FORM 10-Q

                 SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C.  20549




(Mark one)


[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1997

                                      or

[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER:  0-7513


                   ARTISTIC GREETINGS INCORPORATED
            (Exact name of registrant as specified in its charter)

               DELAWARE                           16-0909929
(State or other jurisdiction of                 (I.R.S. Employer 
incorporation or organization)                  Identification No.)


                               ONE KOMER CENTER
                            ELMIRA, NEW YORK  14902
                                (607) 733-5541
   (Address of principal executive offices, including Registrant's telephone
                                    number)


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

[ X ] Yes  [   ] No

As of August 4, 1997, the Registrant had 5,844,946 shares of its common stock
issued and outstanding.
<PAGE>

                   ARTISTIC GREETINGS INCORPORATED

                              FORM 10-Q INDEX

                 FOR QUARTERLY PERIOD ENDED JUNE 30, 1997



                                                               PAGE NO.

PART I. FINANCIAL INFORMATION

        Item 1. Financial Statements

                 Balance Sheets                                    3

                 Unaudited Statements of Operations                4

                 Unaudited Statements of Cash Flows                5

                 Notes to Condensed Financial Statements           6

        Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations     8

PART II. OTHER INFORMATION

        Item 4. Submission of Matters to a Vote of Security Holders  12

        Item 5. Other Information                                 12

        Item 6. Exhibits and Reports on Form 8-K                  12

               Signatures                                         13

               Exhibit Index                                      14


                                       2

<PAGE>



                      PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                   ARTISTIC GREETINGS INCORPORATED
                              BALANCE SHEETS


<TABLE>
<CAPTION>
                                                           June 30,    December 31,
                                                             1997        1996

IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA            (Unaudited)



                        ASSETS

CURRENT ASSETS:
<S>                                                    <C>          <C>
  Cash and cash equivalents                              $    206    $        99
  Marketable securities:
     Trading, at market (cost $2,313 in 1997 
     and $2,452 in 1996)                                    2,641          2,881
     Available for sale, at market (cost $509 
     in 1997 and $9 in 1996)                                  525             19
  Trade receivables - net                                   1,339          1,252
  Inventories                                               2,599          2,270
  Prepaid advertising                                       3,513          3,064
  Prepaid expenses and other current assets                   512            500

       TOTAL CURRENT ASSETS                                11,335         10,085

Deferred advertising                                        2,841          2,113
Property, plant and equipment, net                         17,573         16,237
Cash surrender value of life insurance                        461            433
Other assets                                                  144            130

       TOTAL ASSETS                                      $ 32,354       $ 28,998



         LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:

  Current portion of long-term debt                      $    144            153
  Accounts payable, trade                                  10,439          9,847
  Accrued liabilities                                       1,050          2,386
  Customer advances                                           794            451
  Income taxes payable                                         11            113

     TOTAL CURRENT LIABILITIES                             12,438         12,950

Long-term debt                                              6,517          1,034
Other liabilities                                             333            383

       TOTAL LIABILITIES                                   19,288         14,367

Common stock, subject to put option - 500,000 shares            -          2,343

STOCKHOLDERS' EQUITY:

  Common stock, par value $.10:
       Authorized:  10,000,000 shares;
       Issued: 6,038,520 shares in 1997;
             6,037,720 shares in 1996                         654            604
  Additional paid-in capital                               11,055         11,042
  Unrealized gains on marketable securities 
        held as available for sale,
        net of tax effect                                       8              1
  Retained earnings                                         2,271          1,526

                                                           13,988         13,173

  Less: Treasury stock, at cost (695,356 
        and 200,356 shares in 1997 and
        1996, respectively)                                  (922)          (885)

       TOTAL STOCKHOLDERS' EQUITY                          13,066         12,288

       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 32,354       $ 28,998
</TABLE>

THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.

                                                 3

<PAGE>



                   ARTISTIC GREETINGS INCORPORATED
                     UNAUDITED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                          QUARTER ENDED                 SIX MONTHS ENDED
                                          June 30,                      June 30,
IN THOUSANDS OF DOLLARS, 
EXCEPT PER SHARE DATA                   1997            1996            1997            1996

<S>                               <C>                <C>              <C>             <C>    
Net sales                               $ 22,212        $ 22,250        $ 46,431        $ 49,258
Cost of sales                              9,662           8,931          19,394          19,982
Gross profit                              12,550          13,319          27,037          29,276

Selling, advertising, general 
and administrative expenses               12,693          12,806          26,024          27,912
INCOME (LOSS) FROM OPERATIONS               (143)            513           1,013           1,364

Other income (expense)
  Interest and dividend income                44              11              78              79
  Net unrealized gains on 
   trading securities                        223               8             145              52
  Net realized gains on 
   marketable securities                      55              44              61              83
  Interest expense                          (111)           (187)           (172)           (518)
  Other                                       15              41              38              42
INCOME BEFORE TAXES                           83             430           1,163           1,102

Provision for income taxes                    30               0             419               0
NET INCOME                                $   53          $  430         $   744         $ 1,102

Net income per common 
        and common equivalent share       $ 0.01          $ 0.07         $ 0.12          $  0.17


Weighted average number of 
 common shares outstanding                6,361,382       6,321,940      6,360,465       6,321,617

</TABLE>

THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.

                                                 4

<PAGE>



                   ARTISTIC GREETINGS INCORPORATED
                     UNAUDITED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                SIX MONTHS ENDED
                                                                        June 30,        June 30,
                                                                        1997            1996

IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                  <C>            <C> 
Net income                                                              $  744          $ 1,102
Adjustments to reconcile net income to net cash provided by
  (used in) operating activities:
  Depreciation and amortization                                            970            1,279
  Allowance for doubtful accounts                                          (75)               -
  Net unrealized losses (gains) on trading securities                     (145)             (52)
  Net realized losses (gains) on marketable securities (equity)            (61)             (83)
  Purchase of trading securities                                          (261)          (1,653)
  Proceeds from sale of trading securities                                  60            1,006
  Amortization of interest credit from New York State Urban
     Development Corporation grant                                         (50)             (50)
  Accretion of common stock subject to a put option                        157              156
  Decrease (increase) in cash surrender value of life insurance            (28)             (28)
  Decrease (increase) in assets:
     Trade receivables                                                     (88)             561
     Income taxes receivable                                                 0              900
     Inventories                                                          (329)           2,454
     Prepaid advertising, prepaid expenses and other                      (474)           1,427
     Deferred advertising                                                 (728)           1,125
  Increase (decrease) in liabilities:
     Checks-in-transit                                                   1,012             (625)
     Accounts payable, trade                                              (528)          (5,175)
     Accrued liabilities                                                (1,236)             528
     Customer advances                                                     350               25
     Income taxes payable                                                 (102)               -


        NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES               (812)           2,897

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property, plant and equipment                               (2,305)            (615)
Proceeds from sale of marketable securities                                 68              633

        NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES             (2,237)              18

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of borrowings from the lines of credit                        (4,336)         (13,754)
Proceeds from the lines of credit                                        9,836           11,713
Proceeds from issuance of common stock, treasury stock
      and options exercised                                             (2,318)               4
Repayment of long-term debt                                                (26)            (874)

        NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES              3,156           (2,911)


Net increase in cash and cash equivalents                                  107                4
Cash and cash equivalents at beginning of year                              99              529
Cash and cash equivalents at end of year                                $  206           $  533

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for:
  Interest                                                              $   38           $  379
  Income taxes, net of refunds received                                 $  521           $  906

</TABLE>

THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.

                                                 5

<PAGE>



                   ARTISTIC GREETINGS INCORPORATED
                  NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)


NOTE 1.   STATEMENT OF MANAGEMENT

    The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements, prepared in accordance
with generally accepted accounting principles, have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.

    In the opinion of management, the information contained herein reflects all
adjustments that are of a normal recurring nature and necessary to a fair
statement of the results of operations for the periods presented in the
statements of operations included herein.

    Certain amounts in prior years have been reclassified to conform to the
1997 presentation.


NOTE 2. FORM 10-K

    Reference is made to the following footnotes included in the Company's 1996
report on Form
10-K:

    1.  Summary of Significant Accounting Policies
    2.  Marketable Securities
    3.  Inventories
    4.  Property, Plant and Equipment
    5.  Accrued Liabilities
    6.  Income Taxes
    7.  Leases
    8.  Debt
    9.  Defined Contribution Savings Plan
    10. Stock Options
    11. Stockholders' Equity
    12. Related Party Transactions
    13. Commitments and Contingencies
    14. Supplemental Disclosure of Noncash Investing and Financing Activity
    15. New Accounting Standards



                                                 6

<PAGE>



                   ARTISTIC GREETINGS INCORPORATED
                                  (UNAUDITED)

(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)


NOTE 3. NET INCOME PER SHARE

    Net income or loss per common and common equivalent share is computed on
the basis of the weighted average of common and common equivalent shares
outstanding during the period.  The weighted average number of shares
outstanding were 6,361,382 for the quarter ended June 30, 1997 and 6,321,940
for the quarter ended June 30, 1996.

    The weighted average number of shares outstanding was 6,360,465 for the
six-month period ended June 30, 1997 and 6,321,617 for the six-month period
ended June 30, 1996.

    The Company accounts for net income per common and common equivalent share
in accordance with the provisions of Accounting Principles Board Opinion No. 15
(APB No. 15).  In March 1997, Statement of Financial Accounting Standards No.
128 (SFAS No. 128), "Earnings Per Share" was issued.  SFAS No. 128 replaces
primary Earnings Per Share (EPS) with basic EPS.  Basic EPS is computed by
dividing reported earnings available to common stockholders by weighted average
shares outstanding.  No dilution for common share equivalents is included.
Fully diluted EPS, now called diluted EPS, is still required.  The Company is
required to adopt SFAS No. 128 retroactively for periods ending after December
15, 1997.  On a pro forma basis, basic EPS and diluted EPS for the three and
six months ended June 30, 1997 were $0.01 and $0.12 respectively, the same as
reported EPS.

NOTE 4. SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITY.

    During May 1995, the Company acquired certain assets of Valcheck Company
("Valcheck") in exchange for 500,000 shares of the Company's common stock.  The
common stock was issued at a price of $3.75 per share or $1,875.  The common
stock was puttable to the Company, at Valcheck's option, two years from the
acquisition date at $5 per share.

    Valcheck exercised its put option in the second quarter of 1997.  The
Company paid Valcheck a contractually-determined $5.00 per share or $2.5
million on June 30, 1997, in consideration of the 500,000 shares put to the
Company as of such date.

NOTE 5. LONG-TERM DEBT

     Long-term debt consists of the following:


                             June 30,    March 31,  December 31,
                               1997        1997         1996

     Marine Revolver         $   5,500    $   -        $  -
     UDC Mortgage                  250        275         300
     City of Elmira                911        876         887

     Total Long-term Debt    $   6,661    $ 1,151      $ 1,187
     Less:  Current Portion        144        153          153

     Total                   $   6,517    $   998      $ 1,034

     Long-term debt rose to $5.5 million since the end of the first quarter.
The Company funded from its revolving credit line (the "Revolver") with Marine
Midland Bank ("Marine"), a contractually specified $2 million advertising
payment to Valassis Communications, Inc. ("Valassis"), the Company's exclusive
provider of Free Standing Insert advertising media.  A $2.5 million payment to
Valcheck (as described in Note 4 to the Condensed Financial Statements) was
also funded from the Revolver.  Additionally, the Company utilized an
additional $1 million from the Revolver to fund its working capital.  As of
August 11, 1997, the balance on the Revolver was reduced to approximately $3.8
million.  See "Item 2 - Liquidity and Capital Resources" for a further
description of the Company's cash flow.  Finally, the City of Elmira mortgage
increased in principal amount by thirty-five thousand dollars ($35,000) as a
result of the inclusion of interest which had been accruing since 1991.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS.

(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

    The following discussion contains forward-looking statements.  For a
discussion of important factors that could cause actual results to differ
materially from such forward-looking statements, please carefully review the
discussion of the following Risk Factors:  "Recent Losses; Potential
Fluctuations in Operating Results"; "Dependence on Effective Information
Systems"; "Dependence on Key Personnel"; "Potential Volatility of Stock Price";
and "Control by Present Stockholders," included under the heading "Risk
Factors" in Exhibit 99 to this Report, which Exhibit is incorporated by
reference herein, as well as the other information contained in this Report and
in the Company's periodic reports and other documents filed with the SEC.

Results of Operations:

NET SALES

    In the second quarter of 1997, the Company's sales decreased .2% to $22,212
from $22,250 in the comparable period of 1996.  This decrease is primarily a
result of lower responses due to delayed placement of advertising in the
personalized name and address product category, which consists of labels, mini
printers, self-inking stamps and certain other products generally sold through
mass media channels ("personalized products").  Additionally, certain less
profitable media programs utilized by the Company for checks in the second
quarter of 1996 were eliminated in 1997.  Sales in the personalized products
category therefore decreased 6.3% to $7,523 in the second quarter of 1997 from
$8,026 in the comparable period of the prior year.  Catalog sales decreased by
8.1% to $2,313 in the second quarter of 1997 from $2,518 in 1996, due to lower
responses caused principally by the testing of new mixes of product in the
Personal Touch{<reg-trade-mark> }catalog.  These decreases were offset by an
increase in check sales of 3.6% to $11,030 in the second quarter of 1997 from
$10,642 the prior year.  The increase in check sales was primarily attributable
to a decline in the backlog of customer orders.

    For the six months ended June 30, 1997, sales of $46,431 were 5.7% lower
than the $49,258 revenues reported for the comparable 1996 period.  Check sales
grew .5% to $22,385 in the first half of 1997 from $22,180 in the comparable
prior period.  Personalized product sales decreased 13.6% to $16,574 in the
first six months of 1997 from $19,186 in the first half of 1996.  This decrease
resulted from the planned elimination of less profitable mass media circulation
and the delayed placement of other such advertising.  Catalog shipments were
7.9% lower at $4,821 through June 30, 1997, as compared to $5,356 in 1996,
which reflects the affects of lower response rates for the reason stated above.

COST OF SALES

    The major components of cost of goods sold are materials, which consist
primarily of paper and gift items; direct labor; and manufacturing overhead.

    The cost of materials in the second quarter of 1997 increased 30.6% to
$5,860 from $4,487 in the comparable period of 1996, which is a 6.2% increase
as a percentage of sales.  The increase as a percentage of sales represents a
higher component of material cost allocated for check production with the
Company's outsourcing partner, as compared to mostly in-house manufacturing in
the prior comparable period.  This increase in check material cost was offset
by less scrap and exchanges in personalized products and catalog manufacturing,
as well as a reduction in manufacturing overhead and direct labor expense
associated with the outsourcing of check production.  The cost of materials for
the first six months of 1997 increased 13.6% to $11,880 from $10,463 in the
first half of 1996, which reflects a 4.4% increase as a percentage of sales
from year to year.  The increase as a percentage of sales is due to the reasons
outlined above for the second quarter.

    Direct labor decreased 24.7% to $1,299 in the second quarter of 1997 from
$1,725 in the second quarter of 1996, which represents a decrease of 2.0% as a
component of sales during that period.  Such decrease is primarily attributable
to the elimination of in-house check production in late 1996, combined with
higher labor efficiencies in remaining production activities.  Direct labor for
the first six months of 1997 decreased 30.5% to $2,532 from $3,643 in the first
half of 1996.  This represents a decrease of 1.9% as a component of sales
during that period.  The same reasons as above for quarterly direct labor
changes apply to the six month changes from 1996 to 1997.

    Manufacturing overhead decreased 8.0% to $2,503 in the second quarter of
1997 from $2,718 in the comparable period of 1996, representing a .9% decrease
as a component of sales between periods. Employee benefits were lower in the
second quarter of 1997 due to lower employment levels attributable primarily to
the outsourcing of check production.  Finally, depreciation expense decreased
due to the sale of check-printing equipment in the third quarter of 1996 in
connection with the outsourcing of check manufacturing to John H. Harland
Company ("Harland").   Manufacturing overhead decreased 15.2% to $4,982 in the
first half of 1997 from $5,875 in the comparable period of 1996.  This
represents a decrease of 1.2% as a component of sales during that period.  The
same reasons as outlined above for quarterly manufacturing overhead changes
apply to the six-month changes from 1996 to 1997.

SELLING, ADVERTISING, GENERAL AND ADMINISTRATIVE (SG&A)

    The three largest components of SG&A expenses are advertising, postage and
labor.

    Advertising expense of $8,781 in the second quarter of 1997 was
approximately equal to the $8,747 advertising expense in the comparable period
of 1996.  Advertising expense decreased 9.3% to $17,395 in the first half of
1997 from $19,186 in the comparable period of 1996, which represents a decrease
of 1.4% as a component of sales.  Advertising expense changes through June 30
represent the continuation of the Company's strategy to forego less profitable
advertising circulation.

    Postage and shipping expense in the second quarter of 1997 increased 1.6%
to $2,017 from $1,985 in the comparable period of 1996, which represents a .2%
increase as a component of sales.  The increase in postage is attributable to
an increase in the cost of check postage, shipping and handling with Harland,
offset by a decrease in this category for personalized products due to lower
exchanges and returns.  Postage and shipping expense for the first six months
of 1997 decreased 3.7% to $4,256 from $4,417 in the comparable period of 1996,
which represents an increase of .2% as a component of sales.  The same reasons
as above for quarterly postage and shipping changes apply to the six-month
changes from 1996 to 1997.

    Other administrative expense increased in the second quarter of 1997 by
7.5% to $1,938 from $1,803 in the comparable period of 1996, representing an
increase of .6% as a component of sales.  Other administrative expense
increased in the first six months of 1997 by 7.1% to $4,070 from $3,799 in the
comparable period of 1996, representing an increase of 1% as a component of
sales.  These increases are primarily due to increased depreciation from the
implementation of a new management information computer system, higher
professional fees associated with business development efforts and non-
recurring personnel-related expenses.

OTHER

    The Company recognized other income of $226 in the second quarter of 1997,
compared to an expense of $83 in the comparable period of 1996.  Interest
expense decreased to $111 in the second quarter of 1997 from $187 in the
comparable period of 1996.  The decrease in interest expense was due to
reductions in both long and short term borrowing as the Company applied its
cash flow from operations to debt reduction.  A substantial increase in
interest expense was not experienced by the Company in the second quarter
because the majority of its borrowings under the Revolver (as described in Note
5 to the Condensed Financial Statements) did not occur until the mid-to-late
June time frame.  Net unrealized gains on trading securities increased to $223
in the second quarter of 1997 from $8 in the comparable period of 1996.  The
Company recognized other income of $150 in the first six months of 1997,
compared to an expense of $262 in the comparable period of 1996.  Year-to-year
changes through June 30 are due to the same reasons as discussed above.

TAX PROVISION

    A tax provision of $30, reflecting an effective tax rate of 36%, was
recorded in the second quarter of 1997 as compared to no tax provision recorded
in the second quarter of 1996.  The benefit of a net operating loss
carryforward was utilized in the second quarter of 1996, but due to 1997
expected profitability, a tax provision was required.  A $419 tax provision was
recorded in the first six months of 1997 as compared to no tax provision in the
comparable six months of 1996.  The reason stated above applies to the year-to-
year comparison.

NET INCOME

    For the reasons discussed above, the Company's net income in the second
quarter of 1997 decreased to $53 or $.01 per share, from the prior period of
$430 or $.07 per share.  The Company's net income in the first half of 1997
decreased to $744 or $.12 per share, from a net income of $1,102 or $.17 per
share.

LIQUIDITY & CAPITAL RESOURCES

    Cash and cash equivalents, combined with marketable securities totaled
$3,372 at June 30, 1997 and $2,999 at December 31, 1996.  Total liabilities
increased by $4,921 to $19,288 at June 30, 1997 from $14,367 at December 31,
1996, primarily because, as a result of its outsourcing arrangement with
Harland, the Company has no inventory for its check business but records
accounts payable for the cost of the subcontracted check production.  Long-term
debt increased to $6,517 at June 30, 1997 from $1,034 at December 31, 1996 for
the reasons described in Note 5 to the Condensed Financial Statements.  Income
tax payable decreased to $11 at June 30, 1997 from $113 at December 31, 1996.
Accounts payable increased by 6% to $10,439 at June 30, 1997 from $9,847 at
December 31, 1996, as inventories grew to service expected higher volume in the
second half of the year.

    Working capital at June 30, 1997 was a negative $1.1 million.  The Company
is operating with a working capital deficit as a result of the outsourcing
agreement with Harland in which the Company has no inventory for its check
business but records accounts payable for the costs of Harland's check
production.  Cash flow in the second quarter of 1997 was also negative by $1
million as expected because of the Company's traditionally lower sales in the
second quarter.

    The Company has historically met its cash requirements primarily from
operating activities.  As described in Note 5 to the Condensed Financial
Statements, an aggregate of $4.5 million in payments were made in June of 1997,
all of which were funded from the Revolver.  These payments, in combination
with negative cash flow of $1 million for the second quarter, elevated the
balance under the Revolver to $5.5 million with availability thereunder capped
by a borrowing base of $5.6 million.  As of July 18, 1997, the Company
liquidated $1.5 million of its investments to pay down the Revolver.  As of
August 11, 1997, the outstanding balance on the Revolver was $3.8 million and
the Company does not expect to further liquidate its other investments to pay
down the Revolver with such proceeds.  Operating activities are again fully
funding the Company's cash requirements and the balance under the Revolver is
regularly declining.

    Management believes that the operating activities of the Company, together
with the line of credit available under its Revolver, will substantially
support its cash requirements for the next twelve months and that sufficient
capital resources are available to the Company to provide adequate liquidity
overall.

    Management is of the opinion that inflation will not have a material effect
on the operations of the Company.

    As of June 30, 1997, the Company and Marine Midland Bank executed Amendment
No. 5 to the Revolver, filed herewith as Exhibit No. 10.  This amendment
eliminated certain covenants and imposed minimum tangible net worth, capital
expenditure, cash flow and leverage tests, while extending the term of the
Revolver until January 1, 1999.  The Company is in compliance under all
financial and operating covenants of the Revolver.



                                       7

<PAGE>



                   ARTISTIC GREETINGS INCORPORATED
                                  (UNAUDITED)


                          PART II - OTHER INFORMATION

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

    The Company held its Annual Meeting of Stockholders on May 1, 1997.  At
that Meeting, there were two Proposals acted upon.  The first was the election
of the Company's Board of Directors.  Joseph A. Calabro, Norman S. Edelcup,
Lyndon E. Goodridge, Stuart Komer, Alan F. Schultz, Irving I. Stone and Morry
Weiss were each re-elected as Directors of the Company for a one-year term.
The detail concerning the votes cast for, against and withheld from voting with
respect to each such Director was as follows:

                                       Votes
Name               For               Against          Withheld
J. Calabro     4,598,205                      0         18,940
N. Edelcup     4,594,155                  4,050         18,940
L. Goodridge   4,594,455                  3,750         18,940
S. Komer       4,591,055                  7,150         18,940
A. Schultz     4,598,205                      0         18,940
I. Stone       4,594,005                  4,200         18,940
M. Weiss       4,594,455                  3,750         18,940

    Also at this Meeting, the Company's stockholders ratified the selection of
Arthur Andersen LLP as the Company's independent auditors for its 1997 fiscal
year.  The detail concerning the votes cast for, against and withheld from
voting with respect to this Proposal was as follows:

                       Votes
For              Against           Withheld
4,598,506             14,334              4,305


ITEM 5. OTHER INFORMATION.

    Following the determination of Valassis to cause Valcheck to put its
500,000 shares to the Company, on August 4, 1997, Alan F. Schultz, a member of
the Company's Board of Directors since May 1995, resigned his position as a
member of the Board.  The Board of Directors is considering the
replacement of Mr. Schultz.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

    a)     Exhibits.  See Exhibit Index.

    b)     Reports on Form 8-K.  None.


                                       8

<PAGE>



                             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.


                                 ARTISTIC GREETINGS INCORPORATED

Dated: August 14, 1997       By: /S/THOMAS C. WYCKOFF
                                 Thomas C. Wyckoff
                                 Chief Operating Officer & Executive 
                                 Vice President
                                 (Acting Principal Financial 
                                 and Accounting Officer)


                                       9

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                            EXHIBIT INDEX



<TABLE>
<CAPTION>
EXHIBIT 
NUMBER                        DESCRIPTION                               PAGES
<S>                                 <C>                               <C>

10                      Amendment No. 5 to Revolving Credit             Filed Herewith
                        Agreement dated June 30, 1997,
                        between the Company and Marine
                        Midland Bank

11                      Statement re: computation of per                See Note 3 to the Financial
                        share earnings                                  Statements contained in this report

27                      Financial Data Schedule                         Filed only with EDGAR filing, per
                                                                        Regulation S-K,
                                                                        Rule 601(c)(1)(v)

99                      Risk Factors                                    Filed Herewith

</TABLE>