SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 1998

[ ] 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 0-8445

CONSOLIDATED PRODUCTS, INC.
(Exact name of registrant as specified in its charter)

INDIANA 37-0684070
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)

500 Century Building, 36 S. Pennsylvania Street
Indianapolis, Indiana 46204
(317) 633-4100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Securities registered pursuant to Sec. 12(b) of the Act:
Name of Exchange
Title of Each Class on Which Registered
------------------- -------------------
Common Stock, par value $.50 per share New York Stock Exchange

Securities registered pursuant to Sec. 12(g) of the Act: None.

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.[ ]

The aggregate market value of Common Stock held by persons not "affiliated" with
the registrant, based on the closing price of the Common Stock as of December
10, 1998, was approximately $316,796,384.

The number of shares of Common Stock outstanding at December 10, 1998 was
21,086,099 (not adjusted for the five for four stock split declared in December
1998).

DOCUMENTS INCORPORATED BY REFERENCE

PARTS OF FORM 10-K INTO WHICH
IDENTITY OF DOCUMENT DOCUMENT IS INCORPORATED

Registrant's Annual Report to Shareholders for Parts II and IV
fiscal year ended September 30, 1998

The definitive Proxy Statement to be filed with
respect to the 1999 Annual Meeting of
Shareholders of Registrant Part III

PART I.

ITEM 1. BUSINESS

GENERAL

The Company is engaged primarily in the ownership, operation and franchising of
Steak n Shake restaurants through its wholly-owned subsidiary, Steak n Shake,
Inc. Founded in 1934 in Normal, Illinois, Steak n Shake is one of the oldest
restaurant chains in the country. As of September 30, 1998, Steak n Shake had
233 Company-operated restaurants and 51 franchised restaurants, located in 14
midwestern and southeastern states. Steak n Shake restaurants are generally open
24 hours a day, seven days a week, and in addition to the core menu, offer a
breakfast menu during breakfast hours. During fiscal 1998, lunch and dinner
sales accounted for approximately 36% and 44% of sales, respectively, while
breakfast and late night sales accounted for 7% and 13% of sales, respectively.

THE STEAK N SHAKE CONCEPT

Management's key concept strategies are to:

CAPITALIZE ON DISTINCT MARKET NICHE. Steak n Shake occupies a distinct niche
in the restaurant industry. The restaurants offer full-service dining with
counter and dining room seating, as well as drive-thru and carry-out service.
Counter and dining room sales represent approximately two-thirds of the sales
mix while sales for off-premises dining represent approximately one-third of
the sales mix. Unlike most fast-food restaurants, all food is freshly
prepared, made-to-order in view of the customer and is served promptly on china
with flatware and glassware by friendly wait staff. Steak n Shake's prices are
considerably less than most casual dining concepts with an average check of
approximately $5.25 per person in fiscal 1998, although the average check
during the peak lunch and dinner hours was approximately $5.50 and $5.75,
respectively. The Company believes that Steak n Shake offers a much more
compelling value and higher quality level of core menu items than competitive
fast-food and casual dining chains.

FOCUS ON CORE MENU ITEMS WHILE OFFERING VARIETY. For over 60 years, Steak n
Shake's menu has featured core items which include Steakburgers, thin and
crispy French fries and hand-dipped Milk Shakes. The Company believes that its
focus on certain menu items has allowed it to serve consistent, high quality
food which, in turn, has built brand loyalty with its customers. Menu items
are prepared in accordance with the Company's strict specifications using high
quality ingredients such as 100% pure U.S. beef, including cuts of T-bone,
strip and sirloin steaks, in its steakburgers. Over the years, Steak n Shake
has responded to changing customer tastes with greater menu variety without
losing its focus or customer appeal, by making carefully planned menu additions
such as a grilled chicken breast sandwich, beef and chicken taco salads,
desserts and various homestyle soups and salads.

EMPHASIZE CUSTOMER SATISFACTION. Steak n Shake's reputation and long-standing
customer loyalty have been earned over many years by the consistent quality of
the dining experience. The success of Steak n Shake depends on its employees'
commitment to consistently exceed the customer's expectations. All restaurant
employees participate in a formal training program that focuses on enhancing
customer satisfaction and includes classroom and on-the-job instruction.
Restaurant managers are required to complete a comprehensive eight-week
training program on restaurant operating procedures, employee relations, and
customer service. In order to ensure consistent execution of the Company's
standards for service, self-stamped and addressed comment cards are placed in
every restaurant, and management performs periodic on-site visits and formal
inspections.

RESTAURANT DESIGN

Steak n Shake restaurants have a distinctive exterior appearance and interior
decor. The exterior design of a Steak n Shake restaurant has the individual
character of a branded logo, embracing building shape, awning detail, building
graphics and pylon signage. The interior decor is reminiscent of the nostalgic
diner era using chrome, glass, neon and tile in a contemporary manner. Food
preparation takes place in view of the customer, as reflected by Steak n
Shake's slogan, "In Sight It Must Be Right-Registered Trademark-". The kitchen
area is designed to allow for efficiency of work flow, thereby minimizing the
amount of space required.

All of the Steak n Shake restaurants are free-standing structures except for
eight units, of which four are part of travel centers. Restaurants constructed
prior to 1973 are similar in architectural style but differ in size resulting
in seating capacities varying from 39 to 138 customers. Restaurants built
since 1973 are generally 3,800 square feet in area and seat approximately 100
customers. The travel center units are located in complexes that typically
include a fuel service area and a convenience store. These units are located
on interstate highways and serve both the general traveler and truck traffic.
The travel center unit exteriors and interiors are the same as those of the
free-standing units.

EXPANSION STRATEGY

In fiscal 1992, the Company embarked upon a five-year Steak n Shake expansion
program that contemplated the addition of 39 new Company-operated units by the
end of fiscal 1997. By September 24, 1997, the Company had opened 100 new
Company-operated restaurants. For fiscal year 1998, 33 Company-operated units
were opened. In addition to the 33 new units, the Company purchased eight
units in southern Georgia and northwest Florida from a franchisee.

The Company's five-year growth plan for fiscal 1999 through 2003 calls for
increasing the numbers of new Company-operated Steak n Shake units by 290. In
addition to the 290 Company-operated units planned in the five-year window, the
Company will also very selectively expand its franchise system. The goal would
be over 600 systemwide Steak n Shake restaurants by the end of fiscal 2003 of
which over 500 would be Company-operated.

The Company's controlled expansion program is based upon a market penetration
plan focused on clustering restaurants in existing or contiguous geographic
areas to capitalize on name recognition, increase customer convenience and
achieve media efficiency. The addition of Company-operated restaurants in
markets where the Company's television marketing effort has been implemented
allows the Company to leverage its advertising costs over more units and to
benefit from management efficiencies. In existing media markets, the Company's
advertising expenditures create higher levels of customer recognition and
greater market acceptance for new units. The Company's new restaurants opened
in existing media markets have typically experienced higher than average sales
volumes.

During fiscal 1998, the Company continued its market intensification efforts in
core markets while Tampa, Florida; Chicago, Illinois; Jacksonville, Florida;
Nashville, Tennessee; and Kansas City, Missouri saw increased penetration. New
markets included Lexington, Kentucky; Columbus, Ohio; West Palm Beach, Florida;
and Lansing, Michigan. In fiscal 1999, the Company will begin development in
Madison, Wisconsin; Detroit, Michigan; Cleveland, Ohio; and the Broward-Dade
County, Florida markets.

Another strategy is to link existing major Steak n Shake markets by developing
Steak n Shake units along the connecting interstate highways. Since the
beginning of fiscal 1995, 58 Company-operated and 20 franchised restaurants
have been opened at locations along interstate highways.

The Company's franchising program is designed to extend brand name recognition
of Steak n Shake and derive additional revenues without substantial investment
by the Company. As part of its continuing planning process, management reviews
the relationship of the number of Company-operated to franchised restaurants
and the selection of areas for development by the Company and by franchisees.
The Company's expansion plan contemplates the controlled addition of franchised
restaurants with the current franchisees. See "Franchising."

SITE SELECTION

Management believes that the site selection process is critical to the success
of its restaurants, and senior management devotes significant time and
resources in analyzing each prospective site. A variety of factors are
considered in the site selection process, including local market demographics,
site visibility and accessibility, highway interchanges and proximity to
significant generators of potential customers such as major retailers, regional
malls, shopping centers, office complexes, and hotel and entertainment centers
including stadiums, arenas and multi-screen theaters.

The Company's Vice President of Real Estate and the real estate managers
identify and research sites for review by the Company's senior management prior
to final authorization for purchase or lease. Upon identification of a site,
its success including the potential return on investment is assessed by
utilization of financial models which evaluate the unit's projected sales and
earnings. Management believes this detailed process, along with a critical
approval path, ensures the management discipline and scrutiny necessary to
acquire sites that have the most potential to meet the Company's required
performance criteria.

RESTAURANT LOCATIONS

The following table lists, as of September 30, 1998, the locations of the 284
Steak n Shake restaurants and the number of units in each state and the number
of units in each city if more than one unit:

FLORIDA (48) ILLINOIS (53) INDIANA (56) MISSOURI (52)
Bradenton Alton Anderson Arnold
Clearwater - 2 Aurora Avon *Branson
Daytona Beach Belleville Bloomington - 3 *Cape Girardeau
Gainesville -2 Bloomington - 2 Carmel - 2 *Columbia - 2
Jacksonville - 2 Bradley *Clarksville Eureka
Kissimmee Carbondale Columbus *Farmington
Lakeland - 3 Champaign Elkhart Fenton
Lake Buena Vista Collinsville *Evansville - 2 Festus
Lake Mary Danville - 2 Ft. Wayne - 3 Independence
Largo Decatur - 2 Goshen *Jefferson City
Merritt Island DeKalb Greenwood - 2 *Joplin
Ocala Downers Grove Indianapolis - 20 *Poplar Bluff
Orange City East Peoria Kokomo - 2 *Rolla
Orlando - 9 Edwardsville Lafayette - 2 St. Louis - 33
Ormond Beach Effingham Lebanon *Springfield - 4
Oviedo Elgin Marion Sullivan
Palm Coast Fairview Heights Merrillville
Port Charlotte Forsythe Michigan City GEORGIA (19)
Port Richey Galesburg Mishawaka Albany
Sanford Glendale Heights Muncie *Atlanta - 11
Sarasota Gurnee Noblesville *Brunswick
Spring Hill Hoffman Estates Plainfield Columbus
St. Petersburg -2 *Jacksonville Richmond *Dalton
Stuart Joliet - 2 Schererville Macon
Tallahassee - 2 Lake In the Hills Seymour Tifton
Tampa - 5 *Lincoln South Bend Valdosta
West Melbourne Marion Terre Haute Warner Robins
Wildwood Mattoon Valparaiso
Winterhaven McHenry TENNESSEE (11)
Moline MICHIGAN (10) *Chattanooga - 2
KENTUCKY (12) Mt. Vernon Battle Creek Clarksville
*Bowling Green Naperville Benton Harbor Cleveland
*Elizabethtown Normal - 2 Grand Rapids - 3 Franklin
Florence O'Fallon Holland *Knoxville -2
Frankfort Pekin Kalamazoo Murfreesboro
Lexington Peoria - 4 Lansing - 2 Nashville -3
*Louisville - 4 Peru Portage
*Owensboro *Quincy KANSAS (2)
Paducah Rockford NORTH CAROLINA (1) Overland Park
Richmond *Springfield - 3 *Greensboro Lawrence
Tinley Park
OHIO (15) Urbana 2 MISSISSIPPI (1)
Cincinnati - 6 *Southaven
Columbus - 2 IOWA (2)
Dayton - 5 Davenport - 2
Middletown
Troy

ARKANSAS(2)
*Jonesboro
*Little Rock

- ---------------------
* Franchised units.

RESTAURANT MANAGEMENT

The operations of the restaurants are the responsibility of the Senior Vice
President of Operations and National General Manager, Vice President of
Operations and Deputy National General Manager, eight division managers, forty
district managers and the unit-level restaurant management teams.

The divisions and the number of units in each are as follows:

NUMBER OF
DIVISION UNITS
-------- ---------
Missouri 47
Indiana 49
Illinois 48
Florida 46
Michigan 9
Ohio 17
Tennessee 9
Southeast 8
---
233
---

Division managers are responsible for the operations of the restaurants in the
division as well as supervision of the division support team, which includes
district managers, training and recruiting managers, division training
supervisors and maintenance and administration staff. District managers
generally have responsibility for the operating performance of six to eight
restaurants. The management team of a typical Steak n Shake restaurant
consists of a general manager, a restaurant manager and three assistant
managers. The number of assistant managers varies depending upon the volume of
the unit.

The general manager of each restaurant has primary responsibility for the
day-to-day operations of the restaurant and is responsible for maintaining
Company-established operating standards and procedures. The general manager is
the key person in the success of a Steak n Shake restaurant. An experienced,
well-trained general manager promotes compliance with the Company's high
standards for food quality and customer service. Steak n Shake seeks to employ
restaurant managers who are customer service oriented and who manage the
restaurant from the dining room. Steak n Shake recognizes the important role
of a seasoned, well-trained and properly motivated restaurant team. The
Company has initiated innovative programs that involve hiring, training and
career development, and a wide variety of benefits to reward and recognize
adherence to Steak n Shake's high standards.

Recruiting and hiring programs have been intensified to seek the qualified
people required to support the Company's aggressive growth plan. In order to
develop the talented bench strength for continued internal promotions, people
development is one of the highest priorities of the Company. Regular
organization-wide evaluations of individual development progress are routinely
conducted. As part of the Company's commitment to improving its standards of
execution, emphasis is placed upon strengthening the skills and capabilities of
each restaurant team through innovative selection, development, evaluation, and
reward systems. Employees are encouraged to learn new skills to foster their
professional growth and to create greater opportunities for advancement.

The college recruitment of talented young people to deliver the brand promise
and to provide the future leadership to support our growth programs is also a
major management priority. Initiatives are in place at selected Colleges,
Universities and Technical Schools in Steak n Shake's markets to recruit,
select and retain people who will lead our company into the next century. A
cadre of recruiting professionals is in place to insure that the Steak n Shake
opportunity is communicated to prospective candidates with the competitively
desired inducements to join the Company.

The Company believes that offering competitive compensation, including
incentive bonus plans tied to performance goals for all levels of restaurant
management personnel, is important to attracting and retaining competent and
highly motivated managers. Awards under the incentive bonus plan are based
upon attainment

of defined operating performance standards. Accelerated growth continues as
one of the Company's attractions by providing many new opportunities for
qualified employees to grow within the organization. The Employee Stock
Purchase Plan also provides an attractive opportunity for employees to purchase
shares of the Company's stock at a discounted price and without the cost of any
brokerage fees. This provides an enhanced opportunity for employees to become
shareholders of the Company, invest in its future and share in the growth
through their own efforts.

TRAINING

Each restaurant team member participates in a formal training program that
utilizes work station video presentations, training manuals, a scheduled
evaluation process and recognition awards which signify proficiency in specific
areas. This training process, which takes place within the restaurant, is
continuously reinforced and monitored.

Steak n Shake's goal is to continue to develop strong restaurant management
teams by providing carefully designed leadership training programs. Each
geographic division designates specific restaurants where intensified
on-the-job management training occurs under careful supervision by experienced
restaurant managers. Restaurant managers are required to complete a
comprehensive eight-week training program during which time they are instructed
in subjects such as the standards of food quality and preparation, customer
service and employee relations. Restaurant managers also are provided with
video training presentations and operations manuals relating to food
preparation, customer service standards, restaurant operation practices and
Company procedures. During fiscal 1998, 693 individuals entered this training
program, approximately 27% of whom were promoted from within the Company.

The general managers, together with division personnel, are responsible for
hiring the hourly employees for each restaurant. Each restaurant employs
approximately 40 to 80 hourly employees, many of whom work part-time. Prior to
the opening of a restaurant, the Company's Division Recruiting and Training
Manager assembles a team of experienced employees to train and educate the new
employees. The training period for new employees lasts approximately two weeks
and includes one week of general training prior to opening and one week of
on-the-job supervision at the restaurant. Ongoing employee training remains
the responsibility of the restaurant general manager under the supervision of a
division training manager.

CUSTOMER SATISFACTION AND QUALITY CONTROL

Management believes that employee commitment to consistently exceed customer
expectations is critical to the success of Steak n Shake. The Company intends
to continue to develop and implement standards of execution that will result in
the efficient delivery of high quality, great-tasting food served by friendly,
competent wait staff.

Restaurant management is responsible for ensuring that the restaurants are
operated in accordance with strict operational procedures and quality
requirements. Compliance for Company-operated units is monitored through the
use of customer comment cards, periodic on-site visits and formal inspections
by the division and district managers as well as division training personnel,
and for franchised units through periodic inspections by the Company's
franchise field operations personnel. Unfavorable comment cards are responded
to by division management.

PURCHASING AND DISTRIBUTION CENTER OPERATIONS

Steak n Shake operates a distribution center in Bloomington, Illinois from
which food products (except for items purchased by the restaurants locally such
as bakery goods, produce and dairy products) and restaurant supplies are
delivered to 94 Company-operated and 15 franchised restaurants located in parts
of the Midwest. The Company's semi-trailers have the capability to handle
refrigerated and frozen products along with dry goods in the same delivery
trip. The remaining Steak n Shake restaurants, located primarily in the
Southeast and parts of the Midwest, obtain food products and supplies which
meet the Company's quality standards and specifications from an independent
distributor with locations in Tampa, Florida and Bloomington, Indiana.

Purchases are negotiated centrally for most food and beverage products and
supplies to insure uniform quality, adequate quantities and competitive prices.
Forward buying contracts are utilized to insure availability of products
pursuant to the Company's specifications as well as to even out exposure to
fluctuating prices. Food and supply items undergo ongoing research,
development and testing in an effort to maintain the highest quality products
and to be responsive to changing customer tastes. The Company has not
experienced any significant delays in receiving food and beverage products,
restaurant supplies or equipment.

RESTAURANT REPORTING

Systems and technology are essential for the management oversight needed to
monitor Steak n Shake's high standards for quality and to achieve proper
operating margins. Operational and financial controls are maintained through
the use of point of sale systems in each restaurant, personal computers in the
division offices and an automated data processing system at the corporate
office. The management accounting system polls data from the point of sale
system by way of local and wide area networks and generates daily reports of
sales, sales mix, customer counts, check average, cash, labor and food cost.
Inventories are taken of key products daily and of all products at the end of
each four-week accounting period. Management utilizes this data to monitor the
effectiveness of controls and to prepare periodic financial and management
reports. The system is also utilized for financial and budget analysis,
planning and analysis of sales by revenue center and product mix and labor
utilization. New technology developments during 1998 included the roll out of
a touch screen point-of-sale system connected to a personal computer located in
the restaurant. Planned system developments include an upgrade of the
Corporate office financial systems and additional enhancements, such as sales
forecasting and labor scheduling systems. Cash is controlled through frequent
deposits in local bank operating accounts followed by transfers to the
principal corporate operating account.

MARKETING

Management believes that Steak n Shake's commitment to customer service and
value is the most effective approach to attracting and retaining customers, and
that the strategy of locating multiple restaurants within a defined geographic
area has enabled newer restaurants to benefit from the name recognition and
reputation for quality and value developed by existing operations.
Accordingly, Steak n Shake's marketing thrust is directed toward building brand
loyalty.

Steak n Shake's media program, particularly television advertising, plays a
significant role in its marketing strategy of explaining why Steak n Shake is
different. Using humor with a "tongue in cheek" approach, the advertising
messages focus on specific products and benefits that are inherent in the Steak
n Shake concept: better food with a unique taste, better service and more
ambiance. In addition to its media program, Steak n Shake relies upon word of
mouth and point of purchase advertising to attract customers and generate
additional sales. Steak n Shake's strategy does not involve low price deal
marketing.

Additional marketing activities designed to build brand awareness and loyalty,
create new customer trials and introduce new products include quarterly
free-standing newspaper inserts and seasonal in-store offerings centered around
short-term, special promotions or product introductions. The fully integrated
marketing program also utilizes menu clip-ons, table cards, ceiling danglers
and signage. During fiscal 1998, the Company expended 3.1% of revenues on
media and marketing materials.

FRANCHISING

GENERAL. The Company's franchising program is designed to extend its brand
name recognition of Steak n Shake in areas where the Company has no current
development plan, but yet serves the same general regions, and derives
additional revenues without substantial investment by the Company. The Company
contemplates the controlled addition of franchised restaurants over the next
five years with a very selective screening standard.

As of September 30, 1998, the Company had 51 franchised Steak n Shake
restaurants operated by 17 franchisees, located in Arkansas, Georgia, Illinois,
Indiana, Kentucky, Mississippi, Missouri, North Carolina and Tennessee. These
restaurants are located in areas contiguous to markets in which there are
Company-operated restaurants. Thirty-eight of the franchised units have been
added since fiscal 1995. The Company

currently has commitments from existing franchisees for the development of
additional franchised restaurants. During fiscal 1998, the Company purchased
eight franchised units in southern Georgia and northwest Florida previously
operated by SNS Southern, Inc. of Tifton, Georgia. Subsequent to the end of
fiscal 1998, the Company has purchased two additional franchised units in
Arkansas and one franchised unit in Missouri.

PRINCIPAL FRANCHISEES. Steak n Shake's principal franchise relationship
includes an agreement with Kelley Restaurants, Inc., for the development of a
total of 5 additional Steak n Shake restaurants in the Charlotte, North
Carolina market over the next three years. Kelley Restaurants, Inc. is
controlled by E. W. Kelley, the Chairman of the Company.

APPROVAL. Franchisees undergo a selection process supervised by the Senior
Vice President in charge of franchising, and requires final approval by senior
management. Steak n Shake seeks franchisees with significant experience in the
restaurant business who have demonstrated the financial and management
capabilities required to develop and operate a franchised restaurant. The
Company initially enters into an agreement with the franchisee for the
development of one unit. After the franchisee has demonstrated the ability to
operate that unit in accordance with Company standards, the Company will
consider entering into a broader franchise relationship.

TRAINING AND DEVELOPMENT. Steak n Shake assists franchisees with both the
development and the ongoing operation of their restaurants. Steak n Shake
management personnel assist with site selection, approve all franchise sites
and provide franchisees with prototype plans and specifications for
construction of their restaurants. The Company's training staff provides both
on-site and off-site instruction to franchised restaurant management employees.
Managers of franchised restaurants are required to obtain the same training as
managers of Company-operated units. Steak n Shake's support continues after a
restaurant opening with periodic training programs, the provision of manuals
and updates relating to product specifications, customer service and quality
control procedures, advertising and marketing materials and assistance with
particular advertising and marketing needs. Steak n Shake also makes available
to franchisees certain accounting services and management information reports
prepared at the corporate office for a monthly fee based on Steak n Shake's
actual costs. Steak n Shake has three franchise field representatives who
monitor franchise operations.

OPERATIONS. All franchised restaurants are required, pursuant to their
respective franchise agreements, to serve Steak n Shake approved menu items.
In addition, although not required to do so, several franchisees purchase food,
supplies and smallwares through Steak n Shake's distribution center, at Steak n
Shake's cost, plus a markup to cover its cost of operation, including freight
for delivery. Steak n Shake's point of sale systems are also available for
purchase by franchisees. Access to these services enables franchisees to
benefit from Steak n Shake's purchasing power and assists Steak n Shake in
monitoring compliance with its standards and specifications for uniform
quality. See "Purchasing and Distribution Center Operations".

FRANCHISE AGREEMENT. The standard Steak n Shake franchise agreement currently
has an initial term of 20 years. Among other obligations, the agreement
generally requires franchisees to pay an initial franchise fee of $30,000 for
the first unit in a market, $25,000 for each subsequent unit and a continuing
royalty of 4% of monthly gross sales. The franchise agreement also requires
the franchisee to pay 5% of monthly gross sales to the Company for advertising,
of which 80% is to be spent on local, regional or national marketing and 20% is
to be used by Steak n Shake for creative and promotional development, outside
independent marketing agency fees and technical and professional marketing
advice.

FRANCHISING ASSISTANCE. In certain circumstances, the Company's financing
subsidiary, SNS Investment Company, Inc., will assist qualified franchisees in
financing the development of one or more franchised units by purchasing or
leasing approved sites from third parties, constructing the restaurant and
leasing or subleasing the finished facility to the franchisee. The lease terms
and rentals, including a surcharge by the Company for administrative services,
are negotiated based on prevailing real estate and construction rates in effect
in the franchised area. Through September 30, 1998, seven restaurants had been
financed through this subsidiary.

CONSOLIDATED SPECIALTY RESTAURANTS, INC. ("CSR")

CONCEPTS

CSR, a wholly-owned subsidiary of the Company, operates eleven theme
restaurants located in Illinois and Indiana. Eight of these restaurants are
steakhouses operated under the name of Colorado Steakhouse. The restaurant's
design theme is reminiscent of a Colorado log cabin and gives the ambiance and
atmosphere of a Rocky Mountain Lodge. The Colorado Steakhouse menu features
steak and prime rib with limited non-beef alternatives, such as salmon, chicken
and pork. The narrow menu offering was designed to permit greater attention to
quality and consistency in both food and service. The average dinner check
approximates $15. All of the CSR restaurants also offer alcoholic beverages,
which represent approximately 13% of CSR's sales.

The Company has substantially completed the capital investment required to
develop this concept, and is in the process of refining and evaluating the
operations of these restaurants. The Company does not intend to expand
operations of CSR unless the existing restaurants demonstrate satisfactory
levels of profitability and return on investment.

The Company does not maintain a franchise program for its specialty restaurants.

COMPETITION

The restaurant business is one of the most intensely competitive industries in
the United States, with price, menu offerings, location and service all being
significant competitive factors. The Company's competitors include national,
regional and local chains as well as local owner-operated establishments. There
are established competitors with financial and other resources greater than
those of the Company in all of the Company's current and proposed future market
areas. The Company faces competition for sites on which to locate new
restaurants and for personnel, as well as for customers.

SEASONAL ASPECTS

The Company has substantial fixed costs which do not decline as a result of a
decline in sales. The Company's second fiscal quarter, which falls during the
winter months, usually reflects lower average weekly unit volumes, and sales
can be adversely affected by severe winter weather.

EMPLOYEES

As of September 30, 1998, the Company had approximately 14,000 employees, of
which 13,325 were employed by Steak n Shake and 675 by CSR. None of the
employees is represented by a collective bargaining agreement. Approximately
two-thirds of the Company's hourly employees are part-time.

TRADEMARKS

"Steak n Shake-Registered Trademark-", "Takhomasak-Registered Trademark-",
"Famous For Steakburgers-Registered Trademark-", "FAXASAK-Registered
Trademark-", "In Sight It Must Be Right-Registered Trademark-", "Its a
Meal-Registered Trademark-" and the "Wing and Circle-Registered Trademark-"
logo are federally registered trademarks and servicemarks. CSR holds federal
registrations for "The Charley Horse-Registered Trademark-" and "Colorado
Steakhouse-Registered Trademark-" as well as other federal and state trademarks
and servicemarks applicable to its restaurant businesses in addition to state
registrations. The Company is not aware of any infringing uses that could
materially affect its business. The Company will protect its trademark rights
by appropriate legal action whenever necessary.

GOVERNMENT REGULATION

The Company is subject to various federal, state and local laws affecting its
business. Each of the Company's restaurants is subject to licensing and
regulation by a number of governmental authorities, including health and safety
and fire agencies in the state and municipality in which the restaurant is
located, and alcoholic beverage control in the case of CSR. The development
and construction of additional restaurants will be subject to compliance with
applicable zoning, land use and environmental regulations. Difficulties in
obtaining or failure to obtain the required licenses or approvals could delay
or prevent the development of a new restaurant in a particular area.

The Company's restaurant operations are also subject to federal and state
minimum wage laws and laws governing such matters as working conditions,
overtime and tip credits. Many of the Company's restaurant

employees are paid at rates related to the federal minimum wage and,
accordingly, further increases in the minimum wage would increase the Company's
labor costs.

Steak n Shake currently has franchise operations in eight states -- Georgia,
Illinois, Indiana, Kentucky, Mississippi, Missouri, North Carolina and
Tennessee -- and is subject to certain federal and state laws controlling the
offering and conduct of its franchise business in those states. In addition,
the Company is subject to franchise registration requirements in several states
in which it is now conducting or will in the future conduct its franchise
business.

The federal Americans with Disabilities Act prohibits discrimination in public
accommodations and employment on the basis of disability. The Company builds
all new restaurants to standards which comply with the Act and has reviewed its
employment policies and practices for compliance with the Act.

GEOGRAPHIC CONCENTRATION

During fiscal 1998, approximately 65% of the Company's net sales were derived
from four markets: St. Louis, Missouri (21%); Indianapolis, Indiana (17%);
central Florida (17%) and Chicago, Illinois (10%), respectively. As a result,
the Company's results of operations may be materially affected by weather,
economic or business conditions within these markets. Also, given the
Company's present geographic concentration, adverse publicity relating to Steak
n Shake restaurants could have a more pronounced adverse effect on the
Company's overall sales than might be the case if the Company's restaurants
were more broadly dispersed.

THE RESTAURANT INDUSTRY

Historically, the restaurant industry has been affected by changes in consumer
tastes and by national, regional and local economic conditions and demographic
trends. The performance of individual restaurants may be affected by factors
such as traffic patterns, demographic factors and the type, number and location
of competing restaurants. Although management believes that the Company has
successfully responded to changes in the restaurant industry, in the future,
factors such as inflation, increased food, labor and employee benefit costs and
the lack of availability of experienced management personnel and hourly
employees could adversely affect the restaurant industry in general and the
Company's restaurants in particular.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS

This Report contains certain statements that are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Those
statements include, but may not be limited to, the discussions of the Company's
expansion strategy, expectations concerning its future profitability, capital
sources and needs, Year 2000 remedial efforts, marketing plans and franchising
programs. Investors in the Common Stock are cautioned that reliance on any
forward-looking statement involves risks and uncertainties, and that although
the Company believes that the assumptions on which the forward-looking
statements contained herein are reasonable, any of those assumptions could
prove to be inaccurate, and as a result, the forward-looking statements based
on those assumptions also could be incorrect. The uncertainties in this regard
include, but are not limited to, those identified above. In light of these and
other uncertainties, the inclusion of a forward-looking statement herein should
not be regarded as a representation by the Company that the Company's plans and
objectives will be achieved.

ITEM 2. PROPERTIES

The Company currently leases 30,700 square feet of executive office space in
Indianapolis, Indiana, under a lease expiring December 31, 2005.

STEAK N SHAKE, INC.

As of September 30, 1998, Steak n Shake operated 145 leased and 88 owned
restaurants in Indiana, Illinois, Michigan, Missouri, Florida, Georgia, Iowa,
Ohio, Kansas, Kentucky and Tennessee. Steak n Shake restaurant leases for land
and building typically are noncancelable, have an initial term of 18 to 25
years and renewal terms aggregating twenty years or more and require Steak n
Shake to pay real estate taxes, insurance and maintenance costs. Of these
leases, 89 contain percentage of sales rental clauses in addition to base rent
requirements.

Steak n Shake restaurants constructed prior to 1973 have a similar
architectural style, seat 39 to 138 customers and occupy between 1,010 and
6,000 square feet. Restaurants built since 1973 are generally 3,800 square feet
and seat approximately 100 customers.

Steak n Shake has lease obligations on 16 former restaurant locations in
Georgia, Ohio, Illinois, and Kentucky, all of which have been subleased to
others as of September 30, 1998. These obligations primarily relate to
restaurant locations disposed of in the late 1970's, and the sublease rentals
cover substantially all of the Company's obligations under the primary leases.

Steak n Shake also has a complex of three buildings located in Bloomington,
Illinois, where it owns 38,900 square feet of warehouse space in two separate
buildings, one of which has cold storage facilities, and leases a 26,300 square
foot distribution center and division office facility. Steak n Shake also
leases division offices in Orlando, Florida, St. Louis, Missouri, Franklin,
Ohio, and Tallahasee, Florida and a division office and administrative facility
in Indianapolis, Indiana. At September 30, 1998, Steak n Shake owns one
restaurant location that has been leased to a third party. In addition, there
were five restaurants under construction and the Company owned two parcels of
land which are being held for future development.

CONSOLIDATED SPECIALTY RESTAURANTS, INC.

As of September 30, 1998, CSR operated eleven facilities in Illinois and
Indiana, of which eight are leased facilities and three are owned. The leases
for land and building are typically noncancelable agreements with initial terms
of 10 to 15 years and three five-year renewal terms. All of the leases except
two have percentage of sales rental clauses in addition to base rent
requirements. The leases require CSR to pay real estate taxes, insurance and
maintenance costs. These units have approximately 6,000 to 8,000 square feet
and seat 150 to 225 customers. In addition, CSR has lease obligations on two
former restaurants in Illinois and Indiana which have been, or will be,
subleased to third parties.

SNS INVESTMENT COMPANY, INC.

SNS Investment Company, Inc. ("SIC"), a wholly-owned subsidiary of the Company,
assists qualified franchisees with financing by purchasing or leasing land,
constructing the restaurant and then leasing or subleasing the land and
building to the franchisee. Where SIC leases the land and building as the
primary lessee, the leases typically have an initial term of 18 years and
renewal options aggregating 20 years or more and require SIC to pay real estate
taxes, insurance and maintenance costs. As of September 30, 1998, SIC had
seven land and building leases for properties located in Louisville and
Elizabethtown, Kentucky; Chattanooga, Tennessee; Clarksville, Indiana;
Columbia, Missouri and Little Rock, Arkansas upon which Steak n Shake
restaurants are being operated by franchisees pursuant to sublease agreements.
All lease and sublease agreements between SIC and its franchisees specifically
include triple net lease provisions whereby the franchisee is responsible for
all real estate taxes, insurance and maintenance costs. Subsequent to the end
of fiscal 1998, the Company purchased the franchised unit in Little Rock,
Arkansas and is now operating it.

RESTAURANT LEASE EXPIRATIONS

Restaurant leases are scheduled to expire as follows, assuming the exercise of
all renewal options:

NUMBER OF LEASES EXPIRING
-------------------------
PERIOD SNS CSR SIC
------ --- --- ---
1999 - 2003 4 0 0
2004 - 2008 14 4 0
2009 - 2013 4 2 0
2014 - 2018 8 1 0
2019 - 2023 16 0 0
Beyond 99 1 7
--- - -
145 8 7
--- - -
--- - -

ITEM 3. LEGAL PROCEEDINGS

On May 31, 1995, Pepsi-Cola Company ("Pepsi") filed suit against Steak n Shake,
Inc. in the United States District Court for the Southern District of Indiana
alleging that Steak n Shake had breached a ten-year contract with Pepsi. Under
the contract in question, Steak n Shake agreed to serve certain Pepsi products
in return for cash payments aggregating in excess of $1,000,000, to be made by
Pepsi to Steak n Shake over the term of the contract, and the provision by
Pepsi of a joint marketing program. When Pepsi failed to provide the promised
marketing program, Steak n Shake terminated the contract for cause.

Pepsi claims that it was not legally required to provide the marketing program
in question, and it seeks damages in the amount of the profits it would have
made had the contract not been terminated. Pepsi originally estimated its
damages at approximately $2,800,000 but has since claimed that those damages
are increasing in relation to Steak n Shake's increased cola sales. Steak n
Shake denies it breached the contract, denies that Pepsi would have made any
profit on the contract had it been completed and intends to vigorously defend
this matter. Steak n Shake also has filed a counterclaim against Pepsi seeking
$360,000 in liquidated damages as a result of Pepsi's breach of the contract.

There are no other legal proceedings against the Company, which, if adversely
resolved, would have a material effect upon the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of shareholders during the fourth quarter
of the fiscal year covered by this Report.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the names, ages, positions held with the Company
and its subsidiaries and the date on which service in such capacities began, of
the executive officers of the Company and its subsidiaries:

Name Age Position with Company Since
---- --- --------------------- -----
E.W. Kelley(1)(2) 81 Chairman -
Consolidated Products, Inc. 1984
Steak n Shake, Inc. 1984
Consolidated Specialty Restaurants, Inc. 1990
S. Sue Aramian(1)(3) 66 Vice Chairwoman -
Consolidated Products, Inc. 1990
Steak n Shake, Inc. 1990
Consolidated Specialty Restaurants, Inc. 1990
Secretary -
Consolidated Products, Inc. 1995
Steak n Shake, Inc. 1995
Consolidated Specialty Restaurants, Inc. 1995
Alan B. Gilman(1)(2) 68 President and Chief Executive Officer -
Consolidated Products, Inc. 1992
Steak n Shake, Inc. 1992
Vice Chairman -
Consolidated Specialty Restaurants, Inc. 1992
James W. Bear(3) 53 Senior Vice President, Administration and
Finance and Treasurer -
Consolidated Products, Inc. 1991
Steak n Shake, Inc. 1991
Consolidated Specialty Restaurants, Inc. 1993
Kevin F. Beauchamp 41 Vice President -
Consolidated Products, Inc. 1993
Vice President and Deputy National
General Manager -
Steak n Shake, Inc. 1997
B. Charlene Boog 66 Associate Vice President
Consolidated Products, Inc. 1997
Kevin E. Dooley 55 Vice President -
Steak n Shake, Inc. 1993
Consolidated Specialty Restaurants, Inc. 1993
Gregory G. Fehr 36 Vice President and Controller -
Consolidated Products, Inc. 1997
Steak n Shake, Inc. 1997
Consolidated Specialty Restaurants, Inc. 1997
Duane E. Geiger 36 Vice President and Assistant Treasurer -
Consolidated Products, Inc. 1995
Robert L. Grimm(3) 46 Vice President -
Consolidated Products, Inc. 1997

William H. Hart 49 Vice President -
Steak n Shake, Inc. 1991
Consolidated Specialty Restaurants, Inc. 1990
Mary H. Ham 50 Vice President, General Counsel and
Associate Secretary -
Consolidated Products, Inc. 1995
Steak n Shake, Inc. 1995
Consolidated Specialty Restaurants, Inc. 1995

Gary T. Reinwald 50 Senior Vice President -
Consolidated Products, Inc. 1991
Senior Vice President and National
General Manager -
Steak n Shake, Inc. 1983
James E. Richmond 60 Vice President -
Consolidated Products, Inc. 1986
Steak n Shake, Inc. 1986
Consolidated Specialty Restaurants, Inc. 1996
Gary S. Walker 38 Senior Vice President -
Consolidated Products, Inc. 1998
Steak n Shake, Inc. 1998
Consolidated Specialty Restaurants, Inc. 1998
Victor F. Yeandel 42 Vice President -
Consolidated Products, Inc. 1995

(1) Member of the Board of Directors of the Company
(2) Member of the Executive Committee of the Company
(3) Member of the Personnel/Benefits Committee of the Company

Mr. Kelley has been a Director of the Company since 1981 and Chairman since
1984. From 1981 to 1984 he served as Vice Chairman and Chief Executive
Officer. He served as President and Chief Executive Officer from January 1,
1992 until July 13, 1992, and continued to serve as Chief Executive Officer
until October 1, 1992. Since 1974, he has been a Managing General Partner of
Kelley & Partners, Ltd., a Florida limited partnership which holds investments
in companies engaged in snack food distribution and restaurant operations, and
is a principal shareholder of the Company. Prior to 1981, Mr. Kelley was the
Chief Executive Officer of Fairmont Foods Company, a large consumer goods
company listed on the New York Stock Exchange.

Ms. Aramian has been Vice Chairwoman since 1990, a Director since 1981 and was
named Secretary in 1995. She served as Vice President from 1984 to 1990. Ms.
Aramian has been a Managing General Partner of Kelley & Partners, Ltd. since
1974.

Mr. Gilman was elected President and a Director on July 13, 1992 after serving
as a consultant to the Company on special projects since February 3, 1992 and
assumed the additional position of Chief Executive Officer effective October 1,
1992. From 1985 to 1992, Mr. Gilman was a private investor, and from 1980 to
1985, he served as President of Murjani International, Ltd., an international
marketing firm. From 1968 to 1980, Mr. Gilman served as a principal executive
of various divisions of Federated Department Stores, Inc., concluding as
Chairman and Chief Executive Officer of the Abraham & Straus Division in New
York.

Mr. Bear was elected Senior Vice President, Administration and Finance and
Treasurer in 1991. Prior thereto, he served as Vice President and Treasurer of
the Company from 1980 to 1991.

Mr. Beauchamp was appointed Vice President, Operations and Deputy National
General Manager of Steak n Shake, Inc. effective March 1, 1997. Mr. Beauchamp
joined the Company as Vice President and Controller in 1993. From 1990 to
1993, Mr. Beauchamp was Director of Accounting for a division of The Limited,
Inc.

Ms. Boog was elected Associate Vice President in 1997. Prior thereto, she
served as Assistant Vice President and Assistant Secretary from 1991 to 1997.

Mr. Dooley joined Steak n Shake and CSR as Vice President in 1993 and is
responsible for engineering and construction. Prior thereto and since 1991,
Mr. Dooley was a Director of Engineering with Wendys, Inc.

Mr. Fehr joined the Company as Vice President and Controller in April 1997.
From 1993 to 1997, Mr. Fehr served in various controllership functions for
Fruehauf Trailer Corporation, lastly as Vice President - Corporate Controller.

Mr. Geiger was appointed Vice President, Information Systems, Financial
Planning and Audit in 1995. From 1993 to 1995, Mr. Geiger served as Director
of Financial Planning and Audit and Assistant Treasurer for the

Company. Prior to such time, Mr. Geiger served in various capacities at Ernst
& Young LLP, over a period of eight years, and ultimately served as a Manager.

Mr. Grimm joined the Company as Vice President - Human Resources in November
1997. For the previous twelve years, Mr. Grimm was an executive with May
Department Stores Company. Lastly, he served as Corporate Vice President,
Executive Development and Training.

Mr. Hart has been Vice President, Purchasing of Steak n Shake and CSR since
1991 and was Vice President of Operations of CSR from 1990 to 1991

Ms. Ham was appointed Vice President in December 1996, General Counsel in 1995
and Associate Secretary in 1994. From 1994 to 1995, Ms. Ham served as the
Company's Associate General Counsel for Real Estate and Franchising. From 1992
to 1994, Ms. Ham served as Associate City Attorney for the city of South Bend,
Indiana

Mr. Reinwald was appointed Senior Vice President, Operations and National
General Manager of Steak n Shake, Inc. in December 1996. Prior thereto, Mr.
Reinwald was Vice President, Operations and National General Manager of Steak n
Shake since 1983, and served in various capacities in the Company for 19 years
prior to that date.

Mr. Richmond joined the Company as Vice President in 1986 and is responsible
primarily for real estate.

Mr. Walker joined the Company as Senior Vice President in 1998 and is
responsible for franchising, purchasing and distribution and legal matters and
the general management of Consolidated Specialty Restaurants, Inc. From 1994
to 1998, Mr. Walker was Vice President of Marketing - Home Care Division for
DowBrands L.P. Prior thereto, Mr. Walker served in various brand management
positions with The Proctor & Gamble Company.

Mr. Yeandel joined the Company as Vice President in 1995. From 1992 to 1995,
Mr. Yeandel served as Vice President, Franchise Development for Long John
Silver's, Inc. Prior thereto and since 1987, Mr. Yeandel held various
marketing positions with Long John Silver's, Inc.

Officers are elected annually at the annual meeting of the Board of Directors.

PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET PRICE RANGE/STOCK TRADING

The Common Stock of Consolidated Products, Inc. is traded on the New York Stock
Exchange (NYSE) under the symbol COP. Stock price quotations can be found in
major daily newspapers and in The Wall Street Journal. Consolidated Products,
Inc. moved from the Nasdaq National Market System to the New York Stock Exchange
on November 19, 1996. The high and low closing sales prices for the Company's
Common Stock, as reported on Nasdaq (prior to November 19, 1996) or the New York
Stock Exchange for each quarter of the Company's past two fiscal years, are
shown below:

1998(1) 1997(1)(2)
------------------------------------------------------
HIGH LOW HIGH LOW
---- --- ---- ---

First Quarter $ 16 1/2(2) $ 15 1/16(2) $ 13 11/16 $ 11 5/16

Second Quarter $ 19 3/4 $ 15 3/4 $ 14 7/8 $ 12 1/8

Third Quarter $ 21 7/16 $ 18 9/16 $ 14 7/8 $ 11 3/8

Fourth Quarter $ 21 1/4 $ 15 1/2 $ 15 5/8 $ 13 3/8

(1) THE SALES PRICES HAVE NOT BEEN ADJUSTED TO REFLECT THE FIVE FOR FOUR STOCK
SPLIT DECLARED IN DECEMBER 1998.

(2) THE SALES PRICES HAVE BEEN ADJUSTED TO REFLECT THE FIVE FOR FOUR STOCK
SPLIT DECLARED IN DECEMBER 1997.

Subsequent to the fiscal year end, a five for four stock split was declared on
December 1, 1998, distributable on December 28, 1998 to shareholders of record
on December 14, 1998. This information has not been restated to reflect this
stock split.

During fiscal 1998, the Company issued an aggregate of 23,794 shares of Common
Stock (not adjusted for the five for four stock split declared in December
1998) pursuant to the exercise of options under its Non-Employee Director Stock
Option Plans. The shares were issued in exchange for the payment of the option
price specified in the Plans, which in each case was the fair market value of
the Common Stock on the date of the grant of the options. The sale of these
shares was exempt from the registration requirements of the Securities Act of
1933, as amended, by reason of Section 4(2) thereof, as the offering was made
only to those persons serving on the Board of Directors of the Company who were
not employees of the Company.

ITEM 6. SELECTED FINANCIAL DATA

Selected financial data for each of the Company's five most recent fiscal
years, set forth in the Company's 1998 Annual Report under "Selected Financial
and Operating Data," at page 12 (page 30 in Exhibit 13), are incorporated
herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The portions of the Company's 1998 Annual Report, at pages 13-17, (pages 31-35
in Exhibit 13), constitute management's discussion and analysis of results of
operations and financial condition and are incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure with regard to financial instruments
is to changes in interest rates. Pursuant to the terms of the Senior Note
Agreement, the Company may from time to time issue notes in increments of at
least $5,000,000. The interest rate on the notes is based upon market rates at
the time of the borrowing. Once the interest rate is established at the time
of the initial borrowing, the interest rate remains fixed over the term of the
underlying note. The Revolving Credit Agreement bears interest at a rate based
upon LIBOR plus 75 basis points or the prime rate, at the election of the
Company. Historically, the Company has not used derivative financial
instruments to manage exposure to interest rate changes. At September 30,
1998, a hypothetical 100 basis point increase in short-term interest rates
would have an immaterial impact on the Company's earnings.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of the Company and its subsidiaries,
listed in Item 14 (a) 1 and included in the Company's 1998 Annual Report at
pages 18-21 (Consolidated Statements of Earnings, Consolidated Statements of
Financial Position, Consolidated Statements of Cash Flows and Consolidated
Statements of Shareholders' Equity) and pages 22-28 (Notes to Consolidated
Financial Statements) (together, pages 36-46 in Exhibit 13), and the Report of
Independent Auditors set forth in the Company's 1998 Annual Report at page 29
(page 48 in Exhibit 13), are incorporated herein by reference.

Information on quarterly results of operations, set forth in the Company's 1998
Annual Report under "Quarterly Financial Data (Unaudited)," at page 28 (page 47
in Exhibit 13), is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information included under the caption "Election of Directors" in the
Company's definitive Proxy Statement relating to its 1999 Annual Meeting of
Shareholders to be filed pursuant to Rule 14a-6(c) is incorporated herein by
reference. Information relating to the Company's executive officers is set
forth at pages 14-16 of this Form 10-K under "Executive Officers of the
Registrant."

ITEM 11. EXECUTIVE COMPENSATION

The information included under the captions "Compensation of Directors",
"Compensation of Executive Officers", "Summary Compensation Table", "Stock
Option Grants in Fiscal 1998", "Aggregated Stock Option Exercises in Fiscal
1998 and Fiscal Year End Option Values", "Long Term Incentive Plan - Awards in
Last Fiscal Year", "Report of the Executive Committee" and "Company
Performance" in the Company's definitive Proxy Statement relating to its 1999
Annual Meeting of Shareholders to be filed pursuant to Rule 14a-6(c) is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained under the caption "Ownership of Common Stock" in the
Company's definitive Proxy Statement relating to its 1999 Annual Meeting of
Shareholders to be filed pursuant to Rule 14a-6(c) is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained under the caption "Management Relationships and
Related Transactions" in the Company's definitive Proxy Statement relating to
its 1999 Annual Meeting of Shareholders to be filed pursuant to Rule 14a-6(c)
is incorporated herein by reference.

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) DOCUMENTS FILED AS A PART OF THIS REPORT:

1. FINANCIAL STATEMENTS. The following table sets forth the financial
statements filed as a part of this report:

Consolidated Statements of Financial Position at September 30, 1998
and September 24, 1997

For the years ended September 30, 1998, September 24, 1997 and
September 25, 1996:
- Consolidated Statements of Earnings
- Consolidated Statements of Cash Flows
- Consolidated Statements of Shareholders' Equity

Notes to Consolidated Financial Statements

Report of Independent Auditors

2. FINANCIAL STATEMENT SCHEDULES.

All schedules for the years ended September 30, 1998, September 24,
1997 and September 25, 1996 have been omitted for the reason that they
are not required or are not applicable, or the required information is
set forth in the financial statements or notes thereto.

3. EXHIBITS. The following exhibits are filed as a part of this Annual
Report on Form 10-K.

(2) No exhibit.

(3) 3.01 Articles of Incorporation of Consolidated Products, Inc.
(formerly Steak n Shake, Inc.), as amended through November 1,
1981. (Incorporated by reference to the Exhibits to
Registration Statement No. 2-75094).

3.02 Attachment to Joint Agreement of Merger dated October 31,
1983, between Franklin Corporation and Steak n Shake, Inc.
(Incorporated by reference to the Exhibits to the Registrant's
Form 10-K Annual Report for the year ended September 28,
1983).

3.03 Bylaws of Consolidated Products, Inc. (formerly Steak n Shake,
Inc.) in effect at December 26, 1990. (Incorporated by
reference to the Exhibits to Registration Statement on
Form S-2 filed with the Commission on August 6, 1992, file
no. 33-50568).

3.04 Articles of Amendment to Articles of Incorporation of Steak n
Shake, Inc. dated May 15, 1984. (Incorporated by reference to
the Exhibits to the Registrant's Form 10-K Annual Report for
the year ended September 26, 1984).

3.05 Articles of Amendment to the Articles of Incorporation of
Consolidated Products, Inc. dated May 8, 1998. (Incorporated
by reference to the Exhibits to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 8,
1998.)

(4) 4.01 Specimen certificate representing Common Stock of Consolidated
Products, Inc. (formerly Steak n Shake, Inc.). (Incorporated
by reference to the Exhibits to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 9,
1997).

4.02 Amended and Restated Credit Agreement by and Between
Consolidated Products, Inc. and Bank One, Indianapolis, N.A.
dated December 30, 1994 (amending that earlier credit
agreement between parties dated as of March 10, 1994 and
effective as of February 23, 1994, relating to a $5,000,000
revolving line of credit which was not filed pursuant to Rule
601 of the Securities and Exchange Commission), relating to a
$30,000,000 revolving line of credit. (Incorporated by
reference to the Exhibits to the Registrant's Report on Form
10-Q for the fiscal quarter ended December 21, 1994).

4.03 Note Purchase Agreement by and Between Consolidated Products,
Inc. and The Prudential Insurance Company of America dated as
of September 27 1995 related to $39,250,000 senior note
agreement and private shelf facility. (Incorporated by
reference to the Exhibits to the Registrant's Report on Form
8-K dated September 26, 1995).

4.04 First Amendment to Amended and Restated Credit Agreement by
and between Consolidated Products, Inc. and Bank One,
Indianapolis, N.A. dated September 26, 1995. (Incorporated by
reference to the Exhibits to the Registrant's Report on Form
8-K dated September 26 1995).

4.05 Second Amendment to Amended and Restated Credit Agreement by
and between Consolidated Products, Inc. and Bank One,
Indianapolis N.A. effective January 31, 1997. (Incorporated
by reference to the Exhibits to the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended April 9,
1997).

4.06 Amendment No. 1 to Note Purchase and Private Shelf Agreement
by and between Consolidated Products, Inc. and The Prudential
Insurance Company of America dated as of April 28, 1997
related to senior note and private shelf facility.
(Incorporated by reference to the Exhibits to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended
April 9, 1997).

4.07 Third Amendment to Amended and Restated Credit Agreement by
and between Consolidated Products, Inc. and Bank One,
Indianapolis N.A. effective September 18, 1997. (Incorporated
by reference to the Exhibits to the Registrant's Annual Report
on Form 10-K for the fiscal year ended September 24, 1997.)

4.08 Fourth Amendment to Amended and Restated Credit Agreement by
and between Consolidated Products, Inc. and Bank One,
Indianapolis, N.A. dated February 9, 1998. (Incorporated by
reference to the Exhibits to the Registrant's Quarterly Report
on Form 10-Q for the fiscal quarter ended April 8, 1998.)

(9) No exhibit.

(10) 10.01 Consolidated Products, Inc. Executive Incentive Bonus Plan.
(Incorporated by reference to the Exhibits to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 1, 1992).

10.02 Steak n Shake, Inc. Executive Incentive Bonus Plan.
(Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 1,
1992).

10.03 Consultant Agreement by and between James Williamson, Jr. and
the Registrant dated November 20, 1990. (Incorporated by
reference to the Exhibits to the Registrant's Quarterly Report
on Form 10-Q for the fiscal quarter July 1, 1992).

10.04 Memorandum agreement between Neal Gilliatt and the Registrant
dated July 30, 1991. (Incorporated by reference to the
Exhibits to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended July 1, 1992).

10.05 Area Development Agreement by and between Steak n Shake, Inc.
and Consolidated Restaurants Southeast, Inc. (currently Kelley
Restaurants, Inc.) dated June 12, 1991 for Charlotte, North
Carolina area. (Incorporated by reference to the Exhibits to
the Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 1, 1992).

10.06 Area Development Agreement by and between Steak n Shake, Inc.
and Consolidated Restaurants Southeast, Inc. (currently Kelley
Restaurants, Inc.) dated June 12, 1991 for Atlanta, Georgia
area. (Incorporated by reference to the Exhibits to the
Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 1, 1992).

10.07 Letter from the Registrant to Alan B. Gilman dated June 27,
1992. (Incorporated by reference to the Exhibits to the
Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 1, 1992).

10.08 Consolidated Products, Inc. 1992 Employee Stock Purchase Plan.
(Incorporated by reference in to the Appendix to the
Registrant's definitive Proxy Statement dated January 13, 1993
related to its 1993 Annual Meeting of Shareholders).

10.09 Consolidated Products, Inc. 1992 Employee Stock Option Plan.
(Incorporated by reference to the Appendix to the Registrant's
definitive Proxy Statement dated January 12, 1993 related to
its 1993 Annual Meeting of Shareholders).

10.10 Consolidated Products, Inc. 1994 Capital Appreciation Plan.
(Incorporated by reference to the Appendix to the Registrant's
definitive Proxy Statement dated January 13, 1994 related to
the 1994 Annual Meeting of Shareholders).

10.11 Consolidated Products, Inc. 1994 Nonemployee Director Stock
Option Plan. (Incorporated by reference in to the Appendix to
the Registrant's definitive Proxy Statement dated January 13,
1994 related to its 1994 Annual Meeting of Shareholders).

10.12 Consolidated Products, Inc. 1995 Employee Stock Option Plan.
(Incorporated by reference to the Appendix to the Registrant's
definitive Proxy Statement dated January 12, 1995 related to
the 1995 Annual Meeting of Shareholders).

10.13 Consolidated Products, Inc. 1995 Nonemployee Director Stock
Option Plan. (Incorporated by reference to the Appendix to the
Registrant's definitive Proxy Statement dated January 12, 1995
related to the 1995 Annual Meeting of Shareholders).

10.14 Consolidated Products, Inc. 1996 Nonemployee Director Stock
Option Plan. (Incorporated by reference to the Appendix to
the Registrant's definitive Proxy Statement dated January 15,
1996 related to the 1996 Annual Meeting of Shareholders).

10.15 Consolidated Products, Inc. 1997 Employee Stock Option Plan.
(Incorporated by reference to the Appendix to the Registrant's
definitive Proxy Statement dated December 24, 1996 related to
the 1997 Annual Meeting of Shareholders).

10.16 Consolidated Products, Inc. 1997 Capital Appreciation Plan.
(Incorporated by reference to the Appendix to the Registrant's
definitive Proxy Statement dated December 24, 1996 related to
the 1997 Annual Meeting of Shareholders).

10.17 Amendment to Consolidated Products, Inc. 1992 Employee Stock
Purchase Plan. (Incorporated by reference to the Appendix to
the Registrant's definitive Proxy Statement dated December 24,
1996 related to the 1997 Annual Meeting of Shareholders).

10.18 Consolidated Products, Inc. 1997 Nonemployee Director Stock
Option Plan. (Incorporated by reference to the Appendix to
the Registrant's definitive Proxy Statement dated December 24,
1996 related to the 1997 Annual Meeting of Shareholders).

10.19 Amendment to Consolidated Products, Inc. 1992 Employee Stock
Purchase Plan. (Incorporated by reference to the Appendix to
the Registrant's definitive Proxy Statement dated December 22,
1997 related to the 1998 Annual Meeting of Shareholders).

10.20 Consolidated Products, Inc. 1998 Nonemployee Director Stock
Option Plan. (Incorporated by reference to the Appendix to
the Registrant's definitive Proxy Statement dated December 22,
1997 related to the 1998 Annual Meeting of Shareholders).

(11) No exhibit.

(12) No exhibit.

(13) Annual Report to Shareholders for the Year Ended September 30,
1998 (portions incorporated by reference into this Form 10-K.)

(16) No exhibit.

(18) No exhibit.

(19) No exhibit.

(21) 21.01 Subsidiaries of the Registrant.

(22) No exhibit.

(23) 23.01 Consent of Ernst & Young LLP.

(24) No exhibit.

(27) 27.01 Financial Data Schedule.

(99) No exhibit.

(b) REPORTS ON FORM 8-K:

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

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 December 18, 1998.

CONSOLIDATED PRODUCTS, INC.

By: /s/ James W. Bear
---------------------------
James W. Bear
Senior Vice President and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated, on December 18, 1998.

/s/ E. W. Kelley Director
- -------------------------
E. W. Kelley

/s/ S. Sue Aramian Director
- -------------------------
S. Sue Aramian

/s/ Alan B. Gilman President, Chief Executive Officer and Director
- ------------------------- (Principal Executive Officer)
Alan B. Gilman

/s/ James W. Bear Senior Vice President and Treasurer
- ------------------------- (Principal Financial Officer)
James W. Bear

/s/ Gregory G. Fehr Vice President and Controller
- ------------------------- (Principal Accounting Officer)
Gregory G. Fehr

/s/ Alva T. Bonda Director
- -------------------------
Alva T. Bonda

/s/ Neal Gilliatt Director
- -------------------------
Neal Gilliatt

/s/ Charles E. Lanham Director
- -------------------------
Charles E. Lanham

/s/ J. Fred Risk Director
- -------------------------
J. Fred Risk

/s/ Dr. John W. Ryan Director
- -------------------------
Dr. John W. Ryan

/s/ James Williamson, Jr. Director
- -------------------------
James Williamson, Jr.

CONSOLIDATED PRODUCTS INC. AND SUBIDIARIES

Index to Exhibits

NUMBER DESCRIPTION
------ -----------
(2) No Exhibit.