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 March 31, 2001                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
May 14, 2001:  98,501.0004.




<PAGE>


                          JORDAN INDUSTRIES, INC.

                                   INDEX


Part I.                                                              Page No.
------                                                               --------

   Condensed Consolidated Balance Sheets
   at March 31, 2001 (Unaudited), and December 31, 2000                  3

   Condensed Consolidated Statements of Operations for the
   Three Months Ended March 31, 2001 and 2000 (Unaudited)                4

   Condensed Consolidated Statements of Cash Flows for
   the Three Months Ended March 31, 2001 and 2000 (Unaudited)            5

   Notes to Condensed Consolidated Financial Statements (Unaudited)      6

   Management's Discussion and Analysis of
   Financial Condition and Results of Operations                        16


Part II.
--------

   Other Information                                                    22

   Signatures                                                           23





                                     2
<PAGE>
<TABLE>
<CAPTION>

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


                                                     March 31,       December 31,
                                                       2001              2000
                                                   ------------      ------------
                                                    (unaudited)

<S>                                                  <C>               <C>
ASSETS
Current Assets:
  Cash and cash equivalents                            $29,860           $21,713
  Accounts receivable, net                             118,843           128,265
  Inventories                                          131,948           139,046
  Deferred Income Taxes                                 10,861             9,001
  Prepaid expenses and other current assets             39,204            32,155
                                                        ------            ------
    Total Current Assets                               330,716           330,180

Property, plant and equipment, net                     103,787           107,526
Investments in and advances to affiliates               42,739            42,902
Goodwill, net                                          368,452           371,487
Deferred income taxes                                    1,060             2,851
Other assets                                            39,273            41,755
                                                        ------            ------
    Total Assets                                      $886,027          $896,701
                                                      ========          ========

LIABILITIES AND SHAREHOLDER'S EQUITY
(NET CAPITAL DEFICIENCY)
Current Liabilities:
  Accounts payable                                     $59,820           $68,236
  Accrued liabilities                                   59,086            65,108
  Advance deposits                                       3,900             1,937
  Current portion of long-term debt                     29,536            35,600
                                                        ------            ------
    Total Current Liabilities                          152,342           170,881

Long-term debt                                         799,079           787,694
Other non-current liabilities                           18,358            17,728
Minority interest                                          334               410
Preferred stock                                          2,039             1,998

Shareholder's Equity (net capital deficiency):
Common stock $.01 par value: 100,000 shares
 authorized and 98,501 shares
 outstanding                                                 1                 1
  Additional paid-in capital                             2,116             2,116
  Accumulated other comprehensive loss                 (12,626)          (16,641)
  Accumulated deficit                                  (75,616)          (67,486)
                                                       --------          --------
    Total Shareholder's Equity (net capital
     deficiency)                                       (86,125)          (82,010)
                                                       --------          --------
    Total Liabilities and Shareholder's
     Equity (net capital deficiency)                  $886,027          $896,701
                                                      ========          ========



See accompanying notes to condensed consolidated financial statements.




                                     3
<PAGE>

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


                                                    THREE MONTHS ENDED
                                                         March 31,
                                                    -------------------
                                                      2001        2000
                                                      ----        ----

<S>                                              <C>             <C>
Net sales                                         $182,606        $191,118
Cost of sales, excluding
 depreciation                                      117,044         122,379
Selling, general and
 administrative expenses,
 excluding depreciation                             43,301          41,793
Depreciation                                         5,801           5,574
Amortization of goodwill
 and other intangibles                               3,830           4,074
Management fees and other                              933             294
                                                   -------         -------
Operating income                                    11,697          17,004

Other (income) expenses:
  Interest expense                                  22,848          22,388
  Interest income                                     (558)           (275)
  Other                                                281              (7)
                                                   -------         -------
                                                    22,571          22,106
                                                   -------         -------

Loss from continuing
 operations before income
 taxes and minority interest                       (10,874)         (5,102)
Benefit for income taxes                            (2,709)         (1,851)
                                                    -------        -------
Loss from continuing operations
  before minority interest                          (8,165)         (3,251)
Minority interest                                      (76)             25
                                                    -------        -------
Loss from continuing operations                     (8,089)         (3,276)
Discontinued operations, net of
  taxes                                                 -          190,022
                                                    -------       --------
Net (loss) income                                  $(8,089)       $186,746
                                                   ========       ========



See accompanying notes to condensed consolidated financial statements.




                                     4
<PAGE>

<CAPTION>

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


                                                                     THREE MONTHS ENDED
                                                                          March 31,
                                                                     2001          2000
                                                                    ------        ------

<S>                                                             <C>               <C>
Cash flows from operating activities:
 Net (loss) income                                               $ (8,089)         $186,746
  Adjustments to reconcile net (loss) income to net
   cash used in operating activities:
    Depreciation and amortization                                   9,631             9,648
    Amortization of deferred financing fees                         1,266             1,267
    Minority interest                                                 (76)               25
    Non-cash interest                                               5,298             4,764
    Gain on sale of discontinued operations                            -           (190,022)
    Changes in operating assets and liabilities
     Net of effects from acquisitions:
      Increase in current assets                                  (19,806)           (9,523)
      Increase (decrease) in current liabilities                    4,287             5,891
      Decrease (increase) in non-current assets                       762            (4,360)
      Increase (decrease) in non-current liabilities                  633               595
      Net current assets of discontinued operations                    -             (1,323)
                                                                 --------          --------
        Net cash (used in) provided by operating
         activities                                                (6,094)            3,708


Cash flows from investing activities:
  Proceeds from sale of discontinued operations                        -             71,362
  Proceeds from sale of subsidiary                                 16,663                -
  Capital expenditures, net                                        (2,950)           (4,518)
  Acquisitions of subsidiaries                                       (375)          (33,297)
  Additional purchase price payments                                   -             (3,093)
  Net cash acquired in purchase of subsidiaries                        -              1,957
  Other                                                               254               (33)
                                                                 --------          --------
        Net cash provided by investing activities                  13,592            32,378

Cash flows from financing activities:
  Proceeds from (repayment of) revolving credit
   facilities, net                                                  2,946           (36,973)
  Repayment of long-term debt                                      (3,489)             (893)
  Other borrowing                                                     239                -
                                                                 --------          --------
        Net cash used in financing activities                        (304)          (37,866)

Foreign currency translation                                          953            (1,211)
                                                                 --------          --------
Net increase (decrease) in cash and cash equivalents                8,147            (2,991)
Cash and cash equivalents at beginning of period                   21,713            19,973
                                                                 --------          --------
Cash and cash equivalents at end of period                        $29,860           $16,982
                                                                 ========          ========


See accompanying notes to condensed consolidated financial statements.
</TABLE>


                                     5
<PAGE>



                          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, 2000, which are included in the Company's Annual
Report filed on Form 10-K for such year (the "2000 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:

                                              March 31,      December 31,
                                               2001              2000
                                            ------------     ------------

       Raw materials                         $ 54,617          $ 51,814
       Work-in-process                         17,090            16,760
       Finished goods                          60,241            70,472
                                             --------          --------
                                             $131,948          $139,046
                                             ========          ========

C.  Comprehensive Income
------------------------
Total comprehensive (loss) income for the three months ended March 31, 2001
and 2000 is as follows:


                                           Three Months ended
                                                March 31,
                                          --------------------
                                            2001         2000
                                            ----         ----

Net (loss) income                         $(8,089)     $186,746
Foreign currency translation                4,015        (3,195)
                                          -------       -------
Comprehensive (loss) income               $(4,074)     $183,551
                                          ========     ========

D.  Sale of Subsidiaries
------------------------
On February 2, 2001, the Company sold the assets of Riverside to a
third-party for cash proceeds of $16,663. Riverside is a publisher of
Bibles and a distributor of Bibles, religious books and music recordings.
The cash proceeds were used to pay off the Company's Revolving Credit
Facility. The Company recognized a loss on the sale of $2,798, which was
recorded in the 2000 financial statements.










                                     6
<PAGE>



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

E.  Acquisition and Formation of Subsidiaries
---------------------------------------------
On March 7, 2001, the Company purchased the assets of J.A. Larson Company
("JA Larson"). JA Larson is a flexographic printer of pressure sensitive
labels, tags and seals, which are manufactured in a wide variety of shapes
and sizes. JA Larson is fully integrated into Pamco. The Company paid $375
in cash for the assets. The purchase price was allocated to inventory of
$100, property and equipment of $20 and resulted in an excess purchase
price over identifiable assets of $255.

In December 2000, the Company formed GramTel Communications, Inc.
("GramTel"). GramTel is an information technology infrastructure
outsourcing company that allows its customers to transfer, protect and
store their mission critical data at regionally located Secure Network
Access Centers. The Company has invested $3,332 in GramTel through March
31, 2001 for property, equipment and other start-up related expenses.

On October 23, 2000, the Company purchased the stock of Flavorsource, Inc.
("Flavorsource") for $9,728 including costs directly related to the
transaction. Flavorsource is a developer and compounder of flavors for use
in beverages of all kinds, including coffee, tea, juices, bar mixes, sodas,
and cordials, as well as in nutritional foods, bakery products and ice
cream and dairy products. The acquisition was financed with $8,478 in cash
and a $1,250 subordinated seller note. The purchase price has been
allocated to working capital of $270 and property, plant and equipment of
$66, and resulted in an excess purchase price over net identifiable assets
of $9,392.

On October 10, 2000, the Company purchased the assets of Internet Services
of Michigan, Inc. ("ISMI") for $1,181. ISMI is an Internet service provider
with approximately 9,500 customers located in Michigan. ISMI offers
standard dial up resources as well as high-speed Internet connections such
as DSL, Satellite and ISDN. ISMI also provides website development and
creation services and web hosting features. The acquisition was financed
with cash and the purchase price has been allocated to net operating
liabilities of $(659), and property, plant and equipment of $350, and
resulted in an excess purchase price over net identifiable assets of
$1,490.

On June 2, 2000, the Company purchased Instachange Displays Limited and
Pique Display Systems, Inc. (collectively "IDL") for approximately $12,805
including costs directly related to the transaction. IDL is Canada's
leading manufacturer and distributor of point-of-purchase display and
retail merchandising products. The acquisition was financed with $10,316 of
cash and a $2,489 subordinated seller note. The purchase price has been
allocated to working capital of $1,629, and property, plant and equipment
of $1,389, and resulted in an excess purchase price over net identifiable
assets of $9,787. IDL is a division of Deflecto.






                                     7
<PAGE>


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


On March 14, 2000, the Company purchased Online Environs, Inc. ("Online
Environs"), an international Internet business solutions developer and
consultant, for $5,093 including costs directly associated with the
transaction. The acquisition was financed with $3,593 in cash and a $1,500
subordinated seller note. Online Environs' digital communications solutions
are designed to help clients increase sales, improve communications, and
create and enhance business identities over the Internet, commonly known as
eBusiness. The purchase price has been allocated to working capital of
$258, property, plant and equipment of $194, non current assets
of $2, and long-term liabilities of $(43) and resulted in an excess
purchase price over net identifiable assets of $4,682.

The above acquisitions have been accounted for as purchases and their
operating results have been consolidated with the Company's results since
the respective dates of acquisition. Unaudited pro forma information with
respect to the Company as if the 2001 acquisitions and divestitures had
occurred on January 1, 2001 and 2000 and as if the 2000 acquisitions and
divestitures had occurred on January 1, 2000, is as follows:

                                                     Three months ended
                                                     ------------------
                                                          March 31,
                                                          ---------
                                                      2001          2000
                                                      ----          ----
Net Sales                                           $178,523     $194,005
Net (loss) income before extraordinary items          (9,674)     (43,272)
Net (loss) income                                     (6,889)     (50,397)


F.  Discontinued Operations
---------------------------
On July 25, 1997, the Company recapitalized its investment in Jordan
Telecommunication Products, Inc. ("JTP") and JTP acquired the Company's
telecommunications and data communications products business from the
Company for total consideration of approximately $294,027, consisting of
$264,027 in cash, $10,000 of assumed indebtedness and preferred stock, and
the issuance to the Company of $20,000 aggregate liquidation preference of
JTP Junior Preferred Stock. The Company's stockholders and affiliates and
JTP management invested in and acquired the JTP common stock. As a result
of the recapitalization, certain of the Company's affiliates and JTP
management owned substantially all of the JTP common stock. The Company's
investment in JTP was represented solely by the JTP Junior Preferred Stock.
The JTP Preferred Stock controlled over 80% of JTP's stockholder voting
rights and accreted 95% of JTP's net income or loss. The Company had
obtained an independent opinion as to the fairness, from a financial point
of view, of the recapitalization to the Company and its public bondholders.

On January 18, 2000, the Company's affiliates sold the common stock of JTP
to an unaffiliated third party and the Company sold its interest in the JTP
Junior Preferred Stock for $54,100. The Company also received $6,535 for
reimbursement of expenses, $12,000 for the buyout of the management
services agreements, and $3,900 for an advisory and indemnity fee. The
Company recognized a gain on the sale of its interests in JTP of $197,394
during the quarter ended March 31, 2000, net of taxes of approximately
$28,000.





                                     8
<PAGE>


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


For the period from January 1, 2000 to January 18, 2000, JTP's net sales
were $20,724. The losses from discontinued operations related to JTP in the
Company's Statements of Operations for the period from January 1, 2000 to
January 18, 2000, included income tax expense of $406.

On June 22, 2000, the shareholders of Capita Technologies, Inc. ("Capita")
(including the Company) exchanged their stock in Capita, which included its
subsidiaries Protech, Aurora, Garg, and Raba, for shares in The Interpublic
Group of Companies, Inc. ("IPG") in a reorganization of Capita. In the
reorganization, the Company received registered common shares in IPG having
a value of $10,000 in exchange for its Capita stock. The Company also
received registered common shares in IPG having a value of $60,750 for its
intercompany notes and $2,000 in cash for the buyout of its management
services agreements. The Company's common shares in IPG were sold for cash
of $70,750 in August 2000. In the second quarter of 2000, the Company
recognized a gain, for financial reporting purposes, on the sale of its
stock in IPG of $13,442, net of taxes of $7,000.

For the period from January 1, 2000 to March 31, 2000, Capita's net sales
were $7,372. The losses from discontinued operations related to Capita in
the Company's Statements of Operations for the period from January 1, 2000
to March 31, 2000, included tax expenses of $0.

As a result of the transactions described above, the Jordan
Telecommunication Products segment and the Capita Technologies segment have
been reported as discontinued operations for financial reporting purposes
in accordance with Accounting Principals Board ("APB") Opinion No. 30.

The following table summarizes the Company's discontinued operations:

                                                 Three months ended March 31,
                                                 ----------------------------
                                                    2001               2000
                                                    ----               ----

Loss from discontinued operations
 before income taxes                             $      -          $  (6,966)
Provision for income taxes                              -               (406)
                                                 --------           --------
Net loss from discontinued
 operations                                             -             (7,372)
Gain on sale of discontinued
 operations                                             -            225,394
Provision for income taxes                              -            (28,000)
                                                        -           --------
Gain on sale, net of taxes                              -            197,394
                                                        -            -------
Discontinued operations, net of taxes            $      -          $ 190,022
                                                 ========          =========


G.  Investments in JAAI, JSP, and M&G Holdings
----------------------------------------------

JAAI
----
During 1999, the Company completed the recapitalization of Jordan Auto
Aftermarket, Inc. ("JAAI"). As a result of the recapitalization, certain of
the Company's affiliates and JAAI management own substantially all of the
JAAI common stock and the Company's investment in JAAI is represented
solely by the Cumulative Preferred Stock of JAAI. The JAAI Cumulative




                                     9
<PAGE>



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

Preferred Stock controls over 80% of the combined voting power of JAAI
capital stock outstanding and accretes at plus or minus 97.5% of the
cumulative JAAI net income or net loss, as the case may be, through the
earlier of an Early Redemption Event (as defined) or the fifth anniversary
of issuance (unless redemption is prohibited by a JAAI or Company debt
covenant).

The Company recapitalized JAAI in order to establish JAAI as a more
independent, stand-alone, industry-focused company. The Company continues
to consolidate JAAI and its subsidiaries, for financial reporting purposes,
as subsidiaries of the Company. The Company's consolidation of the results
of JAAI will be discontinued upon redemption of the JAAI Cumulative
Preferred Stock, or at such time as the JAAI Cumulative Preferred Stock
ceases to represent at least a majority of the voting power and a majority
share in the earnings of JAAI and its subsidiaries. The JAAI Cumulative
Preferred Stock is mandatorily redeemable upon certain events and is
redeemable at the option of JAAI, in whole or in part, at any time.

JSP
---
During 1998, the Company recapitalized Jordan Specialty Plastics, Inc.
("JSP"). As a result of the recapitalization, certain of the Company's
affiliates and JSP management own substantially all of the JSP common stock
and the Company's investment in JSP is represented solely by the Cumulative
Preferred Stock of JSP. The JSP Cumulative Preferred Stock controls over
80% of the combined voting power of JSP capital stock outstanding and
accretes at plus or minus 95% 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 fifth anniversary of issuance (unless redemption is
prohibited by a JSP or Company debt covenant).

The Company continues to consolidate JSP and its subsidiaries, for
financial reporting purposes, as subsidiaries of the Company. The Company's
consolidation of the results of JSP will be discontinued upon redemption of
the JSP Cumulative Preferred Stock, or at such time as the JSP Cumulative
Preferred Stock ceases to represent at least a majority of the voting power
and a majority share in the earnings of JSP and its subsidiaries. The JSP
Cumulative Preferred Stock is mandatorily redeemable upon certain events
and is redeemable at the option of JSP, in whole or in part, at any time.

M&G Holdings
------------
Motors and Gears Holdings, Inc., ("M&G Holdings" or "M&G") along with its
wholly-owned subsidiary, Kinetek, Inc. ("Kinetek") (formerly Motors and
Gears, Inc.), was formed to combine a group of companies engaged in the
manufacturing and sale of fractional and sub-fractional motors and gear
motors primarily to customers located throughout the United States and
Europe.




                                    10
<PAGE>



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

At the end of 1996, M&G was comprised of Merkle-Korff and its wholly-owned
subsidiary, Barber-Colman, and Imperial and its wholly-owned subsidiaries,
Scott and Gear. All of the outstanding shares of Merkle-Korff were
purchased by M&G in September 1995 and the net assets of Barber-Colman were
purchased by Merkle-Korff in March 1996. Barber-Colman was legally merged
into Merkle-Korff as of January 1, 1997 and now operates as a division of
Merkle-Korff. The net assets of Imperial, Scott, and Gear were purchased by
M&G, from the Company, at an arms length basis on November 7, 1996, with
the proceeds from a debt offering. The purchase price was $75,656, which
included the repayment of $6,008 in Imperial liabilities owed to the
Company, and a contingent payment payable pursuant to a contingent earnout
agreement. Under the terms of the contingent earnout agreement, 50% of
Imperial, Scott, and Gear's cumulative earnings before interest, taxes,
depreciation and amortization, as defined, exceeding $50,000 during the
five fiscal years ended December 31, 1996, through December 31, 2000, will
be paid to the Company. The Company was paid $174 for this agreement in the
first quarter of 2001.

As a result of this sale to M&G, the Company recognized approximately
$62,700 of deferred gain at the time of sale for U.S. Federal income tax
purposes. A portion of this deferred gain is recognized as M&G reports
depreciation and amortization over approximately 15 years on the step-up in
basis of those purchased assets. As long as M&G remains in the Company's
affiliated group, the gain recognized and the depreciation on the step-up
in basis should exactly offset each other. Upon any future de-consolidation
of M&G from the Company's affiliated group for U.S. Federal income tax
purposes, any unreported gain would be fully reported and subject to tax.

On May 16, 1997, the Company participated in a recapitalization of M&G
Holdings. In connection with the recapitalization, M&G Holdings issued
16,250 shares of M&G Holdings common stock (representing approximately
82.5% of the outstanding shares of M&G Holdings common stock) to certain
stockholders and affiliates of the Company and M&G Holdings management for
total consideration of $2,200 (of which $1,110 was paid in cash and $1,090
was paid through delivery of 8.0% zero coupon notes due 2007). As a result
of the recapitalization, certain of the Company's affiliates and M&G
Holdings management own substantially all of the M&G Holdings common stock
and the Company's investment in M&G Holdings is represented solely by the
Cumulative Preferred Stock of M&G Holdings (the "M&G Holdings Junior
Preferred Stock"). The M&G Holdings Junior Preferred Stock represents 82.5%
of M&G Holdings' stockholder voting rights and 80% of M&G Holdings' net
income or loss is accretable to the M&G Holdings Junior Preferred Stock.
The Company has obtained an independent opinion as to the fairness, from a
financial point of view, of the recapitalization to the Company and its
public bondholders. The Company continues to consolidate M&G Holdings and
its subsidiaries, for financial reporting purposes, as subsidiaries of the
Company. The M&G Holdings Junior Preferred Stock discontinues its
participation in M&G Holdings' earnings on the fifth anniversary of
issuance. The Company's consolidation of the results of M&G Holdings will
be discontinued upon redemption of the M&G Holdings Junior Preferred Stock,
or at such time as the M&G Holdings Junior Preferred Stock ceases to
represent at least a majority of the voting power and a majority share in
the earnings of M&G Holdings and its subsidiaries. As long as the M&G
Holdings Junior Preferred Stock is outstanding, the Company expects the
vote test to be satisfied. The M&G Holdings Junior Preferred Stock is
mandatorily redeemable upon certain events and is redeemable at the option
of M&G Holdings, in whole or in part, at any time.





                                    11
<PAGE>


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

The Company expects to continue to include M&G Holdings and its
subsidiaries in its consolidated group for U.S. Federal income tax
purposes. This consolidation would be discontinued, however, upon the
redemption of the M&G Holdings Junior Preferred Stock, which could result
in recognition by the Company of substantial income tax liabilities arising
out of the recapitalization. If such deconsolidation had occurred at March
31, 2001, the Company believes that the amount of taxable income to the
Company attributable to M&G Holdings would have been approximately $55,000
(or approximately $22,000 of tax liabilities, assuming a 40.0% combined
Federal, state, and local tax rate). The Company currently expects to
offset these tax liabilities arising from deconsolidation with redemption
proceeds from the M&G Holdings Junior Preferred Stock. Deconsolidation
would also occur with respect to M&G Holdings if the M&G Holdings Junior
Preferred Stock ceased to represent at least 80.0% of the voting power and
80.0% of the combined stock value of the outstanding M&G Holdings Junior
Preferred Stock and common stock of M&G Holdings. As long as the M&G
Holdings Junior Preferred Stock is outstanding, the Company expects the
vote test to be satisfied. The value test depends on the relative values of
the M&G Holdings Junior Preferred Stock and common stock of M&G Holdings.
The Company believes the value test is satisfied at March 31, 2001. It is
possible that on or before the fifth anniversary of its issuance, the M&G
Holdings Junior Preferred Stock would cease to represent 80.0% of the
relevant total combined stock value. In the event that deconsolidation for
U.S. Federal income tax purposes occurs without redemption of the M&G
Holdings Junior Preferred Stock, the tax liabilities discussed above would
be incurred without the Company receiving the proceeds of the redemption.

H.  Additional Purchase Price Agreements
----------------------------------------
The Company has a deferred purchase price agreement relating to its
acquisition of Yearntree in December 1999. The agreement is based on
Yearntree achieving certain agreed upon cumulative net income before
interest and taxes for the 24 months beginning January 1, 2000 and ending
December 31, 2001. The agreement is payable 30 days after the receipt of
the December 31, 2001 audited financial statements.

The Company also has a deferred purchase price agreement relating to its
acquisition of Teleflow in July 1999. The agreement is based upon Teleflow
achieving certain agreed upon earnings before interest, taxes,
depreciation, and amortization for each year through the year ended
December 31, 2002. On April 21, 2000, the Company paid $500 related to this
agreement.

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 terms of Kinetek's Advanced DC purchase price agreement provides for
additional consideration to be paid if the acquired entity's results of
operations exceed certain targeted levels. Targeted levels were set
substantially above the historical experience of the acquired entity at the
time of acquisition. The contingent payments applied to operations of
fiscal years 1998 and 1999. Kinetek made payments to the previous
shareholders of Advanced DC of $3,200 in March 1999 and $3,100 in March
2000 related to this agreement.



                                    12
<PAGE>


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


Kinetek 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 provide 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.

I.  Related Party Transactions
------------------------------
An individual who is shareholder, Director, General Counsel, and Secretary
for the Company is also a partner in a law firm used by the Company. The
firm was paid $77 and $170 in fees and expenses in the first three months
of 2001 and 2000, respectively. The rates charged to the Company were at
arms-length.

Certain shareholders of TJC Management Corporation ("TJC") are also
shareholders of the Company. On July 25, 1997, a previous agreement with
TJC was amended and restated. This agreement was amended again in December
1999. Effective January 1, 2000, the Company pays TJC a $250 quarterly fee
for management services. The Company accrued fees to TJC of $250 in the
first three months of 2001 and 2000, respectively, related to this
agreement. These expenses are classified in "management fees and other" in
the Company's statements of operations.

On July 25, 1997, a previous agreement with TJC was amended and restated.
Under the new agreement, the Company pays TJC an investment banking fee of
up to 1%, based on the aggregate consideration paid, for its assistance in
acquisitions undertaken by the Company or its subsidiaries, and a financial
consulting fee not to exceed 0.5% of the aggregate debt and equity
financing that is arranged by the Jordan Company, plus the reimbursement of
out-of-pocket and other expenses. The Company made no payments in either
the first three months of 2001 or 2000 to TJC for their assistance in
relation to acquisition and refinancing activities. The expenses related to
these services are classified in "management fees and other" in the
Company's statements of operations.

The Company has agreements to provide management and consulting services to
various entities whose shareholders are also shareholders of the Company.

The Company also has agreements to provide investment banking and financial
consulting services to these entities. Fees for management and consulting
services are typically a percentage of the entity's net sales or earnings
before interest, taxes, depreciation and amortization. Fees for investment
banking and financial consulting services are based on the aggregate
consideration paid for acquisitions or the aggregate debt and equity
financing that is arranged by the Company, plus the reimbursement of out-of
pocket and other expenses. Amounts due from affiliated entities as a result
of providing the services described above were $2,766 and $1,222 as of
March 31, 2001 and 2000, respectively, and are classified in "prepaid
expenses and other current assets" in the Company's balance sheets. The
Company also made unsecured advances to these entities for the purpose of
funding operating expenses and working capital needs. These advances
totaled $10,147 and $7,243 as of March 31, 2001 and 2000, respectively, and
are classified in "prepaid expenses and other current assets" in the
Company's balance sheets.



                                    13
<PAGE>

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


J.  Investments in and advances to affiliates
---------------------------------------------
The Company holds 75.6133 shares of Class A PIK Preferred Stock and 151.28
shares of common stock of Fannie May Holdings, Inc. ("Fannie May"),
representing a total investment of $1,721 and approximately 15.1% of the
outstanding common stock of Fannie May on a fully diluted basis. The
Company is accounting for this investment under the cost method. Fannie
May's Chief Executive Officer is Mr. Quinn, and its stockholders include
Mr. Jordan, Mr. Quinn, Mr. Zalaznick, and Mr. Boucher, who are directors
and stockholders of the Company, as well as other partners, principals, and
associates of the Jordan Company, who are also stockholders of the Company.
Fannie May, which is also known as "Fannie May Candies", is a manufacturer
and marketer of kitchen-fresh, high-end boxed chocolates and other
confectionary items, through its company-owned retail stores and through
specialty sales channels. Its products are marketed under the "Fannie May
Candy", "Fanny Farmer Candy", "Sweet Factory", and "Laura Secord" brand
names.

As of March 31, 2001 and December 31, 2000, the Company had made
approximately $13,846 and $14,446 of unsecured advances to JIR Broadcast,
Inc. and JIR Paging, Inc. Each of these companies' Chief Executive Officer
is Mr. Quinn and its stockholders include Messrs. Jordan, Quinn, Zalaznick,
and Boucher, who are the Company's directors and stockholders, as well as
other partners, principals and associates of The Jordan Company who are
also the Company's stockholders. These companies are engaged in the
development of businesses in Russia, including the broadcast and paging
sectors. The Company receives notes in exchange for these advances, which
bear interest at 12.0%.

In November 1998, the Company, through Motors and Gears, invested $5,585 in
Class A Preferred Stock and $1,700 in Class B Preferred Stock of JZ
International, Ltd. In April 2000, the Company, through Motors and Gears,
invested an additional $5,059 in Class A Preferred Stock of JZ
International, Ltd. At March 31, 2001 and December 31, 2000, the Company's
investment in JZ International was $12,344. JZ International's Chief
Executive Officer is David W. Zalaznick, and its stockholders include
Messrs. Jordan, Quinn, Zalaznick and Boucher, who are the Company's
directors and stockholders, as well as other partners, principals and
associates. JZ International is a merchant bank located in London, England
that is focused on making European and other international investments. The
Company is accounting for this investment under the cost method. At
March 31, 2001, the cost of the investment approximates market value.

Internet Services Management Group ("ISMG") is an Internet service provider
with over 110,000 customers. ISMG's stockholders include Mr. Jordan, Mr.
Quinn, Mr. Zalaznick, and Mr. Boucher, who are directors and stockholders
of the Company, as well as other partners, principals, and associates of
the Jordan Company, who are also stockholders of the Company. The Company
has a 5% ownership interest in ISMG's common stock and $1,000 of ISMG's 5%
mandatorily redeemable cumulative preferred stock. The Company is
accounting for these investments under the cost method. The Company has
also made unsecured advances to ISMG totaling $10,938 and $10,701 as of
March 31, 2001 and December 31, 2000, respectively, for the purpose of
funding ISMG acquisitions and its working capital needs.



                                    14
<PAGE>

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


The Company has a 20% limited partnership interest in a partnership that
was formed during 2000 for the purpose of making equity investments
primarily in datacom/telecom infrastructure and software, e-commerce
products and services, and other Internet-related companies. The Company
has a $10,000 capital commitment, of which $1,340 and $1,390 had been
contributed through March 31, 2001 and December 31, 2000, respectively. The
Company is accounting for this investment using the equity method of
accounting. Certain stockholders of the Company are also stockholders in
the general partner of the partnership. The Company has an agreement with
the partnership's general partner to provide management services to the
partnership for annual fees of $1,250.

K.  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, 2000
consolidated financial statements with respect to segmentation or the
measurement of segment profit or loss.

L.  Income taxes
----------------
The provision (benefit) for income taxes from continuing operations differs
from the amount of income tax provision (benefit) computed by applying the
United States federal income tax rate to income (loss) from continuing
operations before income taxes, minority interest, and extraordinary items.
A reconciliation of the differences is as follows:

                                                  Three Months ended
                                                    March 31, 2001
                                                    --------------

Computed statutory tax benefit                        $ (3,806)
Increase (decrease) resulting from:
    Amortization of goodwill                               718
    Disallowed meals and entertainment                     105
    State and local tax and other                          274
                                                       -------
Benefit from income taxes                             $ (2,709)
                                                      ========












                                    15
<PAGE>



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


The following discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the 2000 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 quarters
ended March 31, 2001 and 2000. This discussion reviews the following
segment data and certain of the consolidated financial data for the
Company.

                                                 Three Months Ended
                                                      March 31,
                                                  ------------------
                                                2001                2000
                                               -----               ------
Net Sales:
Specialty Printing and Labeling                22,760              24,067
Jordan Specialty Plastics                      25,516              23,317
Jordan Auto Aftermarket                        37,448              37,447
Motors and Gears                               78,297              79,661
Consumer and Industrial Products               18,585              26,626
                                               ------              ------
   Total                                      182,606             191,118
                                              =======             =======

Operating Income (Loss):
Specialty Printing and Labeling                (1,279)                 65
Jordan Specialty Plastics                         972               1,223
Jordan Auto Aftermarket                         5,263               5,169
Motors and Gears                               11,750              13,038
Consumer and Industrial Products               (3,562)               (996)
                                              -------              ------
   Total(a)                                    13,144              18,499
                                              =======              ======

Operating Margin(b)
Specialty Printing and Labeling                 (5.6%)               0.3%
Jordan Specialty Plastics                        3.8%                5.3%
Jordan Auto Aftermarket                         14.1%               13.8%
Motors and Gears                                15.0%               16.4%
Consumer and Industrial Products               (19.2%)              (3.7%)
   Total(a)                                      7.2%                9.7%


(a) The total does not include corporate overhead of $1,447 and $1,495 for
the three months ended March 31, 2001 and 2000, respectively.

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




                                    16
<PAGE>


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


       Specialty Printing and Labeling. As of March 31, 2001, the Specialty
Printing and Labeling group ("SPL") consisted of JII Promotions, Valmark,
Pamco, and Seaboard.

Net sales for the three months ended March 31, 2001 decreased $1.3 million,
or 5.4% from the same period in 2000. The decrease in net sales is
primarily due to lower sales of ad specialty products at JII Promotions,
$1.9 million, and decreased sales of folding boxes at Seaboard, $0.4
million. The decreased sales of ad specialty products at JII Promotions is
due to non-recurring orders in the first quarter of 2000. Partially
offsetting these decreases were higher sales of calendars at JII
Promotions, $1.0 million. Calendar sales have increased as a result of
management's efforts to produce and fill customers 2002 calendar orders
more evenly during the year. Valmark's sales to Apple Computer decreased by
$0.4 million which was more than offset by the increase in sales to other
customers of $0.5 million. The increase in sales is solely due to increases
in the membrane switch product line.

Operating income for the three months ended March 31, 2001 decreased $1.3
million over the same period in 2000. Operating income decreased at JII
Promotions, $0.2 million, Valmark, $0.1 million, Pamco, $0.7 million and
Seaboard, $0.3 million. Operating income decreased at the Specialty
Printing and Labeling companies primarily due to the decreased sales as
discussed above, as well as increased operating expenses at Pamco related
to its new East Coast facility.

       Jordan Specialty Plastics.  As of March 31, 2001, the Jordan
Specialty Plastics group ("JSP") consisted of Beemak, Sate-Lite, and Deflecto.

Net sales for the three months ended March 31, 2001 increased $2.2 million,
or 9.4%, over the same period in 2000. Sales primarily increased due to
higher sales of hardware products at Deflecto of $1.2 million and the
acquisition of IDL in June of 2000. IDL contributed $2.0 million in sales
for the first three months of 2001. Partially offsetting these increases
were lower sales of office products at Deflecto, $0.3 million and lower
sales of colorants and custom molded products at Sate-Lite, $0.3 million
and $0.2 million, respectively.

Operating income for the three months ended March 31, 2001 decreased $0.3
million, or 20.5%, over the same period in 2000. The primary reason for the
decrease was lower operating income at Beemak, $0.3 million, due to their
decrease in sales for the quarter. Partially offsetting this decrease was
higher operating income at Sate-Lite, $0.1 million. Deflecto operating
income for this period was consistent with prior year.





                                    17
<PAGE>



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


       Jordan Auto Aftermarket.  As of March 31, 2001, the Jordan Auto
Aftermarket  group  ("JAAI") consisted of Dacco and Alma.

Net sales for the Jordan Auto Aftermarket group as of March 31, 2001, were
flat in comparison with sales during the same period in 2000. Sales of soft
parts, rebuilt transmission parts, and air compressors increased by $0.6
million, $0.4 million, and $0.8 million, respectively. These increases were
offset by a $1.8 million decrease in remanufactured converters and other
drive train components.

Operating income for the period ending March 31, 2001 increased $0.1
million over the same period in 2000. The increase is primarily the result
of higher operating income, resulting from price increases on certain
product lines, partially offset by increased corporate expenses.


       Kinetek.  As of March 31, 2001, the Kinetek group consisted of
Imperial,  Gear,  Merkle-Korff, FIR, ED&C, Motion Control and Advanced DC.

Net sales for the three months ended March 31, 2001 decreased $1.4 million,
or 1.7%, over the same period in 2000. The decrease in sales was primarily
due to decreased sales in the Motors segment of 3.6%. The decline in the
Motors segment was concentrated in Subfractional products, where sales fell
17% from first quarter 2000 due to significant declines in the appliance
motor market coupled with continued softness in the market for bottle and
can vending motors. Partially offsetting these decreases were increased
sales of Fractional and Integral products which increased 6% for the
quarter, led by strong demand for DC motors which are sold in the material
handling market. Sales in the Controls segment increased as a result of
higher sales of products in the elevator control replacement market of 9%.

Operating income for the three months ended March 31, 2001 decreased $1.3
million, or 9.9%, over the same period in 2000. The decrease was primarily
due to lower operating income in the motors segment of 12%. Gross margin
fell $0.7 million, or 2.4% from 2000, reflecting a decline from 37.3% of
sales in the prior year to 37.1% of sales in the first quarter of 2001.
Gross margins in the Motors segment decreased as a result of external
pricing pressure and unfavorable manufacturing leverage in the
subfractional product line due to the lower sales, partially offset by cost
improvements from the Company's productivity and material sourcing
initiatives. Gross margins in the Controls segment improved as a result of
manufacturing leverage in the elevator controls market and operational
improvements in the automotive conveyor controls market. Selling, general,
and administrative expenses increased in support of the Company's
initiatives to develop new products and markets.



                                    18
<PAGE>



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


       Consumer and Industrial Products. As of March 31, 2001, the Consumer
and Industrial Products group consisted of Cape, Welcome Home, Cho-Pat,
Online Environs, Flavorsource and GramTel. Riverside was sold on February
2, 2001. See Note D to the Condensed Consolidated Financial Statements.

Net sales for the period ended March 31, 2001 decreased $8.0 million, or
30.2% over the same period in 2000. The primary reasons for the decrease in
sales are due to decreased sales at Riverside due to the sale of Riverside
on February 2, 2001, $9.8 million, Cape, $0.2 million, Welcome Home, $0.1
million, and Cho-Pat, $0.1 million. Since Riverside was sold on February 2,
2001 there was only one month of sales for the first quarter of 2001 as
compared to a full quarter of sales in 2000. Partially offsetting these
decreases were increased sales due to the acquisitions of Online Environs,
$0.3 million, ISMI, $0.6 million and FlavorSource, $1.3 million.

Operating income for the period ended March 31, 2001 decreased $2.6
million, or 257.7%, over the same period in 2000. The primary reasons for
the decrease are lower operating income at Cape, $0.2 million,
Welcome Home, $0.8 million, Online Environs, $0.5 million and GramTel, $0.4
million. Partially offsetting these decreases was operating income at
FlavorSource and ISMI of $0.1 million each. Riverside's operating income
decreased $0.7 million due to only one month of income in 2001 compared
to a full quarter of income in 2000, as a result of the sale of Riverside
in February 2001.  ISMI, Online Environs, GramTel and FlavorSource are
new companies in the Consumer and Industrial Products group as of the
second half of 2000 and therefore are not included in first quarter 2000
operating income.

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

Net sales for the three months ended March 31, 2001 decreased by $8.5
million, or 4.5%, over the same period in 2000. Sales decreased due to
lower sales of ad specialties at JII Promotions and folding boxes at
Seaboard in the Specialty Printing and Labeling Group. Sales decreased at
Cape, Welcome Home and Cho-Pat in the Consumer and Industrial Products
Group. In addition, sales in this group decreased due to the sale of
Riverside in February 2001, resulting in only one month of sales in 2001 as
compared with three months of sales in 2000. Sales also decreased in the
motors segment of Kinetek due to softness in the subfractional products
market. Sales in the Jordan Auto Aftermarket group were consistent with the
same period in 2000 on a consolidated basis. Partially offsetting these
decreases were increased sales in the Jordan Specialty Plastics group due
to higher sales of hardware at Deflecto and the acquisition of IDL in June
of 2000. The acquisitions of ISMI, Online Environs, and FlavorSource in the
second half of 2000 also contributed to increased sales when comparing
sales to first quarter 2000, since they were not owned at that time.

Operating income for the three months ended March 31, 2001 decreased $5.3
million, or 28.9%, over the same period in 2000. Operating income decreased
due to lower operating income at all of the Specialty Printing and Labeling
companies due to lower sales at JII Promotions and Seaboard and increased
operating expenses at Pamco due to its new East Coast facility. Operating
income was lower in the motors segment of Kinetek due to lower sales in the
subfractional product line, and operating income decreased at Cape, Welcome
Home, ISMI, Cho-Pat, and Online Environs in the Consumer and Industrial




                                    19
<PAGE>



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

Products group. In addition, the Consumer and Industrial Products group's
operating income decreased as a result of the sale of Riverside in February
2001. Operating income decreased in the Auto Aftermarket group due to
higher operating expenses, partially offset by price increases implemented
in October 2000. Operating income increased at Sate-Lite in the Jordan
Specialty Plastics Group, due to higher sales and lower operating expenses.

       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 expects to satisfy its liquidity
requirements through a combination of funds generated from operating
activities and the funds available under its revolving credit facilities.

The Company had approximately $178.4 million of working capital at March
31, 2001 compared to approximately $159.3 million at the end of 2000. The
increase in working capital during the first three months of 2001 was
primarily due to higher prepaids and other current assets of $7.0 million,
and lower accounts payable, accrued liabilities and current portion of
long-term debt of $8.4 million, $6.0 million and $6.1 million,
respectively. These increases in working capital are partially offset by
lower accounts receivable and inventories of $9.4 million and $7.1 million,
respectively.

Operating activities. Net cash used in operating activities for the three
months ended March 31, 2001 was $6.1 million compared to net cash provided
by operating activities of $3.7 million during the same period in 2000. The
increase in cash used is primarily due to increases in current assets as
compared to the same period in the prior year.

Investing activities. Net cash provided by investing activities for the
three months ended March 31, 2001 was $13.6 million compared to net cash
provided by investing activities of $32.4 million during the same period in
2000. The decrease was primarily due to the proceeds from the sale of
discontinued operations in the prior year.

Financing activities. Net cash used in financing activities for the three
months ended March 31, 2001 was $0.3 million compared to net cash used in
financing activities of $37.9 million during the same period in 2000. This
change is primarily due to net revolver borrowings of $2.9 million in the
current year as compared to net revolver repayments of $37.0 million in the
prior year.

The Company expects its principal sources of liquidity to be from its
operating activities and funding from its revolving lines of credit. 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 twelve months.

The Company is party to various credit agreements under which the Company
is able to borrow up to $160.0 million to fund acquisitions, provide





                                    20
<PAGE>



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

working capital and for other general corporate purposes. The credit
agreements mature at various dates in 2001 and 2002. The agreements are
secured by a first priority security interest in substantially all of the
Company's assets. As of May 14, 2001, the Company had approximately $132.2
million of available funds under these arrangements.

In addition, Welcome Home, a subsidiary of the Company, has a Security
Agreement with Fleet, which provides for maximum borrowings of $15.0
million. The agreement is secured by essentially all the assets of Welcome
Home and expires October 29, 2003. As of May 14, 2001, Welcome Home had
approximately $0.6 million of available funds under this agreement.

The Company may, from time to time, use cash, including cash generated from
borrowings under its credit agreements, to purchase either its 11 3/4%
Senior Subordinated Discount Debentures due 2009 or its 10 3/8% Senior
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 current 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.

The Company's aggregate business has a certain degree of seasonality. JII
Promotions and Welcome Home's sales are somewhat stronger toward year-end
due to the nature of their products. Calendars at JII Promotions have an
annual cycle and home furnishings and accessories at Welcome Home are
popular holiday gifts.

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 March 31, 2001,
the Company had $34.6 million of variable rate debt outstanding. A one
percentage point increase in interest rates would increase the annual
amount of interest paid by approximately $0.3 million. The Company does not
believe that its market risk financial instruments on March 31, 2001 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.



                                    21
<PAGE>




                             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





                                    22
<PAGE>



                                 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.



May 14, 2001                          By:    /s/ Thomas C. Spielberger
                                           ---------------------------
                                               Thomas C. Spielberger
                                                   Senior Vice President,
                                                   Finance and Accounting

















                                    23