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 MARCH 31, 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  May  5,  1997,  the Registrant had 6,342,364 shares of its common stock
issued and outstanding.

<PAGE>

                   ARTISTIC GREETINGS INCORPORATED

                              FORM 10-Q INDEX

                 FOR QUARTERLY PERIOD ENDED MARCH 31, 1997



                                                               PAGE NO.

PART I. FINANCIAL INFORMATION

        Item 1. Financial Statements

                 Balance Sheets                                    3

                 Statements of Operations                          4

                 Statements of Cash Flows                          5

                 Notes to Financial Statements                     6

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

PART II. OTHER INFORMATION

        Item 5. Other Information                                 11

        Item 6. Exhibits and Reports on Form 8-K                  11

               Signatures                                         12

               Exhibit Index                                      13


                                       2

<PAGE>



                      PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                   ARTISTIC GREETINGS INCORPORATED
                              BALANCE SHEETS


<TABLE>
<CAPTION>
                                                           March 31,   December 31,
                                                             1997        1996

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

                                ASSETS

CURRENT ASSETS:
<S>                                                     <C>          <C> 
  Cash and cash equivalents                                 $   38      $   99
  Marketable securities:
     Trading, at market (cost $2,726 in 1997 
     and $2,699 in 1996)                                     2,829       2,881
     Available for sale, at market (cost $11 
     in 1997 and $11 in 1996)                                   19          19
  Trade receivables - net                                    1,155       1,252
  Inventories                                                2,574       2,270
  Prepaid advertising                                        1,789       3,064
  Prepaid expenses and other current assets                    509         500

       TOTAL CURRENT ASSETS                                  8,913      10,085

Deferred advertising                                         2,979       2,113
Property, plant and equipment, net                          17,037      16,237
Cash surrender value of life insurance                         447         433
Other assets                                                   131         130

       TOTAL ASSETS                                        $29,507     $28,998



         LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:

  Current portion of long-term debt                         $  153    $    153
  Accounts payable, trade                                    9,531       9,847
  Accrued liabilities                                        1,787       2,386
  Customer advances                                            900         451
  Income taxes payable                                         356         113

     TOTAL CURRENT LIABILITIES                              12,727      12,950

Long-term debt                                                 998       1,034
Other liabilities                                              359         383

       TOTAL LIABILITIES                                    14,084      14,367

Common stock, subject to put option - 500,000 shares         2,421       2,343

STOCKHOLDERS' EQUITY:

  Common stock, par value $.10:
       Authorized:  10,000,000 shares;
       Issued: 6,037,720 shares in 1997;
             6,037,720 shares in 1996                          604         604
  Additional paid-in capital                                11,052      11,042
  Unrealized  (losses)  gains  on  
        marketable  securities held as available for
        sale, net of tax effect                                  1           1
  Retained earnings                                          2,217       1,526

                                                            13,874      13,173

  Less: Treasury stock, at cost (195,356 and 
        200,356 shares in 1997 and
        1996, respectively)                                   (872)       (885)

       TOTAL STOCKHOLDERS' EQUITY                           13,002      12,288

       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $29,507     $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



                                                               QUARTER ENDED
<TABLE>
<CAPTION>
                                                           March 31,     March 31,
IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA               1997          1996

<S>                                                        <C>          <C>
Net sales                                                   $    24,218  $ 27,008
Cost of sales                                                     9,512    11,051
Gross profit                                                     14,706    15,957

Selling, advertising, general and administrative expenses        13,550    15,106
INCOME (LOSS) FROM OPERATIONS                                     1,156       851

Other income (expense)
   Interest and dividend income                                      33        33
   Net unrealized gains (losses) on trading securities              (78)       44
   Net realized gains (losses) on marketable securities               6        39
   Interest expense                                                 (60)     (306)
   Other                                                             22        11
INCOME (LOSS) BEFORE TAXES                                        1,079       672

Provision for (benefit from) income taxes                           388         0
NET INCOME (LOSS)                                             $     691   $   672

Net income (loss) per common and common equivalent share      $     .11   $   .10

Weighted average number of common shares outstanding            6,353,531  6,539,083

</TABLE>

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

                                       4

<PAGE>

                   ARTISTIC GREETINGS INCORPORATED
                  UNAUDITED STATEMENTS OF CASH FLOW



                                                               QUARTER ENDED
<TABLE>
<CAPTION>
                                                           March 31,     March 31,
IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA               1997        1996

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                     <C>          <C>
Net income (loss)                                           $  691      $ 672
Adjustments to reconcile net income (loss) 
        to net cash provided by
        (used in) operating activities:
  Depreciation and amortization                                424        640
  Allowance for doubtful accounts                              (75)      (113)
  Net unrealized losses (gains) on trading securities           78        (44)
  Net realized losses (gains) on marketable securities 
        (equity)                                                (6)       (39)
  Purchase of trading securities                              (384)      (944)
  Proceeds from sale of trading securities                     362        263
  Accretion of common stock subject to a put option             78         78  
  Decrease  (increase)  in  cash  surrender  value  of  life
        insurance                                              (14)       (14)
  Decrease (increase) in assets:
     Trade receivables                                         173         60
     Inventories                                              (304)     1,284
     Prepaid advertising, prepaid expenses and other         1,265      2,355
     Deferred advertising                                     (867)       862
  Increase (decrease) in liabilities:
     Checks-in-transit                                         173        (41)
     Accounts payable, trade                                  (489)    (3,540)
     Accrued liabilities                                      (598)       351
     Customer advances                                         449        437
     Income taxes payable                                      244       (108)

        NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES  1,200      2,159

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property, plant and equipment                   (1,223)      (401)
Proceeds from sale of marketable securities                  _____        675

        NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (1,223)       274

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of borrowings from the lines of credit            (1,732)    (7,633)
Proceeds from the lines of credit                            1,732      5,965
Proceeds from issuance of common stock, treasury stock
      and options exercised                                     23        __
Payments to New York State Urban Development Corporation       (25)       (25)
Repayment of long-term debt                                    (36)      (565)

        NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES    (38)    (2,258)


Net increase (decrease) in cash and cash equivalents           (61)       175
Cash and cash equivalents at beginning of year                  99        529
Cash and cash equivalents at end of year                    $   38      $ 704

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid (received) during the year for:
  Interest                                                  $   (2)     $ 225
  Income taxes, net of refunds received                     $  145      $   0

</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.

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>



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 was 6,353,531 for the quarter ended March  31,  1997  and 6,539,083
for the quarter ended March 31, 1996.

    In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share".  The statement is
effective  for  fiscal  years  ending  after  December 15, 1997.  When adopted,
restatement of prior years' earnings per share will be required.

    The statement establishes revised standards  for  computing  and presenting
earnings  per  share.   Management  does not expect the application to  have  a
material effect on the Company's financial statements.

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

    During May 1995, the Company acquired certain assets of Valcheck Company 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  is
puttable to the Company, at the Seller's option, two years from the acquisition
date at $5 per share.


    Fair value of assets acquired     $ 1,875
    Less:  common stock issued          1,875
    Cash paid                         $    _



                                       7

<PAGE>

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

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 "Company 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.

(IN THOUSANDS, EXCEPT PER SHARE DATA)

RESULTS OF OPERATIONS:

NET SALES
In the first three months  of  1997, the Company's net sales decreased 10.3% to
$24,218  from $27,008 in the comparable  period  of  1996.   This  decrease  is
primarily  due  to intentional sales volume reductions 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), by an aggregate of 18.9% from $11,160 in 1996
to  $9,050  in  1997.   These  planned  reductions  resulted from discontinuing
marginally  profitable  products  and  advertising initiatives.   In  addition,
catalog sales decreased by 11.6% from $2,837  in  1996 to $2,508 in 1997 due to
slightly lower responses.  Check sales decreased by  1.7%  from $11,538 in 1996
to $11,338 in 1997 because of lower circulation and responses.

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 first three months of 1997 increased .7% to $6,021
from $5,976 in the comparable period of 1996,  which  is  a  2.7% increase as a
percentage  of sales from the prior period.  The increase is attributed  to  an
increase in the  mix  of  material  cost of checks related to outsourcing check
production,  offset  by  lower  sales  volumes  in  personalized  products  and
catalogs.

Direct labor decreased 32.5% from $1,918  in  the first three months of 1996 to
$1,295 in the comparable period of 1997, a decrease  of  1.8% as a component of
net  sales during that period for two primary reasons.  First,  check  printing
was fully  outsourced  in  October  1996 to John Harland Company allowing labor
savings for the check printing.  The  second  factor for the decrease in direct
labor was improved efficiencies.

Manufacturing overhead decreased 30.5% to $2,195  in  the first three months of
1997 from $3,157 in the comparable period of 1996; such  decrease  represents a
2.6%  decrease  as  a  component of sales between periods.  Decreased telephone
expense was attributable  to reduced exchanges and lower volume.  Manufacturing
supplies expense was lower in the first three months of 1997 due to outsourcing
check production.  Finally,  depreciation  expense decreased due to the sale of
check printing equipment in the third quarter  1996  as part of the outsourcing
of check manufacturing to John Harland Company.

SELLING, GENERAL AND ADMINISTRATIVE (SG&A)
The  three  largest  components of SG&A expenses are advertising,  postage  and
labor.

Advertising expense decreased 17.3% to $8,636 in the first three months of 1997
from $10,439 in the comparable  period  of 1996, which represents a decrease of
3.0% as a component of sales.  Advertising  for personalized products decreased
by  17.6% from the first three months of 1996  due  to  downsizing  efforts  to
improve  profitability.   Advertising  for  checks  decreased by 25.5% from the
first three months of 1996 due to the purchase of less  circulation in reaction
to lower response rates related to competitive pricing.   Such  decreases  have
been  partially  offset by a 28.9% increase in circulation in the first quarter
for catalogs to pursue growth opportunities.

Postage and shipping  expense  in the first three months of 1997 decreased 7.9%
to $2,239 from $2,432 in the comparable  period  of  1996,  however,  the first
three  months of 1997 represents a .3% increase as a component of sales.   Such
aggregate decrease in postage and shipping expense is attributable primarily to
lower volume  and  lower  exchanges.   The increase as a percentage of sales is
attributable  to an increase in checks postage  and  shipping  for  outsourcing
handling.

Other administrative  expense  increased  in  the first three months of 1997 by
16.8% to $2,330 from $1,996 in the comparable period  of  1996, representing an
increase  of 2.2% as a component of sales.  This increase as  a  percentage  of
sales is substantially  the  result of the increase in salaries and wages (with
associated  increases in employee  benefits  costs)  related  to  strengthening
senior management  and  initiating business development efforts.  An additional
factor in the increase is related to professional fees associated with business
development efforts.

OTHER EXPENSE (INCOME)
The Company incurred other  expenses of $422 in the first three months of 1997,
an increase of .7% from $419  in  the  comparable  period  of  1996.   Interest
expense decreased to $60 in 1997 from $306 in 1996, which represents a decrease
of 2.2% as a component of net sales.  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.   This decrease is offset by
accruals for employee incentive compensation and contributions  to  the Company
profit-sharing plan due to higher income from operations.

TAX PROVISION
A tax provision of $388, reflecting an effective tax rate of 36%, was  recorded
in  the first three months of 1997 as compared to no tax provision recorded  in
the first  three  months  of  1996.   A  portion  of a net operating loss carry
forward was utilized in the first quarter of 1996,  but  due  to  1997 expected
profitability, a tax provision is required.

NET INCOME
For  the  reasons discussed above, the Company's net income in the first  three
months of 1997 increased 2.8% to $691 or $0.11 per share, from the prior period
of $672 or $0.10 per share.

                                       8

<PAGE>



LIQUIDITY & CAPITAL RESOURCES
Cash and cash  equivalents, combined with marketable securities, totaled $2,999
at December 31, 1996 and $2,886 at March 31, 1997.  Total liabilities decreased
by $283 or 2.0% from $14,367 at December 31, 1996 to $14,084 at March 31, 1997.
Long-term debt decreased  from $1,034 at December 31, 1996 to $998 at March 31,
1997.  Income tax payable increased  from  $113 at December 31, 1996 to $356 at
March 31, 1997.  Accounts payable was reduced by 3.2% from $9,847 at the end of
1996 to $9,531 at March 31, 1997.

Although working capital at March 31, 1997 was  ($3,814),  management  believes
that  the  Company  has  sufficient  resources  from its present cash and cash-
equivalent position, cash flow from operations and  its line of credit, to meet
its current obligations.  The negative working capital  position  at  March 31,
1997  was  primarily  the  result  of  several factors which reflect successful
efforts to manage the operations of the  Company.   Cash  and  cash equivalents
reflect  use  of cash to pay off long-term debt in 1996, as well as  funding  a
major system implementation  from  cash  from  operations,  and  the  inventory
balance  reflects  improved materials management and outsourcing 100% of  check
production.  As a result  of  check  production outsourcing, the Company has no
inventory for its check business but records  accounts  payable for the cost of
the subcontracted check production.

At  March  31, 1997, the Company had a $6.5 million revolving  credit  facility
with its bank  (the  "Revolver"),  which is subject to a borrowing base formula
and certain other conditions.  Based  upon the borrowing base formula, at March
31, 1997, the Company had a total of $5,803  available  for borrowing under the
Revolver of which zero was outstanding as of such date.

Per  the  Company's  May  1995  agreement  with Valcheck Company  ("Valcheck"),
Valassis  Communications,  Inc.  ("Valassis")  has   notified  the  Company  of
Valcheck's intent to exercise its put option on the 500,000  shares  it owns of
the Company's Common Stock.  The Company intends to fund both this $2.5 million
payment  and  the  $2.0  million annual payment under the Company's Advertising
Agreement with Valassis, both of which are due in June 1997, from the Revolver.

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


                                       9

<PAGE>



PART II - OTHER INFORMATION

ITEM 5. OTHER INFORMATION.

     At a  meeting  of  the  Company's  Board  of Directors on May 1, 1997, the
members  of  the Board of Directors unanimously appointed  Thomas  C.  Wyckoff,
former Senior  Vice  President  Administration/  Corporate Development, General
Counsel and Assistant Secretary of the Company, to  serve  as  Chief  Operating
Officer  and  Executive Vice President of the Company.  Mr. Wyckoff serves  the
Company in such capacity under an employment agreement dated as of May 1, 1997,
a copy of which is filed herewith as Exhibit 10.

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

     a)    Exhibits.  See Exhibit Index.

     b)    Reports on Form 8-K.  None.

                                      10

<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: May 15, 1997      By:  /S/  ROBERT E. JOHNSON
                                Robert E. Johnson
                              Senior Vice President Finance and
                              Chief Financial Officer
                              (Principal Financial and Accounting Officer)


                                      11

<PAGE>



                           EXHIBIT INDEX

EXHIBIT
NUMBER    DESCRIPTION                                   PAGES

10        Employment Agreement between the Company      Filed Herewith
          and Thomas C. Wyckoff, dated May 1, 1997

11        Statement re: computation  of  per share      See Note 3 to the
          earnings                                      Financial 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


                                      12