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, 2002               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 15, 2002: 98,501.0004.




<PAGE>
                                     2


                          JORDAN INDUSTRIES, INC.

                                   INDEX


Part I.                                                               Page No.

       Condensed Consolidated Balance Sheets
       at March 31, 2002 (Unaudited), and December 31, 2001               3

       Condensed Consolidated Statements of Operations for the
       Three Months Ended March 31, 2002 and 2001 (Unaudited)             4

       Condensed Consolidated Statements of Cash Flows for
       the Three Months Ended March 31, 2002 and 2001 (Unaudited)         5

       Notes to Condensed Consolidated Financial Statements (Unaudited)   6

       Management's Discussion and Analysis of
       Financial Condition and Results of Operations                     15


Part II.

       Other Information                                                 20

       Signatures                                                        21



<PAGE>
                                     3

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

                                                      March 31,    December 31,
                                                        2002          2001
                                                      ---------    -----------
                                                    (unaudited)

ASSETS
Current Assets:
  Cash and cash equivalents                             $  21,615    $  26,050
  Accounts receivable, net                                113,570      109,384
  Inventories                                             127,209      122,528
  Income tax receivable                                    13,012       12,245
  Deferred income taxes                                     9,485        8,100
  Prepaid expenses and other current assets                20,169       19,030
                                                        ---------    ---------
    Total Current Assets                                  305,060      297,337

Property, plant and equipment, net                         96,158       99,602
Investments in and advances to affiliates                  46,798       36,443
Goodwill, net                                             348,894      358,970
Other assets                                               34,465       37,044
                                                        ---------    ---------
    Total Assets                                        $ 831,375    $ 829,396
                                                        =========    =========

LIABILITIES AND SHAREHOLDER'S EQUITY (NET
  CAPITAL DEFICIENCY)
Current Liabilities:
  Accounts payable                                      $  50,327    $  47,848
  Accrued liabilities                                      65,616       71,372
  Advance deposits                                          3,579        1,853
  Current portion of long-term debt                        13,996       17,137
                                                        ---------    ---------
    Total Current Liabilities                             133,518      138,210

Long-term debt, less current portion                      836,290      819,406
Other non-current liabilities                               9,528        8,668
Minority interest                                              49            4
Preferred stock                                             2,207        2,164

Shareholder's Equity (net capital deficiency):
Common stock $.01 par value: 100,000 shares
 authorized and 98,501 shares issued and
 outstanding                                                    1            1
  Additional paid-in capital                                2,116        2,116
  Accumulated other comprehensive loss                    (17,700)     (15,249)
  Accumulated deficit                                    (134,634)    (125,924)
                                                         ---------    ---------
    Total Shareholder's Equity (net capital
     deficiency)                                         (150,217)    (139,056)
                                                         ---------    ---------
    Total Liabilities and Shareholder's
     Equity (net capital deficiency)                    $ 831,375    $ 829,396
                                                        =========    =========

See accompanying notes to condensed consolidated financial statements.

<PAGE>
                                     4


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


                                       THREE MONTHS ENDED
                                            March 31,
                                      --------------------
                                         2002         2001

Net sales                             $ 165,492    $ 182,606
Cost of sales, excluding
  depreciation                          105,129      117,044
Selling, general and
 administrative expenses,
 excluding depreciation                  41,424       43,301
Depreciation                              5,345        5,801
Amortization of goodwill
 and other intangibles                      295        3,830
Management fees and other                   613          629
                                      ---------    ---------

Operating income                         12,686       12,001

Other (income) expenses:
  Interest expense                       23,183       22,848
  Interest income                           (86)        (254)
  Other                                      69          281
                                      ---------    ---------
                                         23,166       22,875
                                      ---------    ---------
Loss before income taxes and
  minority interest                     (10,480)     (10,874)
Benefit from income taxes                (1,385)      (2,709)
                                      ---------    ---------
Loss before minority interest            (9,095)      (8,165)
Minority interest                            45          (76)
                                      ---------    ---------
Net loss                              $  (9,140)   $  (8,089)
                                      =========    =========

See accompanying notes to condensed consolidated financial statements.




<PAGE>
                                     5

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

                                                         THREE MONTHS ENDED
                                                              March 31,
                                                           2002         2001

Cash flows from operating activities:
 Net loss                                               $ (9,140)   $ (8,089)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
    Depreciation and amortization                          5,640       9,631
    Amortization of deferred financing fees                1,440       1,266
    Minority interest                                         45         (76)
    Non-cash interest                                      5,938       5,298
    Changes in operating assets and liabilities,
     net of effects from acquisitions:
      Increase in current assets                         (12,174)    (19,806)
      (Decrease) increase in current liabilities          (1,921)      4,287
      (Increase) decrease in non-current assets             (237)        762
      Increase in non-current liabilities                    860         633
                                                        ---------   ---------
        Net cash used in operating activities             (9,549)     (6,094)


Cash flows from investing activities:
  Proceeds from sale of subsidiary                             -      16,663
  Proceeds from sale of fixed assets                         100         448
  Capital expenditures                                    (2,285)     (3,398)
  Acquisitions of subsidiaries                                 -        (375)
  Additional purchase price payments                        (574)          -
  Other                                                     (104)        254
                                                        ---------   ---------
         Net cash (used in) provided by investing
           activities                                     (2,863)     13,592

Cash flows from financing activities:
  Proceeds from revolving credit facilities, net          12,270       2,946
  Repayment of long-term debt                             (3,242)     (3,489)
  Other borrowing                                              -         239
                                                        ---------   ---------
        Net cash provided by (used in) financing
          activities                                       9,028        (304)

Effect of exchange rate changes on cash                   (1,051)        953
                                                        ---------   ---------
Net (decrease) increase in cash and cash equivalents      (4,435)      8,147
Cash and cash equivalents at beginning of period          26,050      21,713
                                                        ---------   ---------
Cash and cash equivalents at end of period              $ 21,615    $ 29,860
                                                        =========   =========

See accompanying notes to condensed consolidated financial statements.

<PAGE>
                                     6


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

A.  Organization

The unaudited condensed consolidated financial statements, which reflect
all adjustments that management believes necessary to present fairly the
results of interim operations and are of a normal recurring nature, should
be read in conjunction with the Notes to the Consolidated Financial
Statements (including the Summary of Significant Accounting Policies)
included in the Company's audited consolidated financial statements for the
year ended December 31, 2001, which are included in the Company's Annual
Report filed on Form 10-K for such year (the "2001 10-K"). Results of
operations for the interim periods are not necessarily indicative of annual
results of operations.

B.  Accounting Policies - New Pronouncements

The Company adopted the non-amortization provisions of Statement of
Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other
Intangible Assets, on January 1, 2002, which resulted in a decrease of
approximately $2,600 to the first quarter's net loss and is expected to
decrease the full-year net loss by approximately $10,500. The Company has
not yet determined the financial impact that the impairment provisions of
Statement No. 142 will have on its consolidated financial statements. Any
impairment charge resulting from the transitional impairment testing will
be reflected as a cumulative effect of a change in accounting principle.

The following table provides comparative results had the non-amortization
provisions of Statement No. 142 been adopted for all periods presented:

                        Three Months Ended March 31,
                                        2002            2001
                                        ----            ----

Net loss                                    $(9,140)   $(8,089)
Goodwill amortization                             -      2,588
                                            --------   --------
Adjusted net loss                           $(9,140)   $(5,501)
                                            ========   ========

The changes in the carrying amount of goodwill for the quarter ended March
31, 2002 were as follows:
<TABLE>
<CAPTION>

                                   Specialty   Jordan      Jordan               Consumer &
                                   Printing    Specialty    Auto                Industrial
                                  & Labeling   Plastics  Aftermarket   Kinetek   Products    Consolidated
                                  ---------    -------   -----------  --------   --------    ------------
<S>                               <C>          <C>       <C>         <C>        <C>          <C>
Balance as of
January 1, 2002                   $  43,389    $41,253   $64,737     $194,622   $ 14,969     $  358,970

Additional Purchase Price
Payments                                  -        574         -            -          -            574

Foreign exchange                          -          -         -       (1,157)         -         (1,157)

Sale of a subsidiary                      -          -         -            -     (9,498)        (9,498)

Other                                     5          -         -            -          -              5
                                  ---------    -------   -------     --------   --------     ----------
Balance at
March 31, 2002                    $  43,394    $41,827   $64,737     $193,465   $  5,471     $  348,894
                                  =========    =======   =======     ========   ========     ==========
</TABLE>


<PAGE>
                                     7

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

As of March 31, 2002, the Company had no indefinite-lived intangible
assets. The Company had $1,092 of other intangible assets, net of
accumulated amortization of $26,452, which will continue to be amortized
over their remaining useful lives ranging from 1 to 10 years. Amortization
of these intangibles will be approximately $126 during each of the years
2002 through 2006. These other intangible asset amounts are included in
other assets in the Company's balance sheets.

On January 1, 2002, the Company adopted SFAS No. 144, Accounting for the
Impairment or JORDAN INDUSTRIES, INC. NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED) (ALL DOLLAR AMOUNTS IN THOUSANDS)

Disposal of Long-Lived Assets. There was no impact to the Company's
operating results or financial position related to the adoption of this
standard.

C.  Inventories

Inventories are summarized as follows:

                                    March 31,      December 31,
                                       2002           2001
                                    ---------      -----------
Raw materials                       $ 50,945       $ 52,493
Work-in-process                       18,130         17,329
Finished goods                        58,134         52,706
                                    --------       --------
                                    $127,209       $122,528
                                    ========       ========

D.  Comprehensive Income (Loss)

Total comprehensive income (loss) for the three months ended March 31, 2002
and 2001 is as follows:

                                      Three Months ended
                                           March 31,
                                  ---------------------------
                                       2002         2001

Net loss                             $ (9,140)   $ (8,089)
Foreign currency translation           (2,451)      4,015
                                     ---------   ---------
Comprehensive loss                   $(11,591)   $ (4,074)
                                     =========   =========


E.  Sale of Subsidiaries

Effective on January 1, 2002, the Company sold its subsidiary,
Flavorsource, Inc, ("Flavorsource") to Flavor & Fragrance Group Holdings,
Inc. ("FFG") for a $10,100 note. FFG'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. As the transaction was among entities
under common control, the difference between the note received and the net
assets of Flavorsource of $473 has been reflected as a credit to retained
earnings. Flavorsource is a developer and compounder of flavors for use in
beverages of all kinds, including coffee, tea, juices, and cordials, as
well as bakery products and ice cream and dairy products. Flavorsource was
a part of the Consumer & Industrial Products segment prior to its disposal.


<PAGE>
                                     8

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

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 Company recognized a loss on the sale of $2,798, which was recorded in
the fourth quarter of 2000.

F.  Acquisition and Formation of Subsidiaries

On July 23, 2001, the Company purchased the customer lists of The George
Kreisler Corporation ("Kreisler") for $204 in cash. Kreisler has been fully
integrated into Pamco.

On July 3, 2001, the Company purchased the assets of Pioneer Paper Corp.
("Pioneer"). Pioneer is a manufacturer of printed folding paperboard boxes,
insert packaging, and blister pack cards. The Company paid $3,134 in cash
for the assets. The purchase price was allocated to accounts receivable of
$1,343, inventory of $298, property plant and equipment of $1,000, net
operating liabilities of $(303), and resulted in an excess purchase price
over identifiable assets of $796. Pioneer has been fully integrated into
Seaboard.

On June 30, 2001, the Company purchased Atco Products ("Atco"). Atco is a
manufacturer of air-conditioning components for the automotive aftermarket,
heavy duty truck OEs and international markets. The Company paid $7,344 in
cash for the assets of Atco. The purchase price was allocated to working
capital of $4,264 and property, plant and equipment of $3,080.

On April 6, 2001, Kinetek, through its wholly-owned subsidiary
Merkle-Korff, acquired substantially all of the assets, properties, and
business of Koford Engineering, Inc. for $690. The purchase price has been
preliminarily allocated to working capital of $121, property, plant and
equipment of $130, and resulted in an excess purchase price over
identifiable assets of $439.

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. The Company paid $433 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 $313. JA
Larson has been fully integrated into Pamco.

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 above acquisitions and divestitures had
occurred at the beginning of the respective period is as follows:

                                   Three months ended
                                        March 31,
                                      2002          2001
                                      ----          ----
Net sales                          $ 165,492    $ 182,021
Net loss                           $  (9,140)   $  (7,165)



<PAGE>
                                     9

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


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
Preferred Stock controls over 97.5% 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
97.5% of the combined voting power of JSP capital stock outstanding and
accretes 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 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.


<PAGE>
                                    10

                            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 from December 31, 1996, through December 31, 2000, was
paid to the Company. The Company was paid $174 for this agreement in the
second quarter of 2001.

As a result of this sale to M&G, the Company recognized approximately
$67,400 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 May 16, 2003. 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.


<PAGE>
                                    11

                            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, 2002, the Company believes that the amount of taxable income to the
Company attributable to M&G Holdings would have been approximately $54,600
(or approximately $21,840 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, 2002. It is
possible that on or before May 16, 2003, 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. On March 8, 2002, the
Company paid $574 related to the above agreement.

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. The Company paid $328 and $260 related to this agreement
in April 2002 and 2001, respectively.

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. Kinetek made payments to the previous shareholders of
Advanced DC of $3,093 in March 2000 and $3,200 in March 1999 related to
this agreement.


<PAGE>
                                    12

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


Kinetek also has a contingent purchase price agreement relating to its
acquisition of Motion Control on December 18, 1997. The terms of this
agreement provide for additional consideration to be paid 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 $248 and $77 in fees and expenses in the first three months
of 2002 and 2001, 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. Effective January 1, 2000, the Company owes
TJC a $250 quarterly fee for management services. The Company accrued fees
to TJC of $250 in the first three months of 2002 and 2001, 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 TJC, plus the reimbursement of out-of-pocket
and other expenses. The Company made no payments in either the first three
months of 2002 or 2001 to TJC for their assistance in relation to
acquisition and refinancing activities. At March 31, 2002, $8,142 was
accrued related to this agreement and is included in "accrued liabilities"
on the Company's balance sheet.

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 $4,172 and $3,810 as
of March 31, 2002 and December 31, 2001, 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 $13,789 and $13,318 as of March 31, 2002 and December 31,
2001, respectively, and are classified in "prepaid expenses and other
current assets" in the Company's balance sheets. The Company had reserves
of $10,400 at March 31, 2002 and December 31, 2001, related to these
management and consulting services and advances.


<PAGE>
                                    13


                            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.

The Company has unsecured advances totaling $15,477 and $15,382 as of March
31, 2002 and December 31, 2001, due from 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 a range from 10.75% to 12.0%.

In November 1998, the Company, through Kinetek, invested $5,585 in Class A
Preferred Units and $1,700 in Class B Preferred Units of JZ International,
LLC. In April 2000, the Company, through Kinetek, invested an additional
$5,059 in Class A Preferred Units of JZ International, LLC. This increased
the Company's investment in JZ International to $12,344 at March 31, 2002
and December 31, 2001. JZ International's Chief Executive Officer is David
W. Zalaznick, and its members include Messrs. Jordan, Quinn, Zalaznick and
Boucher, who are the Company's directors and stockholders, as well as other
members. JZ International and its subsidiaries are focused on making
European and other international investments. The Company is accounting for
this investment under the cost method.

The Company has made unsecured advances totaling $11,201 and $11,331 as of
March 31, 2002 and December 31, 2001, respectively to Internet Services
Management Group ("ISMG") an Internet service provider with over 100,000
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
receives notes in exchange for these advances, which bear interest at
10.75%. The Company also holds 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.


<PAGE>
                                    14

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

The Company made aggregate investments of $200 and $1,550 in the capital
stock of three different businesses in technology-related industries in
2001 and 2000, respectively. The Company's ownership in these businesses
ranges from 1-15% on a fully diluted basis. The Company is accounting for
these investments under the cost method.

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 $2,230 had been contributed
through March 31, 2002 and December 31, 2001. 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.

Effective on January 1, 2002, the Company sold the stock of Flavorsource to
FFG for a $10,100 note. The note accrues interest at 8% annually. There is
no stated maturity on the note. The note will be paid back when FFG is sold
to a third party. FFG'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 had reserves of $8,800 at March 31, 2002 and December 31, 2001,
related to the above investments in affiliates.

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, 2001
consolidated financial statements with respect to segmentation or the
measurement of segment profit or loss.

<PAGE>
                                    15

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


L.  Income taxes

The benefit from income taxes differs from the amount of income tax benefit
computed by applying the United States federal income tax rate to loss
before income taxes and minority interest. A reconciliation of the
differences is as follows:

                                     Three Months ended     Three Months ended
                                       March 31, 2002         March 31, 2001
                                       --------------         ---------------
Computed statutory tax benefit              $(3,668)             $(3,806)
Increase (decrease) resulting from:
    Increase in valuation allowance           1,856                    -
    Amortization of goodwill                      -                  718
    Disallowed meals and entertainment          112                  105
    State and local tax and other               315                  274
                                            --------             --------
Benefit from income taxes                   $(1,385)             $(2,709)
                                            ========             ========

M.  Kinetek Credit Agreement

On December 18, 2001, Kinetek, Inc. entered into a new Loan and Security
Agreement with Fleet Bank. The Kinetek Agreement provides for borrowings up
to $50,000 based on the value of certain assets, including inventory,
accounts receivable, machinery and equipment, and real estate. Kinetek had
$15,628 of outstanding borrowings, $0 of outstanding letters of credit, and
$19,684 of excess availability under this agreement at March 31, 2002.

N.  Jordan Industries Credit Agreement

On August 16, 2001, the Company entered into a new Loan and Security
Agreement with Congress Financial Corporation and First Union National
Bank. The new facility provides for borrowings up to $110,000 based on the
value of certain assets including inventory, accounts receivable and fixed
assets. As of March 31, 2002 the Company had borrowings of $27,049, $11,159
of outstanding letters of credit, and $31,600 of excess availability under
this facility.

O.  Subsequent Events

On April 11, 2002, Kinetek, Inc. formed a cooperative joint venture with
Shunde De Sheng Electric Motor Group Co., Ltd. ("De Sheng Group"), which is
named Kinetek De Sheng (Shunde) Motor Co., Ltd (the "JV"). Kinetek Inc.
initially contributed approximately $8,000 for 80% ownership of the JV,
with an option to purchase the remaining 20% in the future. The JV will
acquire all of the net assets of Shunde De Sheng Electric Motor Co., Ltd.
("De Sheng"), a subsidiary of De Sheng Group. The JV will also assume
approximately $6,300 of outstanding debt.

On April 11, 2002, Kinetek Industries, Inc., a wholly-owned subsidiary of
the Company, issued $15,000 principal amount of 5% Senior Secured Notes and
$11,000 principal amount of 10% Senior Secured Notes for net proceeds of
approximately $20,500. The notes are due in 2007 and are guaranteed by
Kinetek, Inc. and substantially all of its domestic subsidiaries. The notes
are also secured by a second priority lien on substantially all of the
assets of the issuer and the guarantors, which lien is subordinate to the
existing lien securing Kinetek, Inc.'s credit facility. Interest on the
notes is payable semi-annually on May 1 and November 1 of each year,
beginning May 1, 2002.



<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 2001 10-K and the financial statements and the related
notes thereto.

Results of Operations

Summarized below are the net sales, operating income (loss) and operating
margins (as defined) for each of the Company's business segments for the
three months ended March 31, 2002 and 2001. This discussion reviews the
following segment data and certain of the consolidated financial data for
the Company.

                                            Three Months Ended
                                                 March 31,
                                            ------------------
                                           2002          2001
                                          -----         ------

Net Sales:
Specialty Printing and Labeling        $  19,774     $  22,760
Jordan Specialty Plastics                 25,173        25,516
Jordan Auto Aftermarket                   38,180        37,448
Kinetek                                   68,198        78,297
Consumer and Industrial Products          14,167        18,585
--------------------------------       ---------     ---------
   Total                               $ 165,492     $ 182,606
                                       =========     =========

Operating Income (Loss):
Specialty Printing and Labeling        $    (974)    $  (1,279)
Jordan Specialty Plastics                  1,870           972
Jordan Auto Aftermarket                    5,256         5,263
Kinetek                                    9,715        11,750
Consumer and Industrial Products          (1,134)       (3,562)
                                       ---------     ---------
   Total(a)                            $  14,733     $  13,144
                                       =========     =========

Operating Margin(b)
Specialty Printing and Labeling             (4.9)%        (5.6)%
Jordan Specialty Plastics                    7.4%          3.8%
Jordan Auto Aftermarket                     13.8%         14.1%
Kinetek                                     14.3%         15.0%
Consumer and Industrial Products            (8.0)%       (19.2)%
   Total(b)                                  8.9%          7.2%


-------------------------
(a) Before corporate overhead of $2,047 and $1,143 for the three months
ended March 31, 2002 and 2001, respectively.

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


<PAGE>
                                    16

                    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, 2002, the Specialty
Printing and Labeling group ("SPL") consisted of JII Promotions, Valmark,
Pamco, and Seaboard.

Net sales decreased $3.0 million or 13.1% for the three months ended March
31, 2002. Net sales decreased primarily due to lower sales of calendars and
outside specialties at JII Promotions, $0.5 million each, decreased sales
of screen printing, membrane switches, rollstock, and shrouds at Valmark,
$1.0 million, $0.5 million, $0.4 million, and $0.1 million, respectively,
and lower sales of labels at Pamco, $0.3 million. The decrease in sales at
Valmark is due to the lower demand for Apple and Dell computers, both of
which use Valmark's screen printing and rollstock. Partially offsetting
these decreases were higher sales of folding boxes at Seaboard, $0.3
million.

Operating loss decreased $0.3 million or 23.9% for the three months ended
March 31, 2002. This decrease was primarily due to higher operating income
at JII Promotions, $0.2 million, Pamco, $0.8 million, and Seaboard, $0.2
million. Partially offsetting these increases was lower operating income at
Valmark, $0.9 million. The increase in operating income at Pamco is due to
the closing of Pamco's East Coast facility in October 2001. The decrease in
operating loss is also due to headcount reductions in the second half of
2001.

      Jordan Specialty Plastics. As of March 31, 2002, the Jordan Specialty
Plastics group ("JSP") consisted of Beemak, Sate-Lite, and Deflecto.

Net sales decreased $0.3 million or 1.3% for the three months ended March
31, 2002. Net sales decreased primarily due to lower sales of Tilt Bins and
thermoplastic colorants at Sate-Lite, $0.4 million each, and decreased
sales of office products at Deflecto, $1.6 million. Partially offsetting
these decreases were higher sales of bike and truck reflectors, $0.3
million, injection molded and fabricated product at Beemak, $0.1 million
each, and higher sales of hardware products at Deflecto, $1.6 million.

Operating income increased $0.9 million or 92.4% for the three months ended
March 31, 2002. This increase was primarily due to higher operating income
at Sate-Lite, $0.1 million, Beemak, $0.1 million, and Deflecto $0.7
million. The increase in operating income is due to ongoing headcount
reductions at Deflecto and higher margins at the Sate-Lite China facility.

      Jordan Auto Aftermarket. As of March 31, 2002, the Jordan Auto Aftermarket
group ("JAAI") consisted of Dacco, Alma and Atco.

Net sales increased $0.7 million or 2.0% for the three months ended March
31, 2002. This increase is primarily due to the acquisition of Atco in July
2001. Atco contributed net sales of $3.3 million in the first three months
of 2002. Partially offsetting this increase were lower sales of
remanufactured torque converters and drive train components at Dacco and
Alma and decreased sales of soft parts at Dacco. The decrease in sales was
consistent with the entire auto aftermarket industry, which was hurt by a
mild winter.

Operating income remained consistent with the prior year for the three
months ended March 31, 2002. This was primarily due to the acquisition of
Atco in 2001, which contributed operating income of $0.3 million in the
first quarter of 2002. Partially offsetting this increase was lower
operating income due to increased corporate expenses.




<PAGE>
                                    17

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


     Kinetek. As of March 31, 2002, the Kinetek group consisted of
Imperial, Gear, Merkle-Korff, FIR, ED&C, Motion Control and Advanced DC.

Net sales decreased $10.1 million or 12.9% for the three months ended March
31, 2002. This decrease was primarily due to lower sales in Kinetek's
motors segment, 14.8%, and decreased sales in Kinetek's controls segment,
8.0%. The decline in motors sales was the result of general economic
weakness in substantially all of Kinetek's principal markets. Subfractional
motor sales were 7.9% lower than in 2001 as a result of protracted declines
in bottle and can vending and general vending motor products, which was
partially offset by stronger appliance motor sales. Sales of fractional and
integral motor products were down 18.7%, driven by sharply lower demand for
DC motors used in the material handling market. The decline in sales of
controls products was due to lower demand in the elevator control
replacement market and a shift toward lower priced products.

Operating income decreased $2.0 million or 17.3% for the three months ended
March 31, 2002. This decrease is due to lower operating income in the
motors segment, 18.2%, and the controls segment, 8.7%. The decrease in
operating income in the motors segment is due to lower gross margins
resulting from price pressure in the market and unfavorable product mix.
Gross margin in the controls segment also declined due to the shift in
demand toward lower priced products, as mentioned above. Partially
offsetting lower gross margin were reduced operating expenses resulting
from Kinetek's facility closings and reductions in headcount.

     Consumer and Industrial Products. As of March 31, 2002, the Consumer
and Industrial Products group consisted of Cape, Welcome Home, Cho-Pat,
Online Environs, ISMI and GramTel.

Net sales decreased $4.4 million or 23.8% for the three months ended March
31, 2002. This decrease was primarily due to the divestitures of Riverside
in February 2001, $4.1 million, and Flavorsource in January 2002, $1.3
million. In addition, sales of web site development services decreased at
Online Environs, $0.1 million. Partially offsetting these decreases were
higher sales of home accessories at Cape, $0.4 million, and increased
retail sales at Welcome Home, $0.7 million. Cape and Welcome Home have been
helped by the consumers' inclination to "nest" and decorate their homes,
and Welcome Home has been helped by lower gas prices.

Operating loss decreased $2.4 million or 68.2% for the three months ended March
31, 2002. This decrease is partially due to the divestiture of Riverside,
as mentioned above, as Riverside had an operating loss of $0.4 million for
the first three months of 2001. In addition, operating income increased at
Cape, $0.6 million, Welcome Home, $0.9 million, Cho-Pat, $0.1 million, and
Online Environs, $0.4 million. The decrease in operating loss is due to
higher sales at the existing businesses as well as higher gross profit
margins at both Cape and Welcome Home.

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

Net sales decreased $17.1 million or 9.4% for the three months
ended March 31, 2002. This decrease was primarily due to lower sales of
calendars and outside specialties at JII Promotions, decreased sales of
screen printing at Valmark, lower sales of office products at Deflecto,
decreased sales of remanufactured torque converters and drive train
components at Dacco and Alma, and decreased sales of fractional and
integral motors and controls at Kinetek. In addition, net sales decreased


<PAGE>
                                    18

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


due to the divestitures of Riverside and Flavorsource in February 2001 and
January 2002, respectively. Partially offsetting these decreases were
higher sales of folding boxes at Seaboard, increased sales of bike and
truck reflectors at Sate-Lite, higher sales of hardware products at
Deflecto, increased sales of home accessories at Cape, and increased retail
sales at Welcome Home. In addition, sales increased due to the acquisition
of Atco in July 2001.

Operating income increased $0.7 million or 5.7% for the three months ended
March 31, 2002. This increase was due to the closing of Pamco's East Coast
facility in October 2001, headcount reductions in the second half of 2001
in the Specialty Printing and Labeling group, Jordan Specialty Plastics
group, and Kinetek group, and higher sales and gross profit margins in the
Consumer and Industrial Products group. Partially offsetting these
increases were lower gross margins in the Kinetek group.


       Liquidity and Capital Resources.

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

The Company had approximately $171.5 million of working capital at March
31, 2002 compared to approximately $159.1 million at the end of 2001. The
increase in working capital during the first three months of 2002 was
primarily due to higher accounts receivable and inventories of $4.2 million
and $4.7 million, respectively, and lower accrued liabilities and current
portion of long-term debt of $5.8 million, and $3.1 million, respectively.
These increases in working capital are partially offset by higher accounts
payable and advanced deposits of $2.5 million and $1.7 million,
respectively.

Operating activities. Net cash used in operating activities for the three
months ended March 31, 2002 was $9.5 million compared to net cash used in
operating activities of $6.1 million during the same period in 2001. The
increase in cash used is primarily due to a decrease in current liabilities
and increase in non-current assets compared with the same period in 2001.

Investing activities. Net cash used in investing activities for the three
months ended March 31, 2002 was $2.9 million compared to net cash provided
by investing activities of $13.6 million during the same period in 2001.
The decrease was primarily due to the proceeds from the sale of a
subsidiary in the prior year.

Financing activities. Net cash provided by financing activities for the
three months ended March 31, 2002 was $9.0 million compared to net cash
used in financing activities of $0.3 million during the same period in
2001. This change is primarily due to net revolver borrowings of $12.3
million in the current year as compared to net revolver repayments of $2.9
million in the prior year.


<PAGE>
                                    19


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


The Company is party to two credit agreements under which the Company is
able to borrow up to $160.0 million to fund acquisitions, provide working
capital and for other general corporate purposes. The credit agreements
mature in 2005 and 2006. The agreements are secured by a first priority
security interest in substantially all of the Company's assets. As of May
15, 2002, the Company had approximately $52.7 million of available funds
under these arrangements.

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.

If the Company's EBITDA and cash flow continue through 2002 at the levels
experienced in the first quarter of 2002, the Company would barely generate
sufficient cash to cover its interest payment obligations in respect of its
bank debt, senior notes and senior subordinated discount notes (which cease
to accrue, and become cash-pay obligations starting with the first interest
payment on October 1, 2002). This assumes no further general, economic or
industry declines, which may necessitate the Company to further reduce
capital expenditures and acquisitions, and no assurances can be given that,
at the end of 2002, the Company will have sufficient financial resources to
pay its cash interest obligations.

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, 2002,
the Company had $42.7 million of variable rate debt outstanding. A one
percentage point increase in interest rates would increase the annual
amount of interest paid by approximately $0.4 million. The Company does not
believe that its market risk financial instruments on March 31, 2002 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.


<PAGE>
                                    20


                             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




<PAGE>
                                    21



                                 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 15, 2002                By:    /s/ Thomas C. Spielberger
                                 ---------------------------
                                     Thomas C. Spielberger
                                       Senior Vice President,
                                       Finance and Accounting