<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
                  [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OF
               THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 3, 1995          Commission File No. 1-8044

                             HUNT MANUFACTURING CO.
                                  (Registrant)

        Pennsylvania                                    21-0481254
   ----------------------                      -------------------------------
  (State of incorporation)                    (IRS Employer Identification No.)

One Commerce Square, 2005 Market Street Philadelphia, PA           19103-7085
--------------------------------------------------------          ------------
(Address of principal executive offices)                           (Zip Code)

Registrant's telephone number, including area code:  (215) 656-0300

Securities registered pursuant to Section 12(b) of the Act:

                                                     Name of each exchange
       Title of each class:                           on which registered:
       --------------------                          ----------------------

Common Shares, par value $.10 per share              New York Stock Exchange

Rights to Purchase Series A Junior                   New York Stock Exchange
  Participating Preferred Stock

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

    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
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 the registrant's Common Shares (its only
voting stock) held by non-affiliates of the registrant as of February 2, 1996
was approximately $167,000,000. (Reference is made to the final paragraph of
Part I herein for a statement of the assumptions upon which this calculation is
based.)

    The number of shares of the registrant's Common Shares outstanding as of
February 2, 1996 was 10,964,644.

                       DOCUMENTS INCORPORATED BY REFERENCE

    Certain portions of the registrant's 1996 definitive proxy statement
relating to its scheduled April 1996 Annual Meeting of Shareholders (which
proxy statement is expected to be filed with the Commission not later than 120
days after the end of the registrant's last fiscal year) are incorporated by
reference into Part III of this report.
<PAGE>

                                     PART I

Item 1.  Business

General

                  Hunt Manufacturing Co. and its subsidiaries (herein called the
"Company", unless the context indicates otherwise) are primarily engaged in the
manufacture and distribution of office products and art/craft products which the
Company markets worldwide.

                  Reference is made to Item 7 and Note 3 to Consolidated
Financial Statements herein for information concerning a pre-tax charge
aggregating $5.3 million (approximately $3.5 million after income taxes, or $.22
per share) recorded in fiscal 1995 for costs relating to organizational changes
and relocation and consolidation of certain of the Company's manufacturing and
distribution operations.

                  Reference is also made to Item 7 and Note 2 to Consolidated
Financial Statements herein for information regarding the Company's private
purchase of 2,150,165 shares at $16.32 per share and repurchase of 2,954,378
shares at $17.00 per share pursuant to a tender offer, both of which purchases
were made subsequent to the Company's 1995 fiscal year-end. The Company also
entered into a new five-year $125 million credit facility. The Company used
borrowings under this new credit facility, together with cash on hand, to fund
the aforesaid private purchase of shares and shares pursuant to the tender
offer.

Business Segments

                  The following table sets forth the Company's net sales and
operating profit by business segment for the last three fiscal years:

                                              1995          1994         1993
                                            --------      --------      ------
                                                        (In thousands)
Net Sales:
         Office products .............      $163,378      $160,307      $142,462
         Art/Craft products ..........       150,503       127,896       113,688
                                            --------      --------      --------
          Total ......................      $313,881      $288,203      $256,150
                                            ========      ========      ========

Operating Profit:
         Office products .............      $  6,966      $ 12,172      $ 11,411
         Art/Craft products ..........        21,678        21,211        18,832
                                            --------      --------      --------
          Total ......................      $ 28,644      $ 33,383      $ 30,243
                                            ========      ========      ========

---------------
                  See Items 6 and 7 herein and Note 17 to Consolidated Financial
Statements herein for further information concerning the Company's business
segments (including information concerning identifiable assets).

                                       -2-
<PAGE>

Office Products

                  The Company has three major classes of office products:
mechanical and electromechanical products; office furniture; and desktop
accessories and supplies. The amounts and percentages of net sales of these
product classes for the last three fiscal years were as follows:

<TABLE>
<CAPTION>
                                       1995                 1994                 1993
                                  ---------------      ---------------      --------------
                                                    (Dollars in thousands)
<S>                               <C>                  <C>                  <C>
Product Class:
  Mechanical and
    electromechanical.....         $69,018    42%       $ 76,897    48%     $ 70,047    49%
  Office furniture........          60,278    37          51,715    32        44,233    31
  Desktop accessories
    and supplies..........          34,082    21          31,695    20        28,182    20
                                  --------   ---        --------   ---      --------   ---
   Total..................        $163,378  100%        $160,307  100%      $142,462  100%
                                  ========  ====        ========  ====      ========  ====
</TABLE>

                  The Company's mechanical and electromechanical office products
consist of a variety of items sold under the Company's BOSTON brand, including
manual and electric pencil sharpeners; paper punches, trimmers and shredders;
electric letter openers; spring clips used to hold sheets of paper; manual and
electronic staplers; electric air cleaners; fans and heaters; laminators; and
other related products. The Company's office furniture products are sold
primarily under the BEVIS brand name. These products include conference,
computer, utility and folding tables; office chairs; bookcases and screen
panels; metal and wood workstations for computer terminals, personal computers,
word processors, printers and other similar electronic office equipment; and
home/office furniture. The Company's desktop accessories and supplies consist of
a broad range of products that support the use of computers, such as computer
diskette, CD and CD ROM storage and filing systems, printer stands, mouse pads
and other computer related accessories which are marketed under the MEDIAMATE
brand name. Also included in desktop accessories and supplies are an array of
items marketed under the LIT-NING brand name, including metal horizontal and
vertical files, letter trays, desk organizers and paper sorting racks. In 1994,
the Company obtained exclusive distribution rights in the United States and
Canada for Schwan-STABILO(1) highlighter markers and writing instruments which
are included under desktop accessories and supplies. In 1995, the Company
acquired the rights to the Calise line of lap-top computer carrying cases which
are included under desktop accessories and supplies.

                  The Company consistently has sought to expand its office
products business through internal product development, the acquisition of
distribution rights to products which complement or extend the Company's
established lines, the acquisition of complementary businesses and through
broadened distribution. Examples of new office product introductions by the
Company in recent years are BOSTON brand electronic staplers, various models of
air cleaners, fans and heaters, personal paper shredders, electric and battery
powered pencil sharpeners, paper punches, and desk-top laminators; BEVIS

--------
1.       Trademark of Schwan-STABILO Schwanhausser GmbH & Co.

                                       -3-
<PAGE>

UNIWORX, BEVIS ULTRAWORX and BEVIS MEGAWORX lines of modular office furniture
systems; BEVIS CONVERGENCE panel systems; MEDIAMATE LASERRAK printer stands;
MEDIAMATE FASTRAC mouse pads; MEDIAMATE multi-media storage files, MEDIAMATE
ROLL'N RAK portable printer stands, MEDIAMATE CD storage products; MEDIAMATE
DISCFINDER CD filing system and CALISE computer carrying cases.

                  There are three major and generally distinct domestic markets
for the Company's office products: commercial offices, home offices and the
general consumer. The commercial line of the Company's office products is
distributed primarily through a network of office supply wholesalers and dealers
and office product superstores. Sales to the home office and the general
consumer include mechanical and electromechanical, and desktop accessories and
supplies products which are sold through large retail outlets, such as office
products superstores, drug and food chain stores, variety stores, discount
chains, catalog showrooms and membership chains. The consumer market has
increased significantly over the last several years primarily due to the
dramatic growth of office products superstores. A more limited line of products
is sold to schools through specialized school supply distributors.

Art/Craft Products

                  The Company manufactures and distributes three major classes
of art/craft products: presentation graphics products; art supplies; and
hobby/craft products. The amounts and percentages of net sales of these three
product classes for the last three fiscal years were as follows:


<TABLE>
<CAPTION>
                                             1995                   1994                 1993
                                       ---------------          -------------       ----------------
                                                           (Dollars in thousands)
<S>                                    <C>                      <C>                 <C>
  Product Class:
   Presentation
     graphics.............             $104,271    69%          $ 83,354   65%       $ 68,734    61%
   Art supplies...........               26,610    18             26,772    21         27,569     24
   Hobby/craft............               19,622    13             17,770    14         17,385     15
                                        --------  ---             ------   ---       --------    ---
     Total................             $150,503   100%          $127,896   100%      $113,688    100%
                                       ========   ===           ========   ===       ========    ===
</TABLE>

                  The Company's presentation graphics products are used largely
by picture framers, graphic artists, display designers and photo laboratories,
and include a range of BIENFANG and CENTAFOAM foam boards (which constitute a
significant portion, although less than 40%, of presentation graphics products);
TECHMOUNT dry mount adhesive products; pressure sensitive and dry mount adhesive
products sold under the SEAL and ADEMCO-SEAL brands, as well as under the
COLORMOUNT, SEALEZE, PRINT GUARD, PRINT MOUNT and GARDIAN brand names;
THERMASHIELD laminating films; an array of mounting and laminating equipment
sold under the CLEAR TECH, SEALEZE, and IMAGE brand names; and specialty tapes
and films supplied under various private brands. The Company's art supply
products are used primarily by commercial and amateur artists, and include
commercial and fine art papers which the Company converts, finishes and sells
under its BIENFANG brand name; various types of X-ACTO brand knives and blades;

                                       -4-
<PAGE>

SPEEDBALL paint markers and acrylic and water-color paints; and CONTE(2)
pastels, crayons and related drawing products, for which the Company is the
exclusive United States and Canadian distributor. The Company's hobby/craft
products generally are used by hobbyists and craft enthusiasts and include
SPEEDBALL print-making products; ACCENT MATS beveled-edge picture framing mats;
SPEEDBALL ELEGANT WRITERS; LETTERSHOP calligraphy kits and PANACHE calligraphy
products; a range of punch quilting products; PAPER KRAZE paper making and
casting products; and X-ACTO brand tools and kits.

                  The Company consistently has sought to expand its art/craft
business primarily through acquisitions of complementary businesses and of
distribution rights to complementary products manufactured by others, through
internal product development, and through broadened distribution. Major
art/craft products introduced during the last several fiscal years include
SINGLE STEP adhesive coated BIENFANG foam board; BIENFANG project display
boards; ARMORCORE and STRATOCORE line of board products; PANACHE calligraphy
products; LETTERSHOP calligraphy kits; punch quilting products; PAPER KRAZE
papermaking and casting products; CLEAR TECH pouch laminators; IMAGE brand large
format laminators; GARDIAN outdoor protective laminates and adhesives; PRINT
MOUNT pressure sensitive adhesives; and THERMASHIELD laminating films. In 1993,
the Company acquired IMAGE TECHNOLOGIES, Inc., a start-up company engaged in the
development and production of large format laminators, which has allowed the
Company to broaden its distribution into the digital imaging market.

                  In late April, 1995, the Company acquired the Centafoam
business of Spicers, Ltd., a division of David S. Smith (Holdings) PLC, a United
Kingdom manufacturer and marketers of a line of styrene-based foam board
products, which will enable the Company to be more competitive in international
foam board markets, as well as provide the Company with a base from which to
build a rigid substrate business for sign and display markets in Europe.

                  BIENFANG foam board has been particularly important, as it has
allowed the Company to penetrate the picture framing, sign, display and exhibit
markets, yet it also holds wide appeal to the traditional customer groups in art
supply and hobby/craft markets. The success of foam board has been attributable,
in significant part, to the Company's ability to offer the end-user a variety of
value-added foam board products, such as colored or adhesive coated foam board.

                  Traditionally, the Company's art/craft products have been
distributed primarily through wholesalers (framing, photomounting, art and
hobby), dealers (specialized art supply and hobby/craft stores), general
consumer-oriented retail outlets (primarily office product superstores and chain
stores), industrial concerns (photo labs, screen printers) and through
specialized school supply distributors. Over the last several years,
consumer-oriented retail outlets have become an increasingly important
distribution channel for the Company's art/craft products.

--------
2.       Trademark of Conte S.A.

                                       -5-
<PAGE>

Sales and Marketing

                  General

                  The Company has over 12,000 active customers, the ten largest
of which accounted for approximately 35% of its sales in fiscal 1995. Three of
these ten largest customers were office products superstore chains. The largest
single customer accounted for 9.4% of sales for that year. There is a continuing
trend toward consolidation of wholesalers, dealers and superstores, particularly
in the office products market, resulting in an increasing percentage of the
Company's sales being attributable to a smaller number of customers. See Item 7
of this report.

                  Because most of the Company's sales are made from inventory,
the Company generally operates without a material backlog. The Company's sales
generally are not subject to material seasonal fluctuations. See Note 16 to
Consolidated Financial Statements herein.

                  Domestic Operations

                  Domestic marketing of the Company's office products and
art/craft products is effected principally through six separate sales forces,
one each for office products, furniture, computer accessory products, art/craft
products, photomounting and mass market. The combined sales forces are comprised
of over 30 Company salespeople and over 300 independent manufacturers'
representatives.

                  The Company maintains domestic distribution operations in
Florence, Alabama; for office products; in Naugatuck, Connecticut; and Cottage
Grove, Wisconsin, for art/craft products; and in Statesville, North Carolina,
for both office and art/craft products.

                  Foreign Operations

                  The Company distributes its products in more than 60 foreign
markets through its own sales force of eight area sales managers and 9
salespersons, and through over 30 independent sales agents and over 300
distributors.

                  Sales of office products and art/craft products represented
approximately 40% and 60%, respectively, of the Company's export sales in fiscal
1995, with electrical and mechanical pencil sharpeners, paper punches, staplers,
X-ACTO brand knives and blades, BIENFANG paper and foam board products, and
pressure sensitive and dry mount adhesive products accounting for the major
portion of these sales. Sales from foreign operations in Europe included
principally presentation graphics products. See Note 17 to Consolidated
Financial Statements herein for further information concerning the Company's
foreign operations.

                  The Company maintains distribution operations in Ontario,
Canada; Basildon, England; Kornwestheim, Germany and in Hong Kong.

                  Foreign operations are subject to the usual risks of doing
business abroad, particularly currency fluctuations and foreign exchange
controls. See also Note 1 to Consolidated Financial Statements herein for
information concerning hedging.

                                       -6-
<PAGE>

Manufacturing and Production

                  The Company's operations include manufacturing and converting
of products, as well as purchasing and assembly of various component parts.
Excluding products for which it acts as a distributor, the vast majority of the
Company's sales are of products which are either manufactured, converted or
assembled by it. See Item 2 herein for information concerning the Company's
major manufacturing facilities.

                  The Company customarily has more than one source of supply for
its critical raw materials and component parts and its businesses have not been
materially hindered by shortages or increased prices of such items. Although
higher costs were experienced, particularly during the first three quarters of
fiscal 1995 for commodities, such as wood, corrugated packaging material, steel
and styrene plastic, the Company began experiencing moderation of prices of some
of its raw materials near the end of fiscal 1995. However, management expects
the price of some of its raw materials to continue to increase in fiscal 1996.
See Item 7 herein.

Competition

                  The Company does not have any single competitor which offers
substantially the same overall lines of either office products or art/craft
products as the Company. However, competition in a number of areas of the
Company's businesses, such as electric pencil sharpeners, paper punches,
staplers, office furniture, computer diskette storage and related accessory
products, paints and foam board, is substantial, and some of the Company's
competitors are larger and have considerably greater financial resources than
the Company.

                  Because of the fragmented nature of the office products and
art/craft products businesses, the multiple markets served by the Company, and
the absence of published market data, the Company generally is not able to
determine with certainty its relative domestic or foreign market share for its
various products. Nevertheless, the Company believes that it is among the
leaders in domestic markets in a number of its products, including manual and
electric pencil sharpeners; electronic staplers; metal desktop paper organizing
products; BIENFANG foam board products; presentation graphics materials and
equipment; X-ACTO brand knives and blades; and calligraphy products. The Company
also believes that it is among the leaders in the United Kingdom picture framing
and photomounting market for dry mounting products.

                  The Company considers product performance and brand
recognition to be important competitive factors in its businesses, but
competitive pricing and promotional discounts also have become increasingly
important factors.

Trademarks, Patents and Licenses

                  The Company's business is not dependent, to a material extent,
upon any patents. However, the Company regards its many trademarks as being of
substantial value in the marketing of its various products. The following
trademarks mentioned in this report are owned by the Company:
ACCENT MATS(R), ADEMCO-SEAL(TM), BEVIS(R), BEVIS(R) CONVERGENCE(TM), BEVIS(R)
MEGAWORX(TM), BEVIS(R) ULTRAWORX(R), BEVIS(R) UNIWORX(R), BIENFANG(R),
BOSTON(R), CALISE(TM), CENTAFOAM(TM), CLEAR TECH(R), COLORMOUNT(R), GARDIAN(TM),
IMAGE(TM), LETTERSHOP(TM), LIT-NING(R), MEDIAMATE(R), MEDIAMATE DISCFINDER(TM),

                                       -7-
<PAGE>

MEDIAMATE(R), FASTRAC(R), MEDIAMATE(R) LASERRAK(R), MEDIAMATE ROLL'N RAK(R),
PANACHE(R), PAPER KRAZE(TM), PRINT GUARD(R), PRINT MOUNT(R), SEAL(R),
SEALEZE(R), SINGLE STEP(R), SPEEDBALL(R), SPEEDBALL(R) ELEGANT WRITERS(R),
SPEEDBALL(R) FABRIC PAINTERS(TM), SPEEDBALL(R) PAINTERS(R), TECHMOUNT(R),
THERMASHIELD(TM) and X-ACTO(R).

                  The Company also has been granted exclusive distribution
rights in designated territories with respect to various products, including
CONTE drawing products; Schwan-STABILO highlighter markers and writing
instruments (the distribution rights to which in the U.S. and Canada were
obtained in fiscal 1994), air cleaners, fans and heaters which are manufactured
by other companies and sold by the Company under the BOSTON brand name; and
PERFECT DATA(3) computer cleaning products. Such rights customarily are granted
for limited periods, after which they expire or may be terminated at the option
of the grantor. The Company's distribution rights generally are of limited
duration (the longest usually not exceeding approximately seven years) and may
be terminated or expire, in certain cases, with as little as approximately six
months notice from the grantor of such rights. While the Company's business is
not dependent upon any of these distribution rights (no line of such distributed
products having accounted for as much as 3% of the Company's net sales in fiscal
1995), the loss of the right to market certain products could have an adverse
effect on the Company's profitability.


Research and Development

                  During fiscal 1995, the Company spent approximately $1.7
million on Company-sponsored research and development, as compared with
approximately $1.6 million in fiscal 1994 and $1.7 million in fiscal 1993.


Personnel

                  As of February 1, 1996, the Company had approximately 2,050
full-time employees.

Environmental Matters

                  Prior to the Company's acquisition of Seal Products, Inc.
("Seal") from Bunzl plc in May 1990, it was discovered that some hazardous waste
materials had been stored at Seal's premises located in Naugatuck, Connecticut.
In compliance with applicable state law, this environmental condition was
reported to the Connecticut Department of Environmental Protection by Bunzl.
Seal, which now is a subsidiary of the Company, may be partially responsible
under law for the environmental conditions on the premises and any liabilities
resulting therefrom. However, in connection with the Company's acquisition of
Seal, Bunzl agreed to take responsibility for correcting such environmental
conditions and, for a period of seven years, to indemnify Seal and the Company
for such resulting liabilities, subject to certain limitations. Bunzl is
continuing the process of remediating the environmental conditions. A
substantial portion of the remediation has been completed, although testing is
continuing.

--------
3.    Trademark of Perfect Data Corporation.

                                       -8-
<PAGE>

                  The Company is also involved on a continuing basis in
monitoring its compliance with environmental laws and in making capital and
operating improvements necessary to comply with existing and anticipated
environmental requirements. Despite its efforts, the Company has been cited for
occasional violations or alleged violations of environmental laws or permits and
on several occasions has been named as a potentially responsible party for
remediation of sites. Expenses incurred by the Company to date relating to
violations of and compliance with environmental laws and permits and site
remediation have not been material. While it is impossible to predict with
certainty, management currently does not foresee such expenses in the future as
having a material effect on the Company's business, results of operations or
financial condition. See Note 13 to Consolidated Financial Statements herein.


Item 2.  Properties

                  The Company presently maintains its principal executive
offices at One Commerce Square, 2005 Market Street, Philadelphia, PA 19103 in
approximately 56,000 square feet of leased space under a sublease expiring in
2002.

                  The following table sets forth information with respect to
certain of the other facilities of the Company:

<TABLE>
<CAPTION>
        Industry         Primary                                       Approximate            Owned or
        segment          function                 Location                size                 leased
        --------         ---------                --------             -----------            --------
<S>                      <C>                      <C>                  <C>                    <C>
        Office           Manufacturing            Florence,            108,000 sq.            (1)
        Products         & Offices                KY                   ft. bldg.
                                                                       on 27 acres

                         Manufacturing,           Florence,            293,000 sq.            Owned
                         Distribution             AL                   ft. bldg.
                         & Offices                                     on 24 acres

                                                     ------------

        Art/Craft        Manufacturing            States-              219,000 sq.            (2)
        Products         & Offices                ville, NC            ft. bldg.
                                                                       on 13 acres

                         Manufacturing,           Naugatuck,           86,000 sq.             Leased
                         Distribution &           CT                   ft. bldg.              (exp. 2000)
                         Offices                                       on 15 acres

                         Manufacturing,           Basildon,            64,000 sq.             Owned
                         Distribution &           England              ft. in two
                         Offices                                       bldgs. on
                                                                       3 acres
 
                                                    ------------
</TABLE>
                                       -9-
<PAGE>

<TABLE>
<CAPTION>
        Industry         Primary                                       Approximate            Owned or
        segment          function                 Location                size                 leased
        --------         ---------                --------             -----------            --------
<S>                      <C>                      <C>                  <C>                    <C>
        Office           Manufacturing            States-              218,000 sq.            Owned
        Products         & Offices                ville,               ft. bldg.
        and Art/                                  NC                   on 16 acres
        Craft
        Products

                         Distribution             States-              320,000 sq.            Leased
                         & Offices                ville,               ft. bldg.              (exp. 2005)
                                                  NC

                         Distribution             Ontario,             59,000 sq.             Leased
                         & Offices                Canada               ft. bldg.              (exp. 2001)

</TABLE>

-----------
(1) The construction and expansion of this facility was financed by the issuance
of industrial revenue bonds by the City of Florence, Kentucky, which bonds have
matured and been paid off. The City retains title to the property and leases it
to the Company for a nominal consideration, and the Company has the option,
subject to certain conditions, to purchase the property for a nominal
consideration.

(2) A portion of this facility was financed by the issuance of industrial
revenue bonds, due 2004, by the Iredell County Industrial Facilities and
Pollution Control Financing Authority. The Authority retains title to the
property and leases it to the Company for rental payments equal to principal and
interest payments on the bonds. The Company has the option, subject to certain
conditions, to purchase the property for a nominal consideration upon payment of
the bonds.

                  At present, the above facilities generally are believed to be
adequately utilized and suitable for the Company's present needs.


Item 3.  Pending Legal Proceedings

                  There currently are no material pending legal proceedings
(within the meaning of the Form 10-K Instructions), other than routine
litigation incidental to the business of the Company, to which the Company is a
party or to which any of its property is subject. See Note 13 to Consolidated
Financial Statements herein and Item 1-- "Environmental Matters" herein.


Item 4.  Submission of Matters to a Vote of Security Holders

                  No matters were submitted to a vote of the security holders of
the Company during the fourth quarter of the fiscal year covered by this report.

                                      -10-
<PAGE>

                             Additional Information

                  The following information is furnished in this Part I pursuant
to Instruction 3 to Item 401(b) of Regulation S-K:

                        Executive Officers of the Company

<TABLE>
<CAPTION>
         Name                               Age                                 Position
         ----                               ---                                 --------
<S>                                        <C>                <C>
Robert B. Fritsch                           64                President and Chief Executive Officer

John W. Carney                              52                Vice President, Human Resources/Strategic
                                                              Planning

William E. Chandler                         52                Senior Vice President, Finance (Chief
                                                              Financial Officer), and Secretary

Spencer W. O'Meara                          49                Executive Vice President and General Manager

W. Ernest Precious                          54                Executive Vice President and General Manager

Eugene A. Stiefel                           48                Vice President, Information Services
</TABLE>

                  The executive officers of the Company customarily are elected
annually by the Board of Directors to serve, at the pleasure of the Board, for a
period of one year or until their successors are elected. All of the executive
officers of the Company, except for Messrs. Chandler and Stiefel have served in
varying executive capacities with the Company for over five years.

                  Mr. Chandler was elected an executive officer of the Company
in February 1993. He joined the Company in September 1992 after three years at
Bally Manufacturing Corporation during which he held positions as Acting Chief
Financial Officer and Vice President, Financial Operations and Controller. Prior
to that, he served for three years at Household Manufacturing, Inc. as Senior
Vice President of Finance, Treasurer and Chief Financial Officer.

Mr. Stiefel was elected an executive officer of the Company in April 1993. He
joined the Company in February 1985 and has served as Vice President,
Information Services since 1987.

                                  ------------

                  For the purposes of calculating the aggregate market value of
the shares of common stock of the Company held by nonaffiliates, as shown on the
cover page of this report, it has been assumed that all the outstanding shares
were held by nonaffiliates except for the shares held by directors and officers
of the Company. However, this should not be deemed to constitute an admission
that all directors and officers of the Company are, in fact, affiliates of the
Company, or that there are not other persons who may be deemed to be affiliates
of the Company. Further information concerning shareholdings of officers,
directors and principal shareholders is included in the Company's definitive
proxy statement filed or to be filed with the Securities and Exchange
Commission.

                                   -----------

                                      -11-
<PAGE>

                                     PART II


Item 5.  Market for the Registrant's Common Stock
         and Related Stockholder Matters

                  (a) The Company's common stock is traded on the New York Stock
Exchange (trading symbol "HUN"). The following table sets forth the high and low
quarterly sales prices of the Company's common stock during the two most recent
fiscal years (all as reported by The Wall Street Journal):

                                        Fiscal Quarter
                                            1995
                   -----------------------------------------------------
                   First         Second             Third         Fourth
                   -----         ------             -----         ------
    High          $14 3/4        $15 1/2           $15 1/4        $18 3/8
    Low            12 5/8         13                13 1/2         13 3/4


                                        Fiscal Quarter
                                            1994
                   -------------------------------------------------------
                   First         Second             Third          Fourth
                   -----         ------             -----          ------
    High          $18 1/4       $18 1/4            $17             $16 5/8
    Low            15 1/8        15 1/4             15 1/8          14 1/4

                  See Note 12 to Consolidated Financial Statements herein for
information concerning certain Rights which were distributed by the Company to
shareholders and which currently are deemed to be attached to the Company's
common stock.

                  (b) As of February 2, 1996, there were over 800 record holders
of the Company's common stock, which number does not include shareholders whose
shares were held in nominee name.

                  (c) During the past two fiscal years, the Company has paid
regular quarterly cash dividends on its common stock at the following rates per
share: 1995 - $.095 per quarter and 1994 - $.09 per quarter.

                  Certain of the Company's credit agreements contain
restrictions on the Company's present and future ability to pay dividends. See
Notes 2 and 8 to Consolidated Financial Statements herein.

                                      -12-
<PAGE>

Item 6.  Selected Financial Data

                  The following table contains selected financial data for each
of the Company's last five fiscal years. This data should be read in conjunction
with the Company's Consolidated Financial Statements (and related notes)
appearing elsewhere in this report and with Item 7 of this report.

<TABLE>
<CAPTION>
                                                          Year Ended
                            ---------------------------------------------------------------------------
                            Dec. 3,        Nov. 27,         Nov. 28,            Nov. 29,         Dec. 1,
                            1995(1)         1994             1993                 1992           1991(2)
                            -------        --------         --------            --------         -------
                                           (In thousands, except per share data)
<S>                         <C>            <C>              <C>                 <C>              <C>
Net Sales                  $313,881        $288,203         $256,150            $234,929         $228,622

Income from
 Continuing
 Operations                  15,335          17,197           14,928              13,302            9,586

Income from
 Continuing
 Operations Per
 Common Share                   .96            1.07              .93                 .83              .60

Total Assets                182,810         173,385          156,317             144,170          151,824

Long-Term Debt                3,559           3,559            3,003               6,160           17,271

Cash Dividends
  Per Share                     .38             .36              .35                 .34              .32
</TABLE>

---------

(1) In fiscal 1995, the Company recorded a charge to net income of approximately
$3.5 million, or $.22 per share, for anticipated costs relating to
organizational changes and relocation and consolidation of operations.

(2) In fiscal 1991, the Company recorded a charge to net income of approximately
$2.7 million, or $.17 per share, for anticipated costs relating to the
relocation and consolidation of certain manufacturing and distribution
operations.

                                      -13-
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and 
         Results of Operations

         Financial Condition

                  The Company's financial condition was further improved in
fiscal 1995 with working capital increasing to $69.1 million at the end of
fiscal 1995 from $64.6 million and $47.1 million at the end of fiscal 1994 and
1993, respectively. Net cash flows of $23.4 million, provided by operating
activities in fiscal 1995 combined with available cash balances, were more than
sufficient to fund additions to property, plant and equipment of $9.5 million,
to pay cash dividends of $6.1 million, to repurchase shares of the Company's
common stock for $2.8 million primarily for use in the Company's various
compensation plans, and to fund a portion ($1.9 million) of the Centafoam
acquisition. The Company acquired the Centafoam business of Spicers, Ltd., a
division of David S. Smith (Holdings) PLC, for cash consideration and related
costs aggregating $2.8 million. Centafoam, whose facilities are located in the
United Kingdom, manufactures and markets a line of styrene-based foam board
products. Net cash flows provided by operating activities were $20.8 million in
fiscal 1994 and $23.2 million in fiscal 1993.

                  The return on average equity, before special charges and an
accounting change discussed below, improved to 13.9% in fiscal 1995 from 13.8%
in fiscal 1994 and 13.1% in fiscal 1993. The current ratio improved to 3.2 at
the end of fiscal 1995 from 3.1 and 2.4 at the end of fiscal 1994 and 1993,
respectively, and the percentage of debt to equity at the end of fiscal 1995 was
further reduced to 3.2% from 3.5% and 5.3% for the same comparable years.

                  The Company's current assets increased to $100.1 million at
the end of fiscal 1995 from $95.3 million at the end of fiscal 1994, largely
attributable to a $2.6 million increase in inventories and a $1.7 million
increase in cash and cash equivalents. The increase in inventories was due
principally to additional inventories of new products, the Centafoam business
acquisition and the anticipated higher sales volume.

                  Other non-current assets increased to $4.7 million at the end
of fiscal 1995 from $2.4 million at the end of fiscal 1994, largely due to an
increase in the cash surrender value of officers' life insurance.

                  Current liabilities were essentially unchanged at the end of
fiscal 1995 from the levels at the end of fiscal 1994. The $1.4 million decrease
in income taxes payable was principally due to lower earnings and a lower
effective tax rate in fiscal 1995 than in fiscal 1994. The $1.2 million increase
in other accrued expenses was largely due to the accrual associated with the
provision for organizational changes and relocation and consolidation of
operations discussed below.

                  Other non-current liabilities increased to $7.6 million at the
end of fiscal 1995 from $5.5 million at the end of fiscal 1994 due to several
factors, including the accrual associated with the provision referred to above
and increases in pension liabilities.

                  At December 3, 1995, the Company had revolving credit
agreements with three banks that provided borrowing capacity totaling $45
million. There were no borrowings under these agreements at the end of fiscal
1995.

                                      -14-
<PAGE>

         Recent Developments

                  On December 19, 1995, the Company purchased from Mary F.
Bartol an aggregate of 2,150,165 of the Company's common shares for a cash
purchase price of $16.32 per share in a private purchase transaction. On
December 21, 1995, the Company commenced a tender offer to purchase up to
3,230,000 of its common shares at $17.00 net per share in cash. Aggregate of
2,954,378 shares were tendered to and purchased by the Company in January 1996
pursuant to the tender offer. The purchase price of the common shares purchased
in the tender offer and estimated expenses pursuant to the offer aggregated
$51.5 million. The Company also obtained a new five-year $125 million credit
facility, of which $75 million was used to finance the shares repurchased from
Mary F. Bartol and in the tender offer. This new credit facility replaced the
revolving credit agreements discussed above which were in effect at December 3,
1995. (See Notes 2 and 8 of the Notes to the Consolidated Financial Statements.)

                  Management believes that funds generated from operations
combined with the new credit facility will be sufficient to meet currently
anticipated working capital and other capital and debt service requirements.
Management currently anticipates expenditures for additions to property, plant
and equipment to be approximately $11 million in fiscal 1996. If additional
resources are needed, management believes that the Company could obtain funds at
competitive costs.

         Results of Operations
         Comparison of Fiscal 1995 vs. 1994

                  The Company's 1995 fiscal year was comprised of 53 weeks,
compared to 52 weeks for fiscal 1994.

                  Net Sales and Earnings. Net sales increased 8.9% to $313.9
million in fiscal 1995 from $288.2 million in fiscal 1994. The increase was
primarily the result of higher unit volume, particularly from new products, and
from average selling price increases of approximately 2%.

                  Office products sales increased 1.9% in fiscal 1995 to $163.4
million from $160.3 million in fiscal 1994 as a result of higher sales of office
furniture products (up 16.6%) and desktop accessories and supplies (up 7.5%),
partially offset by lower sales of mechanical and electromechanical products
(down 10.2%). The sales growth in office furniture products was due primarily to
higher sales of Bevis brand products, particularly folding tables,
computer-related furniture, conference tables and screen panels. The sales
increase in desktop accessories and supplies was the result of higher sales of
MediaMate brand products and Schwan-STABILO brand products, partially offset by
lower sales of Lit-Ning brand metal desk organizing products. The decrease in
mechanical and electromechanical sales was largely due to lower sales of Boston
brand products, particularly pencil sharpeners, manual staplers, paper punches
and office machines. The decrease in Boston brand products was primarily
attributable to lost distribution at some of the Company's large retail
customers and to general softness in demand. Management is taking measures aimed
at regaining such lost market share. Export sales of office products decreased
10.7% in fiscal 1995 as compared to fiscal 1994, primarily due to lower sales to
Latin America (particularly Mexico) and to a lesser extent the Middle East and
Europe.

                  Art/craft products sales of $150.5 million for fiscal 1995
increased 17.7% from fiscal 1994 sales of $127.9 million. This increase was led

                                      -15-
<PAGE>

by higher sales of presentation graphics products, which were up 25.1% due to a
combination of factors, including higher sales in Europe, growth in the digital
imaging market and increases in sales of certain mounting and laminating
products (e.g., Seal and Image mounting and laminating equipment and Bienfang
and Centafoam brand foam boards). Sales of hobby/craft products increased 10.4%,
largely due to higher sales of Speedball Elegant Writer calligraphy markers and
Speedball Painters markers, as well as to the introduction of new products. Art
supplies products sales were essentially unchanged in fiscal 1995 when compared
to fiscal 1994. Export sales of art/craft products grew by 2.7% in fiscal 1995
from fiscal 1994. Foreign sales of art/craft products continued to increase
substantially, growing 51.9% in fiscal 1995 as compared to fiscal 1994. This
increase was due primarily to higher sales of presentation graphics products in
Europe, which includes sales of products of Centafoam (acquired in late April,
1995). Excluding sales from the Centafoam business, foreign sales grew 33.9% in
fiscal 1995.

                  The Company has experienced a 3% general decline in the rate
of orders for its products during the first two months of fiscal 1996.
Management is uncertain as to the reason for this and does not know if this is
indicative of a trend.

                  Net income of $15.3 million, or $.96 per share, for fiscal
1995 decreased approximately 15% from fiscal 1994 due to several factors,
including a provision in fiscal 1995 for organizational changes and relocation
and consolidation of operations aggregating $5.3 million (approximately $3.5
million after income taxes, or $.22 per share) discussed below and the adoption
of Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes," in fiscal 1994, the cumulative effect of which increased fiscal
1994 net income by $.8 million, or $.05 per share.

                  Gross Profit. The Company's gross profit margin decreased to
37.3% of net sales in fiscal 1995 from 39.3% in fiscal 1994. The decrease was
primarily the result of changes in product sales mix (i.e., higher sales for
certain office furniture products and higher foreign sales, which yield lower
gross profit percentages than many of the Company's other products), higher raw
material costs and lower sales and production volume of Boston brand products.
The gross profit percentage for foreign sales was 28.5% in fiscal 1995 and 28.7%
in fiscal 1994. Higher costs of commodities, such as wood, styrene plastics and
corrugated packaging materials had the greatest impact on raw material cost
increases.

                  During the latter part of fiscal 1995, the Company began to
realize the positive effects of its selling price increases and to some extent,
stabilization of prices of some of its raw materials. However, management
expects the price of some of its raw materials to continue to increase in fiscal
1996.

                  Selling, Shipping, Administrative and General Expenses.
Selling and shipping expenses decreased to 19.1% of net sales in fiscal 1995
from 20.3% in fiscal 1994, largely as a result of lower packing and shipping
expense, primarily freight expenses, and lower sales commission expenses
attributable to changes in customer sales mix.

                  Administrative and general expenses increased 3.5% to $28.3
million primarily as a result of salary and wage increases, offset partially by
lower fees for professional services.

                                      -16-
<PAGE>

                  Provision for Organizational Changes and Relocation and
Consolidation of Operations. During fiscal 1995, the Company recorded a pre-tax
charge aggregating $5.3 million (approximately $3.5 million after income taxes,
or $.22 per share) as a provision for costs relating to organizational changes
and relocation and consolidation of certain manufacturing and distribution
operations. The pre-tax charge was comprised of $2.4 million for costs expected
to be incurred in connection with organizational changes being made to more
effectively align the Company's organization with its markets, including the
resignation and planned replacement of the Company's former Chairman and Chief
Executive Officer, and $2.9 million for anticipated costs relating to the
relocation and consolidation of its Hunt Data Products manufacturing and
distribution operations located in Nuevo Laredo, Mexico, and Laredo, Texas, with
its manufacturing facilities in Statesville, North Carolina and the move of the
distribution operations of its Lit-Ning business from Florence, Kentucky, to
Statesville. The relocation and consolidation of operations is expected to
reduce costs and improve product quality and distribution performance. The
provision included recognition of future lease obligations, write-off of
property, plant and equipment, relocation costs, employee severance costs and
other related costs. Approximately $2.2 million of this provision is included in
liabilities as of December 3, 1995 which principally relates to future severance
related payments. It is anticipated that the total pre-tax charge associated
with the relocation and consolidation of operations and organizational changes
will range from $6.1 million to $7.1 million, or from $.25 to $.32 per share.
The remaining portion of these charges (ranging from $.03 to $.10 per share) is
expected to be incurred during fiscal 1996.

                  Interest Income. Interest income increased $229,000 in fiscal
1995 from fiscal 1994 due primarily to higher average cash balances.

                  Provision for Income Taxes. The Company's effective tax rate
decreased to 35.1% in fiscal 1995 from 36.5% in fiscal 1994. This decrease was
principally a result of a reversal of valuation allowances relating to tax net
operating loss carryforwards from the European operations.

         New Accounting Standards

                  SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of," requires changes in
accounting and reporting for impairments of long-lived assets, certain
identifiable intangibles and goodwill related to those assets to be held and
used, and for long-lived assets and certain identifiable intangibles to be
disposed of. SFAS No. 121 is effective for fiscal years beginning after December
15, 1995. Accordingly, the Company will adopt SFAS No. 121 when required.
Management does not believe the adoption of SFAS No. 121 will have a material
effect on its results of operations or financial condition.

                  SFAS No. 123, "Accounting for Stock-Based Compensation,"
encourages, but does not require, companies to recognize compensation expense
for grants of stock, stock options, and other equity instruments to employees
based upon fair value or, alternatively, permits them to continue to apply the
existing accounting rules contained in Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB No. 25). Companies choosing
not to adopt the expense recognition provisions of SFAS No. 123 are required to
disclose pro forma net income and earnings per share data as if such provisions
had been applied. The Company anticipates continuing to account for stock-based
compensation in accordance with APB No. 25 and therefore the adoption of SFAS
No. 123 will not have an impact on the Company's financial position or results
of operations.

                                      -17-
<PAGE>

         Environmental Matters

                  The Company is involved, on a continuing basis, in monitoring
its compliance with environmental laws and in making capital and operating
improvements necessary to comply with existing and anticipated environmental
requirements. Despite its efforts, the Company has been cited for occasional
violations or alleged violations of environmental laws or permits and on several
occasions has been named as a potentially responsible party for the remediation
of sites. Expenses incurred by the Company for all years presented in the
consolidated financial statements relating to violations of and compliance with
environmental laws and permits and site remediation have not been material.
While it is impossible to predict with certainty, management currently does not
foresee such expenses in the future as having a material effect on the Company's
business, results of operations or financial condition. (See Note 13 of the
Notes to Consolidated Financial Statements.)

         Comparison of Fiscal 1994 vs. 1993

                  Net Sales and Earnings. Net sales increased 12.5% to $288.2
million in fiscal 1994 from $256.2 million in fiscal 1993. This increase was
largely the result of higher unit volume, particularly from new products, as
selling prices were essentially unchanged in fiscal 1994 from those in fiscal
1993. Sales for both of the Company's business segments, office products and
art/craft products, grew by 12.5% in fiscal 1994.

                  The office products sales increase to $160.3 million in fiscal
1994 from $142.5 million in fiscal 1993 was led by a 16.9% increase in sales of
office furniture, while desktop accessories and supplies and mechanical and
electromechanical products contributed increases of 12.5% and 9.8%,
respectively. The office furniture sales increase was primarily due to higher
sales of Bevis brand furniture. The desktop accessories and supplies sales
increase was principally attributable to Schwan-STABILO highlighter markers, the
exclusive distribution rights to which in the United States and Canada were
obtained by the Company in fiscal 1994, and the mechanical and electromechanical
products sales increase was due to higher sales of Boston brand office products.
Export sales of office products increased 8.6% in fiscal 1994 as compared with
sales in fiscal 1993.

                  Art/craft products sales grew to $127.9 million in fiscal 1994
from $113.7 million in fiscal 1993 led by a 21.3% increase in sales of
presentation graphics products. Sales of art supplies and hobby/craft products
were essentially unchanged in fiscal 1994 from the levels in fiscal 1993. The
presentation graphics products sales increase was largely the result of new
products, growth in the digital imaging market, and improved economic conditions
in the United Kingdom. Foreign sales of art/craft products grew 34.6%, and
export sales were up 4.4% in fiscal 1994 from sales in fiscal 1993.

                  Net income of $18 million, or $1.12 per share, in fiscal 1994
represents an increase of 20.5% over net income for fiscal 1993. The Company
adopted SFAS No. 109, "Accounting for Income Taxes," in fiscal 1994, the
cumulative effect of which increased net income by $.8 million, or $.05 per
share. Income before the cumulative effect of this accounting change was up
15.2% from the comparable net income for fiscal 1993.

                  Gross Profit. Gross profit, as a percentage of net sales,
decreased to 39.3% in fiscal 1994 from 40.1% in fiscal 1993 due to several
factors, including changes in sales mix and higher raw material costs. Higher
sales of certain furniture products and higher foreign sales, which yield lower
gross profit percentages than the Company's other businesses, caused most of the
gross profit percentage decrease attributable to changes in sales mix. The gross

                                      -18-
<PAGE>

profit percentage for foreign sales was 28.7% in fiscal 1994 and 26.7% in fiscal
1993. Higher costs, particularly near the end of fiscal 1994, for commodities
such as wood, corrugated packaging materials and styrene plastic were not offset
by selling price increases due in large part to continued competitive pressures
and the increasing power of superstores and other large customers in the office
products area.

                  Selling, Shipping, Administrative and General Expenses.
Selling and shipping expenses, as a percentage of net sales, were reduced to
20.3% in fiscal 1994 from 20.6% in fiscal 1993 largely as a result of lower
sales commission expenses attributable to changes in customer sales mix. Lower
freight expenses in the fourth quarter of fiscal 1994 also accounted for a
portion of the decrease.

                  Administrative and general expenses increased 7.6% to $27.3
million in fiscal 1994 from $25.4 million in fiscal 1993. This increase was the
result of several factors, including higher management incentive compensation
and new product development expenses, as well as a stronger British pound
sterling, which increased foreign administrative and general expenses in U.S.
dollar terms.

                  Interest Income and Expense. Interest income increased
$152,000 in fiscal 1994 from fiscal 1993 due primarily to higher average cash
balances. Interest expense was reduced by $157,000 in fiscal 1994 from fiscal
1993 largely as a result of debt reduction and higher capitalized interest
related to additions to property, plant and equipment.

                  Provision for Income Taxes. The Company's effective tax rate
decreased to 36.5% in fiscal 1994 from 37.9% in fiscal 1993. This decrease was
the result of several factors, including lower state and local income taxes.

Item 8.  Financial Statements and Supplementary Data

                  Financial statements and supplementary financial information
specified by this Item, together with the report of Coopers & Lybrand L.L.P.
thereon, are presented following Item 14 of this report.

Item 9.  Disagreements on Accounting and Financial Disclosure
         Not applicable.

                                    PART III

Incorporated by Reference

                  The information called for by Item 10 "Directors and Executive
Officers of the Registrant" (other than the information concerning executive
officers set forth after Item 4 herein), Item 11 "Executive Compensation", Item
12 "Security Ownership of Certain Beneficial Owners and Management" and Item 13
"Certain Relationships and Related Transactions" is incorporated herein by
reference to the Company's definitive proxy statement for its Annual Meeting of
Shareholders scheduled to be held April 17, 1996, which definitive proxy
statement is expected to be filed with the Commission not later than 120 days
after the end of the fiscal year to which this report relates.

                                      -19-
<PAGE>

                                     PART IV

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

                  (a)  Documents Filed as a part of the Report

                       1. Financial Statements:

                                                                          Pages
                                                                          -----
                          Report of Independent Accountants                 F-1

                          Consolidated Statements of
                          Income for the fiscal years
                          1995, 1994 and 1993                               F-2

                          Consolidated Balance Sheets,
                          December 3, 1995 and
                          November 27, 1994                                 F-3

                          Consolidated Statements of
                          Stockholders' Equity
                          for the fiscal years 1995, 1994
                          and 1993                                          F-4

                          Consolidated Statements of
                          Cash Flows for the fiscal years
                          1995, 1994 and 1993                               F-5

                          Notes to Consolidated Financial                F-6-33
                          Statements

                       2.  Financial Statement Schedule:

                           II.  Valuation and Qualifying
                                Accounts for the fiscal years
                                1995, 1994 and 1993                        F-34


                            All other schedules not listed above have been
                            omitted, since they are not applicable or are not
                            required, or because the required information is
                            included in the consolidated financial statements or
                            notes thereto.

                            Individual financial statements of the Company have
                            been omitted, since the Company is primarily an

                                      -20-
<PAGE>

                            operating company and any subsidiary companies
                            included in the consolidated financial statements
                            are directly or indirectly wholly-owned and are not
                            indebted to any person, other than the parent or the
                            consolidated subsidiaries, in an amount which is
                            material in relation to total consolidated assets at
                            the date of the latest balance sheet filed, except
                            indebtedness incurred in the ordinary course of
                            business which is not overdue and which matures in
                            one year.

                       3.  Exhibits:

                           (3)  Articles of incorporation and bylaws:

                                (a)  Restated Articles of Incorporation, as
                                     amended (composite) (incorp. by ref. to Ex.
                                     4(a) to Reg. Stmt. No. 33-57105 on Form
                                     S-8) (reference also is made to Exhibit
                                     4(b) below for the Designation of Powers,
                                     Preferences, Rights and Qualifications of
                                     Preferred Stock).

                                (b)  By-laws, as amended (incorp. by ref. to Ex.
                                     3(b) to Form 10-Q for quarter ended May 28,
                                     1995).

                           (4)  Instruments defining rights of security holders,
                                including indentures:*


                                (a)  (1) Credit Agreement dated December 19,
                                     1995 between the Company and NationsBank,
                                     N.A. (incorp. by ref. to Ex. 9(b) to the
                                     Company's Schedule 13E-4 filed with the SEC
                                     on December 21, 1995 (the "1995 Schedule
                                     13E-4"); (2) Amendment dated as of February
                                     1, 1996 to Credit Agreement (filed
                                     herewith); and (3) Amendment dated as of
                                     February 26, 1996 to Credit Agreement
                                     (filed herewith).

                                (b)  Rights Agreement dated as of August 8, 1990
                                     (including as Exhibit A thereto the
                                     Designation of Powers, Preferences, Rights
                                     and Qualifications of Preferred Stock),
                                     between the Company and Mellon Bank (East),
                                     
                                      -21-
<PAGE>

                                     N.A., as original Rights Agent (incorp. by
                                     ref. to Ex. 4.1 to August, 1990 Form 8-K)
                                     and Assignment and Assumption Agreement
                                     dated December 2, 1991, with American Stock
                                     Transfer and Trust Company, as successor
                                     Rights Agent (incorp. by ref. to Ex. 4(d)
                                     to fiscal 1991 Form 10-K).

                                     Miscellaneous long-term debt instruments
                                     and credit facility agreements of the
                                     Company, under which the underlying
                                     authorized debt is equal to less than 10%
                                     of the total assets of the Company and its
                                     subsidiaries on a consolidated basis, may
                                     not be filed as exhibits to this report.
                                     The Company agrees to furnish to the
                                     Commission, upon request, copies of any
                                     such unfiled instruments.

                           (10) Material contracts:

                                (a)  Lease Agreement dated June 1, 1979 and
                                     First Supplemental Lease Agreement dated as
                                     of July 31, 1994 between the Iredell County
                                     Industrial Facilities and Pollution Control
                                     Financing Authority and the Company
                                     (incorp. by ref. to Ex. 10(a) to fiscal
                                     1994 Form 10-K).

                                (b)  1978 Stock Option Plan, as amended, of the
                                     Company (incorp. by ref. to Ex. 28(a) to
                                     Reg. Stat. No. 33-25947 on Form S-8).**

                                (c)  1983 Stock Option and Stock Grant Plan, as
                                     amended, of the Company (filed herewith).**

                                (d)  1993 Stock Option and Stock Grant Plan of
                                     the Company, as amended (filed herewith).**

                                (e)  1988 Long-Term Incentive Compensation Plan
                                     of the Company (incorp. by ref. to Ex.
                                     10(e) to fiscal 1994 Form 10-K).**

                                (f)  Form of Stock Grant Agreement between the
                                     Company and Messrs. Carney, Chandler,
                                     O'Meara and Precious (filed herewith).**

                                      -22-
<PAGE>

                                (g)  1994 Non-Employee Directors' Stock Option
                                     Plan (incorp. by ref. to Ex. 10(f) to
                                     fiscal 1993 Form 10-K).**

                                (h)  Loan and Security Agreement dated January
                                     31, 1984, as amended, between the Company
                                     and Ronald J. Naples (incorp. by ref. to
                                     Ex. 10(g) to fiscal 1994 Form 10-K).**

                                (i)  Loan and Security Agreement dated April 20,
                                     1988 between the Company and Robert B.
                                     Fritsch (incorp. by ref. to Exh 10(h) to
                                     fiscal 1994 Form 10-K).**

                                (j)  (1) Form of Change in Control Agreement
                                     between the Company and various officers of
                                     the Company (incorp. by ref. to Ex. 10(i)
                                     to fiscal 1994 Form 10-K)** and (2) list of
                                     executive officers who are parties (filed
                                     herewith).**

                                (k)  Employment-Severance Agreement between the
                                     Company and William E. Chandler (incorp. by
                                     ref. to Ex. 10(j) to fiscal 1993 Form
                                     10-K).**

                                (l)  (1) Supplemental Executive Benefits Plan of
                                     the Company, effective April 16, 1992, and
                                     (2) related Amended and Restated Trust
                                     Agreement, effective February 17, 1993
                                     (incorp. by ref. to Ex. 10(j) to fiscal
                                     1992 Form 10-K).**

                                (m)  Employment-Severance arrangements with
                                     Robert B. Fritsch (filed herewith).**

                                (n)  Transition Agreement dated June 13, 1995
                                     between the Company and Ronald J. Naples
                                     (incorp. by ref. to Form 10-Q for quarter
                                     ended Sept. 3, 1995)**.

                                (o)  Stock Purchase Agreement, dated December
                                     19, 1996 between the Company and Mary F.
                                     Bartol (incorp. by ref. to Ex. 9(c) to the
                                     1995 Schedule 13E-4).

                           (11) Statement re:  computation of per share
                                earnings (filed herewith).

                                      -23-
<PAGE>

                           (21) Subsidiaries (incorp. by ref. to Ex. 21 to
                                fiscal 1993 Form 10-K).

                           (23) Consent of Coopers & Lybrand L.L.P. to
                                incorporation by reference, in Registration
                                Statement No.s 33-70660, 33-25947, 33-6359,
                                2-83144, 33-57105 and 33-57103 on Form S-8, of
                                their report on the consolidated financial
                                statements and schedules included in this
                                report (filed herewith).

                           (27) Financial Data Schedule (filed herewith).

---------------
*     Reference also is made to (i) Articles 5th, 6th, 7th and 8th of the
      Company's composite Articles of Incorporation (Ex. 3(a) to this report),
      and (ii) to Sections 1, 7 and 8 of the Company's By-laws (Ex. 3 (b) to
      this report).

**    Indicates a management contract or compensatory plan or arrangement.


                  (b)      Reports on Form 8-K

                  The Company did not file any reports on Form 8-K during the
last quarter of the fiscal year covered by this report.

                                  -----------

                                      -24-


<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Stockholders
and the Board of Directors of
Hunt Manufacturing Co.:

We have audited the consolidated financial statements and the financial
statement schedule of Hunt Manufacturing Co. and Subsidiaries listed in the
index on page 20 of this Form 10-K. These financial statements and the financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Hunt Manufacturing
Co. and Subsidiaries as of December 3, 1995 and November 27, 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 3, 1995 in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.

As discussed in Notes 1 and 9 to the consolidated financial statements, the
Company changed its method of accounting for income taxes in fiscal year 1994.



COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 15, 1996, except as to the
information presented in Notes 2 and 8,
for which the date is January 30, 1996

                                       F-1


<PAGE>

                     HUNT MANUFACTURING CO. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                    for the fiscal years 1995, 1994 and 1993
                     (In thousands except per share amounts)

<TABLE>
<CAPTION>
                                                              1995                1994               1993
                                                           (53 weeks)          (52 weeks)         (52 weeks)
                                                           ----------          ----------         ----------
<S>                                                         <C>                 <C>                <C>
Net sales                                                   $313,881            $288,203           $256,150

Cost of sales                                                196,720             174,927            153,353
                                                            --------            --------           --------

         Gross profit                                        117,161             113,276            102,797

Selling and shipping expenses                                 59,960              58,572             52,831

Administrative and general expenses                           28,296              27,338             25,405

Provision for organizational changes and
      relocation and consolidation of operations               5,342                  --                 --
                                                            --------            --------           --------

          Income from operations                              23,563              27,366             24,561

Interest expense (less $229, $354
       and $283 capitalized in 1995,
       1994 and 1993, respectively)                             (109)                (85)              (242)

Interest income                                                  571                 342                190

Other expense, net                                              (380)               (542)              (471)
                                                            --------            --------           --------

          Income before income taxes and 
           cumulative effect of accounting change             23,645              27,081             24,038

Provision for income taxes                                     8,310               9,884              9,110
                                                            --------            --------           --------

         Income before cumulative effect of
          accounting change                                   15,335              17,197             14,928

Cumulative effect of change in
     accounting for income taxes                                  --                 795                 --
                                                            --------            --------           --------
         Net income                                         $ 15,335            $ 17,992           $ 14,928
                                                            ========            ========           ========
Average shares of common stock
      outstanding                                             16,003              16,102             16,107
                                                            ========            ========           ======== 
Earnings per common share:
        Income before cumulative effect
         of accounting change                                  $ .96              $ 1.07              $ .93

        Cumulative effect of change in
         accounting for income taxes                              --                 .05                 --
                                                            --------            --------           --------
         Net income per share                                  $ .96              $ 1.12              $ .93
                                                            ========            ========           ======== 
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-2


<PAGE>

                     HUNT MANUFACTURING CO. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                     December 3, 1995 and November 27, 1994
                (In thousands except share and per share amounts)

<TABLE>
<CAPTION>

                      ASSETS                                    1995         1994
                                                               ------       ------
<S>                                                           <C>          <C>
Current assets:
     Cash and cash equivalents                                $ 15,503     $ 13,807

     Accounts receivable, less allowance for doubtful 
       accounts: 1995, $2,305; 1994, $2,510                     42,036       41,390

     Inventories                                                36,131       33,550

     Deferred income taxes                                       4,938        5,051

     Prepaid expenses and other current assets                   1,484        1,520
                                                              --------     --------

       Total current assets                                    100,092       95,318

Property, plant and equipment, at cost, less
   accumulated depreciation and amortization                    52,008       49,729

Excess of acquisition cost over net assets
   acquired, less accumulated amortization                      18,204       17,218

Intangible assets, at cost, less accumulated 
   amortization                                                  7,793        8,764

Other assets                                                     4,713        2,356
                                                              --------     --------
                TOTAL  ASSETS                                 $182,810     $173,385
                                                              ========     ========

                      LIABILITIES
Current liabilities:
     Current portion of long-term debt                        $    766     $  1,003
     Accounts payable                                           10,759        9,782
     Accrued expenses:
       Salaries, wages and commissions                           5,446        5,742
       Income taxes                                              3,064        4,464
       Insurance                                                 2,449        2,430
       Compensated absences                                      1,673        1,741
       Other                                                     6,793        5,553
                                                              --------     --------
       Total current liabilities                                30,950       30,715

Long-term debt, less current portion                             3,559        3,559

Deferred income taxes                                            4,520        4,331

Other non-current liabilities                                    7,588        5,546

                      STOCKHOLDERS'  EQUITY
Capital stock:
     Preferred, $.10 par value, authorized 1,000,000
       shares (including 50,000 shares of Series A Junior
       Participating Preferred); none issued                        --           --     

     Common, $.10 par value, authorized 40,000,000
       shares; issued:  1995 - 16,152,322 shares;
       1994 - 16,130,068 shares                                  1,615        1,613

Capital in excess of par value                                   6,434        6,217

Cumulative translation adjustment                                 (983)        (639)

Retained earnings                                              131,216      122,518

     Less cost of treasury stock:
     1995 - 159,159 shares; 1994 - 29,945 shares                (2,089)        (475)
                                                              --------     --------
       Total stockholders' equity                              136,193      129,234
                                                              --------     --------
                TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $182,810     $173,385
                                                              ========     ========
</TABLE>

                                                              
          See accompanying notes to consolidated financial statements.

                                       F-3


<PAGE>

                     HUNT MANUFACTURING CO. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    for the fiscal years 1995, 1994 and 1993
                (In thousands except share and per share amounts)

<TABLE>
<CAPTION>
                                                              Common Stock        Capital     Cumulative
                                                           ------------------    Excess of    Translation      Retained
                                                           Issued    Treasury    Par Value    Adjustments      Earnings
                                                           ------    --------    ---------    -----------      --------
<S>                                                        <C>       <C>          <C>          <C>              <C>
Balances, November 29, 1992 (issued 16,114,848
  shares; treasury 32,926 shares                           $1,611    $  (430)      $6,045        $(1,136)       $101,366

Net income                                                                                                        14,928
Cash dividends on common stock ($.35 per share)                                                                   (5,639)
Translation adjustments                                                                             (359)
Purchase of treasury stock (22,200 shares)                              (308)
Exercise of stock options (issued 10,473 shares;       
   treasury 32,875 shares, net of shares received 
   as payment upon exercise)                                    2        393          113                           (367)
Issuance of stock grants (treasury 3,617 shares)                          46                                           2
                                                           ------    -------       ------        -------        --------
Balances, November 28, 1993 (issued 16,125,321
  shares; treasury 18,634 shares)                           1,613       (299)       6,158         (1,495)        110,290

Net income                                                                                                        17,992
Cash dividends on common stock ($.36 per share)                                                                   (5,794)
Translation adjustments                                                                              856
Purchase of treasury stock (45,600 shares)                              (728)
Exercise of stock options (issued 1,988 shares;       
   treasury 25,925 shares, net of shares received 
   as payment upon exercise)                                             416           16                             25
Issuance of stock grants (issued 2,759 shares;
   treasury  8,364 shares)                                               136           43                              5
                                                           ------    -------       ------        -------        --------
Balances, November 27, 1994 (issued 16,130,068
  shares; treasury 29,945 shares)                           1,613       (475)       6,217           (639)        122,518

Net income                                                                                                        15,335
Cash dividends on common stock ($.38 per share)                                                                   (6,081)
Translation adjustments                                                                             (344)
Purchase of treasury stock (204,900 shares)                           (2,853)
Exercise of stock options (issued 8,044 shares;       
   treasury 70,580 shares, net of shares received 
   as payment upon exercise)                                    1      1,168           55                           (562)
Issuance of stock grants (issued 14,210 shares;
   treasury 5,106 shares)                                       1         71          162                              6
                                                           ------    -------       ------        -------        --------
Balances, December 3, 1995 (issued 16,152,322
  shares; treasury 159,159 shares)                         $1,615    $(2,089)      $6,434        $  (983)       $131,216
                                                           ======    =======       ======        =======        ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-4





<PAGE>

                     HUNT MANUFACTURING CO. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    for the fiscal years 1995, 1994 and 1993
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                              1995           1994           1993
                                                                              ----           ----           ----
<S>                                                                          <C>            <C>            <C>
Cash flows from operating activities:
Net income                                                                   $15,335        $17,992        $14,928
Adjustments to reconcile net income to net cash 
   provided by operating activities:
     Depreciation and amortization                                             8,758          8,039          7,664
     Provision for inventory obsolescence                                      1,778          2,083          1,598
     Provision for doubtful accounts                                             916            921          1,022
     Cumulative effect of change in accounting for income taxes                   --           (795)            --     
     Deferred income taxes                                                       410         (1,155)          (456)
     Loss on disposals of property, plant and equipment                          184            634            571
     Provision (payments) for organizational changes and
       relocation and consolidation of operations                              4,109           (132)          (400)
     Issuance of stock under management incentive bonus
     and stock grant plans                                                       240            312             48
     Changes in operating assets and liabilities, net of
        acquisition of businesses:
          Accounts receivable                                                   (705)        (2,609)        (1,023)
          Inventories                                                         (4,332)        (7,485)        (4,639)
          Prepaid expenses and other current assets                               44          1,124           (922)
          Accounts payable                                                       529          1,352          2,847
          Accrued expenses                                                    (2,240)           400          2,009
          Other non-current assets and liabilities                            (1,660)         2,820            (50)
                                                                             -------        -------        -------
          Net cash provided by operating activities                           23,366         20,797         23,197
                                                                             -------        -------        -------
Cash flows from investing activities:
   Additions to property, plant and equipment                                 (9,523)        (9,305)       (10,339)
   Acquisition of businesses                                                   2,919             --         (1,051)
   Other, net                                                                   (667)          (620)             2
                                                                             -------        -------        -------
         Net cash used for investing activities                              (13,109)        (9,925)       (11,388)
                                                                             -------        -------        -------
Cash flows from financing activities:
   Proceeds from long-term debt                                                  930             --             --     
   Payments of long-term debt, including current maturities                   (1,167)        (1,600)        (1,209)
   Purchases of treasury stock                                                (2,853)          (728)          (308)
   Proceeds from exercise of stock options                                       662            331            211
   Dividends paid                                                             (6,081)        (5,794)        (5,639)
   Other, net                                                                    (20)           (45)           (49)
                                                                             -------        -------        -------
         Net cash used for financing activities                               (8,529)        (7,836)        (6,994)
                                                                             -------        -------        -------

Effect of exchange rate changes on cash and cash equivalents                     (32)            (7)           (50)
                                                                             -------        -------        -------
Net increase in cash and cash equivalents                                      1,696          3,029          4,765

Cash and cash equivalents, beginning of year                                  13,807         10,778          6,013
                                                                             -------        -------        -------
Cash and cash equivalents, end of year                                       $15,503        $13,807        $10,778
                                                                             =======        =======        =======
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-5


<PAGE>

                     HUNT MANUFACTURING CO. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (In thousands except share and per share amounts)

                                      -----

1.       Summary of Significant Accounting Policies:
         ------------------------------------------

         Basis of Presentation:
         ---------------------

         The consolidated financial statements include the accounts of the
         Company and its subsidiaries, all of which are wholly-owned. The
         Company's fiscal year ends on the Sunday nearest the end of November.
         Fiscal year 1995 ended December 3, 1995; fiscal year 1994 ended
         November 27, 1994 and fiscal year 1993 ended November 28, 1993. Fiscal
         year 1995 comprised 53 weeks; fiscal years 1994 and 1993 comprised 52
         weeks.

         Cash Equivalents:
         ----------------
 
         The Company considers all highly liquid temporary cash investments
         purchased with a maturity of three months or less to be cash
         equivalents.

         Inventories:
         -----------

         Inventories are valued at the lower of cost or market. Cost is
         determined by the last-in, first-out (LIFO) method for over half of the
         inventories and by the first-in, first-out (FIFO) method for the
         remainder. The Company uses the FIFO method of inventory valuation for
         certain acquired businesses because the related products and operations
         are separate and distinct from the Company's other businesses.

         Property, Plant and Equipment:
         -----------------------------

         Expenditures for additions and improvements to property, plant and
         equipment are capitalized, and normal repairs and maintenance are
         charged to expense as incurred. The related cost and accumulated
         depreciation of depreciable assets disposed of are eliminated from the
         accounts, and any profit or loss is reflected in other expense, net.

         Excess of Acquisition Cost Over Net Assets Acquired and Intangible
         Assets:
         ------------------------------------------------------------------

         Excess of acquisition cost over net assets acquired relates principally
         to the Company's acquisitions of X-Acto (1981), Bevis Custom Tables,
         Inc. (1985), the Graphic Arts Group of Bunzl plc (1990) and Centafoam
         (1995). The Company's policy is to record an impairment loss against
         the net unamortized excess of acquisition cost over net assets acquired
         and net intangible assets in the period when it is determined that the
         carrying amount of the net assets may not be recoverable. The Company
        
                                       F-6
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

1.       Summary of Significant Accounting Policies (continued):
         ------------------------------------------------------

         Excess of Acquisition Cost Over Net Assets Acquired and Intangible
         Assets (continued):
         ------------------------------------------------------------------

         performs this evaluation on a quarterly basis. This determination
         includes evaluation of factors such as current market value, future
         asset utilization, business climate and future net cash flows
         (undiscounted and without interest) expected to result from the use of
         the net assets.

         Depreciation and Amortization:
         -----------------------------

         Depreciation for financial reporting purposes is computed using the
         straight-line method over the estimated useful life of the asset as
         follows: buildings, 12 to 40 years; machinery and equipment, four to 12
         years; and leasehold improvements over the lease term. Depreciation for
         tax purposes is computed principally using accelerated methods. The
         excess of acquisition cost over net assets acquired is amortized on a
         straight-line basis over periods ranging from 20 to 40 years. The costs
         of intangible assets are amortized on a straight-line basis over their
         respective estimated useful lives, ranging from five to 30 years.
         Amortization of assets under capital leases which contain purchase
         options is provided over the assets' useful lives. Other capital leases
         are amortized over the terms of the related leases or asset lives, if
         shorter.

         Currency Translation:
         --------------------

         The assets and liabilities of subsidiaries having a functional currency
         other than the U.S. dollar are translated at the fiscal year-end
         exchange rate, while elements of the income statement are translated at
         the weighted average exchange rate for the fiscal year. The cumulative
         translation adjustment is recorded as a separate component of
         stockholders' equity. Gains and losses on foreign currency transactions
         are included in the determination of net income and are reflected in
         other expense, net. Such gains and losses were not material in any of
         the years presented in the consolidated financial statements.

         Income Taxes:
         ------------

         Effective November 29, 1993, the Company adopted Statement of Financial
         Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes."
         The adoption of SFAS No. 109 changed the Company's method of accounting
         for income taxes from the deferral method under Accounting Principles
         Board Opinion No. 11 to an asset/liability approach. The adoption of
         
                                       F-7
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

1.       Summary of Significant Accounting Policies (continued):
         ------------------------------------------------------

         Income Taxes (continued):
         ------------------------

         SFAS No. 109 has been recognized as the effect of a change in
         accounting principle and increased net income in fiscal 1994 by $795,
         or $.05 per share. The increase in net income results primarily from
         adjusting deferred tax balances to current tax rates. Financial
         statements for fiscal 1993 have not been restated.

         Hedging:
         -------

         In fiscal year 1995, the Company adopted SFAS No. 119, "Disclosure
         about Derivative Financial Instruments and Fair Value of Financial
         Instruments." Derivative financial instruments are used to hedge risk
         caused by fluctuating currency. The Company periodically enters into
         forward exchange contracts to hedge foreign currency transactions for
         periods generally consistent with its committed exposure. These
         transactions were not material in any of the years presented in the
         consolidated financial statements. Cash flows from hedges are
         classified in the statement of cash flows in the same category as the
         item being hedged. The Company does not hold or issue financial
         instruments for trading purposes.

         Earnings Per Share:
         ------------------

         Earnings per share are calculated based on the weighted average number
         of common shares outstanding. The effect of outstanding stock options
         and stock grants is not material and has not been included in the
         calculation.

         Employee Benefit Plans:
         ----------------------

         The Company and its subsidiaries have non-contributory, defined benefit
         pension plans covering the majority of their employees. It is the
         Company's policy to fund pension contributions in accordance with the
         requirements of the Employee Retirement Income Security Act of 1974.
         The benefit formula used to determine pension costs is the
         final-average-pay method.

         In fiscal year 1995, the Company adopted SFAS No. 112, "Employers'
         Accounting for Postemployment Benefits," which requires the accrual of
         postemployment benefits if the obligation is attributable to employees'
         services already rendered, employees' rights to those benefits
         accumulate or vest, payment of the benefits is probable and the amount
         of the benefits can be reasonably estimated. The adoption of this
         standard did not have a material effect on the Company's results of
         operations or financial condition.

                                       F-8
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

1.       Summary of Significant Accounting Policies (continued):
         ------------------------------------------------------

         Environmental Matters:
         ---------------------

         Environmental expenditures that relate to current operations are
         expensed or capitalized as appropriate. Expenditures that relate to an
         existing condition caused by past operations, and which do not
         contribute to current or future revenue generation, are also expensed.
         The Company records liabilities for environmental costs when
         environmental assessments and/or remedial efforts are probable and the
         costs can be reasonably estimated. The liability for future
         environmental remediation costs is evaluated on a quarterly basis by
         management. Generally, the timing of these accruals coincides with the
         earlier of the completion of a feasibility study or the Company's
         commitment to a plan of action based on the then-known facts.
         Recoveries of expenditures are recognized as a receivable only when
         they are estimable and probable.

2.       Subsequent Events:
         -----------------

         On December 19, 1995, the Company purchased from Mary F. Bartol an
         aggregate of 2,150,165 of the Company's common shares for a cash
         purchase price of $16.32 per share, or $35.1 million in a private
         transaction. Mrs. Bartol is the widow of George E. Bartol III, the late
         Chairman of the Board, the mother-in-law of Gordon A. MacInnes, the
         current Chairman of the Board, and the mother of Victoria B.
         Vallely, another Director of the Company.

         On December 21, 1995, the Company commenced a tender offer to purchase
         up to 3,230,000 of the Company's common shares at a price of $17.00 net
         per share in cash. The Company purchased 2,954,378 common shares in
         January 1996 under the terms and subject to conditions of the tender
         offer. The aggregate purchase price of the common shares and estimated
         expenses pursuant to the offer was $51.5 million.

         On December 19, 1995 the Company also obtained a new five-year $125
         million bank credit facility, consisting of a revolving credit facility
         in an amount up to $81.725 million, and an amortizing term loan in the
         amount of $43.275 million. This new credit facility replaces the
         revolving credit agreement discussed in Note 8 in effect at December 3,
         
                                       F-9
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------


2.       Subsequent Events (continued):
         -----------------------------

         1995. The Company used borrowings of $31.725 million under the
         revolving credit facility and $43.275 million pursuant to the term
         loan, together with cash on hand, to fund the purchase of common shares
         from Mrs. Bartol and common shares pursuant to the tender offer. The
         balance of the new credit facility will be available for working
         capital, strategic acquisitions, and general corporate purposes.

         The revolving credit facility matures on December 31, 2000. The term
         loan will amortize in twenty quarterly installments, consisting of four
         installments each of $1.202 million, $1.683 million, $2.404 million,
         $2.645 million, and $2.885 million, respectively. The first installment
         is due and payable March 31, 1996, and the last installment is due and
         payable December 31, 2000.

         The interest rates under the revolving credit facility (6.14% at
         January 30,1996) are at a base rate (defined as the higher of (i) the
         applicable prime rate of the bank and (ii) the federal funds rate plus
         50 basis points) or, at the option of the Company, LIBOR plus a margin
         of between 40 and 72.5 basis points, the margin in each case to be
         adjusted quarterly based on the Company's leverage ratio (as defined in
         the new credit facility). The interest rates under the term loan (6.2%
         at January 30, 1996) are at the base rate or, at the option of the
         Company, LIBOR plus a margin of between 55 and 87.5 basis points, the
         margin to be adjusted quarterly based on the Company's leverage ratio.

         Commitment fees are payable to the bank under the new credit facility
         with respect to the aggregate amount of the revolving credit facility
         equal to a rate per annum of 15 basis points, payable quarterly. The
         Company will also pay to the bank an administration fee equal to $50
         per annum.

         The new credit facility also contains certain representations,
         warranties, covenants, and conditions, including, but not limited to,
         requirements that the Company comply with certain financial covenants,
         including interest coverage, fixed charge coverage and leverage ratios,
         and maintenance of certain levels of net worth, and also contains
         limitations on liens, indebtedness, investments, changes in lines of
         business, acquisitions, transactions with affiliates, and modifications
         of certain documents. In addition, the new credit facility prohibits
         dividends and other distributions to shareholders unless a minimum
         fixed charge coverage ratio is satisfied after giving effect to such
         dividend or distribution; however, the Company does not presently
         anticipate that this dividend restriction will require any reduction
         from the Company's current dividend level.

                                      F-10
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

2.       Subsequent Events (continued):
         -----------------------------

         The following table sets forth the unaudited pro forma effects on the
         financial results of the Company of the consummation of the purchase of
         common shares from Mary F. Bartol and the tender offer and related
         financing. The summary pro forma income statement data for the year
         ended December 3, 1995 assumes that the repurchase of common shares by
         the Company from Mary F. Bartol and the tender offer and the related
         financing had occurred as of November 28, 1994. The summary pro forma
         balance sheet data assumes that the repurchase of common shares by the
         Company from Mary F. Bartol and the tender offer and related financing
         had occurred as of December 3, 1995.

                     Summary Pro Forma Financial Information
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                        Pro forma         Pro forma
                                            As reported                 adjustment        as adjusted
                                            -----------                 ----------        -----------
<S>                                         <C>                         <C>                <C>
         Income statement:

             Net income                      $ 15,335                   $(3,227)(a)         $ 12,108

             Net income per share                 .96                       .14 (b)             1.10


         Balance sheet:

           Working capital                  $  69,142                  $(16,754)(c)         $ 52,388

           Total assets                       182,810                   (11,070)(c)          171,740

           Total long-term debt                 4,325                    75,000 (c)           79,325

           Shareholders' equity               136,193                   (86,070)(c)           50,123
</TABLE>

                  (a)    Net increases, net of corresponding tax effects, in
                         interest expense relating to the utilized portion of
                         the new $125 million credit facility, as well as
                         amortization of fees incurred in connection with the
                         placement of the new credit facility and administrative
                         fees associated therewith.

                                      F-11
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------


2.       Subsequent Events (continued):
         -----------------------------

                  (b)    Per share data adjusted to reflect the adjustments
                         described in notes (a) and (c). Pro forma average
                         number of shares outstanding during the year ended
                         December 3, 1995 was 10,996,000.

                  (c)    Reflects the purchase of the Mary F. Bartol shares and
                         the shares pursuant to the tender offer and related
                         borrowings under the new credit facility.


3.       Provision for Organizational Changes and Relocation and Consolidation 
         of Operations:
         ---------------------------------------------------------------------

         During fiscal 1995, the Company recorded a pre-tax charge aggregating
         $5.3 million (approximately $3.5 million after income taxes, or $.22
         per share) as a provision for costs relating to organizational changes
         and relocation and consolidation of certain manufacturing and
         distribution operations. The pre-tax charge was comprised of $2.4
         million for costs expected to be incurred in connection with
         organizational changes being made to more effectively align the
         Company's organization with its markets including the resignation and
         planned replacement of the Company's former Chairman and Chief
         Executive Officer, and $2.9 million for anticipated costs relating to
         the relocation and consolidation of its Hunt Data Products
         manufacturing and distribution operations located in Nuevo Laredo,
         Mexico, and Laredo, Texas, with its manufacturing facilities in
         Statesville, North Carolina, and the move of the distribution
         operations of its Lit-Ning business from Florence, Kentucky, to
         Statesville. The relocation and consolidation of operations is expected
         to reduce costs and improve product quality and distribution
         performance. The provision included recognition of future lease
         obligations, write-off of property, plant, and equipment, relocation
         costs, employee severance costs, and other related costs. Approximately
         $2.2 million of this provision is included in liabilities as of
         December 3, 1995 which principally relates to future severance related
         payments. It is anticipated that the total pre-tax charge associated
         with the relocation and consolidation of operations and organizational
         changes will range from $6.1 million to $7.1 million, or from $.25 to
         $.32 per share. The remaining portion of these charges (ranging from
         $.03 to $.10 per share) is expected to be incurred during fiscal 1996.

4.       Business Acquisition:
         --------------------

         On April 29, 1995, the Company acquired the Centafoam business of
         Spicers, Ltd., a division of David S. Smith (Holdings) PLC, for cash
        
                                      F-12
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

4.       Business Acquisition (continued):
         --------------------------------

         consideration and related costs aggregating approximately $2.8 million.
         Centafoam, whose facilities are located in the United Kingdom,
         manufactures and markets a line of styrene-based foam board products.
         Pro forma information is not presented as this acquisition had no
         material effect on the Company's results of operations or financial
         condition for fiscal years 1995 or 1994.

5.       Inventories:
         -----------

         The classification of inventories at the end of fiscal years 1995 and
         1994 is as follows:

                              1995            1994
                            -------          -------
          Finished goods    $18,118          $17,242
          Work in process     5,452            5,807
          Raw materials      12,561           10,501
                            -------          -------
                            $36,131          $33,550
                            =======          =======


         Inventories determined under the LIFO method were $18,446 and $17,276
         at December 3, 1995 and November 27, 1994, respectively. The current
         replacement cost for these inventories exceeded the LIFO cost by $6,226
         and $5,881 at December 3, 1995 and November 27, 1994, respectively.

         Inventory quantities were reduced in fiscal years 1995, 1994 and 1993
         resulting in a liquidation of certain LIFO inventories carried at lower
         costs prevailing in prior years. The effect of these reductions was to
         increase net income by $115, or $.01 per share, $315, or $.02 per share
         and $101, or $.01 per share, in fiscal years 1995, 1994 and 1993,
         respectively.


6.       Property, Plant and Equipment:
         -----------------------------

         Property, plant and equipment at the end of fiscal years 1995 and 1994
         is as follows:

                                      F-13
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

6.       Property, Plant and Equipment (continued):
         -----------------------------------------

<TABLE>
<CAPTION>
                                                                          1995                      1994
                                                                          ----                      ----
<S>                                                                    <C>                        <C>
                  Land and land improvements                            $  3,823                  $  3,859
                  Buildings                                               17,655                    17,683
                  Machinery and equipment                                 70,874                    66,708
                  Leasehold improvements                                     907                       661
                  Construction in progress                                 6,860                     6,981
                                                                       ---------                   -------
                                                                         100,119                    95,892
                  Less accumulated depreciation
                     and amortization                                     48,111                    46,163
                                                                         -------                   -------

                                                                        $ 52,008                   $49,729
                                                                         =======                    ======
</TABLE>

         Depreciation expense was $6,669, $6,001, and $5,649 for fiscal years
         1995, 1994 and 1993, respectively.

7.       Excess of Acquisition Cost Over Net Assets Acquired and Intangible
         Assets:
         ------------------------------------------------------------------
         Excess of acquisition cost over net assets acquired at the end of
         fiscal years 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
                                                                           1995                     1994
                                                                           ----                     ----
<S>                                                                     <C>                        <C>
                  Excess of acquisition cost
                    over net assets acquired                            $ 21,902                   $20,298
                  Less accumulated amortization                            3,698                     3,080
                                                                        --------                  --------
                                                                        $ 18,204                   $17,218
                                                                        ========                  ========
</TABLE>

         Intangible assets at the end of fiscal years 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
                                                                         1995                   1994
                                                                         ----                   ----
<S>                                                                    <C>                     <C>
                  Covenants not  to compete                            $ 11,646                $11,648
                  Customer lists                                          1,510                  1,510
                  Patents                                                 1,533                  1,533
                  Trademarks                                              1,411                  1,418
                  Licensing agreements                                    1,154                  1,154
                  Other                                                   2,137                  1,829
                                                                       --------                -------
                                                                         19,391                 19,092
         Less accumulated amortization                                   11,598                 10,328
                                                                       --------                -------
                                                                       $  7,793                $ 8,764
                                                                       ========                =======
</TABLE>

                                      F-14
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

7.       Excess of Acquisition Cost Over Net Assets Acquired (continued):
         ---------------------------------------------------------------

         New Accounting Standard:
         -----------------------

         SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
         for Long-Lived Assets to Be Disposed Of," requires changes in
         accounting and reporting for impairments of long-lived assets, certain
         identifiable intangibles and goodwill related to those assets to be
         held and used, and for long-lived assets and certain identifiable
         intangibles to be disposed of. SFAS No. 121 is effective for fiscal
         years beginning after December 15, 1995. Accordingly, the Company will
         adopt SFAS No. 121 when required. Management does not believe the
         adoption of SFAS No. 121 will have a material effect on its results of
         operations or financial condition.


8.       Debt:
         ----

         Credit Agreements and Lines of Credit:
         -------------------------------------

         At December 3, 1995, the Company had revolving credit agreements with
         three banks that provide for unsecured borrowings up to $45 million.
         There were no borrowings under these agreements at December 3, 1995 or
         November 27, 1994. On December 19, 1995, the Company entered into a new
         five-year $125 million credit facility, consisting of a revolving
         credit facility in an amount up to $81.725 million, and an amortizing
         term loan in the amount of $43.275 million. This new credit facility
         agreement replaced the revolving credit agreements discussed above
         which were in effect at December 3, 1995. (See Note 2.)

         Long-Term Debt:
         --------------

         Long-term debt at the end of fiscal years 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
                                                                                   1995             1994
                                                                                   ----             ----
<S>                                                                                <C>             <C>  

         Term loan                                                                    --         $   938
         Line of credit (a)                                                      $   766              --
         Capitalized lease obligation (See Note13)                                 2,000           2,000
         Industrial development revenue bond (b)                                   1,559           1,559
         Industrial development revenue bond                                          --              65
                                                                                 -------         -------
                                                                                   4,325           4,562
         Less current portion                                                        766           1,003
                                                                                 -------         -------
                                                                                 $ 3,559         $ 3,559
                                                                                 =======         =======
</TABLE>

                                      F-15
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

8.       Debt (continued):
         ---------------

         Long-Term Debt (continued):
         -------------------------

         (a)      This line of credit is payable in April 1996. The interest is
                  at a floating rate based on LIBOR (7.4375% at December 3,
                  1995).

         (b)      This industrial development revenue bond has a maturity date
                  of June 15, 1999. The interest rate (5.6875% at December 3,
                  1995) is 65% of the lending bank's average daily prime rate.

         The terms of certain financing agreements in effect at December 3, 1995
         (but since terminated) contain, among other provisions, requirements
         for maintaining certain working capital and other financial ratios and
         restrictions on incurring additional indebtedness and obligate the
         Company to equally and ratably collateralize the indebtedness under
         such agreements if the Company grants or assumes certain liens on its
         assets. Under the most restrictive covenants, dividends and purchases
         of capital stock of the Company may not exceed, on a cumulative basis,
         $2 million plus cumulative net income of the Company at any time during
         the period beginning November 30, 1987. As of December 3, 1995, $73
         million was available to the Company under this provision for future
         cash dividends and future purchases of its own capital stock.

         The capitalized lease obligation is collateralized by the property,
         plant and equipment described in Note 13.

         There are no maturities of long-term debt, including the capitalized
         lease, for two fiscal years subsequent to December 1, 1996 on debt in
         effect as of that date. In fiscal 1999 there will be an aggregate
         maturity of $1,559. (See Note 2 for other maturities.)

9.       Income Taxes:
         ------------
 
         Income before provision for income taxes consists of the following:
<TABLE>
<CAPTION>
                                             1995                1994                1993
                                             ----                ----                ----
<S>                                         <C>                  <C>                <C>
               Domestic                     $19,999              $24,935            $21,758
               Foreign                        3,646                2,146              2,280
                                            -------              -------            -------
                                            $23,645              $27,081            $24,038
                                            =======              =======            =======
</TABLE>

                                      F-16
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

9.       Income Taxes (continued):
         ------------------------

         The provision for income taxes consists of the following:

                                    1995          1994           1993
                                    ----          ----           ----
         Currently payable:

          Federal                 $  7,084      $  9,863       $  8,406
          State                        707         1,009            877
          Foreign                      109           167            283
                                  --------      --------       --------
                                     7,900        11,039          9,566
          Deferred                     410        (1,155)          (456)
                                  --------      --------       --------
                                  $  8,310      $  9,884       $  9,110
                                  ========      ========       ========

           The following is a reconciliation of the statutory federal income tax
           rate with the Company's effective income tax rate:
<TABLE>
<CAPTION>
                                                                       1995           1994             1993
                                                                       ----           ----             ----
<S>                                                                    <C>            <C>              <C>
             Statutory federal rate                                    35.0%          35.0%            34.9%
             State income taxes, net of
                  federal tax benefit                                   1.8            2.1              2.2
             Tax benefit of loss carryforwards
                  of foreign subsidiaries                              (2.3)           (.4)              --

             Other, net                                                  .6            (.2)              .8
                                                                       ----           ----             ----
             Effective tax rate                                        35.1%          36.5%            37.9%
                                                                       ====           ====             ====
</TABLE>

            Effective November 29, 1993, the Company adopted SFAS No. 109. (See
            Note 1.)

                                      F-17
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

9.           Income Taxes (continued):
             ------------------------

             The significant components of deferred tax assets and liabilities
             at December 3, 1995 and November 27, 1994 consist of:

<TABLE>
<CAPTION>
                                                         1995                              1994
                                               --------------------------         --------------------------
                                               Assets         Liabilities         Assets         Liabilities
                                               ------         -----------         ------         -----------
<S>                                            <C>            <C>                <C>             <C>
              Inventories                     $ 2,138              --            $ 2,609              --
              Accrued expenses                  3,277           $   499            2,705           $   443
              Allowance for doubtful
              accounts                            746              --                901              --
              Net operating loss
              carryforwards-foreign               207              --                821              --
              Pensions                          1,014               441              766               271
              Net operating loss
              carryforwards-states                347              --                313              --
              Depreciation and
              amortization                        759             6,701              497             6,044
                                              -------           -------          -------           -------
                                                8,488             7,641            8,612             6,758
              Valuation allowance                (429)             --             (1,134)             --
                                              -------           -------          -------           -------
                                              $ 8,059           $ 7,641          $ 7,478           $ 6,758
                                              =======           =======          =======           =======
</TABLE>

             As of December 3, 1995, the Company had foreign net operating loss
             carry-forwards of approximately $600 which may be carried forward
             indefinitely, approximately $300 of which were acquired in
             connection with business acquisitions. To the extent that net
             operating loss carryforwards acquired in connection with business
             acquisitions are utilized in the future and the associated
             valuation allowance reduced, the tax benefit thereof will be
             allocated to reduce excess of acquisition cost over net assets
             acquired related to the acquisition.

             The valuation allowance of approximately $400 relates to net
             operating losses which are uncertain as to realizability as of
             December 3, 1995. The net change in the total valuation allowance
             for the year ended December 3, 1995 was a decrease of approximately
             $700. The Company has recognized approximately $130 of deferred tax
             assets relating to the likely future utilization of net operating
             losses. Of this amount, approximately $100 relates to net operating
             losses acquired in connection with business acquisitions.

                                      F-18
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------


9.           Income Taxes (continued):
             ------------------------

             Deferred income taxes at November 28, 1993 relate to the following
             timing differences between amounts reported for financial
             accounting and income tax purposes:

                    Depreciation                      $  53
                    Provision for relocation
                     and consolidation of
                     operations                          61
                    Other, net                         (570)
                                                      ----- 
                                                      $(456)
                                                      =====

10.          Employee Benefit Plans:
             ----------------------
 
             Pension Plans:
             -------------

             Net pension costs for fiscal years 1995, 1994 and 1993 consist of
the following:

<TABLE>
<CAPTION>
                                                      1995              1994              1993
                                                      ----              ----              ----
<S>                                                  <C>               <C>               <C>
              Service cost-benefits earned
                     during the period               $ 1,901           $ 2,049           $ 1,580
              Interest cost on projected
                   benefit obligation                  2,387             2,155             1,852
              Actual return on plan assets            (4,749)           (1,031)           (1,863)
              Net amortization and deferral            2,643              (759)              107
                                                     -------           -------           -------

              Net pension costs                      $ 2,182           $ 2,414           $ 1,676
                                                     =======           =======           =======
</TABLE>

             Net amortization and deferral consists of the deferral of the
             excess of actual return on assets over estimated return and
             amortization of the net unrecognized transition asset on a
             straight-line basis, principally over 15 years.

                                      F-19
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

10.           Employee Benefit Plans (continued):
              ----------------------------------

              Pension Plans (continued):
              -------------------------

             The funded status of the Company's pension plans at September 30,
             1995 and 1994 (dates of actuarial valuations) is as follows:

<TABLE>
<CAPTION>
                                                              1995                           1994
                                                    -------------------------     -------------------------
                                                    Overfunded    Underfunded     Overfunded    Underfunded
                                                    ----------    -----------     ----------    -----------
<S>                                                 <C>           <C>             <C>            <C>
Plan assets at fair value                            $ 32,192       $    728       $ 26,227       $    643
                                                     --------       --------       --------       --------
 Actuarial present value of benefit obligations:
   Vested                                              23,324          2,429         18,434          1,715
   Non-vested                                              79            390             67            185
                                                     --------       --------       --------       --------
Accumulated benefit obligation                         23,403          2,819         18,501          1,900

Effect of increase in
compensation                                            8,634          1,396          7,999            818
                                                     --------       --------       --------       --------
Projected benefit obligation                           32,037          4,215         26,500          2,718
                                                     --------       --------       --------       --------
Projected benefit obligation less
than (in excess of) plan assets                           155         (3,487)          (273)        (2,075)
Unrecognized net (gain) loss                              123            816             (7)            89
Unrecognized transition asset                          (1,457)           (16)        (1,668)           (19)
Unrecognized prior service cost                           495          1,344            754          1,102
Minimum liability adjustment                             --             (763)          --             (355)
                                                     --------       --------       --------       --------
Pension liability                                    $   (684)      $ (2,106)      $ (1,194)      $ (1,258)
                                                     ========       ========       ========       ========
</TABLE>

             Pension costs are determined using the assumptions as of the
             beginning of the year. The funded status is determined using the
             assumptions as of the date of the actuarial valuation and is deemed
             overfunded or underfunded based on a comparison of the plan assets
             at fair value with the accumulated benefit obligation. Plan assets
             consist principally of common stock and U.S. Government and
             corporate obligations.

                                      F-20
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

10.     Employee Benefit Plans (continued):
        ----------------------------------

        Pension Plans (continued):
        -------------------------

             Significant assumptions as of the dates of actuarial valuations
include:

<TABLE>
<CAPTION>
                                                             1995           1994          1993
                                                             -----          ----          ----
<S>                                                         <C>             <C>           <C>
             Discount rate                                   7.50%          8.00%         7.00%
             Rate of increase in
               compensation levels                           6.00%          6.00%         6.00%
             Expected long-term rate of
               return on plan assets                         7.50%          7.50%         7.50%
</TABLE>

             Supplemental Executive Benefits Plan:
             ------------------------------------

             The Company has instituted a nonqualified, Supplemental Executive
             Benefits (retirement) Plan covering all officers. Expenses of $505,
             $394 and $331 in fiscal years 1995, 1994 and 1993, respectively,
             relating to this plan were actuarially determined and are included
             in the pension costs described above. In 1994 the Company added an
             elective salary deferral feature to this plan. Contributions to
             this portion of the plan by the Company were $32 for fiscal 1995.

             Employee Savings Plan:
             ---------------------

             The Company has a defined contribution 401(k) plan available to a
             majority of its employees in the United States. For participating
             employees, the Company matches 25 cents for each dollar contributed
             up to a maximum of 6% of pre-tax compensation, subject to
             limitations of the plan and the Internal Revenue Code.
             Contributions to the 401(k) plan by the Company were $433, $407 and
             $379 for fiscal years 1995, 1994 and 1993, respectively.

                                      F-21
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

11.          Stock Option, Stock Grant and Long-Term Incentive Compensation
             Plans:
             --------------------------------------------------------------

             In 1993 the Company adopted the 1993 Stock Option and Stock Grant
             Plan which replaced the expired 1983 Stock Option and Stock Grant
             Plan. The 1993 plan authorizes the issuance of up to 1,750,000
             common shares, of which up to 525,000 may be issued in the form of
             stock grants. The terms of the 1993 plan are essentially similar to
             the terms of the 1983 plan described below.

             The Company's 1983 Stock Option and Stock Grant Plan and the 1978
             Stock Option Plan expired by their terms in February 1993 and
             November 1988, respectively, and, while incentive stock options
             granted under them remain outstanding, no further options may be
             granted under these two plans. Under the 1983 plan, common shares
             were authorized for the granting of incentive stock options,
             nonqualified stock options and stock grants to key employees,
             provided that stock grants may be made for no more than 373,125
             common shares. The option price of options granted under the plan
             may not be less than the market value of the shares at the date
             granted. Options may be granted for terms of between two and ten
             years and generally become exercisable not less than one year
             following the date of grant.

             Stock grants under the 1983 plan are subject to a vesting period or
             periods of between one and five years from the date of grant.
             Common shares are not actually issued to a grantee until such
             shares have vested under the plan. The plan also provides for the
             payment of an annual cash bonus to recipients of stock grants in an
             amount equal to the cash dividends which would have been received
             had the shares not yet vested under the grant been actually held by
             the recipients.

             Under the 1978 plan, options for 632,813 common shares were
             authorized for the granting of options to key employees at option
             prices not less than the market value of the common shares at the
             date of grant. Options granted under this plan have terms of not
             more than ten years and generally become exercisable not less than
             one year following the date of grant.

             Payment upon exercise of stock options under the 1993, 1983 and
             1978 plans may be by cash and/or by the Company's common stock in
             an amount equivalent to the market value of the stock at the date
             exercised.

                                      F-22
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

11.          Stock Option, Stock Grant and Long-Term Incentive (continued):
             -------------------------------------------------------------

             A summary of options under the Company's stock option plans is as
follows:
<TABLE>
<CAPTION>
                                                                  1993 Plan                                    1983 Plan
                                                                  ---------                                    ---------
                                                             1995              1994                  1995                  1994
                                                             ----              ----                  ----                  ----
<S>                                                       <C>                <C>                   <C>                   <C>
              Outstanding, beginning of year               363,400                 --                730,003              779,004
              Options granted                              317,300              388,100                 --                   --

              Options exercised (at an average
                 price per share of $9.55 and
                 $12.49, respectively)                        --                   --                (89,561)             (31,501)
              Options expired                                 --                   --                   --                   --
              Options terminated                           (45,900)             (24,700)              (8,600)             (17,500)
                                                        ----------           ----------           ----------           ----------

              Outstanding, end of year                     634,800              363,400              631,842              730,003
                                                        ==========           ==========           ==========           ==========

              Average option price per share            $    15.05           $    15.79           $    13.95           $    13.44

              Outstanding exercisable options,
                 end of year                                  --                   --                631,842              596,803

              Shares reserved for future
                 stock options and grants                1,115,200            1,386,600                 --                   --
</TABLE>

             In 1993 there were 102,282 and 855 options exercised at an average
             price of $10.47 and $6.22 under the 1983 and 1978 plans,
             respectively. At the end of both 1995 and 1994 there remained 2,638
             outstanding exercisable options at an average option price per
             share of $10.58 relating to the 1978 plan.

             The Company's 1988 Long-Term Incentive Compensation Plan provides
             for the granting to management-level employees of long-term
             incentive awards, which are payable in cash and/or by the Company's
             common stock at the end of a designated performance period of from
             two to five years, based upon the degree of attainment of
             pre-established performance standards during the performance
             period. A maximum of 180,000 shares are authorized for issuance
             under this plan.

             As of the end of fiscal 1995, an aggregate of 85,122 shares had
             been earned under this plan (19,114, 17,042 and 13,394 shares in
             fiscal years 1995, 1994 and 1993, respectively, and 35,572 shares
             in all previous years), and an aggregate of 41,558 shares were
             subject to outstanding unvested grants. There is no stated
             limitation on the aggregate amount of cash payable under this plan,
             but the maximum amount (in cash and/or shares) which may be paid to
             
                                      F-23
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

11.          Stock Option, Stock Grant and Long-Term Incentive (continued):
             -------------------------------------------------------------
 
             a participant under all long-term incentive awards under the plan
             with respect to the same performance period may not exceed 125% of
             the participant's base salary in effect at the time the award
             initially was made. The charges to administrative and general
             expenses relating to this plan were $186, $532 and $563 in fiscal
             years 1995, 1994 and 1993, respectively.

             In fiscal 1994, the Company adopted the 1994 Non-Employee
             Directors' Stock Option Plan authorizing the granting of up to an
             aggregate of 90,000 common shares to non-officer directors of the
             Company. Options to purchase an aggregate of 45,000 common shares
             at $16.875 per share were automatically granted in January 1994 in
             equal amounts to each of the non-officer directors of the Company.
             Options granted under this plan extend for a term of ten years and
             become exercisable at the rate of 20% per year over five years
             commencing one year after the date of grant. No other options have
             been granted and as of December 3, 1995 no options have been
             exercised.

             Other Grants:
             ------------

             During 1995 the Company made stock grants in the amount of 84,759
             common shares to certain officers and other employees. By their
             terms, these grants will vest at varying times during 1997. The
             charge to administrative and general expense with respect to these
             grants was $310 in fiscal year 1995.

             New Accounting Standard:
             -----------------------

             SFAS No. 123, "Accounting for Stock-Based Compensation,"
             encourages, but does not require, companies to recognize
             compensation expense for grants of stock, stock options, and other
             equity instruments to employees based upon fair value or,
             alternatively, permits them to continue to apply the existing
             accounting rules contained in Accounting Principles Board Opinion
             No. 25, "Accounting for Stock Issued to Employees" (APB No. 25).
             Companies choosing not to adopt the expense recognition provisions
             of SFAS No. 123 are required to disclose pro forma net income and
             earnings per share data as if such provisions had been applied. The
             Company anticipates continuing to account for stock-based
             compensation in accordance with APB No. 25 and therefore the
             adoption of SFAS No. 123 will not have an impact on the Company's
             financial position or results of operations.

12.          Shareholders' Rights Plan:
             -------------------------

             In 1990 the Company adopted a Shareholders' Rights Agreement and
             declared a dividend of one right (a "Right") for each outstanding
             share of the Company's common shares held of record as of the close
             of business on August 22, 1990.

                                      F-24
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

12.          Shareholders' Rights Plan (continued):
             -------------------------------------

             The Rights initially are deemed to be attached to the common shares
             and detach and become exercisable only if (with certain exceptions
             and limitations) a person or group attempts to obtain beneficial
             ownership of 15% or more of the Company's common shares or is
             determined to be an "adverse person" by the Board of Directors of
             the Company. Each Right, if and when it becomes exercisable,
             initially will entitle holders of the Rights to purchase one
             one-thousandth of a share of Junior Participating Preferred Shares
             (Series A, of which 50,000 shares currently are authorized for
             issuance) for $60, subject to adjustment. The Rights will convert
             into the right to purchase common shares or other securities or
             property of the Company or an acquiring company in certain other
             potential or actual takeover situations. The Rights are redeemable
             by the Company at $.01 per Right in certain circumstances and
             expire, unless earlier exercised or redeemed, on December 31, 2000.

13.          Commitments and Contingencies:
             -----------------------------

             Leases:
             ------

             The capitalized lease obligation (see Note 8) represents the amount
             payable under a lease which is, in substance, an installment
             purchase. Property, plant and equipment includes the following
             assets under a capital lease:

                                                 1995              1994
                                                 ----              ----
              Land                              $   314           $   314
              Buildings                           2,632             2,632
              Machinery and equipment             1,009             1,009
              Accumulated depreciation           (2,853)           (2,746)
                                                -------           -------
                                                $ 1,102           $ 1,209
                                                =======           =======

             The Company has the option to purchase the above assets at any time
             during the term of the lease for amounts sufficient to redeem and
             retire the underlying lessor debt obligation. The capitalized lease
             obligation has one principal payment at maturity on June 15, 2004.

             The minimum rental commitments under all noncancellable leases as
             of December 3, 1995 are as follows:

                                      F-25
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

13.         Commitments and Contingencies (continued):
            ----------------------------------------

            Leases (continued):
            ------------------

             Fiscal                           Operating
             Period                            Leases
             ------                           ---------         
              1996                            $ 3,744
              1997                              3,145
              1998                              2,701
              1999                              2,646
              2000                              2,636
              Thereafter                        8,248
                                              -------
              Minimum lease payments          $23,120

           Rent expense, including related real estate taxes charged to
           operations, amounted to $4,637, $3,912 and $4,217 for fiscal years
           1995, 1994 and 1993, respectively.

           Contingencies:
           -------------

           The Company has employment/severance (change in control) agreements
           with its officers under which severance payments and benefits would
           become payable in the event of specified terminations of employment
           following a change in control (as defined) of the Company. The
           Company also has a termination policy applicable to other employees
           which provides severance payments and benefits in the event of
           certain terminations of employment. In the event of a change in
           control of the Company and subsequent termination of all employees,
           the maximum contingent severance liability would have been
           approximately $16.6 million at December 3, 1995.

           Prior to the acquisition of the Graphic Arts Group by the Company
           from Bunzl plc in May 1990, it was discovered that some hazardous
           waste materials had been stored on the premises of one of the Graphic
           Arts Group companies, Seal, located in Naugatuck, Connecticut. In
           compliance with applicable state law, this environmental condition
           was reported to the Connecticut Department of Environmental
           Protection by Bunzl. Seal, which is now a subsidiary of the Company,
           may be partially responsible under law for the environmental
           conditions on the premises and any liabilities resulting therefrom.
           However, in connection with the Company's acquisition of Seal, Bunzl
           agreed to take responsibility for correcting such environmental
           conditions and, for a period of seven years, to indemnify Seal and
           the Company for such resulting liabilities, subject to certain
           limitations. Management believes that this contingency will not have
           a material effect on the Company's results of operations or financial
           condition.

                                      F-26
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

13.        Commitments and Contingencies (continued):
           -----------------------------------------

           Contingencies (continued):
           -------------------------

           The Company is also involved on a continuing basis in monitoring its
           compliance with environmental laws and in making capital and
           operating improvements necessary to comply with existing and
           anticipated environmental requirements. Despite its efforts, the
           Company has been cited for occasional violations or alleged
           violations of environmental laws or permits and on several occasions
           has been named as a potentially responsible party for the remediation
           of sites. Expenses incurred by the Company to date relating to
           violations of and compliance with environmental laws and permits and
           site remediation have not been material. While it is impossible to
           predict with certainty, management currently does not foresee such
           expense in the future as having a material effect on the Company's
           business, results of operations or financial condition. There are
           other contingent liabilities with respect to product warranties,
           legal proceedings and other matters occurring in the normal course of
           business. In the opinion of management, all such matters are
           adequately covered by insurance or by accruals, and if not so
           covered, are without merit or are of such kind, or involve such
           amounts, as would not have significant effect on the financial
           condition or results of operations of the Company, if disposed of
           unfavorably.

14.        Research and Development:
           ------------------------
 
           Research and development expenses were approximately $1,705, $1,606
           and $1,657 in fiscal years 1995, 1994 and 1993, respectively.

15.        Cash Flow Information:
           ---------------------

           Cash payments for interest and income taxes (net of refunds) were as
           follows:

                                      1995            1994            1993
                                      ----            ----            ----
              Interest paid          $  282          $  408          $  580
              Income taxes            8,941           9,481           8,761

           Excluded from the Consolidated Statements of Cash Flows are the
           effects of certain non-cash investing and financing activities
           relating to certain acquisitions as follows:

                                                 1995       1994        1993
                                                 ----       ----        ----
           Fair value of assets acquired        $3,863       --        $1,512
           Liabilities assumed or created          944       --           461

                                      F-27
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

16.        Quarterly Financial Data (unaudited):
           ------------------------------------

           Results of operations for each of the quarters during fiscal years
           1995 and 1994 are as follows:
<TABLE>
<CAPTION>
                                                                      1995
                                                                      ----
                                         First         Second         Third          Fourth         Total
                                         -----         ------         -----          ------         -----
<S>                                    <C>            <C>            <C>            <C>            <C>     
            Net sales                  $ 70,530       $ 74,881       $ 86,302       $ 82,168       $313,881
            Gross profit                 25,642         28,086         31,247         32,186        117,161
            Net income                    3,347          2,934          3,655          5,399         15,335
            Net income per share            .21            .18            .23            .34            .96
</TABLE>

<TABLE>
<CAPTION>
                                                                       1994
                                                                       ----
                                         First         Second          Third         Fourth         Total
                                         -----         ------          -----         ------         -----
<S>                                    <C>            <C>            <C>            <C>            <C>     
            Net sales                  $ 64,550       $ 69,023       $ 75,765       $ 78,865       $288,203
            Gross profit                 25,155         27,866         29,350         30,905        113,276
            Net income                    3,798          4,088          4,391          5,715         17,992
            Net income per share            .24            .25            .27            .36           1.12
</TABLE>

      The second, third and fourth quarters of fiscal 1995 results include
      charges to net income of approximately $1.4 million, or $.09 per share;
      $1.0 million, or $.06 per share; and $1.1 million, or $.07 per share,
      respectively, relating to the provision for organizational changes and
      relocation and consolidation of operations as described in Note 3. The
      third quarter of fiscal years 1995 and 1994 contained 14 weeks and 13
      weeks, respectively.

      The first quarter of fiscal 1994 results include the cumulative effect of
      a change in accounting for income taxes (adoption of SFAS No. 109) which
      increased net income by $.8 million, or $.05 per share.

17.   Industry Segment Information:
      ----------------------------

      The Company operates in two industry segments, Office Products and
      Art/Craft Products. Total export sales aggregated $20,559 in fiscal 1995,
      $21,235 in fiscal 1994 and $21,580 in fiscal 1993, of which $12,921,
      $11,844 and $11,619 in fiscal years 1995, 1994 and 1993, respectively,
      were made in Canada.

      Operating profits include all revenues and expenses of the reportable
      segment except for general corporate expenses, interest expense, interest
      income, other expenses, other income and income taxes.

      Identifiable assets are those assets used in the operations of each
      business segment.

                                      F-28
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

17.    Industry Segment Information (continued):
       ----------------------------------------

       Corporate assets include cash and miscellaneous other assets not
       identifiable with any particular segment. Capital additions include
       amounts related to acquisitions.
<TABLE>
<CAPTION>
                                      Office          Art/Craft         Corp.
          Fiscal Year 1995           Products          Products        Assets      Consolidated
          ----------------           --------         ---------        ------      -------------
<S>                                  <C>              <C>              <C>          <C>
          Net sales                  $ 163,378        $ 150,503                       $ 313,881
                                     =========        =========                       =========

          Operating profit *         $   6,966        $  21,678                       $  28,644
                                     =========        =========

          General corporate                                                              (5,081)
          Interest expense                                                                 (109)
          Interest income                                                                   571
          Other expense, net                                                               (380)
                                                                                      ---------
          Income before income
                 taxes                                                                $  23,645
                                                                                      =========

          Identifiable assets        $  78,272        $  77,310       $  27,228       $ 182,810
                                     =========        =========       =========       =========

          Capital additions **       $   5,619        $   3,550       $   1,473       $  10,642
                                     =========        =========       =========       =========

          Depreciation and
                 amortization        $   4,494        $   3,676       $     588       $   8,758
                                     =========        =========       =========       =========
</TABLE>

       * Includes the provision for organizational changes and relocation and
         consolidation of operations which reduced the office products operating
         profit by $4.1 million and art/craft products operating profit by $1.2
         million.

      ** Includes $1.1 million of capital additions relating to business
         acquisitions.

                                      F-29
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

17.    Industry Segment Information (continued):
       ---------------------------------------

<TABLE>
<CAPTION>
                                      Office          Art/Craft         Corp.
       Fiscal Year 1994              Products         Products         Assets      Consolidated
       ----------------              --------         ---------        ------      -------------
<S>                                  <C>              <C>              <C>          <C>
       Net sales                     $160,307          $127,896                       $288,203
                                     ========          ========                       ========

       Operating profit              $ 12,172          $ 21,211                       $ 33,383
                                     ========          ========

       General corporate                                                                (6,017)
       Interest expense                                                                    (85)
       Interest income                                                                     342
       Other expense, net                                                                 (542)
                                                                                      --------
       Income before income
              taxes                                                                   $ 27,081
                                                                                      ========

       Identifiable assets           $ 80,218         $ 70,362         $ 22,805       $173,385
                                     ========         ========         ========       ========

       Capital additions             $  5,923         $  3,109         $    273       $  9,305
                                     =========        ========         ========       ========

       Depreciation and
              amortization           $  4,123         $  3,286         $    630       $  8,039
                                     ========         ========         ========       ========

                                      Office          Art/Craft         Corp.
       Fiscal Year 1993              Products          Products        Assets      Consolidated
       ----------------              --------         ---------        ------      -------------
       Net sales                     $142,462         $113,688                       $256,150
                                     ========          =======                       ========

       Operating profit              $ 11,411         $ 18,832                       $ 30,243
                                     ========         ========

       General corporate                                                               (5,682)
       Interest expense                                                                  (242)
       Interest income                                                                    190
       Other expense, net                                                                (471)
                                                                                     --------  
       Income before income
              taxes                                                                  $ 24,038
                                                                                     ========

       Identifiable assets           $ 74,098         $ 67,619        $ 14,600       $156,317
                                     ========         ========         =======       ========

       Capital additions             $  5,559         $  4,082       $      698      $ 10,339
                                     ========         ========        =========      ========

       Depreciation and
              amortization           $  3,898         $  3,234       $      532      $  7,664
                                     ========         ========        =========      ========
</TABLE>

                                      F-30
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

17.    Industry Segment Information (continued):
       ----------------------------------------

       The Company's operations by geographical areas for fiscal years 1995,
       1994 and 1993 are presented below. Intercompany sales to affiliates
       represent products which are transferred between geographic areas on a
       basis intended to reflect as nearly as possible the market value of the
       products.
<TABLE>
<CAPTION>
                                                                                 Adjustments
                                                                                     and
    Fiscal Year 1995               North America      Europe     Corporate      Eliminations    Consolidated
    ----------------               -------------      ------     ---------      ------------    ------------
<S>                                <C>               <C>          <C>            <C>            <C>
    Net sales:

    Customers                         $285,313       $ 28,568                           --         $313,881
    Intercompany                         8,866          3,257                      $(12,123)           --
                                      --------       --------                      --------        --------

    Total                             $294,179       $ 31,825                      $(12,123)       $313,881
                                      ========       ========                      ========        ========

    Operating profit                  $ 26,622       $  2,022                           --         $ 28,644
                                      ========       ========                      ========        ========

    Identifiable assets               $131,496       $ 24,086       $ 27,228            --         $182,810
                                      ========       ========       ========       ========        ========

                                                                                 Adjustments
                                                                                     and
    Fiscal Year 1994               North America      Europe     Corporate      Eliminations    Consolidated
    ----------------               -------------      ------     ---------      ------------    ------------
    Net sales:

    Customers                         $268,710      $ 19,493                           --          $288,203
    Intercompany                         5,060         2,154                      $ (7,214)           --
                                      --------      --------                        --------       --------

    Total                             $273,770      $ 21,647                      $ (7,214)        $288,203
                                      ========      ========                      ========         ========

    Operating profit                  $ 32,648      $    735                           --          $ 33,383
                                      ========      ========                      ========         ========

    Identifiable assets               $131,310      $ 19,270       $ 22,805            --          $173,385
                                      ========      ========       ========        ========        ========
</TABLE>

                                      F-31
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

17.  Industry Segment Information (continued):
     ----------------------------------------

<TABLE>
<CAPTION>
                                                                            Adjustments
                                                                                and
    Fiscal Year 1993          North America      Europe     Corporate      Eliminations   Consolidated
    ----------------          -------------      ------     ---------      ------------   ------------
<S>                           <C>               <C>          <C>            <C>            <C>
    Net sales:

    Customers                   $241,059         $ 15,091                           --       $256,150
    Intercompany                   2,941            1,640                     $ (4,581)           --
                                --------         --------                     --------       --------

    Total                       $244,000         $ 16,731                     $ (4,581)      $256,150
                                ========         ========                     ========       ========

    Operating profit            $ 30,203         $     40                           --       $ 30,243
                                ========         ========                     ========       ========

    Identifiable assets         $124,841         $ 16,876       $ 14,600            --       $156,317
                                ========         ========       ========      ========       ========

</TABLE>

18.  Financial Instruments:
     ---------------------

         Off-Balance Sheet Risk:
         ----------------------

         Letters of credit are issued by the Company during the ordinary course
         of business through major domestic banks as required by certain vendor
         contracts. As of December 3, 1995 and November 27, 1994, the Company
         had outstanding letters of credit for $400 and $216, respectively.

         Concentrations of Credit Risk:
         -----------------------------

         Financial instruments which potentially subject the Company to
         concentrations of credit risk consist principally of temporary cash
         investments and trade receivables. The Company places its temporary
         cash investments ($13.7 million and $11.7 million at December 3, 1995
         and November 27, 1994, respectively) with quality financial
         institutions and, by policy, limits the amount of credit exposure to
         any one financial institution.

         The Company provides credit, in the normal course of business, to a
         large number of distributors and retailers and generally does not
         require collateral or other security to support customer receivables.
         Management believes that concentrations of credit risk with respect to
         trade receivables are limited due to the large number of customers
         comprising the Company's customer base, their dispersion across many
         different industries and geographies with no single customer accounting
         for more than 10% of net sales; however, the Company's ten largest
         customers account for approximately 37% and 32% of accounts receivable
         at December 3, 1995 and November 27, 1994, respectively. The Company
         
                                      F-32
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                (In thousands except share and per share amounts)

                                     ------

18.  Financial Instruments (continued):
     ---------------------------------

         performs ongoing credit evaluations of its customers, maintains
         allowances for potential credit losses and carries credit insurance
         coverage for most of its large customer accounts.

         Fair Value:
         ----------

         The following methods and assumptions were used to estimate the fair
         value of each class of financial instruments:

         Cash and cash equivalents -
         -------------------------

         The carrying amount approximates fair value because of the short
         maturity of these instruments.

         Debt (excluding capital lease obligation) -
         ----------------------------------------

         The fair value of the Company's debt is estimated based on the current
         rates offered to the Company for debt of the same remaining maturities.

         The estimated fair values of the Company's financial instruments at
         December 3, 1995 and November 27, 1994 are as follows:

<TABLE>
<CAPTION>
                                           1995                                    1994
                               ---------------------------              -------------------------
                                Carrying           Fair                   Carrying         Fair
                                 Amount            Value                   Amount          Value
                                --------           -----                  --------         ------
         <S>                    <C>               <C>                    <C>                <C>
         Cash and cash
         equivalents             $15,503          $15,503                  $13,807         $13,807

         Debt (excluding
         capital lease
         obligation)               2,325            2,303                    2,561           2,523
</TABLE>


         Debt and Equity Securities:
         --------------------------

         In fiscal 1995 the Company adopted SFAS No. 115, "Accounting for
         Certain Investments in Debt and Equity Securities," which requires
         changes in accounting and reporting for certain investments in debt and
         equity securities. The adoption of this standard had no effect on the
         Company's results of operations or financial condition.

                                      F-33


<PAGE>

                 SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
                    for the fiscal years 1995, 1994 and 1993
                                 (in thousands)


<TABLE>
<CAPTION>
                   Column A                           Column B             Column C             Column D        Column E
                   --------                           --------             --------             --------        --------
                                                                          Additions
                                                                          ---------
                                                     Balance at     Charged to    Charged to                   Balance at
                                                     Beginning      Costs and       Other                        End of
                Classification                       Of Period       Expenses      Accounts     Deductions       Period   
                --------------                       ----------     ----------    ----------    ----------     -----------
<S>                                                  <C>            <C>           <C>           <C>             <C>
 1995:
 -----

       Allowance for doubtful accounts                 $2,510         $  916         $ --        $1,121(A)        $2,305
                                                       ======         ======         ====        ======           ======


       Reserve for customer returns and deductions     $1,267         $  735         $ --        $  281(C)        $1,721
                                                       ======         ======         ====        ======           ======


       Reserve for inventory obsolescence              $3,530         $1,778         $ --        $2,887(D)        $2,421
                                                       ======         ======         ====        ======           ======


  1994:
  -----

       Allowance for doubtful accounts                 $2,643         $  921         $ --        $1,054(A)        $2,510
                                                       ======         ======         ====        ======           ======


       Reserve for customer returns and deductions(B)  $  702         $1,539         $ --        $  974(C)        $1,267
                                                       ======         ======         ====        ======           ======


       Reserve for inventory obsolescence              $2,236         $2,083         $ --        $  789(E)        $3,530
                                                       ======         ======         ====        ======           ======


  1993:
  -----

       Allowance for doubtful accounts                 $2,587         $1,022         $  3        $  969(A)        $2,643
                                                       ======         ======         ====        ======           ======


       Reserve for inventory obsolescence              $1,655         $1,598         $ --        $1,017(E)        $2,236
                                                       ======         ======         ====        ======           ======
</TABLE>


(A)  Doubtful accounts written off, net of collection expenses.
(B)  These reserves were not significant in years prior to 1994.
(C)  Primarily credits issued to customers.
(D)  Largely the result of programs in effect during 1995 to dispose of fully
     reserved obsolete inventory.  Amount is net of recoveries.
(E)  Primarily a result of disposals of obsolete inventory in the normal course
     of business, net of recoveries.



<PAGE>

                                   SIGNATURES

                  Pursuant to the requirements of Section 13 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.

                                      HUNT MANUFACTURING CO.

Dated:  February 28, 1996             By:/s/ Robert B. Fritsch
                                        ---------------------
                                        Robert B. Fritsch
                                        President and Chief Executive Officer


                  Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below on behalf of the registrant and in the
capacities and on the dates indicated:



/s/ Robert B. Fritsch                                         February 28, 1996
--------------------------
Robert B. Fritsch
President and
Chief Executive Officer



/s/ William E. Chandler                                       February 28, 1996
--------------------------
William E. Chandler
Senior Vice President,
Finance (Principal Financial and
Accounting Officer)



/s/ Vincent G. Bell, Jr.                                      February 28, 1996
-------------------------
Vincent G. Bell, Jr.
Director



/s/ Jack Farber
------------------------                                      February 28, 1996
Jack Farber
Director
<PAGE>

/s/ William F. Hamilton, Ph.D.                                February 28, 1996
------------------------------
William F. Hamilton, Ph.D.
Director



/s/ Mary R. Henderson                                         February 28, 1996
------------------------
Mary R. (Nina) Henderson
Director



/s/ Gordon A. MacInnes, Jr.                                   February 28, 1996
---------------------------
Gordon A. MacInnes, Jr.
Director



/s/ Wilson D. McElhinny                                       February 28, 1996
------------------------
Wilson D. McElhinny
Director



/s/ Robert H. Rock                                            February 28, 1996
------------------------
Robert H. Rock
Director


------------------------
Roderic H. Ross
Director


/s/ Victoria B. Vallely                                       February 28, 1996
------------------------
Victoria B. Vallely
 Director
<PAGE>

                                  EXHIBIT INDEX

                   (Exhibits being filed with this Form 10-K)

            (4)  Instruments defining rights of security holders, including
                 indentures:

                 (a)(2)  Amendment dated as of February 1, 1996 to Credit
                         Agreement dated December 19, 1995 between the Company
                         and NationsBank, N.A.
                 (a)(3)  Amendment dated as of February 26, 1996 to Credit
                         Agreement.

            (10) Material contracts:

                 (c)     1983 Stock Option and Stock Grant Plan, as amended, of
                         the Company.

                 (d)     1993 Stock Option and Stock Grant Plan of the Company,
                         as amended.

                 (f)     Form of Stock Grant Agreement between the Company and
                         Messrs. Carney, Chandler, O'Meara and Precious.

                 (j)(2)  List of executive officers who are parties to Change in
                         Control Agreement.

                 (m)     Employment-Severance arrangements with Robert B.
                         Fritsch.

            (11) Statement re:  computation of per share earnings.

            (23) Consent of Coopers & Lybrand L.L.P. to incorporation by
                 reference, in Registration Statement No.s 33-70660, 33-25947,
                 33-6359, 2-83144, 33-57105 and 33-57103 on Form S-8, of their
                 report on the consolidated financial statements and schedules
                 included in this report.

            (27) Financial Data Schedule.