SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                 ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

                          Commission File Number 1-4773

                             AMERICAN BILTRITE INC.
             (Exact name of registrant as specified in its charter)


DELAWARE                                                             04-1701350
(State or Other Jurisdiction of               (IRS Employer Indentification No.)
Incorporation or organization)


                                 57 River Street
                         Wellesley Hills, MA 02481-2097
                    (Address of Principal Executive Offices)
                                  (781)237-6655
              (Registrant's telephone number, including area code)


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

                                                             Name of Exchange on
Title of Each Class                                            Which Registered
-------------------                                            ----------------

Common Stock, $.01 Par Value                             American Stock Exchange


        Securities registered pursuant to Section 12(g) of the Act: NONE
<PAGE>

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months 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 (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock of the registrant held by
non-affiliates as of March 16, 2000 was $22,325,000.

The number of shares outstanding of each of the registrant's classes of common
stock as of March 16, 2000 was 3,517,386 shares of Common Stock.

            DOCUMENTS INCORPORATED BY REFERENCE

  Part III. Portions of the proxy statement for the annual meeting of
            stockholders to be held on May 9, 2000.


PART I

ITEM 1.  BUSINESS

         (a) General Development of Business. American Biltrite Inc. ("ABI") was
organized in 1908 and is a Delaware corporation. ABI operates domestically
directly through two businesses, the Tape Division and K&M Associates L.P., a
Rhode Island limited partnership ("K&M"), and conducts operations indirectly
through Congoleum Corporation ("Congoleum"), a company in which ABI owns a
controlling interest.

The Tape Division produces adhesive-coated, pressure-sensitive papers and films
used to protect material during handling or storage or to serve as a carrier for
transferring decals or die-cut lettering. The Division also produces pressure
sensitive tapes and adhesive products used for applications in the heating,
ventilating and air conditioning (HVAC), footwear, automotive and electrical and
electronic industries. The Division is the exclusive supplier of EPIC(TM) ink
jet printable digital imaging materials to the sign and screen print industries.
EPIC(TM) is manufactured by and is a trademark of Kimberly-Clark.

In 1995, ABI acquired a controlling interest in K&M, a national supplier,
distributor and servicer of a wide variety of adult, children's and specialty
items of fashion jewelry and related accessories. ABI, through wholly owned
subsidiaries, currently owns an aggregate 83% interest (7% as sole general
partner and 76% in limited partner interests) in K&M. K&M wholesales its
products to mass merchandisers and other major retailers. It also services
certain retail merchandisers' in-store operations in fashion jewelry and related
accessories departments by assisting retailers in managing inventory and
maintaining displays.


                                       2
<PAGE>

At the beginning of 1995, ABI indirectly held an 8% limited partner interest in
K&M. During 1995 and in January of 1996, the Company acquired, through a series
of transactions by its wholly owned subsidiaries, an additional 67.25% in
limited partner interests and a 7% sole general partner interest in K&M for an
aggregate consideration of $15.5 million in cash, notes and ABI common stock. In
conjunction with these K&M transactions, a wholly owned subsidiary of ABI also
entered into agreements with the remaining limited partners of K&M which provide
the ABI subsidiary with the option to buy, and the limited partners the option
to sell, the limited partners' respective remaining interests in K&M for an
aggregate consideration calculated in accordance with a predetermined formula
which is based in part on such limited partner's capital account balance at the
time of sale. As of the date hereof, based on K&M capital account balances as of
December 31, 1999, the aggregate purchase price under the option agreements for
the remaining limited partner interests in K&M would be $3.4 million. See Note 4
of Notes to the Consolidated Financial Statements.

ABI owns a 53% equity interest in Congoleum Corporation ("Congoleum"), a leading
manufacturer of resilient floor tile and sheet vinyl flooring.

On February 8, 1995, Congoleum completed a public offering of 4,650,000 shares
of Class A Common Stock at $13 per share. The net proceeds of the offering,
together with certain other funds of Congoleum, were used to acquire a portion
of Congoleum's outstanding Class B Common Stock held by Hillside Industries
Incorporated. In conjunction with the transaction, ABI exchanged its then
existing shares of Class B Common Stock for 4,395,605 shares of a new series of
Class B Common Stock. The exchange of stock did not change the Company's 44%
equity ownership interest; however, the new shares represented 57% of the voting
power of the outstanding shares of Congoleum, giving ABI majority voting
control. The accounts of Congoleum have been consolidated with the financial
statements of ABI since 1995. During 1997 and 1998, Congoleum's Board of
Directors approved a plan to repurchase up to $15,000,000 of Congoleum's common
stock (Class A and Class B shares). Under the total plan, Congoleum has
repurchased $13,716,000 of common stock at fair market value. The effect of the
repurchase of shares was to increase ABI's ownership interest from 44% to 53%.
In addition, as of December 31, 1999, ABI's ownership of 4,395,605 shares of
Congoleum's Class B common stock represented 68% of the voting control of
Congoleum.

Outside the United States, in addition to international sales of Tape Division
products, the Division operates facilities in Belgium and Singapore where bulk
tape products are converted into various sizes, and a distribution facility in
Italy, to quickly respond to customer demands in the European and Asian markets.
Other international operations include: a wholly owned Canadian subsidiary
("ABI-Canada") which produces resilient floor tile, rubber tiles and Uni-Turf (a
vinyl-based floor covering for use in indoor sports facilities) under license
from ABI and industrial products (including conveyor belting, truck and trailer
splash guards and sheet rubber material); a 50% direct equity interest in a
Honduran producer of footwear components; and, through the Honduran corporation,
an indirect interest in a Guatemalan foam product manufacturer.


                                       3
<PAGE>

For financial reporting purposes, as a result of the consolidation of the
accounts of Congoleum and K&M into the financial statements of ABI, ABI operates
in four industry segments: flooring products, tape products, jewelry and the
Canadian division which produces flooring and rubber products. See Note 15 of
Notes to the Consolidated Financial Statements, set forth in Item 8 below.

         (b) Financial Information about Industry Segments. Business segment
information is in Note 15 of Notes to the Consolidated Financial Statements, set
forth in Item 8 below.

         (c) Narrative Description of Business.
Marketing, Distribution and Sales. The Tape Division's protective papers and
films are sold domestically and throughout the world, principally through
distributors, but also directly to certain manufacturers. Other tape products
are marketed through the division's own sales force and by sales representatives
and distributors throughout the world. ABI's Belgian, Italian and Singapore
facilities sell these products throughout Europe and the Far East.

The business and operations of the Tape Division do not experience seasonal
variations, and neither this division nor the industry in which it operates has
any unusual practices with respect to working capital.

The products of K&M are sold domestically through its own direct sales force
and, indirectly, through a wholly owned subsidiary and through third-party sales
representatives. K&M's business and operations experience seasonal variations.
In general, fashion jewelry supply, distribution and service businesses respond
to the seasonal demands of mass merchandisers and other major retailers, which
typically peak in preparation for end-of-year holiday shopping. Accordingly,
K&M's working capital needs tend to be greatest in the second and third fiscal
quarters, while its revenues tend to be greater toward the end of each fiscal
year, especially in the latter part of the third quarter and the first half of
the fourth quarter.

ABI-Canada's floor tile and rubber tile products are marketed in Canada and the
United States, principally through distributors and to commercial installers.
Uni-Turf is marketed in Canada and internationally through distributors.
ABI-Canada's industrial products are marketed in Canada and the United States
through distributors and also directly to certain large end-users and original
equipment manufacturers.

Congoleum currently sells its products through approximately 23 distributors
providing approximately 82 distribution points in the United States and Canada,
as well as directly to a limited number of mass market retailers. Congoleum
considers its distribution network to be very important to maintaining
competitive position. While most of its distributors have marketed Congoleum's
products for many years, replacements are necessary periodically to maintain the
strength of the distribution network. Although Congoleum has more than one
distributor in some of its distribution territories and actively manages its
credit exposure to its customers, the loss of a major customer could have a
materially adverse impact on Congoleum's sales, at least until a suitable
replacement is in place. The sales pattern for Congoleum's products is seasonal,
with peaks in retail sales typically occurring during March/April/May and
September/October. Orders are generally shipped as soon as a truckload quantity
has been accumulated, and backorders can be canceled without penalty.


                                       4
<PAGE>

ABI owns 50% of Compania Hulera Sula, S.A. de C.V. ("Hulera Sula"), a Honduran
corporation, which produces soles, heels, molded soles and heels, sandals and
other footwear products under license from ABI and markets such products in
certain Central American countries. Hulera Sula owns 100% of Hulera
Sacatepequez, S.A., a Guatemalan corporation which manufactures and markets
products in Guatemala similar to those of Hulera Sula. Fomtex, S.A., a
Guatemalan corporation 60% owned by Hulera Sula, manufactures and markets foam
mattresses, beds and other foam products for sale in the Central American
market.

Working Capital and Cash Flow. In general, ABI's working capital requirements
are not affected by accelerated delivery requirements of major customers or by
obtaining a continuous allotment of raw material from suppliers. ABI does not
provide special rights for customers to return merchandise and does not provide
special seasonal or extended terms to its customers. K&M does provide
pre-approved allowances in the form of markdowns and return authorizations for
end of season merchandise in their service stores.

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

Raw Materials. Basically, all of ABI's products are internally designed and
engineered. Generally, the raw materials required by ABI for its manufacturing
operations are available from multiple sources; however, ABI does purchase some
of its raw materials from a single source or supplier. Any significant delay in
or disruption of the supply of raw materials could substantially increase ABI's
cost of materials, require product reformulation or require qualification of new
suppliers, any one or more of which could materially adversely affect the
business, operations or financial condition of ABI. ABI's subsidiary, Congoleum,
does not have readily available alternative sources of supply for specific
designs of transfer print paper, which are produced utilizing print cylinders
engraved to Congoleum's specifications. Although no loss of this source of
supply is anticipated, replacement could take a considerable period of time and
interrupt production of certain products. Congoleum maintains a raw material
inventory and has an ongoing program to develop new sources which will provide
continuity of supply for its raw material requirements.

Competition. All businesses in which ABI is engaged are highly competitive.
ABI's tape products compete with some of the largest fully integrated rubber and
plastic companies, as well as smaller producers. Included among their
competitors are Minnesota Mining & Manufacturing Company, Fasson, Dupont Kansai
and R-Tape. ABI-Canada's flooring products compete with those of other
manufacturers of rubber and vinyl floor tiles and with all other types of floor
covering. ABI-Canada competes with Armstrong World Industries, Inc., V.P.I. and
Nora Rubber Flooring and with other manufacturers of alternate floor covering
products. In the rubber products category, ABI-Canada has several competitors,
principally among them being Garlock, Sealing Technologies and West America
Rubber Company.

The market for Congoleum's products is highly competitive. Resilient sheet and
tile compete for both residential and commercial customers primarily with
carpeting, hardwood, melamine laminate and ceramic tile. In residential
applications, both tile and sheet products are used primarily in


                                       5
<PAGE>

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

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

K&M competes with other companies making similar products on the basis of
product pricing and the effectiveness of merchandising services offered. In
assessing the effectiveness of K&M products and services, customers tend to
focus on margin dollars realized from the sales of product and return on
inventory investment needed to generate sales. In its business of supplying and
servicing fashion jewelry and accessory products, K&M competes with a variety of
suppliers, among them are AAI Fostergrant, Monet Inc., Victoria Creations Inc.
and a number of other companies offering similar products and/or services. K&M
also competes with numerous importers and overseas suppliers of similar items.

Research and Development. Research and development efforts of both ABI and
Congoleum concentrate on new product development and expanding technical
expertise in the various manufacturing processes. ABI also focuses on improving
existing products. Congoleum also concentrates on ways to increase product
durability. Expenditures for research and development were $5,620,000,
$5,175,000, and $5,388,000 on a consolidated basis for the years ended December
31, 1999, 1998 and 1997, respectively.

Key Customers. For the year ended December 31, 1999, two customers of Congoleum
each accounted for over 10% of ABI's consolidated sales revenue. These customers
were its distributor to the manufactured housing market, LaSalle-Bristol, and
its distributor in the Western U.S., LD Brinkman & Co. K&M sales during 1999
included sales to large customers which accounted for less than 10% of ABI's
consolidated sales revenue. K&M's top three customers in terms of net sales in
1999 together account for approximately 88% of K&M's aggregate net sales, and
the loss of any such customer would have a material adverse effect on K&M. Sales
to four unaffiliated customers of ABI's Tape Division together constitute
approximately 26% of the sales for the Division. These sales constitute less
than 10% of ABI's consolidated sales. The loss of two or more of these customers
would have a significant, adverse effect on the Division's revenue. See Note 15
of Notes to Consolidated Financial Statements set forth in Item 8 below.


                                       6
<PAGE>

Backlog. The dollar amount of backlog of orders believed to be firm as of
December 31, 1999 and 1998 was $15,400,000 and $21,800,000, respectively. It is
anticipated that all of the backlog as of December 31, 1999 will be filled
within the current fiscal year. There are no seasonal or other significant
aspects of the backlog. In the opinion of management, backlog is not significant
to the business of ABI.

Environmental Compliance. Because of the nature of the operations conducted by
ABI, ABI's facilities are subject to a broad range of federal, state, local and
foreign legal and regulatory provisions relating to the environment, including
those regulating the discharge of materials into the environment, the handling
and disposal of solid and hazardous substances and wastes and the remediation of
contamination associated with releases of hazardous substances at ABI facilities
and off-site disposal locations. ABI believes that compliance with these
federal, state, local and foreign provisions will not have a material effect
upon its capital expenditures, earnings and competitive position.

Due to the nature of Congoleum's business and certain of the substances which
are or have been used, produced or discharged by Congoleum, Congoleum's
operations are subject to extensive federal, state and local laws and
regulations relating to the generation, storage, disposal, handling, emission,
transportation and discharge into the environment of hazardous substances.
Congoleum, pursuant to administrative consent orders signed in 1986 and in
connection with a prior restructuring, is in the process of implementing cleanup
measures at its Trenton sheet facility under New Jersey's Environmental Clean-up
Responsibility Act, as amended by the New Jersey Industrial Site Recovery Act.
Congoleum does not anticipate that the additional costs of these measures will
be material. In connection with the acquisition of the Tile Division, American
Biltrite signed a similar consent order with respect to the Trenton tile
facility, and Congoleum agreed to be financially responsible for any cleanup
measures required. In 1999, Congoleum incurred capital expenditures of
approximately $.3 million for environmental compliance and control facilities.

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

See Item 3 below for certain additional information regarding environmental
matters.

Employees.  As of December 31, 1999, ABI employed approximately 3,035 people.

         (d) Financial information about foreign and domestic operations and
export sales. Financial information concerning foreign and domestic operations
is in Note 15 of Notes to the Consolidated Financial Statements, set forth in
Item 8 below. Export sales from the United States were $22,903,000 in 1999,
$20,886,000 in 1998 and $23,008,000 in 1997.


                                       7
<PAGE>

ITEM 2.  PROPERTIES

At December 31, 1999, ABI and Congoleum operated a total of nine manufacturing
plants, leased corporate and marketing office and warehousing space, and ABI
operated a jewelry product distribution warehouse, as follows:

                                       Owned     Industry Segment
                                        or            For Which
Location              Square Feet     Leased     Properties Used
--------              -----------     ------     ---------------
Trenton,  NJ            1,050,000      Owned     Flooring products

Marcus Hook,  PA        1,000,000      Owned     Flooring products

Trenton,  NJ              282,000      Owned     Flooring products

Finksburg,  MD            107,000      Owned     Flooring products

Trenton, NJ               111,314     Leased     Flooring products

Mercerville, NJ            33,597     Leased     Flooring products

Sherbrooke,  Quebec       362,000      Owned     Canadian division

Moorestown,  NJ           226,000      Owned     Tape products

Lowell,  MA                57,000      Owned     Tape products

Ayer, MA                   42,000     Leased     Tape products

Renaix,  Belgium           84,000      Owned     Tape products

Singapore                  32,000      Owned     Tape products

Providence, RI            103,000      Owned     Jewelry products

ABI knows of no material defect in the titles to any such properties or material
encumbrances thereon. ABI considers that all of its properties are in good
condition and have been well maintained.

It is estimated that during 1999, ABI's plants for the manufacture of floor
covering products operated at approximately 69% of aggregate capacity, its
plants for the manufacture of tape products operated at approximately 90% of
aggregate capacity and the Canadian division operated at approximately 97% of
aggregate capacity. All estimates of aggregate capacity have been made on the
basis of a five-day, three-shift operation.


                                       8
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

ABI is a co-defendant with many other manufacturers and distributors of
asbestos-containing products in approximately sixty-three pending claims
involving approximately 764 individuals as of December 31, 1999. These claims
allege personal injury from exposure to asbestos or asbestos-containing
products. See Note 10 to the Consolidated Financial Statements included in Item
8 for detailed information about these claims.

ABI has been named as a Potentially Responsible Party ("PRP") within the meaning
of the federal Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA"), as to two sites in two separate states. See Note 10
to the Consolidated Financial Statements included in Item 8 for detailed
information about these matters.

In addition, ABI has been named as a defendant in one environmental lawsuit the
details of which are set forth in Note 10 to the Consolidated Financial
Statements included in Item 8.

ABI also is potentially responsible for response and remediation costs as to
four state supervised sites, two sites in Massachusetts, and one each in New
York and New Jersey. See Note 10 to the Consolidated Financial Statements
included in Item 8 for information about ABI's potential liability at these four
sites.

As of December 31, 1999, ABI has accrued $3.6 million for its estimable and
probable amounts for contingencies described above.

As of December 31, 1999 Congoleum was named as a defendant, together in most
cases with numerous other defendants, in approximately 676 pending lawsuits
(including workers' compensation cases) involving approximately 6,246
individuals alleging personal injury from exposure to asbestos or
asbestos-containing products. See Note 10 to the Consolidated Financial
Statements included in Item 8 for information about Congoleum's potential
liabilities to these lawsuits.

Together with a large number (in most cases, hundreds) of other companies,
Congoleum is named as a PRP in pending proceedings under CERCLA and similar
state laws. See Note 10 to the Consolidated Financial Statements included in
Item 8 for detailed information about these matters.

Congoleum is also a party to a pending proceeding relating to the investigation
and potential remediation of soil and groundwater contamination at its
manufacturing facility located at 1945 East State Street in Trenton, New Jersey.
The investigation of the nature and extent of any contamination at this site has
not been completed and Congoleum is therefore unable to estimate the amount, if
any, of its probable liability with respect to the potential remediation of this
site.


                                       9
<PAGE>

In the ordinary course of its business, ABI and its consolidated entities become
involved in lawsuits, administrative proceedings, product liability and other
matters. In some of these proceedings, plaintiffs may seek to recover large and
sometimes unspecified amounts and the matters may remain unresolved for several
years. On the basis of information furnished by counsel and others, ABI and its
consolidated entities do not believe that these matters, individually or in the
aggregate, will have a material adverse effect on their business or financial
condition.


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

Not applicable.


PART II


ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND
         RELATED SECURITY HOLDER MATTERS

The registrant's Common Stock is traded on the American Stock Exchange (ticker
symbol: ABL). The approximate number of record holders of ABI's Common Stock at
March 16, 2000 was 420.

High and low stock prices and dividends for the last two years were:

<TABLE>
<CAPTION>
                                            Sales Price of Common Shares
                                            ----------------------------
                                           1999                     1998
Quarter                                    ----                     ----
 Ended                              High         Low          High         Low
-------                             ----         ----         ----         ---
<S>                                <C>          <C>          <C>          <C>

March 31                           26 3/8       18 3/4       31 3/4       23 5/8
June 30                            21 3/4       16 7/8       31 3/4       29 1/4
September 30                       21 3/8       16 1/2       30 7/8       22 1/4
December 31                        17 3/8       12 3/8       24 1/4       20 1/2

<CAPTION>
                                        Cash Dividends Per Common Share
                                        -------------------------------
Quarter
 Ended                                    1999                 1998
-------                                   ----                 ----

<S>                                      <C>                  <C>
March 31                                 $ .125               $ .100
June 30                                    .125                 .100
September 30                               .125                 .125
December 31                                .125                 .125
                                         ------               ------
                                         $ .500               $ .450
                                         ======               ======
</TABLE>


                                       10
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                                       -----------------------
                                     1999         1998          1997          1996           1995
                                     ----         ----          ----          ----           ----
                                          (Dollars in thousands, except per share data)
<S>                             <C>           <C>          <C>           <C>            <C>
Financial Position

Total assets                    $   344,060   $  336,039   $   299,686   $   324,966    $   303,487
Long-term debt                      114,105      118,406        94,409       106,721        110,919
Total stockholders' equity           78,381       71,237        65,345        61,761         57,796

Summary of Operations

Net sales                           422,459      423,879       417,512       417,961        404,473
Earnings before other items          12,725       15,321        11,922        13,103         10,811
Noncontrolling interests             (2,992)      (5,145)       (3,777)       (6,804)        (4,706)
Extraordinary item                                (1,174)
   Net earnings                       9,733        9,002         8,145         6,299          6,105

Basic earnings per share               2.71         2.47          2.24          1.73           1.69
Diluted earnings per share             2.66         2.36          2.18          1.69           1.61
Cash dividends per common
   share                                .50          .45           .40           .40            .35

Number of shares used in
 computing:
   Basic earnings per share       3,591,895    3,641,337     3,633,076     3,645,089      3,619,198
   Diluted earnings per share     3,661,946    3,806,202     3,738,406     3,728,860      3,792,037
</TABLE>


                                       11
<PAGE>

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

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Net sales for the year ended December 31, 1999 were $422.5 million as compared
to $423.9 million for the year ended December 31, 1998, a decrease of $1.4
million. The major portion of this sales decrease occurred at Congoleum
Corporation ("Congoleum") due to lower sales of certain residential products, a
decline in commercial product sales and competitive pressures resulting in lower
selling prices. K&M Associates L.P. ("K&M") experienced slightly lower sales
volume. ABI's Tape and Canadian divisions experienced higher sales volume
compared to last year.

Interest income increased to $2.0 million in 1999 from $1.8 million in 1998 due
to increases in funds available for short-term investment at Congoleum.

Cost of products sold in 1999 increased to 68.9% of net sales from 68.5% last
year. This increase in cost is due mainly to the results at Congoleum where they
experienced lower average selling prices and a less profitable mix of sales.
These factors were partially mitigated by lower material costs and improvements
in manufacturing efficiency. At both ABI and K&M, cost of products sold as a
percentage of net sales were lower than last year.

Selling, general and administrative expenses as a percentage of net sales
increased to 25.0% in 1999 from 24.3% in 1998. Congoleum introduced a wood
laminate flooring product line in mid 1999 and expensed $2.0 million in
displays, samples and other launch related costs, thus increasing the percentage
relationship to sales in this area.

Interest expense increased to $9.5 million in 1999 from $9.0 million in 1998.
This increase occurred mainly at Congoleum and was due primarily to higher
average levels of long-term debt in 1999 versus 1998.

The provision for income taxes declined to 36.7% of pre-tax income in 1999 from
38.7% in 1998 as a result of the lower income tax level at Congoleum, which
reduced the average effective statutory tax rate. Tax benefits occurred from the
establishment of two large foreign sales corporations and lower effective state
income taxes.

Net income for the year ended December 31, 1999 was $9.7 million, up by $.7
million over last year's net income of $9.0 million. ABI, Congoleum and K&M were
all profitable in 1999. Basic net earnings per share was $2.71 in 1999, up from
$2.47 in 1998.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Net sales for the year ended December 31, 1998 were $423.9 million as compared
to $417.5 million for the year ended December 31, 1997, an increase of $6.4
million or 1.5%. The major portion of this sales increase occurred at Congoleum
in improved sales to the manufactured housing industry and to home centers.
Sales from K&M increased over 1997 due to a full year of sales to a


                                       12
<PAGE>

major customer we started servicing for the first time in the latter half of
1997. Sales at ABI's Tape and Canadian divisions reflect slight decreases
compared to 1997.

Interest income increased to $1.8 million in 1998 from $1.6 million in 1997 due
to increases in funds available for short-term investment at both Congoleum and
ABI's Canadian division.

Other revenues increased by $.8 million in 1998 to $1.9 million from $1.1
million in 1997. The major reason for this positive shift is due to the
improvement of the value of the Belgian franc compared to the U.S. dollar during
the course of 1998, which favorably impacted ABI's operation in Belgium.

Cost of products sold in 1998 decreased to 68.5% of net sales from 69.4% in
1997. This decrease in cost is mainly attributable to the results at Congoleum
where they experienced declines in raw material costs, increases in
manufacturing productivity and a higher-margin mix of sales. At both ABI and
K&M, cost of products sold as a percentage of net sales were at the same levels
as 1997.

Selling, general and administrative expenses as a percentage of net sales were
24.3% for 1998 and 24.4% for 1997. At Congoleum, expenses in this area decreased
as a result of expense control initiatives partially offset by increased
spending related to Year 2000 compliance. At K&M, costs increased due to
increases in field sales expense to service additional sales volume. At ABI,
slight cost increases resulted from Year 2000 compliance in addition to
increases in field sales and advertising/promotion expenses.

Interest expense decreased to $9.0 million in 1998 from $9.3 million in 1997.
This decrease occurred at both ABI and K&M due to a reduction in outstanding
indebtedness. This was partially offset by an interest expense increase at
Congoleum primarily due to a lower amount of interest being capitalized rather
than expensed in connection with capital expenditures in 1998.

During 1998, Congoleum issued $100 million in ten year 8 5/8% Senior Notes and
used most of the proceeds to repay its outstanding 9% Senior Notes due 2001 in
the principal amount of $76.6 million, together with accrued interest,
prepayment premiums and financing fees and expenses. Congoleum recorded an
extraordinary after tax charge of $2.4 million of which ABI recorded $1.2
million, reflecting our 49% ownership interest in Congoleum.

Net income for the year ended December 31, 1998 was $9.0 million, up by $.9
million over 1997 net income of $8.1 million. ABI, Congoleum and K&M were all
profitable in 1998. Basic net earnings per share was $2.47 in 1998, up from
$2.24 in 1997.

Liquidity and Capital Resources

At December 31, 1999, consolidated working capital was $86.9 million, the ratio
of current assets to current liabilities was 2.00 to 1.00, and the debt to
equity ratio was 1.46 to 1.00. Influencing the debt to equity ratio is $99.6
million of Congoleum debt, which has no recourse to ABI. Net cash provided by
operations during 1999 was $25.1 million, generated mainly from net earnings


                                       13
<PAGE>

and depreciation. Capital expenditures for 2000 are estimated to be
approximately $23.0 million. At ABI, capital expenditures cover normal
replacement of machinery and equipment and process improvements. Congoleum is
proceeding with a major program to modernize and improve its plant and
equipment. Because of these programs at Congoleum, capital expenditures are
expected to continue at this level for the next two years. Depreciation and
amortization expense is forecasted at $16.0 million.

In 1998, Congoleum's Board of Directors approved a plan to purchase up to $5.0
million of Congoleum's common stock. As of December 31, 1999, Congoleum had
repurchased 717,665 shares of its common stock for an aggregate cost of $4.1
million pursuant to this plan. At ABI, based on a prior Board of Directors
authorization, $2.8 million is available for the purchase of ABI's common stock.

Cash requirements for capital expenditures, working capital, debt service,
equity investments in K&M and the current authorizations of $2.8 million to
repurchase ABI common stock and $.9 million to repurchase Congoleum common
stock, are expected to be financed from operating activities and borrowings
under existing lines of credit which are presently $65.0 million.

Year 2000

From 1996 to 1999, the Company made the modifications and replacements necessary
to assure its systems and equipment would not experience problems handling dates
in the year 2000.

Costs directly associated with achieving Year 2000 compliance, including
modifying computer software or converting to new programs, consist of payments
to third parties as well as an allocation of the payroll and benefits of its
employees based on the amount of their time devoted to this activity. These
costs are expensed as incurred. Costs for new hardware are capitalized in
accordance with the Company's fixed asset policy, and any equipment retired is
written off.

The following table summarizes the Company's direct Year 2000 compliance
expenditures by year (in thousands):

                                                    1997        1998        1999
                                                    ----        ----        ----
Expenses paid to third parties                      $307        $462        $411
Allocated payroll costs                              457         533         261
Capital expenditures                                 120         415         157

In addition to work undertaken explicitly to achieve Year 2000 compliance, the
Company has replaced or upgraded a number of systems in the ordinary course of
business where the replacement or upgrade will, in addition to its primary
benefits, also provide Year 2000 compliance. The nature of these costs, and
their accounting treatment, is the same as described above. The following table
summarizes the Company's expenditures on systems improvements undertaken for
reasons unrelated to the Year 2000, but also serving to achieve Year 2000
compliance (in thousands):

                                                    1997        1998        1999
                                                  ------      ------      ------
Expenses paid to third parties                    $  118      $  473      $  835
Allocated payroll costs                               74         279         518
Capital expenditures                                 244         470       1,342


                                       14
<PAGE>

Contingencies

ABI has recorded what it believes are adequate provisions for environmental
remediation and product-related liabilities, including provisions for testing
for potential remediation of conditions at its own facilities. While ABI
believes its estimate of the future amount of these liabilities is reasonable
and that they will be paid for the most part over a period of one to ten years,
the timing and amount of such payments may differ significantly from ABI's
assumptions. Although the effect of future government regulation could have a
significant effect on ABI's costs, ABI is not aware of any pending legislation
which could significantly affect the liabilities ABI has established for these
matters. There can be no assurances that the costs of any future government
regulations could be passed along by ABI to its customers.

Certain legal and administrative claims are pending or have been asserted
against ABI, which are considered incidental to its business. Among these
claims, ABI is a named party in several actions associated with waste disposal
sites and asbestos-related claims. These actions include possible obligations to
remove or mitigate the effects on the environment of wastes deposited at various
sites, including Superfund sites. The exact amount of such future costs to ABI
is indeterminable due to such unknown factors as the magnitude of cleanup costs,
the timing and extent of the remedial actions that may be required, the
determination of ABI's liability in proportion to other potentially responsible
parties and the extent to which costs may be recoverable from insurance. ABI has
recorded provisions in its financial statements for the estimated probable loss
associated with all known environmental and asbestos-related contingencies. The
contingencies also include claims for personal injury and/or property damage.
(See Note 10 of Notes to Consolidated Financial Statements.)

Market Risk

The Company is exposed to changes in prevailing market interest rates affecting
the return on its investments but does not consider this interest rate market
risk exposure to be material to its financial condition or results of
operations. The Company invests primarily in highly liquid debt instruments with
strong credit ratings and short-term (less than one year) maturities. The
carrying amount of these investments approximates fair value due to the
short-term maturities. Substantially all of the Company's outstanding long-term
debt as of December 31, 1999 consisted of indebtedness with a fixed rate of
interest, which is not subject to change based upon changes in prevailing market
interest rates.

The Company operates internationally, principally in Canada, Europe and the Far
East, giving rise to exposure to market risks from changes in foreign exchange
rates. To a certain extent, foreign currency exchange rate movements also affect
the Company's competitive position, as exchange rate changes may affect business
practices and/or pricing strategies of non-U.S. based competitors. For foreign
currency exposures existing at December 31, 1999, a 10% unfavorable movement in
currency exchange rates in the near term would not materially affect ABI's
consolidated operating results, financial position or cash flows.


                                       15
<PAGE>

Under its current policies, the Company does not use derivative financial
instruments, derivative commodity instruments or other financial instruments to
manage its exposure to changes in interest rates, foreign currency exchange
rates, commodity prices or equity prices.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
         MARKET RISK

See Item 7, page 15, for disclosures about market risk.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements required under this item are incorporated
herein by reference to pages 20 through 61 of this Form 10-K. The consolidated
financial statement schedule required under this item is incorporated herein by
reference to page 62 of this Form 10-K.


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

Not applicable.


PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is contained in ABI's Proxy Statement for
its Annual Stockholders' Meeting to be held May 9, 2000 filed with the
Securities and Exchange Commission within 120 days after December 31, 1999 and
is incorporated herein by reference.


ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is contained in ABI's Proxy Statement for
its Annual Stockholders' Meeting to be held May 9, 2000 filed with the
Securities and Exchange Commission within 120 days after December 31, 1999 and
is incorporated herein by reference.


                                       16
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                  AND MANAGEMENT

The information required by this item is contained in ABI's Proxy Statement for
its Annual Stockholders' Meeting to be held May 9, 2000 filed with the
Securities and Exchange Commission within 120 days after December 31, 1999 and
is incorporated herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is contained in ABI's Proxy Statement for
its Annual Stockholders' Meeting to be held May 9, 2000 filed with the
Securities and Exchange Commission within 120 days after December 31, 1999 and
is incorporated herein by reference.


PART IV

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

(a)      List of Financial Statements and Financial Statement Schedules

         (1)      The following consolidated financial statements of American
                  Biltrite Inc. and subsidiaries are included in Item 8:

                       Report of Independent Auditors

                       Consolidated balance sheets - December 31, 1999 and 1998

                       Consolidated statements of earnings -
                       Years ended December 31, 1999, 1998 and 1997

                       Consolidated statements of stockholders' equity -
                       Years ended December 31, 1999, 1998 and 1997

                       Consolidated statements of cash flows - Years ended
                       December 31, 1999, 1998 and 1997

                       Notes to consolidated financial statements

         (2)      The following financial statement schedule is included in Item
                  14 (d)

                       SCHEDULE II - Valuation and Qualifying Accounts


                                       17
<PAGE>

                  All other schedules for which provision is made in the
                  applicable accounting regulations of the Securities and
                  Exchange Commission are not required under the related
                  instructions or are inapplicable and therefore have been
                  omitted.

         (3)      Listing of Exhibits

                  The listing of exhibits required under this item is
                  incorporated herein by reference to pages 64 through 67 of
                  this Form 10-K.

(b)      Reports on Form 8-K.  None.

(c)      Exhibits: The required exhibits are filed herewith following the
         required Exhibit Index.

(d)      Financial Statement Schedule: The required consolidated financial
         statement schedule is included on page 62 of this Form 10-K.


                                       18
<PAGE>

                Report of Ernst & Young LLP, Independent Auditors


Board of Directors and Stockholders
American Biltrite Inc.


We have audited the accompanying consolidated balance sheets of American
Biltrite Inc. and subsidiaries (the Company) as of December 31, 1999 and 1998,
and the related consolidated statements of earnings, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1999.
Our audits also included the financial statement schedule listed in the Index at
Item 14(a). These financial statements and 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 auditing standards generally accepted
in the United States. 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of American Biltrite
Inc. and subsidiaries at December 31, 1999 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States. 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.


                                                     /s/ERNST & YOUNG LLP


Boston, Massachusetts
March 7, 2000


                                       19
<PAGE>

                     American Biltrite Inc. and Subsidiaries

                           Consolidated Balance Sheets
                            (In thousands of dollars)


<TABLE>
<CAPTION>
                                                                                   December 31
                                                                             1999              1998
                                                                       ------------------------------------
<S>                                                                          <C>              <C>
Assets
Current assets:
   Cash and cash equivalents                                                 $ 27,285         $ 59,505
   Short-term investments                                                      19,232                -
   Accounts and notes receivable, less allowances of
     $5,543 in 1999 and $5,124 in 1998 for doubtful accounts and
     discounts                                                                 30,586           33,551
   Inventories                                                                 82,977           69,722
   Prepaid expenses and other current assets                                   11,672            9,199
                                                                       ------------------------------------
Total current assets                                                          171,752          171,977


Other assets:
   Goodwill, net                                                               21,361           22,332
   Deferred income taxes                                                           --            1,863
   Other assets                                                                14,619           16,097
                                                                       ------------------------------------
                                                                               35,980           40,292


Property, plant and equipment, net                                            136,328          123,770
                                                                       ------------------------------------

Total assets                                                                 $344,060         $336,039
                                                                       ====================================
</TABLE>


<TABLE>
<CAPTION>
                                                                                   December 31
                                                                             1999              1998
                                                                       ------------------------------------
<S>                                                                         <C>              <C>
Liabilities and stockholders' equity
Current liabilities:
   Accounts payable                                                         $  27,453        $  20,596
   Accrued expenses                                                            54,216           50,328
   Current portion of long-term debt                                            3,139            4,305
                                                                       ------------------------------------
Total current liabilities                                                      84,808           75,229

Long-term debt, less current portion                                          110,966          114,101
Other liabilities                                                              50,309           56,039
Noncontrolling interests                                                       19,596           19,433


Stockholders' equity:
   Common stock, par value $.01--authorized
     15,000,000 shares, issued 4,607,902 shares                                    46               46
   Additional paid-in capital                                                  19,423           19,423
   Retained earnings                                                           75,730           68,247
   Accumulated other comprehensive income (loss)                               (3,347)          (4,906)
                                                                       ------------------------------------
                                                                               91,852           82,810
Less cost of shares of common stock in treasury
   (1,071,216 shares in 1999 and 960,914 shares in 1998)                       13,471           11,573
                                                                       ------------------------------------
Total stockholders' equity                                                     78,381           71,237
                                                                       ------------------------------------

Total liabilities and stockholders' equity                                   $344,060         $336,039
                                                                       ====================================
</TABLE>

See accompanying notes.


                                       20
<PAGE>

                     American Biltrite Inc. and Subsidiaries

                       Consolidated Statements of Earnings
                (In thousands of dollars, except per share data)



<TABLE>
<CAPTION>
                                                                    Year ended December 31
                                                           1999              1998             1997
                                                     ------------------------------------------------------
<S>                                                         <C>               <C>              <C>
Revenues:
   Net sales                                                $422,459          $423,879         $417,512
   Interest                                                    2,040             1,790            1,626
   Other                                                       1,895             1,882            1,078
                                                     ------------------------------------------------------
                                                             426,394           427,551          420,216
Costs and expenses:
   Cost of products sold                                     290,940           290,507          289,739

   Selling, general and administrative expenses              105,818           102,999          101,838
   Interest                                                    9,520             9,043            9,344
                                                     ------------------------------------------------------
                                                             406,278           402,549          400,921
                                                     ------------------------------------------------------

Earnings before income taxes and other items                  20,116            25,002           19,295

Provision for income taxes                                     7,391             9,681            7,373
                                                     ------------------------------------------------------
                                                              12,725            15,321           11,922
Noncontrolling interests                                      (2,992)           (5,145)          (3,777)
                                                     ------------------------------------------------------
Earnings before extraordinary item                             9,733            10,176            8,145
Extraordinary item - early retirement of debt, net
   of income tax benefit                                          --            (1,174)              --
                                                     ------------------------------------------------------

Net earnings                                                $  9,733          $  9,002         $  8,145
                                                     ======================================================

Earnings per share:
   Basic
      Earnings before extraordinary item                    $   2.71          $   2.79         $   2.24
      Extraordinary item                                          --              (.32)              --
                                                     ------------------------------------------------------
         Net earnings                                       $   2.71          $   2.47         $   2.24
                                                     ======================================================
   Diluted
       Earnings before extraordinary item                   $   2.66          $   2.67         $   2.18
       Extraordinary item                                         --              (.31)              --
                                                     ======================================================
          Net earnings                                      $   2.66          $   2.36         $   2.18
                                                     ======================================================
</TABLE>

See accompanying notes.


                                       21
<PAGE>

                     American Biltrite Inc. and Subsidiaries

                 Consolidated Statements of Stockholders' Equity
                            (In thousands of dollars)


<TABLE>
<CAPTION>
                                                                                Accumulated
                                                       Additional                  Other                    Total
                                            Common      Paid-in-    Retained   Comprehensive  Treasury   Stockholders'
                                            Stock       Capital     Earnings   Income (Loss)   Stock        Equity
                                            --------------------------------------------------------------------------
<S>                                              <C>    <C>         <C>           <C>         <C>          <C>
Balance at December 31, 1996                     $46    $ 19,423    $ 56,920      $ (2,798)   $(11,830)    $ 61,761
Comprehensive Income:
   Net earnings for 1997                                               8,145                                  8,145
   Other comprehensive income (loss)                                                  (507)                    (507)
                                                                                                           --------
   Total comprehensive income                                                                                 7,638

Dividends declared ($.40 per share)                                   (1,453)                                (1,453)
Effects of Congoleum capital transactions                             (2,688)                                (2,688)
Exercise of stock options                                                                           89           89
Purchase of treasury stock                                                                          (2)          (2)
                                            --------------------------------------------------------------------------
Balance at December 31, 1997                      46      19,423      60,924        (3,305)    (11,743)      65,345
Comprehensive Income:
   Net earnings for 1998                                               9,002                                  9,002
   Other comprehensive income (loss)                                                (1,601)                  (1,601)
                                                                                                           --------
   Total comprehensive income                                                                                 7,401

Dividends declared ($.45 per share)                                   (1,639)                                (1,639)
Effects of Congoleum capital transactions                                (40)                                   (40)
Exercise of stock options                                                                          171          171
Purchase of treasury stock                                                                          (1)         (1)
                                            --------------------------------------------------------------------------
Balance at December 31, 1998                      46      19,423      68,247        (4,906)    (11,573)      71,237
Comprehensive Income:
   Net earnings for 1999                                               9,733                                  9,733
   Other comprehensive income                                                        1,559                    1,559
                                                                                                           --------
   Total comprehensive income                                                                                11,292

Dividends declared ($.50 per share)                                   (1,795)                                (1,795)
Effects of Congoleum capital transactions                               (455)                                  (455)
Purchase of treasury stock                                                                      (1,898)      (1,898)
                                            --------------------------------------------------------------------------
Balance at December 31, 1999                     $46    $ 19,423    $ 75,730      $ (3,347)   $(13,471)    $ 78,381
                                            ==========================================================================
</TABLE>

See accompanying notes.


                                       22
<PAGE>

                     American Biltrite Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows
                            (In thousands of dollars)


<TABLE>
<CAPTION>
                                                                                   Year ended December 31
                                                                              1999         1998          1997
                                                                          -----------------------------------------
<S>                                                                          <C>         <C>           <C>
Operating activities
Net earnings                                                                 $  9,733    $   9,002     $   8,145
Adjustments to reconcile net earnings to net cash provided by
   operating activities:
     Depreciation and amortization                                             16,231       15,128        14,501
     Provision for doubtful accounts                                            2,966        2,411         2,433
     Loss on early retirement of debt, including write-off of deferred
       financing fees                                                              --        3,809            --
     Deferred income taxes                                                      2,634        5,144          (470)
     Accounts and notes receivable                                               (143)      (5,769)        1,718
     Inventories                                                              (13,252)       4,407         5,830
     Prepaid expenses and other current assets                                 (2,342)      (2,518)         (816)
     Accounts payable and accrued expenses                                      7,108        2,342        (9,623)
     Noncontrolling interests                                                   2,992        5,145         3,777
     Other                                                                       (863)         188           (53)
                                                                          -----------------------------------------
Net cash provided by operating activities                                      25,064       39,289        25,442

Investing activities
Purchases of short-term investments                                           (51,044)     (15,000)      (40,200)
Proceeds from sales of short-term investments                                  31,812       22,900        49,800
Investments in property, plant and equipment                                  (26,971)     (17,155)      (22,183)
                                                                          -----------------------------------------
Net cash used in investing activities                                         (46,203)      (9,255)      (12,583)

Financing activities
Long-term borrowings                                                               --      101,719            --
Payments on long-term debt                                                     (4,259)     (77,787)      (12,312)
Net short-term payments                                                            --       (5,500)       (4,750)
Debt issuance costs                                                                --       (3,310)           --
Premium payment on early retirement of debt                                        --       (2,563)           --
Purchase and retirement of Congoleum Class B shares                              (470)          --        (5,630)
Purchase of treasury shares                                                    (5,381)        (191)       (3,896)
Dividends paid                                                                 (1,795)      (1,639)       (1,453)
Proceeds from exercise of stock options                                            --          171           115
                                                                          -----------------------------------------
Net cash (used) provided by financing activities                              (11,905)      10,900       (27,926)

Effect of foreign exchange rate changes on cash                                   824         (735)          715
                                                                          -----------------------------------------
(Decrease) increase in cash and cash equivalents                              (32,220)      40,199       (14,352)

Cash and cash equivalents at beginning of year                                 59,505       19,306        33,658
                                                                          -----------------------------------------

Cash and cash equivalents at end of year                                    $  27,285    $  59,505      $ 19,306
                                                                          =========================================
</TABLE>

See accompanying notes.


                                       23
<PAGE>

                     American Biltrite Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                                December 31, 1999


1.  Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of American Biltrite
Inc. and its wholly-owned subsidiaries (referred to as "ABI" or the "Company"),
as well as entities over which it has voting control, including Congoleum
Corporation, a publicly traded company in which ABI, at December 31, 1999, has a
53% ownership interest and 68% of the voting shares. Intercompany accounts and
transactions, including transactions with associated companies which result in
intercompany profit, are eliminated.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent liabilities, at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Some of the information presented in this
report constitutes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.


Cash Equivalents

Cash equivalents represent highly liquid debt instruments with maturities of
three months or less at the date of purchase. The carrying value of cash
equivalents approximates fair value.


                                       24
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


1.  Significant Accounting Policies (continued)

Short-Term Investments

The Company invests in highly liquid debt instruments with strong credit
ratings. Commercial paper investments with a maturity greater than three months,
but less than one year, at the time of purchase are considered to be short-term
investments. The carrying amount of the investments approximates fair value due
to their short maturity. The Company maintains cash and cash equivalents and
short-term investments with certain financial institutions. The Company performs
periodic evaluations of the relative credit standing of those financial
institutions that are considered in the Company's investment strategy.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the
last-in, first-out (LIFO) method for most of the Company's domestic inventories
and the first-in, first-out (FIFO) method for the Company's foreign inventories.

Property, Plant and Equipment

These assets are stated at cost. Expenditures for maintenance, repairs and
renewals are charged to expense; major improvements are capitalized.
Depreciation, which is determined using the straight-line method, is provided
over the estimated useful lives (30 to 40 years for buildings and building
improvements, ten to 15 years for production equipment and heavy-duty vehicles,
and three to ten years for light-duty vehicles and office furnishings and
equipment).

Debt Issue Costs

Costs incurred in connection with the issuance of long-term debt have been
capitalized and are being amortized over the life of the related debt
agreements. During 1998, Congoleum wrote off old debt issue costs and
capitalized new debt issue costs in connection with a debt offering and
redemption (see Note 6). Debt issue costs at December 31, 1999 and 1998 amounted
to $2,834,000 and $3,170,000, respectively, net of accumulated amortization of
$476,000 and $140,000, respectively, and are included in other noncurrent
assets.


                                       25
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


1.  Significant Accounting Policies (continued)

Goodwill

The excess of purchase cost over the fair value of the net assets acquired
(goodwill) established in 1993 by Congoleum is being amortized on a
straight-line basis over 40 years. Goodwill associated with the K & M
transactions (see Note 4) is being amortized over 20 years. At each balance
sheet date, the Company evaluates the recoverability of its goodwill using
certain financial indicators, such as historical and future ability to generate
income from operations. Accumulated amortization amounted to $8,668,000 and
$7,572,000 at December 31, 1999 and 1998, respectively.

Impairment of Long-Lived Assets

In the event that facts and circumstances indicate the Company's assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset would be compared to the asset's carrying amount to determine if a
write-down to fair market value is required.

Environmental Remediation Liabilities

Effective January 1, 1997, the Company adopted the American Institute of
Certified Public Accountants' (AICPA) Statement of Position (SOP) 96-1,
Environmental Remediation Liabilities. The Company is subject to federal, state,
and local environmental laws and regulations. The Company records a liability
for environmental remediation claims when a clean-up program or claim payment
becomes probable and the costs can be reasonably estimated. The recorded
liabilities are not discounted for delays in future payments (see Notes 5, 7 and
10).

Revenue Recognition

The Company records revenue, net of a provision for estimated returns and
allowances, upon shipment.


                                       26
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


1.  Significant Accounting Policies (continued)

Income Taxes

The Company provides for income taxes based upon earnings reported for financial
statement purposes. Deferred tax assets and liabilities are determined based
upon temporary differences between the financial reporting and tax bases of
assets and liabilities.

Stock-Based Compensation

Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation, requires the recognition of, or disclosure of,
compensation expense for grants of stock options or other equity instruments
issued to employees based on their fair value at the date of grant. As permitted
by SFAS No. 123, the Company follows the disclosure requirements instead of
recognition of compensation expense and therefore continues to apply existing
accounting rules under APB Opinion No. 25 (APB 25) and related interpretations
for its employee stock options. Under APB 25, when the exercise price of the
Company's employee stock options equals the market price of the underlying stock
on the date of grant, no compensation expense is recognized.

Research and Development Costs

Expenditures relating to the development of new products are charged to
operations as incurred and amounted to $5,620,000 , $5,175,000 and $5,388,000
for the years ended December 31, 1999, 1998 and 1997, respectively.

Foreign Currency Translation

All balance sheet accounts of foreign subsidiaries are translated at the current
exchange rate, and income statement items are translated at the average exchange
rate for the period; resulting translation adjustments are made directly to
accumulated other comprehensive income in stockholders' equity. Realized
exchange gains and losses (immaterial in amount) are included in current
operations.


                                       27
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


1.  Significant Accounting Policies (continued)

Issuances of Stock by Subsidiaries

The Company accounts for issuances of stock by its subsidiaries as capital
transactions.

Earnings Per Share

In 1997, the Company adopted SFAS No. 128, Earnings Per Share. Under SFAS No.
128, primary and fully diluted earnings per share are replaced by basic and
diluted earnings per share. Basic earnings per share have been computed based on
the weighted-average number of common shares outstanding during the period.
Diluted earnings per share have been computed based upon the weighted-average
number of common shares outstanding during the year, adjusted for the dilutive
effect of shares issuable upon the exercise of stock options determined based
upon average market price for the period.

Changes in Accounting Principles

During 1998, the Accounting Standards Executive Committee (AcSEC) issued
Statement of Position (SOP) 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. This statement requires certain costs of
internally developed software to be capitalized for years beginning after
December 15, 1998. The Company adopted SOP 98-1 effective January 1, 1999. The
adoption of this SOP did not have a material impact in 1999 or 1998.


                                       28
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2.  Inventories

Inventory at December 31 consisted of the following:

                                             1999             1998
                                         ----------------------------
                                                (In thousands)

Finished goods                             $  61,69        $ 50,683
Work-in-process                               8,628           9,201
Raw materials and supplies                   12,654           9,838
                                         ----------------------------

                                           $ 82,977        $ 69,722
                                         ============================

At December 31, 1999, domestic inventories determined by the LIFO inventory
method amounted to $64,064,000 ,065,000 at December 31, 1998). If the FIFO
inventory method, which approximates replacement cost, had been used for these
inventories, they would have been $491,000 lower at December 31, 1999 and
$181,000 greater at December 31, 1998.

3.  Property, Plant and Equipment

A summary of the major components of property, plant and equipment at December
31 is as follows:

                                            1999             1998
                                         ---------------------------
                                                 (In thousands)

Land and improvements                     $  5,452         $  5,402
Buildings                                   57,631           55,706
Machinery and equipment                    197,466          186,741
Construction-in-progress                    21,017            5,646
                                         ---------------------------
                                           281,566          253,495
Less accumulated depreciation              145,238          129,725
                                         ---------------------------

                                          $136,328         $123,770
                                         ===========================


                                       29
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


3.  Property, Plant and Equipment (continued)

Interest is capitalized in connection with the construction of major facilities.
Capitalized interest is recorded as part of the asset to which it relates and is
amortized over the asset's estimated useful life. Capitalized interest cost was
and $325,000 for 1999 and 1998, respectively.

Depreciation expense amounted to $14,750,000, $13,599,000 and $12,600,000 in
1999, 1998 and 1997, respectively.

4.  Related-Party Transactions

Included in other assets on the accompanying balance sheets is ABI's investment
in Compania Hulera Sula, S.A., a 50%-owned associate. The investment is
accounted for on the cost method due to the uncertainty of the political climate
and currency restrictions in Honduras. During 1997, the Company wrote down its
investment from $1,100,000 to $850,000 to reflect a reduction in Hulera Sula's
net worth.

Congoleum Transactions

In November 1998, Congoleum's Board of Directors authorized Congoleum to
repurchase an additional $5,000,000 of its common stock (Class A and Class B
shares) through the open market or through privately negotiated transactions,
bringing the total authorized common share repurchases to $15,000,000. Under the
total plan, Congoleum has repurchased $13,716,000 of common stock through
December 31, 1999. Shares of Class B stock repurchased (totaling 741,055) have
been retired. The reduction of Congoleum's equity from the repurchase of common
stock during 1999 resulted in a reduction of ABI's investment in Congoleum of
$455,000 (1998--$40,000, 1997--$2,688,000) which was charged to retained
earnings.

The effect of the repurchase of Congoleum's common stock during 1999 was to
increase ABI's ownership interest from 49% to 53%. In addition, as of December
31, 1999, ABI's ownership of 4,395,605 shares of Congoleum's Class B common
stock represented 68% of the voting control of Congoleum. ABI has had voting
control of Congoleum since 1995, and accordingly, the accounts of Congoleum are
consolidated into the financial statements of the Company.


                                       30
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


4.  Related-Party Transactions (continued)

K&M Transactions

During 1995, ABI acquired additional partnership interests in K&M, giving ABI
majority ownership and control. In conjunction with the acquisition, ABI also
entered into agreements with the remaining limited partners of K&M, providing
ABI the option to buy, and providing the limited partners of K&M the option to
sell, the remaining partnership interests in K&M. Since 1995, ABI has acquired
additional limited partnership interests of 12% for consideration of $2,064,000.
If all of the remaining limited partnership interests in K&M were to be
purchased by ABI, the purchase price would amount to approximately $3,439,000 as
of December 31, 1999. ABI owns an 83% partnership interest in K&M at December
31, 1999.

5.  Accrued Expenses

Accrued expenses at December 31 consisted of the following:

                                                 1999          1998
                                              ----------------------
                                                  (In thousands)

Accrued advertising and sales promotions        $23,164      $22,804
Employee compensation and related benefits       10,698       11,225
Interest                                          3,947        4,023
Environmental liabilities                         4,670        3,690
Income taxes                                      7,614        4,739
Other                                             4,123        3,847
                                              ------------------------

                                                $54,216      $50,328
                                              ========================


                                       31
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


6.  Financing Arrangements

Long-term debt at December 31 consisted of the following:

                                                    1999          1998
                                                ------------------------
                                                      (In thousands)

8 5/8% Senior Notes, due 2008                     $ 99,575      $ 99,526
Series A Notes                                      12,000        15,000
Other notes                                          2,530         3,880
                                                -------------------------
                                                   114,105       118,406
Less current portion                                 3,139         4,305
                                                --------------------------

                                                  $110,966      $114,101
                                                ==========================


In August 1998, Congoleum issued $100,000,000 of 8 5/8% Senior Notes, maturing
August 1, 2008, priced at 99.505 to yield 8.70%. The Senior Notes are redeemable
at the option of Congoleum, in whole or in part, at any time on or after August
1, 2003, at a predetermined redemption price (ranging from 104% to 100%), plus
accrued and unpaid interest to the date of redemption. The indenture under which
the notes were issued includes certain restrictions on additional indebtedness
and uses of cash by Congoleum, including dividend payments. The holders of the
Senior Notes have no recourse to the assets of ABI and K&M.

During 1998, proceeds from the 8 5/8% Senior Notes were used to redeem all of
the previously outstanding 9% Senior Notes, including accrued interest and
prepayment premium, to pay certain fees and expenses in connection with the
offering, and for working capital purposes. In connection with the offering in
1998, Congoleum recorded an extraordinary charge of $2,413,000, net of
$1,400,000 of income tax benefit, to write off debt issuance costs and premiums
associated with the repurchase of the 9% Senior Notes. ABI recorded its share of
this extraordinary charge in the amount of $1,174,000 in 1998.

The fair value of Congoleum's long-term debt is based on the quoted market
prices for publicly traded issues. The estimated fair value of the 8 5/8% Senior
Notes was $88,000,000 and $98,500,000 at December 31, 1999 and 1998,
respectively.


                                       32
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


6.  Financing Arrangements (continued)
In 1996, ABI entered into a credit agreement with an insurance company (the
Agreement) providing for the issuance of senior promissory notes aggregating $30
million. In January 1996, $15 million principal amount of notes were issued
(Series A Notes). The Series A Notes bear interest at 6.7% per annum and are
payable in annual installments of $3 million beginning in 1999. Notes issued
under the Agreement are obligations of ABI, and the holders of the Notes have no
recourse to the assets of Congoleum or K&M. The fair value of the Series A Notes
approximates their carrying value at both December 31, 1999 and 1998.

Other notes consist of promissory notes issued in connection with various
transactions. In 1998, the Company obtained loans from local banks in connection
with the acquisition of buildings in Belgium and Singapore. The loans were for
2,500,000 Belgian francs and 2,700,000 Singapore dollars. The loans are payable
in equal installments through 2008 and 2018, respectively. The interest rates on
the loans are 5.6% for the Belgian loan and 1.5% above the local bank's prime
rate (7.5% at December 31, 1999) for the Singapore loan. The loans are secured
by the property acquired.

At December 31, 1999, the Company had revolving and other short-term agreements
providing for secured and unsecured borrowings up to $65 million, with interest
accruing at variable rates. No borrowings were outstanding under these
agreements at December 31, 1999 and 1998. Commitment fees and compensating
balance requirements associated with these agreements are insignificant.

The terms of the Company's loan agreements impose certain restrictions on its
ability to incur additional indebtedness and call for the maintenance of
specific levels of working capital and minimum net worth and restrict the
payment of cash dividends to holders of common stock and other capital
distributions as defined. At December 31, 1999, retained earnings which were
unrestricted as to such distributions amounted to $6,157,000.

Interest paid on all outstanding debt amounted to $10,110,000 in 1999,
$9,480,000 in 1998 and $10,216,000 in 1997.


                                       33
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


6.  Financing Arrangements (continued)

Principal payments on the Company's long-term obligations due in each of the
next five years are as follows (in thousands):

                    2000      $3,139
                    2001       3,108
                    2002       3,111
                    2003       3,115
                    2004         119

7.  Other Liabilities

Other liabilities at December 31 consisted of the following:

                                            1999           1998
                                         ------------------------
                                               (In thousands)

Environmental remediation and product
      related liabilities                  $11,928      $16,198
Pension benefits                            11,662       14,531
Other postretirement benefits                9,647        9,872
Accrued workers' compensation                5,164        4,987
Deferred income taxes                        8,695        6,658
Accrued compensation                         1,346        1,061
Other                                        1,867        2,732
                                         ------------------------

                                           $50,309      $56,039
                                         ========================


                                       34
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


8.  Pension Plans

The Company sponsors several noncontributory defined benefit pension plans
covering substantially all employees. Amounts funded annually by the Company are
actuarially determined using the projected unit credit and unit credit methods
and are equal to or exceed the minimum required by government regulations.
Pension fund assets are invested in a variety of equity and fixed-income
securities.

                                                        Pension Benefits
                                                      1999            1998
                                                  ---------------------------
                                                          (In thousands)
Change in benefit obligation
Benefit obligation at beginning of year             $ 75,040       $ 71,956
Service cost                                           1,729          1,609
Interest cost                                          4,934          4,871
Plan participants' contributions                         140            111
Actuarial (gains) losses                              (3,314)         2,018
Foreign currency exchange rate changes                   226            (79)
Benefits paid                                         (5,388)        (5,446)
                                                  ---------------------------

Benefit obligation at end of year                   $ 73,367       $ 75,040
                                                  ===========================

Change in plan assets
Fair value of plan assets at beginning of year      $ 64,927       $ 64,230
Actual return on plan assets                           7,958          4,794
Company contributions                                  1,923          1,749
Plan participants' contribution                          140            111
Foreign currency exchange rate changes                   450           (511)
Benefits paid                                         (5,388)        (5,446)
                                                  ---------------------------

Fair value of plan assets at end of year            $ 70,010       $ 64,927
                                                  ===========================


                                       35
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


8.  Pension Plans (continued)

<TABLE>
<CAPTION>
                                                                   December 31
                                                            1999                 1998
                                                         --------------------------------
                                                                  (In thousands)

<S>                                                        <C>             <C>
Funded status of the plan (underfunded)                    $ (3,356)       $(10,114)
Unrecognized net actuarial (gains) losses                    (5,117)            788
Unrecognized transition obligation                              220             525
Unamortized prior service cost                               (1,479)         (1,702)
                                                         --------------------------------

Accrued benefit cost                                       $ (9,732)       $(10,503)
                                                         ================================

<CAPTION>
                                                                   December 31
                                                            1999                 1998
                                                         --------------------------------
                                                                  (In thousands)
Amounts recognized in the statement of financial position

<S>                                                        <C>             <C>
Accrued benefit liability                                  $(11,962)       $(14,923)
Intangible asset                                                655             796
Deferred tax asset                                              575           1,322
Accumulated other comprehensive loss                          1,000           2,302
                                                         --------------------------------

Net amount recognized                                      $ (9,732)       $(10,503)
                                                         ================================

<CAPTION>
                                                                   December 31
                                                            1999                 1998
                                                         --------------------------------
<S>                                                      <C>                 <C>
Weighted-average assumptions
Discount rate                                            7.25%--7.50%        6.75%--7.50%
Expected return on plan assets                           7.50%--9.00%        7.50%--9.00%
Rate of compensation increase                                5.00%             5.00%
</TABLE>

At December 31, 1999, three of the Company's plans have projected benefit
obligations in excess of plan assets. The aggregate projected benefit
obligations and plan assets of these plans were $27,514,000 and $17,979,000,
respectively.


                                       36
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


8.  Pension Plans (continued)

<TABLE>
<CAPTION>
                                                        Year ended December 31
                                                   1999          1998          1997
                                             ---------------------------------------
                                                            (In thousands)
<S>                                            <C>            <C>          <C>
Components of net periodic benefit cost
Service cost                                   $ 1,729        $ 1,609      $ 1,535
Interest cost                                    4,934          4,871        4,809
Expected return on assets                       (5,521)        (5,384)      (4,809)
Amortization of prior service cost                (223)          (229)        (240)
Amortization of transition obligation              305            277          274
Recognized net actuarial (gains) losses            (67)          (221)         103
                                             ---------------------------------------

Net periodic benefit cost                      $ 1,157        $   932      $ 1,672
                                             =======================================
</TABLE>

The Company also has three 401(k) defined contribution retirement plans that
cover substantially all employees. Eligible employees may contribute up to a
range of 12% to 15% of compensation with partially matching Company
contributions. Defined contribution pension expense for the Company was
$1,658,000, $1,779,000, and $1,579,000 for the years ended December 1999, 1998
and 1997, respectively.

9.  Postretirement Benefits Other Than Pensions

Net periodic postretirement benefits cost for the year ended December 31 is as
follows:

<TABLE>
<CAPTION>
                                             1999          1998          1997
                                           --------------------------------------
                                                     (In thousands)
<S>                                          <C>           <C>           <C>

Service cost                                 $ 148         $ 139         $ 139
Interest cost                                  480           480           505
Amortization of prior service benefit         (409)         (409)         (409)
Amortization of net loss                        71            60            99
                                           --------------------------------------

   Net periodic benefit cost                 $ 290         $ 270         $ 334
                                           =====================================

Weighted-average discount rate               7.25%         6.75%          7.0%
</TABLE>


                                       37
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


9.  Postretirement Benefits Other Than Pensions (continued)

The change in benefit obligation and the actuarial and recorded liabilities for
these postretirement benefits at December 31, none of which has been funded in
1999 and 1998, were as follows:

<TABLE>
<CAPTION>
                                                       1999                1998
                                                    ---------------------------------
                                                            (In thousands)
<S>                                                   <C>                 <C>
Change in benefit obligation
  Benefit obligation at end of prior year              $  7,376            $  7,552
  Service cost (with interest)                              148                 139
  Interest cost                                             480                 480
  Actuarial  gain                                          (346)               (256)
  Benefits paid                                            (517)               (539)
                                                    ---------------------------------

Benefit obligation at end of year                      $  7,141            $  7,376
                                                    =================================

Funded status (unfunded)                               $ (7,141)           $ (7,376)
Unrecognized net  gain                                     (513)                (96)
Unrecognized prior service benefit                       (2,406)             (2,815)
                                                    ---------------------------------
Accrued postretirement benefit cost                     (10,060)            (10,287)
Less current portion                                        413                 415
                                                    ---------------------------------

Noncurrent postretirement benefit obligations          $ (9,647)           $ (9,872)
                                                    =================================
</TABLE>


The annual rate of increase in the per capita cost of covered health care
benefits was assumed to be 7.4% in 1999; the rate was assumed to decrease
gradually to 5.0% over the next seven years and remain level thereafter. An
increase of one percentage point in the assumed health care cost trend rates for
each future year would increase the aggregate of the service and interest cost
components of net periodic postretirement benefits cost by $56,000 for the year
ended December 31, 1999, and would increase the accumulated postretirement
benefit obligations by $506,000 at December 31, 1999.


                                       38
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies

Leases

The Company occupies certain warehouse and office space and uses certain
equipment and motor vehicles under lease agreements expiring at various dates
through 2010. The leases generally require the Company to pay for utilities,
insurance, taxes and maintenance, and some contain renewal options. Total rent
expense charged to operations was $4,922,000 in 1999, $3,889,000 in 1998 and
$3,428,000 in 1997.

Future minimum payments relating to operating leases are as follows (in
thousands):

         2000                                $ 3,554
         2001                                  3,355
         2002                                  2,763
         2003                                  2,223
         2004                                  1,658
   Thereafter                                  9,227
                                           -----------

   Total future minimum lease payments       $22,780
                                           ===========

Environmental and Other Liabilities

The Company records a liability for environmental remediation claims when a
clean-up program or claim payments become probable and the costs can be
reasonably estimated. As assessments and clean-up programs progress, these
liabilities are adjusted based upon the progress in determining the timing and
extent of remedial actions and the related costs and damages. The recorded
liabilities are not reduced by the amount of insurance recoveries. Such
estimated insurance recoveries are reflected in other noncurrent assets and are
considered probable of recovery.


                                       39
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies (continued)

American Biltrite Inc.

ABI is a co-defendant with many other manufacturers and distributors of
asbestos-containing products in approximately sixtyeventy-three pending claims
involving approximately 764 individuals as of December 31, 1999. These claims
allege personal injury from exposure to asbestos or asbestos-containing
products. As of December 31, 1998, there were approximately seventy-nine pending
claims involving approximately 590 individuals. Activity related to asbestos
claims during the years ended December 31, 1999 and 1998 was as follows:

                                                1999        1998
                                              -------------------

Claims at January 1                              79          66
New c laims                                      17          31
Settlements                                      (3)         (3)
Dismissals                                      (30)        (15)
                                              -------------------

Claims at December 31                            63          79
                                              ===================

The total indemnity costs incurred to settle claims during 1999 and 1998 were
$965,000 and $265,000, respectively, all of which were paid by ABI's insurance
carriers, as were the related defense costs. The average indemnity cost per
resolved claim was $29,000 in 1999 and $15,000 in 1998. Furthermore, under
certain circumstances, third parties are contractually liable for up to the full
amount of any liabilities suffered by ABI in connection with these claims. In
general, asbestos-containing products have not been found to pose a health risk
unless significant amounts of free asbestos fibers become airborne. The asbestos
in asbestos-containing products sold by ABI was encapsulated during the
manufacturing process. ABI believes that these suits are without merit and that,
in any event, the damages sought are substantially within the coverages of its
applicable liability insurance policies, and accordingly, no dedicated reserves
have been set aside for these suits.


                                       40
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies (continued)

ABI has been named as a Potentially Responsible Party ("PRP") within the meaning
of the Federal Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA"), as to two sites in two separate states. At one of
the two sites located in Southington, Connecticut, ("Southington Site"), ABI's
subsidiary ("Ideal") is also named as a PRP. At the Southington Site, the
currently estimated aggregate future cost of remediation and monitoring is
approximately $31 million. ABI's and Ideal's share of the assessments to the
PRPs to date is approximately $115,000. Subject to a final allocation among the
PRPs, ABI's and Ideal's share of the future remediation costs is currently
estimated to be approximately $329,000. Under an agreement, Ideal will share a
percentage of this cost with the former owner of Ideal's assets. Under an
agreement between ABI and The Biltrite Corporation ("TBC"), TBC is liable for
37.5% of the remediation costs incurred by ABI with respect to the Southington
Site.

At the other site, ABI, together with a number of other PRPs, signed a consent
decree and site remediation agreement (the "Agreements") which, without an
admission of liability, requires remediation at the ILCO Superfund site located
in Leeds, Alabama (the "ILCO Site"). On April 22, 1997, the United States
District Court for the Northern District of Alabama approved the consent decree.
The currently estimated aggregate future cost of remediation and associated
transactional costs at the ILCO Site is $20.4 million. Pursuant to a final
allocation among consent decree participants, ABI's share of the currently
estimated remediation cost is approximately $361,000 after considering
commitments from de minimus and de maximus settlors, the City of Leeds and its
insurers and TBC, which is, by agreement, liable for 37.5% of the remediation
costs incurred by ABI. This amount will be payable over the next four to seven
years. ABI and the other settling PRPs also are pursuing litigation against PRPs
who used the ILCO Site and have not settled.

ABI currently is a defendant in a lawsuit in which Olin Corporation, the present
owner of a former chemical plant in Wilmington, Massachusetts, claims that ABI
and other defendants are liable for a portion of the costs associated with
remediating environmental conditions at the site. The lawsuit, captioned Olin
Corporation v. Fisons, plc et al., was filed on May 26, 1993 in the Federal
District Court of Massachusetts. A wholly owned subsidiary of ABI owned and
operated the Wilmington plant from 1959 to 1964, and for


                                       41
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies (continued)

approximately one month during 1964, ABI held title to the property directly.
Olin has conducted an environmental assessment of the site and awaits a decision
by Massachusetts officials concerning the scope of any remedial actions which
must be undertaken at the site.

In January of 2000, ABI and TBC reached an agreement-in-principle with Olin that
would settle all of Olin's claims against ABI and TBC in the litigation. Under
the terms of the agreement-in-principle, ABI would pay Olin $4.1 million in
settlement of its share of Olin's $18 million of response costs incurred at the
site through December 31, 1998. ABI also would pay Olin 21.7% of Olin's response
costs incurred at the site after January 1, 1999. Under an agreement between ABI
and TBC, TBC is liable for 37.5% of the costs that may be incurred by ABI as a
result of this lawsuit and 37.5% of the settlement amounts paid by ABI to Olin
under the agreement-in-principle with Olin described below.

Olin estimates that it incurred $2 million in response costs from January 1 to
December 31, 1999. Additional expenditures, principally remediation and
oversight costs, will be required to remediate the site. ABI is unable to
estimate the amount of additional expenditures that Olin may be required to make
to remediate the site. At this time, ABI cannot determine the estimable and
probable costs of its share of any future response costs. In the event that the
parties are unable to reduce the agreement-in-principle to a mutually
acceptable, fully executed settlement agreement, trial is scheduled to commence
on May 1, 2000.

ABI also is potentially responsible for response and remediation costs as to
four state-supervised sites, two sites in Massachusetts, and one each in New
York and New Jersey. At these four sites, ABI's liability will be based upon
disposal of allegedly hazardous waste material from its current and former
plants. While the exact amount of the future costs to ABI resulting from its
liability is indeterminable due to such unknown factors as the magnitude of
clean-up costs, the timing and extent of the remedial actions that may be
required, determination of ABI's liability in proportion to other responsible
parties and the extent to which costs may be recoverable from insurance, ABI
believes, based upon current information available, that its liability at any of
these sites will not be material. Under an agreement between ABI and TBC, TBC is
liable for 37.5% of the remediation costs which may be incurred by ABI at all of
these sites.



                                       42
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies (continued)


ABI has made demands against its insurance carriers to provide defense and
indemnity for ABI's liabilities at the Southington site, the ILCO site, the Olin
site and the state-supervised sites in Massachusetts, New York and New Jersey.
ABI and its principal carrier have entered into negotiations to resolve this
insurance coverage demand made against the carrier. ABI cannot estimate the
probable insurance recovery from this carrier or any of its other insurance
carriers at any of the sites at this stage of negotiations.

ABI is involved in other routine legal proceedings relating to its business and
operations. ABI does not believe that these proceedings, in the aggregate, will
have a material adverse effect on ABI's results of operations or financial
condition.

As of December 31, 1999, the Company has accrued $3.6 million for ABI's
estimable and probable amounts for contingencies described above. Additional
amounts have been provided for matters related to Congoleum as described below.

Congoleum

Congoleum is named, together with a large number (in most cases, hundreds) of
other companies, as a PRP in pending proceedings under the CERCLA, as amended,
and similar state laws. In two instances, although not named as a PRP, Congoleum
has received a request for information. These pending proceedings currently
relate to seven disposal sites in New Jersey, Pennsylvania, Maryland,
Connecticut and Delaware in which recovery from generators of hazardous
substances is sought for the cost of cleaning up the contaminated waste sites.
Congoleum's ultimate liability in connection with those sites may depend on many
factors, including the volume of material contributed to the site, the number of
other PRP's and their financial viability, the remediation methods and
technology to be used, and the extent to which costs may be recoverable from
insurance. However, under CERCLA, and certain other laws, as a PRP, Congoleum
can be held jointly and severally liable for all environmental costs associated
with a site.

The most significant exposure to which Congoleum has been named a PRP relates to
a recycling facility site in Elkton, Maryland. Two removal actions were
substantially complete as of December 31, 1998; however, the groundwater
remediation phase has not begun, and the remedial investigation/feasibility
study related to the groundwater remediation has not been approved. The PRP
group estimated that future costs of


                                       43
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies (continued)

groundwater remediation would be approximately $26 million, of which, based on
waste allocations among members of the PRP group, Congoleum's share was
estimated to be approximately 5.5%. At December 31, 1999, Congoleum believes its
probable liability, which has been recorded in other liabilities, based on
present facts and circumstances, to be approximately $1.5 million. A
corresponding insurance receivable of $1.2 million has been recorded in other
noncurrent assets. No other PRP sites are material on an individual basis.

Congoleum also accrues remediation costs for certain of Congoleum's owned
facilities on an undiscounted basis. Estimated total clean-up costs, including
capital outlays and future maintenance costs for soil and groundwater
remediation, are primarily based on engineering studies.

Although there can be no assurances, Congoleum anticipates that these matters
will be resolved over a period of years for amounts (including legal fees and
other defense costs) which Congoleum believes based on current estimates of
liability and, in part, on insurance coverage, and based on advice from counsel,
will not have a material adverse effect on the financial position of Congoleum.

Congoleum is one of many defendants in approximately 670 pending claims
(including workers' compensation cases) involving approximately 6,246
individuals as of December 31, 1999, alleging personal injury from exposure to
asbestos or asbestos-containing products. There were 657 claims at December 31,
1998 which involved approximately 1,984 individuals. Activity related to
asbestos claims during the years ended December 31, 1999 and 1998 was as
follows:

                                                            1999          1998
                                                         -----------------------

Claims at January 1                                          657           654
New claims                                                   247           203
Settlements                                                  (48)          (63)
Dismissals                                                  (186)         (137)
                                                         -----------------------

Claims at December 31                                        670           657
                                                         =======================


                                       44
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies (continued)

The total indemnity costs incurred, excluding the case noted below, to settle
claims during 1999 and 1998 were and $2,160,000, respectively, which were paid
by Congoleum's insurance carriers, as were the related defense costs. The
average indemnity cost per resolved claim was $12,000in 1999 and $11,000 in
1998, all of which costs were covered by Congoleum's insurance carriers. Costs
per claim vary depending on a number of factors, including the number of
plaintiffs, the nature of their alleged exposure and the location of the claim.

Nearly all claims allege that various diseases or health issues were contracted
as a result of exposure to asbestos in the course of their activities either as
independent contractors or as employees of shipyards or other industries
utilizing asbestos-containing products (or, in the workers' compensation cases,
as employees of Congoleum) and that included among such products which allegedly
caused their diseases were sheet products provided by Congoleum or resilient
tile provided by the Amtico Tile Division of ABI (the "Tile Division"), or both.
Congoleum discontinued the manufacture of asbestos-containing sheet products in
1983, and the Tile Division ceased manufacturing asbestos-containing tile
products in 1984. In general, asbestos-containing products have not been found
to pose a health risk unless significant amounts of free asbestos fibers become
airborne. All of the asbestos in asbestos-containing sheet and tile products
sold by Congoleum or the Tile Division was fully bonded or encapsulated during
the manufacturing process. Congoleum has issued warnings not to remove
asbestos-containing flooring by sanding or other methods that do not comply with
governmental asbestos handling standards.

In one of the cases tried before a jury in Superior Court of California in Los
Angeles, held in May and June 1997, Congoleum and another defendant were found
liable for $3.3 million in damages, subject to proportional liability under
California law. Congoleum had previously settled one count for an immaterial
amount and had gone to trial for the remaining counts. The jury found that
Congoleum was liable for only 25% of the plaintiff's non-economic damages, but
as a result of post-verdict motions, the trial judge granted plaintiff's motion
for judgment notwithstanding the verdict and held that California Proposition 51
(establishing proportionate liability for non-economic damages) did not apply in
this case. Congoleum and the other defendant appealed this decision and, in
August 1999, the appeals court reversed the previous judgement and ordered the
trial court to enter a judgement against Congoleum for $818,000. Congoleum's
insurance carrier has paid for the defense costs incurred and has indicated that
it would be responsible for paying the ultimate judgment in the case, subject to
certain limitations.


                                       45
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


10.  Commitments and Contingencies (continued)

At December 31, 1999, Congoleum has accrued approximately $4.4 million for costs
related to asbestos product liability. Estimated insurance coverage of $0.8
million has been recorded in other noncurrent assets at December 31, 1999 and
are considered probable of recovery.

Although there can be no assurance, Congoleum believes, based upon the nature of
its asbestos-containing products and its experience with cases to date, that any
potential liability from pending personal injury claims relating to Congoleum's
asbestos-containing products will not have a material adverse effect on the
financial position of Congoleum.

The total balances of environmental and asbestos related liabilities and the
related insurance receivables deemed probable of recovery at December 31 were as
follows:

<TABLE>
<CAPTION>
                                           1999                      1998
                                  Liability    Receivable   Liability   Receivable
                                 ---------------------------------------------------
                                                  (In thousands)

<S>                                <C>          <C>          <C>          <C>
Asbestos product liability         $ 7,500      $ 2,000      $ 9,200      $ 2,900
Environmental liabilities            4,400          800        6,900        3,300
Other                                  800           --        1,100           --
                                 ---------------------------------------------------

Total                              $12,700      $ 2,800      $17,200      $ 6,200
                                 ===================================================
</TABLE>

Other

In the ordinary course of its business, ABI and Congoleum become involved in
lawsuits, administrative proceedings, product liability and other matters. In
some of these proceedings, plaintiffs may seek to recover large and sometimes
unspecified amounts, and the matters may remain unresolved for several years. On
the basis of information furnished by counsel and others, ABI and Congoleum do
not believe that these matters, individually or in the aggregate, will have a
material adverse effect on their business or financial condition.


                                       46
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


11.  Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities as of December 31, 1999 and
1998 were as follows:

<TABLE>
<CAPTION>
                                                      1999             1998
                                                   ----------------------------
                                                         (In thousands)
<S>                                                 <C>              <C>
   Deferred tax assets:
     Accruals and reserves                          $19,574          $21,959
     Credit carryforwards                                --              336
                                                   ----------------------------
   Total deferred tax assets                         19,574           22,295

   Deferred tax liabilities:
     Depreciation                                     14,599           14,212
     Insurance                                         2,615            3,438
     Inventory                                         3,199            2,538
     Undistributed domestic earnings                   2,489            2,517
     Foreign taxes                                     1,084            1,087
     Other                                             1,991            1,640
                                                   ----------------------------
   Total deferred tax liabilities                     25,977           25,432
                                                   ----------------------------

   Net deferred tax  liability                       $(6,403)         $(3,137)
                                                   ============================
</TABLE>

Credit carryforwards consisted primarily of alternative minimum tax credits and
foreign tax credits. The components of earnings before income taxes for the year
ended December 31 were as follows:

                           1999               1998             1997
                        -----------------------------------------------
                                         (In thousands)

   Domestic               $16,726            $21,722          $16,849
   Foreign                  3,390              3,280            2,446
                        -----------------------------------------------

                          $20,116            $25,002          $19,295
                        ===============================================


                                       47
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


11.  Income Taxes (continued)

Significant components of the provision for income taxes for the year ended
December 31 were as follows:

<TABLE>
<CAPTION>
                                                          1999              1998            1997
                                                       ---------------------------------------------
                                                                       (In thousands)
<S>                                                      <C>               <C>              <C>
   Current:
     Federal                                             $3,078            $3,087           $6,346
     Foreign                                              1,295             1,185              931
     State                                                  384               265              566
                                                       ---------------------------------------------
   Total current                                          4,757             4,537            7,843

   Deferred:
     Federal                                              2,416             4,483             (441)
     Foreign                                                 (3)               41               50
     State                                                  221               620              (79)
                                                       ---------------------------------------------
   Total deferred                                         2,634             5,144             (470)
                                                       ---------------------------------------------

                                                         $7,391            $9,681           $7,373
                                                       =============================================
</TABLE>

Deferred income taxes include provisions of $260,000, $479,000 and $301,000
during 1999, 1998 and 1997, respectively, for ABI's share of the undistributed
earnings of Congoleum, which does not file a consolidated tax return with ABI.

The reconciliation of income tax computed at the U.S. federal statutory tax
rates to income tax expense for the year ended December 31 was as follows:

<TABLE>
<CAPTION>
                                                         1999               1998             1997
                                                       --------------------------------------------
<S>                                                       <C>               <C>              <C>

   U.S. statutory rate                                    35.0%             35.0%            35.0%
   State income taxes, net of federal benefits             2.0               2.3              2.8
   Undistributed domestic earnings                         1.3               1.9              1.5
   Other                                                  (1.6)             (0.5)            (1.1)
                                                       --------------------------------------------

       Effective tax rate                                 36.7%             38.7%            38.2%
                                                       ============================================
</TABLE>


                                       48
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


11.  Income Taxes (continued)

Undistributed earnings of foreign subsidiaries aggregated approximately
$18,942,000 at December 31, 1999, which, under existing law, will not be subject
to U.S. tax until distributed as dividends. Because the earnings have been or
are intended to be reinvested in foreign operations, no provision has been made
for U.S. income taxes that may be applicable thereto.

Income taxes paid amounted to approximately $5,269,000 in 1999, $6,160,000 in
1998 and $5,727,000 in 1997.

12.  Other Comprehensive Income

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130, Reporting Comprehensive Income. SFAS No. 130
established standards for reporting and displaying comprehensive income and its
components; however, the adoption of this statement had no impact on the
Company's net income or shareholders' equity. SFAS No. 130 requiress unrealized
gains or losses on available-for-sale securities, foreign currency translation
adjustments and changes in certain minimum pension liabilities, which prior to
adoption, were reported separately in stockholders' equity, to be included in
other comprehensive income. The 1997 financial statements were reclassified to
conform to the requirements of SFAS No. 130.

Components of other comprehensive income (loss) for the year ended December 31
consisted of the following:

<TABLE>
<CAPTION>
                                                           1999           1998              1997
                                                       --------------------------------------------
                                                                        (In thousands)
<S>                                                      <C>            <C>                 <C>
Foreign currency translation adjustments                 $  964         $(1,024)            $(838)
Change in minimum pension liability                         595            (577)              331
                                                       --------------------------------------------

                                                         $1,559         $(1,601)            $(507)
                                                       ============================================
</TABLE>


                                       49
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


12.  Other Comprehensive Income (continued)

Accumulated balances related to each component of other comprehensive loss as of
December 31 were as follows:

<TABLE>
<CAPTION>
                                                              1999           1998          1997
                                                           -----------------------------------------
                                                                        (In thousands)

<S>                                                          <C>           <C>            <C>
Foreign currency translation adjustments                     $(2,819)      $(3,783)       $(2,759)
Minimum pension liability                                       (528)       (1,123)          (546)
                                                           -----------------------------------------

                                                             $(3,347)      $(4,906)       $(3,305)
                                                           =========================================
</TABLE>

13.  Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share for the year ended December 31:

<TABLE>
<CAPTION>
                                                      1999        1998         1997
                                                -----------------------------------------
                                                 (In thousands, except per share amounts)
<S>                                                   <C>         <C>         <C>
Numerator:
  Net income                                          $9,733      $9,002      $8,145
                                                -----------------------------------------

Denominator:
  Denominator for basic earnings per share:
    Weighted-average shares                            3,592       3,641       3,633
  Dilutive employee stock options                         70         165         105
                                                -----------------------------------------
  Denominator for diluted earnings per share:
    Adjusted weighted-average shares and assumed
      conversions                                      3,662       3,806       3,738
                                                =========================================

Basic earnings per share                              $ 2.71      $ 2.47      $ 2.24
                                                =========================================

Diluted earnings per share                            $ 2.66      $ 2.36      $ 2.18
                                                =========================================
</TABLE>


                                       50
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


14.  Stock Option Plans

ABI Stock Plans

During 1999, ABI adopted a stock option plan which permits the issuance of
50,000 options for common stock to non-employee directors. Under the terms of
the plan, options granted are nonqualified and are issued at a price equal to
100% of fair market value at the date of grant. Options granted under the plan
are exercisable six months after the date of grant.

During 1993, ABI adopted a stock award and incentive plan which permits the
issuance of options, stock appreciation rights (SARs), limited SARs, restricted
stock, restricted stock units and other stock-based awards to selected employees
and independent contractors of the Company. The plan reserved 400,000 shares of
common stock for grant and provides that the term of each award be determined by
the committee of the Board of Directors (Committee) charged with administering
the plan. During 1997, the Board of Directors approved an amendment to the plan
to increase the number of shares reserved for grant from 400,000 to 550,000.

Under the terms of the plan, options granted may be either nonqualified or
incentive stock options and the exercise price, determined by the Committee, may
not be less than the fair market value of a share on the date of grant. SARs and
limited SARs granted in tandem with an option shall be exercisable only to the
extent the underlying option is exercisable and the grant price shall be equal
to the exercise price of the underlying option. In addition, the Committee may
grant restricted stock to participants of the plan at no cost. No SARs or
restricted stock have been granted under the plan since its adoption. Other than
the restrictions which limit the sale and transfer of these shares, participants
are entitled to all the rights of a shareholder.


                                       51
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


14.  Stock Option Plans (continued)

The following tables summarize information about ABI's fixed stock options:

<TABLE>
<CAPTION>
                                           1999                    1998                     1997
                                    ------------------------------------------------------------------------
                                                    Weighted-               Weighted-                 Weighted-
                                                     Average                 Average                   Average
                                                    Exercise                Exercise                  Exercise
                                        Shares        Price       Shares      Price        Shares       Price
                                    ------------------------------------------------------------------------
<S>                                      <C>          <C>        <C>          <C>         <C>           <C>
Outstanding at beginning of year         564,080      $18.84     574,580      $18.79      342,640       $15.60
Granted                                    6,000       20.50          --                  238,500        23.63
Exercised                                     --          --     (10,500)      16.26       (6,560)       13.56
Forfeited                                (14,240)      23.04          --                       --           --
                                       -----------              -----------             -----------

Outstanding at end of year               555,840       18.75     564,080       18.84      574,580        18.79
                                       ===========              ===========             ===========

Options exercisable at end of year       414,540                 339,280                  312,932

Available for grant at end of year        77,580                  19,340                   19,340
</TABLE>

<TABLE>
<CAPTION>
                                                             Weighted-Average
   Option         Outstanding at       Exercisable at           Remaining          Exercise
 Grant Date      December 31, 1999    December 31, 1999      Contractual Life        Price
---------------------------------------------------------------------------------------------
<S>                    <C>                <C>                <C>                   <C>
May 1991                50,400             50,400            1.42 years            $  7.00
August 1993            274,440            274,440            3.67 years              16.88
April 1997             225,000             89,700            7.33 years              23.63
July 1999                6,000                 --            9.50 years              20.50
</TABLE>

Congoleum Stock Option Plan

Effective with its public offering, Congoleum adopted the 1995 stock option plan
(the plan). Under the plan, options to purchase up to 800,000 shares of
Congoleum's Class A common stock may be issued to officers and key employees.
These options may be either incentive stock options or nonqualified stock
options, and the option price must be at least equal to the fair value of
Congoleum's Class A common stock on the date of grant. All options granted have
ten-year terms and vest over five years at the rate of 20% per year beginning on
the first anniversary of the date of grant.


                                       52
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


14.  Stock Option Plans (continued)

On July 1, 1999, a Directors Stock Option Plan was established, under which
non-employee directors may be granted options to purchase up to 50,000 shares of
Class A Common Stock. Options granted have ten-year terms and vest six months
from the grant date. During 1999, options to purchase 5,000 shares were granted
under the plan.

The following table summarizes information about Congoleum's fixed stock
options:

<TABLE>
<CAPTION>
                                             1999                    1998                     1997
                                    --------------------------------------------------------------------------
                                                Weighted-                Weighted-                 Weighted-
                                                 Average                  Average                   Average
                                                 Exercise                 Exercise                 Exercise
                                      Shares      Price       Shares       Price       Shares       Price
                                    --------------------------------------------------------------------------
<S>                                   <C>          <C>         <C>         <C>         <C>          <C>
Outstanding at beginning of year      626,000      $10.91      511,900     $13.01      484,500      $  12.89
Granted                                10,000        7.19      345,000       9.00       56,000         14.25
Exercised                                  --       --              --         --       (2,000)        13.00
Forfeited                             (14,000)       9.00     (230,900)     12.72      (26,600)        13.53
                                      -------                 --------                 -------

Outstanding at end of year            622,000      $10.90      626,000      10.91      511,900         13.01
                                      =======                 ========                 =======

Options exercisable at end of year    306,200                  180,000                 185,200

Available for grant at end of year    226,000                  172,000                 286,100
</TABLE>

Pro Forma Disclosure

Pro forma disclosure, as required by SFAS No. 123, regarding net income and
earnings per share has been determined as if the Company had accounted for its
employee stock options under the fair value method of the Statement.

The fair value for the ABI options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for 1999 and 1997, respectively: risk-free interest rate of 5.87%
and 6.69%, expected dividend yield of 18.29% and 12.70%, volatility factor of
the expected market price of the Company's common stock of .287 and .288, and a
weighted-average expected life of the options of seven and one-half years.


                                       53
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


14.  Stock Option Plans (continued)

The fair value for the Congoleum options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1999, 1998 and 1997, respectively: option forfeiture of 15%,
risk-free interest rates of 6.61%, 4.80% and 5.76%, no dividends, volatility
factors of the expected market price of Congoleum's common stock of .576, .365
and .356, and a weighted-average expected life of the options of seven years.

The weighted-average fair value of options granted under ABI's 1997 Stock Award
and Incentive Plan during 1997 was $1.25. The weighted-average fair value of
options granted under ABI's 1999 Stock Award and Incentive Plan during 1999 was
$.22. The weighted-average fair value of options granted under Congoleum's 1995
Stock Option Plan during 1999, 1998 and 1997 was $4.674.72, $4.31 and $6.97,
respectively. The weighted-average fair value of options granted for the
Directors Stock Option Plan in 1999 was $3.15.

For purposes of pro forma disclosures, the estimated fair value of the ABI and
Congoleum options is amortized to expense over the options' vesting period. The
impact on pro forma net income may not be representative of compensation expense
in future years, when the effect of the amortization of multiple awards would be
reflected in the pro forma disclosures.

The Company's pro forma information follows:

<TABLE>
<CAPTION>
                                                      1999                1998             1997
                                                 -------------------------------------------------
                                                   (In thousands, except per share amounts)
<S>                                                  <C>                 <C>             <C>
Net income                                           $9,733              $9,002          $8,145
Estimated pro forma compensation expense
   from stock options                                  (402)               (355)           (332)
                                                 -------------------------------------------------

       Pro forma net income                          $9,331              $8,647          $7,813
                                                 =================================================

Pro forma earnings per share:
         Basic                                      $  2.60             $  2.38        $  2.15
         Diluted                                       2.55                2.27           2.09
</TABLE>


                                       54
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


15.  Industry Segments

Description of Products and Services

The Company has four reportable segments: flooring products, tape products,
jewelry, and a Canadian division which produces flooring and rubber products.
Congoleum represents the Company's flooring products segment, which manufactures
vinyl and vinyl composition floor coverings with distribution primarily through
floor covering distributors, retailers, and contractors for commercial and
residential use. The tape products segment consists of two production facilities
in the United States, and finishing and sales facilities in Belgium and
Singapore. The tape products segment manufactures paper, film, HVAC, electrical,
shoe, and other tape products for use in industrial and automotive markets. The
jewelry segment reflects the results of K&M Associates L.P., a national costume
jewelry supplier to the mass merchandiser markets. The Company's Canadian
division produces flooring, rubber products, including materials used by
footwear manufacturers, and other industrial products.

Measurement of Segment Profit or Loss and Segment Assets

The Company considers all revenues and expenses to be of an operating nature
and, accordingly, allocates them to industry segments regardless of the profit
center in which recorded. Costs specific to a segment, such as pension expense,
are charged to the segment. Corporate office expenses are allocated to certain
segments based on resources allocated. All assets, except investment in Hulera
Sula, are considered operating assets. Significant assets of the Corporate
office include cash, deferred tax assets, goodwill and investment in Hulera
Sula. The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies.

Intersegment sales and transfers are recorded at cost plus an agreed upon
intercompany profit on intersegment sales or transfers.

Factors Used to Identify Reportable Segments

Reportable segments are business units that offer different products and are
each managed separately. The Company's Canadian division manufactures certain
products which are similar to products of the flooring segment; however, the
Canadian division is managed and reports separately from the flooring segment.


                                       55
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


15.  Industry Segments (continued)

Segment Profit and Assets

<TABLE>
<CAPTION>
                                                                                     Year ended December 31
                                                                        1999                   1998                 1997
                                                                  --------------------------------------------------------
Revenues (In thousands) Revenues from external customers:
<S>                                                                  <C>                   <C>                   <C>
    Flooring products                                                $ 245,439             $ 258,258             $ 251,562
    Tape products                                                       88,337                82,233                83,389
    Jewelry                                                             46,552                47,350                44,537
    Canadian division                                                   42,131                36,038                38,024
                                                                  --------------------------------------------------------
Total revenues from external customers                                 422,459               423,879               417,512

Intersegment revenues:
    Flooring products                                                      568                   868                   964
    Tape products                                                          158                   193                   162
    Jewelry                                                                 --                    --                    --
    Canadian division                                                    6,966                 6,613                 5,110
                                                                  --------------------------------------------------------
Total intersegment revenues                                              7,692                 7,674                 6,236
                                                                  --------------------------------------------------------
Total revenue                                                          430,151               431,553               423,748

Reconciling items
    Intersegment revenues                                               (7,692)               (7,674)               (6,236)
                                                                  --------------------------------------------------------
Total consolidated revenues                                          $ 422,459             $ 423,879             $ 417,512
                                                                  ========================================================
</TABLE>

Approximately 54%, 50% and 50% of the Canadian division's revenues from external
customers were for flooring products for 1999, 1998 and 1997, respectively. The
remaining revenues from the Canadian division's external customers were from
sale of rubber and other industrial products.

For the years ended December 31, 1999, 1998 and 1997, the Company had a customer
which represented 16%, 15% and 14% of the Company's net sales, respectively.
This customer represented 28%, 25% and 23% of the flooring segment's net sales,
respectively. For 1999, 1998 and 1997, the Company had another customer which
represented 12%, 13% and 11% of the Company's net sales, respectively. This
customer represented 21%, 22% and 19% of the flooring segment's net sales,
respectively.


                                       56
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


15.  Industry Segments (continued)

<TABLE>
<CAPTION>
                                                                           Year ended December 31
                                                               1999                  1998                 1997
                                                          ------------------------------------------------------
                                                                                  (In thousands)
<S>                                                           <C>                  <C>                  <C>
Interest revenue
    Flooring products                                         $  1,836             $  1,607             $  1,539
    Tape products                                                   18                   22                   15
    Jewelry                                                         40                   61                   --
    Canadian division                                              135                  163                   87
                                                          ------------------------------------------------------
Total segment interest revenue                                   2,029                1,853                1,641

Reconciling items
    Corporate office interest revenue                               76                   37                   23
    Intersegment interest  revenue                                 (65)                (100)                 (38)
                                                          ------------------------------------------------------
                                                              $  2,040             $  1,790             $  1,626
Total consolidated interest revenue
                                                          ======================================================

Interest expense
    Flooring products                                         $  7,938             $  7,365             $  6,797
    Tape products                                                  143                   74                   --
    Jewelry                                                      1,044                1,312                1,654
    Canadian division                                               --                    1                    4
                                                          ------------------------------------------------------
Total segment interest expense                                   9,125                8,752                8,455

Reconciling items
    Corporate office interest expense                              460                  391                  927
    Intersegment interest expense                                  (65)                (100)                 (38)
                                                          ------------------------------------------------------
Total consolidated interest expense                           $  9,520             $  8,752             $  8,455
                                                          ======================================================

Depreciation and amortization expense
    Flooring products                                         $ 11,038             $ 10,741             $ 10,346
    Tape products                                                2,230                1,979                1,831
    Jewelry                                                        695                  239                  237
    Canadian division                                            1,562                1,494                1,395
                                                          ------------------------------------------------------
Total segment depreciation and amortization                     15,525               14,453               13,809

Reconciling items
    Corporate office depreciation and amortization                 706                  675                  692
                                                          ------------------------------------------------------
Total consolidated depreciation and amortization              $ 16,231             $ 15,128             $ 14,501
                                                          ======================================================
</TABLE>


                                       57
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


15.  Industry Segments (continued)

<TABLE>
<CAPTION>
                                                                                        Year ended December 31
                                                                            1999                  1998                 1997
                                                                       ------------------------------------------------------
                                                                                              (In thousands)
<S>                                                                        <C>                  <C>                  <C>
Segment profit
    Flooring products                                                      $  7,648             $ 15,516             $ 11,055
    Tape products                                                             6,304                3,797                4,512
    Jewelry                                                                   3,585                2,657                2,731
    Canadian division                                                         3,826                3,095                2,879
                                                                       ------------------------------------------------------
Total segment profit                                                         21,363               25,065               21,177

Reconciling items
    Corporate office loss                                                    (1,184)                  (4)              (1,940)
    Intercompany (loss) profit                                                  (63)                 (59)                  58
                                                                       ------------------------------------------------------
Total consolidated earnings before income taxes and other items            $ 20,116             $ 25,002             $ 19,295
                                                                       ======================================================
</TABLE>

Segment profit or loss is before income tax expense or benefit and extraordinary
items. In 1998, the flooring segment recorded a loss on early retirement of
debt, net of income tax benefit, of$2,413,000. The extraordinary loss is not
included in the segment profit disclosed above.

<TABLE>
<CAPTION>
                                                                                               December 31
                                                                             1999                  1998                  1997
                                                                       --------------------------------------------------------
                                                                                              (In thousands)
<S>                                                                       <C>                   <C>                   <C>
Segment assets
    Flooring products                                                     $ 231,817             $ 231,865             $ 196,581
    Tape products                                                            49,876                48,308                47,728
    Jewelry                                                                  15,737                16,298                18,074
    Canadian division                                                        27,146                20,710                20,179
                                                                       --------------------------------------------------------
Total segment assets                                                        324,576               317,181               282,562

Reconciling items
    Corporate office assets                                                  26,702                29,446                32,606
    Intersegment accounts receivable                                         (7,003)              (10,436)              (15,389)
    Intersegment profit in inventory                                           (215)                 (152)                  (93)
                                                                       --------------------------------------------------------
Total consolidated assets                                                 $ 344,060             $ 336,039             $ 299,686
                                                                       ========================================================
</TABLE>


                                       58
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


15.  Industry Segments (continued)


<TABLE>
<CAPTION>
                                                                                         Year ended December 31
                                                                                1999                1998                1997
                                                                          -----------------------------------------------------
                                                                                               (In thousands)
<S>                                                                            <C>                 <C>                 <C>
Expenditures for additions to long-lived assets
    Flooring products                                                          $ 18,670            $  9,440            $ 19,767
    Tape products                                                                 2,557               4,396               1,249
    Jewelry                                                                       1,971                 613                 112
    Canadian division                                                             3,735               2,693               1,038
                                                                          -----------------------------------------------------
Total expenditures for additions to long-lived assets                            26,933              17,142              22,166

Reconciling items
    Corporate office expenditure for additions to long-lived assets                  38                  13                  17
                                                                          -----------------------------------------------------
Total expenditures for additions to long-lived assets                          $ 26,971            $ 17,155            $ 22,183
                                                                          =====================================================
</TABLE>

Geographic Area Information

<TABLE>
<CAPTION>
                                                                                         Year ended December 31
                                                                                1999                1998                1997
                                                                          -----------------------------------------------------
                                                                                               (In thousands)
<S>                                                                            <C>                 <C>                 <C>
Revenues from external customers
   United States                                                               $355,174            $363,742            $353,325
   Canada                                                                        36,619              31,314              35,667
   Europe                                                                        15,203              16,225              16,000
   Asia                                                                           6,818               7,397               8,676
   Other                                                                          8,645               5,201               3,844
                                                                          -----------------------------------------------------
Total revenues from external customers                                         $422,459            $423,879            $417,512
                                                                          =====================================================
</TABLE>

Revenues are attributed to countries based on the location of customers.


                                       59
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


15.  Industry Segments (continued)

<TABLE>
<CAPTION>
                                                   Year ended December 31
                                       1999                1998                1997
                                -----------------------------------------------------
                                                      (In thousands)
<S>                                  <C>                 <C>                 <C>
Long-lived assets by area
   United States                     $157,670            $150,079            $147,707
   Canada                              11,033               8,284               7,549
   Europe                               1,104               1,275                 622
   Asia                                 2,501               2,561                 170
                                -----------------------------------------------------
Total long-lived assets              $172,308            $162,199            $156,048
                                =====================================================
</TABLE>


During 1998, the Company acquired buildings in Belgium and Singapore (see Note
6).


                                       60
<PAGE>

                     American Biltrite Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


16.  Quarterly Financial Information (Unaudited)

<TABLE>
<CAPTION>
                                    First               Second             Third            Fourth
                                   Quarter              Quarter           Quarter           Quarter
                                 ------------------------------------------------------------------------
                                           (In thousands of dollars, except per share amounts)
<S>                                <C>                 <C>                 <C>                 <C>
1999
----
   Net sales                       $106,987            $104,002            $106,950            $104,520
   Gross profit                      32,437              32,262              34,115              32,705
   Net earnings                       1,458               1,332               2,837               4,106

   Net earnings per share:
       Basic                            .40                 .37                 .79                1.15
       Diluted                          .39                 .36                 .78                1.14

1998
----
   Net sales                       $106,388            $108,501            $110,681            $ 98,309
   Gross profit                      31,578              34,354              35,401              32,039
   Net earnings                       1,325               2,101               1,821               3,755

   Net earnings per share:
       Basic                            .36                 .58                 .50                1.03
       Diluted                          .35                 .55                 .48                1.00
</TABLE>


In the third quarter of 1998, ABI recorded an extraordinary loss in the amount
of $1,174,000 to recognize its share of Congoleum's loss on early retirement of
debt, net of income tax benefit. Basic and diluted earnings per share before
extraordinary item for the third quarter ended October 3, 1998 were $.82 and
$.79, respectively.



                                       61
<PAGE>

                     American Biltrite Inc. and Subsidiaries

                 Schedule II--Valuation and Qualifying Accounts

                   Year ended December 31, 1999, 1998 and 1997

(Dollars in thousands)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                  COL. A                         COL. B         COL. C         COL. D      COL. E     COL. F       COL. G
------------------------------------------------------------------------------------------------------------------------------
                                                                             Additions
                                                              -----------------------------------
                                                                             Charged to
                                                Balance at     Charged to       Other
                                               Beginning of    Costs and      Accounts--            Deductions--    Balance at
                Description                       Period      and Expenses     Describe     Other    Describe     End of Period
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>                               <C>           <C>

1999
----

   Allowances for doubtful accounts and
     cash discounts                                 $5,124        $ 2,904                           $ 2,485 (A)   $5,543
                                            ===================================================================================

   Reserve for returns and markdowns                $2,840        $12,820                           $12,142 (A)   $3,518
                                            ===================================================================================

1998
----

   Allowances for doubtful accounts and
     cash discounts                                 $5,052        $ 2,411                           $ 2,339 (A)   $5,124
                                            ===================================================================================

   Reserve for returns and markdowns                $3,141        $12,318                           $12,619 (A)   $2,840
                                            ===================================================================================

1997
----

   Allowances for doubtful accounts and
     cash discounts                                 $4,935        $ 2,433                           $ 2,316 (A)   $5,052
                                            ===================================================================================

   Reserve for returns and markdowns                $3,880        $10,588                           $11,327 (A)   $3,141
                                            ===================================================================================
</TABLE>

(A) Represents accounts charged off during the year, net of recoveries


                                       62
<PAGE>

     Pursuant to the requirement 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,

                                        AMERICAN BILTRITE INC.

                                             (Registrant)


Date:    March  8, 2000             by: /s/ Gilbert K. Gailius
      --------------------              -------------------------
                                        Gilbert K. Gailius, Vice President
                                        and Director

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


Date:    March  8, 2000                 by: /s/ Roger S. Marcus
      --------------------                  ----------------------
                                            Roger S. Marcus, Chairman of the
                                            Board, Chief Executive Officer
                                            and Director


Date:    March  8, 2000                 by: /s/ Richard G. Marcus
      --------------------                  -----------------------
                                            Richard G. Marcus, President, Chief
                                            Operating Officer and Director



Date:    March  8, 2000                 by: /s/ William M. Marcus
      --------------------                  -----------------------
                                            William M. Marcus, Executive Vice
                                            President, Treasurer, Chairman of
                                            the Executive Committee and Director


Date:    March  8, 2000                 by: /s/ John C. Garrels, 3rd
      --------------------                  --------------------------
                                            John C. Garrels, 3rd, Director


Date:    March  8, 2000                 by: /s/ Kenneth I. Watchmaker
      --------------------                  --------------------------
                                            Kenneth I. Watchmaker, Director


Date:    March  8, 2000                 by: /s/ Edward J. Lapointe
      --------------------                  ------------------------------------
                                            Edward J. Lapointe, Controller


Date:    March  8, 2000                 by: /s/ Howard N. Feist III
      --------------------                  -----------------------
                                            Howard N. Feist III, Vice President
                                            Finance and Chief Financial Officer


                                       63
<PAGE>

INDEX OF EXHIBITS


<TABLE>
<CAPTION>
Exhibit No.                      Description                                    Page No.
----------                       -----------                                    --------

<S>               <C>                                                              <C>
3 (1)   X         Restated Certificate of Incorporation                            -

                  By-Laws, amended and restated as of
3 (2)   IV        March 13, 1991                                                   -

10 (3)  I, V      1985 Stock Option Plan ("the 1985 Plan")                         -

10 (4)  II, V     Form of Agreement pursuant to the 1985                           -
                  Plan providing for ISO's

10 (5)  III, V    Form of Agreement pursuant to the 1985                           -
                  Plan providing for NQSO's

10 (6)  VI        Joint Venture Agreement dated as of December 16,
                  1992 by and among American Biltrite Inc., Resilient
                  Holdings Incorporated, Congoleum Corporation,
                  Hillside Industries Incorporated and Hillside
                  Capital Corporation                                              -

10 (7)  VII       Closing Agreement dated as of March 11, 1993 by and
                  among American Biltrite Inc., Resilient Holdings
                  Incorporated, Congoleum Corporation, Hillside
                  Industries Incorporated and Hillside Capital
                  Corporation                                                      -

10 (8)  XII, V    1993 Stock Award and Incentive Plan as Amended and
                  Restated as of March 4, 1997                                     -

10 (9)  IX        K&M Associates L.P. Amended and Restated Agreement
                  of Limited Partnership                                           -

10 (10) VIII      Purchase Agreement dated as of March
                  31, 1995 by and among Ocean State and
                  certain limited partners
                  of K&M                                                           -
</TABLE>


                                       64
<PAGE>

<TABLE>
<CAPTION>
Exhibit No.                      Description                                    Page No.
----------                       -----------                                    --------

<S>               <C>                                                              <C>
10 (11) VIII      Agreement and Plan of Merger dated as of April 1,                -
                  1995 by and among the Company, Jewelco Acquisition
                  Co., Inc., AIMPAR, Inc., Arthur I. Maier, Bruce
                  Maier and Edythe J. Wagner

10 (12) VIII      Option Agreement dated as of April 1,                            -
                  1995 by and among Ocean State and
                  certain limited partners of
                  K&M

10 (13) VIII      Agreement and Plan of Merger dated as of May 3,                  -
                  1995 by and among the Company, Zirconia Acquisition
                  Co., Inc., Wilbur A. Cowett Incorporated and Wilbur
                  A. Cowett

10 (14) X, V      Split-Dollar Agreement dated as of December 20,                  -
                  1996 by and between American Biltrite Inc. and
                  Michael J. Glazerman, Trustee of the Marcus Family
                  Insurance Trust u/t/d/ March 1, 1990

10 (15) X, V      Split-Dollar Agreement dated as of December 20,                  -
                  1996 by and between American Biltrite Inc. and the
                  Marcus Family 1990 Insurance Trust

10 (16) X, V      Split-Dollar Agreement dated as of December 20                   -,
                  1996 by and between American Biltrite Inc. and the
                  Marcus Family 1996 Irrevocable Insurance Trust
                  Dated October 28, 1996

10 (17) X, V      Split-Dollar Agreement dated as of December 20,                  -
                  1996 by and between American Biltrite Inc. and The
                  Richard G. Marcus Irrevocable Insurance Trust of
                  1990 Dated June 1, 1990

10 (18) X, V      Split-Dollar Agreement dated as of December 20,                  -
                  1996 by and between American Biltrite Inc. and the
                  Roger S. Marcus Irrevocable Insurance Trust Dated
                  November 29, 1996, Richard G. Marcus, Trustee
</TABLE>


                                       65
<PAGE>

<TABLE>
<CAPTION>
Exhibit No.                      Description                                    Page No.
----------                       -----------                                    --------

<S>               <C>                                                              <C>
10 (19) X, V      Split-Dollar Agreement dated as of December 20,
                  1996 by and between American Biltrite Inc. and the
                  Roger S. Marcus Irrevocable Insurance Trust Dated
                  November 29, 1996                                                -

10 (20) X, V      Split-Dollar Agreement dated as of January 9, 1997               -
                  by and between American Biltrite Inc. and Joseph D.
                  Burns                                                            -

10 (21) X, V      Description of Supplemental Retirement Benefits for
                  Gilbert K. Gailius

10 (22) XIII, V   American Biltrite Deferred Compensation                          -

10 (23) XIII      American Biltrite 1999 Stock Option Plan for
                  Non-Employee Directors                                           -

10 (24) V         Description of Employment Arrangement for Gilbert               68
                  K. Gailius,

11      XI        Statement Re:   Computation of Per Share Earnings                -

21                Subsidiaries of the Registrant (including each                 69-70
                  subsidiary's jurisdiction of incorporation and the
                  name under which each subsidiary does business)

23 (1)            Consent of Ernst & Young LLP, Independent Auditors              71

27                Financial Data Schedule, filed herewith                          -
</TABLE>


                                       66
<PAGE>

-------------------------
   I   Incorporated by reference to exhibit 10 (2) to the Company's Annual
       Report on Form 10-K for the I year ended December 31, 1986. (1-4773)

  II   Incorporated by reference to exhibit 10 (3) to the Company's Annual
       Report on Form 10-K for the II year ended December 31, 1986. (1-4773)

 III   Incorporated by reference to exhibit 10 (4) to the Company's Annual
       Report on Form 10-K for the III year ended December 31, 1986. (1-4773)

  IV   Incorporated by reference to the exhibits to the Company's Annual Report
       on Form 10-K for the IV year ended December 31, 1991. (1-4773)

   V   Compensatory plans required to be filed as exhibits pursuant to Item
       14(c) of Form 10-K.

  VI   Incorporated by reference to the exhibits filed with the Company's
       Current Report on Form 8-K VI filed December 21, 1992. (1-4773)

 VII   Incorporated by reference to the exhibits filed with the Company's
       Current Report on Form 8-K VII filed March 25, 1993. (1-4773)

VIII   Incorporated by reference to the exhibits to the Company's Current Report
       on Form 8-K as amended VIII by the Form 8-K/A filed respectively on May
       17, 1995 and July 17, 1995.

  IX   Incorporated by reference to Item 14 of the Company's Annual Report on
       Form 10-K for the year IX ended December 31, 1995.

   X   Incorporated by reference to the exhibits to the Company's Annual Report
       on Form 10-K for the X year ended December 31, 1996.

  XI   Incorporated by reference to Note 13 of the Company's consolidated
       financial statements (filed XI herewith).

 XII   Incorporated by reference to the exhibits to the Company's Quarterly
       Report on Form 10-Q filed XII on June 28, 1997.

XIII   Incorporated by reference to the exhibits to the Company's Quarterly
       Report on Form 10-Q filed XIII on July 3, 1999


                                       67