcy 
Court").  In Chapter 11, Welcome Home has continued to manage its affairs and 
operate its business as a debtor-in-possession while it develops a 
reorganization plan that will restructure its operations and allow it to 
emerge from Chapter 11.  As a debtor-in-possession in Chapter 11, Welcome Home 
may not engage in transactions outside of the ordinary course of business 
without approval of the Bankruptcy Court.

Subsequent to the filing, Welcome Home reached an agreement with Fleet Capital 
Corporation to provide secured debtor-in-possession financing in the form of a 
credit facility.  The credit facility provides for borrowings dependent upon 
Welcome Home's level of inventory with maximum borrowings of $12,750.  The 
agreement grants a security interest in substantially all assets.  Advances 
under the facility bear interest at the prime rate plus 1.5%.  The agreement 
will terminate on January 31, 1999.

As a result of Welcome Home's Chapter 11 filing, the Company no longer has the 
ability to control the operations and financial affairs of Welcome Home.  
Accordingly, the Company no longer consolidates Welcome Home in its financial 
statements as of January 21, 1997, the date of the filing.  For the period 
ended January 21, 1997, the Company recorded a net loss of $1,195 related to 
Welcome Home. The amount due to the Company from Welcome Home was $1,466 as of 
June 30, 1998.

Cape Craftsmen, a consolidated subsidiary of the Company, would also be 
adversely affected by a liquidation of Welcome Home.  In the second quarter of 
1998, Cape's sales to Welcome Home were $3,100, or 56.8%, of Cape's total 
second quarter sales.  Cape's receivable outstanding related to these sales 
was $2,314 at June 30, 1998.





<PAGE 13>

     PAGE 13

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)

H.  Debenture Swap

On April 2, 1997, the Company privately placed approximately $214,036 
aggregate principal amount of 11.75% Series A Senior Subordinated Discount 
Debentures due 2009 (the "Series A Debentures"), at 56.52% of such principal 
amount. The Company placed the Series A Debentures to refinance substantially 
all of the $133,075 aggregate principal amount of its 11.75% Senior 
Subordinated Discount Debentures due 2005.  The Company has successfully 
registered and exchanged 11.75% Series B Senior Subordinated Discount 
Debentures due 2009 for its Series A Debentures.  In conjunction with this 
transaction, the Company recorded an extraordinary loss of $8,898 relating to 
the write-off of deferred financing fees and the premium assessed on the new 
issue.

I.  Payment of Stock Appreciation Rights

In March 1992, the former shareholders of a wholly-owned subsidiary, were 
granted Stock Appreciation Rights ("SAR") exercisable in full or in part on 
the occurrence of the disposition by voting power and/or value of the capital 
stock of the subsidiary.  The value of the stock appreciation rights was based 
on the ultimate sales price of the stock or assets of the subsidiary, and is 
essentially 15.0% of the ultimate sales price of the stock or assets sold, 
less $15,625.

On April 10, 1997, the Company paid the former shareholders pursuant to an 
agreement ("The Redemption Agreement"), as if the subsidiary was sold for 
$110,000.  The former shareholders received $9,438 in cash and a deferred 
payment of $5,980 over five years including interest.  The Redemption 
Agreement also requires that $1,875 of remaining preferred stock be redeemed 
one year from the date of the agreement.  The Company recorded a charge of 
$15,418 related to this agreement during 1997.  The Company paid $1,200 during 
1998 and has a remaining liability of $4,800 at June 30, 1998.

As consideration for the signing of the Redemption Agreement, the Company 
further agreed to pay the former shareholders non-compete payments totaling 
$352 and a special bonus of approximately $454, determined based on a 
percentage of the subsidiary's gross profit during fiscal 1997.

In connection with the Company's acquisitions of AIM and Cambridge in 1989, 
the seller of these companies was granted stock appreciation rights.  The 
formula used to value these rights was calculated by determining 20% of a 
multiple of average cash flow of these companies for the two years preceding 
the date when these rights were exercised, less the indebtedness of these 
companies.  The seller passed away during the third quarter of 1996 and the 
seller's estate exercised these rights.  The total amount owed under these 
rights is approximately $6,260.  AIM had fully accrued for these rights as of 
December 31, 1996.  In 1997, the Company entered into an agreement to purchase 
and redeem the Estate's and Decedent's interest in the SAR for $3,111 in cash 
and a deferred payment, including interest at 9% per annum, of $3,391 payable 
on May 2, 1998.  JTP paid the remaining liability of $3,391 on May 4, 1998.

<PAGE 14>

     PAGE 14

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)



J.  Additional Purchase Price Agreements

The Company has a contingent purchase price agreement relating to its 
acquisition of Deflecto in 1998.  The plan is based on Deflecto achieving 
certain earnings before interest and taxes and is payable on April 30, 2008.  
If Deflecto is sold prior to April 30, 2008, the plan is payable 120 days 
after the transaction. 

The Company has a contingent purchase price agreement relating to its 
acquisition of Viewsonics in 1996.  The plan is based on Viewsonics achieving 
certain earnings before interest and taxes and can pay a minimum of $0 and a 
maximum of $2,000 for the year ended July 31, 1997 and $3,000 for the year 
ending July 31, 1998.  As of December 31, 1997, the Company had accrued $1,388 
for the plan year ended July 31, 1997.  No amounts have been accrued for the 
plan year ending July 31, 1998.  The Company paid $1,388 to the former owner 
of Viewsonics during the first quarter of 1998.

The Company has a contingent purchase price agreement relating to its 
acquisition of Motion Control on December 18, 1997. The terms of the Company's 
Motion Control acquisition agreement provides for additional consideration to 
be paid if the acquired entity's results of operations exceed certain targeted 
levels.  Targeted levels are set substantially above the historical experience 
of the acquired entity at the time of acquisition.  The agreement becomes 
exercisable in 2003 and payments, if any, under the contingent agreement will 
be placed in a trust and paid out in cash in equal annual installments over a 
four year period.

In addition, the Company has an agreement to make an additional purchase price 
payment of up to $4,000 to the former owners of TSI if certain earnings 
projections are met on or before March 1, 1999. 

The Company has a contingent purchase price agreement relating to its 
acquisition of Advanced D.C.  The contingent purchase price of up to $5,600 is 
dependent upon the acquired entity's results of operations exceeding certain 
targeted levels substantially above its historical experience.

K.  Preferred Stock

In April 1997, the Company entered into an agreement ("The Redemption 
Agreement") with certain former shareholders of a subsidiary.  Pursuant to The 
Redemption Agreement, the Company is required to redeem $1,875 of remaining 
preferred stock one year from the date of the agreement.  At December 31, 
1997, the preferred stock is classified as an accrued liability.  This 
liability was paid in full during the first quarter of 1998.

In May 1997, Motors and Gears Holdings, Inc., a majority-owned subsidiary of 
the Company, issued $1,500 of senior, non-voting 8.0% cumulative 
preferred stock to its minority shareholders.

<PAGE 15>

     PAGE 15

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)


On July 25, 1997, JTP issued and sold twenty-five thousand units, each 
consisting of (i) $1 aggregate liquidation preference of 13.25% Senior 
Exchangeable Preferred Stock due August 1, 2009 ("JTP Senior Preferred 
Stock"), and (ii) one share of JTP Common Stock.

Holders of the JTP Senior Preferred Stock are entitled to receive dividends at 
a rate of 13.25% per annum of the liquidation preference.  All dividends are 
cumulative, whether or not earned or declared, and are payable on February 1, 
May 1, August 1, and November 1 of each year.  On or before August 1, 2002, 
JTP may, at its option, pay dividends in cash or in additional shares of JTP 
Senior Preferred Stock having an aggregate liquidation preference equal to the 
amount of such dividends.  After August 1, 2002, dividends may be paid only in 
cash.  On November 1, 1997, JTP issued 889.3836 of additional shares of JTP 
Senior Preferred Stock, as payment of dividends through that date.  On 
February 1, 1998 and May 1, 1998, the Company issued 864.6345 and 864.3747 
shares of Senior Preferred Stock, respectively, as payment of dividends.

The JTP Senior Preferred Stock has no voting rights and is mandatorily 
redeemable on August 1, 2009.

L.  Foreign Exchange Instruments and Risk Management

The Company enters into foreign currency forward exchange contracts to hedge 
transactions and firm commitments that are denominated in foreign currencies 
(principally the Czech Koruna and Italian Lira) and not to engage in currency 
speculation.  The Company primarily utilizes forward exchange contracts with a 
duration of one year or less.  Gains or losses on hedges of transaction 
exposures are included in income in the period in which exchange rates 
change.  Gains and losses on contracts which hedge specific foreign currency 
denominated commitments, primarily royalty payments from the Company's Czech 
and Italian operations, are deferred and recognized in the basis of the 
transactions underlying the commitments.

Forward exchange contracts generally require the Company to exchange U.S. 
dollars for foreign currencies at maturity, at rates that are agreed to at 
inception of the contracts.  If the counterparties to the exchange contracts 
(primarily highly-rated financial institutions) do not fulfill their 
obligations to deliver the contracted currencies, the Company could be at risk 
for any currency related fluctuation.

The Company has $6,257 notional amount of foreign currency forward exchange 
contracts outstanding at June 30, 1998 ($0 at December 31, 1997).

M.  Subsequent Events

On July 9, 1998, the Company sold its stock of Diversified Wire and Cable 

<PAGE 16>

     PAGE 16

     JORDAN INDUSTRIES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)

for $16,000 which resulted in a loss of $5,000.  JTP adjusted the  carrying
value of Diversified's net assets as of June 30, 1998 and recorded a charge of
$5,000 to reflect this loss.  The proceeds from the sale were used to pay
$1,500 in subordinated seller notes to the original owners of Diversified,
$13,500 to pay down JTP's revolving credit facility, and $1,000 which is
placed in escrow until January 9, 1999, pending certain events subsequent to
the sale.  Diversified's results of operations for the three and six months
ended June 30, 1998 and 1997 were as follows:

                                                    SIX MONTHS ENDED
                           Second Quarter               June 30,    
                           1998     1997             1998        1997 
Net Sales                $7,718   $7,617          $15,697     $15,193
Operating Income            257      422              668       1,034
Net Income (loss)          (339)    (182)            (502)       (204)


On July 14, 1998, the Company, through its 70% owned subsidiary, TSI, 
purchased the net assets of Opto-Tech Industries, Inc. ("Opto-Tech").  
Opto-Tech assembles and sells radio frequency interference products, 
attenuators and message waiting indicators to Regional Bell Operating 
Company's, independent phone operators and distributors of telecommunications 
products.  The purchase price of $6,400, including costs incurred directly 
related to the transaction, has not been allocated at this time.  The 
acquisition was financed with $5,150 of borrowings from JTP's revolving credit 
agreement and $1,250 of subordinated seller notes.












<PAGE 17>


     PAGE 17

     MANAGEMENT'S DISCUSSION AND ANALYSIS
     OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     (UNAUDITED)
     (ALL DOLLAR AMOUNTS IN THOUSANDS)

                                                     SIX MONTHS ENDED
                                     SECOND QUARTER       June 30,    
                                      1998    1997     1998      1997 
Net Sales:
Specialty Printing and Labeling    $ 31,710  $31,305 $ 55,446  $ 54,521
Jordan Specialty Plastics (c)        19,016    6,318   32,828    12,350
Motors and Gears                     71,700   34,999  130,267    66,518
Telecommunications Products (c)      82,109   59,278  154,210   106,203
Welcome Home (d)                          -        -        -     2,456
Consumer and Industrial Products(c)  40,981   41,446   80,467    82,841
     Total                         $245,516 $173,346 $453,218  $324,889 
 
Operating Income:    
Specialty Printing and Labeling    $  3,426 $  3,108  $ 3,553  $  3,152
Jordan Specialty Plastics (c)         2,097      915    3,861     1,230
Motors and Gears                     12,038    7,601   21,029    14,216
Telecommunications Products (c)       9,015   (7,112)  15,122    (1,407)
Welcome Home (d)                          -        -        -    (1,107)
Consumer and Industrial Products(c)   5,228    3,884    8,344     8,019
     Total(a)                      $ 31,804  $ 8,396  $51,909  $ 25,210
         
Operating Margins (b):
Specialty Printing and Labeling      10.8%     9.9%     6.4%      5.8%
Jordan Specialty Plastics(c)         11.0     14.5     11.8      10.0
Motors and Gears                     16.8     21.7     16.1      21.4
Telecommunications Products (c)      11.0    (12.0)     9.8      (1.3)
Welcome Home (d)                        -        -        -     (45.1)
Consumer and Industrial Products(c)  12.8      9.4     10.4       9.7
     Consolidated (a)                13.0      4.8     11.5       7.8
                    
(a)     The total does not include corporate overhead is $158 and $1,195 for 
the second quarter ended June 30, 1998 and 1997, respectively, and $1,887 and 
$4,033 for the six months ended June 30, 1998 and 1997, respectively.

(b)     Operating margin is operating income divided by net sales.

(c)     In 1998, Sate-Lite and Beemak were reclassified from the Consumer and 
Industrial Product segment to the Jordan Specialty Plastics segment.  In 1997, 
the Retube product line of Dura-Line was reclassified from the 
Telecommunications Products segment to the Consumer and Industrial Products 
segment.  Prior period results were also restated into these new groups in 
order to provide accurate comparisons between periods.

(d)   For the period from January 1, 1997 to January 21, 1997, the date 
of the Chapter 11 filing.  See Footnote G.

<PAGE 18>

     PAGE 18

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


The following discussion should be read in conjunction with Management's 
Discussion and Analysis of Financial Condition and Results of Operations 
contained in the 1997 10-K and the financial statements and the related notes 
thereto which are included elsewhere in this quarterly report.

Results of Operations

Summarized below are the net sales, operating income and operating margins (as 
defined) for each of the Company's business segments for the second quarter 
ended June 30, 1998 and 1997.  This discussion reviews the foregoing segment 
data and certain of the consolidated financial data for the Company.

Specialty Printing and Labeling.  As of June 30, 1998, the Specialty Printing 
and Labeling group consisted of SPAI, Valmark, Pamco, and Seaboard.

For the second quarter and first six months of 1998, net sales increased $0.4 
million or 1.3%, and $0.9 million or 1.7%, respectively, over the same periods 
last year.  The second quarter increase is due to higher sales of ad specialty 
products at SPAI, $0.4 million, increased sales of membrane switches and 
shielding devices at Valmark, $0.4 million and $0.7 million, respectively, and 
higher sales of folding boxes at Seaboard, $0.4 million.  Partially offsetting 
these increases are lower sales of calendars and school annuals at SPAI, $0.1 
million each, decreased sales of screen printed and rollstock products at 
Valmark, $0.1 million and $1.1 million, respectively, and lower sales of 
labels at Pamco, $0.1 million.  The increase in sales for the first six months 
of 1998 is due to higher sales of ad specialty products and calendars at SPAI, 
$1.5 million and $0.3 million, respectively, increased sales of membrane 
switches at Valmark, $0.6 million, and higher sales of folding boxes at 
Seaboard, $0.1 million.  Partially offsetting these increases are lower sales 
of school annuals at SPAI, $0.2 million, and decreased sales of screen printed 
and rollstock product at Valmark, $0.2 million and $1.2 million, 
respectively.  The sales gains for both periods at SPAI reflect continued 
focus on growing the corporate programs segment of the ad specialty business 
while the increased sales of membrane switches shows the continued 
diversification of Valmark's customer base.

For the second quarter and first six months of 1998, operating income 
increased $0.3 million or 10.2%, and $0.4 million or 12.7%, respectively, over 
the same periods last year.  The second quarter increase is due to higher 
operating income at Valmark, $0.1 million, increased operating income at 
Seaboard, $0.2 million, and decreased corporate expenses, $0.2 million.  
Partially offsetting these increases is lower operating income at SPAI, $0.2 
million.  The six month increase in operating income is due to higher 
operating income at Valmark, $0.1 million, increased operating income at 
Seaboard, $0.2 million, and decreased corporate 

<PAGE 19>

     PAGE 19

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

expenses, $0.1 million.  The improved operating income at Valmark is due to 
Valmark negotiating more favorable pricing with customers, the increase at 
Seaboard is due to higher sales more fully absorbing fixed operating expenses, 
and the decreased corporate expenses is due to lower bank fees as bank debt 
was repaid in 1997.  The decrease in SPAI's operating income is due to the 
hiring of additional salespeople to focus on continued growth in the ad 
specialty segment.

For the second quarter and first six months of 1998, the operating margin 
increased to 10.8% and 6.4%, respectively, from 9.9% and 5.8%, respectively, 
due to the reasons mentioned above.

Jordan Specialty Plastics.  As of June 30, 1998, the Jordan Specialty Plastics 
group consisted of Beemak, Sate-Lite, Deflecto, and Rolite.

For the second quarter and first six months of 1998, net sales increased $12.7 
million or 201.0%, and $20.5 million or 165.8%, respectively, over the same 
periods last year.  The increase in second quarter sales is primarily due to 
the acquisitions of Deflecto and Rolite during the first quarter of 1998.  
Deflecto and Rolite contributed sales in the second quarter of 1998 of $12.1 
million and $0.9 million, respectively.  In addition, net sales of warning 
triangles increased at Sate-Lite, $0.1 million.  Partially offsetting these 
increases are decreased sales of bike reflectors and custom molding products 
at Sate-Lite, $0.2 million each.  The increase in sales for the first six 
months of 1998 is also due primarily to the acquisitions of Deflecto and 
Rolite.  Deflecto contributed $19.2 million in the first six months while 
Rolite contributed $1.2 million.  In addition, sales increased due to higher 
sales of bike parts and warning triangles at Sate-Lite, $0.2 million and $0.3 
million, respectively.  Partially offsetting these increases are lower sales 
of plastic injection molded products at Beemak, $0.4 million.

For the second quarter and first six months of 1998, operating income 
increased $1.2 million or 129.2%, and $2.6 million or 213.9%, respectively.  
The increase in second quarter operating income is primarily due to the 
acquisitions of Deflecto and Rolite, as discussed above.  Deflecto and Rolite 
contributed operating income in the second quarter of 1998 of $1.6 million and 
$0.1 million, respectively.  Partially offsetting these increases is lower 
operating income at Sate-Lite and Beemak, $0.4 million and $0.1 million, 
respectively.  The six month increase in operating income is primarily due to 
the acquisitions of Deflecto and Rolite who contributed operating income in 
1998 of $2.7 million and $0.2 million, respectively.  Partially offsetting 
these increases is decreased operating income at Sate-Lite and Beemak, $0.2 
million and $0.1 million, respectively.  The decrease in operating income at 
Sate-Lite is due to unfavorable fluctuations in resin prices while the 
decreased operating income at Beemak is primarily due to the lower absorption 
of fixed operating expenses at a lower sales level.

<PAGE 20>

     PAGE 20

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

For the second quarter and first six months of 1998, the operating margin 
decreased to 11.0% and increased to 11.8%, respectively, from 14.5% and 10.0%, 
respectively, in 1997.  The decrease in second quarter operating 
margin is due to the reasons mentioned above.

Motors and Gears.  As of June 30, 1998, the Motors and Gears group consisted 
of Imperial, Scott, Gear, Merkle-Korff, ED&C, Motion Control, and Advanced 
D.C.

For the second quarter and first six months of 1998, net sales increased $36.7 
million or 104.9%, and $63.7 million or 95.8%, respectively, over the same 
periods last year.  The second quarter increase in sales is primarily due to 
the acquisitions of FIR Group, ED&C, Motion Control Engineering, and Advanced 
D.C. in June 1997, October 1997, December 1997, and May 1998, respectively.  
FIR, ED&C, Motion Control, and Advanced D.C. contributed sales in the second 
quarter of 1998 of $11.5 million, $3.0 million, $13.5 million, and $5.6 
million, respectively, or 91.6% of the total increase in sales.  In addition, 
sales increased due to an 11.0% increase in sales of sub-fractional motors and 
a 2.0% increase in sales of fractional/integral motors.  The six month 
increase in net sales is also primarily due to the acquisitions of FIR, ED&C, 
Motion Control, and Advanced D.C.  These companies contributed sales in 1998 
of $20.9 million, $6.5 million, $25.1 million, and $5.6 million, 
respectively.  In addition, sales of sub-fractional motors and 
fractional/integral motors both increased 9.0%.  These increases are 
attributed to continued strength in the vending machine and appliance markets 
and stronger sales in the floor care and elevator markets, respectively.

For the second quarter and first six months of 1998, operating income 
increased $4.4 million or 58.4%, and $6.8 million of 47.9%, respectively, over 
the same periods last year.  The second quarter increase in operating income 
is due to the acquisitions and higher sales of sub-fractional motors and 
fractional/integral motors, as discussed above.  

Operating margins for the second quarter and first six months of 1998 
decreased to 16.8% and 16.1% from 21.7% and 21.4%, respectively, in 1997.  The 
decrease in operating margins is primarily due to FIR, ED&C, and Motion 
Control operating at a slightly lower gross margin than the rest of the group.

Telecommunications Products.  As of June 30, 1998, the Telecommunications 
Products group consisted of Dura-Line, AIM, Cambridge, Johnson Components, 
Viewsonics, Vitelec, Bond, Northern Technologies, LoDan, EEI, TSI, and K&S 
Sheet Metal.

Net sales for the second quarter and first six months of 1998 increased $22.8 
million or 38.5%, and $48.0 million or 45.2%, respectively, over the same 
periods last year.  Net sales increased primarily due to the acquisitions of 
LoDan, EEI, TSI, and K&S Sheet Metal which occurred in May 1997, September 
1997, October 1997, and January 1998, respectively.  LoDan 

<PAGE 21>

     PAGE 21

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

sales increased $4.7 million over second quarter 1997 while EEI, TSI, and K&S 
Sheet Metal contributed sales of $4.3 million, $12.3 million, and $3.0 million 
in 1998, respectively.  In addition, net sales increased due to higher sales 
of power conditioning systems.  Partially offsetting these increases are 
decreased sales of fiber optic conduit systems and certain custom cable 
assemblies.  The six month increase is also primarily due to the acquisitions 
of LoDan, EEI, TSI, and K&S Sheet Metal, as discussed above.  LoDan sales 
increased $11.4 million over the same period in 1997 while EEI, TSI, and K&S 
Sheet Metal contributed sales of $8.4 million, $22.9 million, and $5.5 
million, respectively.  The increase is also due to higher sales of 
infrastructure products and equipment, particularly power conditioning systems 
and CATV products.  Partially offsetting these increases are decreased sales 
of fiber optic conduit systems and certain custom cable assemblies.

For the second quarter and first six months of 1998, operating income 
increased $16.1 million or 226.8%, and $16.5 million or 1174.8%, respectively, 
over the same periods last year.  Operating income increased primarily due to 
a payment of $15.4 million for stock appreciation rights which reduced 
operating income in the second quarter of 1997.  In addition, second quarter 
operating income increased due to the acquisitions discussed above.  LoDan 
operating income increased $0.6 million over second quarter 1997 while EEI, 
TSI, and K&S Sheet Metal contributed operating income of $0.3 million, $1.5 
million, and $0.5 million, respectively.  The six month increase is primarily 
due to the payment of $15.4 million for stock appreciation rights in 1997, as 
discussed above.  In addition, operating income increased due to the 
acquisitions discussed above.  LoDan operating income increased $1.2 million 
over the same period in 1997 while EEI, TSI, and K&S Sheet Metal  contributed 
operating income of $0.3 million, $3.3 million, and $1.1 million, 
respectively.  Partially offsetting these increases is decreased operating 
income from the infrastructure products and equipment segment due to lower 
sales of higher margin product and higher amortization costs related to the 
new acquisitions.

For the second quarter and first six months of 1998, operating margins 
increased to 11.0% and 9.8%, respectively, from (12.0%) and (1.3%), 
respectively, in 1997.  The increases are due to the reasons mentioned above.

Welcome Home.  Net sales decreased $2.5 million or 100.0%, and the operating 
loss decreased $1.1 million or 100.0%.  Due to Welcome Home filing Chapter 11 
bankruptcy on January 21, 1997, the results of operations of Welcome Home are 
not included in the consolidated results of the Company at June 30, 1998.  See 
Note G.

Consumer and Industrial Products.  As of June 30, 1998, the Consumer and 
Industrial Products group consisted of DACCO, Riverside, Parsons, Cape 
Craftsmen, Cho-Pat, and Dura-Line Retube.

<PAGE 22>

     PAGE 22

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


For the second quarter and first six months of 1998, net sales decreased $0.5 
million or 1.1%, and $2.4 million or 2.9%, respectively, over the 
same periods last year.  The decrease in second quarter sales is primarily due 
to the divestitures of Paw Print and Hudson in July 1997 and May 1997, 
respectively.  Paw Print and Hudson contributed sales in the second quarter of 
1997 of $3.9 million and $2.1 million, respectively.  In addition, sales 
decreased due to lower sales of aircraft parts at Parsons, $0.4 million, and 
decreased contract distribution sales at Riverside, $0.2 million.  Partially 
offsetting these decreases were higher sales of rebuilt converters at Dacco, 
$1.2 million, increased sales of bibles, books, videos, music, and gifts at 
Riverside, $0.1 million, $0.8 million, $0.2 million, $0.2 million, and $0.1 
million, respectively, increased sales of wooden furniture and other 
accessories at Cape, $3.0 million, higher sales of plastic pipe at Dura-Line 
Retube, $0.1 million, and sales at Cho-Pat, $0.4 million, due to the 
acquisition of the company in September 1997.  The decrease in sales for the 
first six months of 1998 is also primarily due to the divestitures of Paw 
Print and Hudson.  Paw Print 
and Hudson contributed sales in 1997 of $8.2 million and $6.7 million, 
respectively.  In addition, sales decreased due to lower contract 
distribution sales at Riverside, $0.6 million, and lower sales of aircraft 
parts at Parsons, $0.2 million.  Partially offsetting these decreases are 
increased sales of rebuilt converters at Dacco, $1.9 million, higher sales of 
bibles, books, video, music, and gifts at Riverside, $0.4 million, $2.0 
million, $0.4 million, $0.3 million, and $0.2 million, respectively, higher 
sales at Dura-line Retube, $0.6 million, increased sales at Cape, $6.7 
million, and sales at Cho-Pat, $0.8 million.  The increase in sales at Cape 
reflects management's success in broadening the customer base.

For the second quarter and first six months of 1998, operating income 
increased $1.3 million or 34.6%, and $0.3 million or 4.1%, respectively, over 
the same periods last year.  The increase in second quarter operating income 
is primarily due to higher operating income at Dacco, $1.0 million, increased 
operating income at Riverside, $0.2 million, and higher operating income at 
Cape, $1.9 million.  Partially offsetting these increases is decreased 
operating income at Parsons, $0.2 million, and the divestitures of Paw Print 
and Hudson, as discussed above.  Paw Print and Hudson contributed operating 
income in the second quarter of 1997 of $0.6 million and $1.0 million, 
respectively.  The six month increase in operating income is primarily due to 
higher operating income at Dacco, Riverside, Parsons, Cape, and Cho-Pat of 
$1.0 million, $0.3 million, $0.1 million, $2.1 million, and $0.1 million, 
respectively. Partially offsetting these increases are the divestitures of Paw 
Print and Hudson.  Paw Print and Hudson contributed operating income of $1.1 
million and $2.2 million, respectively, in 1997.  The increase in operating 
income is primarily due to increased sales of higher gross margin product at 
Dacco and Riverside, as well as increased absorption of fixed overhead costs 
at Cape due to the higher sales.

Operating margin for the second quarter and first six months of 1998 increased 
to 12.8% and 10.4%, respectively, from 9.4% and 9.7%, 

<PAGE 23>

     PAGE 23

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

respectively, in 1997.  The six month decrease is primarily due to the 
divestitures of Paw Print and Hudson, as discussed above.   

Consolidated Results:  (See Condensed Consolidated Statements of Operations.) 

For the second quarter and first six months of 1998, consolidated net sales 
increased $72.2 million or 41.6%, and $128.3 million or 39.5%, respectively, 
over the same periods last year.  The increase in sales is primarily due to 
the 1998 acquisitions of Deflecto and Rolite in the Jordan Specialty Plastics 
group, Advanced D.C. in the Motors and Gears group, and K&S Sheet Metal in the 
Telecommunications Products group.  In addition, sales increased due to the 
1997 acquisitions that occurred subsequent to the second quarter of 1997: Fir, 
ED&C and Motion Control in the Motors and Gears group; EEI and TSI in the 
Telecommunications Products group; and Cho-Pat in the Consumer and Industrial 
Products group.  Sales also increased due to higher sales of ad specialty 
products, calendars, membrane switches, and folding boxes in the Specialty 
Printing and Labeling group, increased sales of bike parts and warning 
triangles in the Jordan Specialty Plastics group, higher sales of 
sub-fractional motors and fractional/intergral motors in the Motors and Gears 
group, higher sales of power conditioning systems and CATV products in the 
Jordan Telecommunicaitons group, and increased sales of rebuilt converters, 
bibles, books, video, music, and gifts in the Consumer and Industrial Products 
group.  Partially offsetting these increases are decreased sales of school 
annuals, screen printed product, and rollstock product in the Specialty 
Printing and Labeling group, lower sales of plastic injection molding products 
in the Jordan Specialty Plastics group, decreased sales of fiber optic cable 
conduit systems and certain custom cable assemblies in the Jordan 
Telecommunications group, and lower contract distribution sales in the Consumer 
and Industrial Products group.  In addition, sales decreased due to the 
divestitures of Paw Print and Hudson from the Consumer and Industrial Products 
group.

For the second quarter and first six months of 1998, operating income 
increased $24.4 million or 339.5%, and $28.8 million or 136.2%, respectively, 
over the same periods last year.  The increase is primarily due to the 1998 
and 1997 acquisitions, as discussed above.  In addition, operating income 
increased due to the payment of stock appreciation rights in the Jordan 
Telecommunications group which reduced operating income in the second quarter 
of 1997.  Operating income also increased due to more favorable pricing 
contracts and decreased corporate expenses in the Specialty Printing and 
Labeling group and increased sales of higher gross margin product and higher 
absorption of fixed overhead costs in the Consumer and Industrial Products 
group.  Partially offsetting these increases is decreased operating income due 
to unfavorable fluctuations in resin prices in the Jordan Specialty Plastics 
group, lower sales of higher gross margin product and higher amortization 
costs in the Jordan  Telecommunications group, and the divestitures of Paw 
Print and Hudson in the Consumer and Industrial Products group.

<PAGE 24>

     PAGE 24

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

For the second quarter and first six months of 1998 interest expense increased 
$8.0 million or 41.9%, and $15.8 million or 41.8%, respectively,  due to 
higher debt levels stemming from the Company's July 1997 debt offering at JTP
and the Company's December 1997 debt offering at Motors and Gears.  Interest
expense also increased due to the financing of the Company's acquisitions.
Interest income remained consistent between 1997 and 1998.

Liquidity and Capital Resources.  The Company had approximately $202.3 million 
in working capital at June 30, 1998, compared to $176.5 million at the end of 
1997, representing an increase of $25.8 million or 14.6%.  This increase is 
due to increased net trade receivables, higher inventory, increased prepaids, 
and decreased accrued liabilities.  Partially offsetting these increases in 
working capital is an increased accounts payable balance and a higher advance 
deposits balance.

Operating activities.  Net cash provided by operating activities for the six 
months ended June 30, 1998 was $8.1 million compared to $11.0 million used in 
operating activities during the same period in 1997.  This increase is due to 
an increase in sales and reduction of SAR expenses, partially offset by an 
increase in interest expense.

Investing activities.  Net cash used in financing activities for the six 
months ended June 30, 1998 was $131.6 million compared to $42.8 million used 
in investing activities during the same period in 1997.  This increase is due 
to proceeds from sale of a subsidiary resulting from the divestiture 
of Hudson in the second quarter 1997, increased capital expenditures, 
increased acquisitions during the first half of 1998, and additional purchase
price and SAR payments made during 1998.

Financing activities.  Net cash provided by financing activities for the six 
months ended June 30, 1998 was $94.9 million compared to $51.8 million 
provided by financing activities during the same period in 1997.  This 
increase is primarily due to increased proceeds from the Company's revolving 
credit facilities used for working capital needs and the acquisitions of 
subsidiaries.

None of the subsidiaries require significant amounts of capital spending to 
sustain current operations or to achieve projected growth.

The Company expects its principal sources of liquidity to be from its 
operating activities and funding from the revolving line-of-credit agreement.  
The Company further expects that these sources will enable it to meet its 
long-term cash requirements for working capital, capital expenditures, 
interest, taxes, and debt repayment for at least the next 12 months.


<PAGE>

     PAGE 25


     PART II.  OTHER INFORMATION



Item 1.                 Legal Proceedings
                        None

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
                        None

                        27.  EDGAR Financial Data Schedule



<PAGE>

     PAGE 26

     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.


JORDAN INDUSTRIES, INC.





August 14, 1998                    By:   /s/ Thomas C. Spielberger
                                             Thomas C. Spielberger
                                             Senior Vice President,
                                             Finance and Accounting