================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

[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 1-457

                               BULOVA CORPORATION
             (Exact name of registrant as specified in its charter)

          New York                                             11-1719409
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.) 

                One Bulova Avenue, Woodside, New York 11377-7874
              (Address of principal executive offices) (Zip Code)

                                 (718) 204-3300
              (Registrant's telephone number, including area code)

        Securities registered pursuant to Section 12(b) of the Act: None

          Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, par value $5.00 per share
                                (Title of Class)             

  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]

  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                  
                      ------------                ------------

  As at February 27, 1998, 4,599,857 shares of Common Stock of the Registrant
were outstanding and the aggregate market value of voting stock held by non-
affiliates was approximately $2,100,000.

================================================================================

                                        1

                               BULOVA CORPORATION

                            INDEX TO ANNUAL REPORT ON
                             FORM 10-K FILED WITH THE
                        SECURITIES AND EXCHANGE COMMISSION

                      For The Year Ended December 31, 1997
<TABLE>
<CAPTION>

 Item                                                                       Page 
  No.                                                                        No. 
 ----                                                                      -----
                                    PART I 
  <S> <C>                                                                   <C>
   1  BUSINESS ..........................................................    3  

   2  PROPERTIES ........................................................    4  

   3  LEGAL PROCEEDINGS .................................................    4  

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

                                   PART II   

   5  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
       STOCKHOLDER MATTERS ..............................................    4  

   6  SELECTED FINANCIAL DATA ...........................................    5  

   7  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
        CONDITION AND RESULTS OF OPERATIONS .............................    5

  7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.........    9 

   8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .......................    9

   9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 
       ACCOUNTING AND FINANCIAL DISCLOSURE ..............................   23

                                   PART III  

  10  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ................   24

  11  EXECUTIVE COMPENSATION ............................................   25

  12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ....   26 

  13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ....................   27

                                    PART IV

  14  EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON 
       FORM 8-K .........................................................   28

</TABLE>

                                        2

                                    PART I

Item 1. Business.

  Bulova Corporation (together with its subsidiaries referred to herein as
"Registrant" or the "Company," unless the context otherwise requires) is a New
York corporation. Loews Corporation ("Loews") owns approximately 97% of
Registrant's outstanding Common Stock. See Item 12 below of this Form 10-K.

  Registrant is engaged in the distribution and sale of watches, clocks and
timepiece parts for consumer use. The principal watch brands are Bulova,
Caravelle, Accutron and Sportstime. Clocks are principally sold under the Bulova
brand name. The Registrant's market segment breakdown includes a luxury watch
line represented by Accutron, a mid-ranged priced watch brand represented by
Bulova, and a lower-priced watch line represented by Caravelle. In addition, the
Registrant's Sportstime by Bulova brand, with watches using names and logos of
various professional and college athletic teams, is sold at various price
levels.

  Bulova's principal markets are the United States and Canada, which accounted
for 89% and 11%, respectively, of sales. In most other areas of the world,
Registrant has appointed licensees who market watches under Registrant's
trademarks in return for a royalty. For additional information concerning
Registrant's sales in foreign markets, see Note 6 of the Notes to Consolidated
Financial Statements included in Item 8 of this Form 10-K.

  Registrant buys complete watches and clocks from foreign suppliers for
substantially all of its products. Watch movements, cases and other components
are also purchased from foreign suppliers. In the United States, most of
Registrant's consumer products are sold through major department stores, jewelry
store chains, and premium outlets through Registrant's commission sales force
and outside sales representatives. In Canada, Registrant, through a marketing
subsidiary, sells directly to retailers. The customer base is comprised of large
retailers, small local chains and local independent jewelry shops. In 1997, one
customer represented approximately 11% of sales. No other customer represented
more than 10% of the Company's sales.

  The business is intensely competitive. The principal methods of competition
are price, styling, product availability, aftersale service, warranty and
product performance. In all six categories, Registrant occupies a favorable
position of long standing. There are approximately ten major competitors with
well established names and positions in the principal markets in which
Registrant competes. At least three of these have sales and assets substantially
greater than Registrant. In addition, there are an indeterminate number of minor
competitors.

  It is characteristic of Registrant's business and of the watch industry
generally that customer receivables from watch sales are carried for relatively
long periods. Registrant grants its retailers seasonal credit terms, depending
on the product and date of sale. In certain circumstances, Registrant also
extends credit to its retailers on an interest-bearing basis.

  Any backlog of orders is not believed to be significant. The business is
seasonal; with the greatest sales coming in the third and fourth quarters in
expectation of the holiday selling season.

                                 Employees

  Registrant currently employs approximately 430 persons, approximately 130 of
whom are union members, and has experienced satisfactory labor relations. The
Company has comprehensive benefit plans for substantially all employees.

                                        3

Item 2. Properties.

  The Company owns an 80,000 square foot plant in Woodside, New York used for
executive and sales offices, watch distribution, service and warehouse purposes.
In addition, the Company leases a 71,000 square foot plant in Maspeth, New York,
for clock service and warehouse purposes, and a 25,000 square foot plant in
Toronto, Canada, for watch and clock sales and service.

Item 3. Legal Proceedings.

  Pending litigation includes various civil actions for damages. On the basis of
the facts presently known to it, management does not believe that these actions
will have a material adverse effect upon the financial condition or results of
operations of the Company.

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

  None.

                                    PART II

Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters.

MARKET PRICES

  The following table sets forth, for the periods indicated, the high and low
bid prices for the Company's Common Stock in the over-the-counter market as
reported by Carr Securities Corp. These quotations represent prices between
dealers and do not include retail mark-up, mark-down or commissions. They do not
represent actual transactions.

<TABLE>
<CAPTION>
                                        1997                      1996
                                ------------------------------------------------
                                  High        Low            High        Low
--------------------------------------------------------------------------------
<S>                               <C>         <C>            <C>          <C>
First Quarter .................    4 3/4       4 3/4         4 1/4        4 1/4
Second Quarter ................   10 1/2       4 3/4         4 1/4        4 1/4
Third Quarter .................   14          10 1/2         4 1/4        4 1/4
Fourth Quarter ................   15 5/8      14             4 3/4        4 1/4
</TABLE>

DIVIDEND INFORMATION

  The Company paid no dividends for the years ended December 31, 1997 and 1996.

APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

  There were approximately 1,500 holders of record of common stock of the
Company at February 27, 1998.

                                        4

Item 6. Selected Financial Data.

<TABLE>
<CAPTION>

Year Ended December 31                 1997     1996     1995     1994     1993
--------------------------------------------------------------------------------
(In thousands, except per share data)

<S>                                <C>      <C>      <C>      <C>      <C>
Results of Operations:
  Net sales ....................   $123,443 $115,113 $100,449 $ 93,724 $ 93,894
  Income from continuing
   operations ..................     10,016    7,001    2,269      532    1,911
  Earnings per share ...........       2.18     1.52      .49      .11      .41
  Net income ...................     10,016    7,001    2,632      834    2,514
  Earnings per share ...........       2.18     1.52      .57      .18      .54
  
Financial Position:
  Total assets .................    155,550  148,454  134,127  151,035  149,865
  Discontinued operations-net ..          -        -        -   20,082   15,445
  Long-term debt ...............          -        -        -      200      600
  Debt to affiliate ............          -        -        -   19,000   16,000
  Shareholders' equity .........     81,943   72,381   65,463   62,930   64,101
  Dividends per share ..........       None     None     None     None     None
  Shares of common stock 
   outstanding..................      4,599    4,599    4,599    4,599   4,599
</TABLE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

The Company generated net cash flow from operations of $13,094,000 for the year
ended December 31, 1997, as compared to $9,569,000 and $528,000 for the years
ended December 31, 1996 and 1995, respectively. The increase in net cash flow is
due primarily to the increased sales and collections from customers, and in
1996, the Benetton settlement noted below.

In January 1995, the Company sold its industrial and defense products segment
Bulova Technologies, Inc. ("BTI") for $20,810,000 in cash. The Company applied
$18,000,000 of the consideration received to the repayment of the entire debt
owed to its parent, Loews Corporation ("Loews") under the credit agreement (the
"Credit Agreement") described below, and the balance of the consideration was
added to working capital. Additionally, the Company assumed BTI's liabilities
with respect to postretirement health care benefits for employees of BTI who had
retired prior to the consummation of the sale.

On August 3, 1995, the Company collected $10,554,000, including $4,200,000 of
interest, from Loews related to a tax audit adjustment from the examination of
Loews's consolidated federal income tax returns for 1984 through 1990.

In the first quarter of 1996, the Company received approximately $3,857,000 in
cash from Benetton International, N.V. which represented damages, costs and
interest, as a result of an arbitration proceeding regarding an attempted
premature termination of a licensing agreement with the Company, which is
subject to return under certain circumstances.  See Note 9 of the Notes to
Consolidated Financial Statements.

In previous years the Company has relied on Loews, which owns approximately 97%
of the Company's common stock, to meet working capital needs which the Company
was not able to meet through internally generated funds. In 1979, the Company
entered into the Credit Agreement with Loews which provides, under

                                        5

terms and conditions set forth therein, for unsecured loans in amounts
aggregating up to $50,000,000.  The Credit Agreement has been periodically
extended by the Company and currently expires June 30, 1999. While Loews has no
obligation to enter into or maintain arrangements for any further borrowing, it
is anticipated that should the Company require working capital advances, they
would be provided by Loews under the Credit Agreement. See Note 2 of the Notes
to Consolidated Financial Statements.

The Company has not required any working capital advances from Loews since the
entire debt of $19,000,000 under the Credit Agreement was paid in January 1995
and expects to generate sufficient cash flow from operations in 1998 to fund
working capital requirements. Cash and cash equivalents, and investments
(primarily U.S. government securities and commercial paper) increased
$13,421,000, as compared to 1996, reflecting the improved results from
operations discussed below.

The Company has invested in property, plant and equipment in an effort to
improve warehouse operational efficiency. Capital expenditures related to this
project are estimated to be approximately $1,350,000, of which approximately
$563,000 was incurred in the year ended December 31, 1997.

Year 2000 Issue

Some of the Company's older computer programs were written using two digits
rather than four to define the applicable year.  As a result, time-sensitive
software may incorrectly recognize a date using "00" as the year 1900 rather
than 2000.  This could cause a system failure or miscalculations causing
disruptions of operations, including among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.

The Company is in the process of modifying and/or replacing portions of its
software so that its computer systems will function properly with respect to
dates in the year 2000 and thereafter.  The project is expected to be completed
no later than December 31, 1998, which is prior to any anticipated impact on its
operating systems, and the cost is not expected to be material. The Company
believes that the Year 2000 issue will not pose a significant operational
problem for its computer systems.  However, if the modifications and conversions
of software are not completed timely, the Year 2000 issue could have a material
impact on the operations of the Company.  In addition, due to the interdependent
nature of computer systems, the Company may be adversely impacted depending upon
whether it or other entities not affiliated with the Company (venders,
customers, and business partners) address the issue successfully.

RESULTS OF OPERATIONS

Net sales increased $8,330,000 and $22,994,000, or 7.2% and 22.9%, as compared
to 1996 and 1995, respectively. Income from continuing operations before income
taxes increased $3,622,000 and $8,535,000, as compared to 1996 and 1995,
respectively. 

The increase in net sales is primarily due to overall higher unit prices and
sales volume of watches. Watch unit prices increased 4.5% and 9.8%, while unit
volume increased 6.6% and 21.9%, as compared to 1996 and 1995, respectively.
Effective January 1, 1997 and 1996, the Company selectively increased prices,
primarily on the Bulova brand. New style introductions, combined with a
consistent marketing effort focused on brand image, resulted in significant unit
growth of the Accutron, Bulova and Caravelle watch brands. The price increase
and unit growth resulted in combined increases of $10,159,000 and $25,991,000,
or 11.4% and 35.0%, as compared to 1996 and 1995, respectively.

Revenue increases were partially offset by declines in the clock product line.
Clock revenues declined $1,674,000 and $1,612,000, or 8.4% and 8.1%, as compared
to 1996 and 1995, respectively. Additionally, the Company's watch service
revenues declined $977,000, or 49.2%, as compared to 1995.

Gross profit as a percentage of net sales for the year ended December 31, 1997
was 46.3%, as compared to 42.0% and 37.1% for the years ended December 31, 1996
and 1995, respectively. This increase is attributable to the price increase
discussed above, and continued efforts to improve procurement practices.

                                        6

The Company has adopted amendments, effective July 1, 1996, to its
postretirement benefit health care plan which has reduced the related health
care costs incurred by the Company. Gross profit and selling, general and
administrative expenses include postretirement benefit (credits) costs of
$(196,000), $443,000 and $2,152,000 for the years ended 1997, 1996 and 1995,
respectively. The cost savings have contributed to the favorable results in
gross profit and operating income. See also discussion of selling, general and
administrative costs, below.

Royalty income has declined $257,000, or 6.7%, as compared to 1996, and
increased $409,000, or 12.8%, as compared to 1995. Royalty income represents
payments by a distributor and licensees principally in Europe, the Far East and
South America.  The decline in royalty income reflects the effects of
renegotiation in 1996 of two license agreements. In connection with the
renegotiations, the term of the two license agreements were extended to the year
2001. The licensee for Europe and the Far East is based in Hong Kong.  While the
Company does not believe the current volatility in the Asian economy will have
an impact on royalty income for 1998, there can be no assurance that the Asian
economy will not impact the ability of the licensee to meet its obligations.

Increased interest income reflects the higher level of invested assets.  In
addition, interest and other revenues were primarily affected by the $4,200,000
of interest income recognized during 1995, related to the tax audit adjustment
discussed above, as well as a credit in 1996 of $430,000 due to a revision of
the Company's estimated liability related to certain pension costs.

Selling, general and administrative expenses as a percentage of net sales for
the year ended December 31, 1997 was 38.3%, as compared to 36.8% and 39.0% for
the years ended December 31, 1996 and 1995, respectively. The increase in 1997
was the result of the Company's significant increase in brand support
advertising, as well as the increase in the Loews administrative services (see
"Related Parties," below), partially offset by a reduction in health care costs
and bad debt expenses.

The Company imports most of its watch and clock products. Approximately 5% of
the Company's purchases are denominated in Japanese yen. The remaining purchases
are primarily in U.S. dollars from vendors located in Hong Kong and other Asian
countries. The Hong Kong dollar is pegged to the U.S. dollar and has not been
subject to the fluctuations that have affected other Asian currencies. In the
event that the peg between the two currencies is removed, currency fluctuations
could have a material impact on the cost of those imported products which
ultimately could have a negative impact on gross profit, operating income and
cash flow. Foreign currency fluctuations have not had a material impact on the
results of operations for the years ended December 31, 1997, 1996 and 1995. The
Company is unable to predict the impact of future foreign currency fluctuations.

Asian Economic Crisis - The Company purchases approximately 95% of its products
from Asian countries. The Company believes that the economic crisis to date has
not negatively impacted its vendors. Further deterioration of economic
conditions in Asia could, however, negatively impact the Company, directly
affecting cost, gross profit, operating income and cash flow.

Corporate

Related Parties - Loews has provided administrative services for which the
Company paid $2,064,000, $730,000 and $700,000 for the years ended December 31,
1997, 1996 and 1995, respectively. The cost allocated to the Company is
estimated to be the incremental cost incurred by Loews in providing these
services to the Company. In the fourth quarter of 1996, Loews reevaluated the
services and costs which are allocated to the Company. As a result, the Company
experienced a significant increase in these costs. See Note 2 of the Notes to
Consolidated Financial Statements.

Taxes - For the year ended December 31, 1995, income taxes include a charge of
$1,772,000 caused by the limitation on the utilization of certain tax attributes
in connection with the tax audit adjustment. See Note 3 of the Notes to
Consolidated Financial Statements.

                                        7

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's financial instruments consist primarily of short-term commercial
paper and U.S. government treasury bills.  As such, the Company does not believe
these financial instruments present a significant exposure to market risk.

ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard ("SFAS") No. 130, "Reporting Comprehensive
Income," which establishes accounting standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and loses) in
a full set of general-purpose financial statements.  This Statement requires
that an enterprise (a) classify items of other comprehensive income by their
nature in a financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of the statement of financial position. This
Statement is effective for fiscal years beginning after December 15, 1997.  This
Statement will not have a significant impact on the Company.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for the way
that an enterprise reports information about operating segments in interim and
annual financial statements.  It requires that those enterprises report a
measure of segment profit or loss, certain specific revenue and expense items,
and segment assets, and that the enterprise reconcile the total of those amounts
to the general-purpose financial statements.  It also establishes standards for
related disclosures about products and services, geographic areas and major
customers.  This Statement is effective for fiscal years beginning after
December 15, 1997.  The Company is currently evaluating the effects of this
Statement on its segment disclosures.

In February 1998, the FASB issued SFAS No. 132 "Employers' Disclosures about
Pensions and Other Postretirement Benefits."  This Statement standardizes
disclosure requirements for pension and other postretirement benefits to the
extent practicable, requires additional information on changes in benefit
obligations and fair values of plan assets that will facilitate financial
analysis, and eliminates certain disclosures that are no longer useful to users
of financial statements. It also suggests combined formats for presentation of
pension and other postretirement benefit disclosures.  The Statement supersedes
the disclosure requirements of a number of earlier opinions of the FASB and does
not address measurement or recognition.  It is effective for fiscal years
beginning after December 15, 1997.  The Company is currently evaluating the
effects of this Statement on its benefit plan disclosures.

FORWARD-LOOKING STATEMENTS

When included in this Report, the words "believes," "expects," "intends,"
"anticipates," "estimates" and analogous expressions are intended to identify
forward-looking statements. Such statements inherently are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include, among others,
general economic and business conditions, changes in financial markets,
significant changes in consumer spending patterns, competition in the Company's
product areas, effects of the Asian economic crisis, changes in foreign currency
valuations in relation to the U.S. dollar, changes in foreign, political, social
and economic conditions, and various other matters, many of which are beyond the
Company's control. These forward-looking statements speak only as of the date of
this report. The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statement
contained herein to reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on which any
statement is based.

                                        8

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

  See Management's Discussion and Analysis of Financial Condition and Results of
Operations for information regarding Quantitative and Qualitative Disclosures
about Market Risk.

Item 8. Financial Statements and Supplementary Data.

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS


-------------------------------------------------------------------------------
Assets:
-------------------------------------------------------------------------------

December 31                                              1997              1996 
-------------------------------------------------------------------------------

<S>                                              <C>               <C>
Current assets:

 Cash and cash equivalents (Note 1)              $  9,127,000      $ 10,665,000

 Investments (Note 1)                              19,937,000         4,978,000

 Receivables, less allowance for doubtful 
  accounts and cash discounts of $3,693,000
  and $4,062,000 (Note 1)                          51,377,000        54,417,000

 Inventories (Note 1)                              35,656,000        37,130,000

 Prepaid expenses (Note 4)                          1,560,000         3,174,000

 Prepaid income taxes (Note 3)                        519,000

 Deferred income taxes (Notes 1 and 3)              8,219,000         8,232,000
-------------------------------------------------------------------------------
Total current assets                              126,395,000       118,596,000
-------------------------------------------------------------------------------

Property, plant and equipment, at cost
 (Note 1):

 Land, buildings and improvements                  14,090,000        14,090,000

 Machinery and equipment                            2,631,000         2,523,000

 Furniture, fixtures and leasehold improvements     4,091,000         3,703,000
-------------------------------------------------------------------------------
                                                   20,812,000        20,316,000
 Less accumulated depreciation and amortization     9,323,000         8,734,000
-------------------------------------------------------------------------------
Property, plant and equipment-net                  11,489,000        11,582,000
-------------------------------------------------------------------------------

Other assets:

 Deferred income taxes (Notes 1 and 3)             17,442,000        17,437,000

 Other assets                                         224,000           839,000
-------------------------------------------------------------------------------
Total other assets                                 17,666,000        18,276,000
-------------------------------------------------------------------------------
Total assets                                     $155,550,000      $148,454,000
===============================================================================

See Notes to Consolidated Financial Statements.
</TABLE>

                                        9

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
-------------------------------------------------------------------------------
December 31                                               1997             1996
-------------------------------------------------------------------------------
<S>                                               <C>              <C> 
Current liabilities:
 Accounts payable                                 $  3,092,000     $  3,442,000
 Accrued expenses:
  Salaries, wages and commissions                    3,226,000        3,576,000
  Postretirement benefits (Note 4)                   1,439,000        1,288,000
  Advertising (Note 1)                               3,292,000        2,128,000
  Warranty (Note 1)                                  1,016,000        1,030,000
  Other                                             10,940,000        9,945,000
 Accrued federal and foreign income taxes
  (Notes 1 and 3)                                                     1,663,000
-------------------------------------------------------------------------------
Total current liabilities                           23,005,000       23,072,000
-------------------------------------------------------------------------------

Other liabilities and credits:
 Postretirement benefits payable (Note 4)           40,967,000       42,754,000
 Pension benefits payable (Note 4)                   3,606,000        4,055,000
 Other (Note 9)                                      6,029,000        6,192,000
-------------------------------------------------------------------------------
Total other liabilities and credits                 50,602,000       53,001,000
-------------------------------------------------------------------------------

Commitments and contingent liabilities 
 (Notes 2, 3, 4, 7 and 9)

Shareholders' equity (Note 1):
 Common stock, $5 par value:
  Authorized: 7,500,000 shares
  Issued: 4,600,000 shares                          22,999,000       22,999,000
 Additional paid-in capital                         23,197,000       23,197,000
 Retained earnings                                  37,794,000       27,778,000
 Cumulative translation adjustment                  (1,561,000)      (1,251,000)
 Pension liability adjustment                         (481,000)        (337,000)
-------------------------------------------------------------------------------
                                                    81,948,000       72,386,000
 Less 1,000 shares of common stock held in
  treasury, at cost                                      5,000            5,000
-------------------------------------------------------------------------------
Total shareholders' equity                          81,943,000       72,381,000
-------------------------------------------------------------------------------
Total liabilities and shareholders' equity        $155,550,000     $148,454,000
===============================================================================
</TABLE>

                                        10

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31                   1997               1996           1995
-------------------------------------------------------------------------------


<S>                              <C>                <C>            <C> 
Net sales                        $123,443,000       $115,113,000   $100,449,000
Cost of sales                      66,323,000         66,756,000     63,160,000
-------------------------------------------------------------------------------
Gross profit                       57,120,000         48,357,000     37,289,000
Selling, general and 
 administrative expenses           47,246,000         42,341,000     39,149,000
-------------------------------------------------------------------------------
Operating income (loss)             9,874,000          6,016,000     (1,860,000)

Royalty                             3,606,000          3,863,000      3,197,000
Interest-net                        1,320,000            951,000      4,791,000
Other                                 491,000            839,000        628,000
-------------------------------------------------------------------------------
Income from continuing 
 operations before 
 income taxes                      15,291,000         11,669,000      6,756,000

Income taxes (Notes 1 and 3)        5,275,000          4,668,000      4,487,000
-------------------------------------------------------------------------------
Income from continuing
 operations                        10,016,000          7,001,000      2,269,000

Discontinued operations
 of BTI (net of tax of
 $195,000) (Note 8)                                                     363,000
-------------------------------------------------------------------------------
Net income                       $ 10,016,000       $  7,001,000   $  2,632,000
===============================================================================

Earnings per share (Note 1):
 Income from continuing 
  operations                     $      2.18        $       1.52   $        .49
 Discontinued operations of BTI                                             .08
-------------------------------------------------------------------------------
 Net income                      $      2.18        $       1.52   $        .57
===============================================================================

See Notes to Consolidated Financial Statements.
</TABLE>

                                        11

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                   Additional                 Cumulative       Pension  
                          Common      Paid-in    Retained    Translation     Liability   Treasury
                           Stock      Capital    Earnings     Adjustment    Adjustment      Stock
-------------------------------------------------------------------------------------------------
(Amounts in  thousands)
<S>                      <C>          <C>         <C>           <C>             <C>       <C>     
Balance, Dec. 31, 1994   $22,999      $23,197     $18,145       $(1,406)                  $   (5)
 Net income                                         2,632
 Exchange rate changes
  during the year (net
  of income taxes
  of $175)                                                          325
 Pension liability
  adjustment (Note 4)                                                           $(424)
-------------------------------------------------------------------------------------------------
Balance, Dec. 31, 1995    22,999       23,197      20,777        (1,081)         (424)        (5)
 Net income                                         7,001
 Exchange rate changes
  during the year (net
  of income tax
  benefit of $92)                                                  (170)
 Pension liability
  adjustment (Note 4)                                                              87  
-------------------------------------------------------------------------------------------------
Balance, Dec. 31, 1996    22,999       23,197      27,778        (1,251)         (337)        (5)
 Net income                                        10,016
 Exchange rate changes
  during the year (net
  of income tax 
  benefit of $167)                                                 (310) 
 Pension liability 
  adjustment (Note 4)                                                            (144)
-------------------------------------------------------------------------------------------------
Balance, Dec. 31, 1997   $22,999      $23,197     $37,794       $(1,561)        $(481)   $    (5)
=================================================================================================

See Notes to Consolidated Financial Statements.
</TABLE>

                                        12

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31                    1997              1996           1995 
-------------------------------------------------------------------------------  

Operating Activities:

<S>                               <C>               <C>             <C>
Net income                        $ 10,016,000      $  7,001,000    $ 2,632,000
Adjustments to reconcile net
 income to net cash provided by
 operating activities:
  Amortization of investments         (868,000)         (339,000)      (345,000)
  Depreciation and amortization        649,000           773,000        667,000
  Gain on disposition of 
   assets                              (15,000)          (67,000)      (558,000)
  Provision for losses and cash 
   discounts on accounts
   receivable                        2,126,000         3,194,000      2,174,000
  Deferred income taxes                  8,000        (1,488,000)     2,567,000
Changes in operating assets and
 liabilities-net:
  Receivables                          914,000        (6,653,000)    (1,878,000)
  Inventories                        1,474,000         1,784,000     (3,164,000)
  Prepaid expenses                   1,614,000        (1,721,000)    (1,124,000)
  Other assets                         615,000          (441,000)      (133,000)
  Accounts payable and accrued 
   expenses                          1,596,000         3,916,000          1,000
  Accrued federal and foreign
   income taxes                     (2,182,000)        1,608,000       (463,000)
  Other-net                         (2,853,000)        2,002,000        152,000 
-------------------------------------------------------------------------------
                                    13,094,000         9,569,000        528,000
-------------------------------------------------------------------------------

Investing Activities:

Purchases of short-term
 investments                       (53,462,000)      (14,639,000)    (5,655,000)
Proceeds from sales of U.S.
 government securities              39,371,000        10,000,000      6,000,000
Purchases of property, plant
 and equipment                        (563,000)         (112,000)      (177,000)
Proceeds from disposal of 
 property, plant and equipment          22,000            84,000               
Proceeds from disposal of BTI                                        20,810,000
-------------------------------------------------------------------------------
                                   (14,632,000)       (4,667,000)    20,978,000
-------------------------------------------------------------------------------

Financing Activities:

Principal payments on 
 long-term debt                                         (200,000)      (400,000)
Principal payments on debt to
 affiliate                                                          (19,000,000)
-------------------------------------------------------------------------------
                                                        (200,000)   (19,400,000)
-------------------------------------------------------------------------------
Net change in cash and 
 and cash equivalents               (1,538,000)        4,702,000      2,106,000
Cash and cash equivalents,
 beginning of year                  10,665,000         5,963,000      3,857,000
-------------------------------------------------------------------------------
Cash and cash equivalents,
 end of year                       $ 9,127,000      $ 10,665,000   $  5,963,000
===============================================================================

See Notes to Consolidated Financial Statements.
</TABLE>

                                        13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies -

  (a) Business - The Company is engaged in the distribution and sale of watches,
clocks and timepieces for consumer use. The principal watch brands are Bulova,
Caravelle, Accutron and Sportstime. Clocks are principally sold under the Bulova
brand name. Bulova's principal markets are the United States and Canada.
Royalties are received from a distributor and licensees principally in Europe,
the Far East and South America. Loews Corporation ("Loews") owns approximately
97% of the Company's outstanding voting stock.

  (b) Principles of Consolidation - The consolidated financial statements
include all subsidiaries, which are 100% owned, and all material intercompany
accounts and transactions have been eliminated.

  (c) Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management 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.

  (d) Cash and cash equivalents - The Company classifies as cash equivalents all
highly liquid investments with maturities of three months or less.  At December
31, 1997 and 1996, cash equivalents were comprised of investments in money-
market accounts.

  (e) Investments - Investments consist of commercial paper and U.S. government
securities. These investments are considered available for sale and carried at
fair value, which approximates cost.

  (f) Accounts Receivable and Concentration of Credit Risk - Watches and clocks
are sold to retail outlets throughout the United States and Canada. The Company
grants its retailers seasonal credit terms. For the years ended December 31,
1997 and 1996, accounts receivable were substantially comprised of balances due
from retailers. Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
One customer accounted for approximately 11% and 12% of sales for the years
ended December 31, 1997 and 1996, respectively. Although the Company's exposure
to credit risk associated with non-payment by this customer is affected by
conditions or occurrences within the retail industry, trade receivables from
this customer were collected within terms; no other customer represented more
than 10% of the Company's sales. The carrying amount of receivables approximates
fair value.

  (g) Inventories - Substantially all inventory, consisting primarily of
finished watches and clocks, is computed on a first-in, first-out basis and are
valued at lower of cost or market.     

  (h) Property, Plant and Equipment - Depreciation is calculated on the 
straight-line method over the estimated useful lives of the various classes of
assets. Leasehold improvements are, if such period is shorter, amortized over
the life of the lease. Asset lives range from 2 to 12 years for machinery,
equipment, and furniture and fixtures and from 15 to 40 years for buildings and
improvements.

  (i) Income Taxes - The Company is included in Loews consolidated federal tax
return. Under the tax allocation agreement, the Company is required to provide a
current tax provision calculated on a stand-alone basis. No provision is
required for undistributed earnings of subsidiaries, since substantially all of
these earnings may be remitted to the Company with little or no tax becoming
payable.

  (j) Earnings Per Share and Shareholders' Equity - Earnings per share has been
computed on the basis of the weighted average number of shares outstanding
during the periods (4,599,000 for each of the three years ended December 31,
1997).

  In addition to its common stock, the Company has authorized 500,000 shares of 
preferred stock.

  (k) Foreign Currency Adjustment - The effect of changes in exchange rates in
translating foreign currency

                                        14

financial statements is accumulated in a separate component of shareholders'
equity.

  (l) Forward Exchange Contracts - In connection with purchases of inventory,
from time to time, the Company, enters into forward exchange contracts in order
to hedge its exposure to fluctuations in foreign currency exchange rates. These
agreements generally involve the exchange of one currency for a second currency
at some future date. Counterparties to these agreements are major international
financial institutions. As of December 31, 1997, there were no foreign exchange
contracts outstanding.

  (m) Impairment of Long-Lived Assets - The Company reviews its long-lived
assets for impairment when changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Long-lived assets and certain
intangibles, under certain circumstances, are reported at the lower of carrying
amount or fair value. Assets to be disposed of and assets not expected to
provide any future service potential to the Company are recorded at the lower of
carrying amount or fair value less cost to sell.

  (n) Advertising Costs - Advertising costs for point of sale and media
advertising as well as co-op advertising and promotional allowances are expensed
as incurred.

  (o) Warranty Costs - The Company provides, by a current charge to income, an
amount it estimates will be needed to cover future warranty obligations for
products sold during the year.

  (p) Reclassifications - Certain amounts applicable to prior periods have been
reclassified to conform to the classifications followed in 1997.

Note 2. Related Parties -

In 1979, the Company entered into a credit agreement with Loews (the "Credit
Agreement") which provides for unsecured loans, from time to time, in amounts
aggregating up to $50,000,000 with interest at 10% per annum. The Credit
Agreement has been periodically extended and currently expires June 30, 1999.
There is currently nothing owed by the Company to Loews and the Credit Agreement
has not been utilized since the balance was paid in January 1995.

Loews has provided administrative services for which the Company paid
$2,064,000, $730,000 and $700,000 for the years ended December 31, 1997, 1996
and 1995, respectively. The cost allocated to the Company is estimated to be the
incremental cost incurred by Loews in providing these services to the Company.

                                        15

Note 3. Income Taxes - 

The Company and Loews have a tax allocation agreement with respect to the filing
by Loews of consolidated federal income tax returns, which include the Company
and its subsidiaries. Under the agreement, the Company will (i) be paid by Loews
the amount, if any, by which Loews's consolidated federal income tax is reduced
by virtue of the inclusion of the Company and its subsidiaries in the return, or
(ii) pay to Loews an amount, if any, equal to federal income tax which would
have been payable by the Company if the Company and its subsidiaries had filed a
separate consolidated return. Under this agreement, the Company was required to
pay Loews approximately $2,580,000 and $5,282,000 and has received approximately
$2,109,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
This agreement may be canceled by the Company or Loews upon thirty days written 
notice.

Income before income tax expense consisted of the following for continuing
operations:

<TABLE>
<CAPTION>
Year Ended December 31                1997                1996             1995 
-------------------------------------------------------------------------------
<S>                            <C>                 <C>              <C> 
Income before income taxes:
 Domestic                      $14,179,000         $11,350,000      $ 5,933,000
 Foreign                         1,112,000             319,000          823,000
-------------------------------------------------------------------------------
Total                          $15,291,000         $11,669,000      $ 6,756,000
===============================================================================

Income tax expense (benefit):
 Federal:
  Current                      $ 2,580,000         $ 5,282,000      $   746,000
  Deferred                       1,857,000          (1,627,000)       2,790,000
 State and local:
  Current                        2,849,000             958,000          700,000
  Deferred                      (1,606,000)
 Foreign:
  Current                         (402,000)            (22,000)         245,000
  Deferred                          (3,000)             77,000            6,000
-------------------------------------------------------------------------------
Income tax expense             $ 5,275,000         $ 4,668,000      $ 4,487,000
===============================================================================

<CAPTION>
Deferred tax assets are as follows:

December 31                                               1997             1996 
-------------------------------------------------------------------------------
<S>                                                <C>              <C>
Employee benefits                                  $22,077,000      $22,735,000
Inventory                                            5,603,000        5,779,000
Accrued expenses                                     2,818,000        4,106,000
Accounts receivable                                  1,520,000        1,482,000
Tax loss carryforward                                                 1,085,000
-------------------------------------------------------------------------------
                                                    32,018,000       35,187,000
Valuation allowance                                 (6,357,000)      (9,518,000)
-------------------------------------------------------------------------------
Deferred tax assets-net                            $25,661,000      $25,669,000
===============================================================================
</TABLE>

The valuation allowance relates to state and local temporary differences and
loss carryforwards.

                                        16

Income taxes differ from that computed at the U.S. statutory rate for the
following reasons:

<TABLE>
<CAPTION>
Year Ended December 31                 1997              1996              1995
-------------------------------------------------------------------------------
<S>                              <C>               <C>               <C> 
Income taxes computed at 
 statutory rate                  $5,352,000        $4,084,000        $2,365,000
Increase (decrease) in taxes 
 resulting from:
  State and local taxes             808,000           623,000           455,000
  Foreign taxes                    (794,000)          (53,000)          (43,000)
  Permanent differences              32,000            31,000            38,000
  Tax settlement                                                      1,772,000
  Benefit related to 
   prior years' losses                                                 (177,000)
  Other                            (123,000)          (17,000)           77,000
-------------------------------------------------------------------------------
Income tax expense               $5,275,000        $4,668,000        $4,487,000
===============================================================================
</TABLE>

Federal, foreign, state and local income tax payments (refunds) amounted to
approximately $7,229,000, $2,910,000 and $(6,022,000) for the years ended
December 31, 1997, 1996 and 1995, respectively.

Federal income tax returns have been settled through 1990 and the years 1991
through 1994 are currently under examination. While tax liabilities for
subsequent years are subject to audit and final determination, in the opinion of
management the amount accrued in the consolidated balance sheet is believed to
be adequate to cover any additional assessments which may be made by federal,
state and local tax authorities and should not have a material effect on the
financial position and results of operations of the Company. During the second
quarter of 1995, the Company reached a tax settlement in connection with the
examination of the Loews consolidated federal income tax returns for the 1984
through 1990 tax years. As a result of the settlement, the Company received
$4,200,000 of interest and recorded $1,772,000 of tax expense caused by the
limitation on the utilization of certain tax attributes. This transaction
resulted in pre-tax and after tax income of $4,200,000 and $958,000,
respectively. 

The Company's Canadian tax returns for the years 1984 through 1990 have been
settled which resulted in a tax benefit of $794,000 for the year ended December
31, 1997. The years 1990 through 1992 are currently under examination.

While tax liabilities for subsequent years are subject to audit and final
determination, in the opinion of management the amount accrued in the
consolidated balance sheet is believed to be adequate to cover any additional
assessments which may be made by federal, foreign, state and local tax
authorities and should not have a material effect on the financial condition or
results of operations of the Company.

                                        17

Note 4. Retirement Plans -

Pension Plans - The Company maintains non-contributory pension plans for all of
its employees in the United States. Separate retirement plans are maintained by
the Company's Canadian subsidiary, which are not material. 

Pension cost of the U.S. plans includes the following components:

<TABLE>
<CAPTION>
Year Ended December 31                  1997              1996             1995
-------------------------------------------------------------------------------

<S>                              <C>                <C>             <C>
Service cost-benefits earned     $   655,000        $  614,000      $   517,000
Interest cost                      1,849,000         1,852,000        1,761,000
Return on assets                  (2,131,000)         (954,000)      (3,271,000)
Net amortization and deferrals       158,000          (826,000)       1,564,000
Curtailment and special
 termination benefits expense                          168,000
-------------------------------------------------------------------------------
Net pension cost                 $   531,000        $  854,000      $   571,000
===============================================================================

<CAPTION>
The status of the underfunded U.S. plans were as follows:

December 31                                                1997            1996
-------------------------------------------------------------------------------
<S>                                                 <C>             <C> 
Actuarial present value of benefit obligations:

 Accumulated benefit obligation                     $25,608,000     $24,109,000
===============================================================================
 Accumulated vested benefit obligation              $25,055,000     $23,486,000
===============================================================================


Projected benefit obligation                        $27,932,000     $26,143,000
Plan assets at fair value                            22,990,000      22,377,000
-------------------------------------------------------------------------------
Projected benefit obligation over plan assets         4,942,000       3,766,000
Unrecognized net asset at January 1                   1,435,000       1,913,000
Unrecognized net loss                                (4,661,000)     (4,465,000)
Unrecognized prior service cost                        (293,000)       (322,000)
Additional minimum liability                          1,195,000         840,000
-------------------------------------------------------------------------------
Accrued pension liability - net                     $ 2,618,000     $ 1,732,000
===============================================================================

<CAPTION>
The rates used in the actuarial assumptions were:

Year Ended December 31                   1997            1996             1995 
------------------------------------------------------------------------------- 
<S>                                      <C>             <C>              <C>  
Discount rate                            7.00%           7.50%            7.00%
Rate of compensation increase            5.50%           5.75%            5.50%
Expected long-term rate of return 
 on assets                               7.50%           7.56%            8.75%
--------------------------------------------------------------------------------
</TABLE>

                                        18

The Company's funding policy is to make contributions in accordance with
applicable governmental requirements. The assets of the plans are invested
primarily in interest-bearing obligations. Benefits are determined based on
compensation during each year of credited service. Included in prepaid expense
is $988,000 and $2,323,000 of contributions in excess of the minimum funding
requirement for the year ended December 31, 1997 and 1996, respectively.

At December 31, 1997, 1996 and 1995, the Company's minimum pension liability
exceeded its unrecognized prior service cost and net transition obligation by
$1,195,000, $840,000 and $693,000, respectively. This excess is recorded as a
reduction to shareholders' equity of $481,000, $337,000 and $424,000, net of tax
benefits of $421,000 and $181,000 and $229,000, and intangible assets of
$293,000, $322,000 and $40,000 for the years ended December 31, 1997, 1996 and
1995, respectively. 

Other Postretirement Benefit Plans - The Company maintains postretirement health
care plans covering eligible employees and retirees. Union participants
generally become eligible upon retirement at age 55 and 10 years of service or
upon completion of 20 years of service. Another plan covers salaried employees
who are eligible upon retirement at age 55 and 20 years of service or upon
retirement at age 60 and 10 years of service. Prior to January 1, 1995, salaried
employee participants were eligible upon retirement at age 55 and 10 years of
service or upon completion of 20 years of service. The benefits provided by the
Company are basically health, and for certain retirees, life insurance type
benefits. During 1996, the Company made certain amendments to the plan covering
salaried employees which reduced postretirement benefit expense by approximately
$2,349,000 and $1,108,000 for the years ended December 31, 1997 and 1996,
respectively.

<TABLE>
<CAPTION>
The rates used in the actuarial assumptions were:

December 31                                                  1997         1996
--------------------------------------------------------------------------------

<S>                                                          <C>          <C>
Net periodic postretirement benefit cost                     7.50%        7.00%
Accumulated postretirement benefit liability                 7.00%        7.50%
--------------------------------------------------------------------------------

<CAPTION>
The following table sets forth the postretirement plan's status:

December 31                                                  1997          1996 
-------------------------------------------------------------------------------

<S>                                                   <C>           <C>
Accumulated postretirement benefit obligation:
 Retirees                                             $13,872,000   $18,448,000
 Fully eligible active plan participants                1,425,000     1,570,000
 Other active plan participants                         1,018,000     1,072,000
-------------------------------------------------------------------------------
                                                       16,315,000    21,090,000
 Unrecognized prior service cost                        6,525,000     5,535,000
 Unrecognized net gain                                 19,566,000    17,417,000
-------------------------------------------------------------------------------
Accrued postretirement benefit liability              $42,406,000   $44,042,000
===============================================================================

                                        19

<CAPTION>
Postretirement benefit cost includes the following components:

Year Ended December 31                   1997             1996             1995 
------------------------------------------------------------------------------- 
<S>                               <C>              <C>               <C>
Service costs                     $   103,000      $   206,000       $  438,000
Interest costs                      1,510,000        1,821,000        2,657,000
Net amortization and deferral      (1,809,000)      (1,498,000)        (943,000)
Curtailment gain                                       (86,000)
-------------------------------------------------------------------------------
Net periodic postretirement
 (benefit) cost                   $  (196,000)     $   443,000       $2,152,000
===============================================================================
</TABLE>

For measurement purposes, a trend rate of 8.3% pre-65 and 7.3% post-65, for
covered costs was used. These trend rates are expected to decrease gradually to
5.0% at rates from 0.3% to 0.5% per annum. An increase of one percentage point
in assumed health care cost trend rates would increase the accumulated
postretirement benefit obligation by approximately $990,000 and the net periodic
postretirement benefit cost by approximately $147,000.

Note 5. Quarterly Financial Data (Unaudited) -

<TABLE>
<CAPTION>
1997 Quarters Ended        Dec. 31         Sept. 30        June 30      March 31
--------------------------------------------------------------------------------
<S>                    <C>              <C>            <C>           <C>
Net sales              $35,235,000      $33,049,000    $26,611,000   $28,548,000
Cost of sales           16,692,000       17,840,000     15,342,000    16,449,000
Net income               4,108,000        3,094,000      1,220,000     1,594,000
Earnings per share             .89              .67            .26           .35

<CAPTION>
1996 Quarters Ended        Dec. 31         Sept. 30(1)     June 30      March 31
--------------------------------------------------------------------------------
<S>                    <C>              <C>            <C>           <C> 
Net sales              $35,121,000      $32,980,000    $22,666,000   $24,346,000
Cost of sales           18,920,000       18,888,000     13,903,000    15,045,000
Net income               1,747,000        3,883,000        670,000       701,000
Earnings per share             .38              .84            .15           .15
--------------------------------------------------------------------------------
</TABLE>

(1) Cost of sales and net income includes credits related to the amendment of
the Company's postretirement health care plan of $1,194,000 and $776,000,
respectively. In addition, net income includes a credit related to an adjustment
to certain pension costs of $280,000.

The Company's net sales are traditionally greater during the winter holiday
season. Consequently, the Company's net sales have historically been higher
during the second half of the year.

                                        20

Note 6. Geographic Information -

<TABLE>
<CAPTION>

                                                        
                                                         
Year Ended December 31, 1997          United States      Canada          Total
------------------------------------------------------------------------------
(In thousands)
<S>                                   <C>              <C>            <C>
Sales                                 $112,519          $13,013       $125,532
Intercompany sales                      (2,089)                         (2,089)
------------------------------------------------------------------------------
Total net sales                       $110,430          $13,013       $123,443
==============================================================================

Operating income                      $  8,588          $ 1,286       $  9,874
Royalties                                3,606                           3,606
Interest - net                           1,482             (162)         1,320
Other                                      503              (12)           491 
------------------------------------------------------------------------------
Income from continuing
 operations before tax                $ 14,179          $ 1,112       $ 15,291 
==============================================================================
Identifiable assets                   $144,115          $11,435       $155,550
==============================================================================

Year Ended December 31, 1996   
------------------------------------------------------------------------------
<S>                                   <C>              <C>            <C>
Sales                                 $104,802          $11,688       $116,490
Intercompany sales                      (1,377)                         (1,377)
------------------------------------------------------------------------------
Total net sales                       $103,425          $11,688       $115,113
==============================================================================


Operating income                      $  5,318          $   698       $  6,016
Royalties                                3,863                           3,863
Interest - net                           1,390             (439)           951 
Other                                      779               60            839
------------------------------------------------------------------------------
Income from continuing
 operations before tax                $ 11,350          $   319       $ 11,669
==============================================================================
Identifiable assets                   $137,149          $11,305       $148,454
==============================================================================

<CAPTION>                                 
Year Ended December 31, 1995   
------------------------------------------------------------------------------

<S>                                   <C>              <C>            <C>
Sales                                 $ 90,199          $12,914       $103,113
Intercompany sales                      (2,664)                         (2,664)
------------------------------------------------------------------------------
Total net sales                       $ 87,535          $12,914       $100,449
==============================================================================


Operating (loss) income               $ (2,484)         $   624       $ (1,860)
Royalties                                3,197                           3,197
Interest - net                           5,206             (415)         4,791
Other                                      554               74            628
------------------------------------------------------------------------------
Income from continuing
 operations before tax                $  6,473          $   283       $  6,756
==============================================================================
Identifiable assets                   $120,643          $13,484       $134,127
==============================================================================
</TABLE> 

                                        21

Note 7. Leases -

The Company leases certain of its warehouse and office facilities. The future
minimum lease payments under operating leases for the five years ending December
31, 2002 is $482,000, $497,000, $500,000, $500,000 and $184,000.

Note 8. Discontinued Operations -

On January 17, 1995, Bulova Technologies, Inc. ("BTI"), the Company's industrial
and defense manufacturing business, was sold for $20,810,000 in cash. The sale
resulted in a pre-tax and after tax gain of approximately $558,000 and $363,000,
respectively. The operating results for the year ended December 31, 1995 were
not material. The Company applied $18,000,000 of the consideration received to
the repayment of the entire debt to affiliate.

Note 9. Contingencies and Litigation -

(a) Environmental Matters - During 1991 the Company settled a lawsuit commenced
by the owner of property formerly owned by the Company which sought damages
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, for alleged environmental contamination at the property. Under the
settlement agreement the Company assumed responsibility for the clean-up of the
property and agreed to pay to the owner $50,000 per year until the clean-up is
completed. In 1994, the Company accrued an additional $484,000 based upon
revised cost estimates. As of December 31, 1997, the remaining estimated
liability of $75,000 represents the minimum level of clean-up expense required.

During 1994 the Company became aware of an environmental contaminate which was
discovered in the ground water of a former defense manufacturing facility.
The Company accrued $250,000 to provide for the estimated clean-up costs to be
required. Additional testing and further evaluation is required before a
definitive cost of ultimate clean-up can be determined. However, the Company
believes there will be no additional provisions required. 

During the third quarter of 1995, the Company provided for a liability of
$150,000 in relation to an environmental condition at a former Jackson Heights,
N.Y. watch manufacturing facility which the Company agreed to remediate in
October 1995.  During the second quarter of 1997 testing was completed and a
work plan for remediation has been submitted to New York State for approval.  As
of December 31, 1997 the remaining estimated liability of $95,000 represents the
minimum level of clean-up expense required.

During the fourth quarter of 1995, the Company became aware of an environmental
condition at its Woodside, N.Y. facility. Based upon the information available,
the Company provided $100,000 during the fourth quarter of 1995 for the
estimated clean-up expense required. During the third quarter of 1997, the
Company provided test results to New York State.  Further evaluation is required
before a definitive cost of ultimate clean-up can be determined.  Therefore the
liability accrued may require revisions.

At December 31, 1997, the remaining environmental liability recognized in the
Company's financial statements of $520,000 represents the minimum of the
Company's estimated range in equally likely outcomes; the upper limit of that
range is approximately $1,239,000.

(b) Arbitral Award - In 1991, the Company and a third party commenced an 
arbitration proceeding before the Netherlands Arbitration Institute contesting
the attempt of Benetton International N.V. ("Benetton") to prematurely terminate
the License Agreement for "Benetton by Bulova" timepieces and seeking damages in
relation thereto. (The License Agreement subsequently terminated in 1994). The
arbitral panel determined that Benetton was not entitled to terminate the
License Agreement prior to the expiration of its term and awarded damages to the
Company in relation thereto.

Benetton has commenced proceedings in the Dutch courts seeking to overturn the
arbitral award on a number of

                                        22

grounds and, pending the outcome of those proceedings, to suspend enforcement of
the damage award. The Dutch courts have refused to suspend enforcement of the
damage award and on February 12, 1996, the Company received approximately
$3,857,000 which represented damages, costs and interest. The funds received are
subject to return, with interest, if the Dutch courts ultimately uphold
Benetton's petition to overturn the arbitral award. As a result, the Company has
deferred recognition of the award and recorded a deferred credit. In addition,
Benetton has commenced a second arbitration proceeding, asserting claims against
the Company and the Company has asserted counter claims against Benetton in
relation to the license agreement.

                               * * * *

It is not possible to predict the outcome of pending litigation; however, on the
basis of the facts presently known to it, management does not believe the
actions pending will have a material adverse effect on the financial condition
or results of operations of the Company. Should additional facts arise in the
future indicating a probable adverse determination of any such actions, such
ultimate determination might have a material adverse effect upon the Company's
results of operations or financial condition.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

  None.

                                        23

                                 PART III

Item 10. Directors and Executive Officers of the Registrant.

  (a)Directors.

<TABLE>
<CAPTION>

                                     Principal Occupations           Director of
                                     During Past Five Years          the Company
        Name           Age           and Other Directorships            Since
--------------------------------------------------------------------------------
<S>                    <C>  <C>                                             <C>
Andrew H. Tisch .....  48   Chairman of the Board of the Company and        1979
                             Chairman of the Management Committee of
                             Loews since 1995. Prior thereto he had 
                             been Chairman of the Board and Chief 
                             Executive Officer of Lorillard, Inc., a
                             wholly owned subsidiary of Loews. 
                             Mr. Tisch is also a director of Loews and
                             Zale Corporation.
Herbert C. Hofmann ..  55   President and Chief Executive Officer           1979
                             of the Company. Mr. Hofmann is also a 
                             director of Diamond Offshore Drilling, Inc. 
                             (50.3% owned subsidiary of Loews) and also 
                             serves as Senior Vice President of Loews.
Harry B. Henshel ....  79   Vice Chairman of the Board of the Company.      1958
Laurence A. Tisch ...  75   Co-Chairman of the Board and Co-Chief           1979
                             Executive Officer of Loews. Mr. Tisch is 
                             also Chief Executive Officer and director
                             of CNA Financial Corporation ("CNA")(84%
                             owned subsidiary of Loews). Mr. Tisch also 
                             serves as a director of Automatic Data 
                             Processing, Inc.
Preston R. Tisch ....  71    Co-Chairman of the Board and Co-Chief          1988
                             Executive Officer of Loews. Mr. Tisch is 
                             also a director of CNA, Hasbro, Inc. and
                             Rite Aid Corporation.

  Messrs. Laurence A. Tisch and Preston R. Tisch are brothers and Mr. Andrew H.
Tisch is the son of Mr. Laurence A. Tisch. There are no other family
relationships among any of the Company's directors.

  Each director serves until the annual meeting of shareholders next succeeding
his election and until his successor shall have been duly elected and qualified.


  (b)Executive Officers.

</TABLE>
<TABLE>
<CAPTION>
                                                                    First Became
         Name             Position and Offices Held          Age     an Officer
--------------------------------------------------------------------------------
<S>                      <C>                                 <C>        <C>
Herbert C. Hofmann ..... President and Chief Executive       55         1985
                          Officer
Warren J. Neitzel ...... General Counsel and Corporate       47         1993
                          Secretary
John T. O'Reilly ....... Controller                          37         1996
Paul S. Sayegh ......... Chief Operating Officer             54         1979
</TABLE>

  There are no family relationships among the above. Officers are elected and
hold office until their successors are elected and qualified, and are subject to
removal by the Board of Directors. All officers of the Company,

                                        24

except Mr. O'Reilly, have been engaged actively and continuously in the business
of the Company and its subsidiaries for more than the past five years.

  Mr. O'Reilly served as Assistant Controller for approximately two years prior
to his appointment as Controller. Prior thereto he served, since 1990, as
Treasurer of CLAS International, a hotel reservation service affiliated with
Loews.

Item 11. Executive Compensation.

  (a)General.

  The following table sets forth information for the years indicated regarding
the compensation of the chief executive officer and each of the other three most
highly compensated executive officers of the Company whose compensation exceeded
$100,000 as of December 31, 1997, for services in all capacities to the Company.

                           Summary Compensation Table

<TABLE>
<CAPTION>

          Name and Principal Position                Year             Salary
--------------------------------------------------------------------------------
<S>                                                  <C>              <C>
Herbert C. Hofmann                                   1997             $   -
 President and Chief Executive Officer (a)           1996                 -
                                                     1995                 -

Paul S. Sayegh                                       1997              245,000
 Chief Operating Officer                             1996              245,000
                                                     1995              223,000

Warren J. Neitzel                                    1997              140,000
 General Counsel and Corporate Secretary             1996              130,000
                                                     1995              130,000

John T. O'Reilly                                     1997              103,000
 Controller

------------
(a)Mr. Hofmann is compensated by Loews. Included in the charges to the Company
under a Service Agreement, as discussed in Item 13 of this Form 10-K, was
$200,000 for Mr. Hofmann's services in each of the years ended December 31,
1997, 1996 and 1995.
</TABLE>

  Information with respect to certain non-cash compensation made available to
the Company's executive officers in 1997, has not been included because the
incremental costs thereof to the Company was below the Securities and Exchange
Commission's required disclosure threshold.

  (b)Compensation Pursuant to Plans.

  The Company provides a non-contributory retirement plan (the "Plan") for all
employees, except for those covered by Loews's benefit plans, which Plan
provides pensions upon retirement at one and one-half per cent of the employee's
annual compensation during each year of credited service after December 31,
1976, plus one and one-half per cent of annual compensation for the year 1976
multiplied by the number of years of credited service rendered prior to January
1, 1977. Compensation under the Plan includes all compensation as an employee
included in the table above. Pension benefits are not subject to reduction for
Social Security benefits or other amounts. The following table shows estimated
annual benefits payable upon retirement under the Plan for various amounts of
average compensation and years of credited service, based upon retirement in
1996 and a straight life annuity form of pension. Other forms of pension
payments are also available under 

                                        25

the Plan. Pension benefits may be limited by the Internal Revenue Code.

<TABLE>
<CAPTION>
                                  Estimated Annual Pension for Representative
     Remuneration                           Years of Credited Service
     ------------              -------------------------------------------------
                                    15        20        25        30        35
                                    --        --        --        --        --
<S>                             <C>       <C>       <C>       <C>       <C>
$  50,000 .................     $ 11,250  $ 15,000  $ 18,750  $ 22,500  $ 26,250
  100,000 .................       22,500    30,000    37,500    45,000    52,500
  150,000 .................       33,750    45,000    56,250    67,500    78,750
  200,000 .................       45,000    60,000    75,000    90,000   105,000
  250,000 .................       56,250    75,000    93,750   112,500   131,250

  The years of credited service and the estimated annual retirement benefit
payable at normal retirement age for the following officers are as follows:
<CAPTION>
                                                               Estimated Annual
      Name                      Years                         Retirement Benefit
      ----                      -----                         ------------------
<S>                               <C>                               <C>
Herbert C. Hofmann*
Warren J. Neitzel                 17                                $54,807
Paul S. Sayegh*
John T. O'Reilly*

*Not covered under the Plan.
</TABLE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

  (a) Security Ownership of Certain Beneficial Owners.

  The only person known to the Registrant to be the beneficial owner of more
than 5% of any class of Registrant's voting securities is Loews, which owns
beneficially 4,459,859 shares of the outstanding Common Stock of Registrant as
of February 27, 1998 constituting approximately 97% of the total shares of
Common Stock outstanding. Loews's principal executive offices are located at 667
Madison Avenue, New York, New York 10021-8087. For information with respect to
the principal holders of the outstanding voting securities of Loews, see Item 12
(b) below.

  (b)Security Ownership of Management.

  The following table sets forth certain information, as of February 27, 1998,
with respect to the shares of Registrant's Common Stock and shares of Loews
Common Stock beneficially owned by each of the directors of the Company and
executive officers named above and by all directors and executive officers of
the Company as a group:

                                        26

<TABLE>
<CAPTION>
                                                          Shares of
  Name of Individual       Shares of                        Loews 
     or Number of         Common Stock     Percent of      Common     Percent of
   Persons in Group           (1)             Class        Stock (1)    Class
--------------------------------------------------------------------------------

<S>                           <C>             <C>       <C>              <C>
Harry B. Henshel...........   100              *
Herbert C. Hofmann.........                                     400         * 
Warren J. Neitzel..........
John T. O'Reilly...........
Paul S. Sayegh.............    
Andrew H. Tisch............                                   2,000(2)      *
Laurence A. Tisch..........                              17,749,348      15.4%
Preston R. Tisch...........                              17,749,348      15.4%
All directors and executive 
 officers as a group
 (8 listed above)..........   100              *         35,501,096      30.9%

*Represents less than 1% of the outstanding shares of stock.

  (1) Except as otherwise indicated, the persons listed as beneficial owners of
shares of stock have sole voting and investment power with respect to such
shares.

  (2) In addition, 380 shares of Loews Common Stock are owned by Mr. Tisch's
son, as to which Mr. Tisch disclaims any beneficial interest and 20,000 shares
of Loews Common Stock are held by a charitable foundation as to which Mr. Tisch
has shared voting and investment power.
</TABLE>

Item 13. Certain Relationships and Related Transactions.

  The Company and Loews have entered into a credit agreement (the "Credit
Agreement") providing, under terms and conditions set forth therein, for
unsecured loans by Loews, from time to time, in amounts aggregating up to
$50,000,000, bearing interest at the rate of 10% per annum currently expiring on
June 30, 1999. There has not been any borrowings under the Credit Agreement
since January 17, 1995.

  The Company and Loews have entered into a tax allocation agreement with
respect to the filing by Loews of consolidated federal income tax returns which
include the Company and its subsidiaries. Under this agreement, the Company will
(i) be paid by Loews the amount, if any, by which Loews's consolidated federal
income tax is reduced by virtue of the inclusion of the Company and its
subsidiaries in Loews's consolidated federal income tax return or (ii) pay to
Loews an amount, if any, equal to the federal income tax which would have been
payable by the Company if the Company and its subsidiaries had filed a separate
consolidated return. This agreement may be canceled by the Company or Loews upon
thirty days written notice. Pursuant to this agreement, the Company made
estimated payments to Loews for the year ended December 31, 1997 amounting to
$3,147,000, of which $519,000 will be applied to the year end December 31, 1997,
as a prepaid tax.

  The Company and Loews have entered into a services agreement pursuant to which
Loews provides to the Company various administrative services, including among
other things, data processing, purchasing, accounts payable, printing services,
tax return preparation and cash management services. In addition, the Company
provides Loews with warehousing services. Pursuant to this agreement, each party
reimburses the other in an amount not to exceed the allocated cost of the
services provided. The Company paid Loews $2,064,000 for services provided
during 1997. In addition, the Company has reimbursed to Loews approximately
$509,000 in salaries and related employee benefits for 1997 for employees of
Loews on loan to the Company.

  The Company participates in blanket insurance policies, primarily relating to
property and casualty and general liability insurance, maintained by Loews which
cover properties and facilities of Loews and certain 

                                        27

of its subsidiaries, including the Company. The Company reimbursed to Loews
approximately $231,000 for premiums paid with respect to 1997.

  Certain of the Company's employee health and life insurance benefits are
provided by an insurance subsidiary of CNA. Premiums and fees for such insurance
amounted to approximately $331,000 for 1997.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K.

(a) 1. The consolidated financial statements appear above under Item 8. The
following additional financial data should be read in conjunction with those
financial statements. Schedules not included with these additional financial
data have been omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes to
consolidated financial statements.

<TABLE>
<CAPTION>
                                                                           Page
                                                                          Number
                                                                          ------
    2. Financial statement schedules:

<S>                                                                         <C> 
Independent Auditors' Report.........................................       31
Bulova Corporation and Subsidiaries:
  Schedule II-Valuation and Qualifying Accounts......................       32

<CAPTION>
    3.Exhibits:

                                                                         Exhibit
                              Description                                 Number
                              ------------                             ---------
<S>  <C>                                                                    <C>
(3)  Articles of Incorporation and By-Laws

     Restated Certificate of Incorporation, dated May 25, 1964, and
     filed on August 4, 1964 as Exhibit 3(a) to Amendment No. 2 to 
     Registrant's Registration Statement on Form S-1 (Reg. No. 2-22576),
     incorporated herein by reference. Copies of amendments thereto, 
     dated July 26, 1966, April 22, 1969 and July 2, 1969, incorporated
     herein by reference to Exhibit 3(a) of Registrant's Annual Report 
     on Form 10-K for the year ended December 31, 1980. Copy of 
     Certificate of Change thereto, dated November 25, 1985, incorporated 
     herein by reference to Exhibit 3(a) of Registrant's Annual Report on
     Form 10-K for the year ended December 31, 1985. Copy of Certificate
     of Change thereto, dated July 14, 1987, incorporated herein by 
     reference to Exhibit 3(a) of Registrant's Annual Report on Form 10-K
     for the year ended December 31, 1987. Copy of Certificate of 
     Amendment thereto, dated June 16, 1988, incorporated herein by 
     reference to Exhibit 3(a) of Registrant's Annual Report on Form 
     10-K for the year ended December 31, 1988............................  3(a)

     By-laws currently in effect and incorporated herein by reference to
     Exhibit 3(b) of Registrant's Annual Report on Form 10-K for the year
     ended December 31, 1984..............................................  3(b)

(10) Material Contracts

     Merger Agreement entered into on January 17, 1995, by Bulova 
     Technologies, Inc., a New York corporation ("BTI"), BTI Acquisition
     Corporation, a Delaware corporation, and Bulova Corporation, a New 
     York corporation, the form of which was filed as part of Exhibit (2)
     to Registrant's Report on Form 8-K dated January 17, 1995, and
     incorporated herein by reference..................................... 10(a)

                                        28

<CAPTION>
                                                                         Exhibit
                              Description                                 Number
                              ------------                             ---------
<S>  <C>                                                                    <C>
     Credit Agreement between Loews Corporation and Registrant dated as of
     September 19, 1979, the form of which was filed as part of Exhibit 
     (2) of Item 9(a) of Registrant's Report on Form 10-Q for the quarter
     ended September 30, 1979, and incorporated herein by reference....... 10(b)

     Federal Income Tax Allocation Agreement between Loews Corporation and
     Registrant dated as of March 12, 1980 and effective April 1, 1979,
     incorporated herein by reference to Exhibit 10(b) of Registrant's 
     Annual Report on Form 10-K for the year ended December 31, 1987...... 10(c)

     Corporate Services Agreement between Loews Corporation and Registrant
     dated as of January 1, 1987, incorporated herein by reference to 
     Exhibit 10(c) of Registrant's Annual Report on Form 10-K for the year
     ended December 31, 1987.............................................. 10(d)

(21) Subsidiaries of the Registrant

     List of subsidiaries of Registrant................................... 21*

(27) Financial Data Schedule.............................................. 27*

     *Filed herewith

 (b) Reports on Form 8-K:

 There were no reports on Form 8-K for the three months ended December 31, 1997.

                                        29

                                   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.

                                       BULOVA CORPORATION



Dated: March 27, 1998                  By            /s/ Paul S. Sayegh
                                         ---------------------------------------
                                        (Paul S. Sayegh, Chief Operating Officer
                                             and Principal Financial Officer)

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



Dated: March 27, 1998                  By         /s/ Herbert C. Hofmann
                                          --------------------------------------
                                           (Herbert C. Hofmann, President, Chief 
                                              Executive Officer and Director) 


Dated: March 27, 1998                  By            /s/ Paul S. Sayegh
                                         ---------------------------------------
                                        (Paul S. Sayegh, Chief Operating Officer
                                           and Principal Financial Officer)


Dated: March 27, 1998                  By            /s/ John T. O'Reilly
                                         ---------------------------------------
                                           (John T. O'Reilly, Controller and   
                                             Principal Accounting Officer)


                                       By
                                         ---------------------------------------
                                                (Harry B. Henshel, Director)


Dated: March 27, 1998                  By            /s/ Andrew H. Tisch
                                         ---------------------------------------
                                                  (Andrew H. Tisch, Director)


Dated: March 27, 1998                  By           /s/ Laurence A. Tisch
                                         ---------------------------------------
                                                  (Laurence A. Tisch, Director)


Dated: March 27, 1998                  By           /s/ Preston R. Tisch
                                         ---------------------------------------
                                                 (Preston R. Tisch, Director)

                                        30

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and
Shareholders of Bulova Corporation:

  We have audited the accompanying consolidated balance sheets of Bulova
Corporation and its subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1997.  Our audits
also included the financial statement schedule listed in the index at Item
14(a)2. These financial statements and financial statement schedule are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on the financial statements and financial statement schedule 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 Bulova Corporation and its
subsidiaries at December 31, 1997 and 1996, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1997 in conformity with generally accepted accounting principles.  Also, in
our opinion such financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly in
all material respects the information set forth therein.








Deloitte & Touche LLP
New York, New York
February 18, 1998

                                        31

                                                                     Schedule II


                      BULOVA CORPORATION AND SUBSIDIARIES

                       Valuation and Qualifying Accounts
<TABLR>
<CAPTION>

         Column A               Column B     Column C     Column D    Column E
         --------               --------     --------     --------    --------
                                             Additions
                                Balance at  charged to                Balance at
                                beginning    cost and                     end
         Description            of Period    expenses     Deductions  of Period
         -----------            ----------   ----------   ----------  ----------
<CAPTION>
                                             Year Ended December 31, 1997

<S>                            <C>          <C>         <C>           <C>
Allowance for doubtful 
 accounts....................  $3,514,000   $1,116,000  $1,406,000(a) $3,224,000
Allowance for cash discounts      548,000    1,010,000   1,089,000       469,000
                               -------------------------------------------------
                               $4,062,000   $2,126,000  $2,495,000    $3,693,000
                               =================================================
Allowance for loss on 
 investment in unconsolidated
 subsidiary .................  $  529,000                             $  529,000
                               ==========                             ==========
<CAPTION>

                                              Year Ended December 31, 1996

<S>                            <C>          <C>         <C>           <C>
Allowance for doubtful
 accounts....................  $2,712,000   $2,073,000  $1,271,000(a) $3,514,000
Allowance for cash discounts      434,000    1,121,000   1,007,000       548,000
                               -------------------------------------------------
                               $3,146,000   $3,194,000  $2,278,000    $4,062,000
                               =================================================
Allowance for loss on
 investment in unconsolidated
 subsidiary..................  $  529,000                             $  529,000
                               ==========                             ==========
<CAPTION>
                                              Year Ended December 31, 1995

<S>                            <C>          <C>         <C>           <C>
Allowance for doubtful
 accounts....................  $3,022,000   $  872,000 $1,182,000(a)  $2,712,000
Allowance for cash discounts.     455,000    1,302,000  1,323,000        434,000
                               -------------------------------------------------
                               $3,477,000 $2,174,000   $2,505,000     $3,146,000
                               =================================================
Allowance for loss on 
 investment in unconsolidated
 subsidiary..................  $  529,000                             $  529,000
                               ==========                             ==========
-----------

(a) Includes doubtful accounts written off net of recoveries.
</TABLE>

                                        32