<PAGE>
 
 
 
                              FORM 10-Q
 
                  SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C. 20549
 
              Quarterly Report Under Section 13 or 15(d)
                of the Securities Exchange Act of 1934 
 
 
 For the Quarter ended                September 29, 1996                
  
 
 Commission file number               1-9298                     
 
 
 
                       RAYTECH CORPORATION                     
        (Exact name of Registrant as specified in its charter)
 
 
 
            DELAWARE                               06-1182033     
 (State or other jurisdiction of              (I.R.S. Employer       
 incorporation or organization)               Identification No.) 
 
 
    Suite 512, One Corporate Drive 
    Shelton, Connecticut                                  06484     
 (Address of principal executive offices)               (Zip Code) 
 
 
                            203-925-8023           
                   (Registrant's telephone number)  
 
 
 Indicate by check mark whether the Registrant (1) has filed all
 reports to be filed by Section 13 or 15(d) of the Securities
 Exchange Act of 1934 during the preceding 12 months (or for such
 shorter period that the Registrant was required to file such
 reports) and (2) has been subject to such filing requirements
 for the past 90 days.
 
 
                   Yes   X              No           
 
 As of September 29, 1996, 3,232,080 shares of the Registrant's
 common stock, par value $1.00, were issued and outstanding.
 
 
                              Page 1 of 25
   
                        RAYTECH CORPORATION  
 
                               INDEX  
 
 
                                                            Page     
                                                           Number
 
 PART I. FINANCIAL INFORMATION: 
 
 Item 1.   Condensed Consolidated Balance Sheets as           
           at September 29, 1996 and December 31, 1995         3
 
           Condensed Consolidated Statements of  
           Operations for the thirty-nine weeks ended
           September 29, 1996 and October 1, 1995              4
          
           Condensed Consolidated Statements of Cash  
           Flows for the thirty-nine weeks ended
           September 29, 1996 and October 1, 1995              5
                                                 
           Notes to Condensed Consolidated 
           Financial Statements                                6 
  
  Item 2.  Management's Discussion and Analysis of                    
           Financial Condition and Results of Operations      14 
  
  
  PART II. OTHER INFORMATION
  
  Item 1.  Legal Proceedings                                  17
  
  Item 6.  Exhibits and Reports on Form 8-K                   23 
  
           Signature                                          24 
  
           Exhibit 11 - Earnings Per Share Computation        25
  
  
  
  
  
  
  
  
  
  
                                 -2-
    <PAGE>


RAYTECH CORPORATION

<TABLE>


CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)              
<CAPTION>
                                                                  Sept. 29,   Dec. 31,
As at                                                               1996       1995  
<S>                                                              <C>         <C>
                                                                 
ASSETS                                                                        
Current assets                                                                
  Cash and cash equivalents                                      $ 12,240    $ 19,597
  Trade accounts receivable, less allowance of $701                                   
    for 1996 and $677 for 1995                                     26,290      17,553
  Inventories                                                      25,519      23,573
  Other current assets                                              6,554       5,390
      Total current assets                                         70,603      66,113
                                                                                      
Property, plant and equipment                                     120,651     114,437
  Less accumulated depreciation                                    77,207      72,235
      Net property, plant and equipment                            43,444      42,202
Investment in affiliates                                           10,067         -
Other assets                                                        7,387       6,121
Total assets                                                     $131,501    $114,436
                                                                                      
LIABILITIES                                                                           
Current liabilities                                                                   
  Notes payable                                                  $  8,815    $  8,187
  Current portion of long-term debt (including $28,920 and                   
    $22,696 due to Raymark in 1996 and 1995, respectively)         29,067      22,839
  Accounts payable                                                 12,221       9,388
  Accrued liabilities                                              20,716      20,376
      Total current liabilities                                    70,819      60,790
                                                                                      
Long-term debt due to Raymark                                      13,356      18,476
Long-term debt                                                        279         242
Postretirement benefits other than pensions                         8,864       8,253
Other long-term liabilities                                         7,600       7,995
Total liabilities                                                 100,918      95,756
                                                                                   
SHAREHOLDERS' EQUITY                                                                  
Capital stock                                                                         
  Cumulative preference stock, no par value                                           
  800,000 shares authorized, none issued & outstanding                                
  Common stock, par value $1.00                                       -           -   
  7,500,000 shares authorized, 5,364,139 and 5,362,139                      
    issued and outstanding in fiscal 1996 and 1995, respectively    5,364       5,362
Additional paid in capital                                         70,194      70,192 
Accumulated deficit                                               (42,008)    (54,913)
Cumulative translation adjustment                                   1,594       2,600
                                                                   35,144      23,241 
Less treasury shares at cost                                       (4,561)     (4,561)
      Total shareholders' equity                                   30,583      18,680
Total liabilities and shareholders' equity                       $131,501    $114,436
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>


<PAGE>
                           RAYTECH CORPORATION
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (000's omitted, except share data)

<TABLE>
<CAPTION>


                                       For the 13 Weeks Ended    For the 39 Weeks Ended
                                       Sept. 29,      Oct. 1,    Sept. 29,      Oct. 1,
                                         1996           1995       1996          1995   
<S>                                   <C>           <C>         <C>          <C>

Net Sales                              $ 53,660      $ 41,685   $ 165,839     $137,303
Cost of sales                           (40,861)       31,177    (124,451)     101,230 

       Gross profit                      12,799        10,508      41,388       36,073

Selling and administrative expenses      (7,273)       (7,581)    (20,955)     (19,263)

       Operating profit                   5,526         2,927      20,433       16,810

Interest expense                             (3)         (119)       (953)        (450)
Interest expense - Raymark                 (412)         (508)     (1,238)      (1,526)
Other income (expense), net                  85           884         874        5,218

Income before provision for income
  taxes and minority interest             5,196         3,184      19,116       20,052
Provision for income tax                   (217)       (1,514)     (5,276)      (7,598)
Minority interest                          (225)          (84)       (803)        (646)

Net income                             $  4,754      $  1,586    $ 13,037     $ 11,808

Net income per share                   $   1.38      $    .47    $   3.78     $   3.46

Average shares outstanding            3,454,092     3,389,401   3,450,410    3,414,572

<FN>
The accompanying notes are an integral part of these statements.
</TABLE>

<PAGE>

  
                           RAYTECH CORPORATION

             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (in thousands)

<TABLE>
<CAPTION>

                                                                                        
                                                       Sept. 29,     Oct. 1, 
For the 39 Weeks Ended                                   1996         1995  
<S>                                                   <C>          <C>

    Net cash provided by operating activities         $ 10,265     $ 12,020

Cash flow from investing activities:
  Capital expenditures                                  (5,403)      (7,730)
  Proceeds on sale of property, plant and equipment        119        2,186
  Equity Investment in AFM                              (9,400)         -  
  Acquisition of machinery and equipment from AFM       (3,500)         -  

    Net cash used in investing activities              (18,184)      (5,544)

Cash flow from financing activities:

  Proceeds from short-term borrowings                    3,218          -  
  Net borrowings (payments) under revolving
    line of credit                                      (2,385)       4,660 
  Principal payments on long-term debt                    (117)        (635)
  Proceeds from sale of stock                              -             25
  Payments on borrowings from Raymark                      -         (3,060)
  Proceeds of borrowings from Raymark                      -          5,838
  Other                                                   (128)        (131)


    Net cash used in financing activities                  588        6,697 

Effect of exchange rate changes on cash                    (26)          50

Net change in cash and cash equivalents                 (7,357)      13,223 

Cash and cash equivalents at beginning of period        19,597        4,778

Cash and cash equivalents at end of period            $ 12,240     $ 18,001


<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
                                    


    <PAGE>

                        RAYTECH CORPORATION  
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
              (dollars in thousands, except share data)
  
  NOTE:  For purposes of the notes and Item 2, Raytech Corporation 
         and its subsidiaries are referenced on a consolidated basis  
         as "Raytech" or the "Company" where appropriate.
  
   
  NOTE A - RESTRUCTURING OF RAYTECH, CHAPTER 11 PROCEEDINGS 
           AND OTHER LITIGATION
  
        The restructuring of the Company in October 1986 was for
  the stated purpose of separating Raytech from Raymark Industries,
  Inc.'s ("Raymark") substantial asbestos-related liabilities and
  litigation.  For a further discussion of this matter, please refer
  to Raytech's 1995 Form 10-K, Part 1, Item 1, pages 4-7.  As part of
  the restructuring process of Raytech, Raymark common stock was
  divested and sold as of May 20, 1988 to Asbestos Litigation
  Management, Inc.
  
        Despite the restructuring plan implementation and
  subsequent divestiture of Raymark, Raytech was named a co-defendant
  with Raymark and other named defendants in approximately 3,300     
  asbestos-related lawsuits as a successor in liability to Raymark. 
  The dollar value of these lawsuits cannot be estimated.  Until
  February 1989, the defense of all such lawsuits was provided to
  Raytech by Raymark in accordance with the indemnification agreement
  included as a condition of the purchase of the Wet Clutch and Brake
  Division and German subsidiary from Raymark in 1987.  In February
  1989, an involuntary petition in bankruptcy was filed against
  Raymark and remained pending until August 1996 when the involuntary
  petition was dismissed following a trial.  Subsequent to the
  bankruptcy proceedings against Raymark, a restrictive funding order
  was issued by an Illinois Circuit Court, which required one of
  Raymark's insurance carriers to pay claims but not defense costs,
  and another insurance carrier had been declared insolvent.  These
  circumstances caused Raymark  to be unable to fund the costs of
  defense to Raytech in the asbestos-related lawsuits referenced
  above, as provided in the indemnity section of the acquisition
  agreement.  Raymark's cost of defense and disposition of cases up to
  the automatic stay of litigation under the involuntary bankruptcy
  proceedings has been approximately $333 million of Raymark's total
  insurance coverage of approximately $395 million. As a result of the
  dismissal of the involuntary petition, Raymark has available
  approximately $27 million in cash received from a state guarantee
  association to make up the proceeds of the policies of the insolvent
  carrier and approximately $32 million in remaining insurance
  intended to be used to defend itself against pending and new
  lawsuits filed against it.
  <PAGE>
        In an asbestos-related personal injury case decided in
  October 1988 in a U.S. District Court in Oregon, Raytech was ruled
  under Oregon equity law to be a successor to Raymark's asbestos-
  related liability.  The successor ruling was appealed by Raytech and
  in October 1992 the Ninth Circuit Court of Appeals affirmed the
  District Court's judgment on the grounds stated in the District
  Court's opinion.  The effect of this decision extends beyond the
  Oregon District due to a Third Circuit Court of Appeals decision in
  a related case cited below wherein Raytech was collaterally estopped
  (precluded) from relitigating the issue of its successor liability
  for Raymark's asbestos-related liabilities.
  
        As the result of the inability of Raymark to fund Raytech's
  costs of defense in 1989 recited above, and in order to obtain a
  ruling binding across all jurisdictions as to whether Raytech is
  liable as a successor for asbestos-related and other claims,
  including claims yet to be filed relating to the operations of
  Raymark or its predecessors, on March 10, 1989, Raytech filed a
  petition seeking relief under Chapter 11 of Title 11, United States
  Code in the United States Bankruptcy Court, District of Connecticut. 
  Under Chapter 11, substantially all litigation against Raytech has
  been stayed while the debtor corporation and its non-filed operating
  subsidiaries continue to operate their businesses in the ordinary
  course under the same management and without disruption to
  employees, customers or suppliers.  In the Bankruptcy Court a
  creditors' committee was appointed, comprised primarily of asbestos
  claimants' attorneys.  In August 1995, pursuant to an order of the
  Bankruptcy Court, an official committee of equity security holders
  was appointed for a limited time relating to a determination of
  equity security holders' interest in the estate.  In September,
  Raytech filed a motion to dismiss its bankruptcy petition for the
  reason that Raymark appears to again be capable of providing
  indemnity to claims pending and that may be filed against Raytech. 
  The said motion to dismiss has been continued by the Court without a
  further hearing date set.
  
        Since the bankruptcy filing several entities have asserted
  claims in Bankruptcy Court alleging environmental liabilities of
  Raymark based upon similar theories of successor liability against
  Raytech as alleged by asbestos claimants.  These claims are not
  covered by the class action referenced below and will be resolved in
  the bankruptcy case.  The environmental claims include a claim of
  the Pennsylvania Department of Environmental Resources ("DER") to
  perform certain activities in connection with Raymark's Pennsylvania
  manufacturing facility, which includes submission of an acceptable
  closure plan for a landfill containing hazardous waste products
  located at the facility and removal of accumulated baghouse dust
  from its operations.  In March 1991, the Company entered a Consent
  Order which required Raymark to submit a revised closure plan which
  provides for the management and removal of hazardous waste, for
  investigating treatment and monitoring of any contaminated
  groundwater and for the protection of human health and environment
  <PAGE>
at the site, all relating to the closure of the Pennsylvania
  landfill and to pay a nominal civil penalty.  The estimated cost for
  Raymark to comply with the order is $1.2 million.  The DER has
  reserved its right to reinstitute an action against the Company and
  the other parties to the DER order in the event Raymark fails to
  comply with its obligations under the Consent Order.  Another
  environmental claim was filed against the Company by the U.S.
  Environmental Protection Agency for civil penalties charged Raymark
  in the amount of $12 million arising out of alleged Resource
  Conservation and Recovery Act violations at Raymark's Stratford,
  Connecticut, manufacturing facility.  
  
        It is possible that additional claims for reimbursement of
  environmental cleanup costs related to Raymark facilities may be
  asserted against Raytech, as successor in liability to Raymark. 
  Determination of Raytech's liability for such future possible
  claims, if any, would be subject to Bankruptcy Court deliberations
  and proceedings.  In April 1996, the Indiana Department of
  Environmental Management ("IDEM") advised Raybestos Products Company
  ("RPC"), a wholly-owned subsidiary of the Company, that it may have
  contributed to the release of lead and PCB's (polychlorinated
  biphenyls) found in small waterways near its Indiana facility.  In
  June, IDEM named RPC as a potentially responsible party ("PRP"). 
  RPC continues to assess the extent of the contamination and its
  involvement and is currently negotiating with IDEM for an agreed
  order of cleanup.  If it is learned that the Company was involved in
  the contamination, it will seek indemnification for the cleanup
  costs from Raymark due to its prior ownership.  Blood tests
  administered to residents in the vicinity of the small waterways
  revealed no exposure.
  
        In April 1996, the creditors' committee filed a motion for
  appointment of a trustee based upon alleged breaches of the
  Company's fiduciary obligations to its creditors.  The Company will
  resist the motion when heard; however, the motion has been continued
  without a hearing date set.
  
        Under bankruptcy rules, the debtor-in-possession has an
  exclusive period in which to file a reorganization plan.  Such
  exclusive period had been extended by the Bankruptcy Court pending
  the conclusion of the successor liability litigation.  However, in
  December 1992, the creditors' committee filed a motion to terminate
  the exclusive period to file a plan of reorganization.  At a hearing
  in May 1993, the motion was denied by the Bankruptcy Court but was
  appealed by the creditors' committee.  In November 1993, the U.S.
  District Court reversed the Bankruptcy Court and terminated the
  exclusive period to file a plan of reorganization effective in
  January 1994.  Accordingly, any party in interest, including the
  debtor, the creditors' committee, or a creditor could thereafter
  file a plan of reorganization.
  
    <PAGE>
        In May 1994, Raytech filed a Plan of Reorganization
  ("Debtor's Plan") in the U.S. Bankruptcy Court for the purpose of
  seeking confirmation allowing Raytech to emerge from the bankruptcy
  filed March 10, 1989.  Important conditions precedent to
  confirmation of the Debtor's Plan included a final judgment in the
  litigation to determine whether Raytech is a successor to the
  liabilities of Raymark and a resolution of the environmental claims
  or other claims filed or to be filed by governmental agencies.  The
  Debtor's Plan provided that in the event Raytech is found to be a
  successor, it is to establish a successor trust funded by an amount
  determined to be the difference between what Raytech should have
  paid for the businesses purchased from Raymark less the amount
  actually paid and less amounts to be paid for environmental and
  other claims.  This remedy would satisfy its obligations as a
  successor in full and render all claimants unimpaired, thereby
  eliminating the need for balloting and all equity shareholders would
  retain their interests in full.  In July 1996, Raytech filed its
  first amended Plan of Reorganization ("Debtor's Amended Plan") to
  consider the Third Circuit Court of Appeals decision referenced
  above and other developing factors.  The Debtor's Amended Plan calls
  for successor claimants to be paid from a created creditors trust
  which is to assume the liabilities and be funded by 51% of the stock
  of Raytech, tax advantaged contributions, proceeds from Raymark due
  Raytech under indemnification agreements and proceeds from unjust
  enrichment litigation. Treatment of environmental government
  claimants is to be covered through a separate negotiated consent
  order.  The Debtor's Amended Plan relies upon a theory of limited
  successor liability yet to be litigated.  Raytech's management
  believes the Debtor's Plan to be confirmable.  
  
        In September 1994, the Creditors' Committee filed its own
  Plan of Reorganization in competition to the Debtor's Plan
  ("Creditors' Plan").  The Creditors' Plan calls for the elimination
  of Raytech Corporation and its stockholders to be replaced with a
  new Raytech.  All of the stock of new Raytech would then be
  distributed to unsecured claimants, environmental claimants and both
  past and future asbestos disease claimants on a formulated basis set
  forth in the Plan.  Current stockholders of Raytech would receive
  nothing under the Plan.  The creditors' committee also filed an
  amended Plan of Reorganization (Creditors' Amended Plan") in July
  1996, which essentially did not alter the terms of the Creditors'
  Plan previously filed.  The Future Claimants Representative joined
  in the Creditors' Amended Plan.  Raytech believes the Creditors'
  Amended Plan is unconfirmable and will vigorously contest attempts
  to have it confirmed while it continues to try to get the Debtor's
  Plan confirmed.  In July 1996, the Equity Security Holders Committee
  filed its separate Plan of Reorganization ("Equity Plan") which
  calls for a successor trust to be established and funded by 65% of
  the stock of Raytech.  Treatment of successor and environment
  claimants is similar to the Debtor's Amended Plan.  The debtor
  intends to resist the Equity Plan.
  
  <PAGE>
      Upon motion of the parties and support of the Bankruptcy
  Court, the major interested parties agreed in August 1995 to
  participate in non-binding mediation to attempt to effectuate a
  consensual plan of reorganization.  The mediation process commenced
  in October 1995 and was concluded in March 1996 without agreement
  for a consensual plan of reorganization.  The competing plans of
  Raytech, its creditors and the equity committee will now return to
  Bankruptcy Court procedures.  The outcome of these matters is
  expected to take considerable time and is uncertain.  If an adverse
  plan is confirmed, it would have a material adverse impact on
  Raytech and its stockholders.
  
        In June 1989 Raytech filed a class action in the Bankruptcy
  Court against all present and future asbestos claimants seeking a
  declaratory judgment that it not be held liable for the asbestos-
  related liabilities of Raymark.  It was the desire of Raytech to 
  have this case heard in the U.S. District Court, and since the
  authority of the Bankruptcy Court is referred from the U.S. 
  District Court, upon its motion and argument the U.S. District Court
  withdrew its reference of the case to the Bankruptcy Court and
  thereby agreed to hear and decide the case.  In September 1991, the
  U.S. District Court issued a ruling dismissing one count of the
  class action citing as a reason the preclusive effect of the 1988
  Oregon case, previously discussed, under the doctrine of collateral
  estoppel (conclusiveness of judgment in a prior action), in which
  Raytech was ruled to be a successor to Raymark's asbestos liability
  under Oregon law.  The remaining counts before the U.S. District
  Court involve the transfer of Raymark's asbestos-related liabilities
  to Raytech on the legal theories of alter-ego and fraudulent
  conveyance.  Upon a motion for reconsideration, the U.S. District
  Court affirmed its prior ruling in February 1992.  Also, in February
  1992, the U.S. District Court transferred the case in its entirety
  to the U.S. District Court for the Eastern District of Pennsylvania. 
  Such transfer was made by the U.S. District Court without motion
  from any party in the interest of the administration of justice as
  stated by the U.S. District Court.  In December 1992, Raytech filed
  a motion to activate the case and to obtain rulings on the remaining
  counts which was denied by the U.S. District Court.  In October
  1993, the creditors' committee asked the Court to certify the
  previous dismissal of the successor liability count.  In February
  1994, the U.S. District Court granted the motion to certify and the
  successor liability dismissal was accordingly appealed.  In May
  1995, the Third Circuit Court of Appeals ruled that Raytech is
  collaterally estopped (precluded) from relitigating the issue of its
  successor liability as ruled in the 1988 Oregon case recited above,
  affirming the U.S. District Court's ruling of dismissal.  A petition
  for a writ of certiorari was denied by the U.S. Supreme Court in
  October 1995.  The ruling leaves the Oregon case, as affirmed by the
  Ninth Circuit Court of Appeals, as the prevailing decision holding
  Raytech to be a successor to Raymark's asbestos-related liabilities. 
  
    <PAGE>
        Costs incurred by the Company for asbestos-related
  liabilities are indemnified by Raymark under the 1987 acquisition
  agreements.  By agreement, Raymark has reimbursed the Company in
  part for such indemnified costs by payment of the amounts due in
  Raytech common stock of equivalent value.  Under such agreement,
  Raytech received 177,570 shares in 1990, 163,303 shares in 1991 and
  80,000 shares in 1993.  The Company's acceptance of its own stock
  was based upon an intent to control dilution of its outstanding
  stock.  In 1992, the indemnified costs were reimbursed by offsetting
  certain payments due Raymark from the Company under the 1987
  acquisition agreements.  Costs incurred in 1994 and 1995 were
  applied as a reduction of the note obligations pursuant to the
  agreements.  Costs incurred since are being accumulated as
  indemnified costs for further reductions of the note obligations
  referenced above.
    
        The adverse ruling in the Third Circuit Court of Appeals,
  of which a petition for writ of certiorari was denied by the U.S. 
  Supreme Court, precluding Raytech from relitigating the issue of its
  successor liability leaves the U.S. District Court's (Oregon) 1988
  ruling as the prevailing decision holding Raytech to be a successor
  to Raymark's asbestos-related liabilities.  This ruling could have a
  material adverse impact on Raytech as it does not have the resources
  needed to fund Raymark's substantial uninsured asbestos-related
  liabilities.  Determination of Raytech's actual liabilities are
  subject to the Bankruptcy Court's deliberations and rulings and the
  competing plans of reorganization filed in the Bankruptcy Court
  referenced above.
  
        The ultimate liability of the Company with respect to
  asbestos-related, environmental, or other claims cannot presently be
  determined.  Accordingly, no provision for such liability has been
  recorded in the financial statements.  The accompanying financial
  statements have been prepared assuming that the Company will
  continue as a going concern.  An unfavorable result on the matters
  described above would have a material adverse effect on the
  Company's results of operations and financial position.  These
  uncertainties raise substantial doubt about the Company's ability to
  continue as a going concern.  The financial statements do not
  include any adjustments relating to the recoverability and
  classification of recorded asset amounts or adjustments relating to
  establishment, settlement and classification of liabilities that may
  be required in connection with reorganizing under the Bankruptcy
  Code.
        
  
  NOTE B - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
          In the opinion of management, the accompanying condensed
  consolidated financial statements contain all adjustments necessary
  to fairly present the financial position of Raytech as of
  September 29, 1996 and December 31, 1995, the results of operations
  <PAGE>
for the thirty-nine weeks ended September 29, 1996 and statements
  of cash flows for the thirty-nine weeks ended September 29, 1996. 
  Except for the matters disclosed herein, all adjustments are of a
  normal recurring nature.  The financial statements contained herein
  should be read in conjunction with the financial statements and
  related notes filed on Form 10-K for the year-ended December 31,
  1995.
  
          The year-end condensed balance sheet data was derived from
  audited financial statements but does not include all disclosures
  required by generally accepted accounting principles.
  
  
  NOTE C - INVENTORIES
  
          Inventories consist of the following:
  
                              Sept. 29, 1996    December 31, 1995 
  
          Raw material           $ 8,381            $ 6,901 
          Work in process          7,653              6,143
          Finished goods           9,485             10,529
       
                                 $25,519            $23,573
   
  NOTE D - RELATED PARTIES
  
          During the first three quarters of 1996, the Company
  purchased yarn from Universal Friction Composites, a related party,
  in the amount of $2,377 and at September 29, 1996, the related
  payable amounted to $273.
  
          Effective May 2, 1996, Allomatic Products Company ("APC"),
  a majority-owned subsidiary, declared a cash dividend of $2.81 per
  share payable in equal quarterly installments to shareholders of
  record in March 1996.  As of September 29, 1996, 41,904 shares, or
  40% of the outstanding shares, were held by Universal Friction
  Composites, Inc., a corporation directed by Bradley C. Smith, as
  President, a son of Craig R. Smith.  Accordingly, the  beneficial
  interest of Craig R. Smith is 40%.
  
          Earnings attributable to minority shareholders of
  Allomatic Products Company have been presented net of income tax as
  minority interest in the Condensed Consolidated Statement of
  Operations.
  
          In March 1996, 49% of the common stock of Raymark
  Corporation was purchased by Craig R. Smith from his son Bradley C.
  Smith for $7 in an agreement containing an option to purchase the
  balance of the common stock at a later date.
  
    <PAGE>
 In September 1996, Craig R. Smith entered into a
  consulting agreement with Raymark for services regarding asbestos
  litigation.  Proceeds are to be paid to Raytech pursuant to the
  terms of the agreement.
  
  
  NOTE E - ACQUISITION
  
          On January 31, 1996, Raytech Composites, Inc.
  ("Composites"), a subsidiary of Raytech, and Raybestos Products
  Company ("RPC"), a subsidiary of Composites, entered into a series
  of related transactions with Advanced Friction Materials ("AFM")
  and related entities and persons as follows:  Composites acquired a
  47% minority share of the common stock of AFM for $9.4 million cash
  at closing; RPC acquired 100% of the common stock of AFM Management
  Company, which leases employees to AFM, for $1.0 million, to be
  paid for on January 31, 1997; RPC acquired the machinery and
  equipment and certain other operating assets of AFM for $3.5
  million cash at closing; RPC committed to acquire land and building
  utilized in AFM's manufacturing operations (land and building
  located at 44650 Merrill, Sterling Heights, Michigan) from a
  principal owner of AFM for $6.6 million, to be consummated on
  January 31, 1997; RPC loaned AFM $1.3 million cash at closing
  bearing interest at the prime rate and maturing on January 31,
  2003; RPC agreed to acquire AFM's inventory subsequent to closing
  at an amount that has yet to be negotiated by the parties.  In
  addition, the parties entered into various other agreements,
  including supply and technology exchange agreements.  Subsequent to
  the transaction, RPC is supplying AFM with products (automobile
  transmission component parts) manufactured at the Sterling Heights
  facility.  Sales prices between RPC and AFM are established under
  the terms of the supply agreement entered into at closing.  AFM
  will bear responsibility principally for sales and marketing of the
  products to original equipment manufacturers.  
  
          Composites 47% common stock interest in AFM will be
  accounted for under the equity method commencing February 1, 1996.
  The excess of purchase price over the underlying net assets of AFM
  Management Company and equity interest in the net assets of AFM is
  being amortized on a straight line basis over a 30-year period. 
  The machinery and equipment and real property have been recorded
  based upon preliminary assessments of fair value of the assets,
  which are subject to adjustment based upon independent appraisals. 
  Had the transactions described above occurred on January 1, 1996 or
  January 2, 1995, the estimated pro forma effect on the Company's
  net income for the thirteen weeks ended March 31, 1996 and April 2,
  1995, respectively, would not be material.
    
    
 <PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
           CONDITION AND RESULTS OF OPERATIONS
  
  Summary
  
        Net income for the thirteen-week period ended
  September 29, 1996 amounted to $4,754 or $1.38 per share as
  compared with $1,586 or $.47 per share for the corresponding period
  in 1995.  For the thirty-nine-week period, net income amounted to
  $13,037 or $3.78 per share compared with net income of $11,808 or
  $3.46 per share for the same period in 1995.  Included in 1996 is
  the contribution from the acquired Sterling Heights operations of
  Advanced Friction Materials Company ("AFM"), which amounted to
  approximately $.5 million after tax.  Further, included in 1995 net
  income is a one-time after-tax gain of approximately $2.7 million
  which resulted from a favorable judgment in regard to a product
  disparagement lawsuit.
  
        Excluding the two items mentioned above, net income year-
  to-date was up 37.6% over last year.  However, the increase,
  primarily due to domestic volume increases, was partially offset by
  a slowdown in the European economy which resulted in a reduction in
  sales; contractual price reductions to certain customers; an
  increase in salary and wages and other employee benefits and
  general inflationary cost increases.
  
        During the first quarter of 1996, the Company acquired
  certain assets from Advanced Friction Materials Company and also
  acquired a 47% equity interest in AFM.
  
  Net Sales
  
        Net sales for the thirty-nine-week period ended
  September 29, 1996 increased 20.8% to $165,839 as compared with
  $137,303 for the same period one year ago.  Net sales for the
  thirteen-week period ended September 29, 1996 increased 28.7% to
  $53,660 as compared with $41,685 for the same period one year ago. 
  The overall improvement for the thirty-nine-week period is
  primarily due to additional sales of approximately $17,400 related
  to the Sterling Heights operations and additional volume within the
  domestic product market segments.  Excluding Sterling Heights,
  domestic sales increased by $14,100 compared to last year. 
  However, European sales decreased by $3,000 primarily due to a
  continued decline in the European economy.
  
  Gross Margin    
  
        Gross profit margin as a percentage of sales for the
  thirteen-week period ended September 29, 1996 is 23.9%, as compared
  to 25.2% for the same period one year ago.  For the thirty-nine-
  week period ended September 29, 1996 gross profit margin as a
  percentage of sales is 25.0%, as compared to 26.3% for the same
  <PAGE>
period one year ago.  The overall decrease is primarily due to an
  increase in domestic manufacturing labor and material costs,
  contractual price reductions to certain customers and a lower gross
  margin on AFM sales.
  
  Selling, General and Administrative Expense
  
        Selling, general and administrative expenses decreased
  slightly for the third quarter to $7,273 as compared to $7,581 one
  year earlier.  However, for the thirty-nine-week period expenses
  increased 8.8% to $20,955 as compared to $19,263 one year earlier. 
  Expenses are up due to the impact of increased sales volume on
  related expenses, an increase in salary and wages and other
  employee benefits and the impact of the acquired Sterling Heights
  operation of AFM.
  
  Interest Expense
  
        Interest expense increased primarily as a result of obli-
  gations accrued at present value for certain components of the AFM
  acquisition and the use of the Company's revolving line of credit.
  
  Income Taxes
  
        The effective tax rate decreased from 47.6% for the
  thirteen weeks ended October 1, 1995 to 4.2% primarily due to an
  adjustment of prior years' accruals for tax items which were
  favorably resolved.
        
  Liquidity and Capital Resources
  
        During the first three quarters of fiscal 1996, the
  Company generated positive cash flow from operating activities in
  the amount of $10.3 million.  The positive cash flow is the result
  of the favorable earnings during the first half of fiscal 1996. 
  Capital expenditures year-to-date for fiscal 1996 amounted to $5.4
  million, which is consistent with the Company's projected spending
  plan for 1996.
  
        On January 31, 1996, Raytech Composites, Inc.
  ("Composites"), a subsidiary of Raytech acquired a 47% minority
  share of the common stock of Advanced Friction Materials Company
  ("AFM") for $9.4 million.
  
        On January 31, 1996, Raybestos Products Company ("RPC"),
  a subsidiary of Composites, acquired the machinery and equipment
  and certain other operating assets of AFM for $3.5 million.
  
        At September 29, 1996, the Company's wholly-owned German
  subsidiary (Raybestos Industrie-Produkte GmbH) had available unused
  lines of credit amounting to DM3,132 ($2,054) which all expire on
  demand.
  
  <PAGE>
      In March 1995, Raybestos Products Company ("RPC"), a
  wholly-owned subsidiary of the Company, entered into a loan
  agreement with The CIT Group/Credit Finance, Inc., which provides
  for RPC to borrow up to $15 million, consisting of a revolving line
  of credit of $10 million and a term loan of $5 million at an
  interest rate of 1.75% above the prime rate.  The loans are
  collateralized by accounts receivable, inventory and machinery and
  equipment at RPC.  The purpose of the loan is for working capital,
  capital expenditures, acquisitions and possible settlement of
  successor liability issues.  The amount outstanding under this loan
  at September 29, 1996 was $6,993.
  
        Management believes that the Company will generate
  sufficient cash flow from operations during the balance of 1996 to
  meet all of the Company's obligations arising in the ordinary 
  course of operations.
  
  <PAGE>
                    PART II. OTHER INFORMATION 
  
  ITEM 1.  LEGAL PROCEEDINGS
  
        The formation of Raytech and the implementation of the
  restructuring plan more fully described in Item 1 of Form 10-K
  filed for the fiscal year 1995 was for the purpose of providing a
  means to acquire and operate businesses in a corporate structure
  that would not be subject to any asbestos-related or other
  liabilities of Raymark.
  
        Prior to the formation of Raytech, Raymark was first sued in
  an asbestos-related claim in 1971 and has since been named as a
  defendant in more than 88,000 lawsuits in which substantial damages
  have been sought for injury or death from exposure to airborne
  asbestos fibers.  More than 35,000 of such lawsuits were disposed
  of by settlements, dismissals, summary judgments and trial verdicts
  at a cost in excess of $333 million principally covered by
  Raymark's insurance.  Subsequent to the sale of Raymark in 1988,
  lawsuits continued to be filed against Raymark at the rate of
  approximately 1,000 per month until an involuntary petition in
  bankruptcy was filed against Raymark in February 1989 which stayed
  all its litigation.  In August 1996, the involuntary petition in
  bankruptcy against Raymark was dismissed following a trial.
  
        Despite the restructuring plan implementation and subsequent
  divestiture of Raymark, Raytech was named a co-defendant with
  Raymark and other named defendants in approximately 3,300 asbestos-
  related lawsuits as a successor in liability to Raymark.  Until
  February 1989, the defense of all such lawsuits was provided to
  Raytech by Raymark in accordance with the indemnification agreement
  included as a condition of the purchase of the Wet Clutch and Brake
  Division and German subsidiary from Raymark in 1987.  However,
  subsequent to the involuntary bankruptcy proceedings against
  Raymark, a restrictive funding order was issued by an Illinois
  Circuit Court which required one of Raymark's insurance carriers to
  pay claims but not defense costs and another insurance carrier has
  been declared insolvent.  These circumstances caused Raymark to be
  unable to fund the costs of defense to Raytech under its
  indemnification agreement.  Raymark's cost of defense and
  disposition of cases up to the automatic stay of litigation under
  the involuntary bankruptcy proceedings has been approximately $333
  million of Raymark's total insurance coverage of approximately $395
  million.  As a result of the dismissal of the involuntary petition,
  Raymark has available approximately $27 million in cash received
  from a state guarantee association to make up the proceeds of the
  policies of the insolvent carrier and approximately $32 million in
  remaining insurance intended to be used to defend itself against
  pending and new lawsuits filed against it.
  
    <PAGE>
   In October 1988, in a case captioned Raymond A. Schmoll v.
  ACands, Inc., et al., the U.S. District Court for the District of
  Oregon ruled, under Oregon equity law, Raytech to be a successor to
  Raymark's asbestos-related liability.  In this case the liability
  was negotiated to settlement for a negligible amount.  The
  successor decision was appealed and in October 1992, the Ninth
  Circuit Court of Appeals affirmed the District Court's judgment on
  the grounds stated in the District Court's opinion.  The effect of
  this decision extends beyond the Oregon District due to a Third
  Circuit Court of Appeals decision in a related case cited below
  wherein Raytech was collaterally estopped (precluded) from
  relitigating the issue of its successor liability for Raymark's
  asbestos-related liabilities. 
  
        As the result of the inability of Raymark to fund Raytech's
  cost of defense in 1989 recited above, and in order to obtain a
  ruling binding across all jurisdictions on whether Raytech is
  liable as a successor for asbestos-related and other claims
  including claims yet to be filed relating to the operations of
  Raymark or Raymark's predecessors, on March 10, 1989 Raytech filed
  a petition seeking relief under Chapter 11 of Title 11, United
  States Code in the United States Bankruptcy Court, District of
  Connecticut.  Under Chapter 11, substantially all litigation
  against Raytech has been stayed while the debtor corporation and
  its non-filing operating subsidiaries continue to operate their
  businesses in the ordinary course under the same management and
  without disruption to employees, customers or suppliers.  In the
  Bankruptcy Court a creditors' committee was appointed, comprised
  primarily of asbestos claimants' attorneys.  In August 1995,
  pursuant to an order of the Bankruptcy Court, an official committee
  of equity security holders was appointed for a limited time
  relating to a determination of equity security holders' interest in
  the estate.  In September, Raytech filed a motion to dismiss its
  bankruptcy petition for the reason that Raymark appears to again be
  capable of providing indemnity to claims pending and that may be
  filed against Raytech.  The said motion to dismiss has been
  continued by the Court without a further hearing date set.
  
        Since the bankruptcy filing, several entities have asserted
  claims in Bankruptcy Court alleging environmental  liabilities of
  Raymark based upon similar theories of successor liability against
  Raytech as alleged by asbestos claimants.  These claims are not
  covered by the class action referenced below and will be resolved
  in the bankruptcy case.  The environmental claims include a claim
  of the Pennsylvania Department of Environmental Resources ("DER")
  to perform certain activities in connection with Raymark's
  Pennsylvania manufacturing facility, which includes submission of
  an acceptable closure plan for a landfill containing hazardous
  waste products located at the facility and removal of accumulated
  baghouse dust from its operations.  In March 1991, the Company
  entered a Consent Order which required Raymark to submit a revised
  closure plan which provides for the management and removal of
  <PAGE>
hazardous waste, for investigating, treatment and monitoring of any
  contaminated groundwater and for the protection of human health and
  environment at the site, all relating to the closure of the
  Pennsylvania landfill and to pay a nominal civil penalty.  The
  estimated cost for Raymark to comply with the order is $1.2
  million.  The DER has reserved its right to reinstitute an action
  against the Company and the other parties to the DER order in the
  event Raymark fails to comply with its obligations under the
  Consent Order.  Another environmental claim was filed against the
  Company by the U.S. Environmental Protection Agency for civil
  penalties charged Raymark in the amount of $12 million arising out
  of alleged Resource Conservation and Recovery Act violations at
  Raymark's Stratford, Connecticut, manufacturing facility.  
  
        It is possible that additional claims for reimbursement of
  environmental cleanup costs related to Raymark facilities may be
  asserted against Raytech, as successor in liability to Raymark. 
  Determination of Raytech's liability for such future possible
  claims, if any, would be subject to Bankruptcy Court deliberations
  and proceedings.  In April 1996, the Indiana Department of
  Environmental Management ("IDEM") advised Raybestos Products
  Company ("RPC"), a wholly-owned subsidiary of the Company, that it
  may have contributed to the release of lead and PCB's
  (polychlorinated biphenyls) found in small waterways near its
  Indiana facility.  In June, IDEM named RPC as a potentially
  responsible party ("PRP").  RPC continues to assess the extent of
  the contamination and its involvement and is currently negotiating
  with IDEM for an agreed order of cleanup.  If it is learned that
  the Company was involved in the contamination, it will seek
  indemnification for the cleanup costs from Raymark due to its prior
  ownership.  Blood tests administered to residents in the vicinity
  of the small waterways revealed no exposure.
  
        In April 1996, the creditors' committee filed a motion for
  appointment of a trustee based upon alleged breaches of the
  Company's fiduciary obligations to its creditors.  The Company will
  resist the motion when heard; however, the motion has been
  continued without a further hearing date set.
  
        Under bankruptcy rules, the debtor-in-possession has an
  exclusive period in which to file a reorganization plan.  Such
  exclusive period had been extended by the Bankruptcy Court pending
  the conclusion of the successor liability litigation.  However, in
  December 1992, the creditors' committee filed a motion to terminate
  the exclusive period to file a plan of reorganization.  At a
  hearing in May 1993, the motion was denied by the Bankruptcy Court
  but was appealed by the creditors' committee.  In November 1993,
  the U.S. District Court reversed the Bankruptcy Court and
  terminated the exclusive period to file a plan of reorganization
  effective in January 1994.  Accordingly, any party in interest,
  including the debtor, the creditors' committee or a creditor could
  thereafter file a plan of reorganization.  
  
  <PAGE>
      In May 1994, Raytech filed a Plan of Reorganization ("Debtor's
  Plan") in the U.S. Bankruptcy Court for the purpose of seeking
  confirmation allowing Raytech to emerge from the bankruptcy filed
  March 10, 1989.  Important conditions precedent to confirmation of
  the Debtor's Plan included a final judgment in the litigation to
  determine whether Raytech is a successor to the liabilities of
  Raymark and a resolution of the environmental claims or other
  claims filed or to be filed by governmental agencies.  The Debtor's
  Plan provided that in the event Raytech is found to be a successor,
  it is to establish a successor trust funded by an amount determined
  to be the difference between what Raytech should have paid for the
  businesses purchased from Raymark less the amount actually paid and
  less amounts to be paid for environmental and other claims.  This
  remedy would satisfy its obligations as a successor in full and
  render all claimants unimpaired, thereby eliminating the need for
  balloting and all equity shareholders would retain their interests
  in full.  In July 1996, Raytech filed its first amended Plan of
  Reorganization ("Debtor's Amended Plan") to consider the Third
  Circuit Court of Appeals decision referenced above and other
  developing factors.  The Debtor's Amended Plan calls for successor
  claimants to be paid from a created creditors trust which is to
  assume the liabilities and be funded by 51% of the stock of
  Raytech, tax advantaged contributions, proceeds from Raymark due
  Raytech under indemnification agreements and proceeds from unjust
  enrichment litigation.  Treatment of environmental government
  claimants are to be covered through a separate negotiated consent
  order.  The Debtor's Amended Plan relies upon a theory of limited
  successor liability yet to be litigated.  Raytech believes the
  Debtor's Plan to be confirmable.  
  
        In September 1994, the Creditors' Committee filed its own Plan
  of Reorganization in competition to the Debtor's Plan ("Creditors'
  Plan").  The Creditors' Plan calls for the elimination of Raytech
  Corporation and its stockholders to be replaced with a new Raytech. 
  All of the stock of new Raytech would then be distributed to
  unsecured claimants, environmental claimants and both past and
  future asbestos disease claimants on a formulated basis set forth
  in the Plan.  Current stockholders of Raytech would receive nothing
  under the Plan.  The Creditors' Committee also filed an Amended
  Plan of Reorganization ("Creditors' Amended Plan") in July 1996,
  which essentially did not alter the terms of the Creditors' Plan
  previously filed.  The Future Claimants Representative joined in
  the Creditors' Amended Plan.  Raytech believes the Creditors'
  Amended Plan is unconfirmable and will vigorously contest attempts
  to have it confirmed while it continues to try to get the Debtor's
  Plan confirmed.  In July 1996, the Equity Security Holders
  Committee filed its separate Plan of Reorganization ("Equity Plan")
  which calls for a successor trust to be established and funded by
  65% of the stock of Raytech.  Treatment of successor and
  environment claimants is similar to the Debtor's Amended Plan.  The
  Debtor intends to resist the Equity Plan.
  
  <PAGE>
      Upon motion of the parties and support of the Bankruptcy
  Court, the major interested parties agreed in August 1995 to
  participate in non-binding mediation to attempt to effectuate a
  consensual plan of reorganization.  The mediation process commenced
  in October 1995 and was concluded in March 1996 without agreement
  for a consensual plan of reorganization.  The competing plans of
  Raytech, its creditors and the equity committee will now return to
  Bankruptcy Court procedures.  The outcome of these matters is
  expected to take considerable time and is uncertain.  If an adverse
  plan is confirmed, it would have a material adverse impact on
  Raytech and its stockholders.
  
        In June 1989 Raytech filed a class action in the Bankruptcy
  Court captioned Raytech v. Earl White, et al. against all present
  and future asbestos claimants seeking a declaratory judgment that
  it not be held liable for the asbestos-related liabilities of
  Raymark.  It was the desire of Raytech to have this case heard in
  the U.S. District Court, and since the authority of the Bankruptcy
  Court is referred from the U.S. District Court, upon its motion and
  argument the U.S. District Court withdrew its reference of the case
  to the Bankruptcy Court and thereby agreed to hear and decide the
  case.  In September 1991, the U.S. District Court issued a ruling
  dismissing one count of the class action citing as a reason the
  preclusive effect of the 1988 Schmoll case recited above under the
  doctrine of collateral estoppel (conclusiveness of judgment in a
  prior action), in which Raytech was ruled to be a successor to
  Raymark's asbestos liability under Oregon law.  The remaining
  counts before the U.S. District Court involve the transfer of
  Raymark's asbestos-related liabilities to Raytech on the legal
  theories of alter-ego and fraudulent conveyance.  Upon a motion for
  reconsideration, the U.S. District Court affirmed its prior ruling
  in February 1992.  Also, in February 1992, the U.S. District Court
  transferred the case in its entirety to the U.S. District Court for
  the Eastern District of Pennsylvania.  Such transfer was made by
  the U.S. District Court without motion from any party in the
  interest of the administration of justice as stated by the U.S.
  District Court.  In December 1992, Raytech filed a motion to
  activate the case and to obtain rulings on the remaining counts
  which was denied by the U.S. District Court.  In October 1993, the
  creditors' committee asked the Court to certify the previous
  dismissal of the successor liability count.  In February 1994, the
  U.S. District Court granted the motion to certify and the successor
  liability dismissal was accordingly appealed.  In May 1995, the
  Third Circuit Court of Appeals ruled that Raytech is collaterally
  estopped (precluded) from relitigating the issue of its successor
  liability as ruled in the 1988 Oregon case recited above, affirming
  the U.S. District Court's ruling of dismissal.  A petition for a
  writ of certiorari was denied by the U.S. Supreme Court in October
  1995.  The ruling leaves the Oregon case, as affirmed by the Ninth
  Circuit Court of Appeals, as the prevailing decision holding
  Raytech to be a successor to Raymark's asbestos-related
  liabilities.
  
  <PAGE>
      Costs incurred by the Company for asbestos related liabilities
  are indemnified by Raymark under the 1987 acquisition agreements. 
  By agreement, Raymark has reimbursed the Company in part for such
  indemnified costs by payment of the amounts due in Raytech common
  stock of equivalent value.  Under such agreement, Raytech received
  926,821 shares in 1989, 177,570 shares in 1990, 163,303 in 1991 and
  80,000 shares in 1993.  The Company's acceptance of its own stock
  was based upon an intent to control dilution of its outstanding
  stock.  In 1992 the indemnified costs were reimbursed by offsetting
  certain payments due Raymark from the Company under the 1987
  acquisition agreements.  Costs incurred in 1994 and 1995 were
  applied as a reduction of the note obligations pursuant to the
  agreements.  Cost incurred since are being accumulated as
  indemnified costs for further reductions of the note obligations
  referenced above.
  
        The adverse ruling in the Third Circuit Court of Appeals of
  which a petition for writ of certiorari was denied by the U.S.
  Supreme Court, precluding Raytech from relitigating the issue of
  its successor liability leaves the U.S. District Court's (Oregon)
  1988 ruling as the prevailing decision holding Raytech to be a
  successor to Raymark's asbestos-related liabilities.  This ruling
  could have a material adverse impact on Raytech as it does not have
  the resources needed to fund Raymark's substantial uninsured
  asbestos-related liabilities.  Determination of Raytech's actual
  liabilities are subject to the Bankruptcy Court's deliberations and
  rulings and the competing plans of reorganization filed in the
  Bankruptcy Court referenced above.
  
        The ultimate liability of the Company with respect to
  asbestos-related, environmental, or other claims cannot presently
  be determined.  Accordingly, no provision for such liability has
  been recorded in the financial statements.  The accompanying
  financial statements have been prepared assuming that the Company
  will continue as a going concern.  An unfavorable result on the
  matters described above would have a material adverse effect on the
  Company's results of operations and financial position.  These
  uncertainties raise substantial doubt about the Company's ability
  to continue as a going concern.  The accompanying financial
  statements do not include any adjustments that might result from
  the outcome of these uncertainties.
    <PAGE>
  ITEM 6(a).  EXHIBITS
  
       (11)   Statement re. Computation of Per Share Earnings
  
  
  ITEM 6(b).  REPORTS ON 8-K
  
              None
    <PAGE>
  
                             SIGNATURE 
           
  
          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.
  
                                   RAYTECH CORPORATION
  
  
                                   By: /s/ALBERT A. CANOSA
                                       Albert A. Canosa
                                       Vice President of
                                       Administration, Treasurer
                                       and Chief Financial Officer
  
  Date:  November 8, 1996         
    <PAGE>