<PAGE>   1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              450 Fifth Street, NW
                             Washington, D.C. 20549

                                   FORM 10-QSB



(Mark One)
[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                                  For the quarterly period ended October 3, 1999

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                         For the transition period from __________ to __________

                                                  Commission file number 2-69336



                                  CRAMER, INC.

A Kansas Corporation                            IRS Employment I.D. #48-0638707
625 Adams Street
Kansas City, Kansas  66105                         Telephone No. (913) 621-6700

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes[X] No[ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 4,051,400 shares of common stock, no
par value, as of November 1, 1999.


<PAGE>   2



                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                  CRAMER, INC.
                                  BALANCE SHEET
                                    UNAUDITED
                    (Amounts in Thousands, Except Share Data)

<TABLE>
<CAPTION>

              ASSETS                                                              10/3/99        12/31/98
                                                                                  -------        --------
<S>                                                                               <C>            <C>
CURRENT ASSETS:
     Cash                                                                         $    75        $    63
     Accounts receivable, net of allowance of $34 at October 3, 1999,
         and $21 at December 31, 1998                                               1,487          1,114
     Inventories                                                                    1,430          1,483
     Prepaid expenses                                                                 269            230
                                                                                  -------        -------
              Total current assets                                                  3,261          2,890

PROPERTY, PLANT AND EQUIPMENT
     At cost                                                                        6,027          5,818
     Accumulated depreciation                                                       5,224          5,068
                                                                                  -------        -------
                                                                                      803            750
OTHER ASSETS:
     Intangible pension asset                                                         160            160
     Goodwill                                                                         176            190
     Other non current assets                                                         167            189
                                                                                  -------        -------

              Total Assets                                                        $ 4,567        $ 4,179
                                                                                  =======        =======

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Note payable                                                                 $ 2,044        $ 1,548
     Accounts payable                                                                 674            429
     Accrued liabilities                                                              579            600
                                                                                  -------        -------
              Total current liabilities                                             3,297          2,577

NON-CURRENT LIABILITIES:
     Pension benefits payable                                                         442            494
     Other                                                                            217            238
                                                                                  -------        -------
              Total non-current liabilities                                           659            732

STOCKHOLDERS' EQUITY:
     Common stock, no par value; authorized, 6,000,000 shares; issued and
         outstanding 4,051,400 shares at October 3, 1999,
         and December 31, 1998                                                      3,824          3,824
     Accumulated deficit                                                           (2,946)        (2,687)
                                                                                  -------        -------
                                                                                      878          1,137
     Minimum pension liability adjustment                                            (267)          (267)
                                                                                  -------        -------
              Net stockholders' equity                                                611            870
                                                                                  -------        -------
              Total Liabilities and Stockholders' Equity                          $ 4,567        $ 4,179
                                                                                  =======        =======
</TABLE>


<PAGE>   3


                                  CRAMER, INC.
                              STATEMENTS OF INCOME
                                    UNAUDITED
                  (Amounts in Thousands, Except Per Share Data)

<TABLE>
<CAPTION>

                                                                          QUARTER ENDED                   NINE MONTHS ENDED
                                                                    10/3/99           10/4/98          10/3/99        10/4/98
                                                                   ---------         ---------        ---------      ----------
<S>                                                                <C>               <C>              <C>            <C>
NET SALES                                                          $   3,349         $    3,031       $    9,843     $    9,757
COST OF SALES                                                          2,389              2,397            7,022          7,013
                                                                   ---------         ----------       ----------     ----------
              Gross profit                                               960                904            2,821          2,744

OPERATING EXPENSES:
     Selling expenses                                                     644               596            1,946          1,780
     General and administrative                                           347               312              983            900
                                                                   ----------        ----------       ----------     ----------
              Total operating expenses                                    991               908            2,929          2,680
                                                                   ----------        ----------       ----------     ----------

              Income (loss) from operations                               (31)               (4)            (108)            64

OTHER EXPENSE:
     Interest expense, net                                                (33)              (16)             (88)           (63)
     Other, net                                                           (53)              (20)             (63)           (25)
                                                                   ----------        ----------       ----------     ----------
              Total other expense                                         (86)              (36)            (151)           (88)
                                                                   ----------        ----------       ----------     ----------

LOSS BEFORE INCOME TAXES                                                 (117)              (40)            (259)           (24)
INCOME TAX BENEFIT                                                          0                 0                0              0
                                                                   ----------        ----------       ----------     ----------

NET INCOME LOSS                                                    $     (117)       $      (40)      $     (259)    $      (24)
                                                                   ==========        ==========       ==========     ==========

     Net loss per share based on basic and diluted
          weighted average number of common
          equivalent shares outstanding                            $    (0.04)       $    (0.01)           (0.06)    $    (0.01)

     Weighted Average Common Equivalent
         Shares Outstanding      Basic                              4,051,400         4,051,400        4,051,400      4,051,400
                                 Diluted                            4,051,400         4,051 400        4,051,400      4,051,400
</TABLE>

There is no difference between Net Loss and Total Comprehensive Loss for the
quarter or nine-month periods ending October 3, 1999 and October 4, 1998.

These interim financial statements contain all adjustments required for them to
be comparable to the annual financial statements issued on Form 10KSB.



<PAGE>   4


                                  CRAMER, INC.
                            STATEMENTS OF CASH FLOWS
                                    UNAUDITED
                             (Amounts in Thousands)

<TABLE>
<CAPTION>

                                                                                          Nine Months Ended
                                                                                         10/3/99      10/4/98
                                                                                         -------      -------
<S>                                                                                      <C>          <C>
Cash flows from operating activities:
Net loss                                                                                 $  (259)     $   (24)
Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
     Depreciation and amortization                                                           192          174
     Changes in operating assets and liabilities:
         Accounts receivable                                                                (373)        (127)
         Inventories                                                                          53         (220)
         Prepaid expenses                                                                    (39)          79
         Accounts payable and accrued expenses                                               224          175
         Other non-current liabilities                                                       (73)         (34)
                                                                                         -------      -------

                      Net cash provided by (used by) operating activities                   (278)          23
                                                                                         -------      -------

Cash flows from investing activities:
     Capital expenditures                                                                   (209)        (117)
                                                                                         -------      -------

Cash flows from financing activities:
     Principal payments on notes payable                                                  (3,810)      (3,627)
     Proceeds from issuance of notes payable                                               4,306        3,702
                                                                                         -------      -------

                      Net cash provided by financing activities                              496           75
                                                                                         -------      -------

Net increase (decrease) in cash                                                               12          (19)
Cash at beginning of year                                                                     63           52
                                                                                         -------      -------

Cash at end of quarter                                                                        75      $    33
                                                                                         =======      =======

Supplemental disclosures:
     Cash paid during the period for:
         Interest                                                                        $    88      $    63
                                                                                         =======      =======
         Income tax                                                                      $     0      $     0
                                                                                         =======      =======
</TABLE>


<PAGE>   5


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

A.       FORWARD LOOKING STATEMENTS

         Except for the historical information contained herein, this
         report on Form 10-QSB contains forward-looking statements that
         involve risks and uncertainties. The Company's actual results
         could differ materially from the forward looking statements. In
         connection with the "safe harbor" provisions of the Private
         Securities Litigation Reform Act of 1995, Cramer, Inc. reminds
         readers that there are many important factors that could cause the
         Company's actual results to differ materially from those projected
         in forward-looking statements of the Company made by, or on behalf
         of, the Company. When used in this Form 10-QSB and in other
         filings by the Company with the Securities and Exchange
         Commission, in the Company's press releases and in oral statements
         made with the approval of an authorized executive officer, words
         or phrases such as "will likely result", "expects", "are expected
         to", "will continue", "is anticipated", "estimate", "project" or
         similar expressions are intended to identify forward-looking
         statements. The Company wishes to caution readers not to place
         undue reliance on such forward-looking statements.

         There are a number of reasons why investors should not place undue
         reliance on forward-looking statements. Among the risks and
         uncertainties that could cause the Company's actual results for
         future periods to differ materially from any forward-looking
         statements made are the following:

           -  Fluctuations or reductions in product demand and market acceptance
           -  The level of product development by the Company
           -  Capacity and supply constraints or difficulties
           -  The results of financing efforts
           -  The effect of new laws and regulations
           -  Unexpected additional expenses or operating losses
           -  Competition
           -  The Company's reliance on certain vendors for key components.
           -  The possible effect of the year 2000 on computer systems
           -  The potential inability of the Company's keyboard product line and
              internet distribution channel to generate sufficient sales to
              cover sales, marketing and introduction costs

         The foregoing list of risks and uncertainties is not meant to be
complete.

B.       POSSIBLE EFFECT OF THE YEAR 2000

         As with many other companies, Cramer may be impacted by the "year
         2000 problem". The "year 2000 problem" arose because many existing
         computer programs use only the last two digits to refer to a year.
         Therefore, these computer programs do not properly recognize a year
         that begins with "20" instead of the familiar "19". If not
         corrected, many computer applications


<PAGE>   6


            could fail or create erroneous results.

            In developing a response to the year 2000 issue, the Company has
            considered all of its computer systems, both those that are directly
            related to information technology systems and other systems where
            computer controls exist. The Company has also considered the
            readiness of its key vendors and customers.

            The Company's only critical system is its Enterprise Resource
            Planning (ERP) system that encompasses the Company's manufacturing,
            scheduling, purchasing, and accounting systems. The ERP system
            resides on an IBM advanced 36/AS 400. During the third quarter of
            1999, the Company completed converting the advanced 36/AS400's
            operating system and the core ERP system to allow recognition of
            years beginning with a "20" using the 100 year fixed window
            methodology. This methodology converts all dates entered into the
            system in a prescribed manner that will allow the ERP system to
            consistently handle dates both before and after the turn of the
            century.

            The Company has appointed an internal task force to review year 2000
            compliance issues for all other areas where computer controls exist.
            This review includes all other information technology systems other
            than the ERP system and possible computer controlled processes in
            the Company's facilities, communications, manufacturing equipment,
            etc. At November 1, 1999, the task force had completed its inventory
            of all of the Company's systems and has determined that all computer
            controlled systems have already been appropriately remediated for
            the year 2000.

            The Company has developed a questionnaire to assess its vendors'
            readiness to handle the year 2000 issue. These questionnaires were
            distributed to vendors in later portions of 1998 and in early 1999.
            The responses to these questionnaires have been reviewed and, as
            necessary, supplemented with verbal discussions with the vendor's
            management and information system professionals. Based on these
            procedures, the Company is unaware of any vendor that claims that it
            will not be year 2000 complaint by the end of 1999.

            Through discussions with appropriate parties, the Company is aware
            that its 8 largest wholesale and catalog customers are aware of the
            year 2000 issue and are currently determining how to convert their
            systems to handle the problem. Since the remainder of the Company's
            sales are to a wide variety of other furniture re-sellers, which
            change from year to year, there are no efforts currently underway to
            assess the status of these customers' year 2000 readiness.

            Due to the time required for the year 2000 project, non-essential
            enhancements to the company's computer systems have been delayed at
            times, however, the direct costs associated with the year 2000
            project have been less than $15,000.

<PAGE>   7

            The Company is developing contingency plans in case its ERP system,
            its other computer controlled systems, its vendors, or major
            customers prove not to be ready for the year 2000. With respect to
            the ERP system, the Company believes that it can operate with manual
            controls and systems for some period if all or portions of the ERP
            system were not fully operational. Depending on the extent of the
            deficiency, additional clerical personnel may have to be hired for a
            short period of time. Contingency plans for vendor supplied parts
            may include the purchase of additional inventory in the final month
            of 1999.

            There can be no assurance that year 2000 remediation by the Company
            or third parties will be properly or timely completed and failure to
            do so could have a material adverse effect on the Company's
            financial condition. The Company can not fully predict the actual
            effects of the year 2000 issue, which depends on numerous
            uncertainties such as (1) whether major third parties address this
            issue properly and timely and (2) whether broad-based or systemic
            economic failures may occur. The Company is currently unaware of any
            events, trends, or condition regarding this issue that may have a
            material effect on the Company's results of operations, liquidity,
            or financial position.

C.          SUMMARY OF OPERATIONS

            Order income for the first three-quarters of 1999 was $9,962,000.
            This is a reduction of approximately 3% as compared to the Company's
            order income in the first three-quarters of 1998. The reduction in
            order intake is consistent with the experience of the industry as a
            whole. For the first 6 months of 1999, the Business and
            Institutional Furniture Manufactures Association (BIFMA) reported
            that total industry sales of non-wood seating were approximately 3%
            less in 1999 as compared to 1998.

            At $9,843,000, net sales for the first three-quarters of 1999 were
            $86,000 higher than for the same period in 1998. The Company was
            able to increase sales in 1999 as compared to 1998 despite lower
            order volumes by improving manufacturing and Implementing shorter
            customer order lead times. Management believes the shorter
            lead-times provides better customer service and is a competitive
            advantage.

            The Company's backlog at the end of October 3, 1999 was $946,000.
            This is $32,000 less than at December 31, 1998. The reduction in
            backlog is consistent with the Company's efforts to reduce
            lead-times. Substantially all of the Company's backlog is scheduled
            to ship within the next three months.

            As a percentage of net sales, gross margins in the first nine months
            of 1999 were 28.7% as compared to 28.1% in the first nine months of
            1998.

            Selling expenses in the first nine months of 1999 increased by
            $166,000 as compared to the first nine months of 1998. Personnel
            costs increased in order to hire individuals to more actively manage
            the Company's key customers and to allow more timely contact and
            follow-up with the increasing number of

<PAGE>   8



            customer leads being generated by the Company's web page. In
            addition, the Company's cost for product placement in third party
            catalogs in the first three quarters of 1999 have increased as
            compared to the same period in 1998. This increase in costs is due
            to participation in a greater number of catalogs, and increases in
            the rates being charged by certain of the Company's larger volume
            customers. Finally, in the third quarter of 1999 the Company
            incurred approximately $65,000 in consulting to correct certain
            technical deficiencies in the keyboard product line. Management
            considers these fees to be part of the costs for introducing the
            keyboard product.

            General and administrative costs in the first nine months of 1999
            increased by $83,000 as compared to the total for the same period
            in1998. Approximately half of the increase represents additional
            legal fees related to the successful defense of several product
            liability claims. These claims are being defended by the Company
            under the Self Insured Retention clauses in its liability policies
            with insurance companies and are a normal part of the Company's
            business. See Note 9 of the Company's Form 10KSB for the year ended
            December 31, 1998 for further discussion. An additional increase in
            administrative costs represents fees for training courses that are
            an integral part of a comprehensive program to adopt the principles
            of continuous improvement and lean manufacturing. Management
            believes that this program will result in future lower costs and a
            significant improvement in cycle times; both of which are necessary
            for the Company to reverse it current operating losses.

            Interest expense in the first three-quarters of 1999 increased by
            $25,000 as compared to the first three-quarters of 1998. The
            increase is consistent with the increase in average borrowings as
            discussed below.

            Other non-operating expense increased by $38,000 in the first nine
            months of 1999 as compared to the same period in 1998. The increase
            is primarily due to the fact that in 1998 the Company received
            refunds of prior year workers' compensation insurance premiums. No
            such refunds have been received thus far in 1999.

            Primarily as a result of the increases in operating expenses, the
            Company experienced a loss before income taxes of $259,000 in the
            first three-quarters of 1999. This is a difference of $235,000 when
            compared to the net loss before income taxes of $24,000 during the
            first three-quarters of 1998.

            Growth in the sales of the Company's new keyboard based products
            have been below plan. Contrary to the Company's other products; the
            keyboard is sold directly to end users primarily through the
            Company's web page and direct telemarketing. During the first
            three-quarters of 1999, the start-up sales, marketing and
            manufacturing costs for this product line exceeded the gross margin
            generated. The resultant net loss from these activities were more
            than the net income provided by the Company's core business.

<PAGE>   9

            Management expects that the profitability of the Company's core
            seating and utility product business to increase in future years.
            The gross margins on these products have improved in 1999 as
            compared to 1998 (see discussion in "Summary of Operations" in the
            Company's first quarter 1999 Form 10QSB) and management believes
            that the improvements will continue. Furthermore, the investments in
            new sales personnel are anticipated to increase order intake and
            sales levels of these core products in the future.

            To reduce going forward costs, the Company has more closely
            integrated the marketing of the keyboard product line with the
            Company's traditional products. This combination enables the company
            to command greater gross margins on system sales than on keyboard
            sales alone. Further, the focus of the internet and direct
            telemarketing sales efforts has expanded to include all of the
            Company's products. Finally, the operating costs for the internet
            and direct telemarketing efforts are being reduced to correspond
            more closely to the gross margins being achieved.

            Management believes that for 1999 as a whole, the profits from the
            core seating and utility business will approximate the losses
            associated with the introduction of the keyboard products. However,
            management believes that, in the long run, the keyboard product
            line, internet and direct telemarketing efforts will be successful.


D.          FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

            The Company's trade accounts receivable increased by $373,000 from
            December 31, 1998 to October 3, 1999. The increase is principally
            due to the timing of sales in the final weeks of the respective
            periods.

            Inventories decreased by $53,000 during the period from December 31,
            1998 to October 3, 1999. The difference represents normal
            fluctuations in the Company's inventory balances.

            Capital expenditures aggregated $209,000 during the first
            three-quarters of 1999 and consisted primarily of replacements to
            tooling maintained at vendors used in manufacturing the Company's
            existing utility products. Most of the new tooling expenditures will
            allow reductions in existing product costs or will eliminate
            anticipated product cost increases.

            The Company's accounts payable increased by $245,000 from the
            December 31, 1998 balance. The increase is a result of increased
            purchases of raw materials to support the increased business
            activity in the final weeks of the third quarter of 1999.

            During the first three quarters of 1999 the Company reduced its
            long-term pension liability by $52,000 in accordance with
            established payment schedules.

<PAGE>   10

         The Company's notes payable increased by $496,000 during the first
         three quarters of 1999. The increase is principally due to the timing
         of sales that was described above, the Company's operating losses for
         the period, and the expenditures for new tooling. The Company continues
         to participate in a consolidated cash management and credit facility
         with its parent, Rotherwood. (See discussion in Note 3 to the Financial
         Statements in the Company's 1998 Form 10KSB.) The note was renewed in
         September of 1999 and the total amount available was increased from
         $2,000,000 to $2,500,000. Management believes that the Company's access
         to this facility, along with existing cash balances and cash generated
         from future operations, will be adequate to meet future operating
         requirements and liquidity needs.



PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The Company is a defendant in several lawsuits relating to product
         liability claims arising from accidents allegedly occurring in
         connection with the use of its products. The claims are covered by
         insurance and are being defended by the Company's independent counsel,
         or by counsel assigned by the insurance carriers, but are subject to
         deductibles ranging from $0 to $100,000. A number of the claimants
         allege substantial damages. While management believes the Company has
         substantial defenses with respect to the claims, the ultimate outcome
         of such litigation cannot be predicted with certainty. The Company has
         reasonably estimated and accrued in its financial statements its
         portion of the deductible as a product liability contingency. Such
         claims are an ordinary aspect of the Company's business.



ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.


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

         None.

<PAGE>   11


ITEM 5.  OTHER INFORMATION

         None.



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         None.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                 CRAMER, INC.
                                                 (Registrant)



Date: 11/12/99                                  /s/ Gary Rubin
     ---------                                  ------------------------------
                                                 Gary A. Rubin
                                                 Vice President, Finance & CFO