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, 1998      Commission File Number 33-24317

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

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

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

         Registrant's telephone number, including Area Code:

                              (847) 945-5591

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

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding twelve (12) months (or for such shorter period that 
the registrant was required to file such reports) and (2) has been subject to 
such filing requirements for the past ninety (90) days.

                  Yes  X           No     

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

    The number of shares outstanding of Registrant's Common Stock as of 
November 16, 1998: 98,501.0004.


<PAGE>

 
                                  PAGE 2

                           JORDAN INDUSTRIES, INC.

                                   INDEX

Part I.                                                 Page No.
                             
     Financial Information                                   

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

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

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

     Notes to Condensed Consolidated Financial               7
     Statements                                              

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


Part II.

     Other Information                                      28

     Signatures                                             29       

<PAGE>                                
                                  PAGE 3

                           JORDAN INDUSTRIES, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                      (ALL DOLLAR AMOUNTS IN THOUSANDS)
                                                                        
                                              September 30,   December 31,
                                                  1998            1997    
                                               (unaudited) 
ASSETS
Current Assets:
  Cash and cash equivalents                  $   21,766        $ 52,500
  Accounts receivable, net                      172,153         134,177 
  Inventories                                   148,713         124,000
  Prepaid expenses and other current assets      19,112          12,706
     Total Current Assets                       361,744         323,383

Property, plant and equipment, net              132,744         105,070
Investments in affiliates                         1,722           1,722
Goodwill, net                                   496,101         433,294 
Other assets                                     71,067          66,762
     Total Assets                            $1,063,378        $930,231

LIABILITIES AND NET CAPITAL DEFICIENCY
Current Liabilities:
  Notes payable                              $      241        $  2,650
  Accounts payable                               73,597          58,781
  Accrued liabilities                            76,711          70,473
  Advance deposits                                5,398           5,424
  Current portion of long-term debt              10,225           9,547
     Total Current Liabilities                  166,172         146,875

Long-term debt                                1,051,475         921,871
Other non-current liabilities                     9,414          13,403
Deferred income taxes                             1,444           1,444
Minority interest                                   798              88
Preferred stock                                  24,693          21,835
Net Capital Deficiency:
  Common stock                                        1               1
  Additional paid-in capital                      2,116           2,116
  Accumulated comprehensive income               (1,177)           (504)
  Accumulated deficit                          (191,558)       (176,898)
     Total Net Capital Deficiency              (190,618)       (175,285)
     Total Liabilities and Net Capital  
      Deficiency                             $1,063,378        $930,231


See accompanying notes to condensed consolidated financial statements.
<PAGE>


                              PAGE 4

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

                                                       NINE MONTHS ENDED
                                      THIRD QUARTER      September 30,       
                                      1998      1997     1998      1997

Net sales                           $248,567  $183,041 $701,785  $507,930
Cost of sales, excluding
 depreciation                        158,251   116,923  446,407   319,982
Selling, general and administra-
 tive expenses, excluding deprecia-  
 tion                                49,443    35,725  138,758   103,527
Depreciation                           6,370     5,072   17,596    14,099
Amortization of goodwill and other 
  intangibles                          5,379     3,808   15,810    10,714
Stock appreciation rights expense          -         -        -    15,418
Management fees and other              1,446     1,049    5,514     2,549

Operating income                      27,678    20,464   77,700    41,641

Other (income) and expenses:
  Interest expense                    27,869    21,009   81,428    58,784
  Interest income                       (323)     (595)  (1,755)   (2,201)
Loss (gain) on sale of
    subsidiary and other                 397    (1,454)   5,445   (19,466)
     Total other expenses             27,943    18,960   85,118    37,117
Income (loss) before income taxes,   
 minority interest, equity in
 investee, and extraordinary items      (265)    1,504   (7,418)    4,524 
Provision for income taxes             1,933       167    3,494     1,367 
Income (loss) before minority
  interest, equity in investee,
  and extraordinary items              (2,198)   1,337  (10,912)    3,157 
Minority interest                         491      356      710     1,120
Equity in investee                          -      667        -     4,835 
Income (loss) before extraordinary     (2,689)     314  (11,622)   (2,798)
   items                                            
Extraordinary items                       179   21,630      179    30,993 
Net income (loss)                     $(2,868)$(21,316)$(11,801) $(33,791)
 


See accompanying notes to condensed consolidated financial statements.

     
<PAGE>

                                       PAGE 5
                               JORDAN INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (unaudited)
                        (ALL DOLLAR AMOUNTS IN THOUSANDS)

                                                       NINE MONTHS ENDED 
                                                         September 30,  
                                                      1998        1997   
Cash flows from operating activities:
 Net loss                                          $(11,801)   $(33,791)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
     Depreciation and amortization                   33,406      27,052
     Provision for deferred income taxes               -         132 
     Amortization of deferred financing fees          3,421          -
     Minority interest                                  710       1,120 
     Non-cash interest                               19,661      12,159
     Equity in investee                                   -       4,835
     Extraordinary item                                 179      30,993
     Loss (gain) on sale of subsidiary                5,368     (19,493)
     Changes in operating assets and 
      liabilities net of effects from 
      acquisitions:
        Increase in current assets                  (46,364)    (17,237)
        Increase (decrease) in current liabilities   18,108     (10,055)
        Increase in non-current assets               (9,314)     (6,848)
        Decrease (increase) in non-current 
         liabilities          (2,970)      4,666
        Net cash provided by (used in)
         operating activities                        10,404      (6,467)

Cash flows from investing activities:
   Net proceeds from sale of a subsidiary            13,500      45,954
   Capital expenditures, net                        (17,181)    (11,029)
   Advances to affiliates                                 -      (4,222)
   Redemption of investment in affiliate                  -      12,500 
   Acquisition of subsidiaries                     (118,071)   (112,684)
   Additional purchase price payments and
    SAR payments                                    (10,390)         -
   Net cash acquired in purchase of subsidiaries      2,240       3,049
   Other                                                 10        (241)   
        Net cash used in investing activities      (129,892)    (66,673)

<PAGE>


                                     PAGE 6
                             JORDAN INDUSTRIES, INC. 
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (unaudited)
                            (ALL DOLLAR AMOUNTS IN THOUSANDS)

Cash flows from financing activities:
   Proceeds from Motors and Gears, Inc.
    common stock issuance                                  -      1,100 
   Proceeds from Jordan Telecommunication
    Products, Inc. common stock issuance                   -      1,203
   Repayment of term debt                                  -    (34,804)
   Proceeds from revolving credit facilities, net     99,500      6,000
   Repayment of long-term debt                        (8,246)    (2,682)
   Repayment of senior notes                          (3,400)  (271,600)
   Proceeds from debt issuance - Jordan
    Industries, Inc.                                       -    120,000
   Proceeds from debt issuance - Jordan
    Telecommunications Products, Inc.                      -    273,545
   Proceeds from preferred stock issuance -
    Jordan Telecommunication Products, Inc.                -     25,000
   Deferred financing costs                                -    (26,361)
   Payment of premium and consent fee                   (179)   (13,600)
   Other borrowing                                     1,687          - 
     Net cash provided by financing activities        89,362     77,801 

Foreign currency translation                            (608)         - 
Net (decrease)increase in cash and cash equivalents  (30,734)     4,661 
Cash and cash equivalents at beginning of period      52,500     32,797
Cash and cash equivalents at end of period          $ 21,766   $ 37,458

See accompanying notes to condensed consolidated financial statements.
<PAGE>

                                   PAGE 7

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


A.  Organization

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

B.  Inventories

Inventories are summarized as follows:
                                              September 30, December 31,
                                                  1998         1997     
     Raw materials                              $ 58,546      $ 45,324 
     Work-in-process                              17,439        15,897 
     Finished goods                               72,728        62,779
                                                $148,713      $124,000


C.  Accounting for Income Taxes

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

September 30,     December 31,
    1998             1997    
Deferred tax liabilities

Intangibles                                  $ 4,612            $ 4,393
Tax over book depreciation                     7,260              7,260
Basis in subsidiary                              798                798
Lifo reserve                                      60                 83
Intercompany tax gain                          7,289              7,289
Other                                            612                531
Total deferred tax liabilities                20,631             20,354

<PAGE>

                                    PAGE 8

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


Deferred tax assets

NOL carryforwards                                39,985          37,482
Accrued interest on discount debentures          13,510          13,510
Stock Appreciation Rights Agreements              2,682           3,772
Pension obligation                                  112             444
Vacation accrual                                    411             891
Uniform capitalization of inventory               1,712           1,501
Allowance for doubtful accounts                   1,432           1,125
Foreign NOL's                                     5,412           3,582
Deferred financing fees                             790             814
Intangibles                                       1,173           1,242
Tax asset basis over book basis at             
  subsidiary                                      7,289           7,289
Other                                               189             484
Total deferred tax assets                        74,697          72,136
Valuation allowance for deferred
 tax assets                                     (55,510)        (53,226)
Net deferred tax assets                          19,187          18,910
Net deferred tax liabilities                    $ 1,444        $  1,444 

D.  Comprehensive Income

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

Total comprehensive income was $(1,554) and $(22,996) for the three months 
ended September 30, 1998 and 1997, respectively, and $(12,474)and $(37,054)for 
the nine months ended September 30, 1998 and 1997, respectively.

<PAGE>


                                 PAGE 9

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



E.  Sale of Subsidiaries

On July 9, 1998, JTP sold its stock of Diversified Wire and Cable for $16,000  
which resulted in a loss of $5,368.  The proceeds from the sale were used to 
pay $1,500 in subordinated seller notes to the original owners of Diversified, 
$13,500 to pay down JTP's revolving credit facility, and $1,000 which is 
placed in escrow until January 9, 1999, pending certain events subsequent to 
the sale.

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

On July 31, 1997, the Company sold its subsidiary, Paw Print Mailing List 
Services, Inc. ("Paw Print"), for approximately $12,500.  Paw Print is a 
value-added provider of direct mail services.

F.  Acquisition and Formation of Subsidiaries

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

The purchase price of $15,500, including estimated costs incurred directly 
related to the transaction, has been preliminarily allocated to working 
capital of $2,666, property, plant and equipment of $1,002, non-compete 
agreements of $1,545 and other assets of $91 resulting in an excess purchase 
price over net identifiable assets of $10,196.  The acquisition was financed 
with $14,000 of borrowings from JTP's revolving credit agreement and $1,500 of 
a subordinated seller note.

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

<PAGE>
                                 
                                 PAGE 10

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

1998) and Beemak ($9.8 million at January 31, 1998).  The Company has sold 
these 
subsidiaries in order to establish them as more independent, stand-alone, 
industry-focused companies, and to allow the Company's stockholders and 
employees to invest directly in JSP.

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

The purchase price of $43,000, including costs directly related to the 
transaction, was allocated to working capital of $10,402, property, plant, and 
equipment of $13,929, other long term assets and liabilities of ($2,030), and 
resulted in an excess purchase price over net identifiable assets of $20,699.  
The acquisition was financed with cash from the Jordan Industries, Inc. credit 
line and a $5,000 subordinated seller note.

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

The purchase price of $6,000 including costs directly related to the 
transaction, was allocated to working capital of $483, property, plant, and 
equipment of $793, and resulted in an excess purchase price over net 
identifiable assets of $4,724.  The acquisition was financed with cash and a 
$900 subordinated seller note.

On May 15, 1998, Motors and Gears Industries, Inc. ("Motors and Gears") 
acquired all of the outstanding stock of Advanced D.C. Motors, Inc. and its 
affiliated corporations (collectively "ADC") for $55,500.  The purchase price, 
including costs incurred directly related to the transaction, was allocated to 
working capital of $9,345; property and equipment of $4,088; covenants not to 
compete of $662; other long-term assets and liabilities of $54; and resulted 
in an excess purchase price over net identifiable assets of $41,351.  ADC 
designs and manufactures special purpose, custom designed motors for use in 
electric lift trucks, power sweepers, electric utility vehicles, golf carts, 
electric boats, and other niche products.  ADC also designs and manufactures 
its own production equipment as well as electric motor components know as 
commutators.

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

<PAGE>

                                   PAGE 11
 
                           JORDAN INDUSTRIES, INC.
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                         (ALL DOLLAR AMOUNTS IN THOUSANDS)


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

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

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

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

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

The purchase price of $51,026, including costs directly related to the 
transaction, was allocated to working capital of $16,562, property, plant, and 
equipment of $4,918, other long term assets and liabilities of ($3,442), and 
resulted in an excess of purchase price over net identifiable assets of 
$32,988.  The cash was provided from borrowings under the Motors and Gears 
Industries, Inc. Credit Agreement established on November 7, 1996 among Motors 
and Gears Industries, Inc., various banks, and Bankers Trust Company, as 
agent.

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

<PAGE>


                                     PAGE 12

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

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

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

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

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

The purchase price of $19,850, including costs incurred directly related to 
the transaction, was allocated to working capital of $3,514, property, plant, 
and equipment of $81, covenants not to compete of $120, and resulted in an 
excess purchase price over net identifiable assets of $16,135.  The 
acquisition was financed through a $16,000 borrowing on the Motors and Gears 
line of credit and a $3,850 subordinated seller note.  

On October 31, 1997, JTP,through its newly formed 70% owned subsidiary, 
Telephone Services Holdings, Inc., purchased the stock of Telephone Services, 
Inc. of Florida ("TSI").  TSI designs, manufactures and provides customer 
cable assemblies, terminal strips and terminal blocks and other connecting 
devices primarily to the telephone operating companies and major 
telecommunication manufacturers.  

The purchase price of $53,303, including estimated costs incurred directly 
related to the transaction, has been allocated to working capital of $3,864, 
property, plant, and equipment of $1,528, a non-compete agreement of $2,000, 
and non current assets of $107, resulting in an excess purchase price over net 
identifiable assets of $45,804.  The acquisition was financed with a $48,000
<PAGE>


                                PAGE 13

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

borrowing under the JTP credit facility, a $5,000 subordinated seller note and 
the assumption of a $303 deferred purchase agreement.

On December 18, 1997, Motors and Gears, purchased all of the common stock of 
Motion Control Engineering, Inc. ("MCE").  MCE is the leading independent 
supplier of electronic motion and logic control products to the elevator 
industry.

The purchase price of $53,925, including costs directly related to the 
transaction, was allocated to working capital of $10,071, property and 
equipment of $1,428, non-compete agreements of $1,005, other long-term assets 
and liabilities of ($12), and resulted in an excess of purchase price over net 
identifiable assets of $41,433.  The cash was provided from the issuance of 
$100 million of 10 3/4% bonds by Motors and Gears, Inc.

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


                                                       NINE MONTHS ENDED
                                                         September 30,  
                                                        1998      1997  

Net sales                                             $710,879  $663,789
Net income (loss) before taxes                            (337)    6,730
Net income (loss)                                       (6,670)   (1,518)

G.  Welcome Home Chapter 11 Filing

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

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


                                 PAGE 14

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

As a result of Welcome Home's Chapter 11 filing, the Company no longer has the 
ability to control the operations and financial affairs of Welcome Home.  
Accordingly, the Company no longer consolidates Welcome Home in its financial 
statements as of January 21, 1997, the date of the filing.  For the period 
ended January 21, 1997, the Company recorded a net loss of $1,195 related to 
Welcome Home.  The amount due to the Company from Welcome Home was $1,579 as 
of September 30, 1998.

Cape Craftsmen, a consolidated subsidiary of the Company, would also be 
adversely affected by a liquidation of Welcome Home.  In the third quarter of 
1998, Cape's sales to Welcome Home were $4,638, or 68.6%, of Cape's total 
third quarter sales.  Cape's receivable outstanding related to these sales was 
$4,023 at September 30, 1998.

H.  Debenture Swap

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

I.  Payment of Stock Appreciation Rights

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

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

As consideration for the signing of the Redemption Agreement, the Company 
<PAGE>

                                PAGE 15

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


paid the former shareholders non-compete payments totaling $352 and a special 
bonus of approximately $454, determined based on a percentage of the 
subsidiary's gross profit during fiscal 1997.

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

J.  Additional Purchase Price Agreements

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

The Company has a contingent purchase price agreement relating to its 
acquisition of Viewsonics in 1996.  The plan is based on Viewsonics achieving 
certain earnings before interest and taxes and can pay a minimum of $0 and a 
maximum of $2,000 for the year ended July 31, 1997 and $3,000 for the year 
ending July 31, 1998.  As of December 31, 1997, the Company had accrued $1,388 
for the plan year ended July 31, 1997, which was paid to the former owner of 
Viewsonics during the first quarter of 1998.  As of September 30, 1998, the 
Company has accrued $1,000 for the plan year ended July 31, 1998 which is 
payable during the first quarter of 1999.

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

In addition, the Company has an agreement to make an additional purchase price 
payment of up to $4,000 to the former owners of TSI if certain earnings 
projections are met as of October 31, 1998.  At September 30, 1998, $3,666 has 
been accrued and is payable on or before March 1, 1999. 
<PAGE>

                                    PAGE 16

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

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

K.  Preferred Stock

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

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

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

Holders of the JTP Senior Preferred Stock are entitled to receive dividends at 
a rate of 13.25% per annum of the liquidation preference.  All dividends are 
cumulative, whether or not earned or declared, and are payable on February 1, 
May 1, August 1, and November 1 of each year.  On or before August 1, 2002, 
JTP may, at its option, pay dividends in cash or in additional shares of JTP 
Senior Preferred Stock having an aggregate liquidation preference equal to the 
amount of such dividends.  After August 1, 2002, dividends may be paid only in 
cash.  On November 1, 1997, JTP issued 889.3836 of additional shares of JTP 
Senior Preferred Stock, as payment of dividends through that date.  On 
February 1, 1998,  May 1, 1998, and August 1, 1998 the Company issued 
864.6345,864.3747 and 922.3787 shares, respectively, of Senior Preferred 
Stock, as payment of dividends.  The JTP Senior Preferred Stock has no voting 
rights and is mandatorily redeemable on August 1, 2009.

L.  Foreign Exchange Instruments and Risk Management

The Company enters into foreign currency forward exchange contracts to hedge 
transactions and firm commitments that are denominated in foreign currencies 
(principally the Czech Koruna and Italian Lira) and not to engage in currency 
speculation.  The Company primarily utilizes forward exchange contracts with a 
duration of one year or less.  Gains or losses on hedges of transaction 
exposures are included in income in the period in which exchange rates 
change.  Gains and losses on contracts which hedge specific foreign 
<PAGE>


                                PAGE 17

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

currency denominated commitments, primarily royalty payments from the 
Company's Czech and Italian operations, are deferred and recognized in the 
basis of the transactions underlying the commitments.

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

The Company has $4,925 notional amount of foreign currency forward exchange 
contracts outstanding at September 30, 1998 ($0 at December 31, 1997).

M.  Year 2000 Compliance

The Company has assembled an internal project team that is addressing the 
issue of computer programs and embedded computer chips being unable to 
distinguish between the year 1900 and the Year 2000.  The project team has 
developed and is in the process of implementing a three-step plan intended to 
result in the Company's operations continuing with no or minimal interruption 
through the Year 2000.

For purposes of this discussion, "Year 2000 compatible" means that the 
computer hardware, software or device in question will function in 2000 
without modification or adjustment or will function in 2000 with a one-time 
manual adjustment.  However, there can be no assurance that any such Year 2000 
compatible hardware, software or device will function properly when 
interacting with any Year 2000 noncompatible hardware, software or device.

PROCESS OVERVIEW

The first step in the Company's plan is to inventory all of its computer 
hardware and software and all of its devices having imbedded computer 
technology.  The Year 2000 project team is focusing on five areas: (i) 
business systems; (ii) production (E.G., desk top computers); (iii) financial 
management (E.G., banking software, postage equipment and time clocks); (iv) 
facilities (E.G., heating and air conditioning systems, elevators, telephones, 
and fire and security systems); and (v) significant vendors and customers.  
The inventory is approximately 50% complete and is expected to be finished by 
the end of 1998.

In the second step, the project team is determining whether each inventoried 
system, device, customer or vendor is Year 2000 compatible.  In the third 
step, those that are not compatible will be upgraded or replaced.

BUSINESS SYSTEMS.  The Company's subsidiaries are in the process of assessing 
whether their business systems are Year 2000 compatible and what remediation 
may be required to make them compatible.
<PAGE>

                                PAGE 18

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

PRODUCTION, FINANCIAL MANAGEMENT AND FACILITIES.  Once they have been 
inventoried, each device and each piece of hardware and non-business system 
software (a "Non-System Item") that can be tested by the Company is being 
tested for the Year 2000 compatibility.  In the case of any Non-System Items 
that cannot be tested, the vendor is being asked for a certification regarding 
compatibility.  Each Non-System Item that is noncompatible will be either 
upgraded or replaced.  Approximately 20% of the Non-System Items that have 
been inventoried to date have been tested or certified by the vendor.  The 
Company expects substantially all of its Non-System Items will have been 
tested or certified and upgraded or replaced by the end of the third quarter 
of 1999.

CUSTOMERS AND VENDORS.  The project team has just begun the process of 
contacting each of the Company's significant customers and vendors and 
requesting that they apprise the Company of the status of their Year 2000 
compliance programs.  The Company has targeted the end of the first quarter of 
1999 as the date for receiving substantially all customer and vendor 
responses, although minimal responses have been received to date.  There can be
no assurance as to when this process will be completed.

COSTS

The total cost associated with the Company becoming Year 2000 compatible is 
not expected to be material to its financial position.  The estimate of the 
cost to upgrade or replace Non-System Items is very preliminary and the 
Company expects to develop a more definitive estimate once the inventory has 
been completed and the testing/certification process is further along. 

RISKS

The failure to correct a material Year 2000 problem could result in an 
interruption in or failure of certain normal business activities or operations 
of the Company.  Such failures could have a material adverse effect on the Compa
ny.  Due to the general uncertainty inherent in the Year 2000 problem, 
resulting in part from the uncertainty of Year 2000 compliance by the 
Company's significant customers and vendors, the Company is unable to 
determine at this time whether the consequences of Year 2000 noncompliance 
will have a material adverse effect on the Company, although its Year 2000 
project is expected to significantly reduce that uncertainty.

The Company believes that the areas that present the greatest risk to the 
Company are (i) disruption of the Company's business due to Year 2000 
noncompatibility of one of its critical business systems and (ii) disruption 
of the business of 
certain of its significant customers and venders due to their noncompliance.  
At this time, the Company believes that all of its business systems will be 
Year 2000 compatible before the end of 1999.  Whether disruption of a 
customer's or vendor's business due to noncompliance will have a material 
adverse effect on the Company will depend on several factors including the 
nature and duration of the disruption, the significance of the customer or 
vendor and, in the case of vendors, the availability of alternate sources for 
the vendor's products.
<PAGE>

                                  PAGE 19

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

The Company is in the process of developing a contingency plan to address and 
material Year 2000 noncompliance issues and expects to have the plan completed 
by the end of 1999.
<PAGE>


                                  PAGE 20

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

                                                     NINE MONTHS ENDED
                                     THIRD QUARTER     September 30,   
                                      1998    1997     1998      1997 
Net Sales:
Specialty Printing and Labeling    $ 29,461  $29,152 $  84,907 $ 83,673
Jordan Specialty Plastics (c)        20,066    5,849    52,894   18,199
Motors and Gears                     78,037   39,861   208,304  106,379
Telecommunications Products          78,231   68,741   232,441  174,944
Welcome Home (d)                          -        -         -    2,456
Consumer and Industrial Products     42,771   42,140   123,238  124,981
     Total                         $248,566 $185,743  $701,784 $510,632 
 
Operating Income:    
Specialty Printing and Labeling    $  1,362 $  2,164  $ 4,915   $ 5,316
Jordan Specialty Plastics (c)         1,532      613    5,393     1,843
Motors and Gears                     12,814    7,762   33,843    21,978
Telecommunications Products (c)       8,600    7,876   23,722     6,469 
Welcome Home (d)                          -        -        -    (1,107)
Consumer and Industrial Products(c)   4,071    4,201   12,415    12,220
     Total(a)                       $28,379  $22,616  $80,288  $ 46,719
         
Operating Margins (b):
Specialty Printing and Labeling        4.6%     7.4%     5.8%      6.4%
Jordan Specialty Plastics(c)           7.6     10.5     10.2      10.1
Motors and Gears                      16.4     19.5     16.3      20.7
Telecommunications Products (c)       11.0     11.5     10.2       3.7
Welcome Home (d)                         -        -        -     (45.1)
Consumer and Industrial Products(c)    9.5     10.0     10.1       9.8
     Consolidated (a)                 11.4     12.2     11.4       9.2
                    
(a)     The total does not include corporate overhead of $702 and $700 for the 
third quarter ended September 30, 1998 and 1997, respectively, and $2,589  and 
$3,627 for the nine months ended September 30, 1998 and 1997, respectively.

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

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

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

     
                                  PAGE 21

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


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

Results of Operations

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

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

For the third quarter and first nine months of 1998, net sales increased $0.3 
million or 1.1%, and $1.2 million or 1.5%, respectively, over the same periods 
last year.  The third quarter increase is due to higher sales of ad specialty 
products at SPAI, $0.7 million, and increased sales of membrane switches at 
Valmark, $0.5 million.  Partially offsetting these increases are decreased 
sales  of calendars at SPAI, $0.4 million, lower sales of screen printed and 
rollstock products at Valmark, $0.1 million and $0.2 million, respectively, 
and decreased sales of printed boxes at Seaboard, $0.2 million.  The increase 
in sales for the first nine months of 1998 is due to higher sales of ad 
specialty products at SPAI, $2.2 million, increased sales of membrane switches 
at Valmark, $1.0 million, and higher sales of labels at Pamco, $0.1 million.  
Partially offsetting these increases are decreased sales of calendars and 
school annuals at SPAI, $0.1 million and $0.2 million, respectively, lower 
sales of shielding devices, screen printed product and rollstock product at 
Valmark, $1.0 million, $0.4 million, and $0.3 million, and decreased sales of 
printed boxes at Seaboard, $0.1 million.  The increased ad specialty sales at 
SPAI are due to management's focus on the higher growth corporate program 
business, while decreased sales of shielding devices at Valmark are due to a 
major customer's decision to reduce production of laptop computers that 
require the shields.

For the third quarter and first nine months of 1998, operating income 
decreased $0.8 million or 37.1% and $0.4 million or 7.5%, respectively, over 
the same periods last year.  The third quarter decrease in operating income is 
due to lower operating income at Pamco, SPAI, and Seaboard, $0.3 million, $0.1 
million, and $0.4 million, respectively.  The nine month decrease in operating 
income is also due to lower operating income at Pamco, SPAI, and Seaboard, 
$0.3 million, $0.3 million, and $0.1 million, respectively.  Partially 
offsetting this is increased operating income at Valmark, $0.1 million, and 
decreased corporate expenses, $0.2 million.  The decreased operating income at 
SPAI is due to the hiring of additional salespeople to focus on continued 
growth in the corporate program ad specialty segment, as discussed above.  The 
improved operating income at Valmark is due to Valmark negotiating more 
favorable pricing with customers, while the decreased corporate expenses are 
due to lower bank fees as bank debt was repaid in 1997.
<PAGE>

                                  PAGE 22

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


For the third quarter and first nine months of 1998, the operating margin 
decreased to 4.6% and 5.8%, respectively, from 7.4% and 6.4%, respectively, in 
1997, due to the reasons mentioned above.


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

For the third quarter and first nine months of 1998, net sales increased $14.2 
million or 243.1% and $34.7 million or 190.6%, respectively, over the same 
periods last year.  The increase in third quarter sales is primarily due to 
the acquisitions of Deflecto and Rolite during the first quarter of 1998.  
Deflecto and Rolite contributed sales in the third quarter of 1998 of $13.4 
million and $1.0 million, respectively.  In addition, sales of truck and auto 
lenses at Sate-Lite increased $0.1 million.  Partially offsetting these 
increases are decreased sales of warning triangles and custom molded product 
at Sate-Lite, $0.1 million and $0.2 million, respectively.  The increase in 
sales for the first nine months of 1998 is also primarily due to the 
acquisitions of Deflecto and Rolite.  Deflecto contributed $32.7 million in 
the first nine months while Rolite contributed $2.2 million.  In addition, 
sales of miscellaneous bike parts and warning triangles increased at 
Sate-Lite, $0.2 million each.  Partially offsetting these increases are 
decreased sales of molded and fabricated products at Beemak, $0.3 million and 
$0.1 million, respectively, and lower sales of custom molded product at 
Sate-Lite, $0.2 million.

For the third quarter and first nine months of 1998, operating income 
increased $0.9 million or 149.9% and $3.6 million or 192.6%, respectively, 
over the same periods last year.  The increase in third quarter operating 
income is primarily due to the acquisitions of Deflecto and Rolite, as 
discussed above.  Deflecto and Rolite contributed operating income in the 
third quarter of 1998 of $1.6 million and $0.3 million, respectively.  
Partially offsetting these increases is lower operating income at Beemak and 
Sate-Lite, $0.5 million each.  The nine month increase in operating income is 
also primarily due to the acquisitions of Deflecto and Rolite who contributed 
operating income in 1998 of $4.4 million and $0.5 million, respectively.  
Partially offsetting these increases is lower operating income at Beemak and 
Sate-Lite, $0.6 million and $0.7 million, respectively.  The decreased 
operating income at Beemak is due to lower absorption of fixed operating 
expenses at a lower sales level, as well as additional costs associated with 
Beemak's expansion into a larger facility.  The decrease in operating income 
at Sate-Lite is primarily due to competitive pricing caused by a weaker Yen.

For the third quarter and first nine months of 1998, the operating margin 
decreased to 7.6% and increased to 10.2%, respectively, from 10.5% and 10.1%, 
respectively, in 1997.  The decrease in third quarter operating margin is due 
to the reasons mentioned above.
<PAGE>



                                  PAGE 23

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



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

For the third quarter and first nine months of 1998, net sales increased $38.2 
million or 95.8%, and $101.9 million or 95.8%, respectively, over the same 
periods last year.  The third quarter increase in sales is primarily due to 
the acquisitions of FIR Group, ED&C, Motion Control Engineering, and Advanced 
D.C. in June 1997, October 1997, December 1997, and May 1998, respectively.  
FIR, ED&C, Motion Control, and Advanced D.C. contributed sales in the third 
quarter of 1998 of $12.7 million, $2.2 million, $13.9 million, and $11.0 
million, respectively, or 85.6% of the total increase in sales, compared to 
sales at FIR of $7.1 million in the third quarter of 1997.  In addition, sales 
increased due to a 23.0% increase in sales of sub-fractional motors and a 3.0% 
increase in sales of fractional/integral motors.  The nine month increase in 
net sales is also primarily due to the acquisitions of FIR, ED&C, Motion 
Control, and Advanced D.C.  These companies contributed sales in 1998 of $33.5 
million, $8.7 million, $39.0 million, and $16.6 million, respectively, 
compared to sales at FIR of $7.1 million in the first nine months of 1997.  In 
addition, sales of sub-fractional motors increased 13.0% and sales of 
fractional/integral motors increased 7.0%.  These increases are attributed to 
continued strength in the vending machine and appliance markets and stronger 
sales in the floor care and elevator markets, respectively.

For the third quarter and first nine months of 1998, operating income 
increased $5.1 million or 65.1%, and $11.9 million or 54.0%, respectively, 
over the same periods last year.  The third quarter increase in operating 
income is due to the acquisitions and higher sales of sub-fractional motors 
and fractional/integral motors, as discussed above.  

Operating margins for the third quarter and first nine months of 1998 
decreased to 16.4% and 16.3%, respectively, from 19.5% and 20.7%, 
respectively, in 1997.  The decrease in operating margins is primarily due to 
FIR, ED&C, and Motion Control operating at a slightly lower gross margin than 
the rest of the group.

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

Net sales for the third quarter and first nine months of 1998 increased $9.5 
million or 13.8%, and $57.5 million or 32.9%, respectively, over the same 
periods last year.  Net sales increased primarily due to the acquisitions of 
EEI, TSI,  K&S Sheet Metal, and Opto-Tech which occurred in September 1997, 
October 1997,  January 1998, and July 1998, respectively.  
<PAGE>



                                   PAGE 24

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

EEI, TSI, K&S Sheet Metal, and Opto-Tech contributed sales of $4.2 million, 
$12.5 million, $3.2 million, and $0.4 million in 1998, respectively, compared 
to net sales at EEI of $1.9 million in 1997.  In addition, net sales increased 
due to higher sales of power conditioning systems.  Partially offsetting these 
increases are decreased sales of certain custom cable assemblies and 
electronic components as well as reduced sales at Diversified Wire and Cable 
due to the divestiture of the company in July 1998.  The nine month increase 
is also primarily due to the acquisitions of EEI, TSI, K&S Sheet Metal, and 
Opto-Tech as discussed above.  EEI, TSI, K&S Sheet Metal, and Opto-Tech 
contributed sales of $12.6 million, $35.4 million, $8.7 million, and $0.4 
million, respectively, compared to net sales at EEI of $1.9 million in 1997.  
The increase is also due to higher sales of infrastructure products and 
equipment, particularly power conditioning systems and CATV products.  
Partially offsetting these increases are decreased sales of fiber optic 
conduit systems and certain custom cable assemblies as well as reduced sales 
at Diversified, as discussed above.

For the third quarter and first nine months of 1998, operating income 
increased $0.7 million or 9.2%, and $17.3 million or 266.7%, respectively, 
over the same periods last year.  Third quarter operating income increased due 
to the acquisitions of TSI, K&S Sheet Metal, and Opto-Tech, as discussed 
above.  TSI, K&S Sheet Metal and Opto-Tech contributed operating income of 
$2.6 million, $1.4 million, and $0.2 million, respectively.  The nine month 
increase is primarily due to the payment of $15.4 million for stock 
appreciation rights in 1997.  In addition, operating income increased due to 
the acquisitions discussed above.   TSI, K&S Sheet Metal, and Opto-Tech 
contributed operating income of $5.9 million,  $2.4 million, and $0.2 million, 
respectively.  Partially offsetting these increases is decreased operating 
income from the infrastructure products and equipment segment due to lower 
sales of higher margin product and higher amortization costs related to the 
new acquisitions.

For the third quarter and first nine months of 1998, operating margins 
decreased to 11.0% and increased to 10.2%, respectively, from 11.5% and 3.7%, 
respectively, in 1997.  The fluctuations are due to the reasons mentioned 
above.

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

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

For the third quarter and first nine months of 1998, net sales increased $0.6 
million or 1.5% and decreased $1.7 million or 1.4%, respectively, over the 
same periods least year. The increase in third quarter sales is due to 
increased sales of rebuilt converters at Dacco, $1.0 million, higher sales of 
bibles, books, audio materials, video materials, music, gifts, and contract 
distribution sales 

<PAGE>


                                 PAGE 25

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

at Riverside, $0.5 million, $1.1 million, $0.1 million, $0.2 million, $0.3 
million, $0.1 million, and $0.2 million, respectively, increased sales of 
wooden furniture and other home accessories at Cape, $0.3 million, higher 
sales of orthopedic supports and other pain-reducing devices at Cho-Pat, $0.3 
million, and increased sales of plastic pipe at Dura-Line Retube, $0.4 
million.  Partially offsetting these increases are lower sales of aircraft 
parts at Parsons, $1.0 million, and decreased sales at Paw Print, $2.9 
million, due to the divestiture of the company in July 1997.  The decrease in 
net sales for the first nine months of 1998 is primarily due to the 
divestiture of Paw Print in July 1997 as well as the divestiture of Hudson in 
May 1997.  Paw Print and Hudson contributed net sales of $11.1 million and 
$6.7 million in the first nine months of 1997.  In addition, sales decreased 
due to lower sales of aircraft parts at Parsons, $1.1 million, and decreased 
contract distribution sales at Riverside, $0.3 million.  Partially offsetting 
these decreases are increased sales of rebuilt converters and other hard parts 
at Dacco, $2.8 million, higher sales of bibles, books, video material, music, 
and gifts at Riverside, $0.8 million, $3.3 million, $0.6 million, $0.6 
million, and $0.4 million, respectively, increased sales of wooden furniture 
and other home accessories at Cape, $6.9 million, higher sales of orthopedic 
supports and other pain-reducing devices at Cho-Pat, $1.1 million, and 
increased sales of plastic pipe at Dura-Line Retube, $1.0 million.  Sales 
increased at Dacco due to the addition of eight retail stores in 1998, and 
sales increased at Cape due to management's success at broadening Cape's 
customer base.  Cho-Pat, which was purchased in September 1997, contributed 
sales of $0.1 million in 1997 compared to sales of $1.2 million in 1998.

For the third quarter and first nine months of 1998, operating income 
decreased $0.1 million or 3.1% and increased $0.2 million or 1.6%, 
respectively, over the same periods last year.  The decrease in third quarter 
operating income is due to lower operating income at Parsons and Riverside, 
$0.3 million and $0.1 million, respectively, as well as lower operating income 
at Paw Print, $0.5 million, due to the divestiture of the company, as 
mentioned above.  Partially offsetting these decreases are increased operating 
income at Dacco, Cape, and Dura-Line Retube, $0.3 million, $0.3 million, and 
$0.2 million, respectively.  Operating income for the first nine months of 
1998 increased at Dacco, Riverside, Cape, and Cho-Pat, $1.3 million, $0.2 
million, $2.4 million, and $0.2 million, respectively.  Partially offsetting 
these increases is decreased operating income at Paw Print and Hudson due to 
the divestitures of the companies in July 1997 and May 1997, respectively.  
Paw Print and Hudson contributed operating income of $1.5 million and $2.2 
million, respectively, during the first nine months of 1997.  In addition, 
operating income decreased at Parsons, $0.2 million.  The increased operating 
income at Cape is due to increased sales of higher gross margin product 
primarily wooden furniture, the increased operating income at Cho-Pat is due 
to the acquisition of the company in September 1997, and the decreased 
operating income at Parsons is due to lower absorption of fixed overhead due 
to lower sales of aircraft parts.

Operating margin in the third quarter decreased to 9.5% from 10.0% in 1997 
while operating margin for the first nine months of 1998 increased to 10.1% 
from 9.8% 
<PAGE>


                                  PAGE 26
 
                   MANAGEMENT'S DISCUSSION AND ANALYSIS 
             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

in 1997.  Operating margin for the first nine months of 1998 increased due to 
the reasons mentioned above. 

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

For the third quarter and first nine months of 1998, consolidated net sales 
increased $65.5 million or 35.8%, and $193.9 million or 38.2%, respectively, 
over the same periods last year.  The increase in sales is primarily due to 
the 1998 acquisitions of Deflecto and Rolite in the Jordan Specialty Plastics 
group, Advanced D.C. in the Motors and Gears group, and K&S Sheet Metal and 
Opto-Tech in the Telecommunications Products group.  In addition, sales 
increased due to the 1997 acquisitions that occurred subsequent to the third 
quarter of 1997: ED&C and Motion Control in the Motors and Gears group; TSI in 
the Telecommunications Products group; and Cho-Pat in the Consumer and 
Industrial Products group.  Sales also increased due to higher sales of ad 
specialty products, membrane switches, and labels in the Specialty Printing 
and Labeling group, increased sales of bike parts and warning triangles in the 
Jordan Specialty Plastics group, higher sales of sub-fractional motors and 
fractional/intergral motors in the Motors and Gears group, higher sales of 
power conditioning systems and CATV products in the Jordan Telecommunicaitons 
group, and increased sales of rebuilt converters, bibles, books, video, music, 
gifts, orthopedic supports, and home accessories in the Consumer and 
Industrial Products group.  Partially offsetting these increases are decreased 
sales of calendars, school annuals, screen printed product, rollstock product 
and folding boxes, in the Specialty Printing and Labeling group, lower sales 
of plastic injection molding and fabrication products in the Jordan Specialty 
Plastics group, decreased sales of fiber optic cable conduit systems and 
certain custom cable assemblies in the Jordan Telecommunications group, and 
lower contract distribution sales and sales of aircraft parts in the Consumer 
and Industrial Products group.  In addition, sales decreased due to the 
divestitures of Paw Print and Hudson from the Consumer and Industrial Products 
group, and Diversified Wire and Cable from the Jordan Telecommunications 
group.

For the third quarter and first nine months of 1998, operating income 
increased $7.2 million or 35.3%, and $36.1 million or 86.6%, respectively, 
over the same periods last year.  The increase is primarily due to the 1998 
and 1997 acquisitions, as discussed above.  In addition, operating income 
increased due to the payment of stock appreciation rights in the Jordan 
Telecommunications group which reduced operating income in the second quarter 
of 1997.  Operating income also increased due to more favorable pricing 
contracts and decreased corporate expenses in the Specialty Printing and 
Labeling group and increased sales of higher gross margin product in the 
Consumer and Industrial Products group.  Partially offsetting these increases 
is decreased operating income due to additional costs associated with facility 
expansion and unfavorable fluctuations in the value of the Yen in the Jordan 
Specialty Plastics group, lower sales of higher gross margin product and 
higher amortization costs in the Jordan  Telecommunications group, and the 
divestitures of Paw Print and Hudson from the Consumer and Industrial Products 
group and Diversified Wire and Cable from the Jordan Telecommunications group.
<PAGE>

                                   PAGE 27

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


For the third quarter and first nine months of 1998 interest expense increased 
$6.9 million or 32.7%, and $22.6 million or 38.5%, respectively,  due to 
higher debt levels stemming from the Company's July 1997 debt offering at JTP 
and the Company's December 1997 debt offering at Motors and Gears.  Interest 
expense also increased due to the financing of the Company's acquisitions.  
Interest income remained consistent between 1997 and 1998.

Liquidity and Capital Resources.  The Company had approximately $195.6 million 
in working capital at September 30, 1998, compared to $176.5 million at the 
end of 1997, representing an increase of $19.1 million or 10.8%.  This 
increase is due to increased net trade receivables, higher inventory, and 
increased prepaids.  Partially offsetting these increases in working capital 
are higher accrued expenses and an increased accounts payable balance.

Operating activities.  Net cash provided by operating activities for the nine 
months ended September 30, 1998 was $10.4 million compared to $6.5 million 
used in operating activities during the same period in 1997.  This increase is 
due to improved operating results, partially offset by an increase in interest
expense and working capital.

Investing activities.  Net cash used in financing activities for the nine 
months ended September 30, 1998 was $129.9 million compared to $66.7 million 
used in investing activities during the same period in 1997.  This increase is 
due to proceeds from the sale of two subsidiaries resulting from the 
divestitures of Hudson and Paw Print in 1997, increased capital expenditures 
and increased acquisitions during 1998, and additional purchase price and SAR 
payments made during 1998.

Financing activities.  Net cash provided by financing activities for the nine 
months ended September 30, 1998 was $89.4 million compared to $77.8 million 
provided by financing activities during the same period in 1997.  This 
increase is primarily due to increased proceeds from the Company's revolving 
credit facilities used for working capital needs and the acquisitions of 
subsidiaries.

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

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


                                 PAGE 28


                       PART II.  OTHER INFORMATION



Item 1.                 Legal Proceedings
                        None

Item 2.                 Changes in Securities
                        None

Item 3.                 Defaults upon Senior Securities
                        None

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

Item 5.                 Other Information
                        None

Item 6.                 Exhibits and Reports on Form 8-K
                        None

                        27.  EDGAR Financial Data Schedule



<PAGE>

                                     PAGE 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 16, 1998                    By:   /s/ Thomas C. Spielberger
                                           Thomas C. Spielberger
                                           Senior Vice President,
                                           Finance and Accounting