SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997

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

Commission File No. 0-10894

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

Pennsylvania 23-2200465
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

625 South Fifth Avenue, Lebanon, Pennsylvania 17042
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (717) 274-2521

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, 1.00 Par Value
(Title of Class)

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 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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 27, 1998, reference to the immediately preceding
closing sale price of such stock (3/26/98), was $433,774,107.

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Class Outstanding at March 27, 1998
Common Stock 25,993,954

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant's Annual Report to Stockholders for the year ended
December 31, 1997, and Registrant's definitive proxy statement for the Annual
Meeting of Stockholders to be held on May 6, 1998, are incorporated into Parts
II and III, respectively, as set forth herein.

The total number of pages included in this report, including the cover
page, is 47.

The exhibit index is located on sequentially numbered page 17.

PART I

Item 1. BUSINESS
Arnold Industries, Inc. (hereinafter sometimes referred to as "Arnold
Industries" or the "Company") was incorporated on February 1, 1982, under the
laws of the Commonwealth of Pennsylvania at the direction of the Board of
Directors of New Penn Motor Express, Inc. to become a holding company and to
effect a reorganization pursuant to which, through requisite stockholder
approval, New Penn Motor Express, Inc. became a wholly owned subsidiary of
Arnold Industries as of March 31, 1982. The Company is engaged in the
trucking and warehousing businesses.

The Company's business activities are currently conducted by two (2)
operating subsidiaries and a non-operating, investment management subsidiary.
New Penn Motor Express, Inc. ("New Penn") is a less-than-truckload ("LTL")
transportation company. Arnold Transportation Services, Inc. ("Arnold
Transportation") provides truckload ("TL") service and, under the name Arnold
Logistics, warehousing and warehouse-related trucking service. On December
31, 1997, two truckload carriers previously acquired by the Company, Silver-
Eagle Transport, Inc. ("SilverEagle ") and D.W. Freight, Inc. ("DW"), were
merged with and into Arnold Transportation. Prior to the merger, operational
integration of the truckload carriers had already taken place. Maris, Inc.
("Maris") is a Delaware investment company active in the management of assets
generated by the operating subsidiaries.

In 1997, New Penn, the Company's LTL carrier, and Maris, contributed
approximately fifty-three percent (53%) of the Company's Operating Revenue.
The Company's combined TL carrier operations contributed forty percent (40%),
and Arnold Logistics, its warehousing and related trucking operations,
contributed approximately seven percent (7%).

NEW PENN MOTOR EXPRESS, INC.
New Penn maintains general offices in Lebanon, Pennsylvania, and
transports commodities by motor vehicle on a less-than-truckload basis,
operating primarily in interstate commerce in New England and the Middle
Atlantic states. The southeastern United States, Indiana, Ohio and Quebec and
Ontario, Canada, are serviced through correspondent agreements with certain
other high-service carriers in each area. Certain areas in Canada, including
Montreal, are now serviced directly by New Penn. Puerto Rico is serviced by
New Penn land service in conjunction with correspondent ocean service.
Commodities transported include paper products, food products, textiles,
building products, metal products, pharmaceuticals, office equipment and
supplies, and wearing apparel.

New Penn operates from twenty-two (22) terminals at which it receives,
consolidates and distributes freight. It also utilizes a correspondent's
terminal in Puerto Rico.

Rates and Regulations
In common with other interstate motor carriers, New Penn is subject to
limited Federal economic regulation of its operations, including the
territories it serves and the commodities it carries.

The ICC Termination Act of 1995, effective January 1, 1997, abolished the
Interstate Commerce Commission ("ICC") and the traditional economic regulatory
scheme administered by that agency, and replaced it with significantly
lessened economic regulation administered by the Federal Highway
Administration ("FHWA").

To the extent rates and charges assessed by New Penn for interstate
transportation are published on behalf of New Penn by regional tariff bureaus,
such collectively published rates and charges are exempt from the anti-trust
laws. However, price competition is now widespread, and such bureau-published
rates are of relatively little influence today.

As a result of the changes to the Federal law, neither interstate rates
nor intrastate rates are filed with any regulatory agencies of the Federal
government. Changes in rates and charges may now be effected without
regulatory approval.

The FHWA has jurisdiction over the qualification and the maximum hours of
service of drivers, insurance and the general safety of operations and motor
carrier equipment.

New Penn's operations are subject to limited regulation by the states
through which it operates.

Certificates
The authorized routes, territories and commodities to be transported for
all property carriers by motor vehicle (except carriers of exempt commodities)
are determined by operating authorities issued, in the case of interstate
operations, by FHWA (formerly by the ICC), and, in the case of intrastate
operations, by regulatory agencies of the individual states. Operating
authorities relating to the operations of New Penn have been issued to it by
the respective regulatory agencies having jurisdiction. Recent legislation
has greatly eased or in many cases eliminated the requirements for obtaining
interstate and intrastate operating authority.

Employees and Employee Relations
New Penn has approximately fourteen hundred and fifty (1,450) full-time
employees (including its officers). Most of the hourly paid employees are
covered by contracts with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen, and Helpers of America (Teamsters) effective April
1, 1994, through March 31, 1998. New Penn has agreed to accept the terms of
the recently negotiated Master Freight Agreement between the Teamsters and the
membership of Trucking Management, Inc. when ratified.

Most labor contracts in the unionized trucking industry are negotiated on
an industry-wide basis for three to five year periods and contain uniform wage
rates, fringe benefits and other working conditions applicable to all covered
motor carriers, including competitors of New Penn, subject to local
differences established in riders to the national contracts. New Penn
anticipates stable labor relations with its unionized employees during the
next five (5) years.

New Penn employs a sales staff of approximately sixty-five (65) people,
augmented by sales and related efforts of its four (4) regional managers and
twenty-two (22) terminal managers, together with various other marketing and
sales staff, to solicit new business and to handle service programs with
existing customers.

Competition
The motor carrier industry is highly competitive, particularly as a
result of deregulation of Interstate Commerce Commission operating
authorities. New Penn competes primarily with other motor common carriers,
motor contract carriers, private transportation and railroads. A very
substantial number of motor carriers operate within the same areas served by
New Penn. Some of the competing carriers are larger than New Penn in terms of
revenues, tonnage handled and net worth. Furthermore, as a result of
deregulation, even more carriers may begin to operate in interstate and
intrastate commerce in the same geographical territory in which New Penn is
currently operating.

New Penn believes the competitive position of a transportation company
depends upon rates as well as consistency and dependability of service. Price
cutting in the trucking industry has become intense. Profitability depends
upon New Penn's ability to maximize utilization of revenue equipment and to
minimize handling costs.

ARNOLD TRANSPORTATION SERVICES, INC.
Arnold Transportation changed its name from Lebarnold, Inc. on May 31,
1997. Arnold Transportation has two primary operating divisions: the TL
carrier division and the warehousing and related trucking division. The
warehousing and related trucking division operates under the trade name of
Arnold Logistics.

On December 31, 1997, two other regional truckload companies operated by
the Company were merged with and into Arnold Transportation, creating a "core
carrier." Many manufacturers in the United States are reducing the number of
regional carriers that they utilize and are concentrating their transportation
business in a smaller number of "core carriers." Carriers must be able to
transport goods across inter-regional boundaries if they are to compete for
the business of these manufacturers. By combining the operations of the
Company's three regional truckload carriers, the Company has created a core
carrier able to compete for inter-regional business. Integration of the three
carriers will have the added benefit of reducing duplicative expenses in the
areas of dispatch, record-keeping, administration, etc., with anticipated cost
reductions as a result.

Arnold Transportation's trucking division has 48-state authority to serve
the general public, although its basic business, that of truckload carriage,
is conducted east of the Mississippi and in the southwest. The main operating
location for this division is in Camp Hill, Pennsylvania, with other terminals
located in North Carolina, Georgia, Florida, Texas and Oklahoma. Arnold
Transportation also conducts operations from a customer's location in Ohio,
and a leased facility in New York. Most services are being performed in
company-owned equipment with company drivers, although in 1992 Arnold
Transportation began utilizing owner-operators to complement its fleet.

Arnold Logistics serves the assembly, distribution and warehousing needs
of its customers primarily from twelve (12) separate warehouse buildings in
four (4) operating locations with a total capacity of approximately two (2)
million square feet. These facilities are located in Camp Hill, Mountville
and Mechanicsburg, Pennsylvania, and Fort Worth, Texas. Arnold Logistics also
maintains approximately 300,000 square feet of warehouse in Wilmington, North
Carolina, presently leased to a third party.

Arnold Transportation has approximately seven hundred sixty (760)
employees (including its officers).

General
Truckload carriers no longer file tariff rates with the ICC. Arnold
Transportation's trucking operations are, in general, subject to limited
regulation and competitive factors similar to that experienced by New Penn.

Arnold Transportation is not subject to collective bargaining with its
labor force.

Item 2. PROPERTIES
Headquarters. Arnold Industries and New Penn maintain executive and
general offices at 625 South Fifth Avenue, Lebanon, Pennsylvania 17042.
Arnold Transportation maintains its principal office at 4410 Industrial Park
Road, Camp Hill, Pennsylvania 17011. Arnold Transportation operates regional
centers at 9523 Florida Mining Boulevard, Jacksonville, Florida 32257, and at
3375 High Prairie Avenue, Grand Prairie, Texas 75050. The companies own their
principal offices and regional centers.

Facilities. New Penn maintains general commodities terminal facilities
in twenty-two (22) cities situated in seven (7) states and Quebec province of
Canada. On December 31, 1997, eighteen (18) of the terminals were owned by
the Company or its subsidiaries and four (4) were leased from unrelated
parties. The terminals owned are located as follows: Southington, CT;
Elkridge, MD; Billerica, MA; South Kearny, NJ; Trenton, NJ; Albany, NY;
Newburgh, NY, Cheektowaga, NY; Maspeth (Long Island), NY; Rochester, NY; Camp
Hill, PA; Lancaster, PA; Cinnaminson, NJ; Neville Island, PA; Reading, PA;
Dunmore, PA; Milton, PA; and Cranston, RI. Leases for terminal sites in
Springfield, MA; Syracuse, NY; Altoona, PA; and Stanhope, Quebec, expire from
time to time over the next several years. Management believes the leases will
be renewed or replaced by other leases in the normal course of business. New
Penn also operates through a correspondent in Cantano, Puerto Rico.

In the mid-Atlantic, Arnold Transportation owns and operates trucking
terminals in Camp Hill, Pennsylvania, and Charlotte, North Carolina. It also
leases facilities in Selkirk, New York (near Albany), and Dayton, Ohio, which
it will renew or replace in the normal course of business. Arnold
Transportation owns and, through Arnold Logistics, operates ten (10) warehouse
buildings in three (3) locations, Camp Hill and Mechanicsburg, Pennsylvania,
and Fort Worth, Texas, totaling approximately 1,700,000 square feet. Arnold
Transportation also leases approximately 300,000 square feet of additional
warehouse space for Arnold Logistics' use in Mountville, Pennsylvania, and
25,000 square feet of warehouse space in Fort Worth, Texas. Management
believes that the leases will be renewed or replaced in the normal course of
business. In 1982, Arnold Transportation acquired, from an unrelated third
party, 90 acres near Wilmington, North Carolina, on which are located
approximately 320,000 square feet of warehouse space. This facility is
presently leased to an unrelated third party and is not operated by Arnold
Logistics.

In the southeast, Arnold Transportation maintains seven (7) terminals
and/or drop lots to support its operations. These are located in Jacksonville
and Jasper, Florida; Albany, Atlanta and Fairburn, Georgia; and Greensboro,
North Carolina. The terminals in Jacksonville, Jasper, Albany and Atlanta are
owned by Arnold Transportation; the drop lot in Fairburn, Georgia, is also
owned by the Company. The remaining facilities are leased from unrelated
third parties. These leases expire from time to time over the next several
years. Management believes these leases will be renewed or replaced in the
normal course of business.

In the southwest, Arnold Transportation maintains six (6) terminal and/or
drop-off locations in, respectively, Grand Prairie, Houston, Paris, Waco and
Dallas, Texas, and Muskogee, Oklahoma. Arnold Transportation owns its
facilities in Grand Prairie, Houston and Paris, Texas, and Muskogee,
Oklahoma. The Dallas and Waco facilities are under lease with unrelated
parties, which will expire or be renewed over the next several years.
Management believes the leases will be renewed or replaced in the normal
course of business. Arnold Transportation also owns two warehouses totaling
approximately 150,000 square feet in the Ft. Worth, Texas area, which are
managed by Arnold Logistics.

Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business of the Company, to which the the
Company or its subsidiaries are party or to which any of their property is
subject.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE

PART II

Item 5. MARKET INFORMATION
There is incorporated herein by reference the information appearing under
the captions "Quarterly Performance" and "Price Range Common Stock" on page 17
of the Registrant's Annual Report to Stockholders for the year ended December
31, 1997. It is anticipated that comparable cash dividends will continue to
be paid in the future.

The number of holders of record of the Company's common stock as of March
27, 1998, was approximately 1,392. However, the Company believes there are
substantially more beneficial owners of Company stock than reflected by the
number of record holders.

The Registrant's common stock is traded in the over-the-counter market on
the NASDAQ National Market System under the symbol "AIND." Prices shown are
the actual high and low close for the periods given. The closing price of the
Company's common stock on March 26, 1998, was $16.69.

Item 6. SELECTED FINANCIAL DATA
There is incorporated herein by reference the information appearing under
the caption "Eleven-Year Financial Summary" on pages 20 and 21 of the
Registrant's Annual Report to Stockholders for the year ended December 31,
1997.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
There is incorporated herein by reference the information appearing under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 18 and 19 of the Registrant's Annual Report to
Stockholders for the year ended December 31, 1997.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of Arnold Industries,
Inc. and its subsidiaries, included on pages 8 through 15 of the Registrant's
Annual Report to Stockholders for the year ended December 31, 1997, are
incorporated by reference herein:
Consolidated Balance Sheets - December 31, 1997 and 1996.
Consolidated Statements of Income - Years Ended December 31, 1997, 1996
and 1995.
Consolidated Statements of Stockholders' Equity - Years Ended
December 31, 1997, 1996 and 1995.
Consolidated Statements of Cash Flows - Years Ended December 31, 1997,
1996 and 1995.
Notes to Consolidated Financial Statements.

Also, there is incorporated herein by reference the "Report of Independent
Accountants" and information appearing under the caption "Quarterly
Performance" on pages 16 and 17, respectively, of the Registrant's Annual
Report to Stockholders for the year ended December 31, 1997.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
NONE

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is incorporated herein by reference the information appearing under
the captions "Directors" and "Executive Officers" in the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders on May 6,
1998.

There have been no events under the bankruptcy act, no criminal
proceedings and no judgments or injunctions during the past five (5) years
which would be material to an evaluation of any Director or Executive Officer.

Item 11. EXECUTIVE COMPENSATION
There is incorporated herein by reference the information appearing under
the captions "Executive Officers", "Executive Compensation and Other
Benefits", "Performance Graph," "Report on Executive Compensation" and
"Compensation Committee Interlocks and Insider Participation" in the
Registrant's definitive proxy statement for the Annual Meeting of Stockholders
on May 6, 1998.

No other remuneration payments are proposed to be made in the future,
directly or indirectly, by or on behalf of Arnold Industries and its
subsidiaries, pursuant to any plan or arrangement, to any Director or
Executive Officer of the Company except as disclosed above.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is incorporated herein by reference the information appearing under
the caption "Security Ownership of Directors, Officers and Certain Beneficial
Owners" in the Registrant's definitive proxy statement for the Annual Meeting
of Stockholders on May 6, 1998.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is incorporated herein by reference the information appearing under
the caption "Certain Transactions" in the Registrant's definitive proxy
statement for the Annual Meeting of Stockholders on May 6, 1998.

PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)(1) The following consolidated financial statements of the registrant
and its subsidiaries, included on pages 8 to 15 in the Registrant's Annual
Report to Stockholders for the year ended December 31, 1997 and the report of
independent accountants on page 16 of such report are incorporated herein by
reference in Item 8:

Financial statements:

Consolidated Balance Sheets - December 31, 1997 and 1996
Consolidated Statements of Income - Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Stockholders' Equity - Years Ended
December 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows - Years ended December 31,
1997, 1996 and 1995
Notes to Consolidated Financial Statements

Independent Accountants' Report

Selected Quarterly Financial Data - Years Ended December 31, 1997 and
1996:

Quarterly performance data, included on page 17 in the Registrant's Annual
Report to Stockholders for the year ended December 31, 1997, is incorporated
herein by reference.

(2) The following financial statement schedules for the years 1997, 1996
and 1995 are submitted herewith:

Schedule II - Valuation and qualifying accounts
and reserves

Report of Independent Accountants

All other schedules are omitted because they are not required, inapplicable or
the information is otherwise shown in the financial statements or notes
thereto.

(3) Exhibits included herein:

Exhibit 3 - Articles of Incorporation and Bylaws (Articles of Incorporation of
the Company, as amended, and Bylaws of the Company (filed as Exhibits 3.1 and
3.2 to Registrant's Form 10-K for the fiscal year ended December 31, 1989, and
incorporated herein by reference).

Exhibit 13 - 1997 Annual Report to Stockholders

Exhibit 21 - Subsidiaries of the Registrant

Exhibit 23.1 - Consent of Coopers & Lybrand L.L.P.

Exhibit 27 - Financial Data Schedule

(b) Reports on Form 8-K

No reports on Form 8-K have been filed by the Registrant during the last
quarter of the period covered by this report.

ARNOLD INDUSTRIES, INC. AND SUBSIDIARIES
Schedule II
Valuation and Qualifying Accounts and Reserves
for the years ended December 31, 1997, 1996 and 1995

Additions
Balance at Charged to Charged to
beginning costs and other Balance at
Description of period expenses accounts<FN1> Deductions<FN2> end of year

Year ended December 31, 1997

Allowance for doubtful accounts $ 1,724,106 $ 821, 238 $194,215 $ 1,399,531 $ 1,340,028

Estimated liability for claims $20,140,931 $14,935,706 - $14,890,883 $20,185,754

Year ended December 31, 1996

Allowance for doubtful accounts $ 1,108,051 $ 1,232,565 $ 94,245 $ 710,755 $ 1,724,106

Estimated liability for claims $15,235,791 $17,666,656 - $12,878,516 $20,140,931

Year ended December 31, 1995

Allowance for doubtful accounts $ 895,563 $ 589,513 $ 88,797 $ 465,822 $ 1,108,051

Estimated liability for claims $15,045,879 $12,765,543 - $12,458,631 $15,352,791

<FN>
<FN1>
1 Recoveries
<FN2>
2 Accounts deemed to be uncollectible and charged to allowance for
doubtful accounts and payments made for estimated liability for
claims.
</FN>

[Letterhead of Coopers & Lybrand L.L.P.]

Report of Independent Accountants

The Board of Directors
Arnold Industries, Inc.
Lebanon, Pennsylvania

Our report on the consolidated financial statements of Arnold Industries, Inc.
and Subsidiaries has been incorporated by reference in this Form 10-K from
page 16 of the 1997 Annual Report to Stockholders of Arnold Industries, Inc.
In connection with our audits of such financial statements, we have also
audited the related financial statement Schedule II included in this Form
10-K. This supplementary financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion on
this supplementary financial statement schedule based on our audit.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statement taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P.

One South Market Square
Harrisburg, Pennsylvania
February 27, 1998

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, on March 30, 1998.

ARNOLD INDUSTRIES, INC.

By /s/ E. H. Arnold
E. H. Arnold, President

By /s/ Ronald E. Walborn
Ronald E. Walborn
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the
report has been signed by the following persons in their capacities as
indicated below.

Name Date

/s/ E. H. Arnold March 30, 1998
E. H. Arnold
President and Director

/s/ Kenneth F. Leedy March 30, 1998
Kenneth F. Leedy
Executive Vice President and Director

/s/ Ronald E. Walborn March 30, 1998
Ronald E. Walborn
Treasurer and Director

/s/ Heath L. Allen March 30, 1998
Heath L. Allen
Secretary and Director

INDEX TO EXHIBITS

Sequential Page No.

Exhibit 13 - 1997 Annual Report to Stockholders 18

Exhibit 21 - Subsidiaries of Registrant 44

Exhibit 23.1 - Consent of Coopers & Lybrand L.L.P. 45

Exhibit 27 - Financial Data Schedule 46