SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K
                        FOR ANNUAL AND TRANSITION REPORTS
                        PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

      For the fiscal year ended December 31, 1997

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934

      For the transition period from __________ to ___________

                         Commission File Number 1-13612

                              CONGOLEUM CORPORATION
             (Exact name of Registrant as specified in its Charter)

DELAWARE                                                            02-0398678
(State or other Jurisdiction of              (IRS Employer Identification No.)
 Incorporation or Organization)

                             3705 Quakerbridge Road
                                  P.O. Box 3127
                           Mercerville, NJ 08619-0127
                    (Address of principal executive offices)
                        Telephone number: (609) 584-3000
              (Registrant's telephone number, including area code)

           Securities Registered Pursuant to Section 12(b) of the Act:

                                                  Name of each exchange on
      Title of each class                              which registered
      -------------------                              ----------------

Class A Common Stock, par value $.01 per share    New York Stock Exchange, Inc.

        Securities Registered Pursuant to Section 12(g) of the Act: None


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<PAGE>

      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

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

      As of March 3, 1998, the aggregate market value of all shares of Class A
Common Stock held by non-affiliates of the Registrant was approximately $43.4
million based on the closing price ($10.19 per share) on the New York Stock
Exchange. For purposes of determining this amount, affiliates are defined as
directors and executive officers of the Registrant and, American Biltrite Inc.
and Hillside Capital Incorporated. All of the shares of Class B Common Stock of
the Registrant are held by affiliates of the Registrant. As of March 3, 1998, an
aggregate of 4,282,800 shares of Class A Common Stock and an aggregate of
4,755,000 shares of Class B Common Stock of the Registrant were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE
                      -----------------------------------

      Part  II.         Portions of the Company's Annual Report to
                        Shareholders for the year ended December 31, 1997

      Part III.         Portions of the Company's Proxy Statement for the Annual
                        Meeting of Shareholders to be held on May 14, 1998

      Some of the information presented in or incorporated by reference in this
report constitutes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Although the Registrant
believes that its expectations are based on reasonable assumptions, within the
bounds of its knowledge of its business and operations, there can be no
assurance that actual results will not differ materially from its expectations.
Factors that could cause actual results to differ from expectations include: (i)
increases in raw material prices, (ii) increased competitive activity from
companies in the flooring industry, some of which have greater resources and
broader distribution channels than the Registrant, (iii) unfavorable
developments in the national economy or in the housing industry in general, (iv)
shipment delays, depletion of inventory and increased production costs resulting
from unforeseen disruptions of operations at any of the Registrant's facilities
or distributors and (v) the future cost and timing of payments associated with
environmental, product and general liability claims.


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<PAGE>

                                     PART I

Item 1. BUSINESS

      Congoleum Corporation (the "Company") was incorporated in Delaware in
1986, but traces its history in the flooring business back to Nairn Linoleum Co.
which began in 1886. On March 11, 1993 (effective on February 28, 1993), the
business and assets of the Company and those of the Amtico Tile Division of
American Biltrite Inc. (the "Tile Division") were combined (the "Acquisition").
The Acquisition was effected through the organization of a new corporation,
Congoleum Holdings Incorporated ("Congoleum Holdings"), to which Hillside
Industries Incorporated ("Hillside Industries") contributed all of the
outstanding capital stock of Resilient Holdings Incorporated ("Resilient"), the
owner of all of the outstanding capital stock of the Company, and to which
American Biltrite Inc. ("American Biltrite") contributed the assets and certain
liabilities of the Tile Division. Upon consummation of the Acquisition,
Congoleum Holdings owned all of the outstanding capital stock of Resilient,
which, in turn, owned all of the outstanding capital stock of the Company, and
the Company owned the Tile Division. The assets and liabilities comprising the
Tile Division which were acquired by the Company in the Acquisition are held
directly by the Company. On February 8, 1995, the Company completed a public
offering of 4,650,000 shares of Class A Common Stock (the "Offering"). Upon
completion of the Offering, the Company implemented a Plan of Repurchase
pursuant to which its two-tiered holding company ownership structure was
eliminated through the merger of Congoleum Holdings with and into the Company,
with the Company as the surviving corporation.

      Congoleum produces both sheet and tile floor covering products with a wide
variety of product features, designs and colors. Sheet flooring, in its
predominant construction, is produced by applying a vinyl gel to a flexible felt
or a vinyl (for perimeter installed products) backing, printing a design on the
gel, applying a wearlayer, heating the gel layer sufficiently to cause it to
expand into a cushioned foam and, in some products, adding a high-gloss coating.
The Company also produces through-chip inlaid products for both residential and
commercial markets. These products are produced by applying an adhesive coat and
solid vinyl colored chips to a felt backing and laminating the sheet under
pressure with a heated drum. Tile flooring is manufactured by creating a base
stock (consisting primarily of limestone and vinyl resin) which is less flexible
than the backings for sheet flooring, and transferring or laminating to it
preprinted colors and designs followed by a wearlayer and a urethane coating in
some cases. Commercial tile is manufactured by including colored vinyl chips in
the pigmented base stock. For do-it-yourself tile, an adhesive is applied to the
back of the tile. The differences between products within each of the two
product lines consist primarily of content and thickness of wearlayers and
coatings, the use of chemical embossing to impart a texture, the complexity of
designs and the number of colors.

Raw Materials

      The principal raw materials used in the manufacture of sheet and tile
flooring are vinyl resins, plasticizers, latex, limestone, stabilizers,
cellulose paper fibers, urethane and transfer print paper. Most of these raw
materials are purchased from multiple sources. The Company has had no


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<PAGE>

difficulty in obtaining its requirements for these materials, although
significant price increases in certain materials have been experienced at times.

      The Company believes that alternative suppliers are available for
substantially all of its raw material requirements. However, the Company does
not have readily available alternative sources of supply for specific designs of
transfer print paper, which are produced utilizing print cylinders engraved to
the Company's specifications. Although no loss of this source of supply is
anticipated, replacement could take a considerable period of time and interrupt
production of certain products. The Company maintains a raw material inventory
and has an ongoing program to develop new sources which will provide continuity
of supply for its raw material requirements.

Patents and Trademarks

      The Company believes that the Congoleum brand name, as well as the other
trademarks it holds, are important to maintaining competitive position. In 1993,
the Company sold the rights to the Amtico trademark in the United States and
began selling tile under the Congoleum brand name.

      The Company also believes that patents and know-how play an important role
in maintaining competitive position. In particular, the Company utilizes a
proprietary transfer printing process for certain tile products that it believes
produces visual effects that only one other competitor is presently able to
duplicate.

Distribution

      The Company currently sells its products through approximately 35
distributors providing approximately 100 distribution points in the United
States and Canada, as well as directly to a limited number of mass market
retailers. The sales pattern is seasonal, with peaks in retail sales typically
occurring during March/April/May and September/October. Orders are generally
shipped as soon as a truckload quantity has been accumulated, and backorders can
be canceled without penalty. At December 31, 1997, the backlog of unshipped
orders was $7.5 million, compared to $12.3 million at December 31, 1996.

      The Company considers its distribution network very important to
maintaining competitive position. While most of its distributors have marketed
the Company's products for many years, replacements are necessary periodically
to maintain the strength of the distribution network. Although the Company has
more than one distributor in many of its distribution territories and actively
manages its credit exposure to its customers, the loss of a major customer could
have a materially adverse impact on the Company's sales, at least until a
suitable replacement was in place. For the year ended December 31, 1997, two
customers each accounted for over 10% of the Company's sales. These customers
were its distributor to the manufactured housing market, LaSalle-Bristol, and
its distributor in the Southwest and on the West Coast, LD Brinkman & Co.


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<PAGE>

Working Capital

      The Company produces goods for inventory and sells on credit to customers.
Generally, the Company's distributors carry inventory as needed to meet local or
rapid delivery requirements. Credit sales are typically subject to a discount if
paid within terms.

Product Warranties

      The Company offers a limited warranty on all of its products against
manufacturing defects. In addition, as a part of efforts to differentiate mid
and high-end products through color, design and other attributes, the Company
offers enhanced warranties with respect to wear, moisture discoloration and
other performance characteristics which increase with the price points of such
products.

Competition

      The market for the Company's products is highly competitive. Resilient
sheet and tile compete for both residential and commercial customers primarily
with carpeting, hardwood, melamine laminate and ceramic tile. In residential
applications, both tile and sheet products are used primarily in kitchens,
bathrooms, laundry rooms and foyers and, to a lesser extent, in playrooms and
basements. Ceramic tile is used primarily in kitchens, bathrooms and foyers.
Carpeting is used primarily in bedrooms, family rooms, and living rooms.
Hardwood flooring and melamine laminate are used primarily in family rooms,
foyers, and kitchens. Commercial grade resilient flooring faces substantial
competition from carpeting, ceramic tile, rubber tile, hardwood flooring and
stone in commercial applications. The Company believes, based upon its market
research, that purchase decisions are influenced primarily by fashion elements
such as design, color and style, durability, ease of maintenance, price and ease
of installation. Both tile and sheet resilient flooring are easy to replace for
repair and redecoration and, in the Company's view, have advantages over other
floor covering products in terms of both price and ease of installation and
maintenance.

      The Company encounters competition from domestic and, to a much lesser
extent foreign manufacturers. Certain of the Company's competitors, including
Armstrong in the resilient category, have substantially greater financial and
other resources than the Company.

Research and Development

      The Company's research and development efforts concentrate on new product
development, trying to increase product durability and expanding technical
expertise in the manufacturing process. Expenditures for research and
development for the year ended December 31, 1997 were $3.7 million, compared to
$4.6 million and $3.7 million for the years ended December 31, 1996 and 1995.


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<PAGE>

Environmental Regulation

      Due to the nature of the Company's business and certain of the substances
which are or have been used, produced or discharged by the Company, the
Company's operations are subject to extensive federal, state and local laws and
regulations relating to the generation, storage, disposal, handling, emission,
transportation and discharge into the environment of hazardous substances. The
Company, pursuant to administrative consent orders signed at the time of
Hillside's acquisition of the Company in 1986 and in connection with a prior
restructuring, is in the process of implementing cleanup measures at its Trenton
sheet facility under New Jersey's Environmental Clean-up Responsibility Act, as
amended by the New Jersey Industrial Site Recovery Act. The Company does not
anticipate that the additional costs of these measures will be material. In
connection with the Acquisition of the Tile Division, American Biltrite signed a
similar consent order with respect to the Trenton tile facility, and the Company
agreed to be financially responsible for any cleanup measures required. In 1997,
the Company incurred capital expenditures of approximately $1.1 million for
environmental compliance and control facilities.

      The Company has historically expended substantial amounts for compliance
with existing environmental laws and regulations, including those matters
described above. The Company will continue to be required to expend amounts in
the future, due to the nature of historic activities at its facilities, to
comply with existing environmental laws, and those amounts may be substantial
but should not, in the Company's judgment, have a material adverse effect on the
financial position of the Company. Because environmental requirements have grown
increasingly strict, however, the Company is unable to determine the ultimate
cost of compliance with environmental laws and enforcement policies.

Employees

      At December 31, 1997, the Company employed a total of 1,234 personnel
compared to 1,332 employees at December 31, 1996.

      The Company has entered into collective bargaining agreements with hourly
employees at three of its plants and with the drivers of the trucks that provide
interplant transportation. These agreements cover approximately 685 of the
Company's employees. The Trenton tile plant has a three-year collective
bargaining agreement which expires in May 1998. The Marcus Hook plant has a
three-year collective bargaining agreement which expires in November 1998. The
Trenton sheet plant has a five-year collective bargaining agreement which
expires in February 2001. The Finksburg plant has no union affiliation. In the
past five years, there have been no significant strikes by employees at the
Company and the Company believes that its employee relations are satisfactory.


                                        6
<PAGE>

Executive Officers of the Registrant

      The following information is furnished with respect to each of the
executive officers of the Company, each of whom is elected by and serves at the
pleasure of the Board of Directors. The business experience shown for each
officer has been his principal occupation for at least the past five years. Ages
are shown as of February 1, 1998.

Roger S. Marcus (Age 52)

Roger S. Marcus has been a Director and President and Chief Executive Officer of
the Company since March 1993, and Chairman since December 1994. Mr. Marcus is
also a Director (since 1981), Chairman of the Board (since 1992) and Chief
Executive Officer (since 1983) of American Biltrite. From 1983 to 1992, Mr.
Marcus served as Vice Chairman of the Board of American Biltrite.

Richard G. Marcus (Age 50)

Richard G. Marcus has been Vice Chairman of the Company since December 1994, and
a Director since March 1993. Mr. Marcus is also a Director (since 1982) and
President (since 1983) and Chief Operating Officer (since 1992) of American
Biltrite.

Robert N. Agate (Age 53)

Robert N. Agate has been Senior Vice President - Manufacturing of the Company
since March 1993. Prior thereto, he was Vice President of Manufacturing of the
Tile Division of American Biltrite (since 1981).

Howard N. Feist III (Age 41)

Howard N. Feist III has been Senior Vice President - Finance and Secretary of
the Company since March 1993. Prior thereto, he had served as Vice President -
Finance and Secretary of the Company since 1988.

Dennis P. Jarosz (Age 52)

Dennis P. Jarosz has been Senior Vice President - Marketing since July 1995.
Prior thereto, he had served as Vice President - Marketing since March 1993 and
Vice President - Sales & Marketing of the Tile Division of American Biltrite
(since 1986).

Anthony C. Prestipino (Age 50)

Anthony C. Prestipino has been Senior Vice President - Sales of the Company
since November 1995. Prior thereto, he was Vice President - Sales & Marketing
for commercial products of the Karastan Bigelow Division of Mohawk Industries
and Fieldcrest Cannon (since 1989).


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<PAGE>

Peter J. Rohrbacher (Age 46)

Peter J. Rohrbacher has been Senior Vice President - Research and Engineering of
the Company since May 1997. Prior thereto, he had served as Senior Vice
President - Engineering (since September 1993), Vice President - Coatings of the
Company (since March 1993), and Vice President - Research & Development
of the Tile Division of American Biltrite (since 1988).

Thomas A. Sciortino (Age 51)

Thomas A. Sciortino has been Senior Vice President - Administration of the
Company since March 1993. Prior thereto, he was Vice President - Finance of the
Tile Division of American Biltrite (since 1982).

Merrill M. Smith (Age 72)

Merrill M. Smith has been Senior Vice President - Technology of the Company
since March 1993. Prior thereto, he was Vice President - Technology of American
Biltrite (since 1985).


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<PAGE>

Item 2.  PROPERTIES

      The Company owns four manufacturing facilities located in Maryland,
Pennsylvania and New Jersey and leases corporate and marketing offices in
Mercerville, New Jersey, where it has a lease expiring in 2000, which are
described below:

    Location                 Owned/Leased     Usage              Square Feet
    --------                 ------------     -----              -----------

    Finksburg, MD            Owned            Felt                   107,000
    Marcus Hook, PA          Owned            Sheet Flooring       1,000,000
    Trenton, NJ              Owned            Sheet Flooring       1,050,000
    Trenton, NJ              Owned            Tile Flooring          282,000
    Mercerville, NJ          Leased           Corporate Offices       33,594

       The Finksburg facility consists primarily of a 16-foot wide felt
production line.

       The Marcus Hook facility is capable of manufacturing rotogravure printed
sheet flooring in widths of up to 16 feet. Major production lines at this
facility include a 12-foot wide oven, two 16-foot wide ovens, a 12-foot wide
printing press and a 16-foot wide printing press.

       The Trenton sheet facility is capable of manufacturing rotogravure
printed and through-chip inlaid sheet products in widths up to 6 feet. Major
production lines, all six-foot wide, include an oven, a rotary laminating line
and a press. The examination, packing and warehousing of all sheet products
(except products for the manufactured housing segment) occur at the Trenton
plant distribution center.

       The Trenton tile facility consists of three major production lines, a
four foot wide commercial tile line, a two-foot wide residential tile line and a
one-foot wide residential tile line.

       Productive capacity and extent of utilization of the Company's facilities
are dependent on a number of factors, including the size, construction, and
quantity of product being manufactured, some of which also dictate which
production line(s) must be utilized to make a given product. The Company's major
production lines were operated an average of 75% of the hours available on a
five-day, three-shift basis in 1997, with the corresponding figure for
individual production lines ranging from 25% to 115%.

       Although many of the Company's manufacturing facilities have been
substantially depreciated, the Company has generally maintained and improved the
productive capacity of these facilities over time through a program of regular
capital expenditures. The Company increased capital spending in 1997 to
accelerate improvements to its manufacturing facilities and equipment, including
the refurbishment of an oven line at its Marcus Hook facility. The Company
considers its manufacturing facilities to be adequate for its present and
anticipated near-term production needs.


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<PAGE>

Item 3.  LEGAL PROCEEDINGS

As of December 31, 1997 the Company was named as defendant, together in most
cases with numerous other companies, in approximately 654 currently pending
lawsuits (including worker's compensation cases) involving approximately 6,455
individuals alleging personal injury from exposure to asbestos or
asbestos-containing products. The plaintiffs in these cases, as well as similar
cases in the past which have been settled or dismissed, allege that they or the
individuals they represent have contracted asbestosis, pleural thickenings,
mesothelioma, cancer or other lung disease as a result of exposure to asbestos
in the course of their activities as plumbers, carpenters, floor installers,
machinists, or in other capacities, either as independent contractors or as
employees of shipyards or other industries utilizing asbestos-containing
products (or, in the worker's compensation cases, as employees of the Company or
the Tile Division) and that included among such products which caused their
diseases were sheet products provided by the Company or resilient tile provided
by the Tile Division, or both. The Company discontinued the manufacture of
asbestos-containing sheet products in 1983, and the Tile Division ceased
manufacturing asbestos-containing tile products in 1984. In general,
asbestos-containing products have not been found to pose a health risk unless
the asbestos becomes airborne. All of the asbestos in asbestos-containing sheet
and tile products sold by the Company or the Tile Division was fully bonded or
encapsulated during the manufacturing process. The Company has issued warnings
not to remove asbestos-containing flooring by sanding or other methods that
allow the asbestos fibers to become airborne. Although there can be no
assurance, the Company believes, based upon the nature of its
asbestos-containing products and its experience with cases to date, that any
potential liability from pending personal injury claims relating to the
Company's asbestos-containing resilient products will not have a material
adverse effect in the aggregate on the financial position of the Company. In one
of these cases tried before a jury in Superior Court of California in Los
Angeles held in May and June 1997, the Company and another defendant were found
liable for $3.2 million in damages, subject to proportional liability under
California law. The jury found that the Company was liable for only 25% of the
plaintiff's non-economic damages but as a result of post-verdict motions the
trial judge purportedly granted plaintiffs' motion for judgment notwithstanding
the verdict and held that California Proposition 51 (establishing proportionate
liability for non-economic damages) did not apply in this case. The Company and
the other defendant have appealed this decision. The Company's insurance carrier
has paid for the defense costs incurred and has indicated that it would be
responsible for paying the ultimate judgment in the case, subject to certain
limitations.

Together with a large number (in most cases, hundreds) of other companies, the
Company is named as a "Potentially Responsible Party" ("PRP") in pending
proceedings under the federal Comprehensive Environmental Response, Compensation
and Liability Act, as amended ("CERCLA"), and similar state laws. In four
instances, although not named as a PRP, the Company has received a "Request for
Information." These pending proceedings currently relate to ten waste disposal
sites in New Jersey, Pennsylvania, Maryland, Connecticut and Delaware in which
recovery from generators of hazardous substances is sought for the cost of
cleaning up the contaminated waste disposal sites. Although there can be no
assurances, the Company anticipates that these proceedings will be resolved over
a period of years for amounts (including legal fees and other defense costs)
which the Company believes based on current estimates of liability and, in part,
on insurance


                                       10
<PAGE>

coverage agreements, will not have a material adverse effect on the financial
position of the Company.

On July 15, 1994, Kentile Floors, Inc. ("Kentile"), a debtor-in-possession
pursuant to Chapter 11 of the United States Bankruptcy Code, commenced an
adversary proceeding against the Company in the Bankruptcy Court for the
Southern District of New York. The complaint asserts that the Company tortiously
interfered with certain of Kentile's contracts with its distributors when those
distributors terminated their agreements with Kentile to become distributors of
the Company's floor tile. Kentile seeks $15.0 million in damages on account of
the alleged interference. Although the Company's motion to have the proceeding
dismissed on the pleadings was denied, the Company believes that Kentile's claim
is without merit and intends to vigorously contest the lawsuit.

In connection with the Chapter 11 cases of Color Tile, Inc. and certain
affiliated companies which were commenced on January 24, 1996 and remain pending
in the United States Bankruptcy Court for the District of Delaware, the
unsecured creditors' committee of Color Tile commenced an adversary proceeding
against the Company in January 1998 seeking the avoidance and recovery of
certain payments aggregating $2.6 million made to the Company as allegedly
voidable preferential and postpetition transfers under the Bankruptcy Code and
the turnover of $150,000 constituting an alleged deposit of Color Tile with the
Company. The Company has not yet answered the complaint but disputes the
allegations made and intends to vigorously defend its position.


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

None.


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                                     PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS

 The information required by this item is incorporated by reference to all
information under the caption "Market Information" on page 25 of the Company's
Annual Report to Shareholders for the year ended December 31, 1997 (included as
Exhibit 13.1 to this Annual Report on Form 10-K).


Item 6. SELECTED FINANCIAL DATA

 The information required by this item is incorporated by reference to all
information under the heading "Selected Financial Data" on page 6 of the
Company's Annual Report to Shareholders for the year ended December 31, 1997
(included as Exhibit 13.1 to this Annual Report on Form 10-K).


Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

 The information required by this item is incorporated by reference to all
information under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 7 through 9 of the Company's
Annual Report to Shareholders for the year ended December 31, 1997 (included as
Exhibit 13.1 to this Annual Report on Form 10-K).


Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The financial statements of the Company are incorporated by reference and
the financial statement schedule is included in this report on Form 10-K, as
listed in Item 14(a) Part IV of this report.


Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE

        Not applicable.


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                                    PART III

Item 10.    DIRECTORS AND EXECUTIVE  OFFICERS OF THE REGISTRANT

Item 11.    EXECUTIVE COMPENSATION

Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT

Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information called for by these Items (except for the information
regarding executive officers called for by Item 401 of Regulation S-K which is
included in Part I hereof in accordance with General Instruction G(3)), is
hereby incorporated by reference to the Registrant's definitive Proxy Statement
for its Annual Meeting of Shareholders to be held on May 14, 1998.


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<PAGE>

                                     PART IV

Item 14.    EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
            ON FORM 8-K

    (a)(1)  The following financial statements of the Company and the report of
    independent auditors are incorporated herein by reference to pages 10 to 24
    in the Company's Annual Report to Shareholders for the year ended December
    31, 1997 (included as Exhibit 13.1 to this Annual Report on Form 10-K).

<TABLE>
<CAPTION>
                                                                           Page Number
                                                                           -----------

        <S>                                                                     <C>
        Report of Independent Auditors                                          24
        Balance Sheets as of December 31, 1997 and December 31, 1996            10
        Statements of Operations for the years ended December 31, 1997,
            1996 and 1995                                                       11
        Statements of Changes in Stockholders' Equity for the years ended
            December 31, 1997, 1996 and 1995                                    12
        Statements of Cash Flows for the years ended December 31, 1997,
            1996 and 1995                                                       13
        Notes to Financial Statements                                           14
        Supplementary Data
              Quarterly Financial Data (Unaudited)                              23
</TABLE>

    (2) The following financial statement schedule is included in this report on
Form 10-K:

                                                                     Page Number
                                                                     -----------

           Schedule II - Valuation and Qualifying Accounts                21

        All other schedules are omitted because they are not required,
        inapplicable, or the information is otherwise shown in the financial
        statements or notes thereto.

    (3) Exhibits

  Exhibit
   Number                                    Exhibit
   ------                                    -------

      2.1    Plan of Repurchase dated as of February 1, 1995 by and among
             American Biltrite Inc., Hillside Industries Incorporated, Congoleum
             Holdings Incorporated, Resilient Holdings Incorporated and the
             Company.

      3.1    Certificate of Incorporation of the Company, as amended.

      3.2    Amended and Restated Bylaws of the Company.


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<PAGE>

  Exhibit
   Number                                    Exhibit
   ------                                    -------

      4.1    Financing Agreement, dated April 19, 1991 (the "CIT Financing
             Agreement"), by and among the CIT Group/Business Credit, Inc.
             ("CIT"), The Bank of New York Commercial Corporation ("BONY/CC"),
             Chemical Bank ("Chemical") and The Chase Manhattan Bank, N.A.
             ("Chase") (collectively, the "Senior Lenders") and the Company.

      4.2    First Amendment, dated March 11, 1993, to the CIT Financing
             Agreement by and among the Senior Lenders and the Company.

      4.3    Indenture, dated as of February 1, 1994, between the Company and
             Chemical Bank, as trustee.

      4.4    Registration Rights Agreement, dated as of February 8, 1995 by and
             between the Company and Hillside.

     10.1    The CIT Financing Agreement (see Exhibit 4.1).

     10.2    First Amendment to the CIT Financing Agreement (see Exhibit 4.2).

     10.8    Joint Venture Agreement, dated as of December 16, 1992, by and
             among Resilient Holdings, Hillside, the Company (collectively the
             "Congoleum Group"), Hillside Capital and American Biltrite.

     10.9    Closing Agreement, dated as of March 11, 1993, by and among the
             Congoleum Group, Hillside Capital and American Biltrite.

    10.12    Stockholders Agreement, dated as of March 11, 1993 (the
             "Stockholders Agreement"), by and among the Congoleum Group,
             American Biltrite and Congoleum Holdings.

  10.12.1    First Amendment, dated February 8, 1995, to the Stockholders
             Agreement, by and among Hillside, American Biltrite and the
             Company.

    10.13    Personal Services Agreement, dated as of March 11, 1993 (the
             "Personal Services Agreement"), by and between American Biltrite
             and the Company.

  10.13.1    First Amendment, dated February 8, 1995, to Personal Services
             Agreement, by and between American Biltrite and the Company.

  10.13.2    Second Amendment, dated November 15, 1996, to Personal Services
             Agreement, by and between American Biltrite and the Company.

  10.13.3    Third Amendment, dated as of March 10, 1998, to Personal Services
             Agreement, by and between American Biltrite and the Company.

    10.14    Business Relations Agreement, dated as of March 11, 1993, by and
             between American Biltrite and the Company.

  10.14.1    First Amendment, dated August 19, 1997, to Business Relations
             Agreement, by and between American Biltrite and the Company

    10.15    Tax Sharing and Indemnification Agreement, dated as of March 11,
             1993, by and among Congoleum Holdings, Resilient Holdings, Hillside
             Capital and the Company.

  10.15.1    Tax Sharing Agreement, dated as of November 1, 1996, between
             American Biltrite and the Company.


                                       15
<PAGE>

  Exhibit
   Number                                    Exhibit
   ------                                    -------

    10.19    Commitment Letter, dated January 19, 1994 regarding Financing
             Agreement dated April 19, 1991, as amended, by and among CIT,
             BONYCC and the Company.

    10.20    Trademark Purchase Agreement, dated November 29, 1993, by and
             between the Company and The Amtico Company LTD ("Amtico Company").

    10.21    First Right of Refusal, dated November 29, 1993, by and between
             American Biltrite (Canada) Limited and Amtico Company.

    10.22    Undertaking Concerning Amtico Trademark, dated November 29, 1993,
             by and between American Biltrite and Amtico Company.

    10.23    Form of 1995 Stock Option Plan.

  10.23.1    Form of Amendment to 1995 Stock Option Plan.

    10.24    License Agreement, dated as of September 20, 1995 between Congoleum
             Intellectual Properties, Inc. and the Company.

       11    Statement re: Computation of Per Share Earnings.

     13.1    Pages 6 through 25 of the Congoleum Annual Report to Shareholders
             for the year ended December 31, 1997.

     21.1    Subsidiaries of the Company.

     23.1    Consent of Ernst & Young LLP.

     23.2    Consent of Coopers & Lybrand L.L.P.

     23.3    Opinion of Coopers & Lybrand L.L.P.

     27.0    Financial Data Schedule

      (b)    Reports on Form 8-K.

                  None.


                                       16
<PAGE>

SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 24th day of
March, 1998.

                                    CONGOLEUM CORPORATION

                                    By:  /s/
                                         ---------------------------------------
                                    Roger S. Marcus
                                    President, Chairman & Chief Executive
                                    Officer
                                    (Principal Executive Officer)

      Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                   Title                                               Date
---------                   -----                                               ----

<S>                         <C>                                             <C>
/s/                         President, Chairman, Chief Executive Officer    March 24, 1998
------------------------    and Director (Principal Executive Officer)
Roger S. Marcus

/s/                         Senior Vice President - Finance                 March 24, 1998
------------------------    (Principal Financial and Accounting Officer)
Howard N. Feist

/s/                         Director                                        March 24, 1998
------------------------
Richard G. Marcus

/s/                         Director                                        March 24, 1998
------------------------
William M. Marcus

/s/                         Director                                        March 24, 1998
------------------------
John N. Irwin III

/s/                         Director                                        March 24, 1998
------------------------
Cyril C. Baldwin, Jr.

/s/                         Director                                        March 24, 1998
------------------------
David N. Hurwitz

/s/                         Director                                        March 24, 1998
------------------------
Mark N. Kaplan

/s/                         Director                                        March 24, 1998
------------------------
C. Barnwell Straut
</TABLE>


                                       17
<PAGE>

                                INDEX TO EXHIBITS


      Exhibit
       Number                                   Exhibit
       ------                                   -------

       ***2.1    Plan of Repurchase dated as of February 1, 1995 by and among
                 American Biltrite Inc., Hillside Industries Incorporated,
                 Congoleum Holdings Incorporated, Resilient Holdings
                 Incorporated and the Company.

     *****3.1    Certificate of Incorporation of the Company, as amended.

     *****3.2    Amended and Restated Bylaws of the Company.

        **4.1    Financing Agreement, dated April 19, 1991 (the "CIT Financing
                 Agreement"), by and among the CIT Group/Business Credit, Inc.
                 ("CIT"), The Bank of New York Commercial Corporation
                 ("BONY/CC"), Chemical Bank ("Chemical") and The Chase Manhattan
                 Bank, N.A. ("Chase") (collectively, the "Senior Lenders") and
                 the Company.

        **4.2    First Amendment, dated March 11, 1993, to the CIT Financing
                 Agreement by and among the Senior Lenders and the Company.

        **4.3    Indenture, dated as of February 1, 1994, between the Company
                 and Chemical Bank, as trustee.

       ***4.4    Registration Rights Agreement, dated as of February 8, 1995 by
                 and between the Company and Hillside.

       **10.1    The CIT Financing Agreement (see Exhibit 4.1).

       **10.2    First Amendment to the CIT Financing Agreement (see Exhibit
                 4.2).

       **10.8    Joint Venture Agreement, dated as of December 16, 1992, by and
                 among Resilient Holdings, Hillside, the Company (collectively,
                 the "Congoleum Group"), Hillside Capital and American Biltrite.

       **10.9    Closing Agreement, dated as of March 11, 1993, by and among the
                 Congoleum Group, Hillside Capital and American Biltrite.

      **10.12    Stockholders Agreement, dated as of March 11, 1993 (the
                 "Stockholders Agreement"), by and among the Congoleum Group,
                 American Biltrite and Congoleum Holdings.

    ***10.12.1   First Amendment, dated February 8, 1995, to the Stockholders
                 Agreement, by and among Hillside, American Biltrite and the
                 Company.

      **10.13    Personal Services Agreement, dated as of March 11, 1993 (the
                 "Personal Services Agreement"), by and between American
                 Biltrite and the Company.

    ***10.13.1   First Amendment, dated February 8, 1995, to Personal Services
                 Agreement, by and between American Biltrite and the Company.

      10.13.2    Second Amendment, dated November 15, 1996, to Personal Services
                 Agreement, by and between American Biltrite and the Company.

      10.13.3    Third Amendment, dated as of March 10, 1998, to Personal
                 Services Agreement, by and between American Biltrite and the
                 Company.


                                       18
<PAGE>

      Exhibit
       Number                                   Exhibit
       ------                                   -------

      **10.14    Business Relations Agreement, dated as of March 11, 1993, by
                 and between American Biltrite and the Company.

      10.14.1    First Amendment, dated August 19, 1997, to Business Relations
                 Agreement, by and between American Biltrite and the Company

      **10.15    Tax Sharing and Indemnification Agreement, dated as of March
                 11, 1993, by and among Congoleum Holdings, Resilient Holdings,
                 Hillside Capital and the Company.

      10.15.1    Tax Sharing Agreement, dated as of November 1, 1996, between
                 American Biltrite and the Company.

      **10.19    Commitment Letter, dated January 19, 1994 regarding Financing
                 Agreement dated April 19, 1991, as amended, by and among CIT,
                 BONYCC and the Company.

     ***10.20    Trademark Purchase Agreement, dated November 29, 1993, by and
                 between the Company and The Amtico Company LTD ("Amtico
                 Company").

     ***10.21    First Right of Refusal, dated November 29, 1993, by and between
                 American Biltrite (Canada) Limited and Amtico Company.

     ***10.22    Undertaking Concerning Amtico Trademark, dated November 29,
                 1993, by and between American Biltrite and Amtico Company.

     ***10.23    Form of 1995 Stock Option Plan.

******10.23.1    Form of Amendment to 1995 Stock Option Plan.

    ****10.24    License Agreement, dated as of September 20, 1995 between
                 Congoleum Intellectual Properties, Inc. and the Company.

           11    Statement re: Computation of Per Share Earnings.

         13.1    Pages 6 through 25 of the Congoleum Annual Report to
                 Shareholders for the year ended December 31, 1997.

     ****21.1    Subsidiaries of the Company.

         23.1    Consent of Ernst & Young LLP.

         23.2    Consent of Coopers & Lybrand L.L.P.

         23.3    Opinion of Coopers & Lybrand L.L.P.

         27.0    Financial Data Schedule.

-------------
**     Incorporated by reference to the exhibit bearing the same number filed
       with the Company's Registration Statement on Form S-1 (File No. 33-71836)
       declared effective by the Securities and Exchange Commission on January
       25, 1994).
***    Incorporated by reference to the exhibit bearing the same number filed
       with the Company's Registration Statement on Form S-1 (File No. 33-87282)
       declared effective by the Securities and Exchange Commission on February
       1, 1995.
    

                                       19
<PAGE>

****   Incorporated by reference to the exhibit bearing the same number filed
       with the Company's Annual Report on Form 10-K for the year ended December
       31, 1995.
*****  Incorporated by reference to the exhibit bearing the same number filed
       with the Company's Quarterly Report on Form 10-Q for the period ended
       June 30, 1996.
****** Incorporated by reference to the exhibit bearing the same number filed
       with the Company's Annual Report on Form 10-K for the year ended
       December 31, 1996


                                       20
<PAGE>

                                                                     SCHEDULE II
                              CONGOLEUM CORPORATION
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)
                                     -------

<TABLE>
<CAPTION>
                                                             Additions
                                                     ------------------------
                                       Balance at      Charged                                      Balance
                                       Beginning      to Costs/        Other                        at end
                                       of Period     Expenses (a)     Changes    Deductions (b)    of Period
                                       ---------     ------------     -------    --------------    ---------

<S>                                     <C>           <C>            <C>           <C>              <C>
Year ended December 31, 1997:
   Allowance for doubtful
       accounts and cash
       discounts                        $(3,406)      $    --        $   33 (c)    $   79           $(3,294)

Year ended December 31, 1996:
   Allowance for doubtful
       accounts and cash
       discounts                        $(5,095)      $  (600)       $   --        $2,289           $(3,406)

Year ended December 31, 1995:
   Allowance for doubtful
       accounts and cash
       discounts                        $(5,213)      $(2,800)       $  (55)(d)    $2,973           $(5,095)
</TABLE>

(a)   Uncollectible accounts charged to bad debt expense.
(b)   Balances written-off, net of recoveries.
(c)   Represents reduction of the allowance for doubtful accounts and cash
      discounts.
(d)   Represents increase of the allowance for doubtful accounts and cash
      discounts.


                                       21