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 September 30, 2005        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
                                -----          -----

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12 b-2 of the Exchange Act).

                           Yes              No    X
                                -----           -----

         Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12 b-2 of the Exchange Act).


                           Yes              No    X
                                -----           -----

         The number of shares outstanding of Registrant's Common Stock as of
November 14, 2005: 98,501.0004.




<PAGE>

                                      2


                             JORDAN INDUSTRIES, INC.

                                      INDEX


Part I. Financial Information                                          Page No.
-----------------------------                                          --------

   Item 1. Financial Statements

      Condensed Consolidated Balance Sheets at September 30, 2005
        (Unaudited) and December 31, 2004                                   3

      Condensed Consolidated Statements of Operations for the
        Three Months Ended September 30, 2005 and 2004 (Unaudited)
        and the Nine Months Ended September 30, 2005 and 2004 (Unaudited)   4

      Condensed Consolidated Statements of Cash Flows for
        the Nine Months Ended September 30, 2005 and 2004 (Unaudited)       5

      Notes to Condensed Consolidated Financial Statements (Unaudited)      6

   Item 2. Management's Discussion and Analysis of
              Financial Condition and Results of Operations                20

   Item 3. Quantitative and Qualitative Disclosures About Market Risk      27

   Item 4. Controls and Procedures                                         27


Part II. Other Information                                                 28
--------------------------

   Item 1. Legal Proceedings

   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

   Item 3. Defaults Upon Senior Securities

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

   Item 5. Other Information

   Item 6. Exhibits



<PAGE>

                                      3


                             JORDAN INDUSTRIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (ALL DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                 September 30,     December 31,
                                                                      2005            2004
                                                                 --------------    ------------
                                                                   (unaudited)
<S>                                                                     <C>             <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                            $15,613        $ 15,412
  Accounts receivable, net                                             117,620         109,554
  Inventories                                                          129,115         130,033
  Assets of discontinued operations (See Note E)                           790           3,432
  Income tax receivable                                                  1,413           3,631
  Prepaid expenses and other current assets                             11,245          12,363
                                                                       -------         -------
    Total Current Assets                                               275,796         274,425

Property, plant and equipment, net                                      79,257          85,036
Investments in and advances to affiliates                               25,549          40,882
Goodwill, net                                                          244,720         245,309
Other assets                                                            12,049          16,754
                                                                      --------        --------
    Total Assets                                                      $637,371        $662,406
                                                                      ========        ========

LIABILITIES AND SHAREHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
Current Liabilities:
  Accounts payable                                                     $62,678         $62,796
  Accrued liabilities                                                   81,083          81,451
  Liabilities of discontinued operations (See Note E)                        -             698
  Current portion of long-term debt                                     21,884          27,874
                                                                      --------        --------
    Total Current Liabilities                                          165,645         172,819

Long-term debt, less current portion                                   664,376         689,399
Other non-current liabilities                                           31,435          25,167
Deferred income taxes                                                   18,912          14,255
Minority interest                                                        1,231           1,003
Preferred stock of a subsidiary                                          2,912           2,744

Shareholders' Equity (net capital deficiency):
  Common stock $.01 par value: 100,000 shares
   authorized and 98,501 shares issued and
   outstanding                                                               1               1
  Additional paid-in capital                                             2,116           2,116
  Accumulated other comprehensive income                                 2,314           3,685
  Accumulated deficit                                                 (251,571)       (248,783)
                                                                      --------        --------
    Total Shareholders' Equity (net capital
     deficiency)                                                      (247,140)       (242,981)
                                                                      --------        --------
    Total Liabilities and Shareholders'
     Equity (net capital deficiency)                                  $637,371        $662,406
                                                                      ========        ========
</TABLE>


See accompanying notes to condensed consolidated financial statements.



<PAGE>

                                      4


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


<TABLE>
<CAPTION>

                                                    THREE MONTHS ENDED           NINE MONTHS ENDED
                                                        September 30,               September 30,
                                                  -------------------------  -------------------------
                                                    2005          2004           2005         2004
                                                    ----          ----           ----         ----
<S>                                                  <C>           <C>            <C>          <C>

Net sales                                         $187,918     $187,663       $551,516     $546,899
Cost of sales, excluding
 depreciation                                      132,912      131,541        392,892      377,489
Selling, general and administrative
 expenses, excluding depreciation                   35,815       36,871        109,448      111,525
Depreciation                                         3,600        3,312         10,955       12,403
Amortization                                            89           26            172          124
Income from affiliate transactions (see Note M)     (7,966)           -        (12,376)      (7,954)
Management fees and other                              106           31           (490)         278
                                                   --------      -------       --------      -------

Operating income                                    23,362       15,882         50,915       53,034

Other (income) expenses:
  Interest expense                                  13,646       12,937         41,109       51,828
  Interest income                                     (105)         (42)          (185)      (1,874)
  Gain on sale of subsidiary (see Note K)                -            -           (251)           -
  Other                                                646           80            698         (280)
                                                   --------      -------       --------      -------
                                                    14,187       12,975         41,371       49,674
                                                   --------      -------       --------      -------
Income from continuing operations before
 income taxes and  minority interest                 9,175        2,907          9,544        3,360

Provision for income taxes                           3,125        2,139          9,481        8,097
                                                    -------       -------       --------      ------

Income/(Loss) from continuing operations
 Before minority interest                            6,050          768             63       (4,737)

Minority interest                                      116          102            228          263
                                                   --------      -------       --------      -------

Income/(Loss) from continuing operations             5,934          666           (165)      (5,000)

Discontinued operations:
  Loss from discontinued operations, net
   of tax (See Note E)                              (1,811)      (1,766)        (3,957)      (4,335)
  Gain/(Loss)on sale of discontinued
   operations, net of tax (See Note E)                   -            -          1,502       (1,171)
                                                   --------      -------       --------      -------

Net Income/(Loss)                                   $4,123      $(1,100)       $(2,620)    $(10,506)
                                                   ========     ========       ========    =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.



<PAGE>

                                      5


                             JORDAN INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                        (ALL DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                         NINE MONTHS ENDED
                                                                            September 30,
                                                                         ------------------
                                                                          2005        2004
                                                                          ----        ----
<S>                                                                        <C>         <C>

Cash flows from operating activities:
 Net loss                                                              $ (2,620)   $ (10,506)
  Adjustments to reconcile net loss to net
   cash provided by/(used in) operating activities:
    (Gain)/loss on sale of discontinued operations
     (See Note E)                                                        (1,502)       1,171
    Gain on sale of subsidiary (See Note K)                                (251)           -
    Gain on sale of affiliates (See Note M)                              (4,410)      (7,954)
    Gain on refinancing of affiliate (See Note M)                        (7,966)           -
    Depreciation and amortization                                        11,127       12,584
    Amortization of deferred financing fees                               4,832        6,616
    Minority interest                                                       228          263
    Non-cash interest expense                                             6,193        6,296
    Deferred income taxes                                                 4,550        3,620
    Gain on disposal of fixed assets                                       (133)        (256)
    Other                                                                    52       (1,596)
    Changes in operating assets and liabilities:
      Increase in current assets                                         (5,921)     (29,331)
      Increase in current liabilities                                        31       17,299
      Increase in non-current assets                                     (1,515)        (508)
      Increase/(decrease) in non-current liabilities                        420         (665)
    Decrease in net assets of discontinued operations                     1,944          416
                                                                         ------      --------
        Net cash provided by/(used in) operating activities               5,059       (2,551)

Cash flows from investing activities:
  Proceeds from sale of fixed assets                                        721          844
  Capital expenditures                                                   (5,364)      (5,317)
  Net proceeds from sale of discontinued operations
    (See Note E)                                                          1,002        6,155
  Acquisition of subsidiary (See Note F)                                   (874)        (315)
  Net proceeds from sale of affiliates (See Note M)                       6,600       27,207
  Net proceeds from sale of subsidiary (See Note K)                       1,209            -
  Net proceeds from sale of affiliate promissory note (see Note M)        9,449            -
  Net proceeds from refinancing by an affiliate (See Note M)             15,000            -
                                                                         ------      -------
        Net cash provided by investing activities                        27,743       28,574

Cash flows from financing activities:
  (Repayments of)/proceeds from revolving credit facilities, net        (11,089)       6,070
  Repayment of long-term debt                                           (26,788)     (25,843)
  Proceeds from other borrowings                                          5,961        4,820
  Payment of financing fees                                                   -       (3,820)
                                                                         ------      -------
           Net cash used in financing activities                        (31,916)     (18,773)

Effect of exchange rate changes on cash                                    (685)         955
                                                                         ------      -------
Net Increase in cash and cash equivalents                                   201        8,205
Cash and cash equivalents at beginning of period                         15,412       15,517
                                                                       --------      -------
Cash and cash equivalents at end of period                             $ 15,613      $23,722
                                                                       ========      =======
</TABLE>


See accompanying notes to condensed consolidated financial statements.


<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, 2004,
which are included in the Company's Annual Report filed on Form 10-K for such
year (the "2004 10-K"). Results of operations for the interim periods are not
necessarily indicative of annual results of operations.

B.  Summary of Significant Accounting Policies
----------------------------------------------

The condensed consolidated financial statements include the accounts of Jordan
Industries, Inc. and its subsidiaries. Material intercompany transactions and
balances are eliminated in consolidation. Operations of certain subsidiaries
outside the United States are included for periods ending two months prior to
the Company's year-end and interim periods to ensure timely preparation of the
condensed consolidated financial statements.

Shipping and handling costs are classified in cost of sales in the statement of
operations. Certain prior year amounts have been reclassified from revenue to
cost of sales to conform to the current year presentation.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), "Consolidation
of Variable Interest Entities - An Interpretation of Accounting Research
Bulletin (ARB) No. 51." This interpretation provides guidance on how to identify
variable interest entities and how to determine whether or not those entities
should be consolidated. The Company adopted the provisions of FIN 46 as of
January 1, 2005 and determined that there are no variable interest entities that
the Company would be required to consolidate.

The Company has recorded income tax expense of $9,481 for the nine months ended
September 30, 2005 primarily attributable to foreign taxes, state taxes and the
change in the Company's deferred tax liability. Due to the uncertainty of when
the goodwill deferred tax liability will reverse, the Company has not considered
any future reversal of the deferred tax liability related to goodwill to support
the realization of deferred tax assets. Additionally, the Company continues to
maintain a full valuation allowance against its deferred tax assets.

During 2004, the Company realized $90,404 of cancellation of indebtedness income
for federal income tax purposes as a result of modifications to certain of its
outstanding debt obligations. Such cancellation of indebtedness income was
offset by the consolidated group's net operating losses.








<PAGE>
                                      7


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

C.  Inventories
---------------

Inventories are summarized as follows:

                                   September 30,      December 31,
                                        2005              2004
                                   -------------     -------------

         Raw materials                $56,841         $ 57,453
         Work-in-process               13,318           13,693
         Finished goods                58,956           58,887
                                     --------         --------
                                     $129,115         $130,033
                                     ========         ========

D. Comprehensive Income/(Loss)
------------------------------

Total comprehensive income/(loss) for the three months and nine months ended
September 30, 2005 and 2004 was as follows:


                                 Three Months ended      Nine Months ended
                                    September 30,         September 30, 2005
                                 -------------------   ----------------------
                                  2005        2004       2005        2004
                                  ----        ----       ----        ----

Net income/(loss)               $ 4,123    $(1,100)    $(2,620)   $(10,506)
Foreign currency translation     (1,154)       881      (1,371)      2,319
                                --------   --------    --------   ---------
Comprehensive income/(loss)     $ 2,969      $(219)    $(3,991)   $ (8,187)
                                ========   ========    ========   =========

E.  Discontinued Operations
---------------------------

During 2004, the Company undertook a plan to sell Electrical Design & Control
("ED&C"), a subsidiary of Kinetek. As such, the consolidated financial
statements reflect ED&C as a discontinued operation in all periods presented. On
May 2, 2005, the Company sold certain inventory, equipment, intellectual
property assets and contracts of ED&C. The Company no longer has any ownership
interest in ED&C, however it will continue to collect on the outstanding
receivables which were not sold and pay the remaining accounts payable not
assumed.

On January 20, 2004, the Company sold certain assets and liabilities of JII
Promotions' Ad Specialty and Calendar product lines to a third party for $6,155.
Concurrent with the transaction, the Company agreed to wind down the remaining
activities of JII Promotions and to ultimately retain only the pension-related
liabilities and various immaterial capital leases. The consolidated financial
statements reflect JII Promotions as a discontinued operation in all periods
presented. The Company recorded a loss on the sale of $1,171 in 2004. In the
second quarter of 2005, the Company reached a final settlement with the
purchasers of JII Promotions which provided additional proceeds to the Company
of $1,502, $1,002 of which was paid in cash and $500 of which was evidenced by
promissory notes to be paid in 2006 and 2007. The $1,502 of additional proceeds
has been recorded as a gain on the sale of discontinued operations in the
Company's income statement. There was no tax impact on the gain or loss on sale
or on the loss from discontinued operations.

Summarized selected financial information for the discontinued operations are as
follows:
                                    Three months ended      Nine months ended
                                      September 30,           September 30
                                  --------------------     -------------------
                                    2005        2004        2005       2004
                                    ----        ----        ----       ----

      Revenues                    $    -      $1,878       $1,079     $7,904
      Loss from discontinued
       operations                 (1,811)     (1,766)      (3,957)    (4,335)



<PAGE>

                                      8


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

The major classes of assets and liabilities of the discontinued operations are
as follows:
                                              September 30,     December 31,
                                                  2005              2004
                                            ----------------   -------------

       Current assets                           $ 447              $2,267
       Property, plant and equipment, net         313               1,134
       Other long-term assets                      30                  31
                                                -----              ------
          Total assets                            790               3,432
       Current liabilities                          -                 698
                                                -----              ------
          Net assets of discontinued
            Operations                         $  790              $2,734
                                               ======              ======

F. Acquisition of Subsidiaries
------------------------------

On March 28, 2005, the Company, through its wholly owned subsidiary, Kinetek,
paid in cash the remaining acquisition cost for its September 30, 2004
acquisition of O. Thompson, a New York City-based elevator control company. The
total acquisition cost was originally $887 which was subsequently adjusted to
$853 during the first quarter of 2005. Of the total acquisition price, $315 was
paid through the end of the third quarter in 2004, $57 was paid during the
fourth quarter of 2004, and the remaining $481 was paid during the first quarter
of 2005.

On September 28, 2005, the Company, through its wholly owned subsidiary, Atco,
acquired certain assets including inventory and machinery of Coolstar, Inc. for
$393 including fees. Coolstar is a manufacturer of evaporators for the
automotive climate control market and its operations will be fully integrated
into Atco.

G.  Additional Purchase Price Agreements
----------------------------------------

The Company has a contingent purchase price agreement relating to its
acquisition of Deflecto in 1998. The agreement 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 agreement is payable 120 days
after the transaction. Additional consideration, if any, will be recorded as an
addition to goodwill.

Kinetek has a contingent purchase price agreement relating to its acquisition of
Motion Control on December 18, 1997. The terms of this agreement provide for
additional consideration to be paid to the sellers. The agreement is exercisable
at the sellers' option during a five year period that began in 2003. When
exercised, the additional consideration will be based on Motion Control's
operating results over the two preceding fiscal years. Payments, if any, under
the contingent agreement will be placed in a trust and paid out in cash over a
three or four-year period, in annual installments according to a schedule, which
is included in the agreement. Additional consideration, if any, will be recorded
as an addition to goodwill.

H. Pension Plans and Other Post-Retirement Benefit Plans
--------------------------------------------------------

The components of net periodic benefit cost for the Company's pension plans for
the three months and nine months ended September 30, 2005 and 2004 were as
follows:

                                 Three Months Ended    Nine Months Ended
                                    September 30,        September 30,
                                 ------------------    ------------------
                                  2005         2004     2005        2004
                                  ----         ----     ----        ----

Service cost                      $177         $195     $531       $585
Interest cost                      315          310      945        930
Expected return on plan assets    (296)        (270)    (888)      (810)
Prior service costs recognized      15           15       45         45
Recognized net actuarial loss       32           31       96         93
                                  ----         ----     ----       ----
   Net periodic benefit cost      $243         $281     $729       $843
                                  ====         ====     ====       ====


<PAGE>

                                      9


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

During the second quarter of 2005, one of the Company's subsidiaries, Alma
Products, negotiated and approved certain changes to its retirement plan for
hourly employees. The effect of these changes on the liability of the plan
results in a one-time curtailment charge as calculated pursuant to SFAS 88. The
effect of these changes can not be conclusively calculated at this time, however
a range of curtailment charges has been estimated. The Company has recorded a
curtailment charge of $355 to cost of sales in the financial statements. The
Company will continue to monitor the impact of these changes and will adjust the
related liability as more data becomes available.

The components of net periodic benefit cost for the Company's post-retirement
healthcare benefit plans for the three months and nine months ended September
30, 2005 and 2004 were as follows:

                                    Three Months Ended    Nine Months Ended
                                       September 30,        September 30,
                                    -------------------   ------------------
                                       2005       2004      2005      2004
                                       ----       ----      ----      ----

     Service cost                       $37        $46      $111      $138
     Interest cost                       55         90       165       270
     Recognized net actuarial loss        5         48        15       144
                                        ---       ----      ----      ----
        Net periodic benefit cost       $97       $184      $291      $552
                                        ===       ====      ====      ====

I.  Business Segment Information
--------------------------------

See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" for the Company's business segment disclosures. There have been no
changes from the Company's December 31, 2004 consolidated financial statements
with respect to segmentation or the measurement of segment profit or loss.

J.  Management Discussion of Liquidity
--------------------------------------

As discussed in the 2004 10-K, one of the Company's revolving credit facilities
contains a provision for the step-down in maximum borrowing capacity during 2005
and 2006. As of June 1, 2005, the Company's maximum borrowings under this
agreement decreased from $75,000 to $55,000. This, coupled with the facts that
the Company has experienced operating losses in recent years and has used cash
in operating activities, has caused the Company's executive management to
evaluate various options to improve the Company's liquidity. To this end, the
Company has restructured some of its outstanding debt through the Exchange Offer
discussed in the 2004 10-K and the Modification and Waiver Agreements also
discussed in the 2004 10-K. The effect of these transactions has been to reduce
cash paid for interest in the current year as well as to provide for further
reductions in debt maturity payments if certain financial performance is not
achieved. In addition, the Company expects improved operating performance on a
consolidated basis in the coming quarters. Specifically, new product development
and the continued shift of manufacturing to China in the Specialty Plastics and
Kinetek groups are expected to improve results. Further, the Company has
evaluated its holdings of investments in affiliates and, when appropriate, will
sell certain investments, similar to the sale of the Company's investments in
DMS Holdings Inc, Mabis Healthcare Holdings Inc., Flavor and Fragrance Holdings
Inc. and Fleet Graphics Holdings as described in the 2004 10-K and the Company's
quarterly filings. The Company believes that through its efforts discussed
above, the Company will have sufficient liquidity to meet its obligations in the
coming year.

<PAGE>

                                      10


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

K.  Sale of Subsidiary
----------------------

On March 24, 2005, the Company sold the assets of Cho-Pat, Inc. ("Cho-Pat") to
Cho-Pat's management team for proceeds of $1,075. Cho-Pat is a designer and
manufacturer of orthopedic related sports medicine devices and was part of the
Consumer and Industrial Products segment. The Company recognized a gain of $251
related to the sale of Cho-Pat. In July 2005, the Company received additional
purchase price of $134. These additional funds did not alter the amount of the
gain recorded on the sale.

L.  Warranties
--------------

The Company provides warranties on certain products for varying lengths of time.
The Company estimates the costs that may be incurred and records a liability in
the amount of such costs at the time product revenue is recognized. Changes to
the Company's product warranty accrual during the nine months ended September
30, 2005 and 2004 are as follows:

                                           Nine Months Ended
                                              September 30,
                                           -------------------
                                            2005         2004
                                            ----         ----

         Balance, beginning of year        $2,316       $1,700
         Warranties issued                    850        1,463
         Change in estimate                  (537)         100
         Settlements                       (1,180)        (840)
                                           -------      -------
         Balance, end of year              $1,449       $2,423
                                           =======      =======

M. Affiliate Transactions
-------------------------

On May 4, 2004, two of the Company's affiliates, DMS Holdings, Inc. and Mabis
Healthcare Holdings, Inc., ("DMI/Mabis") were sold to a third party. A portion
of the proceeds from the sale was used to repay the Company for unsecured
advances and operating expenses which the Company paid on behalf of DMS/Mabis in
prior periods, as well as accrued and unpaid management fees due the Company.
These repayments totaled $806 and $1,069, respectively. Also as a result of the
sale, the Company was paid a fee of $1,725 for the termination of its management
fee arrangement with DMS/Mabis, and a fee of $1,600 pursuant to certain advisory
agreements. The Company recorded income of approximately $4,309 in the second
quarter of 2004 as a result of this transaction.

On May 13, 2004, one of the Company's affiliates, Flavor and Fragrance Holdings,
Inc., ("FFG") was sold to a third party. A portion of the proceeds was used to
repay the principal and accrued interest on the note the Company received when
the net assets of Flavorsource were sold to FFG on January 1, 2002. This
principal and accrued interest totaled $12,281. In addition, a portion of the
proceeds from the sale was used to repay the Company for unsecured advances and
operating expenses which the Company paid on behalf of FFG in prior periods, as
well as accrued and unpaid management fees due the Company. These repayments
totaled $4,509 and $1,672, respectively. Also as a result of the sale, the
Company was paid a fee of $1,705 for the termination of its management fee
arrangement with FFG, and a fee of $1,940 pursuant to certain advisory
agreements. The Company recorded income of approximately $3,645 in the second
quarter of 2004 as a result of this transaction.

On May 18, 2005, JIR Paging, Inc. repurchased from the Company its promissory
note in the amount of $9,200. The proceeds to the Company were $9,449 and
consisted of the principal amount of the note plus accrued and unpaid interest
since the last interest payment date of $249. The Company is currently due no
other material amounts from JIR Paging.


<PAGE>

                                      11


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

On June 10, 2005, the Company's affiliate, Fleet Graphics Holdings, was sold to
management of that company for $6,600. A portion of the proceeds from the sale
was used to pay the Company accrued and unpaid management fees and operating
expenses which were paid by the Company on behalf of Fleet Graphics Holdings.
These repayments totaled $1,577 and $613; respectively. Also as a result of the
sale, the Company was paid $1,400 for the termination of its management fee
arrangement with Fleet Graphics Holdings and a fee of $1,160 pursuant to certain
advisory agreements. The Company also received $1,850 for various fees and
charges associated with the transaction. The Company recorded income of $4,410
in the second quarter of 2005 as a result of this transaction.

On July 29, 2005, the Company received $15,000 in fees and repayments from a
refinancing transaction related to Healthcare Products Industries, Inc. ("HPI")
and its operating subsidiary, Hoveround. A portion of the proceeds were used to
repay accrued and unpaid expenses as well as advances paid by the Company to HPI
and Hoveround in prior periods. The Company recorded income of $7,966 in the
third quarter of 2005 as a result of this transaction.


<PAGE>

                                      12


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

N. Condensed Consolidating Financial Statements (Unaudited)
-----------------------------------------------------------

Pursuant to the Exchange Offer described in the 2004 10-K, wholly owned
subsidiaries of the Company, JII Holdings, LLC and JII Holdings Finance
Corporation, issued senior secured notes which have been guaranteed by the
Company and certain of the Company's subsidiaries. Each of these subsidiaries is
100% owned (as defined in Rule 3-10 of Regulation S-X) by the Company, and in
all cases the guarantees are full and unconditional and joint and several. The
following condensed consolidating financial information is provided in lieu of
separate financial statements for the issuers of these notes.
<TABLE>
<CAPTION>

                                                             Three Months Ended September 30, 2005
                           -----------------------------------------------------------------------------------------------
                              Jordan                        JII                        Non-
                             Industries    JII Holdings    Finance    Guarantors   Guarantors   Eliminations  Consolidated
                             ----------    ------------    -------    ----------   ----------   -----------   ------------
<S>                             <C>             <C>          <C>          <C>         <C>            <C>         <C>

Net Sales                    $     -        $     -        $   -        $93,250      $94,668     $      -      $187,918
Cost of sales,
 excluding depreciation            -              -            -         66,614       66,298            -       132,912
Selling, general, and
 administrative expenses,
 excluding depreciation       (1,064)             6            -         22,112       14,761            -        35,815
Depreciation                     181              -            -          1,967        1,452            -         3,600
Amortization                       2              -            -             10           77            -            89
Income from sale of
 affiliates                   (7,966)             -            -              -            -            -        (7,966)
Management fees and other         36              -            -            139          (69)           -           106
                             -------        -------        -----         ------      -------       ------       -------
  Operating income/(loss)      8,811             (6)           -          2,408       12,149            -        23,362

Other (income) and
 expenses:
  Interest expense             2,818            710            -          1,065        9,053            -        13,646
  Intercompany interest
   (income) expense           (1,735)        (5,569)           -          5,472        1,835           (3)            -
  Interest income                (17)             -            -            (56)         (70)          38          (105)
  Intercompany
   management fee
   (income) expense             (877)          (975)           -            913          938            1             -
  Equity in losses of
   subsidiaries                3,052          6,887            -              -            -       (9,939)            -
   Other, net                  1,447              -            -           (108)        (694)           1           646
                             -------        -------        -----         ------      -------       ------       -------
                               4,688          1,053            -          7,286       11,062       (9,902)       14,187
Income/(loss) from
 continuing operations
 before taxes and
 minority interest             4,123         (1,059)           -         (4,878)       1,087        9,902         9,175

Provision for income
 taxes                             -              -            -            379        2,158          588         3,125
                             -------        -------        -----         ------      -------       ------       -------
Income/(loss) from
 continuing operations
 before minority interest      4,123         (1,059)           -         (5,257)      (1,071)       9,314         6,050

Minority interest                  -              -            -            116            -            -           116
                             -------        -------        -----         ------      -------       ------       -------

Income/(loss) from
 continuing operations         4,123         (1,059)           -         (5,373)      (1,071)       9,314         5,934

Discontinued operations:
  Loss from discontinued
   operations, net of tax          -              -            -         (1,514)        (297)           -        (1,811)
  Gain on sale of
   discontinued
   operations, net of tax          -              -            -              -            -            -             -
                             -------        -------        -----         ------      -------     --------        ------

Net income/(loss)             $4,123        $(1,059)       $   -        $(6,887)     $(1,368)    $  9,314        $4,123
                             =======        =======        =====        =======      =======     ========        ======
</TABLE>


<PAGE>

                                      13


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

<TABLE>
<CAPTION>

                                                             Three Months Ended September 30, 2004
                            --------------------------------------------------------------------------------------------------
                              Jordan           JII          JII                         Non-
                            Industries      Holdings       Finance      Guarantors    Guarantors   iminations   Consolidated
                            ------------ --------------- ------------ -------------- -----------   ----------   ------------
<S>                             <C>            <C>           <C>          <C>             <C>          <C>           <C>

Net Sales                    $      -       $    -          $ -          $99,044        $88,619      $   -        $187,663
Cost of sales,
 excluding depreciation             -            -            -           70,894         60,647          -         131,541
Selling, general, and
 administrative expenses,
 excluding depreciation         1,003            -            -           19,788         16,080          -          36,871
Depreciation                   (1,403)           -            -            2,164          2,551          -           3,312
Amortization                        2            -            -               (4)            28          -              26
Income from sale of
 affiliates                         -            -           -                 -              -          -               -
Management fees and
 other                             30           (4)           -              (19)            24          -              31
                             --------       ------          ---          -------        -------      ------       --------
  Operating income                368            4            -            6,221          9,289          -          15,882

Other (income) and
 expenses:
  Interest expense              2,893          844            -            1,390          7,810          -          12,937
  Intercompany interest
   (income) expense            (4,328)      (6,250)           -            6,178          4,402          (2)             -
  Interest income                  (5)           -            -               (1)           (71)         35            (42)
  Intercompany
   management fee
   (income)expense               (848)        (973)           -              769          1,052           -              -
  Equity in losses
  (earnings)of
  subsidiaries                 (1,594)       4,348            -                -              -      (2,754)             -
  Other, net                    5,350            -            -               58         (5,330)          2             80
                             --------       ------          ---          -------        -------      ------       --------
                                1,468       (2,031)           -            8,394          7,863      (2,719)        12,975

Income/(loss) from
 continuing operations
 before taxes and
 minority interest             (1,100)       2,035            -           (2,173)         1,426       2,719          2,907

Provision for income
 taxes                              -            -            -              577          2,542        (980)         2,139
                             --------       ------          ---          -------        -------      ------       --------

Income/(loss)from
 continuing operations
 before minority interest      (1,100)       2,035            -           (2,750)        (1,116)      3,699            768

Minority interest                   -            -            -              102              -           -            102
                             --------       ------          ---          -------        -------      ------       --------

Income/(loss) from
 continuing operations         (1,100)       2,035            -           (2,852)        (1,116)      3,699            666

Discontinued operations:
 (Loss) income from
  discontinued
  operations, net of tax            -            -            -           (1,497)          (269)          -         (1,766)
                             --------       ------          ---          -------        -------      ------       --------

Net income/(loss)            $ (1,100)      $2,035          $ -          $(4,349)       $(1,385)     $3,699       $ (1,100)
                             ========       ======          ===          =======        =======      ======       =========
</TABLE>



<PAGE>

                                      14


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

                                                                      Nine Months Ended September 30, 2005
                             ------------------------------------------------------------------------------------------------------
                                Jordan                         JII                         Non-
                               Industries    JII Holdings    Finance      Guarantors    Guarantors    Eliminations    Consolidated
                               ----------    ------------   ----------    ----------    ----------    ------------    ------------
<S>                               <C>             <C>           <C>          <C>             <C>          <C>              <C>

Net Sales                      $     -        $     -        $    -        $276,188     $275,328        $      -       $551,516
Cost of sales,
 excluding depreciation              -              -             -         199,225      193,667               -        392,892
Selling, general, and
 administrative expenses,
 excluding depreciation         (3,354)            14             -          65,761       47,027               -        109,448
Depreciation                       540              -             -           5,877        4,538               -         10,955
Amortization                         4              -             -              31          137               -            172
Income from sale of
 affiliates                    (12,376)             -             -               -            -               -        (12,376)
Management fees and other         (560)             -             -              70            -               -           (490)
                               -------        -------        ------        --------      -------        --------        -------
  Operating income              15,746            (14)            -           5,224       29,959               -         50,915

Other (income) and
 expenses:
  Interest expense               8,468          2,129             -           3,446       27,066               -         41,109
  Intercompany interest
   (income) expense             (5,002)       (16,413)            -          16,121        5,294               -              -
  Interest income                  (31)             -             -             (57)        (210)            113           (185)
  Intercompany
   management fee
   (income) expense             (2,543)        (2,854)            -           2,321        3,076               -              -
  Equity in losses of
   subsidiaries                 13,727         20,200             -               -            -         (33,927)             -
  (Gain)/loss on sale of
   subsidiary                     (273)             -             -              22            -               -           (251)
   Other, net                    4,020              -             -             (29)      (3,293)              -            698
                               -------        -------        ------        --------      -------        --------        -------
                                18,366          3,062             -          21,824       31,933         (33,814)        41,371
(Loss)/income from
 continuing operations
 before taxes and
 minority interest              (2,620)        (3,076)            -         (16,600)      (1,974)         33,814          9,544

Provision for income
 taxes                               -              -             -           2,242        6,122           1,117          9,481
                               -------        -------        ------        --------      -------        --------        -------
Loss from continuing
 operations before
 minority interest              (2,620)        (3,076)            -         (18,842)      (8,096)         32,697             63

Minority interest                    -              -             -             228            -               -            228
                               -------        -------        ------        --------      -------        --------        -------

Loss from continuing
 operations                     (2,620)        (3,076)            -         (19,070)      (8,096)         32,697           (165)

Discontinued operations:
  Loss from discontinued
   operations, net of tax            -              -             -          (2,629)      (1,328)             -          (3,957)
  Gain on sale of
   discontinued
   operations, net of tax            -              -             -           1,502            -              -           1,502
                               -------        -------        ------        --------      -------        -------         -------

Net loss                       $(2,620)       $(3,076)       $    -        $(20,197)     $(9,424)       $32,697         $(2,620)
                               =======        =======        ======        ========      =======        =======         =======
</TABLE>



<PAGE>

                                      15


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

                                                          Nine Months Ended September 30, 2004
                           ----------------------------------------------------------------------------------------------
                              Jordan         JII         JII
                            Industries     Holdings     Fiance   Guarantors  Non-Guarantors   Eliminations   Consolidated
                            ----------     --------     ------   ----------  --------------   ------------   ------------
<S>                             <C>          <C>         <C>         <C>            <C>               <C>         <C>

Net Sales                    $      -    $      -      $   -     $296,168       $250,731         $    -       $546,899
Cost of sales,
 excluding depreciation             -           -          -      206,820        170,669              -        377,489
Selling, general, and
 administrative
 expenses, excluding
 depreciation                       3           -          -       63,311         48,211              -        111,525
Depreciation                     (641)          -          -        6,726          6,318              -         12,403
Amortization                        4           -          -           15            105              -            124
Income from sale of
 affiliates                    (7,954)          -          -            -              -              -         (7,954)
Management fees and other
                                  278        (375)         -          334             41              -            278
                              -------     -------       ----     --------        -------          -----        -------
  Operating income              8,310         375          -       18,962         25,387              -         53,034

Other (income) and
 expenses:
  Interest expense             12,770       9,039          -        3,547         26,472              -         51,828
  Intercompany interest
   (income) expense           (10,276)    (14,459)         -       18,207          6,528              -              -
  Interest income              (1,762)          -          -           (3)          (213)           104         (1,874)
  Intercompany
   management fee
   (income)expense             (2,998)     (2,389)         -        2,390          2,997              -              -
  Equity in losses
  of subsidiaries              18,886      15,661          -            -              -        (34,547)             -
  Other, net                    5,351           -          -          273         (5,904)          -              (280)
                              -------     -------       ----     --------        -------        -------        -------
                               21,971       7,852          -       24,414         29,880        (34,443)        49,674

(Loss)/income from
 continuing operations
 before taxes and
 minority  interest           (13,661)    (7,477)          -       (5,452)        (4,493)        34,443          3,360

Provision for income
 taxes                              -          -           -        1,760          6,963           (626)         8,097
                              -------    -------        ----     --------        -------         ------        -------
Loss from continuing
 operations before
 minority interest            (13,661)    (7,477)          -       (7,212)       (11,456)        35,069         (4,737)

Minority interest                   -          -           -          263              -           -               263
                              -------    -------        ----     --------        -------         ------        -------
Loss from continuing
 operations                   (13,661)    (7,477)          -       (7,475)       (11,456)        35,069         (5,000)

Discontinued operations:
 Loss from discontinued
  operations, net of tax            -          -           -       (3,859)          (476)             -         (4,335)
 Gain (loss) on sale of
  discontinued
  operations, net of tax        3,155          -           -       (4,326)             -              -         (1,171)
                             --------    -------       -----     --------       --------       --------       --------

Net loss                     $(10,506)   $(7,477)      $   -     $(15,660)      $(11,932)      $ 35,069       $(10,506)
                             ========    =======       =====     ========       ========       ========       ========
</TABLE>



<PAGE>

                                      16


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

<TABLE>
<CAPTION>

                                                            Balance Sheet as of September 30, 2005
                              ---------------------------------------------------------------------------------------------

                                    Jordan                     JII                    Non-
                                  Industries    JII Holdings  Finance  Guarantors   Guarantors   Eliminations  Consolidated
                                  ----------    ------------  -------  ----------   ----------   ------------  ------------
<S>                                   <C>            <C>        <C>      <C>           <C>           <C>            <C>

Current assets:
    Cash and equivalents         $   1,732      $       -      $   -    $  1,163     $ 12,718      $     -       $ 15,613
    Intercompany receivables        37,319        (39,758)         -      (2,762)      15,344      (10,143)             -
    Accounts receivable, net             -              -          -      46,657       70,963            -        117,620
    Inventories                          -              -          -      72,310       56,805            -        129,115
    Assets of discontinued
     operations                          -              -          -         313          477            -            790
    Income tax receivable                -              -          -           -        1,413            -          1,413
    Prepaids and other
     current assets                  3,398              -          -       6,256        3,188       (1,597)        11,245
                                 ---------      ---------     ------    --------     --------    ---------       --------
    Total current assets            42,449        (39,758)         -     123,937      160,908      (11,740)       275,796

Property, plant and
 equipment, net                      1,222              -          -      42,285       35,750            -         79,257
Investments and advances to
 affiliates                         13,205              -          -           -       12,344            -         25,549
Investments in subsidiaries         54,649        209,493          -           -            -     (264,142)             -
Equity in earnings of
 subsidiaries                     (238,942)       (95,044)         -           -            -      333,986              -
Goodwill, net                            -              -          -      78,498      181,946      (15,724)       244,720
Intercompany notes
 receivable                         (1,000)       209,649          -           -        1,000     (209,649)             -
Other assets                           157          4,260          -       3,358        4,274            -         12,049
                                 ---------      ---------     ------    --------     --------    ---------       --------
    Total assets                 $(128,260)     $ 288,600     $    -    $248,078     $396,222    $(167,269)      $637,371
                                 =========      =========     ======    ========     ========    =========       ========
Current liabilities:
  Accounts payable               $       -      $       -     $    -    $ 24,086     $ 38,592    $       -       $ 62,678
  Accrued liabilities               31,885          3,758          -      23,820       24,019       (2,399)        81,083
  Liabilities of
   discontinued operations               -              -          -           -            -            -              -
  Intercompany payables                  -              -          -     (10,768)      10,937         (169)             -
  Current portion of long
   term debt                           530              -          -       4,402       16,952            -         21,884
                                 ---------      ---------     ------    --------     --------    ---------       --------
  Total current liabilities         32,415          3,758          -      41,540       90,500       (2,568)       165,645

Long term debt                     121,547        207,133          -      35,100      300,596            -        664,376
Other non current
 liabilities                        17,329              -          -       8,782        5,324            -         31,435
Intercompany note payable          (50,424)             -          -     229,900       31,722     (211,198)             -
Deferred income taxes               (1,637)             -          -     (13,170)      32,211        1,508         18,912
Minority interest                        -              -          -       1,231            -            -          1,231
Preferred stock of a
 subsidiary                           (350)             -          -      39,739        2,912      (39,389)         2,912

Shareholders equity (deficit)
                                  (247,140)        77,709          -     (95,044)     (67,043)      84,378       (247,140)
                                 ---------      ---------     ------    --------     --------    ---------       --------
    Total liabilities and
     shareholders equity         $(128,260)     $ 288,600     $    -    $248,078     $396,222    $(167,269)      $637,371
                                 =========      =========     ======    ========     ========    =========       ========
</TABLE>



<PAGE>

                                      17


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

<TABLE>
<CAPTION>

                                        Balance Sheet as of December 31, 2004
                                        -------------------------------------
                                   Jordan        JII        JII                  Non-
                                 Industries    Holdings   Finance  Guarantors  Guarantors  Eliminations   Consolidated
                                 ----------    --------   -------  ----------  ----------  -----------    ------------
<S>                                  <C>          <C>        <C>       <C>         <C>         <C>             <C>

Current assets:
    Cash and equivalents        $   2,152     $      -      $ -     $  1,693    $ 11,567   $       -       $ 15,412
    Intercompany receivables        9,543      (25,053)       -       (2,245)     14,931       2,824              -
    Accounts receivable, net            -            -        -       42,656      66,898           -        109,554
    Inventories                         -            -        -       73,883      56,150           -        130,033
    Assets of discontinued
     operations                         -            -        -        1,409       2,023           -          3,432
    Income tax receivable               -            -        -            -       3,631           -          3,631
    Prepaids and other
     current assets                 4,625            -        -        9,236       4,878      (6,376)        12,363
                                ---------      -------      ---      -------    --------   ---------       --------
    Total current assets           16,320      (25,053)       -      126,632     160,078      (3,552)       274,425

Property, plant and
 equipment, net                     1,721            -        -       45,828      37,487           -         85,036
Investments and advances to
 affiliates                        28,538            -        -            -      12,344           -         40,882
Investments in subsidiaries        52,241      202,512        -            -           -    (254,753)             -
Equity in earnings of
 subsidiaries                    (222,701)     (82,684)       -            -           -     305,385              -
Goodwill, net                           -            -        -       78,648     182,385     (15,724)       245,309
Intercompany notes
 receivable                        (1,000)     204,871        -            -       1,000    (204,871)             -
Other assets                          395        6,387        -        3,887       6,085           -         16,754
                                ---------     --------      ---     --------    --------   ---------       --------
    Total assets                $(124,486)    $306,033      $ -     $254,995    $399,379   $(173,515)      $662,406
                                =========     ========      ===     ========    ========   =========       ========
Current liabilities:
    Accounts payable            $       -     $      -      $ -      $25,662    $ 37,134   $       -       $ 62,796
    Accrued liabilities            37,895        9,389        -       22,662      18,277      (6,772)        81,451
    Liabilities of
     discontinued
     operations                         -            -        -          150         548           -            698
    Intercompany payables               -            -        -      (15,740)      4,501      11,239              -
    Current portion of long
     term debt                        250            -        -        5,387      22,237           -         27,874
                                ---------      -------      ---      -------    --------   ---------       --------
    Total current liabilities      38,145        9,389        -       38,121      82,697       4,467        172,819

Long term debt                    121,890      224,033        -       41,779     301,697           -        689,399
Other non current
 liabilities                       10,830            -        -        8,711       5,626           -         25,167
Intercompany note payable         (50,384)           -        -      223,537      31,722    (204,875)             -
Deferred income taxes              (1,636)           -        -      (13,497)     29,388           -         14,255
Minority interest                       -            -        -        1,003           -           -          1,003
Preferred stock of a
 subsidiary                          (350)           -        -       38,025       2,744     (37,675)         2,744

Shareholders equity (deficit)    (242,981)      72,611        -      (82,684)    (54,495)     64,568       (242,981)
                                ---------     --------      ---     --------    --------   ---------       --------
    Total liabilities and
     shareholders equity        $(124,486)    $306,033      $ -     $254,995    $399,379   $(173,515)      $662,406
                                =========     ========      ===     ========    ========   =========       ========
</TABLE>




<PAGE>

                                      18


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


                                                                        Nine Months Ended September 30, 2005
                                  ---------------------------------------------------------------------------------------------
                                      Jordan         JII        JII                      Non-
                                    Industries     Holding    Finance    Guarantors   Guarantors   Eliminations  Consolidated
                                    ----------     -------    -------    ----------   ----------   ------------  ------------
<S>                                    <C>           <C>         <C>      <C>            <C>            <C>              <C>

Net cash (used in) provided
 by operating activities             $(16,638)      $    -      $   -     $ 9,983      $ 11,714      $     -       $   5,059

Cash flows from investing
 activities
  Proceeds from sales of
   fixed assets                             -             -         -        603            118            -             721
  Capital expenditures                    (42)            -         -     (2,680)        (2,642)           -          (5,364)
  Intercompany transfers              (16,900)       16,900         -          -              -            -               -
  Net proceeds from sale of
   discontinued operations              1,002             -         -          -              -            -           1,002
  Acquisition of subsidiary                 -             -         -       (393)          (481)           -            (874)
  Net proceeds from sale of
   affiliate                            6,600             -         -          -              -            -           6,600
  Net proceeds from sale of
   subsidiary                           1,209             -         -          -              -            -           1,209
  Net proceeds from sale of
   affiliate promissory note            9,449             -         -          -              -            -           9,449
  Net proceeds from
   refinancing of affiliate            15,000             -         -          -              -            -          15,000
                                     --------       -------     -----     ------       --------       ------         -------
Net cash provided by (used
 in) investing activities              16,318        16,900         -     (2,470)        (3,005)           -          27,743

Cash flows from financing
 activities
  Proceeds from revolving
   credit facilities, net                   -             -         -     (5,844)        (5,245)           -         (11,089)
  Repayment of long term
   debt                                  (100)      (16,900)        -     (2,483)        (7,305)           -         (26,788)
  Proceeds from other
   borrowings                               -             -         -        284          5,677            -           5,961
  Payment of deferred
   financing costs                          -             -         -          -              -            -               -
                                     --------       -------     -----     ------       --------       ------         -------
Net cash provided by
 financing activities                    (100)      (16,900)        -     (8,043)        (6,873)           -         (31,916)

Effect of exchange rate
 changes on cash                            -             -         -          -           (685)           -            (685)
                                     --------       -------     -----     ------       --------       ------         -------
Net increase in cash and
 equivalents                             (420)            -         -       (530)         1,151            -             201
Cash and equivalents at
 beginning of period                    2,152             -         -      1,693         11,567            -          15,412
                                     --------       -------     -----     ------       --------       ------         -------
Cash and equivalents at
 end of period                       $  1,732       $     -     $   -     $1,163       $ 12,718            -         $15,613
                                     ========       =======     =====     ======       ========       ======         =======
</TABLE>



<PAGE>

                                      19


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


<TABLE>
<CAPTION>

                                                               Nine Months Ended September 30, 2004
                                  -------------------------------------------------------------------------------------
                                    Jordan         JII        JII                   Non-
                                  Industries     Holdings   Finance  Guarantors  Guarantor  Eliminations  Consolidated
                                  ----------     --------   -------  ----------  ---------  ------------  ------------

<S>                                   <C>           <C>        <C>        <C>        <C>          <C>            <C>

Net cash (used in) provided by
 operating activities              $(17,269)    $     -       $  -      $ 7,723   $ 6,995       $ -          $(2,551)

Cash flows from investing
 activities
   Proceeds from sales of
    fixed assets                          -           -          -          786        58         -              844
   Capital expenditures                 (98)          -          -       (2,787)   (2,432)        -           (5,317)
   Intercompany transfers           (18,048)     18,048          -            -         -         -                -
   Net proceeds from sale of
    discontinued operations           6,155           -          -            -         -         -            6,155
   Acquisition of subsidiaries            -           -          -            -      (315)        -             (315)
   Net proceeds from sale of
    affiliates                       27,207           -          -            -         -         -           27,207
Net cash provided by (used         --------     -------       ----      -------   -------       ---          -------
 in) investing activities            15,216      18,048          -       (2,001)   (2,689)        -           28,574

Cash flows from financing
 activities
   Proceeds from revolving
    credit facility                       -           -          -         (849)    6,919         -            6,070
   Repayment of long term
    debt                               (783)    (14,228)         -       (5,153)   (5,679)        -          (25,843)
   Proceeds from other
    borrowings                            -           -          -          427     4,393         -            4,820
   Payment of financing fees              -      (3,820)         -            -         -         -           (3,820)
Net cash (used in) provided        --------     -------       ----      -------   -------       ---          -------
 by financing activities               (783)    (18,048)         -       (5,575)    5,633         -          (18,773)

Effect of exchange rate
 changes on cash                          -           -          -            -       955         -              955
                                   --------     -------       ----      -------   -------       ---          -------
Net (decrease) increase
 in cash and equivalents             (2,836)          -          -          147    10,894         -            8,205
Cash and equivalents at
 beginning of period                  6,301           -          -        1,738     7,478         -           15,517
                                   --------     -------       ----      -------   -------       ----         -------
Cash and equivalents at
 end of period                     $  3,465     $     -       $ -       $ 1,885   $18,372       $ -          $23,722
                                   ========     =======       ====      =======   =======       ====         =======
</TABLE>



<PAGE>

                                      20


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

Item 2. 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 2004 10-K and the financial statements and the related notes
thereto.

Results of Operations

Summarized below are the net sales, operating income (loss) and operating
margins (as defined) for each of the Company's business segments for the three
month and nine month periods ended September 30, 2005 and 2004. Due to the sale
of ED&C, a subsidiary of Kinetek, in the second quarter of 2005 the results of
ED&C have been classified as discontinued operations in all periods presented.
(See Note E to the financial statements.) The following discussion reviews the
following segment data and certain of the consolidated financial data for the
Company.

                                     Three Months Ended      Nine Months Ended
                                         September 30,          September 30,
                                     -------------------    -------------------
                                        2005       2004      2005       2004
                                       ------     ------    ------     -------
Net Sales:
Specialty Printing and Labeling      $12,551    $ 12,717    $37,458  $ 38,936
Jordan Specialty Plastics             40,369      39,300    119,965   110,264
Jordan Auto Aftermarket               31,011      35,736     92,817   116,354
Kinetek                               87,648      83,039    255,358   235,704
Consumer and Industrial Products      16,339      16,871     45,918    45,641
                                    --------    --------   --------  --------
   Total                            $187,918    $187,663   $551,516  $546,899
                                    ========    ========   ========  ========

Operating Income (Loss):
Specialty Printing and Labeling       $1,709     $ 1,303     $4,254   $ 4,358
Jordan Specialty Plastics                773       3,113      3,284     7,027
Jordan Auto Aftermarket                  311         951       (522)    7,443
Kinetek                               11,621      10,127     29,743    26,887
Consumer and Industrial Products        (224)        804     (2,886)     (913)
                                    --------    --------   --------  --------
   Total(a)                          $14,190    $ 16,298    $33,873   $44,802
                                    ========    ========    ========  =======
Operating Margin(b)
Specialty Printing and Labeling        13.6%       10.2%      11.4%     11.2%
Jordan Specialty Plastics               1.9%        7.9%       2.7%      6.4%
Jordan Auto Aftermarket                 1.0%        2.7%      (0.6)%     6.4%
Kinetek                                13.3%       12.2%      11.6%     11.4%
Consumer and Industrial Products       (1.4)%       4.8%      (6.3)%    (2.0)%
   Total                                7.6%        8.7%       6.1%      8.2%

-----------------------------
(a) Before corporate overhead and management fees of $(9,172) and $416 for the
three months ended September 30, 2005 and 2004, respectively, and $(17,042) and
$(8,232) for the nine months ended September 30, 2005 and 2004, respectively.
Corporate overhead and management fees for the nine months ended September 30,
2005 and 2004 include income from the sale of affiliates of $12,376 and $7,954,
respectively.

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






<PAGE>
                                      21


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

    Consolidated Results. (See Condensed Consolidated Statement of Operations.)
    --------------------

Net sales for continuing operations increased $0.3 million, or 0.1%, to $187.9
million for the third quarter of 2005 from $187.6 million last year. Net sales
for continuing operations increased $4.6 million, or 0.8%, to $551.5 million
through the first nine months of 2005 from $546.9 million last year. The
increase in sales for the third quarter was primarily due to growth at Kinetek
and Jordan Specialty Plastics which grew 5.6% and 2.7%, respectively. These
increases were offset by a 13.2% decline in the Automotive Aftermarket segment
largely due to the discontinuation of business with a large customer in the
climate control segment. The improved economy helped both the Kinetek and Jordan
Specialty Plastics segments throughout the first nine months but most of the
growth in these segments continues to come from the introduction of new products
and market share gains in several niche markets. In addition, some of the sales
growth in the third quarter and first nine months can be attributed to improved
success with passing on raw material inflation through increased selling price.

Operating income from continuing operations decreased $2.1 million, or 12.9%, to
$14.2 million for the third quarter of 2005 from $16.3 million for the same
period last year. Operating income from continuing operations decreased $10.9
million, or 24.4%, to $33.9 million through the first nine months of 2005 from
$44.8 million for the same period last year. The decrease in operating income
for both the third quarter and first nine months was primarily due to the
Automotive Aftermarket and Jordan Specialty Plastics. Operating income for
Kinetek improved by 14.8% in the third quarter and 10.6% for the first nine
months partially offsetting declines in the other segments. Raw material
inflation compressed product margins at Kinetek and Jordan Specialty Plastics in
the third quarter and the first nine months. Beginning in the second half of
2004, all companies began to pass along some of these costs with greater success
but to a lesser extent than the increased cost. Through the first nine months,
the Jordan Specialty Plastics segment was only able to pass along approximately
75% of the year over year raw material inflation through selling price
increases. In addition, the Jordan Specialty Plastics segment recorded charges
of approximately $1.0 million in the second quarter of 2005 primarily due to
increased accruals and reserves in foreign operations. Also included in the
operating income for the third quarter and the first nine months of 2005 are
costs associated with product transitions and plant rationalizations at Kinetek
and Jordan Specialty Plastics. The decrease in operating income throughout the
first nine months for the Automotive Aftermarket was mostly due to lower sales
volumes of climate control products, a weaker non-OEM torque converter
aftermarket, and production inefficiencies resulting from consigned parts
shortages in the OEM torque converter aftermarket business.

       Specialty Printing and Labeling. As of September 30, 2005, the Specialty
       -------------------------------
Printing and Labeling group ("SPL") consisted of Valmark, Pamco, and Seaboard.

Net sales for continuing operations decreased $0.2 million, or 1.3%, to $12.5
million for the third quarter of 2005 from $12.7 million for the same period
last year. Net sales of continuing operations decreased $1.5 million, or 3.8%,
to $37.4 million through the first nine months from $38.9 million for the same
period last year. Revenues for Valmark product lines were up 13.3% while sales
of the Pamco labels and Seaboard folding box products each declined 2.6% and
12.7%, respectively, in the third quarter compared with prior year. Sales
related to Valmark's membrane switch products in the third quarter and
throughout the first nine months were up well over last year largely driven by
sales in the medical equipment and navigation products markets.

Operating income from continuing operations increased $0.4 million, or 31.2%, to
$1.7 million for the third quarter from $1.3 million for the same period last
year. Operating income from continuing operations decreased $0.1 million, or
2.4%, to $4.3



<PAGE>

                                      22


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

million through the first nine months of 2005 from $4.4 million for the same
period last year. The decrease in operating income in the third quarter is
largely due to the loss of a large customer in the printing and labeling market
that moved its product source to Asia and unfavorable overhead absorption
associated with lower sales volumes. The decreased operating income associated
with the reduced sales volume through the first nine months was largely offset
by cost savings generated by a management reorganization and reduction in
employment at Valmark which occurred in the first quarter of 2004.

       Jordan Specialty Plastics. As of September 30, 2005, the Jordan Specialty
       -------------------------
Plastics group ("JSP") consisted of Beemak, Sate-Lite, and Deflecto.

Net sales increased $1.1 million, or 2.7%, to $40.4 million for the third
quarter of 2005 from $39.3 million for the same period last year. Net sales
increased $9.7 million, or 8.8%, to $120.0 million through the first nine months
of 2005 from $110.3 million for the same period last year. The increased sales
were the result of a stronger economy, the introduction of several new products,
market share gains, and selling price increases which only partially offset the
significant raw material cost increases. The sales increase for the third
quarter and the first nine months were driven by both office products and
hardware products which were up significantly with the superstore retailers.
Strong sales with the superstore retailers for the third quarter and first nine
months for office products were partially offset by lower sales with several of
the large distributors. Chairmat sales increased significantly in the third
quarter with the largest increases coming from superstores, distributors and
international markets. Hardware products represented the largest increase in
sales with significant growth at the home improvement superstores. Increased
sales of bike related products and safety reflectors for commercial trucks were
up significantly through the first nine months.

Operating income decreased $2.3 million, or 75.2%, to $0.8 million for the third
quarter of 2005 from $3.1 million for the same period last year. Operating
income decreased $3.7 million, or 53.3%, to $3.3 million through the first nine
months of 2005 from $7.0 million for the same period last year. Raw material
inflation and to a lesser extent the sales mix experienced in the third quarter
and throughout the first nine months both contributed significantly to the
decrease in operating income. The third quarter includes costs associated with
the closing of the Niles manufacturing operations and start up costs in
Indianapolis associated with the transferred products. Through the first nine
months JSP was only able to pass along approximately 75% of the year over year
raw material inflation through selling price increases. Charges of approximately
$1.0 million were recorded in the second quarter primarily due to increased
accruals and reserves in foreign operations. The Company continues to pursue
cost reduction initiatives and price increases to overcome the raw material
inflation which continues to compress margins throughout the industry.

       Jordan Auto Aftermarket. As of September 30, 2005, the Jordan Auto
       -----------------------
Aftermarket group ("JAAI") consisted of Dacco, Alma and Atco.

Net sales decreased $4.7 million, or 13.2%, to $31.0 million for the third
quarter of 2005 from $35.7 million for the same period last year. Net sales
decreased $23.5 million, or 20.2%, to $92.8 million for the first nine months of
2005 from $116.3 million for the same period last year. The discontinuation of
business with a large customer in the climate control market represented $6.2
million of the sales decrease in the third quarter and $17.1 million of the
sales decrease through the first nine months. Sales of torque converters to
original equipment manufacturers increased in the third quarter as compared with
the prior year and sales of air compressors for the


<PAGE>

                                      23


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

third quarter also increased over the prior year after excluding the impact of
the discontinuation of business with the large retailer as described above.
Sales of torque converters to original equipment manufacturers were 19.2% lower
for the first nine months as compared with the prior year primarily due to
better warranty experience of the OEM. Sales of torque converters to the non-OEM
automotive aftermarket declined 6.8% in the third quarter versus prior year. The
prolific hurricane season and special new car incentive programs from the
domestic automotive manufacturers both contributed to the lower sales of torque
converters in the non-OEM aftermarket segment. This decrease was partially
offset by the introduction of new torque converter products and the continued
expansion of new DACCO retail distribution centers in targeted locations. Sales
of tubing assemblies and fittings for the truck market were up 21.8% in the
third quarter and 28.6% through the first nine months. The growth in the truck
market is due to a stronger economy and many companies updating their fleets in
advance of the new emissions standards set to become effective in 2007.

Operating income decreased $0.6 million, or 67.3%, to $0.3 million for the third
quarter of 2005 from $0.9 million for the same period last year. Operating
income decreased $7.9 million to a loss of $0.5 million through the first nine
months of 2005 from income of $7.4 million for the same period last year. The
sales decline in the torque converter non-OEM aftermarket segment had a
significant impact on the decline in operating income specifically due to the
high fixed cost nature of the business. In addition, operating income throughout
the first nine months was negatively impacted by a contractual price reduction
for a large customer and production inefficiencies resulting from consigned
parts shortages in the torque converter business. Also contributing to the
decline in operating income for the first nine months were unusually high
medical and workers compensation costs compounded by a $0.4 million favorable
adjustment to inventory quantities in the second quarter of 2004. The decreases
in operating income for the torque converter and climate control segments were
nominally offset by increased operating income associated with the sales of
tubing assemblies and fittings in the truck market.

       Kinetek. As of September 30, 2005, the Kinetek group consisted of
       -------
Imperial Group, Merkle-Korff, FIR, Motion Control, Advanced DC and DeSheng.

Net sales increased $4.6 million, or 5.6%, to $87.6 million for the third
quarter of 2005 from $83.0 million for the same period last year. Net sales
increased $19.7 million, or 8.3%, to $255.4 million through the first nine
months of 2005 from $235.7 million for the same period last year. The sales
increase during the third quarter was led by sales of elevator control products
designed and produced under Kinetek's recently acquired O. Thompson brand name
(see Note F) which added $2.5 million in revenue for the quarter compared to the
previous year, and $7.0 million for the year to date. The sales increases for
the year to date ending September 30, 2005 was led by favorable market
conditions for most of Kinetek's principal product lines and net increases in
market share gains and losses. The combination of favorable markets and net
share gains accounted for approximately $0.6 million of the third quarter 2005
revenue increase, and $9.9 million for the first nine months. The translation
impact of the stronger Euro relative to the dollar in 2005 accounted for $0.6
million increase in sales during the third quarter and $1.6 million for the year
to date. The impact of increases and decreases in selling prices charged to
customers during the period resulted in a net increase in sales of approximately
$0.9 million. For the year to date, changes in selling prices account for
approximately $1.2 million in increased sales.



<PAGE>

                                      24


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

Operating income from continuing operations increased $1.5 million, or 14.8%, to
$11.6 million for the third quarter of 2005 from $10.1 million for the same
period last year. Operating income from continuing operations increased $2.9
million, or 10.6%, to $29.7 million for the first nine months of 2005 from $26.8
million for the same period last year. The increases in operating income are
attributable to the increases in sales and gross margin described previously,
plus reductions in Kinetek's selling, general, and administrative expenses. For
the three months ended in September 2005, SG&A was $12.8 million, a decrease of
$1.2 million (8.6%) from the previous year. For the year to date, SG&A was $40.7
million, a decrease of $1.7 million (4.0%) from 2004. The decrease is primarily
due to reductions in overhead costs that are allocated to Kinetek from Jordan
Industries.

       Consumer and Industrial Products. As of September 30, 2005, the Consumer
       --------------------------------
and Industrial Products group consisted of Welcome Home LLC and its two
divisions, Cape Craftsmen and Welcome Home, and GramTel.

Net sales decreased $0.5 million, or 3.2%, to $16.3 million for the third
quarter of 2005 from $16.8 million for the same period last year. Net sales
increased $0.3 million, or 0.6%, to $45.9 million through the first nine months
of 2005 from $45.6 million for the same period last year. Sales for Welcome Home
increased 3.2% in third quarter while third party sales for Cape Craftsman
decreased 23.4% from prior year. Third party sales for Cape Craftsman increased
8.3% for the first nine months compared with prior year. Comparable store sales
at Welcome Home increased 3.7% in the third quarter and were flat with prior
year through the first nine months. Welcome Home is currently transitioning to a
new merchandising strategy emphasizing a more focused product offering.

Operating income decreased $1.0 million in the third quarter of 2005 to a loss
of $0.2 million compared to income of $0.8 million in the same period last year.
Operating income decreased $2.0 million to a loss of $2.9 million through the
first nine months of 2005 from a loss of $0.9 million for the same period last
year. Merchandise margins decreased at Welcome Home for the third quarter and
for the first nine months largely due to promotional discounts used to increase
the turnover of slower moving inventory and to continue the migration to a new
merchandising strategy. The decrease in operating income at Welcome Home through
the first nine months was partially offset by increased operating income
associated with the Cape Craftsman sales increase.

       Liquidity and Capital Resources.
       --------------------------------

In general, the Company requires liquidity for working capital, capital
expenditures, interest, taxes, debt repayment and its acquisition strategy. Of
primary importance are the Company's working capital requirements, which
increase whenever the Company experiences strong incremental demand or
geographical expansion.

The Company had approximately $109.4 million of working capital at September 30,
2005 compared to approximately $98.9 million at December 31, 2004.

Operating activities. Net cash provided by operating activities for the nine
--------------------
months ended September 30, 2005 was $5.1 million compared to net cash used in
operating activities of $2.6 million during the same period in 2004.



<PAGE>

                                      25


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

Investing activities. Net cash provided by investing activities for the nine
--------------------
months ended September 30, 2005 was $27.7 million compared to net cash provided
by investing activities of $28.6 million during the same period in 2004. In
2005, net cash provided by investing activities primarily includes $1.0 million
from proceeds of a sale of discontinued operations, $6.6 million from the sale
of an affiliate, $1.2 million in proceeds from the sale of Cho-Pat, $9.4 million
from sale of an affiliate promissory note and $15.0 million in proceeds from a
refinancing transaction executed by an affiliate. This is compared to $6.2
million of proceeds from the sale of discontinued operations and $27.2 million
of proceeds from the sale of affiliates in 2004.

Financing activities. Net cash used in financing activities for the nine months
--------------------
ended September 30, 2005 was $31.9 million compared to net cash used in
financing activities of $18.8 million during the same period in 2004. The
increase in cash used in financing activities is primarily due to higher
repayments of borrowings under revolving credit facilities in 2005.

The Company is party to two credit agreements under which the Company is able to
borrow up to $90.0 million to fund acquisitions, provide working capital and for
other general corporate purposes. The credit agreements mature in 2005 and 2006.
The agreements are secured by a first priority security interest in
substantially all of the Company's assets. As of September 30, 2005, the Company
had approximately $29.4 million of available funds under these arrangements.

In conjunction with the Exchange Offer completed by the Company in February 2004
(see 2004 10-K), one of the Company's revolving credit facilities was amended to
reduce, over time, the maximum loan commitment under the facility. As of
December 31, 2004, the maximum loan commitment under the facility was $75.0
million. As of June 1, 2005, that commitment was reduced to $55.0 million and
will be reduced to $45.0 million as of March 1, 2006 and through the remaining
life of the agreement. At this time, the Company does not expect the future
decrease in available funds to have a material impact on its operations.

Kinetek's credit agreement expires December 18, 2005. Kinetek has verbally
negotiated with its lender a one year extension of this credit agreement;
however this negotiated extension has not been fully executed as of the date of
this filing.

The Company may, from time to time, use cash, including cash generated from
borrowings under its credit agreement, to purchase its 11 3/4% Senior
Subordinated Discount Debentures due 2009, its 10 3/8% Senior Notes due 2007, or
its 13% Exchange Notes due 2007, or any combination thereof, through open market
purchases, privately negotiated purchases or exchanges, tender offers,
redemptions or otherwise, and may, from time to time, pursue various refinancing
or financial restructurings, including pursuant to consent solicitations and
waivers involving those securities, in each case, without public announcement or
prior notice to the holders thereof, and if initiated or commenced, such
purchases or offers to purchase may be discontinued at any time.

As discussed above, one of the Company's revolving credit facilities contains a
provision for the step-down in maximum borrowing capacity during 2005 and 2006.
As of June 1, 2005 the Company's maximum borrowings under this agreement
decreased from $75.0 million to $55.0 million. This, coupled with the facts that
the Company has experienced operating losses in recent years and has used cash
in operating activities, has caused the Company's executive management to
evaluate various options to improve the Company's liquidity. To this end, the
Company has restructured some of its outstanding debt through the Exchange Offer
discussed in the 2004 10-K and the Modification and Waiver Agreements also
discussed in the 2004 10-K. The effect of




<PAGE>

                                      26


                     MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

these transactions has been to reduce cash paid for interest in the current year
as well as to provide for further reductions in debt maturity payments if
certain financial performance is not achieved. In addition, the Company expects
improved operating performance on a consolidated basis in the coming quarters.
Specifically, new product development and the continued shift of manufacturing
to China in the Specialty Plastics and Kinetek groups are expected to improve
results.

Further, the Company has evaluated its holdings of investments in affiliates
and, when appropriate, will sell certain investments, similar to the sale of the
Company's investments in DMS Holdings Inc, Mabis Healthcare Holdings Inc.,
Flavor and Fragrance Holdings Inc. and Fleet Graphics Holdings, Inc. as
described in the 2004 10-K and the Company's quarterly filings. The Company
believes that through its efforts discussed above, the Company will have
sufficient liquidity to meet its obligations in the coming year.


<PAGE>

                                      27


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (UNAUDITED)

Item 3. Quantitative and Qualitative Disclosures About Market Risks
-------------------------------------------------------------------

The Company's debt obligations are primarily fixed-rate in nature and, as such,
are not sensitive to changes in interest rates. At September 30, 2005, the
Company had $35.5 million of variable rate debt outstanding. A one-percentage
point increase in interest rates would increase the annual amount of interest
paid by approximately $0.4 million. The Company does not believe that its market
risk financial instruments on September 30, 2005 would have a material effect on
future operations or cash flows.

The Company is exposed to market risk from changes in foreign currency exchange
rates, including fluctuations in the functional currency of foreign operations.
The functional currency of operations outside the United States is the
respective local currency. Foreign currency translation effects are included in
accumulated other comprehensive income in shareholder's equity.

Item 4. Controls and Procedures
-------------------------------

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-15 of the
Securities Exchange Act of 1934 ("Exchange Act") promulgated thereunder, the
Company's chief executive officer and chief financial officer have evaluated the
effectiveness of the Company's disclosure controls and procedures as of the end
of the period covered by this report (the "Evaluation Date"). Based on such
evaluation, the Company's chief executive officer and chief financial officer
have concluded that the Company's disclosure controls and procedures were
effective as of the Evaluation Date to ensure that information required to be
disclosed in reports that the Company files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms. There have been no changes in the Company's internal
controls over financial reporting during the period covered by this report that
were identified in connection with the evaluation referred to above that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.



<PAGE>
                                      28


Part II. OTHER INFORMATION
--------------------------


Item 1.       Legal Proceedings
              -----------------
              None

Item 2.       Unregistered Sales of Securities and Use of Proceeds
              ----------------------------------------------------
              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
              --------

                    A list of exhibits filed with this report is contained on
               the Exhibit Index immediately preceding such exhibits and is
               incorporated herein by reference




<PAGE>

                                      29


                                   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.



November 14, 2005                          By:   /s/ Norman R. Bates
                                                --------------------
                                                 Norman R. Bates
                                                 Chief Financial Officer

























<PAGE>

                                      30


                                  EXHIBIT INDEX

    Exhibit
    Number                         Description
     31(a)   Certificate of Chief Executive Officer pursuant to
             Rule 13a-14 (a) or Rule 15d-14 (a)
     31(b)   Certificate of Chief Financial Officer pursuant to
             Rule 13a-14 (a) or Rule 15d-14 (a)
     32(a)   Certification of John W. Jordan II pursuant to Section 1350.
     32(b)   Certification of Norman R. Bates pursuant to Section 1350.