Exhibit Number 13


             1996 Annual Report to Stockholders, pages 20 through 47






















                                      E-60

<PAGE>
Mangement's Review of Operations
and Financial Conditions

OVERVIEW
Many of the  statements  in  Management's  Review of  Operations  and  Financial
Condition are 'forward-looking  statements' which set forth management's current
expectations  with respect to present or future trends or factors  affecting the
operations,  markets and  products  of Stant  Corporation  and its  consolidated
subsidiaries  (the  'Company').  These  statements  involve  certain  risks  and
uncertainties  and could be  subject  to change  based on a variety  of  market,
industry and competitive factors discussed more fully under Item 1 Business - in
the Company's report on Form 10-K for the year ended December 31, 1996.

Industry - The Company's  products are sold  primarily to the  automotive  parts
industry,  either for use as  original  equipment  by  automobile  manufacturers
('OEMs')  or  as   replacement   parts  in  the  automotive   aftermarket   (the
'aftermarket'). The Company also sells products to the industrial market for use
in the  hardware,  marine,  appliance,  construction  and  aviation  industries.
Consolidated  sales in 1996  include 50% sold to the original  equipment  market
(the 'OE market'),  44% to the aftermarket and 6% to the industrial  market.  In
the OE  market,  the  Company  serves  as  either a direct  (tier  one) or as an
indirect (tier two) supplier.  In the aftermarket,  the Company's products reach
the consumer  through a number of distribution  channels,  including  automotive
specialty retail stores,  mass  merchandisers,  service departments of the OEMs,
traditional service stations, warehouse distributors and jobbers.
     In the OE market,  North  American  combined  production  of cars and light
trucks was relatively  flat for 1996,  following a 2% drop in 1995 from the 1994
level.  Expectations  are that in 1997,  the  combined  production  level may be
slightly  higher.  Many OEMs have  adopted a strategy of reducing  the number of
suppliers with whom they deal and requiring their remaining  suppliers to assume
additional  responsibility  for upfront product design,  engineering and project
management services.  To determine the suppliers with whom they will continue to
deal,  the OEMs have  tightened  supplier  standards and stated they will give a
preference to suppliers  who can serve them on a global basis.  These actions by
the OEMs have and will continue to reduce the number of tier one suppliers,  and
may  lead to  consolidation  among  suppliers.  Today,  most  systems  and  many
components  are sole  sourced  by the OEMs.  Competitive  price  bidding  is the
exception,  with most awards of original  equipment  business being made against
target prices established by the OEM's platform team.
     The aftermarket rebounded in 1996 after experiencing one of its worst years
in decades in 1995.  The reduction in  aftermarket  demand in 1995 compared with
1994 resulted from several measurable factors,  such as the fact that the winter
of 1993/1994  was severe while the winter of 1994/1995  was mild and the economy
was slower in 1995 than it was in 1994, as well as less measurable  factors such
as a continuing improvement in the quality and a lengthening of the service life
of OE parts.  Demand in the  aftermarket  improved in 1996,  due in part to more
normal  weather  during  the  winter of  1995/1996  and a return  to  normalized
inventory  levels.  The mild winter of 1994/1995  resulted in higher than normal
customer inventories throughout most of 1995. Intense competition,  which placed
pressure  on the  Company's  margins  in 1995 as well as on the  margins  of its
aftermarket  customers (leading to credit  difficulties for certain  customers),
continued  in  1996  and  is  contributing  to the  trend  of  consolidation  of
aftermarket  distribution  channels. 

Acquisitions - In late 1996, the Company   purchased   certain  assets  and  the
rights to sell LubriMatic brand lubricating  greases and oils ('Lubrimatic') and
certain  related  lubrication  equipment.  While the  acquisition did not have a
material effect on the Company's financial results for 1996, it is expected that
this  acquisition  will contribute  approximately  $30 million in revenue during
1997.  In  late  1994,  the  Company  completed  two  acquisitions  that  had  a
significant impact on the Company's  financial results for 1995 as compared with
1994. On September 1, 1994, the Company  purchased FEDCO  Automotive  Components
Company,  Inc. ('Fedco'),  a manufacturer and distributor of automotive heaters,
principally  for the  aftermarket.  On December 13, 1994, the Company  purchased
Trico  Products  Corporation  ('Trico'),  a global  manufacturer  of  automotive
windshield wiping systems and windshield wiper blades and refills,  primarily to
the OE market.  With the acquisition of Trico,  the Company added  operations in
the United  Kingdom,  Australia  and  Argentina,  which are herein  described as
'foreign  entities'.  Primarily  as a result of the  acquisition  of Trico,  the
percentage  of the Company's  consolidated  net sales derived from the OE market
increased to 50% in 1996 and 1995 from 26% in 1994.

<PAGE>

Financial - The Company recorded record sales and earnings in 1996, as increased
sales volume in all markets,  coupled with continued  emphasis on cost reduction
programs,  efficient utilization of manufacturing facilities and effective asset
management,  produced sales growth, improved margins and strong cash generation.
The  resulting  cash flow  allowed  for debt  reductions  and  reduced  interest
expense,  in  spite  of  increased  capital   expenditures  and  the  Lubrimatic
acquisition.  For the year ended  December  31,  1996  ('1996'),  net sales were
$657.1  million,  an increase of $44.7  million,  or 7%, from the $612.4 million
reported for the year ended December 31, 1995 ('1995'). Net income increased 46%
to $21.4 million in 1996,  compared with $14.7 million in 1995. Income per share
of $1.28 ($1.26 on a fully-diluted  basis) also increased 46% from $.88 in 1995.
Net  income in 1995  included  a  restructuring  charge  of $.05 per share  ($.9
million net of tax) related to the consolidation of two of its operations.

A Look Ahead - Although  1996 showed  significant  improvement  in relation to a
depressed 1995, the Company believes that major opportunities exist which should
enable the Company to strengthen its  businesses and improve its  profitability.
In North  America,  the Company  maintains a strong market share for a number of
products  both  with the OEMs and in the  aftermarket.  However,  the  Company's
foreign operations currently account for a very small percentage of revenues and
management  will  strive  to  increase  the  Company's   international  business
significantly.  To date,  the Company has  attacked  the cost  structure  of its
various  acquisitions on an individual  basis, but will now focus on integrating
its  manufacturing  capabilities.  In  rationalizing  the entire  business,  the
Company  will  continue  to  seek  cost  reduction  opportunities,   synergy  of
operations, capacity realignments and future acquisitions to complement its core
areas. Significant projects are also underway (and there will be more during the
course of the year)  directed at cost savings in  personnel,  manufacturing  and
distribution  facilities,  administrative  headquarters and general spending. In
early 1997, the Company announced a reorganization  of the executive  management
team and the relocation of its corporate headquarters from Richmond,  Indiana to
Lincolnshire,  Illinois. While the total amount has not yet been quantified,  it
is expected that certain costs, primarily severance and other compensation costs
related to the management reorganization and costs associated with other actions
to increase the efficiency of the operations, will be reflected in the financial
results for the first quarter of 1997. The remaining charges will be recorded as
the Company's plans are finalized and quantified.

RESULTS OF OPERATIONS
Net  Sales  - The  Company  is one  of  the  world's  largest  manufacturers  of
automotive  windshield  wiping systems and windshield  wiper blades and refills,
closure caps and engine thermostats;  and a leading North American  manufacturer
of a variety of other  automotive  products,  including  hose  clamps,  heaters,
grease  guns  and  automotive  tools.  As a  supplier  to the  automotive  parts
industry,  the Company operates within one business segment. The following table
classifies  the Company's  consolidated  net sales by market  within  geographic
areas.   North  America  includes  the  Company's   manufacturing  and  assembly
operations  in the United States and Mexico,  while Foreign  includes the United
Kingdom, Australia and Argentina. ($ in millions)

<TABLE>

<CAPTION>

Year ended December 31,               1996        1995         1994
--------------------------------------------------------------------
<S>                                 <C>         <C>          <C>

North America
  Original equipment                $ 300.2     $ 279.2      $  73.7
  Aftermarket                         261.5       240.1        176.8
  Industrial                           41.1        36.9         35.0
--------------------------------------------------------------------
Total North American                  602.8       556.2        285.5
--------------------------------------------------------------------
Foreign
  Original equipment                   27.7        29.8          1.3
  Aftermarket                          26.6        26.4          1.1
--------------------------------------------------------------------
Total Foreign                          54.3        56.2          2.4
--------------------------------------------------------------------
Total                               $ 657.1     $ 612.4      $ 287.9
--------------------------------------------------------------------
--------------------------------------------------------------------

</TABLE>

<PAGE>

    In 1996,  total North  American  sales were $602.8  million,  an increase of
$46.6 million, or 8%, compared with 1995. On a percentage basis, OE market sales
increased 8%,  aftermarket sales increased 9% and industrial sales increased 11%
in North America.  These  increases are primarily a result of a higher volume of
Company  products  sold; the effect of  acquisitions  and pricing during 1996 on
total North American sales was not significant.
    The  Company's  sales in the OE market  reached a record  $300.2  million in
1996, up from $279.2 million in 1995. Although North American production of cars
and light  trucks was  relatively  flat for 1996,  the  Company's  OE sales were
strong, predominately the result of a higher content of products supplied by the
Company for certain vehicle  platforms.  Increased content and new business more
than offset any price  decreases and lost business.  North American  aftermarket
sales  increased  to  $261.5  million  in 1996,  as  demand  recovered  from the
unusually low levels experienced in 1995,  particularly in the first half of the
year.  Severe winter  weather  encountered by many areas of the country early in
1996 spurred sales of the Company's weather-sensitive products. In addition, the
success of new  products  and programs  such as  Exact-Fit(TM)  wiper blades and
Superstat(R)  thermostats  and the Lubrimatic  acquisition  also  contributed to
increased aftermarket sales of wipers, thermostats and lubrication equipment and
related  products which increased 20%, 8%, and 12%,  respectively.  Sales to the
North American  industrial market increased $4.2 million from 1995,  primarily a
result of increased sales of no-hub clamps.  Foreign entity sales decreased $1.9
million,  or 3%, primarily due to lost business.  The impact of foreign currency
fluctuations on net sales for 1996 was not significant.
    In 1995,  total North  American  sales were $556.2  million,  an increase of
$270.7 million,  or 95%,  compared with 1994.  North American OE sales of $279.2
million increased  significantly in 1995,  largely due to the Trico acquisition.
The Company's historical operations,  which exclude Trico and Fedco, experienced
a modest 3% increase in OE sales.  Decreased OE sales  resulting from a slowdown
in 1995 automotive production were more than offset through new business capture
and new product offerings,  including run/loss valves and eighth turn fuel caps.
North American  aftermarket sales increased $63.3 million,  or 36%.  Incremental
aftermarket sales from the inclusion of Trico and Fedco were partially offset by
an 8% decrease in aftermarket  sales from the Company's  historical  operations;
due primarily to the  discontinuation  of the mirror and antenna product line in
late 1994, a shortfall in the sale of weather-sensitive products and a reduction
in unit sales of caps and  clamps.  The mild  winter of  1994/1995  resulted  in
higher than normal customer inventories throughout most of 1995 and weakened the
demand for the Company's  weather-sensitive products such as wipers, thermostats
and automotive heaters,  particularly in the first half of the year. Aftermarket
sales of these products rebounded in the latter part of 1995, in part due to the
more normal  winter  weather.  North  American  industrial  market sales in 1995
increased $1.9 million, or 5%, due in large part to sales increases in the first
part of the year of clamps used in the  construction  industry.  Foreign  entity
sales increased $53.8 million,  due entirely to the incremental sales of Trico's
foreign operations.

Gross  Margin - Gross  margin was $167.0  million in 1996  compared  with $147.9
million in 1995 and $98.6 million in 1994. Gross margin as a percentage of sales
improved in 1996 to 25.4% from 24.2% in 1995.  Gross margin as a  percentage  of
sales was 34.2% in 1994. The change in the gross margin percentage from 1994 was
due to the inclusion of Trico,  whose sales are  predominately to the OE market.
Sales to the OE market  typically carry a lower gross margin  percentage than do
sales to the aftermarket.

    In 1996,  higher  production  volumes,  better  capacity  utilization,  more
favorable material pricing and cost reduction programs  contributed to the gross
margin improvement.  In 1995, the dollar increase in gross margin resulting from
the  inclusion  of Trico and Fedco was  partially  offset by a decrease in gross
margin by the Company's historical operations. Contributing to the decrease were
lower sales and production  volumes,  price competition,  and increased material
costs,  partially  offset by cost reduction  programs.  In addition,  a slightly
higher sales mix of OE market versus aftermarket sales impacted the gross margin
in 1995. The devaluation of the Peso in late 1994 and throughout 1995 provided a
short-term cost benefit in 1995 related to Peso  denominated  labor and material
purchases.

<PAGE>

Selling,   General   and   Administrative   Expense  -  Selling,   general   and
administrative  expense  ('SG&A') was $104.3  million,  $93.1  million and $62.3
million in 1996, 1995 and 1994, respectively. The increase in dollar amounts for
1996 and 1995 is due primarily to the inclusion of Trico and Fedco. Research and
development  ('R&D')  expense of $6.7 million and $6.3 million in 1996 and 1995,
respectively,  increased from $3.2 million in 1994,  largely due to the increase
in OE business  resulting  from the inclusion of Trico.  R&D expense will likely
remain a  significant  component  of SG&A  expense due to the  proportion  of OE
market  sales  and the  demands  of the OEMs for more  product  development  and
engineering design by their suppliers. SG&A expense in 1996 also included a $1.6
million  provision for  environmental  remediation  at one of its  manufacturing
facilities,  as  discussed  more  fully in Note 13 of the Notes to  Consolidated
Financial Statements.  SG&A expense for 1995 included a historically high amount
of charges, $ 2.2 million, for potentially  uncollectible  receivables resulting
from credit difficulties experienced by certain of the Company's aftermarket and
industrial customers.  Bad debt expense was $1.5 million in 1996 and $.3 million
in 1994.
    SG&A  expense as a  percentage  of net sales  decreased to 15.9% in 1996 and
15.2% in 1995,  from 21.6% in 1994.  The decrease from 1994 was primarily due to
the inclusion of Trico and Fedco whose  operations have lower SG&A expenses as a
percentage of sales than the Company's historical operations.

Income from Operations - Income from operations was $56.6 million in 1996, a 19%
increase  from $47.6  million in 1995 and an 80% increase  from $31.4 million in
1994.  Included in income from  operations  for 1995 were  certain  nonrecurring
charges.  The Company continually strives to reduce  manufacturing and operating
expenses in order to remain competitive and maintain  profitability and, in 1995
and late 1994,  initiated  several cost  reduction  programs.  During 1995,  the
Company  completed the  consolidation of two of its historical  operations,  the
Plews and  Edelmann  divisions,  along with  other  restructuring  efforts,  and
recorded  restructuring charges totaling $1.5 million ($.9 million net of tax or
$. 05 per share).  The  restructuring  charges  were  comprised  of  termination
benefits of $1.1 million for  approximately  110 salaried and hourly  employees,
and other associated  costs. Also included in SG&A expense for 1995 were charges
of $.8 million ($.4 million net of tax or $.03 per share) for the  relocation of
equipment,  inventory and personnel and related travel expenses  associated with
consolidation  efforts. In December 1994, the Company decided to discontinue its
mirror and antenna  product line and recorded a charge to  operations in 1994 of
$1.7  million  ($1.0  million  net of tax  or  $.06  per  share).  Although  the
termination  of this  product  line  reduced  net sales in 1995 by $3.9  million
compared with 1994,  it had little effect on the results of operations  for 1995
due to the low profitability of this product line.

Interest  Expense - Interest  expense of $18.5  million in 1996  decreased  $3.5
million from $22.0 million in 1995.  Interest  expense was $3.9 million in 1994.
Lower debt levels and, to a lesser  extent,  lower interest rates in 1996 versus
1995 resulted in lower  interest  expense for 1996.  The increase in 1995 versus
1994 reflects significantly higher borrowings resulting from the Fedco and Trico
acquisitions late in 1994 and, to a much lesser extent, higher interest rates in
1995.

Income  Taxes - Income tax rates for 1996,  1995 and 1994 were 44.8%,  45.3% and
42.0%,  respectively.  The increase in the  effective tax rate for 1996 and 1995
versus 1994  primarily  resulted from a higher  amount of permanent  differences
versus earnings.

Accounting   Method  Changes  -  The  Company  adopted  Statement  of  Financial
Accounting  Standards  ('SFAS')  No.  121,  'Accounting  for the  Impairment  of
Long-Lived  Assets and for Long-Lived  Assets to Be Disposed Of', which requires
that long-lived assets and certain identifiable intangibles and goodwill amounts
related to those assets be reviewed for impairment whenever events or changes in
circumstances  indicate  that the  carrying  amounts of these  assets may not be
recoverable.  The adoption of SFAS No. 121 did not have a material effect on the
Company's consolidated financial statements.
    The  Company  also  adopted  SFAS  No.  123,   'Accounting  for  Stock-Based
Compensation',  which  encourages,  but does not  require,  companies  to record
compensation cost for stock-based employee compensation plans at fair value. The
Company  has  elected  to  continue  to  account  for  such  transactions  under
Accounting Principles Board Opinion ('APB') No. 25, 'Accounting for Stock Issued
to Employees', and related Interpretations.  Accordingly,  compensation cost for
stock  options  is  measured  as the excess of the  quoted  market  price of the
Company's  stock at the date of grant over the  exercise  price.  The Company is
required under the  provisions of SFAS No. 123 to disclose on a proforma  basis,
if material, net income and earnings per share as if the fair value based method
of accounting had been applied.
     The Company adopted SFAS No. 112, 'Employers' Accounting for Postemployment
Benefits' in 1994.  SFAS No. 112 had the cumulative  effect of reducing 1994 net
income by $.4 million (net of tax benefits of $.3 million).

<PAGE>

FINANCIAL CONDITION
Liquidity and Capital  Resources - The Company's  liquidity needs,  primarily to
fund working capital  requirements and capital  expenditures,  are met through a
combination of cash generated by operations and the Company's  revolving  credit
facilities.  Cash flows  provided by operating  activities  were strong in 1996,
totaling $70.9 million, compared with $22.1 million in 1995 and $27.3 million in
1994.  In  1996,  increased  net  income,  adjusted  for  non-cash  charges  for
depreciation and amortization,  provided significant  operating cash flows. Also
contributing  to the  improvement  in  operating  cash  flows  is  the  emphasis
management is placing on working capital and asset management. Despite increased
sales in the fourth quarter of 1996 as compared with 1995,  the Company  reduced
the level of receivables outstanding at year-end. In contrast to 1996, operating
cash  flows  for  1995   reflected   the  use  of   significant   cash  to  fund
acquisition-related  expenditures.  Approximately $14.0 million was paid in 1995
related  to the Fedco and Trico  acquisitions,  principally  for the  payment of
outstanding  Trico shares tendered in early 1995, and an additional $9.0 million
was paid to satisfy  preacquisition  contingent  liabilities  of Trico.  Working
capital management has been, and will continue to be, a focus of management .
    Cash flows utilized by investing  activities during 1996 were $33.0 million,
compared  with  $9.3  million  in 1995  and  $194.6  million  in  1994.  Capital
expenditures, excluding capital leases, totaled $22.7 million, $21.2 million and
$8.8  million  for  1996,  1995  and  1994,  respectively.  The  higher  capital
expenditure  levels in 1996 and 1995 reflect the addition of Trico and Fedco. In
1996 the Company also recorded a capital lease  obligation of $8.6 million for a
new wiper system  technology  center to support research and development as well
as certain sales functions of Trico. The Company  currently  anticipates that in
1997 capital  expenditures,  including  capital  leases,  will total between $25
million  and $30  million.  Investing  activities  for 1996 also  include  $10.7
million  used for the  Lubrimatic  acquisition.  In  1994,  $185.8  million  was
expended for the acquisition of Trico and Fedco, with an additional $2.9 million
expended in 1995 for additional Fedco  consideration and for the purchase of the
remaining interest in Trico's joint venture in Argentina.  Included in investing
activities for 1995 is approximately $14.5 million in net proceeds received from
the  sale  of  Trico's  former  U.K.   manufacturing  facility  and  a  domestic
distribution/administration facility which became available for sale as a result
of the Company's restructuring efforts.
    Cash flows  utilized  by  financing  activities  during 1996  totaled  $38.1
million, as compared with $11.8 million used in 1995 and $168.4 million provided
in 1994.  Financing activities in 1996 and 1995 include a net reduction in total
debt of $40.2 million and $10.5  million,  respectively,  of which $22.5 million
and $7.5 million represented  payments for such years on the Company's term loan
discussed below.  Financing activities in 1996 also include $11.1 million in net
payments on the Company's  revolving  loans,  a $6.6 million  reduction of other
debt and new  borrowings  of $3.4  million  used to  finance  a  portion  of the
purchase of a previously  leased  manufacturing  facility  located in Pontypool,
Wales. In 1994,  financing  activities reflect a high level of borrowings as the
Company executed a new term loan and revolving credit facility, discussed below,
primarily to finance the  acquisition  of Trico.  Financing  activities for 1994
also included  $34.5  million of debt  payments for acquired  companies and $5.3
million in expenditures related to executing the new credit facility.

<PAGE>

    The Company entered into a Credit Agreement (the  'Agreement')  with a group
of banks,  on  December  12, 1994 and used  borrowings  under the  Agreement  to
finance  the  acquisition  of Trico  and  other  Company  financing  needs.  The
Agreement  originally  provided for up to $325  million of  borrowing  capacity,
including  $200  million,  $115  million and $10 million for Term,  Revolver and
Swing  Line  loans,  respectively.  The  maximum  available  under the Term loan
declines as principal  payments are made, and at December 31, 1996, totaled $170
million. A total of $29.2 million was outstanding at December 31, 1996 under the
Revolver  and Swing Line loans,  plus an  additional  $4.3 million in letters of
credit.  The Company had unused borrowing  capacity under the Agreement of $91.5
million at December 31, 1996.  The Company  entered into  interest  rate caps on
$100 million of the term debt, as required in the Agreement. The cost of the two
year, 10% caps was expensed as interest. As a result of the Agreement,  deferred
financing  costs of $.4 million (net of tax benefit of $.3  million)  associated
with the prior credit  facility were written off as an  extraordinary  charge in
1994.
    The Company expects that, absent additional significant  acquisitions,  cash
flows from  operating  activities  will be  sufficient  to fund working  capital
needs,  capital  expenditures  and debt  reductions  in 1997.  Revolving  credit
borrowings  under the Agreement  are also  available to meet  temporary  working
capital requirements as well as for future acquisitions.

Environmental  and Legal  Matters - There are  certain  environmental  and other
potential  or  actual  legal  claims  pending  against  the  Company,  the  most
significant of which were assumed in the  acquisition  of Trico.  The Company or
one of its subsidiaries has been identified as a potentially  responsible  party
('PRP') with respect to environmental  matters arising at eleven sites which are
under the  jurisdiction  of the United States  Environmental  Protection  Agency
('EPA') or a State  environmental  department.  The Company's potential exposure
for remediation costs at seven of these sites is considered immaterial. The four
remaining  sites,  three of which relate to Trico,  are discussed  more fully in
Note 13 of the Notes to the Consolidated Financial Statements.
    Liabilities   for   environmental   remediation   costs  are  recorded  when
environmental assessments or remediations are probable and the related costs can
be  reasonably  estimated.  For third party  landfills,  the  Company  records a
liability  for its  share of costs  when it has been  named as a PRP and when an
assessment or clean-up plan has been developed.  The Company estimates the range
of loss exposure for all environmental  and legal  contingencies to be from $8.0
million to $13.0 million,  of which approximately $11.3 million has been accrued
at December 31, 1996. The final outcome of these  contingencies  is not expected
to have a material adverse effect on the Company's financial  position,  results
of operations or cash flows;  however,  the resolution of certain  contingencies
could  have a  material  effect  on the  Company's  cash  flows  for an  interim
reporting period.

EFFECTS OF INFLATION
Inflation  generally  affects the Company by increasing the interest  expense of
variable  rate  debt and by  increasing  the cost of  labor,  equipment  and raw
materials.  Management believes that inflation did not have a material effect on
the Company's business over the last three years. In 1997,  management  believes
the cost of certain  raw  materials,  such as copper,  brass,  steel and plastic
resins,  is expected to be  comparable  to 1996.  Additionally,  since the Trico
acquisition,  the Company has significant  operations in Mexico which operate as
integral  components of the Company's  U.S.  operations.  While the  significant
devaluation  of the  Peso,  which  began  in late  1994,  increased  the rate of
inflation  in Mexico in the last two years,  it has also  provided a  short-term
cost benefit related to Peso denominated labor and material purchases.

<PAGE>

<TABLE>

STANT CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets
($ In Thousands, Except Share Data)

<CAPTION>
                                                                                        December 31,
--------------------------------------------------------------------------------------------------------
                                                                                      1996         1995
--------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>          <C>
Assets
Current  Assets
    Cash                                                                          $  3,293     $  3,258
    Accounts  receivable:
      Trade,  less allowance  for  doubtful accounts
       of  $2,037  and  $2,193,respectively                                        112,872      116,155
      Other                                                                          4,920        6,189
    Inventory                                                                       95,359       92,135
    Prepaid  expenses                                                                6,504        7,014
    Deferred  income  taxes                                                          1,735        1,413
--------------------------------------------------------------------------------------------------------
Total  current  assets                                                             224,683      226,164
--------------------------------------------------------------------------------------------------------

Property, Plant  And  Equipment,  Net                                              187,252      174,211
--------------------------------------------------------------------------------------------------------

Other  Assets
    Intangible  assets,  net                                                       164,036      166,470
    Deferred  financing  costs,  net                                                 3,793        4,746
    Other                                                                            1,807        1,945
--------------------------------------------------------------------------------------------------------
Total  other  assets                                                               169,636      173,161
--------------------------------------------------------------------------------------------------------
Total  Assets                                                                     $581,571     $573,536
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

Liabilities  And  Stockholders'  Equity
Current  Liabilities
    Current  portion  of  long-term  debt  and  notes  payable                    $ 35,451     $ 29,620
    Accounts  payable                                                               54,463       48,850
    Accrued  liabilities                                                            50,043       46,949
    Income  taxes  payable                                                           6,158        5,027
--------------------------------------------------------------------------------------------------------
Total  current  liabilities                                                        146,115      130,446
--------------------------------------------------------------------------------------------------------

Long-Term Liabilities
    Long-term  debt                                                                187,533      220,763
    Deferred  income  taxes                                                         11,629        7,396
    Accrued  pension  and  other  benefit  liabilities                              26,109       27,622
    Other                                                                            9,623        9,213
--------------------------------------------------------------------------------------------------------
Total  long-term  liabilities                                                      234,894      264,994
--------------------------------------------------------------------------------------------------------

Stockholders' Equity
    Preferred  stock,  at $100 per  share  liquidation  value,  $.01 par  value,
      820,000 shares authorized, none issued or outstanding                             --           --
    Common  stock,  $.01  par  value,  21,000,000  shares
      authorized  and  16,226,815  shares  issued  and outstanding                     162          162
    Additional  paid-in  capital                                                   155,349      155,349
    Foreign  currency  translation  adjustment                                         831         (825)
    Minimum  pension  liability  adjustment                                         (1,072)      (1,761)
    Retained  earnings                                                              45,292       25,171
--------------------------------------------------------------------------------------------------------

Total  stockholders'  equity                                                       200,562      178,096
--------------------------------------------------------------------------------------------------------
Total  Liabilities  and  Stockholders'  Equity                                    $581,571     $573,536
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

</TABLE>

See notes to consolidated financial statements.

<PAGE>

<TABLE>

STANT  CORPORATION  AND  SUBSIDIARIES

Consolidated  Statements  Of  Income
($  In  Thousands,  Except  Share  Data)

<CAPTION>
                                                                            Year Ended December 31,
-----------------------------------------------------------------------------------------------------------
                                                                            1996        1995        1994
-----------------------------------------------------------------------------------------------------------
<S>                                                                      <C>         <C>          <C>
Net  Sales                                                               $657,067    $612,358     $287,946
Cost  of  Sales                                                           490,103     464,460      189,349
-----------------------------------------------------------------------------------------------------------
Gross  Margin                                                             166,964     147,898       98,597
-----------------------------------------------------------------------------------------------------------
Operating  Expenses
    Selling,  general  and  administrative                                104,259      93,065       62,256
    Amortization  of  intangible  assets                                    5,211       4,875        2,787
    Management  fee  and  expenses                                            850         850          500
    Restructuring  charges                                                     --       1,480           --
    Termination  of  product  line                                             --          --        1,650
-----------------------------------------------------------------------------------------------------------
Total  operating  expenses                                                110,320     100,270       67,193
-----------------------------------------------------------------------------------------------------------
Income  From  Operations                                                   56,644      47,628       31,404
-----------------------------------------------------------------------------------------------------------
Other  Charges  (Credits)
    Interest  expense                                                      18,516      21,952        3,916
    Other                                                                    (641)     (1,135)        (787)
-----------------------------------------------------------------------------------------------------------
Total  other  charges  (credits)                                           17,875      20,817        3,129
-----------------------------------------------------------------------------------------------------------
Income  Before  Income  Taxes, Extraordinary  Loss
    and  Cumulative  Effect  of  Accounting  Change                        38,769      26,811       28,275
Provision  for  Income  Taxes                                              17,350      12,152       11,876
-----------------------------------------------------------------------------------------------------------
Income  Before  Extraordinary  Loss  and
    Cumulative  Effect  of  Accounting  Change                             21,419      14,659       16,399
Extraordinary  Loss  on  Extinguishment  of  Debt  (Net  of  Tax
    Benefit  of  $315)                                                         --          --         (435)
Cumulative  Effect  of  Accounting  Change  (Net  of  Tax
    Benefit  of  $303)                                                         --          --         (418)
-----------------------------------------------------------------------------------------------------------
Net  Income                                                              $ 21,419    $ 14,659     $ 15,546
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------


Primary  Income  per  Share  of  Common  Stock
    Income  before  extraordinary  loss  and  cumulative  effect  of
       accounting  change                                                $   1.28    $   0.88     $   0.97
    Extraordinary  loss                                                        --          --        (0.03)
    Cumulative  effect  of  accounting  change                                 --          --        (0.02)
-----------------------------------------------------------------------------------------------------------
    Net  Income                                                          $   1.28    $   0.88     $   0.92
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
    Average  Common  Stock  and  Equivalents  Outstanding                  16,661      16,686       16,954
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------

Fully Diluted Income per Share of Common Stock
 Income before  extraordinary loss
    and cumulative effect of
       accounting  change                                                $   1.26    $   0.88     $   0.97
    Extraordinary  loss                                                        --          --        (0.03)
    Cumulative  effect  of  accounting  change                                 --          --        (0.02)
-----------------------------------------------------------------------------------------------------------
    Net  Income                                                          $   1.26    $   0.88     $   0.92
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
    Average  Common  Stock  and  Equivalents  Outstanding                  17,010      16,691       16,954
-----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------

</TABLE>

See notes to consolidated financial statements.

<PAGE>

<TABLE>

STANT  CORPORATION  AND  SUBSIDIARIES
Consolidated  Statements  Of  Stockholders'  Equity
($  In  Thousands,  Except  Share  Data)

<CAPTION>


                                                                                 Foreign       Minimum
                                                       Additional  Management    Currency      Pension    Retained       Total
                                             Common     Paid-in       Notes     Translation   Liability   Earnings   Stockholders'
                                             Stock      Capital    Receivable   Adjustment    Adjustment  (Deficit)     Equity
----------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>      <C>             <C>           <C>         <C>     <C>            <C>
Balance  at  January  1,  1994                 $162     $155,349        ($15)         ($58)       ($617)  ($2,436)       $152,385
----------------------------------------------------------------------------------------------------------------------------------
Net  Income                                      --           --          --            --           --    15,546          15,546
Translation  Adjustment                          --           --          --          (408)          --        --            (408)
Minimum  Pension  Liability Adjustment
     (Net  of  Deferred  Taxes  of  $589)        --           --          --            --         (238)       --            (238)
Management  Notes  Repaid                        --           --          15            --           --        --              15
Common Stock  Dividends  Declared
        $ .08  Per  Share                        --           --          --            --           --    (1,298)         (1,298)
----------------------------------------------------------------------------------------------------------------------------------
Balance  at  December  31,  1994                162      155,349          --          (466)        (855)   11,812         166,002
----------------------------------------------------------------------------------------------------------------------------------
Net  Income                                      --           --          --            --           --    14,659          14,659
Translation  Adjustment                          --           --          --          (359)          --        --            (359)
Minimum  Pension  Liability Adjustment
     (Net  of  Deferred  Taxes  of  $620)        --           --          --            --         (906)       --            (906)
Common  Stock  Dividends  Declared
        $ .08  Per  Share                        --           --          --            --           --    (1,300)         (1,300)
----------------------------------------------------------------------------------------------------------------------------------
Balance  at  December  31,  1995                162      155,349          --          (825)      (1,761)   25,171         178,096
----------------------------------------------------------------------------------------------------------------------------------
Net  Income                                      --           --          --            --           --    21,419          21,419
Translation  Adjustment                          --           --          --         1,656           --        --           1,656
Minimum  Pension  Liability Adjustment
     (Net  of  Deferred  Taxes  of  $447)        --           --          --            --          689        --             689
Common  Stock  Dividends  Declared
        $ .08  Per  Share                        --           --          --            --           --    (1,298)         (1,298)
----------------------------------------------------------------------------------------------------------------------------------
Balance  at  December  31,  1996               $162     $155,349          --          $831      ($1,072)  $45,292        $200,562
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>

STANT  CORPORATION  AND  SUBSIDIARIES
Consolidated  Statements  Of  Cash  Flows
($  In  Thousands)

<CAPTION>
                                                                                                     Year Ended December 31,
------------------------------------------------------------------------------------------------------------------------------------
                                                                                             1996             1995            1994
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>              <C>             <C>
Cash Flows From Operating Activities:
     Net  income                                                                           $21,419          $14,659         $15,546
     Adjustments  to  reconcile  net  income  to  net  cash
     provided  by  operating  activities
        Cumulative  effect  of  accounting  change                                              --               --             418
        Extraordinary  loss  on  extinguishment  of  debt                                       --               --             435
        Termination  of  product  line                                                          --               --           1,650
        Depreciation  and  amortization  of  intangible  assets                             27,484           24,372          11,806
        Provision  for  losses  on  accounts  receivable                                     1,518            2,164             312
        Amortization  of  debt  issuance  costs                                                771              762             194
        Loss  on  sale  of  fixed  assets                                                      722              221             102
        Provision  for  deferred  taxes                                                      3,663            5,958           3,767
        Changes  in  assets  and  liabilities,  net  of  effect  of  acquisitions
            Decrease  (increase)  in  accounts  receivable                                   5,876          (13,372)          4,035
            Decrease  (increase)  in  inventories                                            1,121            7,186          (3,301)
            Decrease  (increase)  in  prepaid  expenses  and  other  current  assets           529           (1,901)            159
            Increase  (decrease)  in  accounts  payable  and  accrued  liabilities           8,034          (12,711)         (7,869)
            Decrease (increase)  in  other  assets                                           1,500           (1,689)           (611)
            Increase (decrease)  in  other  liabilities                                     (1,753)          (3,543)            676
------------------------------------------------------------------------------------------------------------------------------------
Net  cash  provided  by  operating  activities                                              70,884           22,106          27,319
------------------------------------------------------------------------------------------------------------------------------------

Cash Flows From Investing Activities:
     Acquisitions, net  of  cash  acquired                                                 (10,738)          (2,880)       (185,768)
     Capital  expenditures                                                                 (22,667)         (21,229)         (8,840)
     Proceeds  from  sale  of  fixed  assets                                                   356           14,779              35
------------------------------------------------------------------------------------------------------------------------------------
Net  cash  used  in  investing  activities                                                 (33,049)          (9,330)       (194,573)
------------------------------------------------------------------------------------------------------------------------------------

Cash Flows From Financing Activities:
     Proceeds  from  issuance  of  long-term  debt                                           3,420               --         200,000
     Repayment  of  term  loans                                                            (27,764)         (10,842)        (16,141)
     Net  borrowings  (repayments)  on  revolving  loans                                   (12,436)             371          25,550
     Repayment  of  debt  of  acquired  companies                                               --               --         (34,450)
     Cost  to  acquire  debt                                                                    --               --          (5,320)
     Payment  of  dividends                                                                 (1,298)          (1,300)         (1,298)
     Management  notes  repaid                                                                  --               --              15
------------------------------------------------------------------------------------------------------------------------------------
Net  cash  (used  in)  provided  by  financing  activities                                 (38,078)         (11,771)        168,356
------------------------------------------------------------------------------------------------------------------------------------

Effect of Exchange Rate Changes on Cash                                                        278              736              --
------------------------------------------------------------------------------------------------------------------------------------

Net Increase in Cash                                                                            35            1,741           1,102

Cash:
     Beginning  of  year                                                                     3,258            1,517             415
------------------------------------------------------------------------------------------------------------------------------------
     End  of  year                                                                          $3,293           $3,258          $1,517
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

NOTE 1.
ORGANIZATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Organization  and  Principles of Consolidation - The  accompanying  consolidated
financial   statements  include  the  accounts  of  Stant  Corporation  and  its
majority-owned domestic and foreign subsidiaries (the 'Company').  The Company's
investments in less than majority-owned  entities,  which are not material,  are
included  in the  accompanying  financial  statements  on the  equity  method of
accounting.   All  significant   intercompany  accounts  and  transactions  with
consolidated subsidiaries have been eliminated in consolidation.
    Bessemer Capital  Partners,  L.P.  ('Bessemer') is the majority owner of the
Company. Since the Company's initial public offering in 1993, Bessemer has owned
approximately  56.9% of the Company's  Common Stock. In the years ended December
31,  1996,  1995 and 1994,  the Company  paid an  affiliate  of Bessemer  annual
management fees of $850,000, $850,000 and $500,000 respectively,  plus expenses,
in  exchange  for  general  corporate,   financial  and  administrative  advice.
Additionally,  during 1994 the Company paid an affiliate of Bessemer  $1,800,000
for its acquisition and debt financing  related services rendered to the Company
in connection with the acquisition of Trico Products Corporation ('Trico').

Business   Description  -  The  Company  is   one   of   the   world's   largest
manufacturers  of automotive  windshield  wiping  systems and  windshield  wiper
blades and refills,  closure caps and engine thermostats.  The Company is also a
leading North American  manufacturer of a variety of other automotive  products,
including hose clamps,  heaters,  grease guns and automotive tools. During 1996,
products  produced in North America,  principally  the United States and Mexico,
include  50%  sold  to the  automotive  original  equipment  market,  43% to the
automotive  aftermarket,  and 7% to the industrial market.  Products produced in
foreign markets,  principally the United Kingdom,  Australia and Argentina, were
sold  evenly to the  automotive  original  equipment  market and the  automotive
aftermarket.

Revenue Recognition - Product sales are recorded when such products are  shipped
to customers.

Translation  of Foreign  Currencies - The financial  statements of the Company's
United  Kingdom,  Australia and Argentina  subsidiaries  are measured  using the
local currency as the functional currency. Assets and liabilities are translated
into U.S. dollars at the rate of exchange existing at year-end. Income statement
amounts  are  translated  at the  average of the  monthly  exchange  rates.  The
resulting  translation   adjustments  are  recorded  directly  into  a  separate
component  of  stockholders'  equity.  Gains and losses  resulting  from  actual
foreign currency transactions are recognized currently in results of operations.
The functional currency of the Company's  subsidiaries in Mexico,  which operate
as integral  components of the U.S.  operations,  is the U.S. dollar.  Gains and
losses  resulting from  remeasurement  of monetary  assets and  liabilities  are
recognized   currently   in  results  of   operations.   Translation   gains  of
approximately  $250,000,  $642,000 and $800,000 are included in other income for
the years ended December 31, 1996, 1995 and 1994, respectively.

<PAGE>

Derivative  Financial Instruments - The Company  uses foreign  exchange  forward
contracts to manage the impact of exchange rates on certain intercompany foreign
currency-denominated  receivables  and  payables  and to hedge  certain  foreign
currency-denominated  transactions  and firm purchase  commitments.  The amounts
receivable  and  payable  on these  contracts  are  offset  in the  accompanying
consolidated  balance sheets.  Gains and losses on foreign  currency-denominated
receivables  and payables are reported  currently in income.  Gains or losses on
contracts  used to  hedge  foreign  currency-denominated  transactions  and firm
purchase  commitments  are not  material.  The  Company  does  not hold or issue
financial instruments for trading purposes.

Use of Estimates - The preparation of financial  statements  in conformity  with
generally accepted  accounting  principles requires management of the Company to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

Inventories - Inventories are  valued at the  lower of cost or market  using the
last-in, first-out (LIFO) cost method for 84% of the inventory and the first-in,
first-out (FIFO) cost method for 16% of the inventory. (Note 3)

Property, Plant and Equipment - Property,  plant  and  equipment  are  stated at
cost. Improvements are capitalized and expenditures for maintenance, repairs and
minor tooling are charged to operations as incurred. Provisions for depreciation
of property,  plant and equipment have been computed on the straight-line method
for financial  reporting  purposes based on estimated useful lives of the assets
as follows: land improvements - 5 to 20 years; buildings and improvements - 6 to
40 years; and equipment - 3 to 20 years. (Note 4)
    Effective  January 1, 1996,  the  Company  adopted  Statement  of  Financial
Accounting  Standards  ('SFAS')  No.  121,  'Accounting  for the  Impairment  of
Long-Lived  Assets and for Long-Lived  Assets to Be Disposed Of', which requires
that long-lived assets and certain identifiable intangibles and goodwill amounts
related to those assets be reviewed for impairment whenever events or changes in
circumstances  indicate  that the  carrying  amounts of these  assets may not be
recoverable.  The adoption of SFAS No. 121 did not have a material effect on the
Company's consolidated financial statements.

Research and Development - Research and development costs, which are included in
selling,  general and administrative expense, are charged to expense as incurred
and totaled  $6,698,000,  $6,272,000 and $3,218,000 for the years ended December
31, 1996, 1995 and 1994, respectively.

Advertising - Advertising costs,  which are  included  in  selling,  general and
administrative   expense,  are  charged  to  expense  as  incurred  and  totaled
$7,791,000,  $7,454,000  and  $6,410,000  for the years ended December 31, 1996,
1995 and 1994, respectively.

Intangibles - Intangible assets include goodwill, patents,  trademarks and other
intangible  assets.  Goodwill  represents  the excess of the cost of  businesses
acquired over  identifiable  net assets at the dates of acquisition and is being
amortized  on a  straight-line  basis over periods not  exceeding 40 years.  All
other intangible assets are recorded at cost, less accumulated amortization, and
are being amortized on a  straight-line  basis over their assigned lives ranging
from 3 to 40 years. The carrying value of goodwill is evaluated  periodically as
events and circumstances  indicate a possible  inability to recover its carrying
amount.  Such  evaluation  is based on  profitability  projections  and involves
significant  management  judgment to  evaluate  the  performance  of an acquired
business.   Historically,  the  Company  has  generated  returns  from  acquired
businesses sufficient to recover the cost of their intangible assets.

Deferred  Financing Costs - Deferred financing  costs consist of fees associated
with the borrowings  incurred in connection with refinancing  activities and are
amortized over the life of the related debt.

<PAGE>

Environmental    Remediation   Liabilities  -  Liabilities   for   environmental
remediation  costs are recorded when  environmental  assessments or remediations
are probable and the related costs can reasonably be estimated.  For third party
landfills, the Company records a liability for its estimated share of costs when
it has  been  named  as a  potentially  responsible  party  ('PRP')  and when an
assessment  or cleanup plan has been  developed.  The Company  records the gross
amount of environmental remediation obligations and costs of future expenditures
are not  discounted  to their  present  value.  The  accruals for such costs are
reviewed on a periodic  basis and  adjusted as further  information  develops or
circumstances change. (Note 13)

Earnings  Per  Share - The  computation  of  earnings  per share is based on net
income  divided by the sum of the weighted  average  number of common shares and
common stock  equivalents,  principally  stock options,  outstanding  during the
periods.

Stock-Based   Compensation - SFAS   No.   123,   'Accounting   for   Stock-Based
Compensation',   encourages,   but  does  not   require,   companies  to  record
compensation cost for stock-based employee compensation plans at fair value. The
Company  has  elected  to  continue  to  account  for  such  transactions  under
Accounting  Principles Board Opinion ('APB') No. 25 'Accounting for Stock Issued
to Employees' and related  Interpretations.  Accordingly,  compensation cost for
stock  options is measured as the excess,  if any, of the quoted market price of
the Company's stock at the date of grant over the exercise price. The Company is
required  under the provisions of SFAS No. 123 to disclose on a pro forma basis,
if material, net income and earnings per share as if the fair value based method
of accounting had been applied. (Note 11)

Restructuring - During  1995,  the Company  recorded  restructuring  charges  of
approximately  $1,480,000 ($.05 per share net of tax) to consolidate  certain of
the  Company's   operations.   The  restructuring   charges  were  comprised  of
termination  benefits of $1,148,000  for  approximately  110 salaried and hourly
individuals,  and other associated  costs,  substantially  all of which had been
paid at December 31, 1995.
    In December 1994, the Company  decided to discontinue its mirror and antenna
product line and recorded a charge to operations  of $1,650,000  ($.06 per share
net  of  tax),   principally  for  the  write  off  of  certain   inventory  and
manufacturing equipment related to these product lines.

<PAGE>

NOTE 2.
ACQUISITIONS
On November 1, 1996, the Company purchased certain assets and the rights to sell
LubriMatic brand  lubricating  greases and oils and certain related  lubrication
equipment  from Witco  Corporation  for a cash purchase  price of  approximately
$10,700,000.  The  acquisition  has been accounted for by the purchase method of
accounting and the operating results are included in the Company's  Consolidated
Statements of Income  beginning on November 1, 1996. The cost of the acquisition
has been allocated on the basis of the fair market value of assets  acquired and
liabilities assumed,  resulting in goodwill of approximately $3,478,000 which is
being amortized over 20 years.
    On December 7, 1995, the Company purchased an additional 70 percent interest
in its joint venture in Argentina for $327,000,  bringing total ownership to 100
percent. This investment had previously been accounted for by the equity method.
    The  proforma  full  year  effect of the 1996 and 1995  acquisitions  is not
material.
    On September 1, 1994, the Company  purchased all of the outstanding stock of
FEDCO  Automotive   Components   Company,   Inc.   ('Fedco')  for  approximately
$23,600,000.  Fedco manufactures and distributes automotive heaters, principally
for the automotive aftermarket.  On December 13, 1994, the Company purchased all
of the outstanding  stock of Trico, one of the world's largest  manufacturers of
automotive windshield wiping systems and windshield wiper blades and refills for
approximately $165,400,000.  The operating results for both acquisitions,  which
were  accounted for by the purchase  method of  accounting,  are included in the
Company's  Consolidated  Financial  Statements from the date of their respective
acquisition.


NOTE 3.
INVENTORY

<TABLE>

Inventories at December 31, 1996 and 1995 consist of the following ($000's):

<CAPTION>
                                                        1996         1995
---------------------------------------------------------------------------
<S>                                                   <C>          <C>
Raw materials                                         $13,341      $12,295
Work in process and components                         40,313       41,697
Finished goods                                         43,113       40,069
---------------------------------------------------------------------------
Total valued on first-in, first-out (FIFO) basis       96,767       94,061
Less reduction to last-in, first-out (LIFO) cost       (1,408)      (1,926)
---------------------------------------------------------------------------
Total                                                 $95,359      $92,135
---------------------------------------------------------------------------
---------------------------------------------------------------------------

</TABLE>

    At December 31, 1996 and 1995,  approximately  $79,725,000 and  $76,521,000,
respectively,  of  inventories  were valued using the LIFO  method.  Approximate
replacement cost of inventories valued using the LIFO method totaled $81,133,000
and $78,447,000 at December 31, 1996 and 1995, respectively.

<PAGE>

NOTE 4.
PROPERTY, PLANT
AND EQUIPMENT

<TABLE>

Property,  plant and equipment  at  December 31, 1996  and  1995  consist of the
following ($000's):

<CAPTION>
                                            1996         1995
-----------------------------------------------------------------
<S>                                         <C>         <C>
Land and improvements                       $ 11,479    $  8,945
Buildings and improvements                    75,193      60,507
Equipment                                    173,697     156,482
-----------------------------------------------------------------
Total property, plant and equipment          260,369     225,934
Accumulated depreciation and amortization    (73,117)    (51,723)
-----------------------------------------------------------------
Property, plant and equipment, net          $187,252    $174,211
-----------------------------------------------------------------
-----------------------------------------------------------------

</TABLE>

     Depreciation  expense,  which includes the  amortization of capital leases,
totaled $22,165,000, $19,389,000 and $8,911,000 for the years ended December 31,
1996, 1995 and 1994, respectively.


NOTE 5.
INTANGIBLE ASSETS
<TABLE>

Intangible  assets  at  December  31,  1996 and 1995  consist  of the  following
($000's):

<CAPTION>
                                                      1996         1995
--------------------------------------------------------------------------
<S>                                                <C>           <C>
Goodwill                                           $172,217      $169,440
Patents, trademarks and other intangible assets      16,577        16,577
--------------------------------------------------------------------------
Total                                               188,794       186,017
Less accumulated amortization                       (24,758)      (19,547)
--------------------------------------------------------------------------
Intangible assets, net                             $164,036      $166,470
--------------------------------------------------------------------------
--------------------------------------------------------------------------

</TABLE>

<PAGE>

NOTE 6.
ACCRUED AND OTHER
LONG-TERM LIABILITIES

<TABLE>

Accrued and  other   long-term  liabilities   at   December  31, 1996  and  1995
consist of the following ($000's):

<CAPTION>
                                            1996         1995
--------------------------------------------------------------
<S>                                       <C>          <C>
Accrued liabilities:
Wages and vacation pay                    $10,643      $ 6,532
Pension and other benefit liabilities       8,733        9,068
Litigation and environmental                3,156        2,192
Other                                      27,511       29,157
--------------------------------------------------------------
Total accrued liabilities                 $50,043      $46,949
--------------------------------------------------------------
--------------------------------------------------------------

Other long-term liabilities:
Litigation and environmental              $ 8,186      $ 7,949
Other                                       1,437        1,264
--------------------------------------------------------------
Total other long-term liabilities         $ 9,623      $ 9,213
--------------------------------------------------------------
--------------------------------------------------------------

</TABLE>

NOTE 7.
DEBT

<TABLE>

Long-term debt at December 31, 1996 and 1995 consists of the following ($000's):

<CAPTION>

                                             1996         1995
-----------------------------------------------------------------
<S>                                       <C>           <C>
Revolver and swing line loans             $ 29,250      $ 40,375
Term loan                                  170,000       192,500
Industrial revenue bonds                     4,891         5,082
Capitalized lease obligations               10,445         2,432
Other term loans and notes payable:
  U.S. term debt and notes payable           1,344         5,362
  Foreign term debt and notes payable        7,054         4,632
-----------------------------------------------------------------
Total                                      222,984       250,383
Less current portion                       (35,451)      (29,620)
-----------------------------------------------------------------
Total long-term debt                      $187,533      $220,763
-----------------------------------------------------------------
-----------------------------------------------------------------

</TABLE>

<PAGE>

    The Company  entered into a Credit  Agreement (the  'Agreement') on December
12,  1994 with a group of banks  which  originally  provided  for a seven  year,
$325,000,000  facility and  includes  Term,  Revolver and Swing Line loans.  The
maximum   borrowings   for  the  Term,   Revolver  and  Swing  Line  loans  were
$200,000,000,  $115,000,000 and $10,000,000, respectively. The maximum available
under the Term loan declines as principal  payments are made and at December 31,
1996  totaled  $170,000,000.  The  term  loan  is to be  repaid  quarterly  with
$30,000,000  due in 1997  and  $35,000,000  due  each  year  thereafter  through
December,  2001.  Revolver and Swing Line  advances  must be repaid by December,
2001.
    Under the terms of the Agreement,  interest on the Term,  Revolver and Swing
Line loans is payable at either  prime  (8.25% at December  31, 1996 and 8.5% at
December  31,  1995) or the LIBOR rate (5.6% and 5.8% at  December  31, 1996 and
1995,  respectively)  plus in each case the  applicable  margin.  The applicable
margin will vary between 0% and .25% for prime  borrowings  and between .50% and
1.25% for LIBOR  advances,  depending  upon the  ability of the  Company to meet
certain interest coverage and leverage ratios. The applicable margin at December
31, 1996 and 1995 was .25% for prime borrowings and 1.25% for LIBOR advances.
Interest is generally payable quarterly.
    In addition,  the Agreement requires a commitment fee for the unused portion
of the  facility  and a letter of credit fee on  outstanding  letters of credit.
Letters of credit  outstanding  at December  31, 1996  totaled  $4,294,000.  The
commitment  fee can vary from .25% to .375%  and the  letter of credit  fee from
 .75% to 1.5% depending upon the ability of the Company to meet certain  interest
coverage and leverage  ratio tests.  The commitment fee was .375% and the letter
of credit fee was 1.5% at December  31,  1996.  The total amount of the fees for
1996 and 1995 was  $410,000  and  $361,000,  respectively,  and is  included  in
interest expense. The Company entered into interest rate caps on $100,000,000 of
the Term loan as  required in the  Agreement.  The cost of the two year 10% caps
was  $149,000  and is  included  in  interest  expense  in 1995.  The  Agreement
restricts  certain corporate acts and contains required minimum financial ratios
and other  covenants.  Under the  Agreement,  at  December  31, 1996 the maximum
dividend  allowable under the most  restrictive debt covenant was $.08 per share
per year  plus an  additional  $3,570,000  in the  aggregate.  Loans  under  the
Agreement are secured by certain assets of the Company.
    In conjunction with executing the Agreement,  the Company refinanced a prior
credit agreement dated July 28, 1993 and recorded an extraordinary  loss in 1994
of $435,000,  net of tax benefit of $315,000,  or $.03 per share, related to the
write off of unamortized deferred financing costs.
    Capital leases include a long-term capital lease in the amount of $8,558,000
entered  into during 1996 for a new wiper  system  technology  center to support
research  and  development  as well as  certain  sales  functions  of one of the
Company's wholly-owned subsidiaries. The agreement provides for aggregate annual
payments,  including  interest,  of approximately  $1,000,000,  payable monthly,
through  July,  2016.  At December 31,  1996,  future  minimum  payments for the
initial term of the lease were $18,448,000,  including  $9,997,000  representing
interest.  The Company's  obligations  under all capital leases carry an average
interest rate of 9.2%.
    Industrial Revenue Bonds have a face value of $5,700,000.  The book value of
$4,891,000  at December 31, 1996 reflects an  unamortized  discount of $809,000.
The discount is being  amortized  over the life of the bonds using the effective
interest method.  Interest is payable semi-annually at an annual rate of 6.9% of
the face  value  (the  effective  rate is  10.8%).  Principal  payments  are due
annually in the amount of $300,000 on June 1 of each year through  2003,  with a
final payment of $3,600,000 due on June 1, 2004.
     Other U.S.  term  loans and notes  payable  consist of debt  assumed in the
Trico  acquisition  and at December 31, 1996 is  comprised of a $1,344,000  term
loan  which is  payable  in  monthly  installments  through  2000 at an  average
interest  rate of 7.8%.  The term loan is secured by  machinery  and  equipment.
Foreign  indebtedness is primarily comprised of a $3,276,000  factoring facility
that provides up to $7,706,000 in borrowings and a note payable in the amount of
$3,742,000 which is payable in quarterly  installments  through 2006, both at an
interest rate of 1.5% over the British base rate. The British base rate was 6.0%
and 6.25% at December 31, 1996 and 1995, respectively.

<PAGE>

Future  minimum  principal  payments to be made as of  December  31, 1996 are as
follows ($000's):

<TABLE>

<S>                                     <C>
1997                                    $ 35,451
1998                                      36,381
1999                                      36,133
2000                                      36,648
2001                                      65,180
Thereafter                                14,000
------------------------------------------------
Subtotal                                 223,793
Less total unamortized discount              809
------------------------------------------------
Total                                   $222,984
------------------------------------------------
------------------------------------------------

</TABLE>

NOTE 8.
INCOME TAXES

<TABLE>

Foreign  components of pre-tax  income for the year ended December 31, 1994 were
not material to the Company's Consolidated Financial Statements.  Components for
the years ended December 31, 1996 and 1995 consist of the following ($000's):

<CAPTION>
                                 1996              1995
-------------------------------------------------------
<S>                           <C>                <C>
United States                 $33,945            $21,121
Foreign                         4,824              5,690
--------------------------------------------------------
Total                         $38,769            $26,811
--------------------------------------------------------
--------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>

Deferred  tax  assets  (liabilities) at December 31, 1996  and   1995 consist of
the following ($000's):

<CAPTION>
                                                         1996         1995
----------------------------------------------------------------------------
<S>                                                  <C>           <C>
Current deferred tax asset:
  Reserves not currently deductible                  $ 13,491      $ 13,182
  Valuation allowance                                    (311)         (660)
----------------------------------------------------------------------------
Subtotal                                               13,180        12,522
----------------------------------------------------------------------------
Current deferred tax liability:
  Inventory                                           (11,415)      (10,970)
  Other                                                   (30)         (139)
----------------------------------------------------------------------------
Subtotal                                              (11,445)      (11,109)
----------------------------------------------------------------------------
Net current deferred tax asset                       $  1,735      $  1,413
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Noncurrent deferred tax asset:
  U.S. tax credits                                   $  1,846      $ 4,556
  Mexico tax credits                                      504           --
  U.K. loss carryover                                  10,539        9,193
  Pension and other benefit liabilities                11,386       13,278
  Environmental and legal reserves                      3,259        3,456
  Other                                                   447          404
  Valuation allowance                                 (10,616)      (9,021)
---------------------------------------------------------------------------
Subtotal                                               17,365       21,866
---------------------------------------------------------------------------
Noncurrent deferred tax liability:
  Fixed assets                                        (22,474)     (23,524)
  Intangibles                                          (6,155)      (5,105)
  Other                                                  (365)        (633)
---------------------------------------------------------------------------
Subtotal                                              (28,994)     (29,262)
---------------------------------------------------------------------------
Net noncurrent deferred tax liability                $(11,629)     $(7,396)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

</TABLE>

<TABLE>

The provision for income taxes for the years ended  December 31, 1996,  1995 and
1994 consists of the following ($000's):

<CAPTION>
--------------------------------------------------------------------
                                     1996        1995         1994
--------------------------------------------------------------------
<S>                                <C>         <C>          <C>
Current provision:
U.S. federal                       $ 9,562     $ 3,356      $ 5,987
U.S. state and local                 3,052       1,041        1,504
Foreign                              1,073       1,797          618
--------------------------------------------------------------------
Total current provision            $13,687     $ 6,194      $ 8,109
--------------------------------------------------------------------
Deferred provision:
U.S. federal                       $ 2,818     $ 5,189      $ 3,827
U.S. state and local                   121         806          379
Foreign                                724         (37)        (439)
--------------------------------------------------------------------
Total deferred provision             3,663       5,958        3,767
--------------------------------------------------------------------
Provision for income taxes         $17,350      $2,152      $11,876
--------------------------------------------------------------------
--------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>

The difference  between the tax provision  calculated  using the U.S.  statutory
federal income tax rate and the actual  provision for the years ending  December
31, 1996, 1995 and 1994 is reconciled as follows ($000's):

<CAPTION>
                                                               1996            1995                 1994
-------------------------------------------------------------------------------------------------------------
                                                           Amount     %      Amount      %     Amount      %
-------------------------------------------------------------------------------------------------------------
<S>                                                       <C>      <C>      <C>       <C>     <C>       <C>
U.S. statutory federal income tax provision               $13,569  35.0     $ 9,384   35.0    $ 9,896   35.0
Net tax effect of foreign earnings                            109    .3        (231)   (.8)        --     --
U.S. state income tax, net of U.S. federal tax benefit      2,063   5.3       1,201    4.4      1,441    5.1
Permanent differences,
 primarily goodwill amortization                            1,343   3.5       1,424    5.3        567    2.0
Other 266                                                      --    .7         374    1.4        (28)   (.1)
-------------------------------------------------------------------------------------------------------------
Provision for income taxes                                $17,350  44.8     $12,152   45.3    $11,876   42.0
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------

</TABLE>

    No provision  was made in 1996 for U.S.  income  taxes on the  undistributed
earnings of the foreign subsidiaries as it is the Company's intention to utilize
the  earnings  in the foreign  operations  for an  indefinite  period of time or
repatriate such earnings only when it is tax effective to do so. At December 31,
1996 undistributed earnings of the foreign subsidiaries amounted to $19,423,000.
It is not  practicable to determine the amount of tax that would be payable upon
the remittance of the foreign earnings.
    The Company  reduced  goodwill by $698,000 and  $1,020,000 in 1996 and 1995,
respectively,  as a result of the utilization of certain  acquired net operating
loss carryovers for which a valuation allowance had been established.
    At December 31, 1996,  the Company had unused U.S.  alternative  minimum tax
credits of $1,846,000 which have an unlimited  carryforward  period and U.K. net
operating  and  capital  losses of  $31,937,000  which  also  have an  unlimited
carryforward  period.  A valuation  allowance  has been recorded at December 31,
1996,  for all  deferred  tax  assets of the U.K.  subsidiary,  including  those
related to the loss carryforwards,  since it is uncertain that such deferred tax
assets will be realized.


NOTE 9.
FINANCIAL
INSTRUMENTS
The Company has only limited involvement with derivative  financial  instruments
and does not use them for trading or  speculative  purposes.  The purpose of the
Company's foreign currency hedging activities is to protect the Company from the
risk of being adversely  affected by changes in foreign currency exchange rates.
The  Company  is exposed to credit  risk in the event of  nonperformance  by the
counterparty;  however, the Company anticipates the counterparty will be able to
satisfy its obligations  under the contracts.  No collateral is held in relation
to the  contracts.  At  December  31,  1996 and 1995,  the  Company  had foreign
exchange forward contracts maturing in January 1997 and 1996,  respectively,  as
follows ($000's):

<PAGE>

<TABLE>

<CAPTION>

Notional U.S.
Dollar Equivalent            1996         1995
-----------------------------------------------
<S>                       <C>          <C>
Buy:
  Pound sterling          $1,969       $   --
  Japanese yen               675          532
  Australian dollar          656          669
Sell:
  Canadian dollar         $1,361       $1,796
  Pound sterling              --        3,261

</TABLE>

    The carrying value and fair value of the Company's  foreign exchange forward
contracts are not material.  Given the variable  nature of the interest rates on
the Company's long-term debt, its carrying value is a reasonable estimate of its
fair value.  For foreign currency  forward  contracts,  the fair value generally
reflects the estimated  amount the Company would receive or pay to terminate the
contract  on the  reporting  date,  thereby  taking  into  account  the  current
unrealized gains or losses on open contracts.

Concentration of Credit  Risk - As a tier one or tier two supplier  to  original
equipment  manufacturers,  the Company had three major customers at December 31,
1996 and 1995 which  accounted for more than 10% of the  Company's  consolidated
accounts  receivable  at those dates.  Accounts  receivable  from Customer A was
$13,669,000 in 1996 and $16,394,000 in 1995. Accounts receivable from Customer B
was  $11,760,000  in 1996 and  $11,982,000  in 1995.  Accounts  receivable  from
Customer C was $11,220,000 in 1996 and $12,009,000 in 1995.


NOTE 10.
EMPLOYEE
BENEFIT PLANS
Pension Plans - The Company maintains defined  benefit  pension  plans  covering
certain salaried and hourly  employees in the U.S., U.K. and Australia.  Pension
benefits under the salaried plans are based  principally on an employee's  years
of service and either the highest average  earnings over a period of years or on
career-average compensation near retirement with stated amounts for each year of
service.  Pension  benefits  under the hourly plans are stated  amounts for each
year of service.  Assets of certain of the  Company's  defined  benefit  pension
plans are managed by Bessemer Trust Company,  N.A., an associated company of the
majority limited partner of Bessemer.  The pension fund assets consist of equity
investments, bond investments, general account assets of insurance companies and
cash and cash equivalents.

<PAGE>

    Net pension  expense for the years ended  December 31,  1996,  1995 and 1994
includes the following components ($000's):

<TABLE>

<CAPTION>
                                        1996        1995         1994
---------------------------------------------------------------------
<S>                                  <C>         <C>         <C>
Service cost                         $  2,653    $  1,855    $ 1,020
Interest cost                           9,359       9,841      2,542
Return on assets                      (13,167)    (17,800)     1,122
Net amortization and deferrals          4,419       9,687     (3,214)
Employee contributions                     --          --        (85)
---------------------------------------------------------------------
Net pension expense                   $ 3,264    $  3,583    $ 1,385
---------------------------------------------------------------------
---------------------------------------------------------------------

</TABLE>

    The Company generally follows the policy of funding the actuarially computed
minimum  contribution.  The following table  reconciles the funded status of the
plans with amounts  recognized  in the  Company's  Consolidated  Balance  Sheets
($000's):

<TABLE>

<CAPTION>
                                                         December 31, 1996       December 31, 1995
----------------------------------------------------------------------------------------------------------
                                           Assets Exceed    Accumulated    Assets Exceed     Accumulated
                                             Accumulated      Benefit      Accumulated        Benefit
                                               Benefit    Exceeds Assets      Benefit      Exceeds Assets
----------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>              <C>              <C>
Accumulated benefit obligation:
Vested                                          $17,276        $105,467         $1,514           $121,410
Nonvested                                           816           1,145            347              1,252
----------------------------------------------------------------------------------------------------------
Subtotal                                         18,092         106,612          1,861            122,662
Effect of projected pay increases                 3,768             757            897              4,841
----------------------------------------------------------------------------------------------------------
Projected benefit obligation                     21,860         107,369          2,758            127,503
Plan assets at fair value                        19,560          90,015          2,971             99,509
----------------------------------------------------------------------------------------------------------
Projected benefit obligation in excess
 of (less than) plan assets                       2,300          17,354           (213)            27,994
Unrecognized net gain (loss)                     (1,443)          1,931           (113)            (5,461)
Unrecognized prior service costs                    180            (823)            --               (612)
Transition obligation                                --              (4)            --                 (4)
Adjustments for minimum liability                    --           2,559             --              3,405
----------------------------------------------------------------------------------------------------------
Accrued (prepaid) pension cost recognized
 in the Consolidated Balance Sheet              $ 1,037        $ 21,017         $ (326)          $ 25,322
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>

Accounting assumptions used were as follows:

<CAPTION>
                                                     1996        1995         1994
-----------------------------------------------------------------------------------
<S>                                              <C>         <C>          <C>
Discount rates:
  U.S.                                                7.5%        7.5%         8.5%
  Non-U.S.                                            7.5%   8.0%-8.5%    8.5%-9.0%
Rates of increase in compensation levels:
  U.S.                                           4.0%-5.0%   4.0%-5.0%    5.0%-5.5%
  Non-U.S.                                            6.0%        6.0%    5.5%-6.0%
Expected long-term rates of return on assets:
  U.S.                                                9.0%        9.0%    8.5%-9.0%
  Non-U.S.                                            9.0%        9.0%         9.5%

</TABLE>

    The Company also  maintains  defined  contribution  plans  covering  certain
salaried  and hourly  employees.  Contributions  to these  plans are  determined
annually at the discretion of  management.  Expense for  contributions  to these
plans was $1,721,000, $1,797,000 and $1,211,000 for the years ended December 31,
1996, 1995 and 1994, respectively.

Postretirement  Benefits Other Than Pension  Plans - The Company  provides  life
insurance and health care benefits to certain U.S. salaried and hourly employees
after retirement.  The cost of postretirement  benefits is determined under SFAS
No. 106.

<TABLE>

    The  following  table  reconciles  the  accumulated  postretirement  benefit
obligation with amounts recognized in the Company's  Consolidated Balance Sheets
at December 31, 1996 and 1995 ($000's):

<CAPTION>
                                                                                      1996         1995
--------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>          <C>
Accumulated postretirement benefit obligation:
Retirees                                                                            $5,756       $5,709
Fully eligible actives                                                                 694          855
Other actives                                                                          691          578
--------------------------------------------------------------------------------------------------------
Subtotal                                                                             7,141        7,142
Unrecognized net loss                                                                 (265)        (427)
Unrecognized prior service costs                                                       125          137
--------------------------------------------------------------------------------------------------------
Accrued postretirement benefit cost recognized in the Consolidated Balance Sheet    $7,001       $6,852
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>

Postretirement benefit cost for the years ended December 31, 1996, 1995 and 1994
includes the following components ($000's):

<CAPTION>
                                           1996        1995         1994
------------------------------------------------------------------------
<S>                                        <C>         <C>          <C>
Service cost                               $ 74        $ 44         $ 45
Interest cost                               514         520          228
Net amortization and deferrals               (3)         (9)          12
------------------------------------------------------------------------
Net postretirement benefit cost            $585        $555         $285
------------------------------------------------------------------------
------------------------------------------------------------------------

</TABLE>

    The assumed  health care cost trend rate used in measuring  the  accumulated
postretirement  benefit  obligation was 10% for 1996,  decreasing  linearly each
successive year until it reaches 5% in 2001 after which it remains  constant.  A
one  percentage-point  increase in the  assumed  health care cost trend rate for
each year would increase the accumulated postretirement benefit obligation as of
December 31, 1996 and net postretirement  health care cost as of January 1, 1996
by  approximately  4%.  The  assumed  discount  rate  used  in  determining  the
accumulated  postretirement  benefit  obligation  was  7.5%,  7.5%  and  8.5% at
December 31, 1996, 1995 and 1994, respectively.

Postemployment   Benefits - Effective   January  1, 1994,  the  Company  adopted
SFAS  No.  112,  'Employers'  Accounting  for  Postemployment  Benefits,'  which
prescribes accrual accounting methods for employers who provide certain benefits
to former or inactive  employees  after  employment but before  retirement.  The
cumulative  effect of adopting  SFAS No. 112 was $418,000 (net of tax benefit of
$303,000),  or  $.02  per  share,  which  has  been  included  in the  Company's
Consolidated Statement of Income for the year ended December 31, 1994.


NOTE 11.
STOCK OPTIONS
The Company has two plans under which stock  options for the  purchase of Common
Stock may be granted: the Stant Corporation Stock Option Plan for Directors (the
'Directors  Option  Plan') and the 1993 Stock  Option Plan for Key  Employees of
Stant  Corporation and its subsidiaries  (the 'Stock Option Plan').  The maximum
number of shares  of  Common  Stock  that may  currently  be  granted  under the
Directors  Option Plan and the Stock  Option Plan is 50,000 and 700,000  shares,
respectively.  The Board of  Directors  has  adopted,  subject  to  stockholders
approval at the Company's  annual  meeting on April 30, 1997,  amendments to the
Directors  Option Plan and the Stock Option Plan to increase the maximum  number
of shares of Common  Stock that may be granted  under such plans to 150,000  and
1,600,000 shares, respectively.
    The Directors Option Plan permits nonemployee Directors to elect to have any
or all of their  retainer and Board and Committee  meeting fees paid in the form
of stock  options,  rather than in cash.  The Stock Option Plan provides for the
granting of  nonqualified  options to key  employees.  With the exception of the
Directors  Option  Plan,  options to purchase  common stock have been granted at
prices  not less  than  fair  market  value at the date of  grant.  The  Company
recognized  $131,000 , $138,900 and $103,000 as compensation  expense related to
the  granting  of options  under the  Directors  Option  Plan in the years ended
December 31, 1996, 1995 and 1994, respectively.  The weighted-average fair value
of options  granted  under the  Directors  Option  Plan during 1996 and 1995 was
$13.88 and $7.88, respectively.  Option shares generally become exercisable upon
one year from the grant date and expire at the end of ten years from the date of
grant.  In years prior to 1993,  the  Company  granted  nonqualified  options to
certain key employees  providing for the purchase of 1,457,602  shares of Common
Stock, all of which are fully vested.

<PAGE>

<TABLE>

     Information  regarding the Company's stock option plans for the years ended
December 31, 1996, 1995 and 1994 is as follows (shares 000's):

<CAPTION>

                                              1996                1995                1994
-----------------------------------------------------------------------------------------------------
                                                  Weighted-            Weighted-           Weighted-
                                                  Average              Average             Average
                                                  Exercise             Exercise            Exercise
                                        Shares    Price      Shares    Price     Shares    Price
-----------------------------------------------------------------------------------------------------
<S>                                     <C>        <C>        <C>       <C>       <C>         <C>
Outstanding at beginning of year        2,072      $10.63     1,980     $10.51    1,923       $10.41
Granted                                   248      $10.90       128     $13.92       61       $14.22
Exercised                                  --          --        --         --       --           --
Cancelled                                  (2)     $14.66       (36)    $16.17       (4)      $17.60
-----------------------------------------------------------------------------------------------------
Outstanding at end of year              2,318      $10.65     2,072     $10.63    1,980       $10.51
-----------------------------------------------------------------------------------------------------
Options exercisable at end of year      2,054      $10.57     1,778     $ 9.61    1,617       $ 8.90
-----------------------------------------------------------------------------------------------------
Weighted-average fair value of
 options granted during the year               $5.72                $ 7.85               --
-----------------------------------------------------------------------------------------------------

</TABLE>

<TABLE>

Information  regarding  options  outstanding  at December 31, 1996 is as follows
(shares 000's):

<CAPTION>
                                           Options Outstanding        Options Exercisable
-----------------------------------------------------------------------------------------
                                            Weighted-    Weighted-              Weighted-
                                            Remaining     Average                Average
                                           Contractual   Exercise               Exercise
Range of Exercise Prices         Number       Life        Price      Number      Price
-----------------------------------------------------------------------------------------
<S>                               <C>        <C>           <C>        <C>        <C>
$  .25 -   $2.50                   61       6 years      $ 1.60        47         $ 1.32
$ 5.00 -  $14.50                1,342       5 years      $ 8.92     1,109         $ 8.39
$15.00 - $20.00                   574       7 years      $17.16       557         $17.15
$ 8.00 -  $8.50                   341      10 years      $ 8.15       341         $ 8.15
                                            or more
</TABLE>

    The Company has adopted the  disclosure-only  provisions of SFAS No. 123 and
applies APB Opinion 25 and related  Interpretations  in accounting for its stock
option plans. Accordingly, except for the Directors Option Plan discussed above,
no compensation  cost has been recognized  related to the Company's stock option
plans. Consistent with the provisions of SFAS No. 123, had compensation cost for
the Stock Option Plan been determined  based on the fair value at the grant date
for  awards in 1996 and 1995,  the  effect on the  Company's  net income and net
income per share for such years would not be material.

<PAGE>

<TABLE>

    The fair value of each option  grant is  estimated  on the date of the grant
using the Black-Scholes option-pricing model with the following weighted average
assumptions.

<CAPTION>
                                         1996          1995
------------------------------------------------------------
<S>                             <C>                  <C>
Expected volatility                       35%          31.2%
Risk-free interest rate         6.27% - 6.32%          7.74%
Expected term of options              7 years        7 years
Expected dividend yield                   .7%            .5%

</TABLE>

NOTE 12.
SUPPLEMENTAL
CASH FLOW INFORMATION

<TABLE>

Supplemental information related to the Consolidated Statements of Cash Flows is
as follows ($000's):

<CAPTION>
                                                         1996        1995         1994
---------------------------------------------------------------------------------------
<S>                                                   <C>         <C>          <C>
Cash paid during year for:
  Interest                                            $17,099     $19,964      $  2,996
  Income taxes                                         11,539       4,922        13,818
Noncash investing and financing activities:
  Liabilities assumed in acquisitions                 $ 2,525     $    --      $160,644
  Capital lease obligations                             9,273         556            --

</TABLE>

NOTE 13.
COMMITMENTS
AND CONTINGENCIES
The Company leases certain  facilities and equipment under operating leases. All
real estate  leases  provide for  payment by the lessee of costs  applicable  to
operating  the leased  premises  (inclusive of real estate taxes) in addition to
the minimum rental payments.  Minimum rentals for future periods under operating
leases in effect at December 31, 1996 are  $4,423,000  for 1997,  $2,696,000 for
1998, $1,597,000 for 1999, $897,000 for 2000, $286,000 for 2001 and $367,000 for
all years  thereafter.  Rental  expense  charged to operations for all operating
leases  totaled  $5,921,000,  $6,647,000  and  $1,901,000  for the  years  ended
December 31, 1996, 1995 and 1994, respectively.
    There are certain  environmental matters and other potential or actual legal
claims pending against the Company,  the most significant of which are described
below.  Based on the  information  obtained to date,  at  December  31, 1996 the
Company  estimates  the range of loss  exposure  for all such matters to be from
$8,000,000 to $13,000,000 and accrued approximately  $11,340,000 at December 31,
1996 for these matters.  In part due to such accrual,  the Company  believes the
ultimate  resolution  of all such  matters,  in the  aggregate,  will not have a
material adverse effect on its financial position, results of operations or cash
flows,  except that there could be such an effect on cash flows for a particular
interim reporting period.

<PAGE>

    In April 1992, the New York State Department of  Environmental  Conservation
('NYDEC')  notified  the Company and a number of other  companies  that all such
entities  were  PRPs  pursuant  to  certain  sections  of  the  New  York  State
Conservation  Law ('NYSCL') and the United  States  Comprehensive  Environmental
Response,  Compensation and Liability Act ('CERCLA') with respect to a privately
owned  landfill  in  Cheektowaga,  New York (the  'Pfohl  Landfill').  The NYDEC
originally  proposed a remediation  approach that the NYDEC estimated would cost
approximately  $53,000,000,  but independent  parties' estimates were as much as
$60,000,000. An alternative remediation approach has been presented to the NYDEC
which is estimated to cost  approximately  $35,000,000.  The Company has entered
into a preliminary participation agreement with approximately 23 other companies
(collectively the 'Pfohl Brothers PRPs') to negotiate jointly with the NYDEC and
to pursue jointly  non-participating  parties. The Pfohl Brothers PRPs currently
are negotiating with the NYDEC respecting the appropriate  remediation  approach
to be implemented. At this time, the Pfohl Brothers PRPs have not determined the
allocated share of liability for each of the Pfohl Brothers PRPs, but based upon
factual submissions, the Company estimates that its allocated share of liability
will be  between  4% and 5%.  To date,  the  remediation  efforts  at the  Pfohl
Landfill have generated  twelve  lawsuits  involving more than 90 plaintiffs who
seek  recovery  either for personal  injury as a result of exposure to hazardous
materials  in the  Pfohl  Landfill  or for  property  damage  as a result of the
proximity of their land to the Pfohl Landfill, as well as punitive damages.
    In July 1993,  NYDEC  issued a demand to the  Company  and a number of other
companies for a remedial  investigation  and feasibility  study  ('RI/FS'),  and
eventual remediation,  for a site in Tonawanda,  New York ('Roblin Steel Site').
Approximately  150 PRPs,  including the Company,  have joined in a participation
agreement and negotiated  with NYDEC an agreed scope of work for the RI/FS.  The
estimated  cost of the RI/FS is $300,000 and the  Company's  allocated  share is
approximately 4.5%.
    In March 1994, the Company was notified by NYDEC that the Company was one of
approximately  20 PRPs pursuant to NYSCL and CERCLA  responsible  for past costs
incurred  and for  future  remediation  costs  involving  a former  solvent  and
petroleum  processing  facility  in North  Tonawanda,  New York (the  'Booth Oil
Site').  Prior to notifying  the PRPs,  NYDEC  investigated  the Booth Oil Site,
performed  removal  actions and issued a Record of Decision  which would require
on-site  incineration  of remaining  hazardous  wastes at an  estimated  cost of
$20,000,000.   The  PRPs  have  recommended  to  NYDEC  alternative  remediation
activities that will reduce the cost of the required site remediation.  Although
NYDEC has not yet agreed to amend the Record of Decision,  during 1996 the NYDEC
did allow the PRPs to perform a supplemental  remedial  investigation  to better
define the extent and nature of  contamination  at the Booth Oil Site.  Although
the supplemental remedial  investigation has been completed,  the report has not
yet been prepared.  The PRPs also  performed an initial  allocation of liability
among   themselves  to  apportion  the  costs  of  the   supplemental   remedial
investigation and the Company's allocation was 1.3%.
    In  1988,   the  Company   conducted  an   investigation   at  its  Waltham,
Massachusetts   facility  which  indicated  the  presence  of  volatile  organic
compounds  and petroleum  hydrocarbons  in the soil and  groundwater,  which the
Company reported to the  Massachusetts  Department of Environmental  Protection.
During 1996, the Company  completed a Phase II  Comprehensive  Site Assessment ,
the  primary  objectives  of which  were to  evaluate  the  nature and extent of
contamination  and potential  risks to health,  safety,  public  welfare and the
environment.  During 1997, the Company will develop a Phase III Remedial  Action
Plan to evaluate  appropriate  response  actions.  During 1996,  the Company was
notified by Raytheon Company  ('Raytheon') of the Company's  potential liability
for groundwater contamination at Raytheon's property (the 'Raytheon Site') which
adjoins the south  property  line of the Waltham  facility,  and was notified by
Barry Wright Corporation  ('Barry Wright') of the Company's  potential joint and
several liability with Raytheon for groundwater  contamination at property owned
by Barry Wright (the 'BW Site') which is south of the  Raytheon  Site.  Raytheon
has alleged that it has already spent in excess of $2,500,000 to investigate and
remediate  groundwater  at the Raytheon  Site and that the total of all past and
future investigation and remediation costs could total approximately $7,000,000.
Raytheon has  proposed  that the Company pay 50% of all such  investigation  and
remediation   costs.  Barry  Wright  has  alleged  that  it  has  already  spent
approximately  $200,000 and will spend an  additional  $700,000 in the future to
investigate  and  remediate  groundwater  at the BW Site.  Barry  Wright has not
suggested an apportionment of liability between Raytheon and the Company. Recent
communications  with Barry Wright  indicate  that there may in fact be no future
costs at the BW Site and that any demand by Barry Wright against the Company may
be reduced to participating in past costs only.

<PAGE>

NOTE 14.
QUARTERLY
FINANCIAL DATA (Unaudited)

<TABLE>

The following is a condensed  summary of quarterly results of operations for the
years ended December 31, 1996 and 1995 ($000's except per share data):

<CAPTION>

Quarter                                                       First        Second      Third        Fourth
-----------------------------------------------------------------------------------------------------------
<S>                                                        <C>            <C>         <C>          <C>
1996:
Net sales                                                  $163,787       $156,691    $161,203     $175,386
Gross margin                                               $ 40,443       $ 38,860    $ 41,994     $ 45,667
Income from operations                                     $ 14,260       $ 12,296    $ 14,495     $ 15,593
Net income                                                 $  5,542       $  4,340    $  5,635     $  5,902
Primary income per share                                   $    .33       $    .26    $    .34     $    .35
-----------------------------------------------------------------------------------------------------------
1995:
Net sales                                                  $160,638       $144,240    $144,911     $162,569
Gross margin                                               $ 38,219       $ 33,782    $ 35,768     $ 40,129
Income from operations                                     $ 12,237       $  9,036    $ 11,741     $ 14,614
Net income                                                 $  4,162       $  1,471    $  3,607     $  5,419
Primary income per share                                   $    .25       $    .09    $    .22     $    .33
-----------------------------------------------------------------------------------------------------------

</TABLE>

    Results for 1995 include  restructuring  charges of  $972,000,  $589,000 and
$24,000 for the first, second and third quarters,  respectively, and a credit to
restructuring charges of $105,000 for the fourth quarter.
    Earnings  per  common  share were based on the  weighted  average  number of
shares  outstanding  for  each  period,  and  the  sum  of the  quarters  do not
necessarily equal the full year earnings per common share amount.


NOTE 15.
SEGMENT INFORMATION
The  Company  and its  wholly-owned  subsidiaries,  as  worldwide  suppliers  of
automotive  parts and  automotive  related  products,  are  engaged  in only one
business  segment.  Geographic  areas of operation are the United States (U.S.),
United Kingdom,  Australia,  Mexico and Argentina.  Amounts for the U.S. include
those of the Company's Mexican subsidiaries which operate as an integral part of
the U.S.  operations.  Geographic  distribution  of operating data for the years
ended December 31, 1996, 1995 and 1994 are as follows ($000's):

<PAGE>
<TABLE>
<CAPTION>
                                          U.S.         Foreign     Elimination   Consolidated
---------------------------------------------------------------------------------------------
<S>                                    <C>            <C>            <C>             <C>
1996:
Sales to unaffiliated customers        $602,730       $54,337        $    --         $657,067
Transfers between geographic areas        1,670        15,806        (17,476)              --
---------------------------------------------------------------------------------------------
Net sales                              $604,400       $70,143       $(17,476)        $657,067
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

Income before income taxes             $36,384        $ 2,159       $    226         $ 38,769
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

Identifiable assets                    $546,949       $45,980       $(11,358)        $581,571
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------

1995:
Sales to unaffiliated customers        $556,194      $56,164        $     --         $612,358
Transfers between geographic areas        1,408       10,339         (11,747)              --
----------------------------------------------------------------------------------------------
Net sales                              $557,602      $66,503        $(11,747)        $612,358
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------

Income before income taxes             $ 24,262      $ 3,188        $   (639)        $ 26,811
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------

Identifiable assets                    $546,238      $34,881        $ (7,583)        $573,536
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------

1994:
Sales to unaffiliated customers        $285,508      $ 2,438        $     --         $287,946
Transfers between geographic areas           34          192            (226)              --
----------------------------------------------------------------------------------------------
Net sales                              $285,542      $ 2,630        $   (226)        $287,946
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------

Income before income taxes,
 extraordinary loss and cumulative
 effect of accounting change           $ 28,157      $    59        $     59         $ 28,275
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------

Identifiable assets                    $541,312      $50,198        $ (7,484)        $584,026
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
</TABLE>
    As a tier one or tier two supplier,  sales of the Company's products for use
by  three  automotive   manufacturers,   either  as  original  equipment  or  as
replacement parts, accounted for more than 10% of consolidated net sales for the
years ended December 31, 1996 and 1995. Sales to Customer A totaled $146,743,000
and $132,330,000,  respectively, or 22%. Sales to Customer B totaled $95,336,000
and  $95,910,000,  or 15% and 16%,  respectively.  Sales to  Customer  C totaled
$66,336,000 and $58,376,000,  respectively,  or 10%. No one customer represented
more than 10% of the Company's consolidated net sales for 1994.

<PAGE>

To the Stockholders of Stant Corporation:

The Company maintains  accounting and related internal control systems which are
intended to provide  reasonable  assurance that assets are safeguarded from loss
or  unauthorized  use and to produce  records  necessary for the  preparation of
financial  information.  There are limits  inherent  in all  systems of internal
control,  and the cost of the systems  should not exceed the expected  benefits.
Through the use of a program of internal audits and through discussions with and
recommendations  from its independent  auditors the Company periodically reviews
these systems and controls and compliance therewith.
    The  Audit  Committee  of the  Board of  Directors,  comprised  entirely  of
nonemployee directors,  meets regularly with management,  the internal auditors,
and the independent  auditors to review the results of their work and to satisfy
itself that their  responsibilities are being properly discharged.  The internal
auditors  and  independent  auditors  have  full and free  access  to the  Audit
Committee and have discussions  regarding  appropriate matters, with and without
management present.
    The primary  responsibility for the integrity of financial information rests
with management.  Certain valuations contained herein result, of necessity, from
estimates and judgments of management.  The accompanying  consolidated financial
statements,  notes  thereto,  and other  related  information  were  prepared in
conformity with generally accepted accounting principles applied on a consistent
basis.



JACK P. REILLY                                   THOMAS K. ERWIN
President and                                     Senior Vice President
Chief Executive Officer                           and Chief Financial Officer



To the Board of Directors and Stockholders of Stant Corporation:

We  have  audited  the  accompanying   consolidated   balance  sheets  of  Stant
Corporation  and  subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of income,  stockholders' equity and cash flows for each
of the three  years in the period  ended  December  31,  1996.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.
    We conducted  our audits in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
    In our opinion,  such consolidated  financial  statements present fairly, in
all  material  respects,   the  financial  position  of  Stant  Corporation  and
subsidiaries  as of  December  31,  1996  and  1995,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.


DELOITTE & TOUCHE LLP
Cincinnati, Ohio
February 12, 1997















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