SECURITIES AND EXCHANGE COMMISSION
  
                              WASHINGTON, D.C.  20549
  
  
  
                                     FORM 10-QSB
  
  
                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
  
                           SECURITIES EXCHANGE ACT OF 1934
  
  
  
       For Quarter Ended December 31, 1995      Commission file number 0-5223
  
  
  
                              CUTCO INDUSTRIES, INC.
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              (Exact name of registrant as specified in its charter)
  
  
  
                       New York                              11-1771806
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              (State or other jurisdiction of             (I.R.S. Employer
               incorporation or organization)              Identification No.)
  
  
       
         125 South Service Road, Jericho, New York                 11753
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              (Address of principal executive offices)           (Zip Code)
  
  
  
       Registrant's telephone number, including area code   (516) 334-8400
                                                          --------------------
  
       -----------------------------------------------------------------------
          Former name, former address and former fiscal year, if changed 
          since last report.
  
  
          *  Indicate by check mark whether the registrant (1) has  filed  all 
       reports  required to be filed by Section 13 or 15(d) of the  Securities 
       Exchange  Act  of  1934 during the preceding 12  months  (or  for  such 
       shorter  period that the registrant was required to file such  reports) 
       and  (2) has been subject to such filing requirements for the  past  90 
       days.                                         Yes    X        No 
                                                          -----          -----
           Transitional Small Business Disclosure:   Yes           No    X
                                                      -----        -----



                                CUTCO INDUSTRIES, INC.
  
                                      FORM 10-QSB
  
                                         INDEX
  
  
  
                                                                            Page
  
       PART I -  FINANCIAL INFORMATION
  
                 Item 1.  Financial Statements (Unaudited)
  
                     Consolidated Condensed Balance Sheets -
                     December 31, 1995 and June 30, 1995                     1-2
  
                     Consolidated Condensed Statements of Operations -
                     Six and Three Months Ended December 31, 1995 and 
                     1994                                                    3-4
  
                     Consolidated Condensed Statement of Shareholders' 
                     Equity - Six Months Ended December 31, 1995               5
  
                     Consolidated Condensed Statements of Cash Flows -
                     Six Months Ended December 31, 1995 and 1994               6
  
                     Notes to Unaudited Consolidated Condensed 
                     Financial Statements                                      7
  
                 Item 2.  Management's Discussion and Analysis of 
                 Financial Condition and Results of Operations               8-9
  
  
       PART II - OTHER INFORMATION
  
                 Item 6.  Exhibits and Reports on Form 8-K                    10
  
  
       SIGNATURES                                                             11



                                 PART I - FINANCIAL INFORMATION
  
  Item 1.  Financial Statements.
  
  CUTCO INDUSTRIES, INC. AND SUBSIDIARIES
      (UNAUDITED)
<TABLE>
                                             December 31,      June 30,
                                                 1995            1995
                                             -------------   -------------
  
  ASSETS
  
  CURRENT ASSETS
     <S>                                         <C>           <C>
     Cash and cash equivalents                   $876,607      $1,096,793 
     Marketable securities                        270,241         267,586 
     Notes and accounts receivable, net           437,897         545,588 
     Merchandise inventory                        500,666         537,896 
     Prepaid and refundable income taxes           70,518          94,858 
     Deferred income taxes, net                   135,000         135,000 
     Prepaid expenses and miscellaneous                                  
        receivables                                47,024          84,358 
                                             -------------   -------------
                                                                          
        TOTAL CURRENT ASSETS                    2,337,953       2,762,079 
                                             -------------   -------------
                                                                          
  PROPERTY, PLANT AND EQUIPMENT, AT COST
     Furniture, fixtures and equipment          2,544,473       2,609,826 
     Leasehold improvements                       170,730         184,976 
                                             -------------   -------------
                                                2,715,203       2,794,802
                                                                           
     Less accumulated depreciation                                        
        and amortization                        1,367,532       1,338,702
                                             -------------   -------------
                                                1,347,671       1,456,100 
                                             -------------   -------------
  OTHER ASSETS
     Notes receivable, noncurrent                 286,020         329,763 
     Deferred charges and other                   491,702         520,276 
     Deposits                                     128,812         123,567 
                                             -------------   -------------
                                                  906,534         973,606 
                                             -------------   -------------
                                               $4,592,158      $5,191,785 
                                             =============   =============
</TABLE>
  
  
  See notes to unaudited consolidated condensed financial statements.
  
                                       -1-



        CUTCO INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED CONDENSED BALANCE SHEETS - Continued 

                                             December 31,      June 30,
                                                 1995            1995
                                             -------------   -------------
<TABLE>
  
  LIABILITIES AND SHAREHOLDERS' EQUITY
  
  CURRENT LIABILITIES
     <S>                                      <C>               <C>
     Accounts payable and accrued
        expenses                               $1,009,603        $997,170 
     Current portion of long-term debt             77,262          78,996 
     Accrued and withheld taxes,                                         
        other than income taxes                    85,748         204,167 
     Income taxes payable                          12,869          31,276 
                                             -------------   -------------
        TOTAL CURRENT LIABILITIES               1,185,482       1,311,609 
  
                                                                         
  LONG-TERM DEBT                                  201,242         219,724 
  DEPOSITS PAYABLE                                 67,380          64,860 
  DEFERRED FRANCHISE FEE REVENUE, NET             130,597         232,462 
  DEFERRED INCOME TAXES                           152,000         152,000 
                                             -------------   -------------
        TOTAL LIABILITIES                       1,736,701       1,980,655 
                                             -------------   -------------
  
  
  
  SHAREHOLDERS' EQUITY
  
     Common Stock                                 188,371         188,371 
     Additional paid-in capital                 4,185,250       4,185,250 
     Retained earnings                          1,963,428       2,319,101 
                                             -------------   -------------
                                                6,337,049       6,692,722 
     Less treasury stock - at cost              3,481,592       3,481,592 
                                             -------------   -------------
        TOTAL SHAREHOLDERS' EQUITY              2,855,457       3,211,130 
                                             -------------   -------------
                                               $4,592,158      $5,191,785 
                                             =============   =============
  
</TABLE>
  See notes to unaudited consolidated condensed financial statements.
  
                                 -2-


    CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
  (UNAUDITED)
<TABLE>

                                                                       Six Months Ended
                                                                         December 31,
                                                                      1995          1994

     <S>                                                           <C>           <C>
                                                                   -----------   -----------
  Revenues:
     Owned retail stores                                           $4,956,817    $5,252,534
     Sales of equipment and products                                  111,248       111,796
     Royalties and service fees                                     1,049,769     1,168,464
     Franchise fee income                                             121,865        98,469
     Interest and dividend income                                      45,243        61,612
     Other income, net                                                 30,073        35,796
     Loss on sale or abandonment of fixed assets, net                (106,662)      (55,934)
                                                                   -----------   -----------
                                                                    6,208,353     6,672,737
                                                                   -----------   -----------
  Costs and Expenses:
     Direct costs of owned retail stores                            4,729,637     5,064,668
     Costs of equipment and products sold                              92,160        70,807
     Depreciation and amortization                                    294,341       286,093
     Selling, general and administrative expenses                   1,413,538     1,548,488
     Interest expense                                                  19,397        16,011
                                                                   -----------   -----------
                                                                    6,549,073     6,986,067
                                                                   -----------   -----------
  Loss before income taxes (benefit)                                 (340,720)     (313,330)
  
  Income taxes (benefit)                                               14,953       (24,807)
                                                                   -----------   -----------
  Net loss                                                           (355,673)     (288,523)
                                                                   ===========   ===========
  
  
  
  
  Loss per common share                                                ($0.46)       ($0.37)
                                                                   ===========   ===========
  Weighted average number of shares outstanding                       780,625       780,625
                                                                   ===========   ===========
</TABLE>
  See notes to unaudited consolidated condensed financial statements.
  
                                                -3-


<TABLE>
        CUTCO INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
  (UNAUDITED)
                                                                       Three Months Ended
                                                                         December 31,
                                                                      1995          1994
     <S>                                                           <C>           <C>
  
  Revenues:                                                        -----------   -----------
     Owned retail stores                                           $2,415,502    $2,687,005 
     Sales of equipment and products                                   52,522        50,917 
     Royalties and service fees                                       418,148       552,521 
     Franchise fee income                                              59,879        55,854 
     Interest and dividend income                                      21,406        31,241 
     Other income, net                                                 12,790        20,573 
     Loss on sale or abandonment of fixed assets, net                 (61,414)      (43,000)
                                                                   -----------   -----------
                                                                    2,918,833     3,355,111 
                                                                   -----------   -----------
  Costs and Expenses:                                                                                                              
     Direct costs of owned retail stores                            2,276,528     2,609,033 
     Costs of equipment and products sold                              41,778        31,192 
     Depreciation and amortization                                    147,736       145,429 
     Selling, general and administrative expenses                     672,282       761,955 
     Interest expense                                                   9,379         8,383 
                                                                   -----------   -----------
                                                                    3,147,703     3,555,992 
                                                                   -----------   -----------
                                                                                                                                   
                                                                                                                                   
  Loss before income taxes                                           (228,870)     (200,881)
  Income taxes                                                          7,301         3,466 
                                                                   -----------   -----------
  Net loss                                                          ($236,171)    ($204,347)
                                                                   ===========   ===========
  
  Loss per common share                                                ($0.30)       ($0.26)
                                                                   ===========   ===========
  Weighted average number of shares outstanding                       780,625       780,625 
                                                                   ===========   ===========
</TABLE>
  See notes to unaudited consolidated condensed financial statements.
  
                                                -4-


<TABLE>
        CUTCO INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
  SIX MONTHS ENDED DECEMBER 31, 1995
  
  
  
                                Common Stock             Additional                             Treasury Stock                     
                            Shares          Amount          Capital        Earnings         Shares          Amount          Total  
                         -------------   -------------   -------------   -------------   -------------   -------------  ------------
  <S>                     <C>              <C>           <C>             <C>              <C>           <C>             <C>
                                                                                                                                   
  Balance at July 1, 1995 1,883,706        $188,371      $4,185,250      $2,319,101       1,103,081     ($3,481,592)    $3,211,130 
                                                                                                                                   
  Net loss                                                                 (355,673)                                      (355,673)
                                                                                                                                   
                       -------------   -------------   -------------   -------------   -------------   -------------  -------------
  Balance at December 31,
   1995 (Unaudited)       1,883,706        $188,371      $4,185,250      $1,963,428       1,103,081     ($3,481,592)    $2,855,457 
                       =============   =============   =============   =============   =============   =============  =============
  See notes to unaudited consolidated condensed financial statements.       
                                                -5-                                                                                
</TABLE>

<TABLE>
  CUTCO INDUSTRIES, INC. AND SUBSIDIARIES                                             
                                                                                     Six Months Ended
  CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)                           December 31,
                                                                                -----------------------------
                                                                                    1995            1994
     <S>                                                                           <C>             <C>
                                                                                -------------   -------------
  CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                      ($355,673)      ($288,523)
     Adjustments to reconcile net loss to net                                                                                      
       cash used in operating activities:                                                                                          
         Depreciation and amortization                                               294,341         286,093 
         Provision for doubtful accounts and notes receivable                         60,000          25,000 
         Loss on sale and abandonment of property, plant,                                                                          
           and equipment                                                             106,662          55,934 
         Changes in operating assets and liabilities, net of acquisition effect                                                    
           (Increase) decrease in:                                                                                                 

             Notes and accounts receivable                                            76,474          15,052 
             Merchandise inventory                                                    22,014         (19,554)
             Prepaid and refundable income taxes                                      24,340         (12,182)
             Prepaid expenses and miscellaneous receivables                           37,334         (15,143)
             Deposits                                                                 (5,245)         (4,905)
             Deferred charges and other                                                3,341          (2,767)
           Increase (decrease) in:                                                                                                 
             Accounts payable and accrued expenses                                    12,433          50,220 
             Accrued and withheld taxes, other than income taxes                    (118,419)        (90,934)
             Income taxes payable                                                    (18,407)        (33,966)
             Deposits payable                                                          2,520             789 
             Deferred franchise fee revenue, net                                    (101,865)        (83,255)
                                                                                -------------   -------------
     Net cash used in operating activities                                            39,850        (118,141)
                                                                                -------------   -------------
     Cash flows from investing activities:                                                                                         
       Purchases of property, plant and equipment                                   (216,235)       (286,867)
       Decrease (increase) in marketable securities                                   (2,655)        373,838 
       Proceeds from sale of property, plant, and equipment                           14,070                                       
       Payment for salon acquired                                                    (15,000)        (22,000)
                                                                                -------------   -------------
     Net cash used in investing activities                                          (219,820)         64,971 
                                                                                -------------   -------------
     Cash flows from financing activities:                                                                                         
       Principal payments on loans                                                   (40,216)        (33,708)
                                                                                -------------   -------------
     Net cash used in financing activities                                           (40,216)        (33,708)
                                                                                -------------   -------------
     Net decrease in cash and cash equivalents                                      (220,186)        (86,878)
     Cash and cash equivalents at beginning of year                                1,096,793         691,579 
                                                                                -------------   -------------
     Cash and cash equivalents at end of period                                     $876,607        $604,701                       
        =============
  Supplemental disclosures of cash flow information:                                                                               
     Cash paid during the period for:                                                                                              
       Interest                                                                      $10,659         $16,050 
       Income taxes                                                                   $7,387         $14,383 
     Non cash investing and financing activities:                                                                                  
       Notes payable in connection with acquisition of salon                         $20,000         $10,000 
       Notes and accounts receivable forgiven in connection                                                                        
          with acquisition of salon                                                  $49,960 

</TABLE>
 See notes to unaudited consolidated condensed financial statements.



                                                 -6-



                          CutCo Industries, Inc.
  
       Notes to Unaudited Consolidated Condensed Financial Statements
  
                             December 31, 1995
        
  
  
  
  
    Note 1 - Financial Statements
  
             The accompanying unaudited consolidated condensed  financial 
             statements  have been prepared without audit  in  accordance 
             with  generally accepted accounting principles  for  interim 
             financial information and with the instructions to Form  10-
             QSB    of   the   Securities   and   Exchange    Commission.   
             Accordingly, they do not include all of the information  and 
             footnotes   required   by  generally   accepted   accounting 
             principles  for  complete  financial  statements.   In   the 
             opinion of management, all adjustments (consisting of normal 
             recurring   accruals)  considered  necessary  for   a   fair 
             presentation have been included.  Operating results for  the 
             six and three month periods ended December 31, 1995 are  not 
             necessarily  indicative of the results that may be  expected 
             for the year ending June 30, 1996.  For further information, 
             refer to the consolidated financial statements and footnotes 
             as of June 30, 1995 included in the Company's Annual  Report 
             on Form  10-KSB for the  Company's fiscal year  then  ended. 
                                     -7-



    Item 2.  Management's Discussion and Analysis of
             Financial Condition and Results of Operations
     
  
    Liquidity and Capital Resources:
  
             Cash  and  cash equivalents were $876,607  at  December  31,   
             1995,  as  compared  to  $604,701  at  December  31,   1994.  
             Additionally, at December 31, 1995, the Company had $270,241 
             of  marketable  securities,  as  compared  to  $500,069   at 
             December 31, 1994.  The Company had a current ratio of  1.97 
             at December 31, 1995, as compared to 2.11 at June 30,  1995, 
             and 2.25 at December 31, 1994. 
  
             At  December 31, 1995, commitments for capital  expenditures 
             and  other  investments  did  not  exceed  $200,000,   which 
             commitments were for acquisition or construction of  salons, 
             salon  refurbishing,  and other  investments.   The  Company 
             believes  its  working capital is adequate  to  support  its 
             operations for at least the next twelve months. 
  
             Results of Operations:
  
             Revenues from Company-owned hair salon operations  decreased 
             by  5.6% ($295,717) and 10.1% ($271,503),  respectively,  in 
             the  six  and three month periods ended December  31,  1995. 
             Comparable store sales operating throughout each of the  six 
             and  three  month periods ended December 31, 1995  and  1994 
             declined by 5.9% and 6.9%, respectively.  As of December 31, 
             1995, there were 46 Company-owned salons, compared to 56  at 
             December  31,  1994.   During the  six  month  period  ended   
             December  31,  1995, the Company acquired one salon  from  a 
             licensee,  opened three salons, sold two salons  and  closed 
             nine  salons.  Management will continue  to  close  existing 
             salons that do not meet its cash flow criteria. 
  
             Direct costs of Company-owned hair care salons decreased  by 
             6.6%  ($335,031) and 12.7% ($332,505), respectively, in  the 
             six  and  three month periods ended December 31,   1995,  as 
             compared  to  the same periods in  1994.    Advertising  and 
             promotion  and  occupancy costs increased as  a  percent  of 
             sales in 1995 as compared to the same periods last year.  
  
             Sales  of  equipment  and  products  declined  by  $548  and 
             increased  by  $1,605, respectively, in the  six  and  three 
             month  periods  ended December 31, 1995 as compared  to  the 
             same  periods in 1994.  Correspondingly, cost  of  equipment 
             and   products  sold  increased  by  $21,353  and   $10,586, 
             respectively, reflecting lower  margins.   
                                      -8-



             Consolidated  royalties and service fees decreased by  10.2% 
             ($118,695)  and 24.3% ($134,373), respectively, in  the  six 
             and three month periods ended December 31, 1995, as compared
             to the same periods in 1994.  The decreases are due to a
             lower  average  number of franchised units operating  and  a 
             decrease in comparable store sales. The Company expects  the 
             decline in royalties to continue.  The number of hair  salon 
             franchised outlets at December 31, 1995 was 305, as compared 
             to 309 at December 31, 1994. 
  
             Franchise  fee income increased in the six and  three  month 
             periods  ended  December  31, 1995 by  $23,396  and  $4,025, 
             respectively,  as  compared  to the same  periods  in  1994.  
             Franchise  fee  income  increased  primarily  due  to    the 
             recording of a franchise fee from the opening of a salon  by 
             a  new  licensee.  Franchise fees related to  the  New  Area 
             Development  Program  will  begin to  decline  as  the  note 
             payments cease at varying maturities.
  
             The number of franchised salons has been steadily decreasing 
             for   several  years  and  management  believes  that   such 
             decreases  will continue for the foreseeable future.  It  is 
             likely  that  the downward trend in franchise  revenues  and 
             revenues from sales of equipment and products will  continue 
             for as long as the downward trend in the number of franchise 
             salons continues. Inflation has not materially affected  the 
             Company's  revenues  and income during the past  two  fiscal 
             years. 
  
             Interest  and  dividend income in the six  and  three  month 
             periods  ended  December 31, 1995 decreased by  $16,369  and 
             $9,835,  respectively,  due to a decline in  the  amount  of 
             invested assets. 
  
             Selling,  general, and administrative expenses decreased  by 
             8.7%  ($134,950) and 11.8% ($89,673), respectively,  in  the 
             six  and  three month periods ended December 31,   1995,  as 
             compared to the same periods in 1994.  The decreases in 1995 
             are due in part to lower general and administrative  payroll 
             costs  which  will continue throughout  the  current  fiscal 
             year. 
  
             The effective income tax benefit was 7.9% in the six   month 
             period  ended December 31, 1994.   In 1995 the  Company  was 
             not  able  to utilize for federal income  tax  purposes  its 
             operating  losses.   Additionally, since the  Company  files 
             separate   subsidiary  state  income  tax  returns,   versus 
             consolidated  returns,  it was not able  to  offset  certain 
             subsidiary  losses against other subsidiary income  in   the 
             1995 and 1994 periods.     
                                      -9-



              Part II - Other Information
  
  
     
    Item 6.  Exhibits and Reports on Form 8-K
  
             a)  Not Applicable.
  
             b)  None.
                                        -10-



                      CUTCO INDUSTRIES, INC. AND SUBSIDIARIES
  
                                     SIGNATURES
  
  
  
  
  
  
       Pursuant  to the requirements of the Exchange Act, the  Registrant 
  
       caused this report to be signed on its behalf by the  undersigned, 
  
       thereunto duly authorized.
  
  
  
                                     CUTCO INDUSTRIES, INC.
  
                                     (Registrant)
  
  
  
  
                                     s/DON vonLIEBERMANN
                                     ____________________________________
                                             DON vonLIEBERMANN
                                                 President
  
  
  
                                     s/MICHAEL KRAMER
                                     ____________________________________
                                               MICHAEL KRAMER
                                            Principal Financial &
                                          Chief Accounting Officer
  
  
  
  
  
        DATE:   February 13, 1996
                                         -11-