UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                
                      WASHINGTON, DC  20549
                                
                            FORM 10-Q

(MARK ONE)

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

For the quarterly period ended July 4,October 3, 1998

                               OR

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

For the transition period from _____________ to  _______________

Commission File Number 0-2648

                          HON INDUSTRIES Inc.
     (Exact name of Registrant as specified in its charter)

                Iowa                            42-0617510
 (State or other jurisdiction of             (I.R.S. Employer
  incorporation or organization)           Identification Number)

P.O. Box 1109, 414 East Third Street, Muscatine, Iowa  52761-7109
(Address of principal executive offices)               (Zip code)Code)

Registrant's telephone number, including area code   319-264-7400code:  319/264-7400


Indicate by check mark whether the registrant (1) has filed all
required reports to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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 90 days.    YES     X        NO

Indicate the number of sharesshare outstanding of each of the issuer's
classes of common stock,commons tock, as of the latest practical date.

          Class                     Outstanding at July 4,October 3, 1998
 Common Shares, $1 Par Value                 61,683,33461,739,052 shares

Exhibit Index is on page 18.19.

 Page 1 of 19

              HON INDUSTRIES Inc. and SUBSIDIARIES
                                
                              INDEX
                                
                                                               
                 PART I.  FINANCIAL INFORMATION
                                
                              
                                                            Page
Item 1.   Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets --
July 4,-
October 3, 1998, and January 3, 1998                         3-4

Condensed Consolidated Statements of Income ---
Three Months Ended July 4,October 3, 1998, and June 28,October 4, 1997        5

Condensed Consolidated Statements of Income --
Six-
Nine Months Ended July 4,October 3, 1998, and June 28,October 4, 1997         6

Condensed Consolidated Statements of Cash Flows --
Six-
Nine Months Ended July 4,October 3, 1998, and June 28,October 4, 1997         7

Notes to Condensed Consolidated Financial Statements        8-11

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations    12-1512-16


                   PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                    1617

SIGNATURES                                                    1718

EXHIBIT INDEX                                                 1819

     (3i)   Articles of Incorporation of the Registrant,
            as amended and restated, on August 10, 1998

     (3ii)  By-Laws of the Registrant, as amended and
            restated, on July 29, 1998
     
     (27)   Financial Data Schedule

19

 Page 2 of 19

                 PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements


              HON INDUSTRIES Inc. and SUBSIDIARIES
                                
              CONDENSED CONSOLIDATED BALANCE SHEETS

                                             July 4,October 3,
                                                1998     January 3,
                                            (Unaudited)     1998
ASSETS                                         (In thousands)
                                                       
CURRENT ASSETS                                         
 Cash and cash equivalents                    $ 29,60531,410   $ 46,080
 Short-term investments                            265167        260
 Receivables                                   169,426197,024    158,408
 Inventories (Note B)                           64,90569,359     60,182
 Deferred income taxes                          13,84915,055     14,391
 Prepaid expenses and other current assets       9,3278,720     15,829
                                                                 
    Total Current Assets                       287,377321,735    295,150
                                                                 
PROPERTY, PLANT, AND EQUIPMENT, at cost                          
  Land and land improvements                    10,64911,569     10,059
  Buildings                                    122,180134,713    111,387
  Machinery and equipment                      355,644384,628    333,216
  Construction in progress                      99,66299,260     60,832
                                               588,135630,170    515,494
  Less accumulated depreciation                187,747198,665    174,464
                                                                 
  Net Property, Plant, and Equipment           400,388431,505    341,030
                                                                 
GOODWILL                                       110,175109,327     98,720
                                                                 
OTHER ASSETS                                    23,27021,948     19,773
                                                                 
    Total Assets                              $821,210$884,515   $754,673


See accompanying notes to condensed consolidated financial
statements.



              Page 3 of 19


               HON INDUSTRIES Inc. and SUBSIDIARIES
                                
              CONDENSED CONSOLIDATED BALANCE SHEETS


                                             July 4,October 3,       
                                                1998     January 3,
                                            (Unaudited)    1998
LIABILITIES AND SHAREHOLDERS' EQUITY           (In Thousands)thousands)
                                                       
CURRENT LIABILITIES                                    
 Accounts payable and accrued expenses        $187,228$200,237   $183,738
 Income taxes                                   6,53510,855      8,133
 Note payable and current maturities                             
   of long-term debt                            2,49614,496      2,545
 Current maturities of other long-term                           
   obligations                                   2,6415,579      6,343
                                                                 
    Total Current Liabilities                  198,900231,167    200,759
                                                                 
LONG-TERM DEBT                                 150,462153,173    123,487
                                                                 
CAPITAL LEASE OBLIGATIONS                        10,3849,102     11,024
                                                                 
OTHER LONG-TERM LIABILITIES                     18,97219,391     18,601
                                                                 
DEFERRED INCOME TAXES                           21,68724,797     19,140
                                                                 
SHAREHOLDERS' EQUITY (Note C)                                    
  Capital Stock:                                                 
  Preferred, $1 par value; authorized                            
  1,000,000 shares; no shares outstanding            -          -
                                                                 
  Common, $1 par value; authorized                               
  200,000,000100,000,000 shares; outstanding 61,683-             61,739     61,659
  1998 - 61,683,33461,739,052 shares;                                      
  1997 - 61,659,316 shares                                       
                                                                 
  Paid-in capital                               56,55557,928     55,906
  Retained earnings                            301,191327,136    265,203
  Accumulated other comprehensive income                         
  2,475            (7)
  (Note F)                                       1,181        (7)
  Receivable from HON MembersMember Company                             
    Ownership Plan                             (1,099)    (1,099)
                                                                 
    Total Shareholders' Equity                420,805$446,885    381,662
                                                                 
    Total Liabilities and Shareholders'
      Equity                                  $821,210$884,515   $754,673

See accompanying notes to condensed consolidated financial
statements.

 Page 4 of 19


              HON INDUSTRIES Inc. and SUBSIDIARIES
                                
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                           (Unaudited)




                                             Three Months Ended
                                             JulyOctober 3,  October 4,   June 28,
                                               1998         1997
                                             (In thousands, except
                                                per share data)
                                                       
Net sales                                     $401,417     $296,567$448,679   $391,348
                                                                 
Cost of products sold                          278,107      200,969309,080    268,147
                                                                 
  Gross Profit                                 123,310       95,598139,599    123,201
                                                                 
Selling and administrative expenses             83,213       64,30388,162     80,641
                                                                 
  Operating Income                              40,097       31,29551,437     42,560
                                                                 
Interest income                                    213          441585        601
                                                                 
Interest expense                                 2,904        1,5822,610      2,810
                                                                 
  Income Before Income Taxes                    37,406       30,15449,412     40,351
                                                                 
Income taxes                                    14,027       11,30718,530     15,132
                                                                 
  Net Income                                  $ 23,37930,882   $ 18,84725,219
                                                                 
Net income per common share (Note C)          $   0.380.50   $   0.320.43
                                                                 
Average number of common shares
  outstanding                               61,663,050   59,384,15461,691,164 59,355,904
           
Cash dividends per common share               $   0.08   $   0.07


See accompanying notes to condensed consolidated financial
statements.




              Page 5 of 19


HON INDUSTRIES Inc. and SUBSIDIARIES
                                
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                           (Unaudited)




                                             SixNine Months Ended
                                            JulyOctober 3,  October 4,   June 28,
                                              1998         1997
                                           (In thousands, except
                                              per share data)
                                                       
Net sales                                   $819,680     $579,426$1,268,359   $970,774
                                                                 
Cost of products sold                          569,678      395,163878,758    663,310
                                                                 
  Gross Profit                                 250,002      184,263389,601    307,464
                                                                 
Selling and administrative expenses            171,776      124,756259,938    205,397
                                                                 
  Operating Income                             78,226       59,507129,663    102,067
                                                                 
Interest income                                  648          8521,233      1,453
                                                                 
Interest expense                                 5,511        3,1358,121      5,945
                                                                 
  Income Before Income Taxes                   73,363       57,224122,775     97,575
                                                                 
Income taxes                                    27,511       21,45946,041     36,591
                                                                 
  Net Income                                $   45,85276,734   $ 35,76560,984
                                                                 
Net income per common share (Note C)        $     0.741.24   $   0.601.03
                                                                 
Average number of common shares
  outstanding                               61,655,604   59,391,98861,667,458 59,379,358
                                                                 
Cash dividends per common share             $     0.160.24   $   0.140.21


See accompanying notes to condensed consolidated financial
statements.

 Page 6 of 19


              HON INDUSTRIES Inc. and SUBSIDIARIES

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)
                                
                                                SixNine Months Ended
                                               JulyOctober 3,  October 4,     June 28,
                                                  1998        1997
                                                 (In thousands)
Net Cash Flows From (To) Operating                        
Activities:
  Net income                                    $ 45,85276,734   $ 35,76560,984
  Noncash items included in net income:                            
    Depreciation and amortization                 24,650      15,08438,039     25,334
    Other postretirement and postemployment                        
      benefits                                     49         6861,167      1,041
    Deferred income taxes                          3,090       1,2344,993      1,851
    Other - net                                        (24)         123         20
  Net increase (decrease) in noncash                               
    operating assets and liabilities            (13,530)     (6,674)(24,610)   (15,651)
  Increase (decrease) in other liabilities       (751)     (2,356)(1,549)      (571)
    Net cash flows from operating activities      59,336      43,75194,777     73,008
                                                                   
Net Cash Flows From (To) Investing Activities:
  Capital expenditures - net                   (80,016)    (34,222)(123,324)   (56,898)
  Acquisition spending, net of cash acquired    (11,310)   (66,292)(67,025)
  Short-term investments - net                        (4)        44693        444
  Long-term investments                             (8)(35)      1,045
  Other - net                                        4        (194)132      (164)
    Net cash flows (to) investing activities   (91,334)    (99,217)(134,444)  (122,598)
                                                                   
Net Cash Flows From (To) Financing Activities:
  Purchase of HON INDUSTRIES common stock        (1,387)     (2,535)(1,573)    (3,714)
  Proceeds from long-term debt                    45,78166,287    100,000
  Payments of note and long-term debt           (21,064)    (42,249)(27,635)   (48,106)
  Proceeds from sales of HON INDUSTRIES                            
    common stock to members and stock-based
    compensation                                   2,061       1,5052,723      1,930
  Dividends paid                                (9,868)     (8,314)(14,805)   (12,468)
    Net cash flows from (to) financing
      activities                                  15,523      48,40724,997     37,642
                                                                   
Net increase (decrease) in cash and                                
  cash equivalents                              (16,475)     (7,059)(14,670)   (11,948)
Cash and cash equivalents at beginning                             
  of period                                       46,080     31,196
                                                                   
Cash and cash equivalents at end of period      $ 29,60531,410   $ 24,13719,248


See accompanying notes to condensed consolidated financial
statements.


 Page 7 of 19

              HON INDUSTRIES Inc. and SUBSIDIARIES
                                
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                                
                         July 4,October 3, 1998


Note A.  Basis of Presentation

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.  In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included.  Operating results for the six-monthnine-month period
ended July 4,October 3, 1998, are not necessarily indicative of the
results that may be expected for the year ending January 2, 1999.
For further information, refer to the consolidated financial
statements and footnotes included in the Company's annual report
on Formform 10-K for the year ended January 3, 1998.


Note B.

Inventories Inventories of the Company and its subsidiaries are summarized as
follows:

                                      July 4, 1998October 3,     January 3,
($000)                                   1998           1998
                                     (Unaudited)         1998
                                                    
Finished products                       $26,411$27,308        $26,352
Materials and work in process            51,50555,062         48,186
LIFO Allowance                         (13,011)       (14,356)
                                        $64,905$69,359        $60,182


Note C.  Shareholders' Equity

The Board of Directors approved a two-for-one common stock split
in the form of a 100 percent stock dividend, paid on March 27,
1998, to shareholders of record on March 6, 1998.  All reported
net income per share and share outstanding amounts have been
adjusted to retroactively reflect the split.

Note D.  Business Combinations

During June 1998, the Company finalized its purchase price
allocation for the stock purchase of Allsteel Inc. Page 8 of 19

The final purchase price and allocation for the Allsteel Inc.
acquisition is shown below:
                                             (In Millions)
     Purchase Price                             $66.0

     Final Allocation of Purchase Price:
          Working capital, other than cash       24.3
          Property, plant, and equipment         38.4
          Goodwill                                9.9
          Other liabilities                       6.6

The Company acquired Aladdin Steel Products Inc. on February 20,
1998.  The transaction has been accounted for under the purchase
method. The cash purchase price and preliminary allocation is
shown below:

                                             (In Millions)
      Purchase Price                            $10.2

      Preliminary Allocation of Purchase Price:
          Working capital, other than cash         .3
          Property, plant, and equipment          1.8
          Goodwill                                8.1

Assuming the acquisition of Allsteel Inc., Bevis Custom Furniture
Inc., Panel Concepts Inc., and Aladdin Steel Products Inc.
occurred on December 29, 1996, the beginning of the Company's
1997 fiscal year, instead of June 17, 1997, November 13, 1997,
December 1, 1997, and February 20, 1998, when they actually
occurred, the Company's pro forma consolidated net sales for the
secondthird quarter ended June 28,October 4, 1997, would have been
approximately $347.6$414.8 million instead of the reported $296.6$391.3
million.  Pro forma consolidated net sales for the sixnine months
ended June 28,October 4, 1997, would have been approximately $689.1$1,103.9
million instead of the reported $579.4$970.8 million.  Pro forma
consolidated net income and net income per share for the secondthird
quarter and first sixnine months of 1997 would not have been
materially different from the reported amounts.

Note E.  New Accounting Standards

The Company adopted Statement of Financial Accounting Standards
(SFAS) No. 128, Earnings Per Share and SFAS No. 129, Disclosure
of Information about Capital Structure, as of January 3, 1998,
year-end 1997.  Their adoption had no material effect on
financial condition or results of operations.

Note F.  Comprehensive Income

The Company adopted Statement of Financial Accounting Standardsstandards
(SFAS) No. 130, Reporting Comprehensive Income, as of January 4,
1998, the beginning of its 1998 fiscal year.  In its first fiscal
quarterFor the three- and
nine-month periods ended April 4,October 3, 1998, the adoption of SFAS No. 130 had no
material effect on financial condition or results of operations. 
The only comprehensive income transactions during the quarter
were nominal foreign currency adjustments recorded under SFAS No.
52, Foreign Currency Translation.

 Page 9is
approximately ($1,294,000) and $1,188,000, respectively.

The Company's comprehensive income consists of 19

In its second fiscal quarter ended July 4, 1998, the Company
converted a privatean unrealized
holding gain on equity securities investment held as a long-
term investment to newly issued publicly traded securities
following an initial public offering by the issuer.  As
a result of this conversion, the securities automatically became securities available-for-sale under SFAS
No. 115, Accounting for Certain Investments in Debt and Equity
Securities.  The Company
anticipates selling the new securities at such time as it
believes they are fairly valued.  The current comprehensive
income effect of the unrealized holding gain on these equity
securitiesSecurities, and on-going nominal foreign currency translation
adjustments, for the three- and six-month periods ended July 4,
1998, is approximately $2,481,000 and $2,482,000, respectively.adjustments.

Note G.  Reclassifications

Certain prior year information has been reclassified to conform
to the current year presentation.

Note H.  Business Segment Information

The Company adopted Statement of Financial Accounting Standards
(SFAS) No. 131, Disclosures about Segments of an Enterprise and
Related Information, effective with its 1998 fiscal year
beginning January 4, 1998.  This segment disclosure is
essentially unchanged from the format used by the Company
historically in complying with SFAS No. 14, Financial Reporting
for Segments of a Business Enterprise, and No. 30, Disclosures of
Information about Major Customers.  That is, management views the
Company as being in two business segments: office furniture and
hearth products with the former being the principal business
segment.

The office furniture segment manufactures and markets a broad
line of metal and wood commercial and home office furniture which
includes file cabinets, desks, credenzas, chairs, storage
cabinets, tables, bookcases, freestanding office partitions and
panel systems, and other related products.  The hearth products
segment manufactures and markets a broad line of manufactured 
gas-, pellet-, and wood-burning fireplaces and stoves, fireplace
inserts, and chimney systems principally for the home.

For purposes of segment reporting, intercompany sales transfers
between segments are not material and operating profit is income
before income taxes exclusive of certain unallocated corporate
expenses.  These unallocated corporate expenses include the net
costs of the Company's corporate operations, interest income, and
interest expense.  Management views interest income and expense
as corporate financing costs and not as a business segment cost.
In addition, management applies one effective income tax rate to
its consolidated income before income taxes so income taxes are
not reported or viewed internally on a segment basis.

No geographic information for revenues from external customers or
for long-lived assets is disclosed inasmuch as the Company's
primary market and capital investments are concentrated in the
United States.

 Page 10 of 19

Reportable segment data reconciled to the consolidated financial
statements for the three month and sixnine month period ended
July 4,October 3, 1998, and June 28,October 4, 1997, is as follows:

Note H.  Business Segment Information

                                 Three Months Ended   SixNine Months Ended
                                 JulyOct. 3,   Oct. 4,    June 28,       JulyOct. 3,   Oct. 4,   June 28,
                                   1998      1997      1998       1997
                                             (In thousands)
Net Sales:                                                      
  Office furniture               $343,493   $244,725      $710,329   $484,363$383,409  $334,159 $1,093,738 $818,522
  Hearth products                  57,924     51,842       109,351     95,063
                                 $401,417   $296,567      $819,680   $579,426

Operating65,270    57,189    174,621  152,252
                                 $448,679  $391,348 $1,268,359 $970,774

Operation Profit:                                                       
  Office furniture               $ 39,29552,844  $ 29,663      $ 75,958   $ 58,21142,695   $128,802 $100,906
  Hearth products                   6,725      6,604         9,656      8,6589,835     8,066     19,491   16,724
    Total operating profit         46,020     36,267        85,614     66,86962,679    50,761    148,293  117,630
  Unallocated corporate expenses    (8,614)    (6,113)      (12,251)    (9,645)expense  (13,267)  (10,410)   (25,518) (20,055)
    Income before income taxes   $ 37,40649,412  $ 30,15440,351   $122,775 $ 73,363   $ 57,22497,575
                                                                        
Identifiable Assets:                                                    
  Office furniture                                    $606,765   $437,737$661,760 $473,453
  Hearth products                                      150,645    135,320161,155  138,553
  General corporate                                     63,800     62,335
                                                          $821,210   $635,39261,600   59,798
                                                      $884,515 $671,804
                                                                        
Depreciation & Amortization                                             
Expense:Expense
  Office furniture               $ 10,09310,757  $  5,8538,046    $30,500 $ 19,743   $ 11,31919,365
  Hearth products                   2,318      1,447         4,260      3,0792,296     1,859      6,556    4,938
  General corporate                   328336       345        647        686983    1,031
                                 $ 12,73913,389  $ 7,64510,250    $38,039 $ 24,650   $ 15,08425,334
                                                                        
Capital Expenditure, Net:                                               
  Office furniture               $ 34,05837,817  $ 12,63019,076   $107,569 $ 69,752   $ 26,66645,742
  Hearth products                   4,415      3,048         8,941      7,2594,246     3,232     13,187   10,491
  General corporate                 1,476        132         1,323        2971,245       368      2,568      665
                                 $ 39,94943,308  $ 15,81022,676   $123,324 $ 80,016   $ 34,22256,898
 Page 11 of 19



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

Results of Operations

A summary of the period-to-period changes in the principal items
included in the Condensed ConsolidatedConsolidate Statements of Income is
shown below:


                                           Comparison of
Increases (Decreases)    Three Months      Ended  SixNine Months Ended       Three Months
                             Ended            Ended              Ended
Dollars in Thousands    July 4,Thousand     Oct. 3, 1998 &    July 4,Oct. 3, 1998 &    July 4,Oct. 3, 1998 &
                         June 28,Oct. 4, 1997      June 28,Oct. 4, 1997      AprilJul. 4, 1998
                                                           
                                                                     
Net sales                $104,850  35.4%    $240,254  41.5%   $(16,846) (4.0)%$57,331   14.6% $297,585   30.7%   $47,262    11.8%
Cost of products sold     77,138  38.4      174,515  44.2     (13,464) (4.6)40,933    15.3  215,448    32.5    30,973     11.1
Selling & Administrative
  expenses                 18,910  29.4       47,020  37.7      (5,350) (6.0)7,521     9.3   54,541    26.6     4,949      5.9
Interest income             (228)(51.7)        (204)(23.9)       (222)(51.0)(16)   (2.7)    (220)  (15.1)       372    174.6
Interest expense           1,322  83.6        2,376  75.8         297  11.4(200)   (7.1)    2,176    36.6     (294)   (10.1)
Income taxes               2,720  24.1        6,052  28.2         543   4.03,398    22.5    9,450    25.8     4,503     32.1
Net income                 4,532  24.0       10,087  28.2         906   4.05,663    22.5   15,750    25.8     7,503     32.1
                                                                            
                                                                            
All per share information in this report reflects a two-for-one
stock split in the form of a 100% stock dividend effective March
27, 1998.

The Company reported its tenth consecutiveall-time record quarterly record net sales and
earnings.earnings, marking the eleventh consecutive quarter of record
results.  Consolidated net sales for the secondthird quarter ended
July 4,October 3, 1998, were $401.4$448.7 million, up 35.4%14.6%, compared to
$296.6$391.3 million for the same quarter a year ago.  For secondthird
quarter 1998, net income increased 24.0%22.5% to $23.4$30.9 million,
compared to $18.8$25.2 million in 1997.  Net income per share for the
quarter rose to $0.38$0.50 per diluted share, an increase of 18.8%16.3%
from $0.32$0.43 per diluted share earnedearning in secondthird quarter 1997.

For the first sixnine months ofended October 3, 1998, consolidated net sales
rose
41.5% to $819.7were $1.27 billion, up 30.7% from $970.8 million from $579.4 million last year.for the year-ago
period.  Net income for the nine months of 1998 was $45.9$76.7
million, up 28.2% from $35.8or $1.24 per diluted share, an increase of 25.8%,
compared to $61.0 million, in the
first half of 1997.  Earningsor $1.03 per diluted share for the
six months were
$0.74, an increase of 23.3% compared to $0.60comparable period in 1997.

Earnings
per shareResults of operations for both the secondthird quarter and six-monththe nine-
month period ended October 4, 1997, included one extra week of
1998 reflectbusiness activity compared to the additionsame periods in 1998.  This
extra week occurs every five or six years as a result of 2,300,000 shares of common stock
issuedthe leap
year effect on the Company's fiscal year calendar.  Adjusting for
an extra week in fourththird quarter 1997, undernet sales, on a primary offering.

The Company experienced strong growth in both its value-priced
office furniture and hearth products core business segments.   It
is continuing to outperform industry sales estimates for both
office furniture and hearth products.  Acquisitions completed
during 1997 and 1998 also contributed to current quarterly and
six-month results of operations.  See Note D. Business Combinations
for related pro forma data. The office furniture trade association
is currently estimating the overall U.S. office furniture industry
grew 10% in the first half of 1998.  The Company believes that
the hearth products industry has grown at a comparable rate.comparative
basis, actually increased approximately 24% with proportionate
impact on earnings.



Page 12 of 19

SecondThird quarter 1998 office furniture net sales represented 86%85% of
total consolidated quarterly net sales and contributed 85%84% of
consolidated operating profit before unallocated corporate
expenses.  Hearth product sales made up the balance of
consolidated net sales and operating profit.

TheStrong industry economics in both business segments coupled with
the dedication of the Company's strategiesmember-owners to offer customersprovide superior
customer service, rapidly introduce new innovative products, and
superior service, coupled with a commitment toachieve operational excellence through a Rapid Continuous
Improvement Program (RCI) program,
are believedcontributed to be contributing to its strongthe Company's record
sales growth.  The
quick delivery of a broad selection of quality, value-priced
products is a key driver to increasing orders.and earnings.

Consolidated gross profit margins improved from 30.3%30.7% in the
first quarter of 1998 to 30.7%31.1% in the second quarter.  This
improvementthird quarter, which is
consistent with management's expectations. 
Margins have been reduced in the short-term as acquisitions
are in various stages of integration, which is typically an eighteen-
to twenty-four-month process with larger acquisitions.  Integrations
become complex endeavors often involving product-line
rationalization, realignment of sales programs and support,
implementation of production and capacity efficiencies, reduction
of production cycle times, enhancement of product quality, and
improvement of complete and on-time shipment of product.  The
Company has aCompany's goal of maintaining consolidated
gross profit margins in the 31-32% range and expectsrange. Margins have been
reduced in the short-term as acquisitions, in various stages of
integration, become fully operationally integrated.  Full
integration is typically an eighteen- to be approaching this
goal by year-end 1998.twenty-four month
process with larger acquisitions.

Selling and administrative expenses continue to be a cost-reduction
target.  These costsfor the third quarter of 1998
were reduced to 20.7%19.6% of net sales forcompared to 20.6% in the secondcomparable
quarter fromof 1997.  On a nine-month basis, they were 20.5% in 1998
versus 21.2% in 1997.  Management places major emphasis on
controlling and reducing selling and administrative expenses as a
percent of net sales.  The Company's selling and administrative
expenses also include freight and distribution expenses incurred
to get the first quarter of 1998.  The
Company expectsproduct to leverage these costs as sales grow; however,
necessary increased costs to meet competitive conditions offset a portion
of the efficiency and leveraging gains.customer.

Liquidity and Capital Resources

As of July 4,October 3, 1998, cash and short-term investments increaseddecreased
to $29.9$31.4 million from $11.0compared to a $46.1 million balance at the end of first quarter
1998.year-end
1997.  The decrease is principally due to capital expenditures.
Net cash flows from operations contributed towas strong at $94.8 million for
the improvement.first nine months, an improvement of 29.8% for the same
period a year ago.  Cash flow and working capital management are
major focuses of management to ensure the Company is poised for
continued future growth.

Net capital expenditures for the secondthird quarter and six-monthnine-month
period in 1998 continue at an accelerated level.  First quarter netNet
expenditures were $40.1 million and $39.9 million in the second quarter
for a total of $80.0 million compared to $34.2 million for the same
six-month period in 1997.first nine months of 1998 were $123.3
million.  These expenditures are supporting new products,
construction of new facility capacity, and cost reduction
initiatives through the purchase and customization of production-
related machinery and equipment.  These investments were funded
by a combination of cash reserves, cash from operations, and a
revolving credit agreement.



Page 13 of 19

On February 20, 1998, the Company completed an acquisition of the
assets of Aladdin Steel Products Inc. located in Colville,
Washington.  Aladdin is a manufacturer of wood-, pellet-, and gas-burninggas-
burning stoves and inserts under the Quadra-Fire brand name with
annual sales of approximately $16 million.  A new division,
Aladdin Hearth Products, has been formed under the Hearth
Technologies Inc. operating company to manufacture and market the
Company's Quadra-Fire, Arrow, and Dovre brand stoves.  Please
refer to Note D. Business Combinations for related information.

On March 27, 1998, the Company paid a two-for-one stock split, in
the form of a 100% stock dividend, to shareholders of record on
March 6, 1998.  Shareholders received one share of common stock
for each share held on the record date.

The Board of Directors declared a regular quarterly cash dividend
of $0.08 per share on its common stock on May 11, 1998, to
shareholders of record at the close of business on May 21.  It
was paid on June 1, 1998, and represented the 173rd consecutive
dividend paid by the Company since its first shareholder dividend
in 1955.

The Company filed a Form 8-A on June 12, 1998, with the U.S.
Securities and Exchange Commission to register its common stock
and preferred share purchase rights in preparation for them being
traded on the New York Stock Exchange (NYSE).  Effective July 2, 1998, HON INDUSTRIES common stock began trading
on the NYSENew York Stock Exchange (NYSE) under the ticker symbol
HNI.  The Company's common stock was previously had
been traded on the
NASDAQ National Market System under the symbol HONI.  The move to
the NYSE was initiated in the interest of the anticipated longer-termlonger-
term benefits to the Company's shareholders.  Effective June 26,
1998, Harris Trust and Savings Bank, Chicago, Illinois, began
serving as the Company's transfer agent and registrar of its
common stock.  The transfer function was previously performed by
the Company.

On August 14, 1998, the Company filed a Form 8-A to register its
new share purchase rights plan with the U. S. Securities and
Exchange Commission and subsequently amended this filing on
September 14, 1998. The new plan replaced an existing rights plan
that expired on August 12, 1998.  Also, on August 14, 1998, the
Company filed a Form 8-K Current Report to acknowledge the Board
of Directors dividend declaration of one right for each share of
common stock outstanding.

The Board of Directors declared a regularly quarterly cash
dividend of $0.08 per share on its common stock on August 10,
1998, to shareholders' of record at the close of business on
August 20.  It was paid on September 1, 1998, and represented the
174th consecutive quarterly dividend paid by the Company since
its first shareholder dividend in 1955.

For the sixnine months ended July 4,October 3, 1998, the Company
repurchased 43,79550,605 post-split shares of its common stock at a
cost of approximately $1.4$1.6 million or an average price of $31.16$30.82
per share.  As of July 4,October 3, approximately $3.3$3.1 million of the
Board's current repurchase authorization remained unspent.

On November 9, 1998, the Board of Directors declared another
regular quarterly dividend of $0.08 per share on its common stock
payable December 1, 1998, to shareholders of record at the close
of business on November 19, 1998.  On November 12, 1998, the
Board of Directors authorized an additional $70.0 million for the
HON INDUSTIRES' share repurchase program.  This authorization is
in addition to the approximately $3.1 million unspent of the
Board's prior repurchase authorization.  The new authorization
supports the Company's commitment to enhance shareholder value.

Year 2000

The Company is continuing to pursuehas a two-phase Year 2000 (Y2K)Y2K assessment, remediation, testing,
and remediation program.implementation program underway that encompasses its computer
business information systems, operating equipment that uses date
sensitive computer chips, and key suppliers, service providers
and customers.  Phase I of the program is an internal
assessmentinternally developed
program which focuses principally on the Company's computer
business information systems and remediation plan encompassing the critical functions
of the business.  This phase was launched in the fall of 1997 is
ongoing, and is
anticipatedexpected to be completecompleted in the first quarter of 1999.  Phase II
consists of reviewuses as a guideline a comprehensive externally licensed
assessment and monitoring of the 
critical functions of the business using aremediation program that is focused principally on
operating equipment and third-party Y2K planningsupplier and assessment guide.customer
relationships.  Phase II is scheduled for rolloutwas launched in August-SeptemberSeptember 1998 and is
targeted for completion in mid-1999.  AssessmentAs the final step in each
phase, the Company will develop contingency plans as deemed
appropriate.

The Company's Y2K program is directed and remediation findings,monitored by designated
members of executive management working with a variety of
technical and management personnel, and program progress is
routinely reported to date, consistthe Board of Y2K
business issues mostly concentratedDirectors.

The costs associated with older computer hardware
and software.  While the Y2K assessment efforts are not complete,
a significant number ofaddressing the Company's computer business systems
have been assessed and any remediation required has been completed

 Page 14 of 19

or is underway.  Assessment of Y2K compliance with key suppliers, 
customers, and service providers is also part of both Phase I and
Phase II plans.  Based on efforts to date, the Company continues 
to believe its ultimate consolidated Y2K remediation cost will
not be financially material andissues
will be expensed or capitalized depending uponin the period incurred.
Remediation costs incurred to date have been immaterial and were
expensed as incurred.  The Company currently estimates its cost
to perform and complete its Y2K assessment and remediation
program to be in the range of $1 million, including some costs
which, because of their nature, as incurred.will be capitalized.  The Company
expects to have any Y2K issues resolved prior to them having an
adverse impact on its operations. However, given the pervasive
nature of Y2K and especially noncontrollable third-party
relationship exposures, the Company cannot avoid assuming some
measure of business risk.  These business risks range from
inconsequential errors or failures to potentially more serious
risks.  Management believes the Company's primary business risks in the
event of significant failure caused by the Y2K issue, wouldmay
include, but not be limited to, delays in shipmenthigher than expected remediation
costs, business interruption risks, insurers may require
exclusions for losses/damages attributable to Year 2000, and
litigation risk.



Looking Ahead

Management feels that the softening of products or delivery
of services leading to lost revenues, increased operating costs,
loss of customers or suppliers, or other business interruptions of 
a material nature, as well as claims of mismanagement, misrepresentation,
or breach of contract.

No need for contingency planning has been identified at this point,the world economy may
eventually slow the sales momentum, but feel the Company is
prepared, as a low-cost, flexible manufacturer, to do so if and when such circumstances
are identified.

Looking Aheadoutperform the
industries in which they compete.  Management's financial goals
for fiscal year 1998 continue to be to achieve double-digit
growth in both sales and earnings.

Except for the historical information contained herein, the
matters discussed in this Form 10-Q are forward-looking
statements.  Such forward-looking statements involve risks and
uncertainties which could cause actual results or outcomes to
differ materially from those discussed in the forward-looking
statements including but not limited to: competitive conditions,
pricing trends in the office furniture and hearth products
markets, acceptance of the Company's new product introductions,
the overall growth rate of the office furniture and hearth
products industries, the achievement of cost reductions and
productivity in the Company's operations, the Company's ability
to improve margins of acquired businesses, impact of future
acquisitions, the Company's ability to identify and correct or
implement contingency plans to deal with the Y2K issue,issues, as well
as the risks, uncertainties, and other factors described from
time to time in the Company's SEC filings and reports.



                Page 15 of 19


                  PART      II.  OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits. See Exhibit Index.

     (b)  Reports on Form 8-K. No reports onOn August 14, 1998, the Company filed a
          Form 8-K were filed duringto acknowledge the quarterBoard of Directors dividend
          declaration of one share purchase right for which this
     report is filed.each share of HON
          INDUSTRIES common stock outstanding.

 Page 16 of 19

                            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.


Dated: November 17, 1998                HON INDUSTRIES Inc.

Dated: August 13, 1998


                                   By   /s/  David C. Stuebe
                                        David C. Stuebe
                                        Vice President and
                                        Chief Financial Officer



                                   By   /s/  Melvin L. McMains
                                        Melvin L. McMains
                                        Vice President and
                                        Controller

 Page 17 of 19


                       PART II.  EXHIBITS

EXHIBIT INDEX

     Page(3i) Articles of Incorporation of the Registrant, as amended
          and restated, on August 10, 1998
     
     (3ii)By-Laws of the Registrant, as amended and
          restated, on July 29, 1998
     
     (27) Financial Data Schedule

19 

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