============================================================================== 
                     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, 1998

                                     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 of February 26, 1999, 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 $2,590,000.
===============================================================================

                                     1

                             BULOVA CORPORATION

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

                    For The Year Ended December 31, 1998
<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 .......     8

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

  9   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
       FINANCIAL DISCLOSURE ............................................    21

                                  PART III

 10   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ...............    22

 11   EXECUTIVE COMPENSATION ...........................................    23

 12   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ...    24

 13   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ...................    25

                                  PART IV

 14   EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K ...    26
</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 product 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 90% and 10%, 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 1998, 1997
and 1996, one customer represented approximately 13%, 11% and 12%, respectively,
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 the 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 445 persons, approximately 150 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
and also owns a 91,000 square foot plant in Brooklyn, New York, for clock
service and warehouse purposes. The Brooklyn warehouse replaces a 71,000 square
foot facility the Company leased in Maspeth, New York. In addition, the Company
leases 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>
                                              1998                   1997
                                       -----------------------------------------
                                         High          Low      High         Low
--------------------------------------------------------------------------------
<S>                                    <C>          <C>       <C>         <C>    
 
First Quarter ....................     16 1/4       15 5/8     4 3/4       4 3/4
Second Quarter ...................     17 1/2       16 1/4    10 1/2       4 3/4
Third Quarter ....................     23 1/4       18        14          10 1/2
Fourth Quarter ...................     18 1/8       16 5/8    15 5/8      14
</TABLE>

DIVIDEND INFORMATION

  The Company paid no dividends for the years ended December 31, 1998 and 1997.

APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

  There were approximately 1,400 holders of record of common stock of the
Company at February 26, 1999.                             
                                                
                                      4

Item 6. Selected Financial Data.
<TABLE>
<CAPTION>

Year Ended December 31           1998       1997       1996       1995      1994
--------------------------------------------------------------------------------
(In thousands, except per share data)

<S>                          <C>        <C>        <C>        <C>       <C>
Results of Operations:
  Net sales ...............  $129,157   $123,443   $115,113   $100,449  $ 93,724
  Income from continuing
   operations .............    10,920     10,016      7,001      2,269       532
  Per share ...............      2.37       2.18       1.52        .49       .11
  Net income ..............    10,920     10,016      7,001      2,632       834
  Per share ...............      2.37       2.18       1.52        .57       .18

Financial Position:
  Total assets ............   164,452    155,550    148,454    134,127   151,035
  Discontinued 
   operations-net .........         -          -          -          -    20,082
  Long-term debt ..........         -          -          -          -       200
  Debt to affiliate .......         -          -          -          -    19,000
  Shareholders' equity ....    91,831     81,943     72,381     65,463    62,930
  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.

RESULTS OF OPERATIONS

1998 Compared with 1997

Net sales and income before income taxes increased $5,714,000 and $3,319,000, or
4.6% and 21.7%, as compared to 1997, respectively.

The increase in net sales is primarily attributable to the unit growth of the
Company's Bulova and Caravelle watch brands of 12.7% and 3.7%, respectively, as
compared to 1997. The unit growth, attributable to Bulova and Caravelle, 
resulted in a combined increased net sales of $9,407,000, or 10.0%, as compared
to 1997. This increase was partially offset by a combined sales decline in the
Sportstime licensed product line and the clock product line of $2,075,000, or
9.9%. The Company is continuing its evaluation of the market position and sales
contribution of the Sportstime licensed product business.

Gross profit as a percentage of net sales for the year ended December 31, 1998
was 49.0%, as compared to 46.3% for the year ended December 31, 1997. The
increase in gross profit is attributable to a favorable product sales mix and a
credit of $338,000 to cost of sales related to an actuarial revaluation of its
postretirement benefit net periodic expense.

Royalty income was essentially unchanged from that of the prior year. Royalty
income represents payments by a distributor and licensees principally in Europe,
the Far East and South America. The licensee for Europe and the Far East is
based in Hong Kong. The Company's South American distributor is based in the
United States. While the Company does not believe the current volatility in the
Asian and South American economies will have an impact on royalty income for
1999, there can be no assurance that these economic conditions will not impact
the ability of the licensee and distributor to meet their respective
obligations.

Interest income increased by $576,000, or 43.6%, as compared to 1997. This
increase is the result of the increased level of invested assets during 1998.

Selling, general and administrative expenses as a percentage of net sales for
the year ended December 31, 1998 was 39.1% as compared to 38.3% for the year
ended December 31, 1997. The primary reason for the increase in 1998 was the
result of the Company's significant increase in brand support advertising. This
increase was partially offset by a credit of $629,000 recorded in selling,
general and administrative expenses related to an actuarial revaluation of its
postretirement benefit net periodic expense.

                                       5

1997 Compared with 1996

Net sales and income before income taxes increased $8,330,000 and $3,622,000, or
7.2% and 31.0%, as compared to 1996, 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%, while unit volume
increased 6.6%, as compared to 1996. Effective January 1, 1997, 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, or 11.4%, as compared to 1996.

Revenue increases were partially offset by declines in the clock product line.
Clock revenues declined $1,674,000, or 8.4%, as compared to 1996.

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

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) and $443,000 for the years ended 1997 and 1996, 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. 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.

Interest income increased by $369,000, or 38.8%, as compared to 1996, due
primarily to the Company's increased level of invested assets during 1997.

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% for the year
ended December 31, 1996. The increase in 1997 was the result of the Company's
significant increase in brand support advertising, and an increase in the charge
from Loews for administrative services (see "Related Parties," below), partially
offset by a reduction in health care costs and bad debt expenses.

Foreign Currency

The Company imports most of its watch and clock products. In 1998, approximately
4% of the Company's purchases were denominated in Japanese yen. The remaining
purchases are primarily denominated in U.S. dollars and acquired from vendors
located in Europe, 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
the Company's 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, 1998, 1997 and 1996. Future foreign currency
fluctuations, however, could impact gross profit, income and cash flow.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

The company generated (utilized) cash flow from operations of $(509,000) and
$13,094,000 for the years ended December 31, 1998 and 1997, respectively. The
change in cash flow is due primarily to: (1) the increased level of accounts
receivable which resulted from an increase in sales during the fourth quarter of
1998; (2) the increased level of inventory in the fourth quarter of 1998 to meet
the sales demand for its Bulova and Caravelle product lines; (3) a decrease in
prepaid assets, resulting from the timing of the transactions; and (4) a
decrease in other liabilities which is primarily related to a reduction in
postretirement and pension liabilities as determined by an actuarial
calculation. The above was partially offset by an increase in accounts payable
and accrued expenses. The increase in cash flow from December 31, 1997 as
compared to December 31, 1996 is due primarily to increased sales and
collections from customers.

In the first quarter of 1996, the Company received approximately $3,857,000 in
cash from Benetton International, N.V. which represented damages, costs 

                                       6

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 8 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 a credit agreement with Loews (the "Credit Agreement") which
provides, under 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 on June 30, 2000.
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 in principal amount under the Credit Agreement was
paid in January 1995 and expects that existing cash balances and cash flow from
operations will be sufficient to fund anticipated working capital requirements. 

The Company has invested in property, plant and equipment in an effort to
improve warehouse operational efficiency. In the third quarter of 1998, the
Company increased the scope of this project and revised its estimate of related
capital expenditures from $1,350,000 to $2,000,000. Approximately $495,000 was
incurred during the year ended December 31, 1998, and approximately $1,058,000
has been incurred since the inception of the project, which commenced in the
first quarter of 1997. This project will be funded through the Company's working
capital. Additionally, during the fourth quarter of 1998, the Company purchased
a building for its clock warehousing and distribution requirements. The cost of
the building was approximately $4,000,000 and was funded through the Company's
available working capital. The Company anticipates it will incur approximately
$800,000 in renovation costs during the first half of 1999. These costs will be
funded through the Company's working capital.

Year 2000 Issue

The widespread use of computer programs, both in the United States and
internationally, that rely on two digit date fields to perform computations and
decision making functions may cause computer systems to malfunction when
processing information involving dates beginning in 1999. Such malfunctions
could lead to business delays and disruptions. The Company renovated or replaced
many of its legacy systems and upgraded its systems to accommodate business for
the Year 2000 and beyond. In addition, the Company is checking embedded systems
in computer hardware and other infrastructure such as heating and ventilating
systems, and security systems.

Based upon its current assessment, the Company estimates the total cost to
replace and upgrade its systems to accommodate Year 2000 processing is expected
to be approximately $350,000. As of December 31, 1998, approximately $337,000
has been spent. However, prior to 1997, the Company did not specifically
separate technology charges for Year 2000 from other information technology
charges. In addition, while some hardware charges are included in the budget
figures, the Company's hardware costs are typically included as part of ongoing
technology updates and not specifically as part of the Year 2000 project. All
funds spent and to be spent will be financed from current operating funds.

The Company believes that it will be able to resolve the Year 2000 issue during
the first half of 1999. As of December 31, 1998, the Company has certified
internally over 90% of its internal applications and systems as being ready for
the year 2000. However, due to the interdependent nature of computer systems,
there may be an adverse impact on the Company if vendors, customers and other
business partners fail to successfully address the Year 2000 issue. The
Company's contingency plans will be prepared so that the Company's critical
business processes can be expected to continue to function on January 1, 2000
and beyond. The Company's contingency plans will be structured to address both
remediation of systems and their components and overall business operating risk.
These plans are intended to mitigate both internal risks as well as potential
risk with the Company's vendors, customers and other business partners.

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. The company has exposure to economic
losses due to interest rate risk arising from changes in the level of 
volatility of interest rates. The Company mitigates its exposure to interest 
rate risk by maintaining investments with short-term maturities. As such, the
Company does not believe 

                                       7

these financial instruments present a significant exposure to market risk.

ACCOUNTING STANDARDS

In March 1998, the AICPA's Accounting Standards Executive Committee issued SOP
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." For purposes of this SOP, internal-use software is software
acquired, internally developed or modified solely to meet the entity's internal
needs for which no substantive plan exists or is being developed to market the
software externally during the software's development or modification.
Accounting treatment for costs associated with software developed or obtained
for internal use, as defined by this SOP, is based upon a number of factors,
including the point in time during the project that costs are incurred as well
as the types of costs incurred. This SOP is effective for financial statements
for fiscal years beginning after December 15, 1998 and will be adopted in the
first quarter of 1999. The Company is currently evaluating the effects of this
SOP.

In April 1998, the AICPA's Accounting Standards Executive Committee issued SOP
98-5, "Reporting on the Costs of Start-Up Activities." This SOP requires costs
of start-up activities and organization costs, as defined, to be expensed as
incurred. SOP 98-5 is effective for financial statements for fiscal years
beginning after December 15, 1998. Initial application of this SOP should be
reported as a change in accounting principle, and will, accordingly, involve a
cumulative adjustment. The Company does not expect the adoption of the SOP to
have a significant impact on its results of operations or equity.

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.

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.

                                        8

Item 8. Financial Statements and Supplementary Data.

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
Assets:
--------------------------------------------------------------------------------
December 31                                             1998               1997
--------------------------------------------------------------------------------
<S>                                             <C>                 <C>
Current assets:

 Cash and cash equivalents (Note 1)             $  5,720,000        $ 9,127,000
 
 Investments (Note 1)                             19,964,000         19,937,000

 Receivables, less allowance for doubtful 
  accounts and cash discounts of $3,839,000 
  and $3,693,000 (Note 1)                         56,213,000         51,377,000

 Inventories (Note 1)                             38,937,000         35,656,000

 Prepaid expenses (Note 4)                         1,502,000          1,560,000

 Prepaid income taxes (Note 3)                     1,057,000            519,000

 Deferred income taxes (Notes 1 and 3)             9,416,000          8,219,000
--------------------------------------------------------------------------------
Total current assets                             132,809,000        126,395,000
--------------------------------------------------------------------------------

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

 Land, buildings and improvements                 18,040,000         14,090,000

 Machinery and equipment                           2,759,000          2,631,000

 Furniture, fixtures and leasehold improvements    4,381,000          4,091,000
--------------------------------------------------------------------------------
                                                  25,180,000         20,812,000
 Less accumulated depreciation and amortization    9,973,000          9,323,000
--------------------------------------------------------------------------------
Property, plant and equipment-net                 15,207,000         11,489,000
--------------------------------------------------------------------------------

Other assets:

 Deferred income taxes (Notes 1 and 3)            16,220,000         17,442,000

 Other assets                                        216,000            224,000
--------------------------------------------------------------------------------
Total other assets                                16,436,000         17,666,000
--------------------------------------------------------------------------------
Total assets                                     164,452,000       $155,550,000
================================================================================
See Notes to Consolidated Financial Statements.

                                       9

<CAPTION>
--------------------------------------------------------------------------------
Liabilities and Shareholders' Equity:
--------------------------------------------------------------------------------
December 31                                             1998               1997
--------------------------------------------------------------------------------
<S>                                             <C>                <C>
Current liabilities:

 Accounts payable                               $  3,579,000       $  3,092,000
 Accrued expenses:
  Salaries, wages and commissions                  3,248,000          3,226,000
  Pension (Note 4)                                   197,000               
  Postretirement benefits (Note 4)                   972,000          1,439,000
  Advertising (Note 1)                             4,435,000          3,292,000
  Warranty (Note 1)                                1,017,000          1,016,000
  Other                                           11,660,000         10,940,000
--------------------------------------------------------------------------------
Total current liabilities                         25,108,000         23,005,000
--------------------------------------------------------------------------------

Other liabilities and credits:

 Postretirement benefits payable (Note 4)         39,495,000         40,967,000
 Pension benefits payable (Note 4)                 3,590,000          3,606,000
 Other (Note 8)                                    4,428,000          6,029,000
--------------------------------------------------------------------------------
Total other liabilities and credits               47,513,000         50,602,000
--------------------------------------------------------------------------------

Commitments and contingent liabilities 
 (Notes 2, 3, 4, 7 and 8)

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                                48,714,000         37,794,000
 Accumulated other comprehensive loss             (3,074,000)        (2,042,000)
--------------------------------------------------------------------------------
                                                  91,836,000         81,948,000
 Less 1,000 shares of common stock held in 
  treasury, at cost                                    5,000              5,000
--------------------------------------------------------------------------------
Total shareholders' equity                        91,831,000         81,943,000
--------------------------------------------------------------------------------
Total liabilities and shareholders' equity      $164,452,000       $155,550,000
================================================================================
</TABLE>

                                        10

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31                 1998               1997             1996
-------------------------------------------------------------------------------

<S>                            <C>                <C>              <C>
Net sales                      $129,157,000       $123,443,000     $115,113,000
Cost of sales                    65,845,000         66,323,000       66,756,000
-------------------------------------------------------------------------------
Gross profit                     63,312,000         57,120,000       48,357,000
Selling, general and 
 administrative expenses         50,465,000         47,246,000       42,341,000
-------------------------------------------------------------------------------
Operating income                 12,847,000          9,874,000        6,016,000
Royalty                           3,581,000          3,606,000        3,863,000
Interest-net                      1,896,000          1,320,000          951,000
Other                               286,000            491,000          839,000
-------------------------------------------------------------------------------
Income before income taxes       18,610,000         15,291,000       11,669,000

Income taxes (Notes 1 and 3)      7,690,000          5,275,000        4,668,000
-------------------------------------------------------------------------------
Net income                     $ 10,920,000       $ 10,016,000     $  7,001,000
===============================================================================
Net income per share (Note 1)  $       2.37       $       2.18     $       1.52
===============================================================================

See Notes to Consolidated Financial Statements.
</TABLE>

                                        11

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

                                                                                      Accumulated 
                                                             Additional                  Other 
                                    Comprehensive   Common    Paid-in     Retained    Comprehensive   Treasury
                                       Income       Stock     Capital     Earnings    Income (Loss)     Stock
--------------------------------------------------------------------------------------------------------------
(Amounts in thousands)

<S>                                <C>             <C>       <C>          <C>            <C>          <C>
Balance, December 31, 1995                         $22,999   $  23,197    $ 20,777       $(1,505)     $    (5)
Comprehensive income:
 Net income                          $  7,001                                7,001
                                     --------
 Other comprehensive 
  income (loss), net of tax:
   Exchange rate changes
    during the year (net of
    income tax benefit of $92)           (170)                                              (170)
   Pension liability
    adjustment, net (Note 4)               87                                                 87
                                     --------
 Other comprehensive loss                 (83)
                                     --------
 Comprehensive income                   6,918
                                     ========
                                                   -----------------------------------------------------------
Balance, December 31, 1996                          22,999      23,197      27,778        (1,588)          (5)
Comprehensive income:
 Net income                          $ 10,016                               10,016
                                     --------
 Other comprehensive
  loss, net of tax benefit:
   Exchange rate changes
    during the year (net of
    income tax benefit of $167)          (310)                                              (310)
   Pension liability
    adjustment, net (Note 4)             (144)                                              (144)
                                     --------
 Other comprehensive loss                (454)
                                     --------
 Comprehensive income                $  9,562
                                     ========
                                                  ------------------------------------------------------------
Balance, December 31, 1997                          22,999       23,197      37,794        (2,042)         (5)
Comprehensive income:
 Net income                          $ 10,920                                10,920
                                     --------
 Other comprehensive 
  loss, net of tax benefit:
   Exchange rate changes
    during the year (net of
    income tax benefit of $213)          (396)                                              (396)
   Pension liability
    adjustment, net (Note 4)             (636)                                              (636)
                                     --------
 Other comprehensive loss              (1,032)
                                     --------
 Comprehensive income                $  9,888
                                     ========    -------------------------------------------------------------
Balance, December 31, 1998                         $22,999    $  23,197    $ 48,714       $(3,074)     $   (5)
                                                 =============================================================

See Notes to Consolidated Financial Statements.
</TABLE>

                                        12

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31                   1998              1997            1996
--------------------------------------------------------------------------------

Operating Activities:

<S>                               <C>              <C>             <C>
Net income                        $10,920,000      $ 10,016,000    $  7,001,000
Adjustments to reconcile net 
 income to net cash (used in)
 provided by operating activities:
  Amortization of investments      (1,563,000)         (868,000)       (339,000)
  Depreciation and amortization       727,000           649,000         773,000
  Gain on disposition of assets       (11,000)          (15,000)        (67,000)
  Provision for losses and cash
   discounts on accounts
   receivable                       2,591,000         2,126,000       3,194,000
  Deferred income taxes                25,000             8,000      (1,488,000)
Changes in operating assets and
 liabilities-net:
  Receivables                      (7,427,000)          914,000      (6,653,000)
  Inventories                      (3,281,000)        1,474,000       1,784,000
  Prepaid expenses                     58,000         1,614,000      (1,721,000)
  Other assets                          8,000           615,000        (441,000)
  Accounts payable and accrued 
   expenses                         2,103,000         1,596,000       3,916,000
  Accrued federal and foreign 
   income taxes                      (538,000)       (2,182,000)      1,608,000
  Other-net                        (4,121,000)       (2,853,000)      2,002,000
--------------------------------------------------------------------------------
                                     (509,000)       13,094,000       9,569,000
--------------------------------------------------------------------------------

Investing Activities:

Purchases of short-term 
 investments                     (228,416,000)      (53,462,000)    (14,639,000)
Proceeds from sales of  
 U.S. government securities       229,952,000        39,371,000      10,000,000
Purchases of property, plant 
 and equipment                     (4,445,000)         (563,000)       (112,000)
Proceeds from disposal of 
 property, plant and equipment         11,000            22,000          84,000
--------------------------------------------------------------------------------
                                   (2,898,000)      (14,632,000)     (4,667,000)
--------------------------------------------------------------------------------

Financing Activities:

Principal payments on 
 long-term debt                                                        (200,000)
--------------------------------------------------------------------------------


Net change in cash and 
 cash equivalents                  (3,407,000)       (1,538,000)      4,702,000
Cash and cash equivalents,
 beginning of year                  9,127,000        10,665,000       5,963,000
--------------------------------------------------------------------------------
Cash and cash equivalents,
 end of year                      $ 5,720,000       $ 9,127,000    $ 10,665,000
================================================================================

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) Accounting changes - Effective December 31, 1998, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for presenting
comprehensive income and its components. The Company has presented this
information in its Consolidated Statements of Shareholders' Equity.

Effective December 31, 1998, the Company adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." SFAS No. 131 revises
standards for the way that public business enterprises report information about
operating segments in interim and annual financial statements and related
disclosures about products and services, geographic areas and major customers.
The Company has presented this information in Note 6.

Effective December 31, 1998, the Company adopted SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 132
standardizes disclosure requirements for pensions 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
analysis, and eliminates certain disclosures that are no longer deemed as useful
to users of financial statements. The Company has presented this information in
Note 4.

(e) Cash and cash equivalents - The Company classifies as cash equivalents all
highly liquid investments with maturities of three months or less. At December
31, 1998 and 1997, cash equivalents were comprised of investments in
money-market accounts.

(f) 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.

(g) 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,
1998 and 1997, 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 U.S. based customer accounted for approximately 13%, 11% and 12%, of sales
for the years ended December 31, 1998, 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.

(h) 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.

(i) 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.

(j) 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. The Company provides
for deferred income taxes under the liability method, whereby deferred income
taxes result from temporary differences between the tax basis of assets and
liabilities and their reported amounts in the financial statements. 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.

                                        14

(k) 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,
1998).

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

(l) Foreign Currency Adjustment - The effect of changes in exchange rates in
translating foreign currency financial statements is accumulated as a separate
component of other comprehensive income in the statement of shareholders'
equity.

(m) 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, 1998 and 1997, there were no foreign
exchange contracts outstanding.

(n) 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 by the Company are recorded at the lower of
carrying amount or fair value less cost to sell.

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

(p) 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.

(q) Reclassifications - Certain amounts applicable to prior periods have been
reclassified to conform to the classifications followed in 1998.

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, 2000.
The Credit Agreement has not been utilized since the balance due to Loews was
paid in January 1995.

Loews has provided administrative services for which the Company paid
$2,075,000, $2,064,000 and $730,000 for the years ended December 31, 1998, 1997
and 1996, respectively. The cost allocated to the Company is estimated to be the
incremental cost incurred by Loews in providing these services to the Company.

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 $4,585,000, $2,580,000 and $5,282,000 for the years
ended December 31, 1998, 1997, and 1996, respectively. This agreement may be
canceled by the Company or Loews upon thirty days written notice.

Income before income taxes consisted of the following:

<TABLE>
<CAPTION>
Year Ended December 31                   1998             1997             1996
--------------------------------------------------------------------------------
<S>                               <C>              <C>              <C>
Income before income taxes:
 Domestic                         $17,140,000      $14,179,000      $11,350,000
 Foreign                            1,470,000        1,112,000          319,000
--------------------------------------------------------------------------------
Total                             $18,610,000      $15,291,000      $11,669,000
================================================================================
</TABLE>

                                        15

<TABLE>
<CAPTION>
Year Ended December 31                   1998             1997             1996
--------------------------------------------------------------------------------
<S>                               <C>              <C>              <C>
Income tax expense (benefit):
 Federal:
  Current                         $ 4,585,000      $ 2,580,000      $ 5,282,000
  Deferred                            723,000        1,857,000       (1,627,000)
 State and local:
  Current                           1,847,000        2,849,000          958,000
  Deferred                           (126,000)      (1,606,000)
 Foreign:
  Current                             840,000         (402,000)         (22,000)
  Deferred                           (179,000)          (3,000)          77,000
--------------------------------------------------------------------------------
Income tax expense                $ 7,690,000      $ 5,275,000      $ 4,668,000
================================================================================
</TABLE>

Deferred tax assets are as follows:

<TABLE>
<CAPTION>
December 31                                               1998             1997
--------------------------------------------------------------------------------
<S>                                                <C>              <C>
Employee benefits                                  $21,369,000      $22,077,000
Inventory                                            5,781,000        5,603,000 
Accrued expenses                                     2,933,000        2,818,000 
Accounts receivable                                  1,569,000        1,520,000
--------------------------------------------------------------------------------
                                                    31,652,000       32,018,000
Valuation allowance                                 (6,016,000)      (6,357,000)
--------------------------------------------------------------------------------
Deferred tax assets-net                            $25,636,000      $25,661,000
================================================================================
</TABLE>

The valuation allowance relates to state and local temporary differences.

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

<TABLE>
<CAPTION>
Year Ended December 31                  1998              1997             1996
--------------------------------------------------------------------------------
<S>                                <C>              <C>              <C>
Income taxes computed at 
 statutory rate                    $6,514,000       $5,352,000       $4,084,000
Increase (decrease) in taxes 
 resulting from:
  State and local taxes             1,119,000          808,000          623,000
  Foreign taxes                       146,000         (794,000)         (53,000)
  Permanent differences                11,000           32,000           31,000
  Benefit of tax allocation
   agreement                         (100,000)         (77,000)        
  Other                                                (46,000)         (17,000)
--------------------------------------------------------------------------------
Income tax expense                 $7,690,000       $5,275,000       $4,668,000
================================================================================
</TABLE>

Federal, foreign, state and local income tax payments amounted to approximately
$8,484,000, $7,229,000 and $2,910,000 for the years ended December 31, 1998,
1997 and 1996, respectively.

Federal income tax returns have been examined through 1994 and settled through
1990. The years 1995 through 1997 are currently under examination. The Company's
Canadian tax returns have been examined and settled through 1990 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.

                                         16

Note 4. Benefit 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.

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 of contributions in excess of the minimum funding requirement for
the year ended December 31, 1997.

At December 31, 1998, 1997 and 1996, the Company's minimum pension liability
exceeded its unrecognized prior service cost and net transition obligation by
$1,982,000, $1,195,000 and $840,000, respectively. This excess is recorded as a
reduction to shareholders' equity of $1,117,000, $481,000 and $337,000, net of
tax benefits of $601,000, $421,000 and $181,000 and intangible assets of
$264,000, $293,000 and $322,000 for the years ended December 31, 1998, 1997 and
1996, 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. The benefits provided by the
Company are basically health, and for certain retirees, life insurance type
benefits.

Components of net periodic benefit costs are as follows:

<TABLE>
<CAPTION>
                                             Pension Benefits                 Other Postretirement Benefits
                                 --------------------------------------   ------------------------------------
                                        1998         1997         1996          1998         1997        1996
--------------------------------------------------------------------------------------------------------------
<S>                              <C>          <C>          <C>           <C>          <C>         <C>
Service cost-benefits earned     $   730,000  $   655,000  $   614,000   $   108,000  $   103,000 $   206,000
Interest cost                      1,919,000    1,849,000    1,852,000     1,081,000    1,510,000   1,821,000
Expected return on plan assets    (1,563,000)  (1,623,000)  (1,479,000)
Amortization of unrecognized
 net (asset) liability              (478,000)    (478,000)      31,000
Amortization of unrecognized
 net loss (gain)                     180,000       99,000      146,000    (1,352,000)  (1,168,000) (1,008,000)
Amortization of unrecognized
 prior service cost                   29,000       29,000     (478,000)     (804,000)    (641,000)   (490,000)
Curtailment and special 
 termination benefits                                          168,000                                (86,000)
--------------------------------------------------------------------------------------------------------------
Net periodic benefit costs       $   817,000  $   531,000  $   854,000   $  (967,000) $  (196,000)$   443,000
==============================================================================================================

                                        17

<CAPTION>
Changes in benefit obligations are as follows:
                                                                        Other         
                                      Pension Benefits         Postretirement Benefits
                                  -----------------------    ---------------------------
                                         1998        1997           1998           1997
----------------------------------------------------------------------------------------
<S>                               <C>         <C>            <C>            <C>
Benefit obligation at January 1   $27,932,000 $26,143,000    $16,315,000    $21,090,000
Service cost                          730,000     655,000        108,000        103,000
Interest cost                       1,919,000   1,849,000      1,081,000      1,510,000
Plan participants' contribution                                  211,000        316,000
Amendments                                                    (4,628,000)    (1,630,000)
Actuarial (gain) loss               1,030,000     803,000     (2,494,000)    (3,635,000)
Benefits paid                      (1,479,000) (1,518,000)      (972,000)    (1,439,000)
----------------------------------------------------------------------------------------
Benefit obligation at December 31  30,132,000  27,932,000      9,621,000     16,315,000
----------------------------------------------------------------------------------------

Change in plan assets:

Fair value of plan assets at 
 January 1                         22,990,000  22,377,000
Actual return on plan assets        2,020,000   2,131,000                    
Company contributions                 435,000                    761,000      1,123,000
Plan participants' contribution                                  211,000        316,000
Benefits paid                      (1,479,000) (1,518,000)      (972,000)    (1,439,000)
----------------------------------------------------------------------------------------
Fair value of plan assets at                                                       
 December 31                       23,966,000  22,990,000
---------------------------------------------------------------------------------------

Benefit obligation over plan
 assets                             6,166,000   4,942,000      9,621,000     16,315,000
Unrecognized net actuarial 
 (loss) gain                       (5,054,000) (4,661,000)    20,497,000     19,566,000
Unrecognized prior service 
 (cost) gain                         (264,000)   (293,000)    10,349,000      6,525,000
Unrecognized net asset                956,000   1,435,000
----------------------------------------------------------------------------------------
Net benefit obligation            $ 1,804,000 $ 1,423,000    $40,467,000    $42,406,000
========================================================================================

Amounts recognized in the balance 
 sheet consist of:

Accrued benefit liability         $ 3,787,000 $ 3,606,000    $40,467,000    $42,406,000
Prepaid expenses                                 (988,000)
Intangible asset                     (264,000)   (293,000)
Accumulated other comprehensive
 loss                              (1,719,000)   (902,000)
----------------------------------------------------------------------------------------
Net benefit obligation            $ 1,804,000 $ 1,423,000    $40,467,000    $42,406,000
========================================================================================

                                            18

<CAPTION>
Weighted-average assumptions are as follows:

                               Pension Benefits           Other Postretirement Benefits
                           --------------------------    -------------------------------
December 31                1998      1997       1996         1998       1997       1996
----------------------------------------------------------------------------------------
<S>                        <C>       <C>        <C>          <C>        <C>        <C>
Discount rate              6.75%     7.00%      7.50%        6.75%      7.00%      7.50%
Expected return on 
 plan assets               7.00%     7.50%      7.00%
Rate of compensation  
 increase                  5.50%     5.50%      5.75%
----------------------------------------------------------------------------------------
</TABLE>

For measurement purposes, a trend rate of 7.8% pre-65 and 7.0% post-65, for
covered costs was used. These trend rates are expected to decrease gradually to
4.8% at rates from 0.3% to 0.5% per annum. An increase (or decrease) of one
percentage point in assumed health care cost trend rates would increase (or
decrease) the postretirement benefit obligation by approximately $1,016,000 (or
$858,000) and the net periodic postretirement benefit cost by approximately
$147,000 (or $127,000).

Note 5. Quarterly Financial Data (Unaudited) -

<TABLE>
<CAPTION>
1998 Quarters Ended                   Dec. 31       Sept.30        June 30     March 31
---------------------------------------------------------------------------------------  
<S>                               <C>           <C>            <C>          <C>
Net sales                         $37,496,000   $33,920,000    $26,815,000  $30,926,000
Cost of sales                      17,016,000    16,853,000     14,528,000   17,448,000
Net income                          3,403,000     3,241,000      1,919,000    2,357,000
Net income per share                      .74           .70            .42          .51

<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
Net income per share                      .89           .67            .26          .35
---------------------------------------------------------------------------------------
</TABLE>

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.

                                        19

Note 6. Geographic Information -

The Company operates predominantly in a single industry segment, that being the
distribution and sale of watches and clocks under the brand names of Bulova,
Caravelle and Accutron. Substantially all of the Company's sales are in the
United States and Canada. The Company evaluates performance based on operating
earnings of the respective geographic area and the geographic distributions of
the Company's identifiable assets and operating results are summarized in the
following tables:

<TABLE>
<CAPTION>
Year Ended December 31, 1998      United States           Canada          Total
--------------------------------------------------------------------------------
<S>                               <C>                <C>           <C>
Sales                             $118,357,000       $13,052,000   $131,409,000
Intercompany sales                  (2,252,000)                      (2,252,000)
--------------------------------------------------------------------------------
Total net sales                   $116,105,000       $13,052,000   $129,157,000
================================================================================

Operating income                  $ 11,466,000       $ 1,381,000   $ 12,847,000
Royalties                            3,581,000                        3,581,000
Interest - net                       1,860,000            36,000      1,896,000
Other                                  233,000            53,000        286,000
--------------------------------------------------------------------------------
Income before tax                 $ 17,140,000       $ 1,470,000   $ 18,610,000 
================================================================================
Identifiable assets               $153,311,000       $11,141,000   $164,452,000
================================================================================

<CAPTION>
Year Ended December 31, 1997
--------------------------------------------------------------------------------
<S>                               <C>                <C>           <C>
Sales                             $112,519,000       $13,013,000   $125,532,000
Intercompany sales                  (2,089,000)                      (2,089,000)
--------------------------------------------------------------------------------
Total net sales                   $110,430,000       $13,013,000   $123,443,000 
================================================================================

Operating income                  $  8,588,000       $ 1,286,000   $  9,874,000
Royalties                            3,606,000                        3,606,000 
Interest - net                       1,482,000          (162,000)     1,320,000
Other                                  503,000           (12,000)       491,000
--------------------------------------------------------------------------------
Income before tax                 $ 14,179,000       $ 1,112,000   $ 15,291,000
================================================================================
Identifiable assets               $144,115,000       $11,435,000   $155,550,000
================================================================================

<CAPTION>
Year Ended December 31, 1996      United States          Canada           Total
--------------------------------------------------------------------------------
<S>                                <C>             <C>             <C>
Sales                              $104,802,000    $ 11,688,000    $116,490,000
Intercompany sales                   (1,377,000)                     (1,377,000)
--------------------------------------------------------------------------------
Total net sales                    $103,425,000    $ 11,688,000    $115,113,000
================================================================================

Operating income                   $  5,318,000    $    698,000    $  6,016,000
Royalties                             3,863,000                       3,863,000 
Interest - net                        1,390,000        (439,000)        951,000
Other                                   779,000          60,000         839,000
--------------------------------------------------------------------------------
Income before tax                  $ 11,350,000    $    319,000    $ 11,669,000
================================================================================
Identifiable assets                $137,149,000    $ 11,305,000    $148,454,000
================================================================================
</TABLE>

                                        20

Note 7. Leases -

The Company leases certain of its warehouse and office facilities. The future
minimum lease payments under operating leases for the four years ending December
31, 2002 is $106,000, $106,000, $106,000 and $106,000.

Note 8. Contingencies and Litigation -

(a) Environmental Matters - Prior to 1996, the Company had received notice of
environmental contaminates at various manufacturing facilities. The Company has
provided for the expected costs of remedition in those earlier years. The
Company has cooperated with the current owners of those properties and the
appropriate regulatory agencies. It believes that it has substantially addressed
these contingencies. At December 31, 1998, the remaining environmental liability
recognized in the Company's financial statements of $236,000 represents the
minimum of the Company's estimated range in equally likely outcomes, the upper
limit of the range is approximately $500,000.

(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 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.

                                        21

                                  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 .....    49   Chairman of the Board of the Company.         1979
                               Mr. Tisch is also the Chairman of the
                               Executive Committee and a member of the
                               Office of the President of Loews since
                               January 1999. Prior thereto he had been
                               Chairman of the Management Committee of
                               Loews. From September 1989 to May 1995,
                               Mr. Tisch served as 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...    56   President and Chief Executive Officer         1979
                               of the Company. Mr. Hofmann is also
                               a director of Diamond Offshore 
                               Drilling, Inc. (52% owned subsidiary 
                               of Loews) and also serves as Senior 
                               Vice President of Loews.
Harry B. Henshel ....    80   Vice Chairman of the Board of the Company.    1958
Laurence A. Tisch ...    76   Co-Chairman of the Board of Loews. Prior      1979
                               to January 1999, Mr. Tisch had also been
                               Co-Chief Executive Officer of Loews.
                               Mr. Tisch is also Chief Executive Officer
                               and a director of CNA Financial
                               Corporation ("CNA") (85% owned subsidiary
                               of Loews). In addition, he served as
                               Chairman, President and Chief Executive
                               Officer and a director of CBS, Inc.
                               until November 24, 1995. Mr. Tisch also
                               serves as a director of Automatic Data
                               Processing, Inc.
Preston R. Tisch ....    72   Co-Chairman of the Board of Loews. Prior      1988
                               to January 1999, Mr. Tisch had also been
                               Co-Chief Executive Officer of Loews.
                               Mr. Tisch served as Postmaster General of
                               the United States from August 15, 1986 to
                               February 26, 1988. Prior thereto he had
                               served as President and Chief Operating
                               Officer of Loews since 1969 and as a
                               director of Loews since 1960. He was
                               re-elected a director of Loews in March
                               1988. Mr. Tisch is also a director of CNA,
                               Hasbro, Inc. and Rite Aid Corporation.
</TABLE>

 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.

                                       22

(b) Executive Officers.
<TABLE>
<CAPTION>
                                                                 First Became an
    Name                  Position and Offices Held     Age          Officer
--------------------------------------------------------------------------------
<S>                    <C>                              <C>            <C>
Herbert C. Hofmann...  President and Chief Executive    56             1985
                        Officer
Warren J. Neitzel ...  General Counsel and Corporate    48             1993
                        Secretary
John T. O'Reilly ....  Vice President and Controller    38             1996
Carl E. Rosen .......  Senior Vice President            45             1998
Paul S. Sayegh ......  Chief Operating Officer          55             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, 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.

  Mr. Rosen served in an executive capacity in the Registrant's operations for
more than five years prior to his appointment as Senior Vice President. Mr.
Rosen also serves as Executive Director of Information Technology for 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, 1998, 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                                     1998               -
 President and Chief Executive Officer(a)              1997               - 
                                                       1996               - 

Paul S. Sayegh                                         1998           $ 262,000
 Chief Operating Officer                               1997             245,000
                                                       1996             245,000
Warren J. Neitzel                                      1998             144,000
 General Counsel and Corporate Secretary               1997             140,000
                                                       1996             130,000
    
John T. O'Reilly                                       1998             104,000
 Vice President and Controller                         1997             103,000
------------

(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
$240,000 for Mr. Hofmann's services in the year ended December 31, 1998 and
$200,000 in each of the years ended December 31, 1997 and 1996.
</TABLE>

  Information with respect to certain non-cash compensation made available to
the Company's executive officers in 1998, has not been included because the
incremental costs thereof to the Company was below the Securities and Exchange
Commission's required disclosure threshold.

                                        23 

  (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
1999 and a straight life annuity form of pension. Other forms of pension
payments are also available under 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
      -----                          -----                  -------------------  
<C>                                   <C>                      <C> 
Herbert C. Hofmann*
Warren J. Neitzel                     18                       $59,484
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 26, 1999 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.

                                       24

  (b) Security Ownership of Management.

  The following table sets forth certain information, as of February 26, 1999,
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:

<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.......
Carl E. Rosen .........
Paul S. Sayegh.........
Andrew H. Tisch........                                      2,000(2)      *
Laurence A. Tisch......                                 17,308,998(3)   15.5%
Preston R. Tisch.......                                 17,308,998(4)   15.5%
All directors and 
 executive officers as
 a group (9 listed 
 above)................        100             *        34,620,396      31.0%

*Represents less than l% 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.

  (3) Includes 3,000,000 shares held by Mr. Tisch's wife.

  (4) Includes 3,000,000 shares held by Mr. Tisch's wife
</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, 2000. 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, 1998 amounting to
$5,642,000, of which $1,057,000 is reported as prepaid income taxes at December
31, 1998.

                                        25

  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 $2,075,000 for services provided
during 1998. In addition, the Company has reimbursed to Loews approximately
$552,000 in salaries and related employee benefits for 1998 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 of its subsidiaries,
including the Company.  The Company reimbursed to Loews approximately $210,000
for premiums paid with respect to 1998.

  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 $281,000 for 1998.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules 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
                                                                         ------
<S>                                                                        <C>
     2.  Financial statement schedules:

Independent Auditors' Report.........................................      29
Bulova Corporation and Subsidiaries:
 Schedule II-Valuation and Qualifying Accounts.......................      30

<CAPTION>

     3. Exhibits:

                                                                        Exhibit
                      Description                                       Number
                      -----------                                       -------
 
<S>                                                                     <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)

                                        26

<CAPTION>

                                                                        Exhibit
                      Description                                       Number
                      -----------                                       -------
 
<S>                                                                     <C>    
     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

     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(a)

     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(b)

     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(c)

(21) Subsidiaries of the Registrant

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

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

     *Filed herewith
 
</TABLE>

 (b) Reports on Form 8-K:

  There were no reports on Form 8-K for the three months ended December 31,
1998.

                                        27

                                   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 30, 1999                       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 30, 1999                       By       /s/ Herbert C. Hofmann 
                                               ---------------------------------
                                                (Herbert C. Hofmann, President,
                                                  Chief Executive Officer and
                                                  Director)


Dated: March 30, 1999                       By         /s/ Paul S. Sayegh       
                                               ---------------------------------
                                               (Paul S. Sayegh, Chief Operating
                                                 Officer and Principal Financial
                                                 Officer)


Dated: March 30, 1999                       By        /s/ John T. O'Reilly     
                                               ---------------------------------
                                                (John T. O'Reilly, 
                                                  Vice President and Controller)



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

Dated: March 30, 1999                       By        /s/ Andrew H. Tisch
                                               ---------------------------------
                                                   (Andrew H. Tisch, Director)


Dated: March 30, 1999                       By       /s/ Laurence A. Tisch
                                               ---------------------------------
                                                 (Laurence A. Tisch, Director)


Dated: March 30, 1999                       By       /s/ Preston R. Tisch       
                                               ---------------------------------
                                                  (Preston R. Tisch, Director)

                                       28

                           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 ("the Corporation")as of December 31, 1998 and
1997, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1998. 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, 1998 and 1997, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1998 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, presents fairly in
all material respects the information set forth therein.


Deloitte & Touche LLP
New York, New York
February 10, 1999

                                        29

                                                                     Schedule II

                      BULOVA CORPORATION AND SUBSIDIARIES

                       Valuation and Qualifying Accounts


<TABLE>
<CAPTION>
         Column A               Column B     Column C     Column D    Column E
         -----------            ----------   ----------   ----------  ----------
                                             Additions 
                                Balance at   charged to               Balance at
                                beginning    costs and                  end of
         Description            of Period    expenses     Deductions    Period
         -----------            ----------   ----------   ----------  ----------

                                         Year Ended December 31, 1998

<S>                            <C>          <C>         <C>           <C>
Allowance for doubtful 
 accounts ...................  $3,224,000   $1,361,000  $1,363,000(a) $3,222,000
Allowance for cash discounts      469,000    1,230,000   1,082,000       617,000
                               -------------------------------------------------
                               $3,693,000   $2,591,000  $2,445,000    $3,839,000
                               =================================================

Allowance for loss on 
 investment in unconsolidated
 subsidiary .................  $  529,000               $  529,000
                               =================================================

                                         Year Ended December 31, 1997

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

                                         Year Ended December 31, 1996

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
                               ==========                             ==========
-------------

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

                                       30