<PAGE> PAGE 1

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________

FORM 10-K/A

/X/  ANNUAL REPORT Pursuant to Section 13 or 15(d) of
     the Securities Exchange Act of 1934 (Fee required) (AMENDED)

/ /  TRANSITION REPORT Pursuant to Section 13 or 15(d) of
     the Securities Exchange Act of 1934 (No fee required)
________________________________________________________________

For the fiscal year ended June 30, 1996
________________________________________________________________

Commission File No. 1-6485
________________________________________________________________

ACTION INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________________

Pennsylvania
(State or other jurisdiction of incorporation or organization)
________________________________________________________________

25-0918682
(I.R.S. Employer Identification No.)
________________________________________________________________

460 Nixon Road, Cheswick, Pennsylvania                 15024-1098
(Address of principal executive offices)               (Zip Code)
________________________________________________________________

Registrant's telephone number, including area code:
(412) 782-4800
_________________________________________________________________

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

                                        Name of each exchange
    Title of each class                  on which registered
    -------------------                 ---------------------
Common stock, par value                American Stock Exchange
  $.10 per share
9% Convertible Subordinated
  Debentures Due 1998
________________________________________________________________

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

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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 report(s), and (2) has been subject to such filing
requirements for the past 90 days.  Yes   X     No
                                        -----       -----
________________________________________________________________

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

As of October 17, 1996, the aggregate market value of the
Registrant's common stock held by nonaffiliates of Registrant was
approximately $6,468,100.
________________________________________________________________

The number of shares of the Registrant's common stock outstanding
at September 27, 1996 was 5,539,458.
________________________________________________________________

<PAGE> PAGE 3

PART I
______________________________________________________________________

ITEM 1. BUSINESS
______________________________________________________________________


NOTE:  References to a fiscal year in this Form 10-K are to Action
Industries, Inc.'s fiscal year ending for the five most recent fiscal
years on June 30, 1996, June 24, 1995, June 25, 1994, June 26, 1993, and
June 27, 1992.  Unless otherwise indicated, information is presented for
continuing operations.


GENERAL DEVELOPMENTS IN THE BUSINESS - FIVE YEARS ENDED JUNE 30, 1996

Sale of Operating Assets.  The Company has entered into an agreement to
sell its inventory and related intellectual property associated with its
Replenishment (Powerhouse) business (sold October 18, 1996), and pending
the approval of its shareholders, to also sell the inventories and
intellectual property related to its Promotional business on or about
mid to late December 1996 or early January 1997.  If approved by the
shareholders and consummated, this transaction will result in the sale
of substantially all of the operating assets currently employed in the
Company's business.  Assets remaining would be the Company's trade
receivables and several notes and other non-trade receivables relating
to prior asset dispositions and a prior sale/leaseback transaction.
   
With the assistance of its investment bankers, Parker/Hunter, the
Company is actively exploring other strategic options available to it,
including business combinations with other operating businesses, in
order to continue as an operating concern and preserve all or a portion
of its income tax net operating loss carryforwards.  The Company has had
indications of interest from third parties for a business combination of
this type.  Discussions are in process with interested third parties,
but such discussions are preliminary and may not result in an agreement
relating to any such transaction.
    
The events which have led to the decision to sell the current operations
are described in the following paragraphs.
   
Organization and Business. The organization and business of Action
Industries, Inc. and its Subsidiaries (collectively, the "Company") have
undergone significant changes beginning in fiscal 1990 and continuing
through fiscal 1996 in connection with a major restructuring effort and
the Company's response to declining sales.  See "Management's Discussion
and Analysis."

The Company has experienced declining sales in its traditional
promotional business each year since 1989.  See Sales Comparison under
"Management's Discussion and Analysis-Financial Condition."  The Company
implemented a restructuring plan in 1990 including various activities
intended to return the Company to sales growth or stability and
profitability.  The Company focused on its core promotional program
business and sold or eliminated those noncore business units, including
non-promotional merchandise item sales lines, manufacturing and retail

<PAGE> PAGE 4

store operations, and assets which were not profitable or were not
consistent with these objectives.  Almost continuous downsizing efforts
have been made over the years since 1990 to reduce merchandise
inventories and the Company's reliance on working capital borrowings,
and to reduce personnel and other operating costs in order to compensate
for the decline in sales.  The strategy has also  encompassed reduction
of low margin business, including reduction of guaranteed sale business,
which has contributed to the decline in sales.  While progress was made
initially and at other times over the years, the Company has not been
able to make sufficient progress overall to improve or even maintain its
position in the retail marketplace.  Guaranteed sale business is sold
under terms where the customer retains the right to return goods which
remain unsold at the close of the promotional period.
    
In fiscal 1995 the Company implemented plans to close its plastics
manufacturing facility and to sell its lamp business, consistent with
the focus on the core business.  These transactions were completed in
August and September of 1995 respectively, and were recorded in the
financial statements as of June 24, 1995.  The Company's retail store in
Holland, Michigan was closed in September 1995.

In September of 1995 the Company announced the resignation of R. Craig
Kirsch as its Chairman, President and Chief Executive Officer.  T.
Ronald Casper was appointed Acting President and Chief Executive Officer
and Joel M. Berez was elected Chairman of the Board.
   
In fiscal year 1996 the Company agreed in principle to terminate the
lease on its headquarters office/warehouse facility (where it has been
the sole tenant) and to enter into a new lease as a tenant for
significantly reduced space in this facility in the form of office space
only. The Company has operated its business from public warehouses since
February of 1996.  A new operating lease arrangement was signed in
October 1996.  The new lease will eliminate the Company's substantial
commitment under the prior arrangement, which will materially reduce
(but not eliminate) the Company's future occupancy costs.  In addition
the new arrangements are expected to provide the Company's landlord in
the facility with  the ability to refinance or resell the property in
two to five years such that the Company could realize some or all of the
$2.3 million reduced principal portion of what was originally a $3.5
million note receivable due to the Company from its sale/leaseback of
the facility in 1991.  This note has been recorded at no value in
the accompanying financial statements, as a result of the uncertainties
associated with its realization, both past and present.

In fiscal 1996 the decline in sales continued, principally due to
decreased sales to two of the Company's largest customers of fiscal 1995
(a $6.1 million decrease from $8.8 million in sales last year to $2.7
million in sales in the current year).  Sales to three other customers
decreased $1.8 million as a result of those customers discontinuing
their businesses.  In addition, approximately $1.5 million in sales to
customers in Mexico and Canada last year were not repeated in the
current year as a result of the impact of unfavorable currency exchange
rates. Replenishment (Powerhouse) sales decreased $2.8 million related
to new store setup business last year which was not repeated or replaced
in the current year, and reduced order fill rates related to the
Company's significant reduction in inventory levels in the current year.

<PAGE> PAGE 5

New store setup sales in the Company's Replenishment (Powerhouse)
business involve initiating the Replenishment program for a new customer
or for additional stores for an existing customer.  In a setup, the
entire Replenishment program area is shipped to intially stock the
customers' stores, resulting in a one-time increase in sales, as compared
to ongoing reorders to replace merchandise sold to the consumer by the
Company's customers.  In general, the Company's reduced inventory levels
and capital constraints limited inventory purchasing and resulted in
reduced order fill rates and the inability to introduce new programs.
The implementation of the strategy to reduce guaranteed sale business,
which is particularly applicable to the Company's seasonal Gift
business, was the major contributor to decreased Gift sales in fiscal
1995 and 1996 as compared to 1994 and prior years.  Many of the reasons
for the continuation in the decline in sales in fiscal 1996 are
symptomatic of the inability of the Company to maintain its past market
position.

During fiscal 1996 continued declining sales and increasing operating
losses (see "Net Earnings (Loss) By Year" below) resulted in the Company
aggressively accelerating its inventory reduction plan, further
downsizing of the operating infrastructure, and the assessment that
significant improvements in sales and profitability were necessary in
order to provide sufficient liquidity to continue to operate the
business.
<TABLE>
                     NET EARNINGS (LOSS) BY YEAR
                            (in millions)
<CAPTION>
               Fiscal Year             Net Earnings (Loss)
               -----------             -------------------
                  <S>                       <C>
                  1990                      $(17.0)
                  1991                         2.5
                  1992                         2.5
                  1993                       (14.4)
                  1994                          .1
                  1995                        (3.7)
                  1996                       (12.9)
                                            -------
                                 Net Loss   $(42.9)
                                            =======
</TABLE>
    
In response to this assessment, the Company engaged an investment
banking firm to assist in identifying, analyzing and pursuing possible
strategic alternatives for potential business combinations involving
substantially all of the business, operating assets or stock of the
Company.
   
Working with its advisors, the Company was unable to attract a source of
additional debt and/or equity capital.  A credible forecast of improved
future operating results could not be developed, given the Company's
sales and profitability prospects.  Upon this determination that there
was little or no possibility of raising the additional capital necessary
to finance a turnaround or further restructuring of the business, a
comprehensive search for purchase and/or merger candidates interested in

<PAGE> PAGE 6

the Company's common stock, all of its assets, or its business in its
entirety was undertaken.  This was also unsuccessful for the same
reasons.  The investment bankers located the opportunity to sell the
Company's inventory and intangible assets related to the operation of the
business to Mazel.  The opportunity for the Sale to Mazel was the only
alternative to a liquidation of the business, and is considered
preferable to a liquidation of the business in terms of the expected
proceeds on the sale of the assets, and the ability to maximize the
value of the realization of the other assets not involved in the sale.

Restructuring charges of $5.1 million were recorded in fiscal 1993,
including severance and other personnel costs associated with
downsizing, and the writeoff of inventories and computer software costs.
Also related to restructuring, the Company sold substantially all the
assets of Action Nicholson Color Company (ANC), a wholly-owned
subsidiary, in April of 1994.  ANC has been reported as a discontinued
operation.  Other restructuring activities have included the liquidation
of Action Tungsram, Inc., an affiliated company, and the sale/leaseback
of the Company's headquarters which was completed in fiscal 1991.
Further, and the September 1995 sale of the lamp business and August
1995 closing of the plastics manufacturing operation were reported in
the financial statements for fiscal 1995.

The business of Action Nicholson Color Company was sold to Filmet Color
Laboratories, Inc. in April of 1994 for $600,000 cash and a percentage
of the sales in that business through April of 1997.  The Company's
retail stores were closed, and no significant proceeds nor costs were
involved.  Property in Mt. Clemens, Michigan, the sight of a pottery
manufacturing operation closed in 1987, was sold in June of 1995 to
Riverside Associates, a real estate developer, for $1,050,000 cash.  The
Company's plastic manufacturing business was closed in August of 1995.
Machinery and equipment was sold piece by piece to various parties from
mid 1995 into early 1996 for proceeds of approximately $1.2 million in
the aggregate, $360,000 of which was needed to pay off capital leases on
certain of the equipment.  The lamp business was sold to its management
in September of 1995 for approximately $2.3 million in the form of the
assumption of accounts payable ($900,000) and a note in the amount of
$1.4 million payable monthly through April of 1999.  The proceeds of
these transactions, after costs associated with the transactions,
including severance and other personnel costs,  were used to pay down
current debt and other current obligations.  None of the purchasers
involved in these transactions were affiliated parties with the Company,
other than the buyers of the lamp business, who had been employees of
that business.


DESCRIPTION OF BUSINESS AND MARKETING SEGMENT

The Company is the successor to a business which was founded in 1917 and
incorporated in 1946.  In 1969 the Company first sold its common stock
in the public market.  For more than thirty years the Company's
principal business has been the sale of comprehensive promotional
programs to retailers, including DOLLAR-AMA (registered trademark) and
others.  More recently, the Company introduced ACTION EXPRESS
(registered trademark) and POWER PALLET (registered trademark) and other
similar programs designed to provide a broad range of value-oriented

<PAGE> PAGE 7

products, programs, displays and services to meet the traditional
promotional objectives of the retailer and reduce the need for in-store
labor.  The Company's focus has been on its core promotional business
consisting of two distinct business-marketing units designed to meet the
needs of both its retail customers and the consumer.

The Company's Core Promotional Business consists of its Promotional
Business and its Powerhouse Business.  The Promotional Business is the
sale of comprehensive promotional programs such as DOLLAR-AMA
(registered trademark), Dollar Days and others to retailers.   The
objectives of the promotional programs are to enhance sales volume and
store traffic as compared to the results which might be attained by the
retailer  independent of such programs, while reducing the need for
in-store labor.  The Company provides selected assortments of
merchandise, and generally furnishes promotional advertising and display
materials, often packing the merchandise in pre-packed displays ready to
be placed on the selling floor.  The Company sells the assortments of
merchandise to its customers at fixed percentage discounts from the even
dollar retail prices at which the merchandise is offered for sale to the
consumer.  Promotional programs are sold periodically, and are not
maintained in the customers' retail stores at all times, only during the
promotional period of two to four weeks.  Promotional program
merchandise is generally not restocked when sold.  Promotional programs
may be stocked on the customers permanent shelves or may be set up in
aisles or other open, temporary spaces using the Company's cardboard
display fixtures.

The Company's Powerhouse Business focuses on "store within a store"
concepts using a combination of promotional programs and themed events.
Powerhouse merchandise and program concepts or themes are generally the
same or similar to the Promotional Business.  The primary difference is
that Powerhouse customers generally stock the Company's merchandise in
permanent display areas enhanced with the Company's display materials,
and merchandise is reordered and restocked to replace merchandise sold.
Powerhouse merchandise is expected to be maintained in the customers'
stores indefinitely, as opposed to a limited promotional period.
    
The sale of the Company's lamp business in September of 1995
substantially eliminated the Specialty Products business, which had been
the Company's "Item" business, wherein proprietary branded lines of
merchandise were sold independent of any promotional programs.

The principal product categories sold by the Company have been
housewares (kitchenware, cleaning aids, food storage), plastic products
for the home, picture frames, toys, stationery, closet accessories,
health and beauty aids and the like.
   
In fiscal 1996 one of the Company's customers accounted for 18.2% of
consolidated net sales as a result of the merger of what had been two
separate customers, American Stores and Lucky Stores, which individually
accounted for 9.2% and 9% of consolidated net sales respectively.  In
fiscal 1995 American Stores accounted for 11.6% of consolidated net
sales.  In fiscal 1994 Walmart accounted for 15.3% of consolidated net
sales.  Business with Walmart decreased significantly in fiscal
1995, as a result of Walmart narrowing its business with the
Company to smaller/older stores in fiscal 1995.  The Company has several

<PAGE> PAGE 8

large customers, however, which are significant to its business.  In
fiscal 1996 the Company sold in excess of $1 million to each of 6
customers who, in the aggregate, accounted for 42% of consolidated net
sales.    In fiscal 1995 the Company sold in excess of $1 million to
each of 11 customers who, in the aggregate, accounted for 48% of
consolidated net sales. In fiscal 1994 the Company sold in excess of $1
million to each of 19 customers who, in the aggregate, accounted for 57%
of consolidated net sales.  The loss of large customers has had an
adverse effect on the Company.
    
There are no long-term arrangements or contracts which obligate any
customer to purchase from the Company.  The Company generally receives
firm orders from its customers only a short time before shipment and
consequently has no significant dollar amount of backlog of firm orders.

In its promotional retail marketing programs (DOLLAR-AMA [registered
trademark], deep discount Gift promotions, ACTION EXPRESS [registered
trademark] and others), the Company sells selected assortments of its
products to retailing chains in various trading areas at different times
throughout the year, and generally furnishes promotional advertising and
display materials, sometimes including related newspaper circulars and
inserts for advertising the merchandise.  While newspaper circulars were
a major part of the Company's programs in the past, this activity has
been decreasing for the last several years, to the point where it has
been utilized in only a small part of the Company's business in recent
years.

The Company sells these assortments of merchandise to its customers at
fixed percentage discounts from the retail prices at which the
merchandise is advertised for sale to the consumer, resulting in uniform
overall profitability to the Company's customers.  The overall
profitability to the Company of the promotional programs depends upon
the aggregate costs of the various items included in the assortments.
Items have been added to or discontinued in the assortments from time to
time, based upon customer demand, retail sell-through and overall
profitability to the Company.

Promotional programs have been the principal marketing vehicle for the
Company's products.  Promotional programs, which enhance sales volume
and store traffic as compared to the results which might be attained
independent of such programs, are the Company's primary area of
expertise.  The Company believes all of the items in its merchandise
line are marketable independent of its promotional programs.
   
The Company's Gift program business has been seasonal to the Christmas
selling season.  In recent years including fiscal 1996, approximately
50% to 70% of the Company's annual Gift volume has been sold in the
Company's second quarter (October, November and December).  As a result,
commitments to purchase Gift inventories have been made early, in
advance of the selling season, and inventory levels have been more
difficult to adjust as sales volume has fluctuated.  In addition, as the
mix of its customer base has changed in recent years to proportionately
more major drug store and grocery store chains, the demand for
guaranteed sales has increased.  Historically, the Company's customer
base has included proportionately more mass merchandisers, which have
not required guaranteed sales terms as often as drug and grocery chains.

<PAGE> PAGE 9

In fiscal 1995 and 1996, drug and grocery chains accounted for 69% of
the Company's core promotional sales.  In fiscal 1990 drug and grocery
chains accounted for just under 50% of promotional sales.  The
percentage increase in sales to drug and grocery chains has been offset
by a corresponding decrease in the percentage of sales to mass
merchandisers.  In 1993 and 1994 approximately 50% of the Gift program
was sold under guaranteed sales terms.  The Company prices its programs
based on the merchandise and services provided, including, where
applicable, the assumption of the risk of return on guaranteed sales.
In general, the Company expects returns of 30% or less on its guaranteed
sales programs, and at that level, expects to realize acceptable gross
margins after accounting for customer returns.  Business in certain
types of programs and with certain customers has historically resulted
in greater levels of customer returns.  The Company has historically
taken this into account in its pricing, accounting, and gross margin
expectations. Excessive returns are actual returns in excess of the
level expected when the pricing of the program was determined and agreed
to with the customer.  This level may vary with the type of program and
the customer, and the Company does not use a specific return rate in all
cases.  Significant execution problems and excessive returns in 1993
resulted in planned reduction of the Gift business in 1994.  The
Company's fiscal 1994 Gift program did not meet sales and profitability
expectations.  As a result, the Company purchased limited gift
merchandise, reduced its sales expectations and offered a significantly
reduced Gift program principally on a non-guaranteed basis in fiscal
1995 and 1996.  Actual Gift program sales were $2.3 million in 1996 and
$2.1 million in 1995 as compared to $8.5 million in 1994 and $15.1
million in 1993.
    

PRODUCTS

The products sold by the Company consist of imported products,
Company-manufactured products, and products purchased from other United
States manufacturers and suppliers.

The breakdown of consolidated net sales by source is as follows:
<TABLE>
<CAPTION>
                                             Fiscal Year
                                  ---------------------------------
                                  1996           1995          1994
                                  ----           ----          ----
<S>                               <C>            <C>           <C>
Imported Products                  82%            72%           75%

Company-manufactured Plastics       7%            15%           17%

Domestic Products                  11%            13%            8%
                                  ----           ----          ----
                                  100%           100%          100%
                                  ====           ====          ====
</TABLE>

<PAGE> PAGE 10

Imported Products
   
Imported products consist of approximately 600 merchandise items.  These
include cleaning products such as sponges, rubber gloves and cleaning
and scouring pads; kitchen utensils, toys, tools, grooming products and
picture frames and a wide variety of other housewares and gift items.
Most of these items have been manufactured and packaged to the Company's
specifications under the Company's brand names.  Imported products have
been purchased from various manufacturers in twenty countries, primarily
in the Far East and Europe.
    
The Company's importing activities have been subject to the effects of
inflation and fluctuations in the value of the U.S. dollar in relation
to other currencies, as well as various other economic and political
risks.  It has been the Company's practice to purchase in U.S. dollars
wherever possible, and to evaluate these risks, as well as the cost and
availability of merchandise from all of its product sources, and to
change suppliers and countries of origin as necessary to meet its
purchasing objectives.  While the Company considers its recent sources
of supply adequate for its operations and has generally been successful
at developing alternative sources of supply, there have not been
assurances that suitable merchandise from foreign countries would
continue to be available at satisfactory U.S. dollar prices.

Company-manufactured Plastics

Until August of 1995 the Company manufactured in its own plant (located
at its headquarters facility) more than 100 plastic housewares items,
such as wastebaskets, laundry baskets, pails, food storage containers,
tumblers, storage bins, and the like.  As a result of declining sales
volume and a decreasing proportionate use of plastics in its existing
business, the Company closed its manufacturing facility, and made
arrangements to meet its needs for plastic products through outside
purchases from both domestic and import sources.

Products Purchased from Other United States Manufacturers and Suppliers

Domestically manufactured products purchased from others currently have
consisted of approximately 100 items sold in the Company's promotional
programs.  As with its imported products, while the Company considers
its recent sources of supply adequate for its operations, there have not
been assurances that suitable merchandise from domestic manufacturers
would continue to be available to the Company at satisfactory prices.


COMPETITION
   
The Company sells assortments of housewares including kitchen and
cleaning items, tabletop and serving pieces, health and beauty items,
picture frames, gift items, toys, tools, books and a wide variety of
other low priced items.

The business of importing and marketing the categories of merchandise
sold to the retail trade by the Company is highly competitive.  While
the Company has experienced some competition from certain importers in
terms of "direct import" promotional programs, no competitor has been

<PAGE> PAGE 11

known to provide the breadth of program selection and services which the
Company has provided.  The Company however, has experienced competition
from a large number of firms, many of which have greater financial
resources, including large manufacturers selling branded promotional
items, the retailers' own internally developed promotional programs,
wholesalers and importers.

The Company's promotional programs, including Replenishment, which in
the fiscal year ended June 30, 1996 accounted for approximately 99.7% of
net sales, have been the Company's principal method of competing with
other suppliers of like merchandise to retail chains.  The Company has
endeavored to provide a broad range of value-oriented products and
programs, as well as merchandising, point-of-sale displays and other
promotional support materials and services, in a unique fashion,
responsive to the retailers' needs.  Competitive pricing has been an
important factor in meeting the needs of the Company's customers.  The
success of the promotional programs has been dependent on achievement of
the goal of increasing sales and enhancing gross margin contribution in
the stores of the Company's customers.
    
The Company believes it has been the leading independent marketer of
promotional programs to the retail trade.  The Company's principal
competition in providing these programs often has come from its own
customers, most of whom have the capabilities to conduct promotional
programs internally.  Building in-store sales and traffic and providing
the retailer with comprehensive, turnkey programs (including promotional
merchandise with consistent, reasonable profit margins for the retailer)
have been the Company's basis for competition with the internally
created promotions of its customers.


SEASONALITY

Fluctuations in sales of the Company's DOLLAR-AMA (registered trademark)
and similar promotions from quarter to quarter reflect the cumulative
result of individual decisions made by various customers with regard to
the timing and placement of orders.  Sales of the Company's Gift
programs have been seasonally highest in the Company's second fiscal
quarter.  The December quarter has accounted for approximately 50% to
70% of the annual volume for Gift sales during the last three fiscal
years.


TRADEMARKS HELD, AND LICENSES AND FRANCHISES GRANTED
   
The Company's trademarks are recognized by consumers throughout the
United States, and represent the basic concepts under which the
Company's promotional programs have been sold.  DOLLAR-AMA (registered
trademark), DOLLAR POWER (registered trademark) and other trademarks are
easily recognized program concepts which indicate high value, low cost
merchandise for sale.  The Company's program merchandise is priced at
even dollar (generally $1, $2 or $3) retail price points which represent
perceived high value to the consumer.  The objectives of the promotional
programs are to enhance sales volume and store traffic as compared to
the results which might be attained by the retailer independent of such
programs, while reducing the need for in-store labor.  The Company
<PAGE> PAGE 12

provides selected assortments of merchandise, and generally furnishes
promotional advertising and display materials, often packing the
merchandise in pre-packed displays ready to be placed on the selling
floor.  The Company sells the assortments of merchandise to its
customers at fixed percentage discounts from the even dollar retail
prices.  Trademarks are considered to be an integral part of the ability
to market promotional programs.  Trademark rights endure as long as they
are in continued use in the conduct of the business.  All of the
Company's trademarks are to be sold in conjunction with the sale of
assets of its Replenishment and Promotional businesses.
    
In connection with the Company's promotional program sales, licenses to
use DOLLAR-AMA (registered trademark) and other trademarks have been
granted to customers' stores.  The licenses have been granted at no
additional cost to the customer (the Company charges only for the
merchandise provided) for limited periods of time, usually one to two
weeks, during which the licensed stores advertise their sales of the
Company's merchandise.


EMPLOYEES

At October 15, 1996 the Company employed 40 regular employees and no
temporary employees.  At October 15, 1995 it employed 169 regular
(including 70 represented by a labor union) and 25 temporary employees.
The decrease is due to the downsizing and outsourcing of distribution
operations and other work force reductions related to these and other
downsizing activities during the year.


ITEM 2. PROPERTIES
______________________________________________________________________

The Company occupies the following facilities:

Headquarters.  The Company's corporate headquarters are located in a
580,000-square foot building on a 43-acre tract of land in Harmar
Township, Pennsylvania (near Pittsburgh).  The facility is leased from
Allegheny Capital Growth Limited Partnership.  During the third quarter
of fiscal 1996, the Company moved all of its inventory and distribution
activities from this location to lower cost public warehouse facilities
described below.  A substantial part of the facility is subleased to a
third party under a short-term arrangement.  In October 1996 the Company
finalized the negotiation of and signed a new lease wherein the Company
will lease only 58,000 square feet of office space in the facility.

Other Distribution Facilities.  The Company has occupied 330,000 square
feet at a public warehouse facility in Mt. Vernon Ohio , and 55,000
square feet at an additional distribution facility in Columbus, Ohio.
The facilities are occupied under short-term lease arrangements
permitting the Company to expand or contract its space to accommodate
the Company's fluctuating inventory and distribution volume.  The
obligations under these leases are expected to be terminated in
conjunction with the sale of the inventory.


<PAGE> PAGE 13

ITEM 3. LEGAL PROCEEDINGS
______________________________________________________________________

The Company previously reported an adversary action against the Company
and some 50 other defendants, filed on August 16, 1994 by the Official
Committee of Unsecured Creditors of Phar-Mor, Inc. in the United States
Bankruptcy Court, Northern District of Ohio, and subsequently
transferred to the United States District Court for the Western District
of Pennsylvania.  The Official Committee sought the recovery of
approximately $75 million (about $2.6 million in the case of Action
Industries) paid to the defendants for Phar-Mor shares tendered by them
in a July 1991 tender offer.  The claim was based upon allegations that
at the time of the tender offer Phar-Mor was insolvent or had
unreasonably small capital, and, therefore, the transfers pursuant to
the tender offer constituted fraudulent conveyances.  On August 22,
1995, summary judgment was entered in favor of the Company and the other
defendants.  In September 1995, the Official Committee filed an appeal
of this decision.  In October 1996 the U.S. Court of Appeals for the
Third Circuit affirmed the judgment of the District Court in favor of
the Company and the other defendants.


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

There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal 1996.


EXECUTIVE OFFICERS OF THE REGISTRANT
______________________________________________________________________

The names, ages, positions and business experience of the Company's
executive officers are set forth below.

Kenneth L. Campbell, 49.  Mr. Campbell has served as Senior Vice
President, Finance and Chief Financial Officer since 1989.  He has been
an executive officer of the Company since his employment in 1984.

T. Ronald Casper, 52.  Mr. Casper was appointed as Acting President and
Chief Executive Officer on September 7, 1995. Since 1988, he has been
Managing Director of Cornerstone Capital Associates, Ltd., a merchant
banking organization, of which he is a co-founding principal.  Mr.
Casper serves under a contract between the Company and Cornerstone, and
is not an employee of the Company.  He was a consultant to the Company,
reviewing its strategic plans, for about two months prior to his
appointment.

<PAGE> PAGE 14

PART II
_______________________________________________________________________

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS
_______________________________________________________________________

The Company's common stock is traded on the American Stock Exchange
(trading symbol ACZ).  The following table sets forth the high and low
sale prices of the stock during each quarter of the last two fiscal
years:
<TABLE>
<CAPTION>
FISCAL YEAR 1996                    FISCAL YEAR 1995
----------------                    ----------------
                   High     Low                      High      Low
                   ----     ---                      ----      ---
<S>              <C>        <C>     <S>              <C>      <C>
First Quarter     1-1/4     9/16    First Quarter    2-1/2    2
Second Quarter      3/4     7/16    Second Quarter   2-5/16   1-5/8
Third Quarter       3/4     7/16    Third Quarter    2-1/8    1-5/16
Fourth Quarter   2-11/16    3/8     Fourth Quarter   1-1/2     15/16
</TABLE>

There are approximately 1,300 holders of record of the Company's common
stock, including brokers named on listings provided by clearing
agencies.  It is estimated that these holders represent approximately
2,700 beneficial owners of the Company's stock.

The Company's Board of Directors has not declared cash dividends during
the last two fiscal years and has no present plans to do so.

<PAGE> PAGE 15

ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>
(In thousands except per share amounts)
<CAPTION>
OPERATING RESULTS                                         1996        1995        1994        1993         1992
                                                        --------    --------    --------    --------     --------
<S>                                                    <C>          <C>         <C>         <C>          <C>
Net Sales                                              $  30,212    $ 45,088    $ 60,049    $  76,684    $ 84,059
Cost of Products Sold                                     26,385      34,374      44,527       62,725      58,360
                                                       -----------------------------------------------------------
Gross Margin                                           $   3,827    $ 10,714    $ 15,522    $  13,959    $ 25,699

Earnings (Loss) from Continuing Operations (a)(b)      $ (12,899)   $ (2,907)   $    128    $ (10,390)   $  5,557
                                                       -----------------------------------------------------------
Earnings (Loss) Per Share from Continuing
   Operations (a)                                      $   (2.33)   $  (0.52)   $   0.02    $   (1.88)   $   0.97
Cash Dividends                                               -           -           -            -           -
Weighted Average Shares Outstanding                        5,539       5,539       5,561        5,539       5,738
                                                       -----------------------------------------------------------

BALANCE SHEET DATA

Total Assets                                           $   8,908    $ 39,546    $ 39,363    $  56,873    $ 66,137
Long-Term Debt                                         $     115    $  7,854    $  8,487    $   9,022    $  9,427
                                                       ===========================================================

(a)  Losses for 1996 include $4,226,000 in costs and expenses due to the sale of assets and closing of a
     warehouse.  Losses for 1993 include $5,123,000 of restructuring costs.   Net earnings for 1992 include
     deferred income tax credits of $500,000.

(b)  Excludes losses from discontinued operations in 1995 of $808,000 ($0.15 per share), in 1994 of $3,000,
     in 1993 of $3,990,000 ($0.72 per share), and in 1992 of $1,697,000 ($0.30 per share).
</TABLE>

<PAGE> PAGE 16

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


OVERVIEW

NOTE:   References to a fiscal year in this Form 10-K are to the
Company's fiscal year ended on the last Saturday of June prior to 1996,
and for fiscal year 1996, ending June 30, 1996.  This Item 7 should be
read in conjunction with the Notes to Financial Statements and Item 1.


FINANCIAL CONDITION
   
The Company has experienced declining sales in its traditional
promotional business in recent years, as follows:
<TABLE>
                   SALES COMPARISON - YEAR TO YEAR
                           ($ in millions)
<CAPTION>
                                  Percentage      Cumulative
Fiscal Year       Net Sales        Decrease        Decrease
-----------       ---------       ----------      ----------
   <S>             <C>               <C>             <C>
   1989            $134.2
   1990             130.6             2.7%            2.7%
   1991             100.9            22.7%           24.8%
   1992              84.1            16.7%           37.3%
   1993              76.7            10.0%           42.8%
   1994              60.0            21.8%           55.3%
   1995              45.1            24.8%           66.4%
   1996              30.2            33.0%           77.6%
</TABLE>

In fiscal 1996 the decline in sales continued, principally due to
decreased sales to two of the Company's largest customers of fiscal
1995, American Stores and Payless Drug, (a $6.1 million decrease from
$8.8 million in sales last year to $2.7 million in sales in the current
year).  Sales to three other customers, Bradlees, Jamesway and F & M
Distributors, decreased $1.8 million as a result of those customers
discontinuing business.  In addition, approximately $1.5 million in
sales to customers in Mexico and Canada last year were not repeated in
the current year as a result of the impact of unfavorable currency
exchange rates.  Replenishment (Powerhouse) sales decreased $2.8 million
related to new store setup business last year which was not repeated or
replaced in the current year, and reduced order fill rates related to
the Company's significant reduction in inventory levels in the current
year from $18.1 million at June 24, 1995 to $3.9 million at June 30,
1996.  In general, the Company's reduced inventory levels and capital
constraints limited inventory purchasing and resulted in reduced order
fill rates and the inability to introduce new programs.  Further, the
Company closed its retail store in September 1995, which accounted for
$600,000 in decreased sales.  The Company experienced lost sales
opportunities in both fiscal 1996 and 1995 as a result of its efforts to

<PAGE> PAGE 17

reduce low margin and guaranteed sale business from the level of such
business experienced in 1993 and 1994.

The historical decline in sales is the result of many factors, including
a changing retail marketplace, the increasing complexity of the
promotional business itself, and strategic decisions to exit or downsize
unprofitable, higher risk product lines.  The Company's business has been
the sale of comprehensive promotional programs and merchandise to the
retail trade, principally discount mass merchants, supermarkets and drug
chains.  This is a vast market, including such programs developed
internally by the retailers themselves, and those outsourced to
suppliers such as the Company and others, including large manufacturers
and distributors.  The Company has historically believed it was the
leading independent marketer of comprehensive houseware and giftware
promotional programs.  However, it has held only a minor share of the
overall market for promotional programs.  In recent years the Company
has continued to call on the majority of the major retailers in the
market segments it has historically served.  The Company has not been
able to maintain its position in the market, as evidenced by the
continuation of the decline in sales in fiscal 1996.  Many of the
reasons for the continuation in the decline in sales in fiscal 1996 are
symptomatic of the inability of the Company to maintain its past market
position.
    
These issues have led to management's decision to sell the inventory
and other assets of its Replenishment business and, subject to
shareholder approval, the inventory and other assets of its Promotional
business. The proceeds of the sales will be used to pay existing
obligations and, if an appropriate opportunity presents itself, to
explore its other strategic options, including possible business
combinations with other operating businesses.  Substantial doubt exists
as to the ability of the Company to continue to exist as a going
concern, unless a business combination can be accomplished which
provides additional capital.


LIQUIDITY AND CAPITAL RESOURCES

The major sources of cash during the 1996 fiscal year were significantly
reduced inventory levels (78% reduction) and collections on receivables.
Operating losses and repayment of current and long-term obligations were
the primary uses of cash.  Working capital at June 30, 1996 was
$436,000, decreased from $12.8 million at June 24, 1995, largely related
to the lower level of sales in the current year and operating and other
losses.  The Company will be required to continue to manage the timing
of payment of its obligations to deal with this impaired liquidity.

Cash and cash equivalents were $78,000 at June 30, 1996 as compared to
$567,000 at June 24, 1995.  Cash balances fluctuate daily to meet
operating requirements.

Accounts receivable of $2.8 million at June 30, 1996 decreased from $9.9
million at June 24, 1995, as a result of decreased sales, particularly
in the month of June, and improved collections in the current year.

<PAGE> PAGE 18

Inventories of $3.9 million decreased significantly compared to $18.1
million at June 24, 1995, related to the lower level of sales and the
Company's aggressive inventory reduction efforts in light of its capital
constraints, and inventory adjustments related to the sales of the
inventories and writeoffs associated with the termination of the
Company's operating business.

Aggregate borrowings (long-term debt and notes payable) decreased from
$18.0 million at June 24, 1995 to $3.2 million at June 30, 1996. This
decrease was primarily the result of elimination of the sale/leaseback
obligation as a result of finalizing the negotiations of a new lease,
and the repayment of borrowings with cash generated from the reduction
of inventories and receivables, net of cash used to fund operating
losses incurred.  Letters of credit outstanding were $82,000 at June 30,
1996, significantly below  $909,000 at June 24, 1995 reflecting
reductions in the Company's level of overseas purchases of inventory.
   
The Company's Credit Agreement provided for available credit of up to
$10 million through June 30, 1997.  Availability under the line is
limited to $1 million during January of 1997, $500,000 during February
of 1997, and is to be paid off as of February 28, 1997.  Credit is also
limited by the level of eligible accounts receivable and inventories.
At June 30, 1996 outstanding borrowings under the Credit Agreement were
$3.0 million and outstanding letters of credit were $82,000.

The Company did not meet the required levels of net worth and working
capital, the current ratio or the ratio of liabilities to tangible net
worth under the restrictive covenants of the Credit Agreement as of
June 30, 1996 and September 30, 1996, and will not be able to meet these
covenants subsequently.  The lender's remedies under such a default
include the right to demand immediate repayment of the outstanding loan
and interest to date.  Foothill Capital, the Company's lender, has
continued to provide the Company with advances within the borrowing
formula and the limitations described above.

Assuming that Foothill will continue to provide credit, given the
defaults under the financial covenants, the Company believes that the
credit available under its existing borrowing arrangements, together
with funds from the sale of its inventories and other operating assets
(to which Foothill has consented) and from its operations in the period
prior to the completion of the sale, will be sufficient to meet most or
all of its near term operating needs.  For the longer term, if the
Company is to benefit from the use of its tax net operating losses, it
must reduce its cost structure to a bare minimum to maintain sufficient
liquidity and to provide enough time to identify and close a transaction
to acquire a profitable operating business.  Unless a business
combination and/or a source of additional capital can be achieved in the
next few months, there can be no assurance that the Company's capital
resources will be sufficient to meet its operating needs, in which case
material adverse consequences may result.
    
The Company's capital expenditures were $220,000 in fiscal 1996, all
under a project initiated in 1994 to replace its core information
systems computer hardware and software.  No further capital expenditures
are planned.

<PAGE> PAGE 19

RESULTS OF OPERATIONS

Fiscal 1996 Compared with Fiscal 1995

Net Sales.   Aggregate net sales for fiscal 1996 were $30,212,000, a
decrease of $14,876,000 (33.0%) compared to $45,088,000 in the prior
year.
   
The decline in sales in fiscal 1996 was principally due to decreased
sales to two of the Company's largest customers of fiscal 1995, American
Stores and Payless Drug, (a $6.1 million decrease from $8.8 million in
sales last year to $2.7 million in sales in the current year).  Sales to
three other customers, Bradless, Jamesway and F & M Distributors,
decreased $1.8 million as a result of those customers discontinuing
business.  In addition, approximately $1.56 million in sales to
customers in Mexico and Canada last year were not repeated in the
current year as a result of the impact of unfavorable currency exchange
rates. Replenishment (Powerhouse) sales decreased $2.8 million related
to new store setup business last year which was not repeated or replaced
in the current year, and reduced order fill rates related to the
Company's significant reduction in inventory levels in the current year.
The closing of the Company's retail store in September 1995 accounted
for $600,000 in decreased sales.  In general, the Company's reduced
inventory levels and capital constraints limited inventory purchasing
and resulted in reduced order fill rates and the inability to introduce
new programs as planned.
    

Following is a comparison of net sales by type of program:
<TABLE>
<CAPTION>
                                         NET SALES
                                     Fiscal Year Ended
                               ------------------------------        Increase
                               June 30, 1996    June 24, 1995       (Decrease)
                               -------------    -------------       ----------
<S>                             <C>              <C>              <C>
Dollar Days                     $21,047,000      $31,933,000      $(10,886,000)
Replenishment                     6,778,000        9,560,000        (2,782,000)
                                -----------      -----------      -------------
Core Promotional Business        27,825,000       41,493,000       (13,668,000)

Gift                              2,302,000        2,122,000           180,000

Other                                85,000        1,473,000        (1,388,000)
                                -----------      -----------      -------------
                                $30,212,000      $45,088,000      $(14,876,000)
                                ===========      ===========      =============
</TABLE>

Cost of Products Sold and Gross Profit Margins.  Gross profit margins
(as a percentage of sales) decreased from 23.8% in fiscal 1995 to 12.7%
in the current year, principally due to higher than anticipated returns
on prior period guaranteed sales, including increased provisions for
returns on guaranteed sales outstanding at June 30, 1996.  The Company
has also experienced lower gross margins related to its inventory

<PAGE> PAGE 20

reduction program, as a result of the sale of certain merchandise at
reduced prices, and increased (as a percentage of sales) display and
other costs due to a decrease in the value of the merchandise  included
per display fixture.

Operating Expenses.  Operating expenses decreased from $12,461,000
(27.6% of sales) in fiscal 1995 to $10,462,000 (34.6% of sales) in
fiscal 1996.  The decrease in costs was the result of the Company's
continuing cost reduction efforts.  The increase in costs as a
percentage of net sales is due to the greater impact of fixed and
indirect costs on the lower level of sales, including executive search,
legal, and other corporate costs, as well as costs of the Company's
merchandise acquisition operation normally allocated to purchases which
were not fully absorbed in fiscal 1996 due to the limited purchasing
during the year.

Interest Expense.  The increase of $146,000 was due to higher effective
interest rates and other borrowing costs.  Average borrowing levels in
the current year were also higher as compared to average borrowings
attributed to continuing operations last year, resulting from increased
borrowings in the first half of the current year.

Other Income (Expense), Net.  Other expense of $58,000 in fiscal 1996
represented miscellaneous items.  The other income amount of $674,000 in
fiscal 1995 included a gain on the sale of property in Mt. Clemens,
Michigan (site of a previously discontinued operation) in the amount of
$950,000 and gains from the sale of plastic production equipment of
$296,000, net of the writedown of the estimated value of remaining
amounts due from the prior sale of Action Nicholson Color Company of
$518,000 and other miscellaneous items.

Costs and Expenses Due to Sale of Assets and Closing of Warehouse.  As
a result of the sale of its operating assets and the resultant
termination of its operating business, the Company has taken charges in
the fiscal year ended June 30, 1996 for the estimated loss on the sale
of its inventories and intellectual property ($600,000), other
adjustments to reflect the net realizable value of inventory ($2.1
million)and other assets and liabilities ($1.4 million).

Loss From Continuing Operations Before Income Taxes.  The loss increased
from $2,907,000 in fiscal 1995 to $12,899,000 in fiscal 1996.  The
increase of $9,992,000 reflects the combined effect of all the above.

Provision for Income Taxes.  No income tax benefits were provided on the
losses in fiscal 1996 and 1995 because realization of such benefits
cannot be reasonably assured.  Net operating loss carryforwards
available to offset future taxable income and thereby reduce future
income taxes payable in fiscal 1996 and beyond are approximately $34
million for income tax reporting purposes.

Loss From Continuing Operations.  The increase of $9,992,000 reflects
the combined effect of all of the above.

<PAGE> PAGE 21

Loss From Discontinued Operation.  In fiscal 1995 the Company adopted a
plan to sell its lamp business, and completed the sale in September of
1995.  Operating losses of $808,000 for fiscal 1995 were reclassified as
discontinued.

Net Loss.  The increased loss of $9,184,000 reflects the combined effect
of all the above.


Fiscal 1995 Compared with Fiscal 1994

Net Sales.   Aggregate net sales for fiscal 1995 were $45,088,000, a
decrease of $14,961,000 (24.9%) compared to $60,049,000 in fiscal 1994.
   
Sales to Walmart, the Company's largest customer in 1994 decreased $9.5
million in fiscal 1995 as a result of that customer's decision to use
the Company's programs in a limited manner in 1995.  In addition, Gift
program sales decreased $6.4 million as a result of the Company's
decision to reduce the offering of this program in order to reduce
guaranteed sales.
    
The Company's sales volume has declined materially in each of the last
several years.  It is the Company's belief that economic conditions and
other changes in the retail marketplace, along with increased ability on
the part of the Company's customers to create their own promotional
programs and a shifting customer base, have contributed to the decline
in sales volume.

Following is a comparison of net sales by type of program:
<TABLE>
<CAPTION>
                                           NET SALES
                                       Fiscal Year Ended
                                -------------------------------        Increase
                                June 24, 1995     June 25, 1994       (Decrease)
                                -------------     -------------       ----------
<S>                              <C>               <C>              <C>
Dollar Days                      $31,933,000       $41,257,000      $ (9,324,000)
Replenishment                      9,560,000         8,224,000         1,336,000
                                 -----------       -----------      -------------
Core Promotional Business         41,493,000        49,481,000        (7,988,000)

Gift                               2,122,000         8,521,000        (6,399,000)
Other Specialty Products           1,473,000         2,047,000          (574,000)
                                 -----------       -----------      -------------

                                 $45,088,000       $60,049,000      $(14,961,000)
                                 ===========       ===========      =============
</TABLE>

Cost of Products Sold and Gross Profit Margins.  Gross profit margins
(as a percentage of sales) decreased from 25.8% in fiscal 1994 to 23.8%
in fiscal 1995, principally due to increased cost of merchandise sold in
core business programs, related primarily to the mix of programs sold
and increased plastic manufacturing costs related to the lower level of
production in 1995.

<PAGE> PAGE 22

Operating Expenses.  Operating expenses decreased from $13,245,000
(22.1% of sales) in fiscal 1994 to $12,461,000 (27.6% of sales) in
fiscal 1995.  The increase in costs as a percentage of sales was
primarily the result of increased selling and merchandising costs
related to the development of programs for the future, and the lower
level of sales in 1995.

Interest Expense.  The decrease of $238,000 was due to lower average
borrowing levels in the fiscal 1995 net of increased interest rates and
other borrowing costs.

Other Income (Expense), Net.  Other income of $674,000 in fiscal 1995
included a gain on the sale of property in Mt. Clemens Michigan (site of
a previously discontinued operation) in the amount of $950,000 and gains
from the sale of plastic production equipment of $296,000, net of the
writedown of the estimated value of remaining amounts due from the prior
sale of Action Nicholson Color Company of $518,000 and other
miscellaneous items.  The fiscal 1994 income amount of $77,000 was
comprised of miscellaneous items.

Earnings (Loss) From Continuing Operations Before Income Taxes.
Earnings (Loss) decreased from earnings of $128,000 in fiscal 1994 to a
loss of $2,907,000 in fiscal 1995.  The decrease of $3,035,000 reflects
the combined effect of all the above.

Provision for Income Taxes.  No income tax benefits were provided on the
loss in fiscal year 1995 because realization of such benefits cannot be
reasonably assured.  No income tax expense was provided on earnings in
fiscal year 1994, because previously unrecognized deferred income tax
benefits and net operating loss deductions from prior years were
available to offset income taxes on current earnings.

Earnings (Loss) From Continuing Operations.  The decrease of $3,035,000
reflects the combined effect of all the above.

Loss From Discontinued Operation.  In fiscal 1995 the Company adopted a
plan to sell its lamp business, and completed the sale in September of
1995. Operating losses of $808,000 for 1995 and $3,000 for 1994 were
reclassified.

Net Earnings (Loss).  The decrease of $3,840,000 reflects the combined
effect of all the above.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
______________________________________________________________________

See Index to Financial Statements and Financial Statement Schedules
included as part of Item 14 appearing on Page 33 of this Form 10-K
Annual Report.

<PAGE> PAGE 23

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

There are no disagreements between the Company and its independent
accountants concerning matters of accounting principles or practices or
financial statement disclosures.


PART III
______________________________________________________________________

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
______________________________________________________________________

Ernest S. Berez, who had been a Director of the Company since 1951 and
had served as Chairman of the Board from 1987 to 1990 resigned from the
Board in January 1996 for retirement purposes.  With Mr. Berez's
departure, the Board of Directors is now comprised of six members
divided among three classes, one of which has three members, another has
two members and the third has one member.  Each class of Directors
serves a three-year term.

One candidate, who has been nominated by the Board for election as a
director this year is identified below, along with the directors
continuing in office.

NOMINEE FOR A 3-YEAR TERM EXPIRING IN 1999:

Charles C. Cohen, 55.  Mr. Cohen has served as a Director of the Company
since June 1991.  He has been a Director of the law firm of Cohen &
Grigsby, P.C.  since 1981 and Adjunct Professor of Securities Regulation
at the University of Pittsburgh School of Law since 1976.  He also
serves on the Boards of Directors of Robroy Industries, Inc., and
several civic organizations.  Mr. Cohen will resign from the three year
term expiring in 1997 which he is currently serving, in order to stand
for election to the class of directors which will become vacant upon the
expiration of Mr. Gold's term.

DIRECTORS CONTINUING IN OFFICE:

SERVING THE SECOND YEAR OF A 3-YEAR TERM EXPIRING IN 1998:

Joel M. Berez, 42.  Mr. Berez has served as a Director of the Company
since 1983, and as Chairman since September 1995.  He has been a
business consultant since May 1996.  Prior to that he had served as
President and Chief Executive Officer of Digital Alchemy, Inc., a
producer of home education software from January 1995.  He had
previously been employed by the Company from 1988 to 1995 and had served
in several executive positions, most recently Senior Vice President.

William B. Snow, 64.  Mr. Snow has served as a Director of the Company
since August 1994.  Since July 1994 he has served as Vice Chairman and
Chief Financial Officer of Movie Gallery, Inc., a video cassette and
retail sales and rental business.  He had previously been Director,
Executive Vice President and Chief Financial Officer of Consolidated

<PAGE> PAGE 24

Stores Corporation, a retailer in the "close-out" consumer goods
industry since 1985.

SERVING THE THIRD YEAR OF A 3-YEAR TERM EXPIRING IN 1997:

James H. Knowles, Jr., 56.  Mr. Knowles has served as a Director of the
Company since November 1993.  Having over eleven years of experience in
the founding and management of venture capital firms, he is presently
President and Chief Executive Officer of Dragonswood, Inc., a venture
capital investment management company, where he has served since 1988.

David S. Shapira, 54.  Mr. Shapira has served as a Director of the
Company since 1981.  He has held various executive positions with Giant
Eagle, Inc. a retail supermarket chain, including Director, Chairman,
President and Chief Executive Officer since 1980.  He also serves on the
Boards of Directors of Mellon Bank, N. A., Mellon Bank Corporation,
Equitable Resources, Inc. and Bell Telephone Company of Pennsylvania.

In August 1992, Phar-Mor, Inc. reported that it had been the victim of
a fraud and embezzlement scheme perpetrated by Phar-Mor executives whose
employment was immediately terminated.  David S. Shapira, a Director of
the Company, was Director and Chief Executive Officer of Phar-Mor at the
time of discovery of the embezzlement.  Company Director, Charles C.
Cohen, was also a Director of Phar-Mor at that time.  On August 17,
1992, Phar-Mor filed for protection under Chapter 11 of the United
States Bankruptcy Act.  Mr. Shapira was an executive officer of Phar-Mor
at the time of filing.

COMPLETING A 3-YEAR TERM EXPIRING IN 1996:

Joel L. Gold, 55.  Mr. Gold has served as a Director of the Company
since 1978.  He has been Managing Director of Fechtor, Detwiler & Co.,
Inc., and investment banking company since April 1995.  Prior to that,
he had served as Managing Director for Furman Selz, Incorporated, an
investment banking company from 1992 to 1995, and as Managing Director
for Bear, Stearns & Co., Inc., also an investment banking firm, from
1990 to 1992.  He also serves on the Boards of Directors of Concord
Camera Corp., Life Medical Sciences, Inc. and Biomechanics Corporation
of America.  Mr. Gold will not stand for election when his current term
expires.

COMPLIANCE WITH CERTAIN FILING REQUIREMENTS:

Directors and executive officers are required under Section 16(a) of the
Securities Exchange Act of 1934 to file reports concerning their
holdings and transactions in Company stock.  All such reports for fiscal
year 1996 have been filed on a timely basis.

The information concerning executive officers required by Item 10 is
contained at the end of Part I of this Form 10-K.

<PAGE> PAGE 25

ITEM 11. EXECUTIVE COMPENSATION
______________________________________________________________________


COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

COMPENSATION FOR DIRECTORS: Directors who are employees of the Company,
as well as former employee Ernest S. Berez receive no additional
compensation for their services on the Board.  For the fiscal year 1996
R. Craig Kirsch was a director until his resignation in September of
1995.

Compensation for nonemployee Directors includes an annual retainer of
$12,000 for Directors and $17,000 for the Chairman plus $1,000 for each
full Board meeting attended and $500 for each committee meeting attended
on a day other than the day of a full Board meeting.  Upon appointment
to the Board, each of the present nonemployee Directors other than Mr.
Joel Berez, a former employee, was granted the option to purchase 7,500
shares of stock, pursuant to a Nonemployee Director Stock Option Plan
approved by the shareholders in 1991.  In addition nonemployee Directors
received an annual stock option grant of 1,000 shares each in 1995.  New
nonemployee Directors will receive an initial stock option grant of
4,000 shares.
   
Ernest S. Berez, former Director, Chairman and President of the Company,
is compensated under an agreement with the Company dated July 31, 1990
and amended July 31, 1991.  Pursuant to that agreement, Mr. Berez
receives lifetime retirement benefits in the amount of $139,200
annually.  If Mr. Berez's wife should survive him, she will receive
lifetime survivor benefits of one-half Mr. Berez's benefit amount.  In
November 1996, the Company suspended payment of such benefits to Mr.
Berez in an effort to preserve its liquidity.  Mr. Berez has consented
to the suspension of payments pending negotiations of a settlement of
the aggregate amount due and future payment terms.  The obligation is
recorded in the financial statements.  Ernest Berez and Joel Berez are
father and son.
    
COMPENSATION FOR EXECUTIVE OFFICERS: The following tables show, for the
last three fiscal years, all compensation received by each Chief
Executive Officer for fiscal year 1996, the two other executive officers
of the Company as of the end of fiscal year 1995, and one other
individual who served as an executive officer but left the employ of the
Company prior to the end of the fiscal year.

<PAGE> PAGE 26
<TABLE>
<CAPTION>
                            SUMMARY COMPENSATION TABLE
                          --------------------------------
                                                           Long-term
                                                          Compensation
                               Annual Compensation           Awards
                          -----------------------------   ------------
                                                           Securities
Name and                                                   Underlying
Principal                 Fiscal                            Options/     All Other
Position                   Year    Salary($)    Bonus($)    SARs (#)    Compensation
--------                  ------   ---------    --------   ----------   ------------
<S>                        <C>       <C>         <C>        <C>           <C>
T. Ronald Casper (1)       1996            0          0           0       $285,000
President and Chief        1995            0          0           0              0
Executive Officer          1994            0          0           0              0

R. Craig Kirsch (2)        1996      243,437          0           0              0
Former Chairman,           1995      243,437          0      88,642          2,448
President and Chief        1994      243,437          0           0          2,875
Executive Officer

Robert I. Christian (3)    1996      125,000     15,000           0              0
Former Senior Vice         1995      125,000     30,000     175,000            340
President, Sales           1994       49,725          0           0              0

Kenneth L. Campbell        1996      118,690          0           0              0
Senior Vice President,     1995      118,690          0      20,000            522
Finance                    1994      118,698      6,000           0            554

Robert P. Garrity (4)      1996      108,000          0           0              0
Senior Vice President,     1995      106,082          0      25,000            441
Operations                 1994       20,000          0      20,000              0

   
(1)  Mr. Casper is not an employee of the Company.  He serves as
     President and Chief Executive Officer under a contract between the
     Company and Cornerstone Capital Associates, Ltd. (CCA), a merchant
     banking firm of which Mr. Casper is a principal.  The amount shown
     for All Other Compensation represents the fees paid to Cornerstone
     for the services of Mr. Casper.  CCA is not an affiliate of the
     Company.
    
(2)  During fiscal year 1995, Mr. Kirsch, who resigned from the Company
     in September 1995, was granted an 88,462 share option which has
     since expired and been canceled.

(3)  During fiscal year 1995, Mr. Christian, who resigned from the
     Company in May 1996, was granted 175,000 option shares which have
     since expired and been canceled.

(4)  During fiscal years 1994 and 1995 Mr. Garrity was granted 20,000
     shares and 25,000 share stock options which have since expired and
     been canceled.

<PAGE> PAGE 27

There were no Option/SAR Grants during the Company's fiscal year ended
June 30, 1996.

</TABLE>
<TABLE>
         AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                    AND FY END OPTION/SAR VALUES

<CAPTION>
                                                      Number of
                                                      Securities       Value of
                                                      Underlying      Unexercised
                                                     Unexercised      In-the-Money
                                                     Options/SARs     Options/SARs
                                                      at FY End       at FY End ($)
                        Shares Acquired     Value    Exercisable/     Exercisable/
                        on Exercise (#)   Realized   Unexercisable    Unexercisable
                        ---------------   --------   -------------    -------------
<S>                             <C>          <C>        <C>             <C>
Kenneth L. Campbell             0            NA         18,000          $ 8,500
                                                        12,000          $12,750

Robert P. Garrity               0            NA         13,000          $ 5,313
                                                        32,000          $21,250

Mr. Garrity resigned from the Company on July 15, 1996.  All of his
options expired October 15, 1996.
</TABLE>

EMPLOYMENT CONTRACTS
   
R. Craig Kirsch.  Until his resignation on September 7, 1995, Mr. Kirsch
served under an employment agreement dated as of March 12, 1992.  The
agreement provided for five years' employment with base compensation
subject to review of the compensation committee of the Board of
Directors, participation in any incentive compensation program
implemented by the Company and customary insurance benefits for
executives of the Company.  Mr. Kirsch had stock options to purchase a
total of 288,462 shares of the Company's common stock; these were
canceled upon his resignation.  The agreement provides for Mr. Kirsch's
covenant not to compete with the Company for two years following his
separation.  Mr. Kirsch will receive separation benefits in the form of
salary continuation at an annual rate of $243,437 until the earliest to
occur of March 12, 1997, his employment with another firm, or his death.
In November 1996, the Company suspended payment of such benefits to Mr.
Kirsch in an effort to preserve its liquidity.  Mr. Kirsch has consented
to the suspension of payments with the understanding that the suspension
is temporary and that the Company's obligation to make the remaining
payments under the agreement remains.  The obligation is recorded in the
financial statements.
    
Robert I. Christian.  Until his resignation on May 26, 1996, Mr.
Christian served under an agreement of employment "at will."  The
agreement provided for base compensation at $125,000 annually and
minimum bonus payments, subject to adjustment by the Company's Chief
Executive Officer, participation in the Company's stock option plan and
participation in the Company's group insurance benefits and retirement

<PAGE> PAGE 28

plan.  Mr. Christian had stock options to purchase a total of 175,000
shares of the Company's stock; these were canceled upon his resignation.

Robert P. Garrity.  Until his resignation on July 15, 1996, Mr. Garrity
served under an employment agreement dated December of 1995.  The
agreement provides for base compensation of $106,082 annually, subject
to adjustment by the Company's Chief Executive Officer, participation in
any bonus, incentive compensation and stock option plan for executives
of the Company and participation in the Company's group insurance
benefits and retirement plan.  The agreement also provides for Mr.
Garrity's covenant not to compete with the Company for a period of two
years after his employment ends.  Further, in the event of termination
of Mr. Garrity's employment, other than for cause, the agreement
provides for continued payment of Mr. Garrity's base salary and health
care benefits for a period of six months.  Mr. Garrity will receive
separation benefits until January 15, 1997.

Kenneth L. Campbell. Mr. Campbell serves as an employee "at will."  Mr.
Campbell has a severance arrangement with the Company which provides, in
the event of termination of Mr. Campbell's employment, other than for
cause, for continued payment of Mr. Campbell's base salary ($117,400
annually) and health care benefits for a period of six months.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the compensation committee during fiscal year 1996 were
Messrs. Gold, Knowles, Shapira, and until his resignation, Kirsch.  Mr
Kirsch, who was a nonvoting member, was President and Chief Executive
Officer of the Company until his resignation in September 1995.  Mr.
Shapira is a Director and executive officer of Giant Eagle, Inc. which
engaged in several arms-length business transactions with the Company
during the fiscal year.  The Company sold merchandise to Giant Eagle in
the amount of $143,200 and paid Giant Eagle $1,000 in trade show booth
fees.  Giant Eagle is not an affiliate of the Company.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

It is the policy of the compensation committee to compensate executive
officers of the Company under a pay plan with three components: base
salary, performance-based pay and equity ownership.  The compensation
plan was developed in 1990 with the assistance and recommendations of
compensation consultants.  Under this pay system, base salaries for
executives are set at or just below the market median for each position,
as determined from market survey information for companies with
comparable sales volume.

Performance-based compensation is paid pursuant to a plan implemented in
September 1990.  The plan provides that a portion of the compensation
payable to each executive officer will be based upon the individual's
achievement of predetermined performance objectives and the Company's
attainment of overall performance objectives.  The plan is a flexible
program in which performance objectives, which are individually
determined for each executive appropriate to his position, are
established each year by senior management.  The aggregate amount
potentially payable to executives is determined by the Board of
Directors each year, based upon a percentage of the Company's profits.

<PAGE> PAGE 29

The plan has been suspended for the last three fiscal years, as
management did not expect the Company to have the financial resources to
fund it.

The equity ownership portion of executive officer compensation is paid
in the form of stock options under a Stock Option Plan approved by the
shareholders and amended in 1995.  Under this plan the Company earlier
granted options to executive officers and other managers for
approximately 450,000 shares.  Options for an additional 370,000 shares
were granted in 1995 (excluding options canceled prior to shareholder
approval of the amendment which authorized their granting). The number
of option shares granted to each individual is based upon the
executive's position in the Company and the relative potential for that
position to affect the Company's performance.  The option price for each
grant is the fair market value at the date of grant.  Executives have
ten years from the date of grant to exercise their options by paying the
option price for the stock.  There were no stock option grants under the
plan in fiscal 1996 as a result of the Company's performance.

The compensation committee believes that this three-component pay system
for executive officers effectively balances the employee's need for
income security and the Company's need to maximize performance.  The
base salary component provides the executive a reliable but moderate
income stream.  The opportunity for any additional income exists only
through the performance-based compensation plan and the stock option
plan, and is available only by virtue of individual achievement and
overall Company performance.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT
______________________________________________________________________


           PRINCIPAL HOLDERS OF THE COMPANY'S COMMON STOCK

Security of Ownership of Management

The following table shows, as of October 17, 1996, the beneficial
ownership of the Company's common stock of each Director, each person
who
served as Chief Executive Officer or acted in a similar capacity during
the fiscal year ended June 30, 1996 ("fiscal 1996"), each executive
officer of the Company during fiscal 1996 whose total annual salary and
bonus for fiscal 1996 was at least $100,000 and all the Directors and
Officers of the Company as a group.

<PAGE> PAGE 30
<TABLE>
<CAPTION>
                                    Amount and Nature of Beneficial Ownership
                                    -----------------------------------------
                             Sole Voting     Shared
                                 and       Voting and                   Percent of
                             Investment    Investment                     Shares
Name                            Power         Power        Total        Outstanding
----                         -----------    ----------     -----        -----------
<S>                            <C>          <C>          <C>              <C>
Ernest S. Berez                  5,531       16,169       21,700  (1)        *
Joel M. Berez                   18,014      677,937      695,951  (2)      12.6%
Kenneth L. Campbell             20,352            0       20,352  (3)        *
T. Ronald Casper                10,000        2,000       12,000  (4)        *
Robert I. Christian                  0            0            0  (5)        -
Charles C. Cohen                12,750            0       12,750  (6)        *
Robert P. Garrity                2,200            0        2,200  (7)        *
Joel L. Gold                    11,250          500       11,750  (8)        *
R. Craig Kirsch                      0            0            0  (9)        -
James H. Knowles, Jr.           64,875            0       64,875 (10)       1.2%
David S. Shapira                 7,750       28,302       36,052 (11)        *
William B. Snow                  4,000            0        4,000 (12)        *
All directors and officers
 as a group (14 persons)       178,321      730,523      908,844 (13)      15.9%

* Represents less than 1% of the outstanding shares

 (1) Amount includes 16,169 shares held by Mr. Ernest Berez's wife as to
     which shares he disclaims beneficial interest.  Mr. Ernest Berez
     retired as a director in January of 1996.

 (2) Amount includes 667,506 shares held in twelve trusts for which Mr.
     Joel Berez is co-trustee but as to which he disclaims beneficial
     ownership in 336,970 shares and 10,431 shares held by Mr. Berez
     jointly with his wife.

 (3) Amount includes 19,000 shares which Mr. Campbell does not now own,
     but has the right to acquire within 60 days under stock option
     agreements.

 (4) Amount includes 2,000 shares held by Mr. Casper's wife.

 (5) Mr. Christian resigned from the Company in May of 1996.

 (6) Amount includes 7,750 shares which Mr. Cohen does not now own, but
     has the right to acquire within 60 days under a stock option
     agreements.

 (7) Mr. Garrity resigned from the Company in July of 1996.

 (8) Amount includes 7,750 shares which Mr. Gold does not now own but
     has the right to acquire within 60 days under stock option
     agreements.

 (9) Mr. Kirsch resigned from the Company in September of 1995.

<PAGE> PAGE 31

(10) Amount includes 5,875 shares which Mr. Knowles does not now own,
     but has the right to acquire within 60 days under stock option
     agreements.

(11) Amount includes 7,750 shares which Mr. Shapira does not now own,
     but has the right to acquire within 60 days under stock option
     agreements and 28,302 shares held in various trusts for which Mr.
     Shapira is co-trustee.

(12) Amount includes 4,000 shares which Mr. Snow does not now own, but
     has the right to acquire within 60 days under stock option agreements.

(13) Amount includes 73,458 shares which the directors and officers do
     not now own, but have the right to acquire within 60 days under
     stock option agreements.
</TABLE>

Security Ownership of Certain Others

The following table shows the beneficial ownership of the Company's
common stock of those persons, other than the persons named in the table
above, who are known by the Company to be beneficial owners of more than
5% of the Company's outstanding common stock.
<TABLE>
<CAPTION>

                                Amount and            Percent of
                                 Nature of               Shares
Name and Address            Beneficial Ownership      Outstanding
----------------            --------------------      -----------
<S>                             <C>     <C>              <C>
Steven H. Berez                 673,400 (1)              12.2%
35 Sutton Road
Needham, MA 02192

Barry W. Blank                  583,500 (2)              10.5%
3 Hanover Square
New York, NY 10004

(1)  Steven H. Berez's shareholdings include 5,698 shares as to which he
     has sole voting and dispositive power, 196 shares as to which he
     shares voting and dispositive power with his wife, and 667,506
     shares held in twelve trusts as to which he shares voting and
     dispositive power as co-trustee but as to which disclaims
     beneficial ownership in 336,970 shares.  The shares held by Mr.
     Steven Berez as co-trustee are the same shares as those described
     with respect to Mr. Joel Berez in footnote 2 under "Security
     Ownership of Management."

(2)  This amount excludes any shares which may be owned by Mr. Blank's
     customers, in which he disclaims any beneficial or other interest
     and over which he has no voting or dispositive power.
</TABLE>

<PAGE> PAGE 32

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
______________________________________________________________________

BUSINESS RELATIONSHIPS, TRANSACTIONS WITH MANAGEMENT AND INVOLVEMENT IN
LEGAL PROCEEDINGS:
   
During fiscal year 1996, the Company engaged arms-length business
transactions with Giant Eagle, Inc.  The Company sold merchandise to
Giant Eagle in the amount of $143,200.  David S. Shapira, a Director of
the Company, is Director, Chairman, President and Chief Executive
Officer of Giant Eagle.  Giant Eagle is not an affiliate of the Company.
    

PART IV
______________________________________________________________________

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
         FORM 8-K
______________________________________________________________________

(a)     The following documents are filed as part of this report:

                                                                  Page
1. Financial Statements

   Report of Independent Auditors                                    37

   Consolidated Balance Sheets at June 30, 1996
   and June 24, 1995                                                38

   Consolidated Statements of Operations for the years
   ended June 30, 1996, June 24, 1995, and June 25, 1994            40

   Consolidated Statements of Shareholders' Equity
   for the years ended June 30, 1996, June 24, 1995,
   and June 26, 1993                                                41

   Consolidated Statements of Cash Flows for the years
   ended June 24, 1995, June 25, 1994, and June 24, 1995            42


   Notes to Consolidated Financial Statements                       43


2. Financial Statement Schedules

   For the years ended June 30, 1996, June 24, 1995,
   and June 25, 1994 (as required)

   Schedule II - Valuation and Qualifying Accounts                  55



Other schedules are omitted because they are not applicable or because
the required information is shown in the consolidated financial
statements or notes thereto.

<PAGE> PAGE 33

3. Exhibits:
_______________________________________________________________________

                                                                  Page

 3.1  Articles of Incorporation, as amended, filed as
      Exhibit 3.1 to 1994 Form 10-K and incorporated
      herein by reference.

 3.2  Bylaws, as amended, filed as Exhibit 3.2 to 1992
      Form 10-K and incorporated herein by reference.

 4.1  Amendment 2 to Form S-1 Registration Statement
      (File No. 2-31014), filed April 1, 1969 and
      incorporated herein by reference.

 4.2  Amendment 1 to Form S-1 Registration Statement
      (File No. 2-42809), filed January 26, 1972 and
      incorporated herein by reference.

 4.3  Amendment 1 to Form S-8 Registration Statement
      (File No. 2-44531), filed October 15, 1972 and
      incorporated herein by reference.

 4.4  Amendment 4 to Form S-7 Registration Statement
      (File No. 2-59334), filed September 21, 1977, and
      Form of Indenture dated as of September 15, 1977,
      filed as an Exhibit thereto, both incorporated
      herein by reference.  First Supplemental Indenture
      dated as of May 15, 1982, filed September 23, 1983
      and incorporated herein by reference.

 4.5  Amendment 2 to Form S-2 Registration Statement
      (File No. 2-81849), filed April 6, 1983, and Form
      of Indenture dated as of April 1, 1983, filed as
      Exhibit 4.2 thereto, both incorporated herein by
      reference.  Supplemental Indenture dated as of
      August 31, 1983, filed as Exhibit 4.5 to 1984 Form
      10-K and incorporated herein by reference.

 4.6  Form S-8 Registration Statement No. 33-48361, filed
      June 3, 1992 and incorporated herein by reference.

 4.7  Form S-8 Registration Statement No. 33-48362, filed
      June 3, 1992 and incorporated herein by reference.

10.1  Letter dated July 31, 1990 regarding employment and
      retirement agreement of Ernest S. Berez, filed as
      Exhibit 10.5 to 1990 Form 10-K and incorporated
      herein by reference.

10.2  Deferred Compensation arrangement, filed as Exhibit
      10.2 to 1994 Form 10-K and incorporated herein by
      reference.

<PAGE> PAGE 34

10.3  Stock Option Plan, filed as Exhibit 10.10 to 1990
      Form 10-K and incorporated herein by reference.

10.4  Nonemployee Director Stock Option Plan, filed
      herein as Exhibit 10.10 to 1992 Form 10-K and
      incorporated herein by reference.

10.5  Deferred Compensation Plan for Directors of Action
      Industries, Inc., incorporated herein by reference.

10.6  Plan of Liquidation of Action Tungsram, Inc., dated
      April 25, 1990, filed as Exhibit 10.12 to 1990 Form
      10-K and incorporated herein by reference.

10.7  Addendum to Plan of Liquidation of Action Tungsram,
      Inc., dated April 30, 1993, filed as Exhibit 10.24
      to 1993 Form 10-K and incorporated herein by
      reference.

10.8  Employment Agreement dated March 12, 1992 with R.
      Craig Kirsch, filed as Exhibit 10.14 to 1992 Form
      10-K and incorporated herein by reference.

10.9  Employment Agreement dated as of July 1, 1994 with
      Ronald A. Gagnon, filed as Exhibit 10.11 to 1994
      Form 10-K and incorporated herein by reference.

10.10 Employment Agreement dated December 15, 1993 with
      Robert P. Garrity, incorporated herein by
      reference.

10.11 Employment Agreement dated April 15, 1994 with
      Robert I. Christian, incorporated herein by
      reference.

10.12 Loan Agreement with Allegheny Capital Growth
      Limited Partnership dated February 4, 1991, filed
      as Exhibit 10.15 to 1991 Form 10-K and incorporated
      herein by reference.

10.13 Lease Agreement and Restated Second Amendment to
      Lease Agreement with Allegheny Capital Growth
      Limited Partnership dated June 29, 1990 and
      February 4, 1991, filed as Exhibit 10.16 to 1991
      Form 10-K and incorporated herein by reference.

10.14 Loan and Security Agreement (and related
      Agreements) dated January 20, 1994, filed as
      Exhibit 10 to fiscal 1994 second quarter Form 10-Q
      and incorporated herein by reference.

10.15 Amendments One, Two, Three and Four, dated May 27,
      1994, November 11, 1994, December 9, 1994, and May
      11, 1995, respectively, incorporated herein by
      reference.

<PAGE> PAGE 35

10.16 Asset Purchase Agreement and Bill of Sale,
      Assignment and Assumption Agreement with Filmet
      Color Laboratories, Inc., dated April 21, 1994,
      filed as Exhibit 10.17 to 1994 Form 10-K and
      incorporated herein by reference.

10.17 Purchase/Sale Agreement with Riverside Associates,
      dated February 14, 1995, incorporated herein by
      reference.

10.18 Remediation and Indemnification Agreement with
      Riverside Associates, dated June 16, 1995,
      incorporated herein by reference.

10.19 Asset Purchase Agreement with Kensington
      Collection, Inc. dated September 18, 1995,
      incorporated herein by reference.

10.20 Letter dated January 8, 1996 regarding Extension of
      Employment Agreement dated December 15, 1993 of
      Robert P. Garrity, including amendment and
      restatement of severance arrangements, filed herein.

10.21 Letter dated January 8, 1996 regarding severance
      arrangement of Kenneth L. Campbell, filed herein.

10.22 Settlement Agreement with Allegheny Capital Growth
      Limited Partnership dated October 1, 1996, filed
      herein.

10.23 Amended and Restated Lease Agreement with Allegheny
      Capital Growth Limited Partnership dated October 1,
      1996, filed herein.

10.24 Promissory Judgment Note with Allegheny Capital
      Growth Limited Partnership dated October 1, 1996,
      filed herein.

10.25 Supplemental Promissory Judgment Note with
      Allegheny Capital Limited Partnership dated October
      1, 1996, filed herein.

10.26 Asset Purchase Agreement with Mazel Company L.P.
      dated October 1996, filed herein.

22    Subsidiaries of Registrant, filed as Exhibit 22 to
      1993 Form 10-K and incorporated herein by
      reference.

23    Consent of Independent Auditors, filed herein.

<PAGE> PAGE 36

(b)   Reports on Form 8-K:

      The Company filed the following report on Form 8-K during the
      fourth quarter of fiscal 1996:

      May 17, 1996 - Report of the engagement of Parker/Hunter
      Incorporated.

<PAGE> PAGE 37

                    REPORT OF INDEPENDENT AUDITORS


To the Shareholders and Board of Directors
Action Industries, Inc.


We have audited the accompanying consolidated balance sheets of Action
Industries, Inc. and Subsidiaries as of June 30, 1996 and June 24, 1995,
and the consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended June 30,
1996, as listed in the accompanying index to financial statements Item
14(a).  Our audits also included the financial statement schedule listed
in the index at 14(a).  These financial statements and the schedule are
the responsibility of the Company's management.  Our responsibility is
to express an opinion on these financial statements and 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, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Action Industries, Inc. and Subsidiaries at June 30, 1996
and June 24, 1995, and the consolidated results of its operations and
cash flows for each of the three years in the period ended June 30, 1996
in conformity with generally accepted accounting principles.  Also in
our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

As more fully described in Note A to the consolidated financial
statements, the Company has entered into an agreement to sell all its
inventory and related intellectual property subject to the approval of
the Company's shareholders.  Additionally, as described in Note D, the
Company has experienced recurring losses and is currently in violation
of its debt agreement with its lender.  These conditions raise
substantial doubt about the Company's ability to continue as a going
concern.  Management's plans regarding these matters are also described
in Note A.  The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and
classification of the assets or the amounts and classification of the
liabilities that may result from the outcome of this uncertainty.

ERNST & YOUNG LLP
   
Pittsburgh, PA
    
October 14, 1996

<PAGE> PAGE 38
<TABLE>
                             ACTION INDUSTRIES, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                                          (In thousands)
<CAPTION>
                                                                          June 30,         June 24,
                                                                            1996             1995
                                                                          --------         --------
ASSETS
<S>                                                                        <C>               <C>
CURRENT ASSETS
   Cash and cash equivalents                                                   $78             $567
   Trade accounts receivable, less allowances of $353 and $478               2,769            9,908
   Inventories                                                               3,928           18,133
   Other current assets                                                        671            1,111
                                                                           -------          -------
      TOTAL CURRENT ASSETS                                                   7,446           29,719

PROPERTY, PLANT AND EQUIPMENT                                                  385            7,964

OTHER ASSETS
   Note Receivable                                                             850            1,200
   Other                                                                       227              663
                                                                           -------          -------

                                                                            $8,908          $39,546
                                                                           =======          =======
<PAGE> PAGE 39

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
   Notes and acceptances payable                                            $3,039          $10,162
   Accounts payable                                                          2,628            4,406
   Accrued compensation                                                        607              926
   Other accrued liabilities                                                   736            1,382
                                                                           -------          -------
      TOTAL CURRENT LIABILITIES                                              7,010           16,876

LONG-TERM LIABILITIES
   Financing obligation - sale/leaseback                                       -              7,739
   Long-term debt                                                              115              115
   Deferred compensation                                                     1,554            1,688
                                                                           -------          -------
      TOTAL LONG-TERM LIABILITIES                                            1,669            9,542

SHAREHOLDERS' EQUITY
   Common stock, $0.10 par value;
      authorized 20,000,000 shares; issued 7,187,428 shares                    719              719
   Capital in excess of par                                                 25,498           25,498
   Retained earnings (deficit)                                             (14,414)          (1,515)
                                                                           -------          -------
                                                                            11,803           24,702
   Less treasury shares, at cost                                            11,574           11,574
                                                                           -------          -------
      TOTAL SHAREHOLDERS' EQUITY                                               229           13,128
                                                                           -------          -------
                                                                            $8,908          $39,546
                                                                           =======          =======

See notes to consolidated financial statements.
</TABLE>
<PAGE> PAGE 40
<TABLE>
                       ACTION INDUSTRIES, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                         (In thousands except per share data)

<CAPTION>
                                                                 Year Ended
                                                      ----------------------------------
                                                      June 30,     June 24,     June 25,
                                                        1996         1995         1994
                                                      --------     --------     --------
<S>                                                  <C>           <C>          <C>
NET SALES                                             $30,212      $45,088      $60,049

COSTS AND EXPENSES
  Cost of products sold                                26,385       34,374       44,527
  Operating expenses                                   10,462       12,461       13,245
  Costs and expenses due to sale of
     assets and closing of warehouse                    4,226         -            -
  Interest expense                                      1,980        1,834        2,072
                                                     ---------    ---------    ---------
                                                       43,053       48,669       59,844

OTHER INCOME (EXPENSE), NET                               (58)         674          (77)
                                                     ---------    ---------    ---------

EARNINGS (LOSS) FROM CONTINUING
  OPERATIONS BEFORE INCOME TAXES                      (12,899)      (2,907)         128

PROVISION FOR INCOME TAXES                               -            -            -
                                                     ---------    ---------    ---------

EARNINGS (LOSS) FROM CONTINUING OPERATIONS            (12,899)      (2,907)         128

LOSS FROM DISCONTINUED OPERATIONS                        -            (808)          (3)
                                                     ---------    ---------    ---------

NET EARNINGS (LOSS)                                  ($12,899)     ($3,715)        $125
                                                     =========    =========    =========

EARNINGS (LOSS) PER SHARE
  Continuing operations                                ($2.33)      ($0.52)       $0.02
  Discontinued operations                                -           (0.15)        0.00
                                                     ---------    ---------    ---------
NET EARNINGS (LOSS) PER SHARE                          ($2.33)      ($0.67)       $0.02
                                                     =========    =========    =========

Weighted average shares outstanding                     5,539        5,539        5,561


See notes to consolidated financial statements.
</TABLE>
<PAGE> PAGE 41
<TABLE>
                                      ACTION INDUSTRIES, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                        (In thousands except share amounts)
<CAPTION>

                                    For the Years Ended June 30, 1996, June 24, 1995, and June 25, 1994
                              --------------------------------------------------------------------------------
                                                    Capital      Retained
                                 Common Stock       In Excess    Earnings      Treasury Stock
                               Shares     Amount     of Par      (Deficit)   Shares      Amount        Total
                              --------------------------------------------------------------------------------
<S>                             <C>        <C>       <C>          <C>         <C>       <C>           <C>
BALANCE - JUNE 26, 1993         7,187      $719      $25,498       $2,075     1,648     ($11,574)     $16,718

  Net Earnings                    -          -          -             125       -           -             125
                              --------------------------------------------------------------------------------

BALANCE - JUNE 25, 1994         7,187       719       25,498        2,200     1,648      (11,574)      16,843

  Net Loss                        -          -          -          (3,715)      -           -          (3,715)
                              --------------------------------------------------------------------------------

BALANCE - JUNE 24, 1995         7,187       719       25,498       (1,515)    1,648      (11,574)      13,128

  Net Loss                        -          -          -         (12,899)      -           -         (12,899)
                              --------------------------------------------------------------------------------

BALANCE - JUNE 30, 1996         7,187      $719      $25,498     ($14,414)    1,648     ($11,574)        $229
                              ================================================================================

See notes to consolidated financial statements.
</TABLE>
<PAGE> PAGE 42
   
<TABLE>
                              ACTION INDUSTRIES, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (In thousands)
<CAPTION>
                                                                                Year Ended
                                                                    ----------------------------------
                                                                    June 30,     June 24,     June 25,
                                                                      1996         1995         1994
                                                                    --------     --------     --------
OPERATING ACTIVITIES:
<S>                                                                 <C>           <C>          <C>
Net earnings (loss) from continuing operations                      ($12,899)     ($3,715)        $125
Adjustments to reconcile net earnings (loss) to net cash
   provided by operating activities:
  Depreciation and amortization                                          762        1,055        1,248
  Provision (credit) for doubtful accounts                              (125)        (138)         873
  Non-cash provision for inventory losses                              1,851           -            -
  Non-cash charge related to vacating warehouse facility                  84           -            -
  Changes in operating assets and liabilities:
     Trade accounts receivable                                         7,264         (390)       7,178
     Inventories                                                      12,354         (549)       6,203
     Other current assets                                                890           76        1,953
     Accounts payable and accrued expenses                            (2,743)         132       (5,193)
                                                                    ---------    ---------    ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                    7,438       (3,529)      12,387
                                                                    =========    =========    =========
INVESTING ACTIVITIES:

   Acquisition of property, plant and equipment                         (220)        (759)        (127)
   Payments received on notes receivable                                 100          297           -
                                                                    ---------    ---------    ---------
NET CASH USED IN INVESTMENT ACTIVITIES                                  (120)        (462)        (127)
                                                                    =========    =========    =========
FINANCING ACTIVITIES:

   Notes and acceptances payable                                      (7,123)       4,723      (11,001)
   Payment of deferred compensation                                     (134)        (324)        (602)
   Principal payments on long-term obligations                          (786)        (633)        (535)
   Other, net                                                            236           (8)         (52)
                                                                    ---------    ---------    ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                   (7,807)       3,758      (12,190)
                                                                    =========    =========    =========

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        (489)        (233)          70

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                           567          800          730
                                                                    ---------    ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                 $78         $567         $800
                                                                    =========    =========    =========

The completion of the new lease on the Company's headquarters facility resulted in a noncash credit for the elimination
of the sale/leaseback obligation of $6.9 million and non-cash charges of $6.2 million for the net book value of the
leased property including land, building and certain equipment, $600,000 for other property and equipment abandoned
and $200,000 net book value of equipment disposed of during the year.

See notes to consolidated financial statements.
</TABLE>
    

<PAGE> PAGE 43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACTION INDUSTRIES, INC. AND SUBSIDIARIES
___________________________________________________________________


NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fiscal Year: References to a fiscal year in these financial
statements are to the Company's fiscal year ending for the three
most recent fiscal years on June 30, 1996, June 24, 1995 and June
25, 1994.

Basis of Presentation:  In October 1996 the Company entered into an
agreement to sell its inventory and related intellectual property
associated with its Replenishment (Powerhouse) business and
Promotional business.  The Powerhouse-related assets are to be sold
promptly.  Powerhouse inventories were approximately $570,000 at
the date the agreement was signed.  The Company's Promotional-related
assets have been sold  subject to the approval of the
Company's shareholders.  The assets to be sold represent
substantially all of the operating assets currently employed in the
Company's business.  Trade accounts receivable are to be retained,
as well as non-operating notes and other receivables from prior
sales of the Company's headquarters facility and certain business
units.  Upon completion of the sales described above, all of the
Company's current operations will have been sold.

Also in October 1996 the Company finalized negotiations and signed
a new lease arrangement for its headquarters facility.  The new
lease obligates the Company for rent of approximately $100,000 per
year for a five year period under an operating lease.  This lease
agreement, in conjunction with the physical departure from the
warehouse space in the facility, results in the elimination of  the
previously reported capital lease obligation for the facility.

The accompanying financial statements include the historical
results of operations of the Company's Promotional and Replenishment
businesses.  Valuation adjustments have been made to the historical
cost basis of the Company's inventories, property and equipment and
any other assets impacted by the sale of the Company's current
operations, to value these assets at estimated net realizable value
and to reflect the abandonment or sale of certain fixed assets no
longer used to support operations. The valuation of the assets and
liabilities are based on management estimates and assumptions as of
the date of issuance of the financial statements.  Actual
realization of the assets and settlement of the liabilities could
be higher or lower than the estimated amounts.
   
The financial statements have been prepared on a going concern basis
because the disposition of the Company's inventories and other operating
assets to be sold is subject to approval by the shareholder vote
described above.  The asset adjustments described above are the result
of recognition of the market value of the inventories and the
abandonment of property and equipment formerly utilized in warehouse
space which has been vacated.

<PAGE> PAGE 44
    
Principles of Consolidation:  The consolidated financial statements
include the accounts of Action Industries, Inc. and its
wholly-owned subsidiaries (the Company). All significant
intercompany accounts and transactions have been eliminated.  Until
September of 1995, the Company operated a lamp business as
Kensington Lamp Company, a wholly-owned subsidiary (KLC).  The
business and certain assets of KLC were sold in September of 1995,
a fiscal 1995 event for financial reporting purposes.  The lamp
business has been reported as a discontinued operation.  Action
Nicholson Color Company (ANC), a wholly-owned subsidiary, was sold
in April of 1994.  ANC was held for sale as of June 26, 1993, and
has been reported as a discontinued operation.

Financial Instruments:  Cash and cash equivalents, accounts and
notes receivable,  and accounts and notes payable are carried at
cost, which approximated their fair value at June 30, 1996 and June
24, 1995.

Inventories:  Inventories are valued at the lower of first-in,
first-out (FIFO) cost or market.  Market valuation is based on
known or estimated sales value.

Property, Plant and Equipment:  Property, plant and equipment is
carried at cost.  Elimination of the capitalized lease on the
Company's headquarters facility and the sale of the Company's
operations have resulted in the sale or devaluation of
substantially all of the Company's property, plant and equipment as
of June 30, 1996.  The remaining book value is comprised of
computer equipment and office furniture and fixtures in continuing
use.

Historically, the Company has provided for depreciation (including
amortization of assets held under capital leases) over the
estimated useful lives or lease terms of the assets, principally on
the straight-line method.  Estimated useful lives used in providing
for depreciation have been 20-40 years for buildings and 3-15 years
for machinery and equipment.

Property, plant and equipment is comprised of the following (in
thousands):
<TABLE>
<CAPTION>
                                   1996        1995
                                   ----        ----
<S>                              <C>         <C>
Land                             $   -       $    521
Buildings                            -          7,965
Machinery and equipment            5,981       21,833
                                 --------    ---------
                                   5,981       30,319
(Less allowances)                 (5,596)     (22,355)
                                 --------    ---------
                                 $   385     $  7,964
                                 ========    =========
</TABLE>

<PAGE> PAGE 45

Income Taxes:  The Company accounts for income tax expense and
liabilities under the liability method.  Deferred income taxes are
provided for temporary differences between financial and income tax
reporting, relating principally to restructuring charges, reserves
for losses on investments and other assets, depreciation and
deferred compensation.

Employees' Retirement Plans:  The Company has defined contribution
retirement plans covering substantially all of its employees.  The
plans provide for defined contributions based on eligible
employees' compensation.  It is the policy to fund retirement plan
costs accrued.

Revenue Recognition:  The Company recognizes revenue from the sale
of merchandise at the time of shipment to its customers.  In the
case of sales where the customer has the right to return unsold
goods (guaranteed sales), revenue recognized is reduced for
estimated returns, based on historical experience.

Interest Allocation:  The Company has allocated interest to
discontinued operations based on the receivables and inventories
used in such operations.

Impact of Recently Issued Accounting Standards:  The Company has
not adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets to be Disposed
Of" (SFAS No. 121).  Management does not believe that the adoption
of SFAS No. 121 will have a material impact on the Company's
financial position or results of operations.  The ultimate recovery
of the carrying value of the remaining long-lived assets will
depend on the results of the Company's efforts to accomplish a
business combination with an operating business.

The Company has not adopted Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
No. 123).  SFAS No. 123 establishes financial accounting and
reporting standards for stock-based compensation plans.  This
Standard is optional, and the Company is permitted to continue to
account for its plans under previous accounting standards.  The
Company does not expect to adopt the recognition provisions of the
new accounting standard, and consequently, the future adoption of
SFAS No. 123 will not have an impact on the Company's results of
operations.


NOTE B -- SALE OF OPERATING ASSETS
   
The purchase price for the sale of the Company's Promotional
inventory and related intellectual property will not be determined
until after the process of obtaining shareholder approval is
completed, which is expected to be in December of 1996.  The
purchase price will equal 63.3% of the cost of the inventory sold
plus a cash payment of $100,000.  The proceeds of the sale are
estimated at approximately $1.1 million to $1.5 million, and will be
used to repay debt under the Company's credit arrangements and trade
payables.  The estimated loss on the sale (approximately $600,000

<PAGE> PAGE 46

has been recorded in the accompanying financial statements.  In
addition, the Company has incurred additional inventory losses of
approximately $1.8 million related to the sales of all current
operations, including excess quantities and other obsolete
inventories, primarily display materials; unabsorbed acquisition
costs related to the Company's low level of purchasing in 1996 and
the writeoff of unamortized display costs. These losses have been
recorded as a reduction in the value of inventory in the
accompanying financial statements.
    
The Company, with the help of its advisors, is actively exploring
other strategic options available to it, including business
combinations with other operating businesses in order to continue
as an operating concern and preserve all or a portion of its income
tax net operating loss carryforwards.  The Company has received
indications of interest from third parties, and has been engaged in
specific discussions relating to such a transaction with interested
parties.  Such discussions are preliminary and may not result in an
agreement relating to any such transaction, and the Company may not
be able to maintain sufficient capital to continue the pursuit of
such transactions.  The issues discussed above and those discussed
in Note D regarding the status of the Company's credit facilities
raise substantial doubt about the ability of the Company to
continue as a going concern.


NOTE C -- DISCONTINUED OPERATIONS

Kensington Lamp Company:  The Company owns 100% of the common stock
of Kensington Lamp Company (KLC), now inactive, but formerly an
assembler of lead crystal and other table lamps.  The Company sold
certain of the assets and the business to KLC management in
September of 1995.  Terms of the sale included retention of
accounts receivable by the Company, assumption of inventory-related
accounts payable by the buyer, and an interest bearing note secured
by a second mortgage on inventories and receivables,  payable over
a 42 month period which began November 1, 1995.  As of June 30,
1996 the amount receivable under the note was $1,299,900.

The estimated realizable value from the sale was included in other
current assets and other long-term assets in the accompanying
balance sheet as of June 24, 1995 as if the sale had taken place in
the year ended June 24, 1995.   The statement of operations for
1994 was restated to reflect KLC as a discontinued operation.
Total sales for KLC were $10.1 million for 1995 and $9.3 million
for 1994.

Interest allocated to KLC in the accompanying statement of
operations was $334,000 in fiscal 1995 and $283,000 in fiscal 1994.

Action Nicholson Color Company:  The Company owns 100% of the
common stock of Action Nicholson Color Company (ANC), now inactive,
but formerly a producer of color separations.  The Company sold the
assets and the business of ANC in April of 1994.  Terms of the sale
included a cash payment at closing and future payments based on
sales of the business over the three years subsequent to April

<PAGE> PAGE 47

1994.  The estimated net realizable value of the future payments
($125,000 as of June 30, 1996) is included in the accompanying
balance sheet.


NOTE D -- LONG-TERM DEBT AND CREDIT FACILITIES

Long-term debt outstanding at June 30, 1996 and June 24, 1995
consisted of $115,000 in 9% Convertible Subordinated Debentures,
due in 1998.  There are no current maturities of long-term debt.

Convertible Subordinated Debentures:  The Debentures may be
converted into common stock at a price of $9.87 per share at any
time prior to maturity. If conversion does not occur, the Company
is required to redeem the Debentures on the maturity date, April 1,
1998.  The Debentures may be redeemed early, at the Company's
option, upon payment of a premium.  The sale of substantially all
of the Company's operating assets in a transaction requiring
shareholder approval may require redemption of the Debentures at
the time the sale is completed.

Credit Facilities:  The Company's Credit Agreement provides for
available credit of up to $10 million through June 30, 1997.
Availability under the credit line is further limited by the level
of eligible accounts receivable and inventories.  Interest is
payable at 3.5% over the prime rate of interest.

Borrowings are used for short-term financing under notes payable
and to back up letters of credit issued against purchases of
imported merchandise.  Borrowings are secured by substantially all
of the Company's assets, including its cash balances, accounts
receivable, inventories, and  property, plant and equipment.

Short-term borrowings against the credit lines ranged from a high
of $12.4 million to a low of $2.5 million during the 1996 fiscal
year.  At June 30, 1996 the unused borrowing capacity based on the
borrowing formula in the agreement was $1.5 million.  During the
year ended June 24, 1995, borrowings ranged from a high of $14.6
million to a low of $4.6 million.

The Company did not meet the required levels of net worth and
working capital under the restrictive covenants of its Credit
Agreement as of June 30, 1996, and will not be able to meet these
covenants subsequently.  The lender's remedies under such a default
include the right to demand repayment of the outstanding loan.

Maturities of Debt:  There are no maturities of long-term debt  for
the five fiscal years subsequent to 1996, with the exception of the
Convertible Subordinated Debentures due April 1, 1998 ($115,000).

Interest paid was $2,067,000 during the year ended June 30, 1996,
$2,098,000 in 1995, and $2,585,000 in 1994.

<PAGE> PAGE 48

NOTE E -- SALE/LEASEBACK

In 1991 the Company refinanced its headquarters facility under a
sale/leaseback arrangement.  The facility was sold for $14 million,
$3.5 million of which was in the form of an interest bearing note
receivable.  $10.5 million was received in cash.  The transaction
was  accounted for as a financing, wherein the property remained on
the books and continued to be depreciated.  A financing obligation
representing the proceeds was recorded, and was reduced based on
payments under the lease.
   
The sale/leaseback financing obligation was eliminated in October
of 1996 when the Company completed negotiations and agreed to an
operating lease on the office space in the facility (which space
represents approximately 10% of the total space in the facility).
In connection with the settlement of the sale/leaseback obligation,
the note receivable was reduced to $2.3 million from the original
$3.5 million, and the note will not bear interest until 1998.  An
unrelated third party has leased the entire warehouse portion of
the space from the Company's landlord.  As a result of the Company's
vacating the warehouse facilities during March and April of 1996
and the signing of a new operating lease, the capitalized lease
obligation was eliminated from the financial statements as of June
30, 1996.  The note receivable has been recorded in the
financial statements as follows:
<TABLE>
<CAPTION>
                <S>                     <C>
                Note receivable         $2,300,000
                Valuation allowance      2,300,000
                                        ----------
                Net recoverable amount  $        0
                                        ==========
</TABLE>
The valuation allowance has been provided to reduce the estimated net
recoverable amount of the note to zero because the note does not bear
interest until 1999 and because the Company's ability to realize some or
all of the value of the note is dependent on whether or not the owner of
the facility can sell or refinance the property in sufficient amount to
satisfy the first mortgage to a third party, which has priority over the
Company's note receivable.
    
The original sale/leaseback (under which the Company has been the
sole tenant) had a lease term of twelve years for the office and
eight years for the warehouse (beginning in April 1991) and
required minimum annual rental payments of approximately $1.9
million per year through 1999 and lesser payments thereafter.
   
The new lease requires minimum annual rental payments of $100,000
per year for the five year period beginning November 1, 1996. The
Company's office space requirements are currently less than the
space rented under the new lease.  The Company and its landlord are
actively seeking prospective tenants to relieve the Company of some
or all of its obligations under the lease.  The note resumes the accrual
of interest in March of 1999, at which time the Company will receive
$138,000 interest per year, which may be offset against the rental

<PAGE> PAGE 49

obligation.  Termination of the original sale/leaseback lease resulted
in elimination of the capitalized lease obligation ($6.9 million at June
30, 1996) from the balance sheet, offset by the elimination of the land,
building and certain equipment directly related to the facility with an
aggregate net book value of approximately $6.2 million.  In
addition, the Company incurred significant costs associated with
vacating the facility.

The net reduction in costs related to the capital lease termination was
as follows:
<TABLE>
<CAPTION>
<S>                                                  <C>
Termination of capital lease obligation              $6,953,000

Property, plant and equipment eliminated              6,206,000
Severance, facilities costs, transfer freight           622,000
                                                     ----------
                                                      6,828,000
                                                     ----------
Net cost reduction from lease termination            $  125,000
                                                     ==========
</TABLE>
The Company also incurred other costs in connection with the capital
lease termination which have not been quantified, including moving
expenses, inventory transfer costs other than freight, and inventory
losses.
    

<PAGE> PAGE 50

NOTE F -- INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying value of assets and liabilities
for financial reporting purposes and the amounts reported for
income tax purposes.  Significant components of the Company's
deferred income tax liabilities and assets are as follows:
<TABLE>
<CAPTION>
                                            1996          1995
                                            ----          ----
   <S>                                  <C>           <C>
   Deferred Tax Assets:
     Deferred tax benefits associated
       with losses provided for
       restructuring, discontinued
       operations and other asset
       valuation allowances             $ 6,093,200   $ 4,085,000

     Deferred gain on sale/leaseback          -         1,865,000
     Net operating loss carryforwards    13,869,000     7,480,000
     Alternative minimum tax credit         805,000       805,000
                                        -----------   -----------
                                         20,767,200    14,235,000

   Deferred Tax Liabilities:
     Excess tax depreciation over book      567,600     1,454,000
     Change from LIFO to FIFO               513,600     1,027,000
                                        -----------   -----------
                                          1,081,200     2,481,000
                                        -----------   -----------

   Net deferred tax asset                19,686,000    11,754,000
   Valuation allowance                   19,686,000    11,754,000
                                        -----------   -----------
     NET DEFERRED TAX ASSET REPORTED    $         0   $         0
                                        ===========   ===========
</TABLE>
The reconciliation of the effective income tax rate to the Federal
statutory rate is as follows:
<TABLE>
<CAPTION>
                                       1996      1995     1994
                                       ----      ----     ----
<S>                                   <C>       <C>      <C>
Federal income tax rate               (34.0)%   (34.0)%   34.0 %
Deferred tax charge (credit)             -         -        -
 Effect of net operating loss carry-
  forward and valuation allowance      34.0 %    34.0 %  (34.0)%
State income tax, net of
  Federal benefit                        -         -        -
Other                                    -         -        -
                                      -------   -------  -------
Effective income tax rate               0.0 %     0.0 %    0.0 %
                                      =======   =======  =======
</TABLE>

<PAGE> PAGE 51

The Company has net operating loss carryforwards available for
income tax reporting purposes of approximately $34 million expiring
in 2008 through 2011 which, upon recognition, based on current tax
rates, could result in future tax benefits of approximately $13.8
million.  The Company made no tax payments during the years ended
June 30, 1996, June 24, 1995 and June 25, 1994.


NOTE G -- EMPLOYEES' RETIREMENT PLANS

Contributions under the Company's retirement plans were $75,000 in
1996, $123,000  in 1995 and $133,000 in 1994.  Contributions were
for employees subject to a collective bargaining agreement, which
provides for such contributions at a rate of 6% of eligible
compensation.  All employees eligible for contributions under the
collective bargaining agreement were terminated prior to June 30,
1996.


NOTE H -- OTHER INCOME (EXPENSE), NET

Other income (expense) consists of the following (in thousands):
<TABLE>
<CAPTION>
                                   1996       1995       1994
                                   ----       ----       ----
<S>                                <C>       <C>        <C>
Gain on sale of equipment          $  -      $ 296      $  -
Gain on sale of property              -        950         -
Writedown of remaining estimated
 realizable of Action Nicholson     (200)     (518)        -
Interest income                       -         -          -
Gain on sale of other assets         208        -          -
Other income (expense), net          (66)      (54)       (77)
                                   ------    ------      -----
                                   $ (58)    $ 674       $(77)
                                   ======    ======      =====
</TABLE>

NOTE I -- LEASES

The Company leases office space and equipment under noncancelable
operating leases.  Future minimum lease payments under operating
leases (including the new facility leases referred to in Note E
above are $338,000 in 1997; $287,000 in 1998; $215,000 in 1999;
$100,000 in 2000 and $100,000 in 2001.  Currently there are no
leases with payments due beyond 2001.   Rent expense under
operating leases (excluding the sale/leaseback transaction which
was a capital lease) amounted to $280,000 in 1996, $855,000 in
1995, and $905,000 in 1994.


NOTE J -- COMMITMENTS AND CONTINGENCIES

Commitments as of June 30, 1996 for outstanding letters of credit
for merchandise purchases were $82,000.

<PAGE> PAGE 52
   
The Company owned property located in Mt. Clemens, Michigan, the
book value of which was previously written off.  The Company sold
the property in June of 1995.  The Company retains an environmental
obligation with respect to the Mt. Clemens property but understands that
the obligation has been fulfilled by the buyer's completion of the
required environmental cleanup procedures.
    
Creditors of Phar-Mor, Inc. previously filed a claim against the
Company (and other shareholders and former shareholders of Phar-Mor)
to recover certain proceeds (approximately $2.6 million)
received by the Company in connection with a Phar-Mor tender offer
in fiscal 1992 for part of the Company's investment in the common
stock of Phar-Mor.  The claim has been denied by summary judgment,
with no repayment required of the Company.  An appeal of the denial
was filed by the Creditors in September 1995.  In October of 1996
the summary judgment was affirmed by the appeals court.


NOTE K -- SEGMENT INFORMATION AND CREDIT CONCENTRATION

The Company has operated in one market segment - sales to
retailers.  Substantially all of the Company's accounts receivable
are from retailers.  The Company's credit arrangements with its
customers are generally unsecured.  Credit loss experience has been
in line with the expectations of management.

Substantially all operations have been located in the United
States.  Export sales were less than 10% of net sales.

During fiscal 1996 one entity accounted for 18.2% of the Company's
consolidated net sales, as a result of the merger of two customers
which accounted for 9.9% and 9.2% respectively.   One customer
accounted for 11.6% of consolidated net sales in 1995 and one
customer accounted for 15.3% of consolidated net sales in 1994.

The Company has had several large customers which have been
significant to its business.  In the fiscal year ended June 30,
1996 the Company sold in excess of $1 million to each of six
customers who, in the aggregate, accounted for 42% of net sales.
In the fiscal year ended June 24, 1995 the Company sold in excess
of $1 million to each of eleven customers who, in the aggregate
accounted for 48% of net sales.  The loss of large customers has
had an adverse effect on the Company.


<PAGE> PAGE 53

NOTE L -- STOCK OPTION PLANS

The Company has adopted Stock Option Plans which provide for the
granting of stock options to certain key employees and directors.
The Plans reserve 1,055,300 shares of common stock.  Options are
granted at no less than fair market value of the shares at the date
of grant.  Option activity for 1996, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
                               1996         1995         1994
                               ----         ----         ----
<S>                          <C>          <C>           <C>
Options outstanding at
   beginning of year          863,731      739,600      597,075

Granted                          -         332,900      204,500
Exercised                        -            -            -
Canceled                     (670,531)    (208,769)     (61,975)
                             ---------    ---------     --------
Outstanding at end of year    193,200      863,731      739,600
                             =========    =========     ========

Option price range             $1.00        $1.00        $1.63
  at end of year                 to           to           to
                               $5.38        $6.25        $6.25

Exercisable at end of year    117,300      378,800      295,000
                              =======      =======      =======
</TABLE>

<PAGE> PAGE 54

NOTE M -- UNAUDITED QUARTERLY FINANCIAL INFORMATION

The following table summarizes the reported results of continuing
operations for each quarterly period in fiscal 1996 and 1995.   The
quarterly results for 1995 were restated from the amounts
previously reported to reflect the discontinuance of the Company's
lamp assembly business.  Amounts shown are stated in thousands of
dollars, except per share data.
<TABLE>
<CAPTION>
                                 CONTINUING OPERATIONS
                       ------------------------------------------
                                Cost of                 Earnings
                        Net     Products    Earnings     (Loss)
Quarter Ended          Sales      Sold       (Loss)     Per Share
-------------          -----      ----       ------     ---------
1996
<S>                   <C>        <C>        <C>          <C>
September 30, 1995    $ 9,180    $ 7,165    $ (1,203)    $(0.22)
December 31, 1995       9,899      8,225      (1,471)     (0.27)
March 31, 1996          5,455      4,937      (2,365)     (0.43)
June 30, 1996           5,678      6,058      (7,860)     (1.42)
                      -------    -------    ---------
                      $30,212    $26,385    $(12,899)    $(2.33)
                      =======    =======    =========    =======

1995

September 24, 1994    $11,035    $ 7,846    $   (119)    $(0.02)
December 24, 1994      16,494     12,467        (  9)      0.00
March 25, 1995          6,201      4,770      (1,709)     (0.31)
June 24, 1995          11,358      9,291      (1,070)     (0.19)
                      -------    -------    ---------    -------
                      $45,088    $34,374    $ (2,907)    $(0.52)
                      =======    =======    =========    =======
</TABLE>

The fourth quarter of the fiscal year ended June 30, 1996 includes
accounting adjustments to reflect the loss on the sale of the
Company's inventories and intellectual property ($600,000),
inventory adjustments of approximately $2 million related to the
sales of all current operations, including excess quantities and
other obsolete inventories, primarily display materials; unabsorbed
acquisition costs related to the Company's low level of purchasing
in 1996 and the writeoff of unamortized display costs.  Other
assets were written down $400,000.

<PAGE> PAGE 55
<TABLE>
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS

(In Thousands)
 <CAPTION>
                                                               Additions
                                                         -----------------------
                                                                      Charged to
                                           Balance at    Charged to     Other                       Balance at
                                           Beginning       Cost or     Accounts     Deductions          End
Description                                of Period      Expenses    (Describe)    (Describe)       of Period
---------------------------------------    ---------      --------    ----------   ----------        ---------
Year ended June 25, 1994
<S>                                           <C>            <C>         <C>          <C>      <S>     <C>
Estimated future costs of discontinued
   operation                                    $421         $  -        $  -           ($304) (b)       $117
Allowance for Doubtful Accounts                1,578           873          -          (1,317) (a)      1,134
Restructure reserve:
   Inventory                                     715            -           -            (234)          481
   Property, plant and equipment                 -              -           -             -               -
                                         ---------------------------------------------------------------------
                                              $2,714          $873            $0      ($1,855)         $1,732
                                         =====================================================================

Year ended June 24, 1995

Estimated future costs of discontinued
   operation                                    $117         $  -        $  -           ($117) (b)         $0
Allowance for Doubtful Accounts                1,134           298          -            (954) (a)        478
Restructure reserve:
   Inventory                                     481            -           -            (481) (c)          0
   Property, plant and equipment                 -              -           -             -                 0
                                         ---------------------------------------------------------------------
                                              $1,732          $298            $0      ($1,552)           $478
                                         =====================================================================

Year ended June 30, 1996

Allowance for Doubtful Accounts                 $478           $96       $  -           ($221) (a)       $353
                                         =====================================================================


(a)  Doubtful accounts charged off as uncollectible, net of recoveries and claims (primarily reserved in
     prior years).
(b)  Charges related to the discontinued business reserved previously.
(C)  Inventory disposals.
</TABLE>
<PAGE> PAGE 56

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.

                                  ACTION INDUSTRIES, INC.
                                       (Registrant)

Date: October 23, 1996            By /s/T. Ronald Casper
                                     ------------------------
                                     T. Ronald Casper
                                     President and
                                     Chief Executive Officer

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

Name                            Title                    Date

/s/T. Ronald Casper         President and            October 23, 1996
-------------------------   Chief Executive Officer
T. Ronald Casper

/s/Kenneth L. Campbell      Senior Vice President,   October 23, 1996
-------------------------   Finance (Principal
Kenneth L. Campbell         Financial and Accounting
                            Officer)

/s/Joel M. Berez            Chairman of the Board    October 23, 1996
-------------------------
Joel M. Berez

-------------------------   Director                 October 23, 1996
Charles C. Cohen

-------------------------   Director                 October 23, 1996
Joel L. Gold

/s/James H. Knowles, Jr.    Director                 October 23, 1996
-------------------------
James H. Knowles, Jr.

/s/David S. Shapira         Director                 October 23, 1996
-------------------------
David S. Shapira

/s/William B. Snow          Director                 October 23, 1996
-------------------------
William B. Snow