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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K
(Mark One)

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

                                       OR

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

For the year ended December 31, 1996                 Commission File No. 0-12361

                        Richton International Corporation
             (Exact name of registrant as specified in its charter)

                Delaware                                       05-012205
    (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                        Identification No.)

  340 Main Street, Madison, New Jersey                            07940
(Address of principal executive offices)                        (Zip Code)

Issuer's telephone number ......................................  (201) 966-0104

   Securities registered under            Name of Exchange on which Registered:
Section 12(b) of the Exchange Act:

  Common Stock, par value $.10                    American Stock Exchange

         Securities registered under Section 12(g) of the Exchange Act:

            Series A Preferred Stock, par value $1.00. Purchase Right

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports,  and  (2)  has  been  subject  to such  filing
requirements  for  the  past  90  dates.     Yes [X]   No [ ]  

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

State the aggregate  market value of the voting stock held by  nonaffiliates  of
the Registrant.

         Aggregate market value at March 1, 1997 amounted to $8,100,000

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of the latest practicable date.

         Common Stock, par value $.10, 2,949,447 shares at March 1, 1997

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the annual  shareholders report for the year ended December 31, 1996
are incorporated by reference into I and II. 

Portions of the proxy statement for the annual  shareholders  meeting to be held
April 28, 1997 are incorporated by reference into Part III.

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<PAGE>

                                     PART I

Item 1. Business

     Richton  International  Corporation  (the  "Company"  or  "Richton")  is  a
diversified  service  company with two operating  subsidiaries,  Century  Supply
Corp.  ("Century")  and CBE  Technologies,  Inc.  ("CBE").  Richton was formerly
engaged,  until 1992, in the  manufacture and marketing of fashion  jewelry.  In
November 1992 the Company sold its principal operating  subsidiary,  Coro Canada
Inc.  Subsequently,  Richton  pursued a new direction  with the  acquisition  of
Century on October 27, 1993.

     CBE was  acquired  in  March  1995 by  issuance  of $5.0  million  in notes
including  $3.0  million in senior  debt to a Michigan  Bank and  assumption  of
certain liabilities.

     Century  is a  leading  full-service  wholesale  distributor  of  sprinkler
irrigation   systems,   outdoor  lighting  and  decorative  fountain  equipment.
Headquarted  in Michigan  Heights,  Michigan it has branches in 16 States in the
Eastern  half of the country  and  Ontario,  Canada.  Irrigation  products  have
historically been sold by manufacturers primarily through wholesale distributors
and Century is the leading distributor of irrigation equipment in the geographic
areas it serves.  Century is  currently a  distributor  for three of the leading
original  equipment  manufacturers  (OEM) of turf  irrigation  equipment  in the
United States.

     In January 1997, Century entered into a cooperative  marketing  arrangement
with  Shemin  Nurseries,  Inc. a major  wholesale  distributor  of  nursery  and
landscape materials and related products.  Initially,  Century will open outlets
in eight of the fourteen  Shemin  locations.  These fully  stocked  outlets will
provide  Century with increased  market  penetration by providing under a single
roof all the supplies and services required by nursery, landscape and irrigation
contractors. Shemin Nurseries, Inc. is headquartered in Danbury, Connecticut.

     Century's  primary  customers are irrigation and landscape  contractors who
install irrigation systems for commercial,  residential and golf course watering
systems.  Approximately  93% of revenues are derived from  irrigation  products,
with the remaining 7% from lighting and fountains.  Century represents more than
60  suppliers  and  provides  a complete  product  line to  approximately  6,500
customers through 54 branches.

     Century is organized  into three  regions,  each with a regional  team that
manages  branches  within  a  specific  geographic  area.  Purchasing,  accounts
receivable,  accounting and cash  management are  centralized  functions.  Close
control is maintained over receivables,  inventory and other key factors through
a centralized order entry management information system. All branches are linked
to the on-line system,  and substantially all of Century's business is conducted
in a real time order entry environment.

     Century  assets  constitute  a  material  portion  of  Richton's  business.
Although  Century  has a history of  operating  profitability,  its  business is
impacted by both the economic and climatic  conditions in the  geographic  areas
where its branches are located.  Since irrigation and landscape  contractors are
Century's  primary  customers,  business is best when commercial and residential
construction is strong and general economic  conditions and consumer  confidence
are favorable.  Weather is also a significant  noncontrollable element affecting
Century's  business.  Business is better during warm dry periods,  especially in
spring months and when general construction is strong. Climatic factors that can
adversely affect Century principally relate to above-average rainfall during the
primary selling season or other unusual  weather-related  conditions.  Century's
geographic  diversity makes it much less susceptible to weather than many of its
competitors who operate in a more limited geographic area. Century has mitigated
some of the impact of both  economic  and  climatic  conditions  by  pursuing an
aggressive growth program. By opening or acquiring branches (see Competition) in
new areas and continuing to grow its business in existing  markets,  Century has
created both geographic  diversity and consistent  growth.  Even so, seasonality
causes a significant disparity in quarterly sales and results.

     CBE Technologies,  Inc. ("CBE") headquartered in Boston, Massachusetts with
satellite  offices in New York,  Los  Angeles and  Portland,  Maine is a Systems
Integrator  providing network  consulting,  design,  and  installation;  network
management and related support;  technical services  outsourcing;  comprehensive
hardware maintenance; and equipment sales.

     CBE's technical certifications include; Novell Platinum reseller, Microsoft
Channel partner,  Banyan Enterprise Network dealer,  Novell authorized  Training
Center, as well as a Novell Authorized Service Center.



                                       1
<PAGE>

     Physical   resources  include  a  fully  integrated   network  lab  with  a
functioning model of most computer  operating  systems; a network management lab
to support remote management; training labs at both Boston and Portland sites to
support in-house training programs.

     CBE is also a  authorized  service  and  warranty  center  for  most of the
leading PC manufacturers including IBM, Conpaq, Hewlett Packard, Apple, AST, and
service most every other make of PC and printer. The field staff is supported by
a fully  automated  call  control  and  dispatch  center;  a parts depot with an
extensive inventory; and a complete diagnostic/repair lab for PC's, printers and
monitors.

     CBE's  business is impacted by  technological  changes both in software and
hardware.  There can be no  assurance  that CBE can (a) continue to maintain the
highly qualified and experienced  technicians and engineers,  and (b) that those
technicians continue to remain technically proficient in an environment in which
technology changes occur regularly.

Suppliers

     Century  maintains a broad base of  suppliers  that  enables the Company to
offer a wide range of irrigation equipment. Products are obtained from more than
60 suppliers  with no one supplier  comprising  more than 30% of average  annual
purchases.  Century has master  distrubutor  agreements in place with Rain Bird,
Hunter,  Hardie,  and Legacy as well as with other OEM suppliers  that authorize
Century as a distributor of their products for specific  geographic areas. These
agreements  are  renewable  annually,  and  there  is no  assurance  that  these
agreements will be renewed.  Therefore,  Century's business is subject to change
in these distribution agreements with manufacturers or in manufacturers pursuing
alternate channels of distribution.  However, Century maintains excellent vendor
relations   with  these   suppliers  and   management   believes  the  wholesale
distribution  channel will continue to be the dominant  professional channel for
the irrigation industry.

     CBE acquires its products  from OEM  suppliers as well as  wholesalers  and
distributors,  such as Tech Data  Corporation,  Ingrim  Micro,  and Gates  Arrow
Electronics  which  accounts  for  approximately  17%,  12%  and  10%  of  CBE's
purchases, respectively.

Competition

     Historically,  irrigation  distribution,  like the  wholesale  distribution
industry  in  general,  has been  fragmented  with many  small  distributorships
serving  specific  geographic  markets.   However,  the  more  recent  trend  in
distribution has been one of consolidation,  where larger wholesaler chains have
been created as a result of mergers,  acquisitions and distributors  moving into
new territories to expand market share and achieve economy of scale.  Within the
irrigation   industry,   Century   has  been  a  leader  in  the  trend   toward
consolidation.

     During the period of Richton ownership,  Century has grown from 29 branches
and $43 million in sales for 1993 to the current 54 branches, and $74 million in
sales for 1996. Since Century has a sophisticated computer system supporting its
branch  operations  and most of its  administrative  functions are  centralized,
Century has been able to achieve  significant  economies of scale as a result of
consolidation and growth.

     This growth has resulted in Century facing different  competitors in almost
every  market it serves.  Century  competes  with these  other  distributors  by
providing local warehousing linked to a centralized computer system that enables
Century customers to get product when they need it, and by providing value-added
services, such as design assistance,  training seminars,  incentive programs and
sales leads to its  customers.  Century also  competes  against  large  discount
stores and plumbing supply companies that sell irrigation  products,  but who do
not  provide  the range of  services  that  Century  offers.  While  some of its
competitors  in  specific  markets  are larger  than the  corresponding  Century
operations, none are larger when only the irrigation business is considered.

     CBE competes in maintenance  service with many  companies,  both larger and
smaller than CBE. Larger companies generally are OEM suppliers that also provide
network  installation  and  maintenance  services  and offer a  broader  line of
product and service than CBE.

Employee Relations

     At December 31, 1996,  the Company  employed  approximately  370  full-time
employees.  None of these  employees  are  covered  by a  collective  bargaining
agreement.



                                       2
<PAGE>

     The  Company  considers  its  people to be one of its  greatest  assets and
provides  training courses on sales,  product features and benefits,  management
skills,  and  communication.  This has created an effective,  knowledgeable  and
self-motivated work force with a strong focus on customer service.

Working Capital

     Century's  business is seasonal due principally to the fact that irrigation
systems are normally  installed  during warm weather and a majority of Century's
branches  are located in the  northern  half of the United  States.  As a result
Century's  monthly and quarterly  sales,  operating  results and working capital
requirements fluctuate significantly.  Century relies on short-term borrowing to
finance its working capital needs.  During the first quarter  Century's  working
capital requirements are at minimum, with short-term  borrowings,  historically,
approximately $6.0 million.  Beginning in April needs expand. By July short-term
borrowings  have increased to  approximately  $14 million.  During the remaining
months receivables are liquidated,  releasing  substantial  amounts of cash that
may be used to reduce short-term borrowing. (See Note 6 of Notes to Consolidated
Financial Statements for a description of the Company's credit line.)

Business Acquisitions

     On March  29,  1995 the  Company,  through  its  wholly  owned  subsidiary,
Century,  acquired all the  operating  assets and business of CBE  Technologies,
Inc. for $5.0 million plus assumption of certain  liabilities which was financed
by bank borrowings of $3.0 million, a $1.0 million unsecured  promissory note to
the former  owners and a $1.0 million note to the Chairman of Richton.  The note
to the  Chairman  was subject to a fairness  opinion of an  independent  advisor
chosen by Richton's Board of Directors.  The note to the former owners, which is
guaranteed by both Century and Richton, is to be paid over the next four years.

     During  1996 each of the  Company's  two  operating  subsidiaries  acquired
businesses.  Century acquired five branch  operations for $1.8 million including
inventories and accounts receivables that generated approximately $10 million in
sales in 1996. CBE acquired three  operations in Maine, New York and Los Angeles
for $.3 million that contributed approximately $3.3 million in sales in 1996.

Liquidity

     The Company's financial condition continues to improve. The net worth as of
December 31, 1996 has  increased to $7.0 million.  Tangible net worth,  which at
the end of 1995 was nil has  increased to nearly $3.0 million as of December 31,
1996.  At  December  31,  1996,  the  Company's  long-term  debt was nearly $9.0
million,  including $5.2 million of senior secured debt owed to a Michigan bank.
Of the  balance  of the  outstanding  debt,  $1.8  million  is  owed  to Fred R.
Sullivan,  Chairman and Chief Executive Officer of Richton.  Notes issued to Mr.
Sullivan were subject to a fairness  opinion  issued by an  independent  advisor
chosen by  Richton's  Board of  Directors.  The bank debt carries with it a loan
covenant  that  restricts  upstreaming  of funds to  Richton  from  Century  and
precludes distribution of funds to shareholders.

     The   operating   cash  flow  of  the   Company--before   working   capital
requirements--improved  to $4.44 million as compared to $3.88 million last year.
These funds were used to retire  nearly $1.9  million of term and  subordindated
debt which came due during the year,  fund a portion of the  increase in working
capital not provided by the line of credit  financing,  and  partially  fund the
acquistions noted above.

     At December 31, 1996 working capital  increased nearly $2.6 million to $5.6
million  from $3.0  million last year.  Acquisitions  accounted  for nearly $1.0
million of this increase and the balance came from  operations  driven by higher
sales.

     Though the Company has continued to generate  sufficient  cash to liquidate
its term and suborinated debt as it becomes due, and make acquisitions necessary
for it's growth, there is no assurance,  given the high degree of leverage,  the
seasonality of its principal  business,  and the decreasing  availability of the
deferred tax  benefit--currently  at $2.8 million--that it can continue to do so
in the future.


                                       3
<PAGE>

ITEM 2. Properties

     Richton's executive offices at 340 Main St. Madison, New Jersey, are leased
on a month-to-month  basis.  Century's principal offices are in Madison Heights,
Michigan,  under a lease that  expires in October  2000.  Century  owns a 15,000
square foot facility in Sarasota, Florida. In addition, Century leases warehouse
and sales space in its other  branches.  The  aggregate  of such leased space is
approximately  226,000 square feet.  Expiration dates extend to July 2006. Eight
of these  facilities  are leased from the former owner of Century  under a lease
agreement  which  approximates  current  market  value.  These leases  expire in
October,  2000.  One facility is leased from a  partnership  which  includes the
President  of Century.  The lease,  which is currently on a month to month basis
approximates  current market value. In addition,  during 1996 Century acquired a
10,000 square foot facility in Sarasota, Florida which it had previously leased.
CBE's principal offices are located in Boston. Mass. This office is leased under
an agreement which expires in June, 1998. CBE leases approximately 10,000 square
feet of additional  office space at its other  locations.  Richton believes that
its properties are adequately equipped, maintained and suited to the purpose for
which they are used.


ITEM 3. Legal Proceedings

     None.


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

     No matter was  submitted  to a vote of security  holders  during the fourth
quarter of fiscal 1996.

                      EXECUTIVE OFFICERS OF THE REGISTRANT

     For the information about the executive  officers of Richton required to be
included  in this Part I, see  "Executive  Officers of  Registrant"  in Part III
below, which is incorporated into Part I by reference.




                                       4
<PAGE>

                                     PART II

ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters

     (a) Market information:

     The Company's  Common Stock trades on the American Stock Exchange under the
symbol "RHT".  The following  table sets forth the high and low sales prices for
the Common Stock.  The  quotations  shown are as reported by the American  Stock
Exchange.

                                           1996                     1995
                                    ------------------        ----------------
           Calendar Quarter           High      Low            High       Low
            ---------------         -------   --------        --------  ------
     First .....................    $3 7/16   $3 1/8          $3 3/4    $2 3/8
     Second ....................     4 7/16    3 7/16          3 3/8     2 5/8
     Third .....................     4 3/16    3 13/16         4 1/8     3
     Fourth ....................     4 7/16    4 3/8           3 11/16   3 1/16


     (b) Approximate Number of Equity Stockholders:

                                                 Approximate Number
                                                  of Record Holders
                  Title of Class                at February 28, 1997
                    -----------                  ------------------
           Common Stock, $ .10 par value                 612
                                           
     (c) Dividends:

     No cash dividends were paid by the Company in 1996, 1995.


ITEM 6. Selected Financial Data

                              SUMMARY OF OPERATIONS
            (In thousands, except percentages and per share amounts)

<TABLE>
<CAPTION>
                                                    December 31                    
                                  --------------------------------------------       April
                                    1996        1995        1994        1993         1993
                                  --------    --------    --------    --------     --------
<S>                               <C>         <C>         <C>         <C>                
Net Sales .....................   $ 87,750    $ 66,659    $ 50,306    $ 11,080         --
Gross Profit percentage .......         28%         28%         28%         27%        --
Operating Profit ..............      3,832       3,466       2,702        (847)        --
Interest expense. net .........      1,216       1,092         817          21     $     55
Income (loss) from operations .      1,766       1,365       1,004        (573)      (1,001)
Income (loss) from Discontinued
   Operations .................       --          --          --          (426)         164
Net Income ( loss) ............      1,766       1,365       1,004        (999)        (837)
Net Income (loss) per share ...   $   0.54    $   0.43    $   0.34    $  (0.37)    $  (0.32)
</TABLE>

                               FINANCIAL POSITION
                          (In thousands, except ratios)

                                          December 31                
                           ------------------------------------------     April
                              1996       1995       1994       1993       1993
                           ---------  ---------  ---------  ---------  ---------
Total Assets ............     32,374     26,114     15,801     15,849      3,096
Long-term Debt ..........      6,986      7,150      3,834      6,621       --
Working Capital .........      5,620      3,029      2,341      2,537      2,682
Current ratio ...........  1.31 to 1  1.22 to 1  1.28 to 1  1.32 to 1  6.66 to 1

Notes to Selected Financial Data:
Note a -- The Registrant acquired CBE effective March 29, 1995
Note b -- The Registrant acquired Century effective August 31, 1993
Note c -- The Registrant  was a shell company with no operating  units from May,
1992 until August, 1993


                                       5
<PAGE>

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

     The  following  information  should  be read  along  with the  Consolidated
Financial Statements and Notes to Consolidated  Financial Statements on page F-6
through F-14.

RESULTS OF OPERATIONS

1996 Compared with 1995

     Sales for the year ended December 31, 1996 were $87.8 million,  an increase
of $21.1  million  over the 1995 amount of $66.7  million.  Century  contributed
nearly $17 million of this increase due largely to favorable weather  conditions
in most of it's  market  areas  and to  geographical  expansion.  A  significant
portion of this  expansion  has occurred in the Eastern half of the Country from
North Carolina to New Jersey.  Presently,  Century has 54 branches.  As has been
noted  earlier,  CBE's  sales  reflects  a full year for 1996.  It was  acquired
effective  March 30,  1995.  CBE's  sales in 1996,  on a full year  basis,  have
increased more than 20% over 1995 levels  principally  due to expansion  through
the  acquisition  of two  businesses  in  Maine  and  another  in  Los  Angeles,
California.

     Gross  profit for the year ended  December  31,  1996 was $24.8  million an
increase  of $6.2  million or  approximately  33% over the 1995  amount of $18.6
million.  This increase is due primarily to the higher sales noted above.  While
CBE continued to  experience  declining  typewriter  maintenance  revenues,  its
overall gross profit percentage was about the same as the prior year.

     Selling,  general and  administration  expenses for the year ended December
31, 1996 increased $5.8 million or 38.4% to $20.9 million from $15.1 million for
the year ended  December  31,  1995.  The  geographical  expansion  noted  above
accounted for nearly $4.2 million of this increase. The balance of this increase
relates to CBE's costs  associated  with  acquiring and expanding into three new
market  areas  during  1996 and to higher  goodwill  amortization  charges--$.56
million--principally   associated  with  the  typewriter  contract   maintenance
business.

     Interest  expense,  net for the year ended  December 31, 1996 increased $.1
million  or 10% over the year  earlier  period to $1.2  million.  This  increase
reflects  the higher  term debt and higher line of credit  facility  incurred in
acquiring the various  businesses noted above and in carrying the higher working
capital, partially offset by a slightly lower borrowing rate.

     The  federal,  state and foreign  income tax  provision  for the year ended
December 31, 1996 was $.85  million,  a decrease of  approximately  $.16 million
from last  year.  The  lower  tax rate is  principally  due the  recognition  of
deferred  tax benefit  associated  with the goodwill  amortization  and to lower
state taxes.

     Net income for the year ended December 31, 1996 was $1.76 million,  or $.54
per share.  This compares with $1.36 million or $.43 per share  reported for the
year ended December 31, 1995. The higher net income is due principally to higher
sales.

1995 Compared with 1994

     Sales for the year ended December 31, 1995 were $66.7 million,  an increase
of $16.4 million over the 1994 amount of $50.3 million.  The  acquisition of CBE
in March  contributed  $7.7  million of the  increase  (See  Acquisitions).  The
balance  of the  increase  was  principally  due to  acquisitions  by Century of
additional  branches in Georgia and  Virginia and to  increased  penetration  of
existing markets.  The markets served by Century had generally favorable weather
conditions  throughout the selling season. The CBE results reflect approximately
10% improvement  over that  experienced by its predecessor  company in 1994. The
increase  was  driven by higher  sales of  computer  maintenance  contracts  and
network  installations,  offset by a decline in typewriter  maintenance contract
revenues.

     Gross profit for the year ended December 31, 1995 increased $4.5 million to
$18.6 million,  31.6% over the 1994 amount of $14.1 million.  The sales increase
noted above contributed to all of the gross profit increase.  CBE's gross profit
percentage was below prior year results due principally to decline in typewriter
maintenance contracts,  which carry a high gross profit percentage.  Thus, while
sales and gross profit for CBE increased year to year,  gross profit  percentage
declined.  The Company expects this trend of declining  typewriter based revenue
to continue.



                                       6
<PAGE>

     Selling,  general and  administrative  expenses for the year ended December
31, 1995 increased $3.7 million to $15.1 million from $11.4 million reported for
the year ended December 31, 1994. The addition of CBE accounted for $2.6 million
of the increase.  Included in the administrative expenses for CBE for the period
ended December 31, 1995 was a $1.0 million charge attributable to the impairment
of goodwill . This charge relates to the typewriter  portion of CBE's  business,
which as noted,  above  experienced  a decline in sales below that reported last
year.  The balance of the  increase in selling  and  administrative  expenses is
principally due to the increase in the number of Century branches.

     Interest  expense for the year ended  December  31, 1995  increased to $1.1
from  $.8  million  in the  year  ended  December  31,  1994 . The  increase  is
principally  due to the  additional  $5.0 term debt for the  acquisition of CBE,
partially offset by lower borrowing for working capital.

     Federal and state income tax provision for the year ended December 31, 1995
was  approximately  $1.0 million,  an increase of approximately $.1 million over
the year ended  December 31,  1994.  The  effective  higher tax rate for 1994 is
principally  due to a $.15  million  non-recurring  charge  included in the 1994
amount relating to federal tax audit of Century's prior year tax returns.

     Net income for the year ended  December 31, 1995 was $1.365 million or $.43
per share.  This compares  with the $1.0 million or $.34 per share  reported for
the year ended December 31, 1994. The higher net income is due to higher sales.

Financial Condition

     The Company's financial condition continues to improve. The net worth as of
December 31, 1996 has  increased to $7.0 million.  Tangible net worth,  which at
the end of 1995 was nil has  increased to nearly $3.0 million as of December 31,
1996.  The  Company  still  has  $8.9  million  of term  and  subordinated  debt
outstanding at December 31, 1996.  This compares to $9.2 million  outstanding at
the end of last year.

     As was  noted  last  year,  the  Company  continues  to rely on  short-term
borrowings  to finance it's working  capital.  During the first  quarter of each
year Century's working capital  requirements are at a low point, with short-term
borrowings,  historically,  of $6.0 million.  During the second quarter  working
capital  requirements  begin  to  expand  and by July of each  year  the  amount
necessary to carrying the working capital  historically expands to approximately
$14.0  million.  From July through the  remainder of the year,  receivables  are
liquidated,  releasing  substantial  amounts  of cash that may be used to reduce
short-term debt. The operating cash flow of the Company--before  working capital
requirements--improved  to $4.44  million  from $3.88  million  last  year.  The
Company  was thus able to retire  nearly $1.9  million of term and  subordinated
debt which came due during the year.  This amount is  approximately  the same as
last year.

     At December  31, 1996  working  capital has  increased  approximately  $2.6
million to $5.6 million from $3.0 million last year.  Acquisitions accounted for
nearly $1.0 million of this increase and the balance came from operations driven
by higher sales financed in part by operating cash flow.

     During the second  quarter of 1996 the  Company  for the second  time in as
many years  renegotiated  its  revolving  credit  facility  and  long-term  debt
agreement with Michigan  National  Bank.  The revised  agreement (a) lowered the
rate of  interest  charged  on the line of credit to prime  less an eighth  from
prime,  (b) offered a lower rate of interest on the  Term-Debt and (c) converted
$1.4 million of line of credit  facility to  term-debt  without  increasing  the
quarterly  repayment  amount.  Century and CBE's  expansion into new markets was
financed by the increase in the term debt.

     Though the Company has continued to generate  sufficient  cash to liquidate
its  term  and  subordinated  debt as it  becomes  due,  and  make  acquisitions
necessary  for it's  growth,  there is no  assurance,  given the high  degree of
leverage,  the  seasonality  of  its  principal  business,  and  the  decreasing
availability of the deferred tax benefit--currently at $2.7 million--that it can
continue to do so in the future.


                                       7
<PAGE>

ITEM 8. Financial Statements

     The financial statements required by this Item, are set forth below:

                                                                         Page
                              Description                               Number
                              -----------                               ------
     Report of Independent Public Accountants .........................   F-1
     Consolidated Balance Sheets at December 31, 1996 and
        December 31, 1995 .............................................   F-2
     Consolidated Statements of Operations for the three years
        ended December 31, 1996 .......................................   F-3
     Consolidated Statements of Shareholders' Equity for the
        three years ended December 31, 1996 ...........................   F-4
     Consolidated Statements of Cash Flows for the three years
        ended December 31, 1996 .......................................   F-5
     Notes to Consolidated Financial Statements .......................   F-6

Richton International Corporation

     Quarterly analysis of sales,  operating margin, net income and earnings per
share

<TABLE>
<CAPTION>
                                                                       Net                  Equivalent
                                                         Pre-Tax      Income    Earnings      Shares
                      Sales      Gross $     Profit %    Profit       (Loss)    Per Share   Outstanding
                      -----      -------     --------    -------      ------    ---------   ----------
<S>                <C>          <C>            <C>     <C>           <C>          <C>        <C>      
1st Qtr.  1996     10,449,000   2,445,000      23.40   (1,373,000)   (872,000)    (0.27)     3,185,000
          1995      5,165,000   1,237,000      23.95   (1,256,000)   (794,000)    (0.28)     2,866,000
2nd Qtr.  1996     27,903,000   8,773,000      31.44    2,962,000   1,860,000      0.57      3,236,000
          1995     24,840,000   7,124,000      28.68    2,593,000   1,634,000      0.52      3,166,000
                                                                                           
3rd Qtr.  1996     32,660,000   9,714,000      29.74    1,829,000   1,107,000      0.34      3,247,000
          1995     23,089,000   6,407,000      27.75    1,561,000     872,000      0.28      3,152,000
                                                                                           
4th Qtr.  1996     16,738,000   3,852,000      23.01     (802,000)   (329,000)    (0.10)     3,290,000
          1995     13,565,000   3,790,000      27.94     (524,000)   (347,000)     0.11      3,161,000
                   ----------   ---------      -----     --------    --------      ----      ---------
Year      1996     87,750,000  24,784,000      28.24    2,616,000   1,766,000      0.54      3,290,000
          1995     66,659,000  18,558,000      27.84    2,374,000   1,365,000      0.43      3,161,000
</TABLE>
                                                                         
ITEM  9. Changes  in and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure

     None


                                       8
<PAGE>

                                    PART III

ITEM 10. Executive Officers of Registrant

     Identification of the executive officers:

            Name            Age       Positions and Offices        Officer Since
            ----            ---       ---------------------        -------------
    Fred R. Sullivan         82    Director, Chairman of the Board      1989
                                     & Chief Executive Officer
    Cornelius F. Griffin     57    Vice President & Chief               1985
                                     Financial Officer
    Marshall E. Bernstein    58    Secretary                            1985

     There is no family  relationship  among any of the  executive  officers and
directors of the Company.  Each  executive  officer holds office for one year or
until a respective successor is chosen,  except that each officer may be removed
from office, with or without cause, at any time by the Board of Directors.

     The business experience of the executive officers is:

     Fred R. Sullivan--Director, Chairman of the Board & Chief Executive Officer
for more than five years.

     Cornelius F.  Griffin--Vice  President & Chief  Financial  Officer for more
than five years.

     Marshall E. Bernstein--For more than five years a Member of the law firm of
Robinson, Brog, Leinwand, Greene, Genovese & Gluck P.C. and predecessor.

ITEM 11. Executive Compensation

     The  information  required by Item 11 is  incorporated  by reference to the
Company's  definitive  proxy  statement  to be  filed  with the  Securities  and
Exchange Commission not later than April 30, 1997.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

     The  information  required by Item 12 is  incorporated  by reference to the
Company's  definitive  proxy  statement  to be  filed  with the  Securities  and
Exchange Commission not later than April 30, 1997.

ITEM 13. Certain Relationships and Related Transaction

     The  information  required by Item 13 is  incorporated  by reference to the
Company's  definitive  proxy  statement  to be  filed  with the  Securities  and
Exchange Commission not later than April 30, 1997.

                                     PART IV

ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

     (a) (1) (2)  The  list of  financial  statements  and  financial  statement
schedules by this item are included in Item 8 on page 6.

     (a) Exhibits:

        (2) Exhibits

           2.1   -- Stock  Purchase  Agreeement  dated as of July  31,  1993 and
                    amendment  thereto  dated  August 27, 1993 and among  Ernest
                    Hodas as trustee of the Ernest Hodas  Revocable  Trust,  The
                    Hodas Family  Limited  Partnership,  Ernest  Hodas,  Century
                    Supply Corp.,  Century  Acquisition  Corporation and Richton
                    International Corporation

                 -- Incorporated  by  reference  to Exhibit 2.1 to  Registrant's
                    Current report on Form 8--for January 5, 1994

           2.2   -- Agreement for the Purchase of Assets dated March 29, 1995 by
                    and among CBE  Acquisition  Corp.,  (the  "Buyer"),  Century
                    Supply  Corp.,  Richton  International  Corporation  and CBE
                    Technologies, Inc. (the "Seller")


                                       9
<PAGE>

                 -- Incorporated  by  reference  to Exhibit 2.1 to  Registrant's
                    Current report on Form 8-K for April 5, 1995

        (3) Exhibits

           3.1   -- Certificate  of  Incorporation   of  Richton   International
                    Corporation

                 -- Incorporated  by reference  to Exhibit 99.1 to  Registrant's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1995

           3.2   -- By laws of Richton International Corporation

                 -- Incorporated  by reference  to Exhibit 99.1 to  Registrant's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1995

        (4) Exhibits

           4.1   -- Stock Certificate (Specimen)

       (10) Exhibits -- Material contracts

           10.1  -- 1990 Long-Term Incentive Plan

                 -- Incorporated  by  reference  to Exhibit (b) to  Registrant's
                    Annual  Report on Form 10-K for the fiscal  year ended April
                    30, 1990

           10.2  -- Amendment to the 1990 Long Term Incentive Plan providing for
                    additional 150,000 shares for issuance under the Plan

                 -- Incorporated  by reference to Exhibit 10(b) to  Registrant's
                    Annual  Report on Form  10-KSB  for the  fiscal  year  ended
                    December 31, 1994 Incorporated

           10.3  -- Retirement  Plan  for  Employees  of  Richton  International
                    Corporation dated February 1986

                 -- Incorporated  by reference to Exhibit 10(k) to  Registrant's
                    Annual  Report on Form 10-K for the fiscay  year ended April
                    30, 1986

           10.4  -- Amendment  dated  April  10,  1987 to  Retirement  Plan  for
                    Employees of Richton International Corporation

                 -- Incorporated  by reference to Exhibit 10(k) to  Registrant's
                    Annual  Report on Form 10-K for the fiscal  year ended April
                    30, 1987

           10.5  -- Amendment  dated  August  1,  1989 to  Retirement  Plan  for
                    Employees of Richton International Corporation

                 -- Incorporated  by reference to Exhibit (10m) to  Registrant's
                    Annual  Report on Form 10-K for the fiscal  year ended April
                    30, 1990

           10.6  -- Amendment  dated  December 31, 1994 to  Retirement  Plan for
                    Employee of Richton International Corporation

                 -- Incorporated  by reference to Exhibit 10(f) to  Registrant's
                    Annual Report on Form 10-KSB for the year ended December 31,
                    1994

           10.7  -- Restated  Excess  Benefit  Plan for  Salaried  Employees  of
                    Richton International Corporation dated July 15, 1986

                 -- Incorporated  by reference to Exhibit 10(l) to  Registrant's
                    Annual  Report on Form 10-K for the fiscal  year ended April
                    30, 1987

           10.8  -- Amendment dated June 4, 1987 to Restated Excess Benefit Plan
                    for Salaried Employees of Richton International Corporation

                 -- Incorporated  by reference to Exhibit 10(m) to  Registrant's
                    Annual  Report on Form 10-K for the fiscal  year ended April
                    30, 1987

           10.9  -- Rights Agreement dated January 26, 1987

                 -- Incorporated  by reference to Exhibit 10(m) to  Registrant's
                    Annual  Report on Form 10-K for the fiscal  year ended April
                    30, 1987

           10.10 -- Amendment dated November 1, 1994 to Rights Agreement

                 -- Incorporated  by reference to Exhibit 10(j) to  Registrant's
                    Annual  Report on Form  10-KSB  for the  fiscal  year  ended
                    December 31, 1994

                                       10
<PAGE>

           10.11 -- Loan and Financing  Agreement dated October 27, 1993 between
                    Michigan National Band and Century Supply Corp.

                 -- Incorporated  by reference  to Exhibit 28.1 to  Registran'ts
                    Current report on Form 8-- for January 5, 1994

           10.12 -- Letter  Agreement  dated March 21, 1994  amending the Credit
                    Note with Michigan National Bank

                 -- Incorporated  by reference to Exhibit 10(l) to  Registrant's
                    Annual Report on Form 10-KSB for the year ended December 31,
                    1994

           10.13 -- Letter  Agreement  dated June 23, 1994  amending  the Credit
                    Note with Michigan National Bank

                 -- Incorporated  by reference to Exhibit 10(m) to  Registrant's
                    Annual Report on Form 10-KSB for the year ended December 31,
                    1994

           10.14 -- Letter  Agreement dated April 27, 1995 amending the Loan and
                    Financing  Agreement dated October 27, 1993 between Michigan
                    National Bank and Century Supply Corp.

           10.15 -- Letter  Agreement  dated June 17, 1996 amending the Loan and
                    Financing  Agreement dated October 27, 1993 between Michigan
                    National Bank and Century Supply Corp.

           10.16 -- A Term note for $3.0 million  dated October 27, 1993 made by
                    Century Supply Corp.  (the  "borrower") in favor of Michigan
                    National Bank (the "payee")

                 -- Incorporated  by reference  to Exhibit 28.2 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.17 -- A Credit note for $8.0 million  dated  October 27, 1993 made
                    by  Century  Supply  Corp.  (the  "borrower")  in  favor  of
                    Michigan National Bank (the "payee")

                 -- Incorporated  by reference  to Exhibit 28.3 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.18 -- Subordination   Agreement   dated  October  27,  1993  among
                    Michigan  National  Bank (the "bank),  Century  Supply Corp.
                    (the "borrower") and Richton International  Corporation (the
                    "Subordinating Creditor")

                 -- Incorporated  by reference  to Exhibit 28.4 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.19 -- Subordination   Agreement   dated  October  27,  1993  among
                    Michigan National Bank (the "bank"),  Richton  International
                    Corporation and Ernest Hodas, as Trustee of the Ernest Hodas
                    Revocable Trust (the "Trustee") and the Hodas Family Limited
                    Partner-ship") and Ernest Hodas (collectively  referred to a
                    "Subordinating Creditor")

                 -- Incorporated  by reference  to Exhibit 28.5 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.20 -- The  Purchase  Price  Promissory  Note  for  $500,000  dated
                    October 27, 1993 between Century Acquisition Corporation and
                    Ernest  Hodas  as  agent  for  the  Hodas   Family   Limited
                    Partner-ship and Ernest Hoads as Trustee of the Ernest Hodas
                    Revocable Trust

                 -- Incorporated  by  reference  to Exhibit 2.2 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.21 -- Non-Competition  and Non-Disclosure  Agreement dated October
                    27, 1993 by and  between  Ernest  Hodas and  Century  Supply
                    Corp.
                 
                 -- Incorporated  by  reference  to Exhibit 2.3 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.22 -- Consulting  Agreement  dated October 27, 1993 by and between
                    Century Supply Corp. and Ernest Hodas
                   
                 -- Incorporated  by  reference  to Exhibit 2.4 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.23 -- Promissory  Note for $510,691 dated October 27, 1993 between
                    Century Supply Corp. and Ernest Hodas
                   
                 -- Incorporated  by  reference  to Exhibit 2.5 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

                                       11

<PAGE>
          
           10.24 -- Guaranty  dated  October 27,  1993 by Richton  International
                    Corporation   in  favor   of  the   Hodas   Family   Limited
                    Partner-ship  and  Ernest  Hodas,  as  Trustee of the Ernest
                    Hodas Revo-cable Trust and Ernest Hodas
                    
                 -- Incorporated  by  reference  to Exhibit 2.6 to  Registrant's
                    Current report on Form 8-- for January 5, 1994
          
           10.25 -- Subordination  Agreement  dated  October  27,  1993  between
                    Michigan   National   Bank,   Century   Supply  Corp.   (the
                    "borrower"),  Ernest  Hodas,  as Trustee of the Ernest Hodas
                    Revocable Trust and the Hodas Family Limited Partnerhsip and
                    Ernest  Hodas  (collectively  referred to as  "Subordinating
                    creditor")
                    
                 -- Incorporated  by reference  to Exhibit 28.6 to  Registrant's
                    Current report on Form 8-- for January 5, 1994
 
           10.26 -- Stock Pledge Agreement dated October 27, 1993 by and between
                    Richton International Corporation and Michigan National Bank
                     
                 -- Incorporated  by reference  to Exhibit 28.6 to  Registrant's
                    Current report on Form 8-- for January 5, 1994
         
           10.27 -- Stock Pledge  Agreement  dated April 27, 1995 by and between
                    Richton International Corporation and Michigan National Bank
           
           10.28 -- Guarantee  dated  October 27, 1993 by Richton  International
                    Corporation  and issued to Michigan  National Bank on behalf
                    of Century Supply Corp.
                    
                 -- Incorporated  by reference  to Exhibit 28.8 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.29 -- Amended and restated Guaranty Agreement dated April 27, 1995
                    by Richton International  Corporation and issued to Michigan
                    National Bank on behalf of Century Supply Corp.
  
           10.30 -- Series A Warrant to Purchase  236,250 shares of Common Stock
                    of Richton International Corporation
                   
                 -- Incorporated  by reference  to Exhibit 28.9 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.31 -- Subordinated  Note  issued by  Richton  International  Corp.
                    dated  October  26,  1993  to Mr.  Fred R.  Sullivan  in the
                    principal amount of $1,181,250.
              
                 -- Incorporated  by reference to Exhibit 28.10 to  Registrant's
                    Current report on Form 8-- for January 5, 1994

           10.32 -- Subordinated  Promissory  Note for $1.0 million  dated March
                    29, 1995 between CBE  Acquisition  Corp. and CBE Liquidating
                    Corp.

                 -- Incorporated  by  reference  to Exhibit 2.2 to  Registrant's
                    Current report on Form 8K-- for April 5, 1995

           10.33 -- Subordinated  Promissory  Note for $1.0 million  dated March
                    29, 1995 between Richton International  Corporation and Fred
                    R. Sullivan

                 -- Incorporated  by  reference  to Exhibit 2.3 to  Registrant's
                    Current report on Form 8K-- for April 5, 1995

           10.34 -- Guaranty dated March 29, 1995 by Richton International Corp.
                    in favor of the CBE Liquidating

                 -- Incorporated  by  reference  to Exhibit 2.4 to  Registrant's
                    Current report on Form 8K-- for April 5, 1995

           10.35 -- Guaranty  dated March 29, 1995 by Century Supply Corp. in in
                    favor of the CBE Liquidating Corp.

                 -- Incorporated  by  reference  to Exhibit 2.5 to  Registrant's
                    Current report on Form 8K-- for April 5, 1995



                                       12
<PAGE>

        (11) Exhibit

           11.1  -- Calculation of earnings per share

        (21) Exhibits-- Subsidiaries of the Registrant
        (99) Exhibits-- Other

           99.1  -- Fairness  Opinion  received  from  Quirk,  Carson  &  Pettit
                    relating to the $1.0 million the  promissory  note agreement
                    between F.R. Sullivan and the Registrant

                 -- Incorporated  by reference  to Exhibit 99.1 to  Registrant's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1995 

           99.2  -- Fairness  Opinion  received  from  Quirk,  Carson  &  Pettit
                    relating to the $1.0 million the  promissory  note agreement
                    between F.R. Sullivan and the Registrant
                    

                 -- Incorporated  by reference  to Exhibit 99.1 to  Registrant's
                    Annual  Report on Form 10-K for the year ended  December 31,
                    1995

   (b)  Reports on Form 8-K
      None.





                                       13
<PAGE>

                                   SIGNATURES

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

                                          RICHTON INTERNATIONAL CORPORATION
                                                     (Registrant)

                                          By: /s/     FRED R. SULLIVAN
                                             ---------------------------------
                                                      Fred R. Sullivan
                                                 Chairman of the Board and
                                                   Chief Executive Officer
                                                (Principal Executive Officer)

Date: March 7, 1997

                                          By: /s/    CORNELIUS F. GRIFFIN
                                             ---------------------------------
                                                     Cornelius F. Griffin
                                                      Vice President and
                                                    Chief Financial Officer
                                                   (Principal Financial and 
                                                       Accounting Officer)

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


          Signature                  Title                             Date
          ---------                  -----                             ----

/s/   FRED R. SULLIVAN      Chairman of the Board and              March 7, 1997
   -----------------------    Chief Executive Officer
      Fred R. Sullivan        (Principal Executive Officer)

/s/ CORNELIUS F. GRIFFIN    Vice President and Chief               March 7, 1997
   -----------------------    Financial Officer (Principal
    Cornelius F. Griffin      Financial and Accounting Officer)

/s/  NORMAN E. ALEXANDER    Director                               March 7, 1997
     Norman E. Alexander

/s/  PHILIPPE GUTZWILLER    Director                               March 7, 1997
   -----------------------
     Philippe Gutzwiller

/s/    THOMAS J. HILB       Director                               March 7, 1997
   -----------------------
       Thomas J. Hilb

/s/   STANLEY J. LEIFER     Director                               March 7, 1997
   -----------------------
      Stanley J. Leifer

/s/    PETER A. WHITE       Director                               March 7, 1997
   -----------------------
       Peter A. White


                                       
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders of
   Richton International Corporation:

     We have audited the  accompanying  consolidated  balance  sheets of Richton
International  Corporation  (a  Delaware  corporation)  and  subsidiaries  as of
December  31,  1996  and  1995,  and  the  related  consolidated  statements  of
operations,  shareholders' equity, and cash flows for each of the three years in
the  period  ended  December  31,  1996.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all material  respects,  the financial  position of Richton
International Corporation and subsidiaries, as of December 31, 1996 and 1995 and
the results of their operations and their cash flows for each of the three years
in the period ended  December 31, 1996 in  conformity  with  generally  accepted
accounting principles.



                                                       ARTHUR ANDERSEN LLP



Detroit, Michigan
March 6, 1997






                                      F-1
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS
                                                                           December 31
                                                                   ----------------------------
                                                                       1996            1995
                                                                   ------------    ------------
<S>                                                                <C>             <C>         
Current Assets:
  Cash and Cash Equivalents ....................................   $    372,000    $    467,000
  Notes and Accounts Receivable, net of allowance for
      doubtful accounts of $700,000 and $590,000, respectively .     13,004,000       8,882,000
  Inventories ..................................................      9,550,000       6,511,000
  Prepaid Expenses and Other Current Assets ....................        467,000         442,000
  Deferred Taxes ...............................................        568,000         420,000
                                                                   ------------    ------------
    Total Current Assets .......................................     23,961,000      16,722,000
Property, Plant and Equipment, .................................      2,287,000       1,419,000
  Less: Allowance for Depreciation and Amortization ............       (747,000)       (445,000)
                                                                   ------------    ------------
                                                                      1,540,000         974,000
Other Assets: Deferred taxes ...................................      2,224,000       3,044,000
  Goodwill .....................................................      4,050,000       5,201,000
  Other ........................................................        599,000         173,000
                                                                   ------------    ------------
TOTAL ASSETS ...................................................   $ 32,374,000    $ 26,114,000
                                                                   ============    ============

                       LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current Portion of Long Term Debt ............................   $  1,879,000    $  2,004,000
  Notes Payable ................................................      7,947,000       5,275,000
  Accounts Payable,Trade .......................................      3,978,000       2,015,000
  Accrued Liabilities ..........................................      2,387,000       2,495,000
  Deferred Income ..............................................      2,160,000       1,904,000
                                                                   ------------    ------------
    Total Current Liabilities ..................................     18,351,000      13,693,000
Noncurrent Liabilities
  Long Term Senior Debt ........................................      5,200,000       4,400,000
  Subordinated Debt ............................................      3,665,000       4,754,000
  Less: Current Portion of Long-term Debt ......................     (1,879,000)     (2,004,000)
                                                                   ------------    ------------
                                                                      6,986,000       7,150,000
Stockholders' Equity
  Preferred Shares,$1.00 par value; authorized
    500,000 shares; none issued ................................           --              --
  Common Shares, $.10 par value; authorized
    4,000,000 shares; issued and outstanding 3,088,347 shares at
    December 31, 1996 and December 31, 1995 ....................        309,000         309,000
  Additional Paid-in Capital ...................................     17,661,000      17,661,000
  Retained Earnings ............................................    (10,518,000)    (12,284,000)
  Treasury Stock ...............................................       (415,000)       (415,000)
                                                                   ------------    ------------
    Total Shareholders' Equity .................................      7,037,000       5,271,000
                                                                   ------------    ------------
  Total Liabilities and Shareholders' Equity ...................     32,374,000      26,114,000
                                                                   ============    ============
</TABLE>

       The accompanying notes to consolidated financial statements are an
           integral part of these consolidated financial statements.

                                      F-2
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                 Twelve Months ended December 31
                                                          --------------------------------------------
                                                              1996            1995            1994
                                                          ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>         
Net Sales .............................................   $ 87,750,000    $ 66,659,000    $ 50,306,000
Cost of Sales .........................................     62,966,000      48,101,000      36,202,000
                                                          ------------    ------------    ------------
Gross Profit ..........................................     24,784,000      18,558,000      14,104,000
Selling, general & administrative expenses ............     20,952,000      15,092,000      11,402,000
Interest (income) .....................................       (407,000)       (349,000)       (339,000)
Interest expense ......................................      1,623,000       1,441,000       1,156,000
                                                          ------------    ------------    ------------
Income before Taxes ...................................      2,616,000       2,374,000       1,885,000
Provision for income taxes ............................        850,000       1,009,000         881,000
                                                          ------------    ------------    ------------
Net Income ............................................   $  1,766,000    $  1,365,000    $  1,004,000
                                                          ============    ============    ============

Net Income Per share: .................................   $       0.54    $       0.43    $       0.34
                                                          ============    ============    ============

Average Common and Common Equivalent Shares Outstanding      3,290,000       3,161,000       2,975,000
                                                          ============    ============    ============
</TABLE>

       The accompanying notes to consolidated financial statements are an
           integral part of these consolidated financial statements.

                                      F-3
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                Additional                                     Cumulative
                                  Common          Paid-in     Accumulated       Treasury      Translation
                                  Shares          Capital        Deficit          Stock        Adjustment
                               ------------    ------------   ------------    ------------    ------------
<S>                            <C>             <C>            <C>             <C>             <C>      
Balance at December 31, 1993   $    292,000    $ 17,277,000   $(14,653,000)   $   (415,000)   $      --
Issuances of 109,097
   common shares ...........         11,000         213,000
Cumulative Translation
   Adjustment ..............          3,000
Net Income .................      1,004,000
                               ------------    ------------   ------------    ------------    ------------
Balance at December 31, 1994        303,000      17,490,000    (13,649,000)       (415,000)          3,000
Issuances of 58,877
   common shares ...........          6,000         171,000
Cumulative Translation
   Adjustment ..............                                                                        (3,000)
Net Income .................                                     1,365,000
                               ------------    ------------   ------------    ------------    ------------
Balance at December 31, 1995        309,000      17,661,000    (12,284,000)       (415,000)              0
Net Income .................                                     1,766,000
                               ------------    ------------   ------------    ------------    ------------
Balance at December 31, 1996   $    309,000    $ 17,661,000   $(10,518,000)   $   (415,000)   $          0
                               ============    ============   ============    ============    ============
</TABLE>


       The accompanying notes to consolidated financial statements are an
           integral part of these consolidated financial statements.

                                      F-4
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              Twelve Months ended December 31
                                                         -----------------------------------------
                                                             1996           1995           1994
                                                         -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>        
OPERATING ACTIVITIES
Net Income ...........................................   $ 1,766,000    $ 1,365,000    $ 1,004,000
   Reconciliation of net cash provided by (used by)
      operating activities:
        Depreciation and amortization of assets ......       302,000        424,000        207,000
        Amortization of goodwill and impairment ......     1,558,000      1,000,000
        Deferred income ..............................      (115,000)       (95,000)
        Other working capital items, assets ..........    (4,839,000)    (3,658,000)       297,000
        Other working capital items, liabilities .....       625,000        131,000
        Decrease in deferred taxes ...................       672,000      1,275,000        683,000
        Decrease (increase) in other assets ..........       142,000       (180,000)        41,000
                                                         -----------    -----------    -----------
   Net cash provided by operating activities .........       111,000        262,000      2,232,000

INVESTING ACTIVITIES
Capital expenditures .................................      (350,000)      (147,000)      (292,000)
Cash (paid) or received for businesses acquired,net ..    (2,093,000)      (166,000)
                                                         -----------    -----------    -----------
   Net cash used by investing activities .............    (2,443,000)      (313,000)      (292,000)

FINANCING ACTIVITIES
Increase (decrease) of long-term debt ................     1,400,000     (1,310,000)    (1,622,000)
Increase (decrease) in subordinated debt .............    (1,235,000)
Repayment of term-debt ...............................      (600,000)
Increase (decrease) in line of credit ................     2,672,000      1,800,000       (354,000)
                                                         -----------    -----------    -----------
   Net cash provided by (used in) financing activities     2,237,000        490,000     (1,976,000)
Effect of exchange rate on cash balances .............                       (3,000)         3,000
                                                         -----------    -----------    -----------
Increase (decrease) in cash and cash equivalents .....       (95,000)       436,000        (33,000)
Cash and cash equivalents, beginning of period .......       467,000         31,000         64,000
                                                         -----------    -----------    -----------
Cash and cash equivalents, end of period .............   $   372,000    $   467,000    $    31,000
                                                         ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
   Cash payments during the period for interest ......   $ 1,391,000    $ 1,408,000    $ 1,030,000
   Cash payments during the period for income taxes ..   $   430,000    $   366,000    $    61,000
</TABLE>

Supplemental Disclosure of Non-Cash Activities

     During the year ended  December 31, 1995,  the Company issued 58,877 shares
of the  Company's  common  stock to the  Chairman  in lieu of  compensation  and
interest owed to him of $177,000.

     During 1995,  the Company issued $3.0 million of term debt and $2.0 million
of unsecured subordinated notes to acquire CBE Technologies, Inc.

     During the year 1994,  the Company issued 109,097 shares of common stock to
the Chairman in lieu of compensation and interest owed to him of $224,000.

       The accompanying notes to consolidated financial statements are an
           integral part of these consolidated financial statements.

                                      F-5
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Description of Business:

     Richton International Corporation ("Richton") is a holding company with two
principal  subsidiaries,  Century Supply Corp.  ("Century") and CBE Technologies
Inc,  ("CBE"),  collectively  the "Company."  Century is a leading  full-service
wholesale  distributor of sprinkler  irrigation  systems,  outdoor  lighting and
decorative fountain equipment.  Branches are in 14 States on the Eastern half of
The United States and Ontario,  Canada.  Irrigation  products have  historically
been sold by manufacturers primarily through wholesale distributors.  Century is
a major  distributor in the United States for three of the four leading original
equipment manufacturers (OEM) in the irrigation systems field.

     CBE Technologies,  Inc. ("CBE") headquartered in Boston, Massachusetts with
satellite  offices in New York,  Los  Angeles and  Portland,  Maine is a Systems
Integrator  providing,  network  consulting,  design, and installation;  network
management and related support;  technical services  outsourcing;  comprehensive
hardware  maintenance;  and  equipment  sales.  CBE's  technical  certifications
include;   Novell  Platinum   reseller,   Microsoft   Channel  partner,   Banyan
Enterprise/Network  dealer,  Novell  authorized  Training  Center,  as well as a
Novell Authorized Service Center.


2.  Summary of Significant Accounting Policies:

     Principles  of  Consolidation--The   accompanying   consolidated  financial
statements  include the accounts of Richton and all  wholly-owned  subsidiaries.
All   intercompany   accounts  and   transactions   have  been   eliminated   in
consolidation.

     As of August 31, 1993 Richton  acquired 100% of the issued and  outstanding
shares of Century Supply Corp. On March 30, 1995 Richton  acquired CBE (See Note
3).

     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  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

     Cash and Cash Equivalents--Cash and Cash Equivalents are defined as cash on
demand at a bank,  and  certificates  of deposit  and or  government  securities
purchased with maturities of less than three months.

     Allowance  For Doubtful  Accounts--The  Company  provides an allowance  for
doubtful  accounts  arising from operations of the business,  which allowance is
based  upon a specific  review of certain  outstanding  amounts  and  historical
collection performance.  In determining the amount of the allowance, the Company
is required to make certain  estimates and  assumptions  and actual  results may
differ from these estimates and assumptions.

     Inventories -- The Company values  inventory at the lower of cost or market
using the first-in first-out ("FIFO") method of accounting.

     Goodwill -- Goodwill is amortized on a straight-line  basis over periods of
5--15 years as follows:

<TABLE>
<CAPTION>
                             Amortization    12/31/95                                     12/31/96
                                Period        Balance       Additions     Reductions       Balance
                             ------------     -------       ---------     ----------       -------
<S>                           <C>            <C>              <C>         <C>               <C>    
Typewriter Maintenance ....   5 years        1,700,000                    1,310,000(a)      390,000
Computer Maintenance ......   15 years       3,360,000        167,000       227,000       3,300,000
Irrigation ................   5 years          141,000        239,000        21,000         360,000
                                             ---------        -------     ---------       ---------
                                             5,201,000        406,000     1,558,000       4,050,000
                                             =========        =======     =========       =========
</TABLE>

(a) Includes third quarter 1996 impairment charge of $.8 million.



                                      F-6
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued


     Long-Lived  Assets -- During 1995,  the Company  adopted the  provisions of
Statement  of  Financial   Accounting  Standard  No.  121  "Accounting  for  the
Impairment of Long Lived Assets"  ("SFAS 121").  SFAS 121 requires,  among other
things,  that an  entity  review  its  long-lived  assets  and  certain  related
intangibles for impairment  whenever changes in circumstances  indicate that the
carrying  amount of an asset  may not be fully  recoverable.  As a  result,  the
Company  continually  evaluates whether events and  circumstances  have occurred
that  indicate  the  remaining  estimated  useful  life  of  long-lived  assets,
including goodwill, may not be recoverable.  The acquisition of CBE (See Note 3)
resulted in goodwill of approximately  $6.0 million which was based on CBE's two
major lines of business - computer maintenance and network installation services
and typewriter  services.  Subsequent to the  acquisition of CBE, the typewriter
contract  maintenance  business  experienced  a decline in  revenues  and it was
determined that expected future cash flows  (undiscounted  and without  interest
charges)  would be less than the  carrying  amount of goodwill  allocated to the
typewriter maintenance business. Based on discounted estimated future cash flow,
the Company  recorded a write-down  of Goodwill in the amount of $1.0 million in
1995, and based on further  deterioration of that business, an additional charge
of $.8  million in the third  calendar  quarter of 1996,  which is  included  in
selling,  general and administrative  expenses in the consolidated  statement of
operations for the respective periods involved.

     Deferred  Income  --  Deferred  income   represents  income  received  from
customers  related to service  contracts  that extend for  specified  periods of
time, less than one year. Income is recognized  proportionally  over the life of
the contract.

     Income Taxes -- The Company  accounts for income taxes in  accordance  with
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes" (SFAS No. 109). This statement requires the Company to recognize deferred
tax assets and liabilities  for the expected  future tax  consequences of events
that have been recognized in the Company's financial  statements or tax returns.
Under this method,  deferred tax assets and liabilities are determined  based on
the  difference  between the financial  statement  carrying  amounts and the tax
basis of assets and liabilities.

     Accounting  for Stock  Based  Compensation  -- The  Company  has elected to
account for stock-based compensation using the intrinsic value method prescribed
in Accounting  Principles Board Opinion No. 25,  "Accounting for Stock issued to
Employees,"  and related  interpretations.  Accordingly,  compensation  cost for
stock  options is measured as the excess,  if any, of the quoted market price of
the  Company's  stock at the date of grant over the amount the employee must pay
to acquire the stock in the accompanying  Statements of Income.  As supplemental
information,  the Company has provided pro forma disclosure of the fair value at
the date of grant of stock options  granted  during 1995 and 1996 in Note 10, in
accordance with the requirements of Statement of Financial  Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (SFAS 123).

3.  Acquisitions:

     In August 1993,  Richton acquired all of the outstanding  shares of Century
for $6.2  million in cash,  150,000  shares of  Richton's  common stock and $1.7
million  payable  to the former  owner over a period of six years,  a portion of
which is subject to a right of off-set,  as defined.  The  transaction  has been
accounted for using the purchase method of accounting. Accordingly, the purchase
price has been  allocated  to the assets  acquired and the  liabilities  assumed
based on the estimated fair value at date of acquisition. The excess of purchase
price over the estimated fair value of the net assets acquired has been recorded
as a Deferred Tax Benefit reflecting the likely ability to utilize Richton's net
operating  loss carry  forward,  which benefit will be amortized as earnings are
realized.  (See Note 5) The  operating  results of Century  are  included in the
Company's  consolidated  results  of  operations  from  the  effective  date  of
acquisition, August 31, 1993.

     On March  29,  1995 the  Company,  through  its  wholly  owned  subsidiary,
Century,  acquired all the  operating  assets and business of CBE  Technologies,
Inc. for $5.0 million plus assumption of certain liabilities. The $5 million was
financed by bank borrowings of $3.0 million, a $1.0 million unsecured promissory
note to the former owners and a $1 million  unsecured  subordinated  note to the


                                      F-7
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued


Chairman of Richton.  The note to the Chairman was subject to a fairness opinion
of an independent advisor chosen by Richton's Board of Directors.

     The following  unaudited pro forma summary  presents the 1995  consolidated
results of  operations as if the  acquisition  of CBE had occurred on January 1,
1995. These pro forma results do not purport to be indicative of what would have
occurred had the  acquisition  been made as of that date or of the results which
may occur in the future.

                                                      Twelve Months Ended
                                                        December 31 1995
                                                          (Unaudited)
                                                      -------------------
          Net Sales ..............................         $69,066,000
                                                           ===========
          Net Income .............................         $ 1,377,000
                                                           ===========
          Net Income per Share ...................         $       .44
                                                           ===========

4.  Property and Equipment:
                                                              December 31
                                                        -----------------------
                                                           1996         1995
                                                        ----------   ----------
     Land ...........................................   $   80,000   $     --   
     Property held for sale or future use ...........      108,000         --   
     Building and Improvements ......................      820,000      474,000
     Autos and Trucks ...............................      445,000      372,000
     Machinery and Equipment ........................      479,000      242,000
     Furniture and Fixtures .........................      355,000      331,000
                                                        ----------   ----------
                                                        $2,287,000   $1,419,000
     Less: Accumulated Depreciation and Amoritization      747,000      445,000
                                                        ----------   ----------
                                                        $1,540,000   $  974,000
                                                        ==========   ==========

     All fixed assets are currently  depreciated over five years except building
improvements which are based upon the respective lease terms which are from 2-10
years.

5.  Income Taxes:

     At December 31, 1996, the Company has deferred tax assets of  approximately
$2.8 million.  Significant  components of the deferred tax assets as of December
31, are as follows:

                                                  1996            1995
                                               -----------     -----------
     Current:
     Allowance for bad debts .............     $   238,000     $   200,000
     Accrued Pension Cost ................          97,000          97,000
     Other ...............................         233,000         123,000
                                               -----------     -----------
                                               $   568,000     $   420,000
                                               ===========     ===========
     Long Term:
     Net operating loss carry forward ....     $ 1,383,000     $ 2,748,000
     Goodwill ............................         666,000         261,000
     Depreciation ........................          40,000
     Other ...............................         175,000          (5,000)
                                               -----------     -----------
                                               $ 2,224,000     $ 3,044,000
                                               ===========     ===========


                                      F-8
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued


      At December 31, 1996, the Company has available  approximately  $4,067,000
of net operating loss carry  forwards,  expiring in varying amounts between 2004
and 2007, as follows:

       2004 .............................   $2,114,000
       2005 .............................        6,000
       2006 .............................      276,000
       2007 .............................    1,671,000
                                            ----------
                                            $4,067,000
                                            ==========
               
     Under SFAS 109, a valuation  reserve is not  required  if it is  determined
that it is more likely than not that the related  benefit of deferred tax assets
will be realized.  Based on prior  utilization  and estimates of future  taxable
income,  the company expects that the remaining net operating loss  carryforward
will be utilized. As a result, no valuation allowance has been provided. For the
years  ended  December  31,  1996,  1995 and  1994  $4,014,000,  $3,158,000  and
$3,392,000  of net  operating  loss carry  forward  has been  utilized to offset
taxable  income.  The  provision  for  income  taxes for the three  years  ended
December 31, 1996 consists of the following:

                                     1996           1995            1994
                                 -----------    -----------     -----------
     Federal
       Current Payable ......    $   109,000    $  (436,000)    $
       Deferred .............        672,000      1,275,000         791,000
     State & Local ..........         50,000        151,000          90,000
     Foreign ................         19,000         19,000
                                 -----------    -----------     -----------
                                 $   850,000    $ 1,009,000     $   881,000
                                 ===========    ===========     ===========

     A reconciliation of the Federal provision for income taxes at the statutory
rate to the actual provision for income taxes for the three years ended December
31, 1996, is as follows:

                                           1996          1995         1994
                                            ---           ---          ---
     Federal ......................          34%           35%          34%
     State & Local ................           3             7            5
     Other ........................          (4)                         7
                                                          ---          ---
                                             33%           42%          46%
                                            ===           ===          ===

6.  Statement of Cash Flows:

     The components of other working capital items included in the  Consolidated
Statement of Cash Flows are as follows:

                                                      For Twelve Months Ended
                                                           December 31
                                                      ----------------------- 
                                                          1996       1995
                                                        -------    -------
                                 (in thousands)
     Receivables ....................................   $(3,232)   $(2,388)
     Inventories ....................................    (1,595)    (1,238)
     Prepaid Expenses ...............................       (12)       (32)
                                                        -------    -------
     Increase in Working Capital Items, Assets ......   $(4,839)   $(3,658)
                                                        =======    =======
     Accounts Payable ...............................       775        (35)
     Accrued Expenses ...............................      (150)       166
                                                        -------    -------
     Increase Working Capital Items, Liabilities ....   $   625    $   131
                                                        =======    =======

                                      F-9
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued


7.  Bank Borrowing:

      During  1996,  the  Company  completed  a  modification  of the  Loan  and
Financing agreement with its bank. The principal modifications of this agreement
were (a) an increase in the term loan to $5.6 million from $4.2  million,  (b) a
reduction in the  interest  rate on the credit line to prime less .125% or LIBOR
plus 2.35%,  from prime,  (c) provide for a potential  reduction on the interest
rate of the Term loan by adding an option to select LIBOR plus 2.5% on a 30, 60,
or 90 day basis,  (d) increase the line of credit facility to $18.0 million from
$15.0  million and  increase the basis upon which that line is  determined.  The
term loan will  continue to amortize at the rate of $.2 million per quarter.  In
addition,  certain financial  covenants and distribution  restrictions were also
modified. All obligations due the seller or related parties and amounts advanced
by Richton to Century are subordinated to the Agreement. Certain covenants, some
of which are financial in nature, must be maintained. In addition, the Agreement
imposes  certain  restrictions  on the  distributions  of funds from  Century to
Richton.


8.  Long-Term Debt:

      The Company has the following long-term debt as of December 31, 1996:

                                                        1996            1995
                                                     ----------      ----------

Term note payable to a bank, secured by accounts
receivable, inventory, fixtures and equipment,
interest at prime (8.25% as of December 31, 1996),
payable in quarterly installments of $200,000,
final payment due April 27, 1998. .................. $5,200,000      $4,400,000

Installments payable to former owner of Century,
unsecured and subordinated to the bank debt,
payable in quarterly installments of $50,000,
final payment due September 30, 2001 ...............    668,000         868,000

Note payable to related party, unsecured and
subordinated to bank debt, interest at 9%, payable
in semi-annual installments of $118,125 commencing
April 1996, final payment due October 31, 2000 -
net of discount (A) ................................    887,000       1,095,000

Note payable to former owner of Century, unsecured
and subordinated to the bank debt, interest at 8% ..                    100,000

Notes payable to former owner of Century and
unrelated third-party, unsecured and subordinated
to the bank debt, interest at 9%, payable in
monthly installments of approximately $10,800, due
October 1997 .......................................    106,000         234,000

Note payable to related party, unsecured and
subordinated to the term note payable to bank,
interest at 10%, payable in 10 installments of
$100,000 on October 15th and May 15th, final
payment April 2000 (B) .............................    900,000       1,000,000

Note payable to seller's of CBE Technologies,Inc
unsecured and subordinated to the all bank debt,
interest at 9% payable in 10 installments of
$100,000 on October 15th and May 15th, final
payment due May 2000. ..............................    700,000       1,000,000

Other ..............................................    404,000         457,000
                                                     ----------      ----------
                                                      8,865,000       9,154,000

Less - Current Portion ...........................    1,879,000       2,004,000
                                                     ----------      ----------
                                                     $6,986,000      $7,150,000
                                                     ==========      ==========

     (A): The Company issued in 1993, 236,250 warrants to acquire 236,250 shares
of the common stock of Richton at $1 3/8 per share in connection with this loan.
The warrants were valued at $143,000.

                                      F-10
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued


     (B): The Company issued in 1995, 100,000 warrants to acquire 100,000 shares
of Richton's  common stock at $3.0 per share - the fair market value at the time
of issuance

     The scheduled future maturities of long-term debt at December 31, 1996, are
as follows:

          1997 ..................................    $1,879,000
          1998 ..................................     1,760,000
          1999 ..................................     4,565,000
          2000 ..................................       633,000
          2001 ..................................        28,000
                                                     ----------
                                                     $8,865,000
                                                     ==========

9.  Retirement Plans:

     The Company's Richton employees were covered by a noncontributory,  defined
benefit plan ( the "Retirement Plan") sponsored by Richton.  Effective,  January
1, 1995 the Plan was frozen and the accrual of benefits  thereafter  ceased. The
Company  subsequently  decided,  effective  December 31, 1995 to  terminate  the
Retirement  Plan.  In respect of this  event,  Richton  during 1996 paid out its
obligations to all of its former  employees and  participants  in the Retirement
Plan.  At December 31, 1996  Richton's  remaining  obligations  to three current
employees is estimated at  approximately  $.55 million in excess of Plan assets,
which has been accrued for in the accompanying financial statements. Because the
amount  actually  payable is determined  based upon interest rates and mortality
assumptions  applicable  on the date of  settlement  the actual  payment of this
remaining liability may differ from this amount.

     Pension expense reflected in the consolidated statements of income for this
Plan was $37,000 and $155,000 in 1995 and 1994, respectively.

     Century and CBE have Tax Deferred Savings Plans under Section 401 ( k) (the
"Plans") of the Internal Revenue Code. The Plans allows employees to defer up to
15% of eligible  compensation  on a pre-tax basis through  contributions  to the
Plans.  In line  with the  provisions  of the  Plans,  Century  has  elected  to
contribute,  for every dollar the employee  contributes,  50 % of the employee's
amount, up to 4 % of eligible compensation.  Century may also make discretionary
contributions.  The charge to income for employer  contributions  to the Century
Plan was  approximately  $224,000,  $184,000  and  $152,000  for the years ended
December  31,  1996,  1995  and  1994,  respectively.   Century's  discretionary
contribution  to the Plan were  $170,000,  $100,000  and $100,000 in each of the
three years ended in December  31,  1996,  respectively.  CBE has elected to not
contribute to its Plan.


10.  Stock Options:

     The Company has as part of its 1990  Long-Term  Compensation  Plan, a Stock
Option Plan ("the Plan").  Richton  accounts for this plan under APB Opinion No.
25, under which no compensation cost has been recognized.  Had compensation cost
for this plan been determined  consistent with SFAS 123 the Company's net income
and earnings per share would have been approximately the same.

                                               1996                1995
                                          -------------       -------------
     Net Income:
         As reported ..............       $   1,766,000       $   1,365,000
         Pro Forma ................           1,766,000           1,361,000
     EPS:
         As reported ..............       $         .54       $         .43
         Pro Forma ................                 .54                 .43
                                                        
     Because the SFAS 123 method of  accounting  has not been applied to options
granted prior to January 1, 1995, the resulting pro forma  compensation cost may
not be representative of that to be expected in future years.



                                      F-11
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued


     The Company may grant options for up to 275,000  shares under the Plan. The
Company has granted options on 275,000 shares through  December 31, 1996.  Under
the Plan,  the option  exercise price equals the stock's market price on date of
grant except for options  granted to Mr.  Sullivan.  The exercise  price for Mr.
Sullivan's options are at 110% of the current market price at date of grant.

     A summary of the status of the Company  stock  option plan at December  31,
1996, 1995 and 1994 is presented in the table below:

<TABLE>
<CAPTION>
                                               1996                   1995                    1994
                                      ---------------------   ---------------------   ---------------------
                                                   Wtd Avg                 Wtd Avg                 Wtd Avg
                                        Shares     ex price     Shares     ex price     Shares     ex price
                                      ---------   ---------   ---------   ---------   ---------   ---------
<S>                                     <C>       <C>           <C>       <C>           <C>       <C>      
Outstanding at beginning of Year ..     270,000   $    2.15     210,000   $    1.98     125,000   $    1.89
Granted ...........................       5,000        5.09      60,000        2.72      85,000        2.12
Exercised .........................        --          --          --          --          --          --   
Forfeited .........................        --          --          --          --          --          --   
Expired ...........................        --          --          --          --          --          --   
                                      ---------   ---------   ---------   ---------   ---------   ---------
Outstanding at End of Year ........     275,000   $    2.20     270,000   $    2.15     210,000   $    1.98
Exercisable at End of Year ........     270,000        2.15     260,000        2.10     210,000        1.98
</TABLE>

     The Company has issued warrants to purchase  336,250 shares of Common Stock
in  connection  with several debt  agreements ( see Note 5). These  warrants are
currently exercisable and will expire in seven years from date of issue.

11.  Earnings per Common Share and Common Share Equivalent:

     Earnings  per  common  share  equivalent  were  calculated  on the basis of
3,290,000, 3,161,000 and 2,975,000 weighted average common and common equivalent
shares  outstanding  in the years  ending  December 31,  1996,  1995,  and 1994,
respectively.

12.  Stockholders' Equity:

     During 1995 and 1994,  respectively,  the Company issued 58,877 and 109,097
shares of the Common Stock to its Chairman in lieu of compensation  and interest
owed to him of $177,000 and $224,000  respectively.  The number of shares issued
was  determined  based on the quoted  market  price of the shares at the time of
issuances.

13.  Long-term Leases and other Commitments:

     The Company leases its corporate offices,  distribution facilities and data
processing  equipment  under  agreements  which expire at varying  dates through
2007. Minimum annual rental commitments at December 31, 1996, are as follows:

            1997 .....................................    $1,213,000
            1998 .....................................     1,074,000
            1999 .....................................       881,000
            2000 .....................................       665,000
            2001 .....................................       190,000
            Thereafter ...............................       178,000
                                                          ----------
                                                          $4,201,000
                                                          ==========
                                       
     Rent expense under the Company's  various  operating leases was $1,478,000,
$1,374,000 and $1,123,000 for the years ended December 31, 1996,  1995, and 1994
respectively.


                                      F-12
<PAGE>

               RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued


14.  Segment Data:

     The Company operates in two industry segments, wholesale distribution,  and
computer services. See Notes 1 and 3 for description of businesses and detail of
the 1995 and 1996 acquisitions of business.  There are no intersegment sales and
all sales occur in North  America.  Income  (loss) from  operations  by industry
segment  consists of net sales less  related  cost and  expenses.  In  computing
income  (loss) from  operations by segment,  cost of borrowed  funds for working
capital  have been  included.  Corporate  includes  the  general  and  corporate
expenses and interest, incurred to acquire the two business. Corporate operating
expenses,  directly traceable to industry segments,  if any, have been allocated
to those segments.  Amortization of goodwill and related  impairment charges are
considered  segment  related and  accordingly  charged to the  related  industry
segment.  Identifiable assets by industry segment are those assets that are used
in the Company's  operation in each industry  segment and do not include general
corporate assets.  General corporate assets consist primarily of cash,  deferred
taxes, corporate property.

                                                           Corporate  
                                  Wholesale    Computer    Charges/   
                                Distribution   Services    Interest       Total
                                ------------   --------    --------      -------
                                                  (in millions)            
                                ------------------------------------------------
     Sales ...................     $  73.8     $  14.0                   $  87.8
                                   =======     =======      =======      =======
     Pre-Tax Income ..........         5.5        (2.0)     $   (.9)     $   2.6
                                   =======     =======      =======      =======
     Identifiable Assets .....     $  23.0     $   6.4      $   2.8      $  32.2
                                   =======     =======      =======      =======
                                                                        

15.  Shareholder Rights Plan:

     On January 26,  1988,  the Board of  Directors  of the  Company  declared a
dividend  distribution of one Right for each outstanding  share of Common Stock,
to stockholders of record at the close of business on February 5, 1988 Except as
set forth below,  each Right entitles the registered holder to purchase from the
Company one  one-hundredth  of a shares of Series A Preferred  Stock,  par value
$1.00 per  share,  at a price of  $14.00  (the  "Purchase  Price"),  subject  to
adjustment.  The Purchase Price shall be paid in cash. The Description and terms
of the Rights  are set forth in the Rights  Agreement  (the  "Right  Agreement")
between the Company and First City Transfer Company as Rights Agent.  Initially,
no separate Rights  Certificate will be distributed.  Until the earlier to occur
of (i) 20 business days following a public  announcement  that a person or group
of affiliated or associated  persons (an  "Acquiring  Person") has acquired,  or
obtained  the  right  to  acquire,  beneficial  ownership  of 30% or more of the
outstanding  Common  Stock or (ii) 20  business  days  following  as defined the
commencement of a tender offer or exchange offer if, upon consummation  thereof,
such  person  or  group  would  be the  beneficial  owner of 30% or more of such
outstanding   Common   Stock  (the  earlier  of  such  dates  being  called  the
"Distribution  Date"), the Rights will be evidenced,  with respect to any Common
Stock  outstanding as of the Record Date, by the certificates  representing such
Common Stock. As soon as practicable  following the Distribution Date,  separate
certificates  evidencing  the Rights  will be mailed to holders of record of the
Common  Stock  as of the  close  of  business  on  the  Distribution  Date  and,
thereafter, such separate Rights Certificates alone will evidence the Rights. As
of December 31, 1996 no Rights have been issued.



                                      F-13