
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
          
          
                             FORM 10-Q

[X]	Quarterly report pursuant to Section 13 or 15(d) of the 
Securities Exchange Act of 1934

For the quarterly period ended March 31, 1998

or

[  ]	Transition report pursuant to Section 13 or 15(d) of the 
Securities Exchange Act of 1934

	 For the transition period from __________ to  ____________

Commission file number 0-14787

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

		   Delaware						                      04-2916536
(State of incorporation)	      (I.R.S. Employer Identification No.)

	815 Chestnut Street, North Andover, MA			   01845
	   (Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code:  (978) 688-1811

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

	        Class				                Outstanding at April 30, 1998

Class A Common, $.10 par value					16,756,027
										
Class B Common, $.10 par value					10,296,827

WATTS INDUSTRIES, INC. AND SUBSIDIARIES


INDEX


Part I.   Financial Information						        Page #

	Item 1.    Financial Statements

		Condensed Consolidated Balance Sheets at
		March 31, 1998 and June 30, 1997	            3	

		Condensed Consolidated Statements of
		Operations for the Three Months Ended
		March 31, 1998 and March 31, 1997	           4

		Condensed Consolidated Statements of
		Operations for the Nine Months Ended
		March 31, 1998 and March 31, 1997	           5

		Condensed Consolidated Statements of Cash
		Flows for the Nine Months Ended
		March 31, 1998 and March 31, 1997	           6

		Notes to Condensed Consolidated Financial		
		Statements	                                  7-10	

	Item 2.	Management's Discussion and Analysis of
		Financial Condition and Results of Operations    11-15

Part II.	  Other Information

	Item 1.   Legal Proceedings	                      15-17

	Item 6.   Exhibits and Reports on Form 8-K	       17

	Signatures	                                       18

	Exhibit Index	                                    19

		Exhibit 27.1 - Financial Data Schedule-March 31, 1998	  20
		Exhibit 27.2 - Restated Financial Data Schedule-March                       
			              31, 1997	                                21
		Exhibit 27.3 - Restated Financial Data Schedule-
		               September 30, 1996 	                     22



PART I.  FINANCIAL INFORMATION
------------------------------
ITEM 1.  FINANCIAL STATEMENTS
        ----------------------
WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

                                                          (Unaudited)  (Audited)
                                                          Mar. 31,     June 30,
                                                            1998         1997
                                                          ---------    ---------
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                             $    9,954   $   13,904
  Short-term investments                                       257          518
  Trade accounts receivable, less allowance
     for doubtful accounts of $8,592 at March 31, 1998
     and $7,945 at June 30, 1997                           140,392      121,349
  Inventories:
     Raw materials                                          64,306       64,261
     Work in process                                        37,216       26,030
     Finished goods                                         90,502       80,926
                                                          ---------    ---------
        Total Inventories                                  192,024      171,217
  Prepaid expenses and other assets                         13,169       13,087
  Deferred income taxes                                     21,616       22,480
  Net assets held for sale                                   2,046        3,037
                                                          ---------    ---------
     Total Current Assets                                  379,458      345,592
                                                          ---------    ---------
PROPERTY, PLANT AND EQUIPMENT:
  Property, plant and equipment, at cost                   298,996      281,231
  Accumulated depreciation                                (140,609)    (128,537)
                                                          ---------    ---------
     Property, plant and equipment, net                    158,387      152,694
                                                          ---------    ---------
OTHER ASSETS:
  Goodwill, net of accumulated amortization of $15,799 at
     March 31, 1998 and $13,484 at June 30, 1997           119,985      110,928
  Other                                                     13,769       12,869
                                                          ---------    ---------
TOTAL ASSETS                                            $  671,599   $  622,083
                                                          =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                      $   46,459   $   48,896
  Accrued expenses and other liabilities                    59,351       53,738
  Accrued compensation and benefits                         15,519       15,834
  Income taxes payable                                       7,911            -
  Current portion of long-term debt                          1,583        2,422
                                                          ---------    ---------
     Total Current Liabilities                             130,823      120,890
                                                          ---------    ---------
LONG-TERM DEBT, NET OF CURRENT PORTION                     133,006      125,937
DEFERRED INCOME TAXES                                       16,365       16,675
OTHER NONCURRENT LIABILITIES                                12,037       13,796
MINORITY INTEREST                                           11,787       11,146
STOCKHOLDERS' EQUITY:
  Preferred Stock,$.10 par value; 5,000,000 shares
     authorized; no shares issued or outstanding                -            -
  Class A Common Stock, $.10 par value; 1 vote per share;
     80,000,000 shares authorized; issued and outstanding:
     16,451,077 shares at March 31, 1998 and 15,797,460
     shares at June 30, 1997                                 1,645        1,580
  Class B Common Stock, $.10 par value; 10 votes per share;
     25,000,000 shares authorized; issued and outstanding:
     10,701,777 at March 31, 1998 and 11,215,627
     shares at June 30, 1997                                 1,070        1,121
  Additional paid-in capital                                47,598       44,643
  Retained earnings                                        327,834      293,170
  Cumulative translation adjustment                        (10,566)      (6,875)
                                                          ---------    ---------
     Total Stockholders' Equity                            367,581      333,639
                                                          ---------    ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $  671,599   $  622,083
                                                          =========    =========
See accompanying notes to condensed consolidated financial statements.


WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share information)
(Unaudited)
                                                          Three Months Ended
                                                          --------------------
                                                          Mar. 31,     Mar. 31,
                                                            1998         1997
                                                          ---------    ---------
Net sales                                               $  183,615   $  184,191
Cost of goods sold                                         119,381      120,461
                                                          ---------    ---------
  GROSS PROFIT                                              64,234       63,730
Selling, general & administrative expenses                  40,835       40,983
                                                          ---------    ---------
  OPERATING INCOME                                          23,399       22,747
                                                          ---------    ---------
Other (income) expense:
  Interest income                                             (659)        (125)
  Interest expense                                           2,677        2,715
  Other, net                                                  (183)        (280)
                                                          ---------    ---------
                                                             1,835        2,310
                                                          ---------    ---------
  INCOME BEFORE INCOME TAXES                                21,564       20,437
Provision for income taxes                                   7,523        7,548
                                                          ---------    ---------
  NET INCOME                                            $   14,041   $   12,889
                                                          =========    =========
Income per common share :
  Basic                                                 $      0.52  $      0.48
                                                          =========    =========
  Diluted                                               $      0.51  $      0.47
                                                          =========    =========
Dividends per common share                              $    0.0875  $    0.0775
                                                          =========    =========
See accompanying notes to condensed consolidated financial statements.


WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share information)
(Unaudited)
                                                          Nine Months Ended
                                                          --------------------
                                                          Mar. 31,     Mar. 31,
                                                            1998         1997
                                                          ---------    ---------
Net sales                                               $  542,273   $  534,419
Cost of goods sold                                         350,424      350,181
                                                          ---------    ---------
  GROSS PROFIT                                             191,849      184,238
Selling, general & administrative expenses                 121,575      118,087
                                                          ---------    ---------
  OPERATING INCOME                                          70,274       66,151
                                                          ---------    ---------
Other (income) expense:
  Interest income                                           (1,243)        (397)
  Interest expense                                           7,653        7,938
  Other, net                                                   778          171
                                                          ---------    ---------
                                                             7,188        7,712
                                                          ---------    ---------
  INCOME FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES                                      63,086       58,439
Provision for income taxes                                  21,816       21,454
                                                          ---------    ---------
  INCOME  FROM CONTINUING OPERATIONS                        41,270       36,985
  Income from discontinued operations, net of taxes             -            79
  Gain on disposal of discontinued operations,
     net of taxes                                               -         3,208
                                                          ---------    ---------
  NET INCOME                                            $   41,270   $   40,272
                                                          =========    =========
Income per common share :
  Basic
     Continuing operations                              $      1.52  $      1.36
     Discontinued operations                                    -            -
     Gain on disposal of discontinued operations                -           0.12
                                                          ---------    ---------
     Net Income                                         $      1.52  $      1.48
                                                          =========    =========
  Diluted
     Continuing operations                              $      1.51  $      1.35
     Discontinued operations                                    -            -
     Gain on disposal of discontinued operations                -           0.12
                                                          ---------    ---------
     Net Income                                         $      1.51  $      1.47
                                                          =========    =========
Dividends per common share                              $    0.2425  $    0.2175
                                                          =========    =========
See accompanying notes to condensed consolidated financial statements.


WATTS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF  CASH FLOWS
(Dollars in thousands)
(Unaudited)
                                                          Nine Months Ended
                                                          --------------------
                                                          Mar. 31,     Mar. 31,
                                                            1998         1997
                                                          ---------    ---------
OPERATING ACTIVITIES
  Income from continuing operations                     $   41,270   $   36,985
  Adjustments to reconcile net income from continuing operations
     to net cash provided by continuing operating activities:
     Restructuring  payments                                (1,523)      (4,335)
     Depreciation and amortization                          17,136       17,026
     Deferred income taxes                                     533        1,080
     Gain on disposal of assets                             (1,170)        (561)
     Equity in undistributed earnings of affiliates            (77)          -
     Changes in operating assets and liabilities, net of effects
        from acquisitions and dispositions:
        Accounts receivable                                (18,594)     (16,966)
        Inventories                                        (16,070)      (2,612)
        Prepaid  expenses and other assets                  (1,225)      (2,621)
        Accounts payable, accrued expenses and
           other liabilities                                10,980       (3,369)
                                                          ---------    ---------
  Net cash provided by continuing operations                31,260       24,627
  Net cash provided by discontinued operations                  -           653
                                                          ---------    ---------
  NET CASH PROVIDED BY OPERATING ACTIVITIES                 31,260       25,280
                                                          ---------    ---------
INVESTING ACTIVITIES
  Additions to property, plant and equipment               (21,927)     (21,075)
  Proceeds from sale of assets                               7,335        1,756
  Increase in other assets                                  (1,043)        (771)
  Discontinued  Operations:
     Additions to property, plant and equipment                 -          (142)
     Proceeds from disposal of discontinued operations          -        90,581
  Business acquisitions, net of cash acquired              (22,495)     (37,575)
  Net changes in short-term investments                        260           -
                                                          ---------    ---------
  NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES      (37,870)      32,774
                                                          ---------    ---------
FINANCING ACTIVITIES
  Proceeds from long-term borrowings                        73,491       91,376
  Payments of long-term debt                               (67,102)    (119,088)
  Proceeds from exercise of stock options                    2,699          746
  Dividends paid                                            (6,569)      (5,932)
  Purchase and retirement of common stock                       -       (23,069)
                                                          ---------    ---------
  NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES        2,519      (55,967)
                                                          ---------    ---------
Effect of exchange rate changes on cash and
  cash equivalents                                             141        1,293
                                                          ---------    ---------
CHANGE IN CASH AND CASH EQUIVALENTS                         (3,950)       3,380
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD            13,904           -
                                                          ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD              $    9,954   $    3,380
                                                          =========    =========

See accompanying notes to condensed consolidated financial statements.


WATTS INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1.	In the opinion of management, the accompanying unaudited, 
condensed, consolidated financial statements contain all necessary 
adjustments, consisting only of adjustments of a normal recurring 
nature, to present fairly Watts Industries, Inc.'s Condensed 
Consolidated Balance Sheet as of March 31, 1998, its Condensed 
Consolidated Statements of Operations for the three and nine months 
ended March 31, 1998 and 1997, and its condensed Consolidated 
Statements of Cash Flows for the nine months ended March 31, 1998 
and 1997. 

	The balance sheet at June 30, 1997 has been derived from the 
audited financial statements at that date. Certain amounts have 
been reclassified to conform with the 1998 presentation.  The 
accounting policies followed by the Company are described in the 
June 30, 1997 financial statements which are contained in the 
Company's 1997 Annual Report.  It is suggested that these financial 
statements be read in conjunction with the financial statements and 
notes included in the 1997 Annual Report to Stockholders.

2.	During September 1997, a wholly owned subsidiary of the 
Company purchased the Orion Fittings Division of Kelstan Plastic 
Products, Ltd.  The Orion Fittings Division has manufactured 
corrosion resistant polyolefin piping systems for laboratory 
drainage and high purity process installations since 1963.  The 
product line includes pipe, fittings, sinks, neutralizing tanks, pH 
alarm and monitoring systems and sediment interceptors.  Sales have 
been concentrated in the Canadian market and were approximately 
$584,000 for the twelve months ended August 31, 1997.

	During December 1997, a wholly owned subsidiary of the Company 
purchased the pneumatic valve and motion switch business of 
Aerodyne Controls Corporation.  The Aerodyne product line consists 
of high quality valve components for medical, analytical, military 
and aerospace applications.  Sales for the twelve months ended 
October 1997 were approximately $7,000,000.

	During March 1998, a wholly owned subsidiary of the Company 
purchased the solenoid valve business of Atkomatic Valve Company.  
The Atkomatic product line consists of heavy duty process solenoid 
valves for clean air, gases, liquids, steam and corrosive and 
cryogenic fluids.  Sales for the twelve months ended September 30, 
1997 were $4,500,000.

	During March 1998, a wholly owned subsidiary of the Company 
purchased Telford Valve & Specialties, Inc. of Edmonton, Canada.  
Telford manufactures check valves, pipeline closures, and specialty 
gate valves that are used in industrial and oil and gas 
applications.  Telford is also a distributor and authorized repair 
facility for a number of other independent manufacturers of 
oilfield products.  Current annualized sales are approximately 
$15,000,000.  

	The aggregate purchase price for these acquisitions was 
$22,495,000.



3.	During fiscal year ended June 30, 1996, the Company decided to 
undertake certain restructuring initiatives aimed at improving the 
efficiency of certain of its continuing operations.  The two most 
significant of those initiatives were the consolidation and 
downsizing of Pibiviesse S.p.A. and the relocation of Jameco 
Industries, Inc. from Wyandanch, New York to the Company's existing 
Spindale, North Carolina manufacturing facility.  In connection 
with this restructuring plan and during the year ended June 30, 
1996, the Company recorded a $25,415,000 restructuring charge for 
related severance costs, plant closure costs and asset write-downs.

	Cash payments for accrued employee severance and other plant 
closure costs were $1,523,000 during the nine months ended March 
31, 1998, and the Company's remaining accrued restructuring 
liability was $2,301,000 at March 31, 1998.  It is expected that 
the restructuring initiatives will be substantially complete by 
June 30, 1998.  The Company expects that some settlement payments 
will be paid subsequent to June 30, 1998.

	Since commencement of the restructuring plan, there has been a 
related net reduction of 246 employees.  As of March 31, 1998, 
there are approximately 50 additional restructuring related 
terminations that are expected to occur.

4.	On September 4, 1996, the Company sold its Municipal Water 
Group of businesses.  Sales revenue from these businesses amounted 
to $14,027,000 during the period between July 1, 1996 and September 
4, 1996.  This revenue, net of all related expense including income 
taxes, has been classified as income from discontinued operations 
in the accompanying statement of operations for the nine months 
ended March 31, 1997.

5.         During the quarter ended December 31, 1997, the Company 
adopted Statement of Financial Accounting Standards ("SFAS") No. 
128 Earnings per Share.    SFAS 128 required the Company to change 
the method formerly used to compute earnings per share and to 
restate all prior periods presented. The requirements for 
calculating basic earnings per share excludes the dilutive effect 
of securities. Diluted earnings per share assumes the conversion of 
all dilutive securities. The following table sets forth the 
reconciliation of the calculation per SFAS 128:

						   For the Three Months Ended March 31, 1998
					 	         Income	             Shares	           Per Share
						        (Numerator)	        (Denominator)         Amount

Basic EPS
Net Income					$14,041,000		       27,162,904            $.52

Effect of Dilutive 
Securities - 
primarily
stock options					-		                 424,539	

Diluted EPS					$14,041,000		      27,587,443            $.51

  

  For the Nine Months Ended March 31, 1998
					 	          Income	             Shares	             Per Share
						         (Numerator)	        (Denominator)          Amount

Basic EPS
Net Income					 $41,270,000		      27,082,038           $1.52

Effect of Dilutive 
Securities - 
primarily
stock options					 -		                337,762

Diluted EPS					$41,270,000		      27,419,800            $1.51

At March 31, 1998, there were no outstanding options to purchase 
shares of common stock with exercise prices greater than the 
average market price of the common shares during the three-month 
and nine-month periods then ended.							
						
						  For the Three  Months Ended March 31, 1997
					 	          Income	             Shares	           Per Share
						        (Numerator)	        (Denominator)          Amount

Basic EPS
Net Income					 $12,889,000		      27,029,898             $.48

Effect of Dilutive 
Securities - 
primarily
stock options					 -	 	               275,854
	

Diluted EPS					$12,889,000		      27,305,752             $.47
	
    For the Nine  Months Ended March 31, 1997
					 	          Income	             Shares	           Per Share 
						         (Numerator)	        (Denominator)         Amount
Basic EPS
Income from 
Continuing 
Operations		    $36,985,000	        27,224,419		          $1.36

Income from 
Discontinued 
Operations	          79,000		                               -

Gain on Disposal 
of Discontinued
Operations					   3,208,000			                              .12

Net Income					 $40,272,000				                           $1.48

Effect of Dilutive 
Securities - 
primarily
stock options						   -		              161,311
	

Diluted EPS					$40,272,000		       27,385,730            $1.47
     


Options to purchase 26,500 shares and 689,100 shares of common 
stock at prices ranging from $22.13 to $26.13 were outstanding 
during the three-month and nine-month periods ended March 31, 1997, 
respectively.  These options were not included in the related 
computations of diluted EPS since the exercise price of the options 
was greater than the average market price of the common shares 
during those respective periods.

6.	During June 1997, the Company entered into a joint venture 
agreement with the sales agent who markets imported vitreous china 
and faucets into the do-it-yourself ("DIY") market.  Prior to the 
July 1997 commencement of operations by the joint venture, the 
related sales were recorded as part of the Company's Jameco 
business.  The Company now has a 49% minority interest in the new 
joint venture and reports activities on the equity basis, thus 
excluding these sales from the Company's consolidated revenues.  
Revenues in fiscal 1997 were $13,415,000 for this business.

	During December 1997, the Company sold a small Italian valve 
manufacturing division which was not part of the Company's core 
business.  The division's sales for the six-month period ended 
December 31, 1997 were $3,386,000.

7.	On March 27, 1998, the Company entered into an amended and 
restated $125 million revolving credit agreement with a group of 
commercial banks to replace the existing agreement. The agreement 
expires on March 27, 2003.  Interest payable on borrowings is 
variable based upon the Company's option of selecting either a 
LIBOR rate plus 0.165%,  Prime Rate, or a competitive money market 
rate to be specified by the lender.  

8.  	The Company has developed comprehensive global plans to assess 
and address in a timely manner its information systems including 
customer service, production, distribution and financial systems in 
conjunction with the year 2000.  As part of these plans, the 
Company is also communicating with its suppliers, distributors and 
others with whom it conducts business to coordinate year 2000 
compliance.  The implementation of these plans is not expected to 
have a material adverse effect on the results of operations or the 
financial condition of the Company.  However if the Company, its 
suppliers or distributors are unable to fully implement these plans 
related to year 2000 risk on a timely basis, it could result in a 
financial risk. 

9.	The Company uses foreign currency forward exchange contracts 
to reduce the impact of currency fluctuations on certain 
anticipated intercompany purchase transactions that are expected to 
occur within the fiscal year and other known exposures.  The 
notional amount of such contracts and the related realized and 
unrealized gains and losses as of March 31, 1998 are not material.

10.	Information in "Note (12) Contingencies and Environmental 
Remediation" set forth in the Registrant's Form 10-K is 
incorporated herein by reference.  Also see Part II, Item 1.






Item 2.	  WATTS INDUSTRIES, INC. AND SUBSIDIARIES
	  Management's Discussion and Analysis of Financial Condition 
and Results of Operations

Results of Operations 
Three Months Ended March 31, 1998 Compared to
Three Months Ended March 31, 1997

	Net sales decreased $576,000 (0.3%) to $183,615,000.  An 
analysis of this change in net sales is as follows: 

Internal Growth	                          $ 3,961,000	  2.2%
Acquisitions	                               3,625,000	  2.0%
Jameco Sales now through Joint Venture
  and Divestitures	                        (5,062,000)	(2.8%)
Foreign Exchange Rate Effect	              (3,100,000) (1.7%)
Total Decrease	                           $  (576,000) (0.3%)	

	The increase in net sales from internal growth is primarily 
attributable to increased unit shipments of European oil and gas 
valves and increased unit shipments of North American plumbing and 
heating valves.  These increases were partially offset by decreased 
unit shipments of domestic oil and gas valves. Last year's sales 
included $3,010,000 for a segment of the Jameco business for 
imported vitreous china and faucets in which the Company now has a 
49% minority interest, thereby eliminating these sales from current 
year results.  The unfavorable effect that changes in foreign 
exchange rates had on sales was primarily attributable to the 
Company's European operations.  The Company intends to maintain its 
strategy of seeking acquisition opportunities as well as expanding 
its existing market position to achieve sales growth.
	
During December 1997, the Company sold a small Italian valve 
manufacturing division which was not part of the Company's core 
business.  The division's sales for the three-month period ended 
March 31, 1997 were $1,454,000.

Gross profit increased $504,000 (0.8%) and increased as a 
percentage of net sales from 34.6% to 35.0%.  This percentage 
increase is primarily attributable to improved gross margins for 
European oil and gas valves and domestic plumbing and heating 
valves.  The gross margin on oil and gas valves improved due to 
increased sales volumes and factory efficiencies. The gross margin 
on domestic plumbing and heating valves increased primarily due to 
an improved sales mix.  These improvements were partially offset by 
manufacturing inefficiencies associated with the relocation of the 
Jameco product line into a Watts Regulator factory in Spindale, 
North Carolina.

	Selling, general and administrative expenses decreased 
$148,000 (0.4%) to $40,835,000. This decrease is primarily 
attributable to the impact of foreign exchange rate changes and the 
elimination of the operating expenses associated with the segment 
of the Jameco business in which the Company now maintains a 49% 
minority interest.  These reductions were partially offset by the 
inclusion of the expenses of acquired companies and increased 
variable selling expenses.

	The decrease in the effective tax rate from 36.9% to 34. 9% 
was primarily attributable to the implementation of tax planning 
strategies intended to reduce income tax expense.

	Net income increased $1,152,000 (8.9%) to $14,041,000.

	The Company's consolidated results of operations are impacted 
by the effect that changes in foreign currency exchange rates have 
on its international subsidiaries' operating results.  Changes in 
foreign exchange rates had an adverse effect on net income for the 
quarter ended of approximately $350,000.

Results of Operations 
Nine Months Ended March 31, 1998 Compared to
Nine Months Ended March 31, 1997

	Net sales from continuing operations increased $7,854,000 
(1.5%) to $542,273,000. An analysis of this change in net sales is 
as follows: 

Internal Growth	                             $12,669,000	  2.4%
Acquisitions/New Joint Ventures	              21,039,000	  3.9%
Jameco Sales now through Joint Venture
  and Divestitures	                          (12,521,000)	(2.3%)
Foreign Exchange Rate Effect	                (13,333,000)	(2.5%)
Total Increase					                          $ 7,854,000			1.5%

The increase in net sales from internal growth is primarily 
attributable to increased unit shipments of oil and gas valves and 
increased unit shipments of plumbing and heating valves.  The 
increased sales due to acquisitions is primarily attributable to 
the inclusion of the sales of Ames, acquired in January 1997.  Last 
year's sales included $9,271,000 for a segment of the Jameco 
business for imported vitreous china and faucets in which the 
Company now has a 49% minority interest, thereby eliminating these 
sales from current year results.  The unfavorable effect that 
changes in foreign exchange rates had on sales was primarily 
attributable to the Company's European operations.  The Company 
intends to maintain its strategy of seeking acquisition 
opportunities as well as expanding its existing market position to 
achieve sales growth.

During December 1997, the Company sold a small Italian valve 
manufacturing division which was not part of the Company's core 
business.  The division's sales for the six-month period ended 
December 31, 1997 were $3,386,000.

Gross profit from continuing operations increased $7,611,000 
(4.1%) and increased as a percentage of net sales from 34.5% to 
35.4%.  This percentage increase is primarily attributable to 
improved gross margins for European oil and gas valves and the 
inclusion of the gross margin of Ames which operates at a higher 
gross margin than the Company average. These improvements were 
partially offset by manufacturing inefficiencies associated with 
the relocation of the Jameco product line into a Watts Regulator 
factory in Spindale, North Carolina.

	Selling, general and administrative expenses increased 
$3,488,000 (3.0%) to $121,575,000. This increase is primarily 
attributable to the inclusion of the expenses of Ames and other 
acquired companies and increased variable selling expenses.  This 
increase was partially offset by the effect of the change in 
foreign exchange rates and the exclusion of the expenses of the 
Jameco joint venture.

Interest income increased $846,000 to $1,243,000 due to an 
increased level of cash and short-term investments.

	Other nonoperating expense increased by $607,000 (355.0%) to 
$778,000 for the nine months ended March 31, 1998.  Minority 
interest expense charges, resulting from the improved operating 
results of the two Chinese joint ventures, were recognized during 
this period.  Increased charges were partially offset by gains 
recognized on the sale of a Canadian manufacturing facility and a 
small Italian valve manufacturing division.

	The effective tax rate for continuing operations decreased 
from 36.7% to 34.6% primarily due to the implementation of tax 
planning strategies intended to reduce income tax expense.

Income from continuing operations increased $4,285,000 (11.6%) 
to $41,270,000.

The Company's consolidated results of operations are impacted 
by the effect that changes in foreign currency exchange rates have 
on its international subsidiaries' operating results.  Changes in 
foreign exchange rates had an adverse effect on income from 
continuing operations of approximately $1,400,000.

In the quarter ended September 30, 1996 the Company sold its 
Municipal Water Group of companies.  This divestiture resulted in 
an after-tax gain of $3,208,000, or $.12 earnings per share on both 
a basic and diluted basis for the period ended March 31, 1997.

Liquidity and Capital Resources

	During the nine-month period ended March 31, 1998, the Company 
generated $31,260,000 in cash flow from operations, which was 
principally used to fund capital expenditures of $21,927,000.  
These capital expenditures were primarily for manufacturing 
machinery and equipment as part of the Company's commitment to 
continuously improve its manufacturing capabilities.  The Company's 
capital expenditure budget for fiscal 1998 is $29,500,000.

	During the nine months ended March 31, 1998, the Company sold 
one of its facilities in Canada, consolidating the operations into 
another existing Canadian plant. Additionally, the Company sold a 
small Italian valve manufacturing division (ISI) which was not part 
of the Company's core business.  The proceeds for these two 
transactions totaled $7,135,000.

	On December 18, 1997, the Company acquired Aerodyne Controls 
Corporation ("Aerodyne") located in Ronkonkoma, New York.  Aerodyne 
is a manufacturer of pneumatic valve and motion switches.  
Aerodyne's sales for the twelve months ended October 1997 were 
approximately $7,000,000.  Customers are primarily in the medical, 
analytical, military and aerospace markets.  

	On March 26, 1998, the Company acquired Telford Valve and 
Specialties, Inc. ("Telford") located in Edmonton, Alberta, Canada.  
Telford manufactures check valves, pipeline closures, and specialty 
gate valves that are used in industrial and oil and gas 
applications.  Telford is also a distributor and authorized repair 
facility for a number of other independent manufacturers of oil 
field products.  Current annualized sales are approximately 
$15,000,000.

	The aggregate purchase price for the acquisitions of Aerodyne, 
Telford, and other product line acquisitions during the nine months 
ended March 31, 1998 is $22,495,000.

The Company has available an unsecured $125,000,000 line of 
credit which expires on March 27, 2003.  The Company's intent is to 
utilize this credit facility to support the Company's acquisition 
program, working capital requirements of acquired companies and for 
general corporate purposes.  As of March 31, 1998, $35,000,000 was 
borrowed under this line of credit.  Working capital was 
$248,635,000 at March 31, 1998 compared to $224,702,000 at June 30, 
1997. 

The ratio of current assets to current liabilities was 2.9 to 
1 at both March 31, 1998 and June 30, 1997.  Cash and short-term 
investments were $10,211,000 at March 31, 1998 compared to 
$14,422,000 at June 30, 1997.  Debt as a percentage of total 
capital employed was 26.8% at March 31, 1998 compared to 27.8% at 
June 30, 1997.  At March 31, 1998, the Company was in compliance 
with all covenants related to its existing debt.

	The Company from time to time is involved with environmental 
proceedings and incurs costs on an ongoing basis related to 
environmental matters. The Company currently anticipates that it 
will not incur significant expenditures in fiscal 1998 in 
connection with any of these environmentally contaminated sites.  

   	The Company anticipates that available funds and those funds 
provided from current operations will be sufficient to meet current 
operating requirements and anticipated capital expenditures for at 
least the next 24 months.

	The Company has developed comprehensive global plans to assess 
and address in a timely manner its information systems including 
customer service, production, distribution and financial systems in 
conjunction with the year 2000.  As part of these plans, the 
Company is also communicating with its suppliers, distributors and 
others with whom it conducts business to coordinate year 2000 
compliance.  The implementation of these plans is not expected to 
have a material adverse effect on the results of operations or the 
financial condition of the Company.  However if the Company, its 
suppliers or distributors are unable to fully implement these plans 
related to year 2000 risk on a timely basis, it could result in a 
financial risk.

	The Company uses foreign currency forward exchange contracts 
to reduce the impact of currency fluctuations on certain 
intercompany purchase transactions that will occur within the 
fiscal year and other known foreign currency exposures.  The 
notional amount of such contracts and the related realized and 
unrealized gains and losses as of March 31, 1998 are not material.

	Certain statements contained herein are forward looking.  Many 
factors could cause actual results to differ from these statements, 
including loss of market share through competition; introduction of 
competing products by other companies; pressure on prices from 
competitors, suppliers, and/or customers; regulatory obstacles; 
lack of acceptance of new products; changes in the plumbing and 
heating and oil and gas markets; changes in global demand for the 
Company's products; changes in distribution of the Company's 
products; interest rates; foreign exchange fluctuations; 
cyclicality of industries in which the Company markets certain of 
its products and general and economic factors in markets where the 
Company's products are sold, manufactured or marketed; and other 
factors discussed in the Company's reports filed with the 
Securities and Exchange Commission.

	Statement of Financial Accounting Standards ("SFAS") No. 130, 
Reporting Comprehensive Income, and SFAS No. 131, Disclosures about 
Segments of an Enterprise and Related Information, become effective 
during fiscal year 1999.  At that time, the Company will report net 
income as currently reported and will begin to also report 
"comprehensive income" which will include the effect of currency 
translation adjustments.  As the Company adopts SFAS No. 131, it 
will make the required disclosures concerning its segments. 

Part II.  Other Information

Item 1.   Legal Proceedings

The Company, like other worldwide manufacturing companies, is 
subject to a variety of potential liabilities connected with its 
business operations, including potential liabilities and expenses 
associated with possible product defects or failures and compliance 
with environmental laws.  The Company maintains product liability 
and other insurance coverage which it believes to be generally in 
accordance with industry practices.  Nonetheless, such insurance 
coverage may not be adequate to protect the Company fully against 
substantial damage claims which may arise from product defects and 
failures.

	Leslie Controls, Inc. and Spence Engineering Company, both 
subsidiaries of the Company, are involved as third-party defendants 
in various civil product liability actions pending in the U.S. 
District Court, Northern District of Ohio.  The underlying claims 
have been filed by present or former employees of various shipping 
companies for personal injuries allegedly received as a result of 
exposure to asbestos.  The shipping companies contend that they 
installed in their vessels certain valves manufactured by Leslie 
Controls and/or Spence Engineering which contained asbestos. Leslie 
Controls is also a defendant in two similar matters pending in 
Superior Court of California, San Francisco County.  The Company 
has resort to certain insurance coverage with respect to these 
matters.  Coverage has been disputed by certain of the carriers 
and, therefore, recovery is questionable, a factor which the 
Company has considered in its evaluation of these matters.  The 
Company has established certain reserves which it currently 
believes are adequate in light of the probable and estimable 
exposure of pending and threatened litigation of which it has 
knowledge.  Based on facts presently known to it, the Company does 
not believe the outcome of these proceedings will have a material 
adverse effect on its financial condition, results of operations or 
its liquidity.

	On June 25, 1997, a complaint entitled State of California ex 
rel. Nora Armenta v. James Jones Company, Mueller Co., Tyco 
International, Ltd. and Watts Industries, Inc. was filed under seal 
in the Superior Court of Los Angeles County, California, alleging 
violations of the California False Claims Act.  The Company became 
aware of the action in April 1998.  The complaint alleges that 
since at least 1987, James Jones Company, (which was a subsidiary 
of the Company until September 1996 when it was sold to Tyco 
International Ltd.), sold products utilized in municipal water 
systems within the State of California which failed to meet 
contractually specified industry standards and falsely certified 
that such standards had been met.  The complaint alleges that the 
municipal entities have suffered tens of millions of dollars of 
damages as a result of the defective products, and seeks injunctive 
relief, treble damages, civil penalties of up to $10,000 for each 
violation of the California False Claims Act, costs and attorney's 
fees.  The Company has undertaken the defense of the action on 
behalf of other named defendants subject to contractual limitations 
with respect to its indemnification obligations.  The action is 
filed by a former employee of James Jones Company, and no 
government entity is currently a party by intervention in the 
action.  The Company intends to vigorously defend the action.

	Certain of the Company's operations generate solid and 
hazardous wastes, which are disposed of elsewhere by arrangement 
with the owners or operators of disposal sites or with transporters 
of such waste.  The Company's foundry and other operations are 
subject to various federal, state and local laws and regulations 
relating to environmental quality.  Compliance with these laws and 
regulations requires the Company to incur expenses and monitor its 
operations on an ongoing basis.  The Company cannot predict the 
effect of future requirements on its capital expenditures, earnings 
or competitive position due to any changes in federal, state or 
local environmental laws, regulations or ordinances.	

	The Company is currently a party to or otherwise involved with 
various administrative or legal proceedings under federal, state or 
local environmental laws or regulations involving a number of 
sites, in some cases as a participant in a group of potentially 
responsible parties ("PRPs").  Three of these sites, the Sharkey 
and Combe Landfills in New Jersey, and the San Gabriel Valley/El 
Monte, California water basin site, are listed on the National 
Priorities List.  With respect to the Sharkey Landfill, the Company 
has been allocated .75% of the remediation costs, an amount which 
is not material to the Company.  No allocations have been made to 
date with respect to the Combe Landfill or San Gabriel Valley 
sites. The EPA has formally notified several entities that they 
have been identified as being potentially responsible parties with 
respect to the San Gabriel Valley site.  As the Company was not 
included in this group, its potential involvement in this matter is 
uncertain at this point given that either the PRPs named to date or 
the EPA could seek to expand the list of potentially responsible 
parties.  In addition to the foregoing, the Solvent Recovery 
Service of New England site and the Old Southington landfill site, 
both in Connecticut, are on the National Priorities List, but, with 
respect thereto, the Company has resort to indemnification from 
third parties and based on currently available information, the 
Company believes it will be entitled to participate in a de minimis 
capacity.
	During the quarter ending March 31, 1998, the Company received 
an administrative order from the New Hampshire Department of 
Environmental Services with respect to certain regulatory issues 
concerning its Franklin, New Hampshire operation. The Company has 
appealed this administrative order.  The state agency has not as of 
yet issued any fines or penalties in connection with this matter.

	With respect to the Combe Landfill, the Company is one of 
approximately 30 potentially responsible parties.  The Company and 
all other PRPs received a Supplemental Directive from the New 
Jersey Department of Environmental Protection & Energy in 1994 
seeking to recover approximately $9 million in the aggregate for 
the operation, maintenance, and monitoring of the implemented 
remedial action taken up to that time in connection with the Combe 
Landfill North site.  Certain of the PRPs, including the Company, 
are currently negotiating with the state only to assume maintenance 
of this site in an effort to reduce future costs.  The Company and 
the remaining PRPs have also received a formal demand from the U.S. 
Environmental Protection Agency to recover approximately $17 
million expended to date in the remediation of this site.  The EPA 
has filed suit against certain of the PRPs, and the Company has 
been named a third-party defendant in this litigation.

	Based on facts presently known to it, the Company does not 
believe that the outcome of these environmental proceedings will 
have a material adverse effect on its financial condition. The 
Company has established balance sheet accruals which it currently 
believes are adequate in light of the probable and estimable 
exposure of pending and threatened environmental litigation and 
proceedings of which it has knowledge.  Given the nature and scope 
of the Company's manufacturing operations, there can be no 
assurance that the Company will not become subject to other 
environmental proceedings and liabilities in the future which may 
be material to the Company.

Item 6.   Exhibits and Reports on Form 8-K

(a)  The exhibits are furnished elsewhere in this report.
(b)  There were no reports filed on Form 8-K for the quarter ended 
     March 31, 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.


  
							                                   WATTS INDUSTRIES, INC.


Date:	May 13, 1998					                 By:	/s/ Timothy P.Horne
				                                        Timothy P. Horne
								                                    Chairman and Chief 
                                            Executive Officer




Date: May 13, 1998 	                    By:	/s/ Kenneth J. McAvoy
		                                          Kenneth J. McAvoy
	                                           Chief Financial Officer 
                                            and Treasurer

EXHIBIT INDEX


Listed and indexed below are all Exhibits filed as part of this 
report.

Exhibit No.	                Description

3.1		Restated Certificate of Incorporation, as amended.  (1)

3.2		Amended and Restated By-Laws.  (2)

10.28		Amended and Restated Revolving Credit Agreement 
       dated March 27, 1998 between and among Watts 
       Investment Company, certain financial institutions, 
       BankBoston N.A., as Administrative Agent, and the 
       Registrant as Guarantor. *

11		Computation of earnings per share (3)

27.1		Financial Data Schedule-March 31, 1998*

27.2  Restated Financial Data Schedule-March 31, 1997*

27.3  Restated Financial Data Schedule-September 30, 1996*

(1)	Incorporated by reference to the relevant exhibit to the 
Registrant's Annual Report on Form 10-K filed with the 
Securities and Exchange Commission on September 28, 1995.

(2)	Incorporated by reference to the relevant exhibit to the 
Registrant's Current Report on Form 8-K filed with the 
Securities and Exchange Commission on May 15, 1992.

(3)	Incorporated by reference to the Notes to Condensed 
Consolidated Financial Statements, Note 5, of this Report.

*Filed herewith.










