U.S. 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

For the fiscal year ended December 31, 2003

                                       or

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

           For the transition period from ___________ to ___________ .

                           Commission File No. 1-1031

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

       NEW JERSEY                                         22-0743290
       ----------                                         ----------
(State of incorporation)                    (I.R.S. Employer Identification No.)

CAMPUS DRIVE, P.O. BOX 6707, SOMERSET, N.J.                             08875
-------------------------------------------                             -----
  (Address of principal executive office)                             (Zip Code)

           Registrant's telephone number:                         (732) 469-8300
                                                                  --------------
           Securities registered pursuant to Section 12(g) of the Act:

                                                Name of each exchange
          Title of each class                    on which registered
          -------------------                   ---------------------
        Common Stock par value                  Nasdaq SmallCap Market
           $1.00 per share

        12% Cumulative Convertible         Over-the-Counter Bulletin Board
           Preferred Stock no par value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES |X| NO |_|

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES |_| NO |X|

The aggregate market value of common equity held by non-affiliates of the
registrant was approximately $2,327,000 as of June 30, 2003, the last business
day of the registrant's most recently completed second fiscal quarter, computed
by reference to the average bid and asked price of such common equity.

<PAGE>

As of March 19, 2004, there were 4,055,223 shares of the registrant's common
stock outstanding, adjusted to reflect a 5% common stock dividend declared on
February 12, 2004.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement for the 2003 Annual
Meeting of Shareholders are incorporated by reference into Part I.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in Item 7, contains
forward-looking statements that involve risks and uncertainties, as well as
assumptions that, if they never materialize or prove incorrect, could cause the
results of Ronson Corporation and its consolidated subsidiaries (the "Company")
to differ materially from those expressed or implied by such forward-looking
statements. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements, including any
projections of earnings, revenue, margins, costs or other financial items; any
statements of the plans, strategies and objectives of management for future
operations; any statement concerning new products, services or developments; any
statements regarding future economic conditions or performance; any statements
of belief; and any statements of assumptions underlying any of the foregoing.
The risks, uncertainties and assumptions referred to above include the success
of new products; competition; prices of key materials, such as petroleum
products; the challenge of managing asset levels, including inventory; the
difficulty of aligning expense levels with revenue changes; assumptions relating
to pension costs; and other risks that are described herein and that are
otherwise described from time to time in the Company's Securities and Exchange
Commission reports. The Company assumes no obligation and does not intend to
update these forward-looking statements.


                                       2

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                               Page
                                                                               ----
<S>                                                                             <C>
Part I

Item 1.    Business.                                                             4

     2.    Properties.                                                           7

     3.    Legal Proceedings.                                                    8

     4.    Submission of Matters to a Vote of Security Holders.                  9

Part II

Item 5.    Market for the Company's Common Stock, Related Stockholder
           Matters, and Issuer Purchases of Equity Securities.                  10

     6.    Selected Financial Data.                                             11

     7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations.                                               11

     7A.   Quantitative and Qualitative Disclosures about Market Risk.          19

     8.    Financial Statements and Supplementary Data.                         23

     9.    Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure.                                                23

     9A.   Controls and Procedures.                                             23

Part III

Item 10.   Directors and Executive Officers of the Registrant.                  24

     11.   Executive Compensation.                                              26

     12.   Security Ownership of Certain Beneficial Owners and  Management
           and Related Stockholder Matters.                                     31

     13.   Certain Relationships and Related Transactions.                      33

     14.   Principal Accountant Fees and Services.                              34

Part IV

Item 15.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.     34

Signatures.                                                                     38

Financial Statements.                                                           39
</TABLE>


                                       3

<PAGE>

                                     PART I

Item 1 - DESCRIPTION OF BUSINESS

(a)  General Development of Business.

          The Registrant, Ronson Corporation (the "Company"), is a company
incorporated in 1928.

          The Company is engaged principally in the following businesses:

               1.   Consumer Products; and

               2.   Aviation-Fixed Wing Operations and Services and Helicopter
                    Services.

          The Company's common shares are listed on the Nasdaq SmallCap Market,
and the Company's preferred shares are listed on the NASD Over-the-Counter
("OTC") Bulletin Board. The Company's common shares are quoted under the symbol
RONC and its preferred shares are quoted under the symbol RONCP. On February 12,
2004, the Company's Board of Directors approved the redemption of the preferred
stock to be completed in the first half of 2004 (refer to Note 9 of Notes to
Consolidated Financial Statements).

(b)  Financial Information about Segments.

     Refer to Note 12 of the Notes to Consolidated Financial Statements below.

(c)  Narrative Description of Business.

     (1)  Consumer Products

          The Company's consumer packaged products, which are manufactured in
Woodbridge, New Jersey, and distributed in the United States by the Company's
wholly owned subsidiary, Ronson Consumer Products Corporation ("RCPC"), include
Ronsonol lighter fluid, Multi-Fill butane fuel injectors, flints, wicks for
lighters, a multi-use penetrant spray lubricant product under the tradename
"Multi-Lube", and a spot remover under the product tradename "Kleenol". In
addition, the Company's consumer packaged products are marketed in Canada
through Ronson Corporation of Canada Ltd. ("Ronson-Canada"), a wholly owned
subsidiary of the Company. RCPC and Ronson-Canada together comprise Ronson
Consumer Products. The Company also distributes its consumer products in Mexico.
The consumer products segment has a greater than 10% customer, which is a
distributor, supplying Ronson's products to numerous retailers. Management does
not believe that this segment is substantially dependent on this distributor
because of the presence of many other distributors which provide retailers with
Ronson's consumer products. Sales to this distributor in 2003 and 2002 accounted
for 16% of Consolidated Net Sales of the Company and 25% and 26%, respectively,
of Net Sales of the segment.

          The consumer products are distributed through distributors, food
brokers, automotive and hardware representatives and mass merchandisers, drug
chains and convenience stores in the United States and Canada. Ronson Consumer
Products is a principal supplier of packaged flints and lighter fuels in the
United States and Canada. These subsidiaries' consumer products face substantial
competition from other nationally distributed products and from numerous local
and private label packaged products. Since Ronson Consumer Products produces
packaged products in accordance with its sales forecasts, which are frequently
reviewed and revised, inventory accumulation has not been a significant factor,
and this segment does not have a significant order backlog. The sources and
availability of raw materials for this segment's packaged products are not
significant factors.

          Ronson Consumer Products also distributes six lighter and torch
products - the "RONII" refillable butane lighter; the Ronson "WINDII" liquid
fuel windproof lighter; the Ronson "AmeroFlame Ignitor", used for lighting
fireplaces, barbecues, camping


                                       4

<PAGE>

stoves and candles; the "EURO LITE" and "AMERO LITE" blue point flame butane
lighters, excellent for pipes and cigars; and the "Tech Torch", used for craft
and hobby work, cooking specialties, and soldering. The lighter products are
marketed in the United States and Canada. In addition, Ronson Consumer Products
expects to introduce a new lighter, the "COMET", and a new torch, the "AERO
TORCH", in the first half of 2004.

          The RONII is a pocket lighter that meets the child resistant
requirements issued by the Consumer Product Safety Commission. The RONII is
manufactured for the Company in Spain and is sold through the Company's
distribution channels. The RONII is priced competitively but has strong
competition from several other brands of disposable lighters as well as much
lower priced unbranded imports from China and other Far Eastern countries.

          In 1997 Ronson Consumer Products introduced the Ronson WINDII
windproof lighter in the United States and Canada. The WINDII uses Ronson
flints, Ronsonol lighter fuel and Ronson wicks. The WINDII faces strong
competition from another nationally distributed brand and from unbranded
imports. The Ronson WINDII lighter is manufactured in China in accordance with
the engineering and quality specifications of the Company. The Company has the
exclusive right to market this product in the United States, Canada and Mexico,
and does so through its established distribution channels.

          In late 2002 the Company introduced a new refillable ignitor called
the Ronson AmeroFlame Ignitor. The AmeroFlame Ignitor is manufactured in China,
in accordance with the Company's engineering and quality specifications. It has
a patented child resistant/adult friendly mechanism. It is sold as a single
ignitor or in kit form with a 26 gram Ronson Multi-Fill Butane. The AmeroFlame
Ignitor faces strong competition from imported disposable and refillable
ignitors.

          In 2002 the Company introduced a new torch, the "Tech Torch". The Tech
Torch has a precision "hi heat" blue flame. The Tech Torch is manufactured in
Taiwan for the Company in accordance with the Company's engineering and quality
specifications. The Tech Torch faces competition from other nationally
distributed brands of torches, but the Company believes the Tech Torch is a
unique product in the marketplace.

          In 2003 Ronson Consumer Products introduced the new EURO LITE and
AMERO LITE blue point flame butane lighters, in both the United States and
Canada. The EURO LITE and AMERO LITE use Ronson Multi-Fill butane fuel injectors
and are manufactured in China in accordance with the Company's engineering and
quality specifications. The EURO LITE and AMERO LITE face strong competition
from other nationally distributed brands and unbranded imports.

          In the second quarter of 2004, the Company expects to begin
distribution of the COMET, a new high quality, low cost refillable butane
lighter with electronic ignition, adjustable flame and child-resistance feature.
The COMET uses Ronson Multi-Fill butane fuel injectors and is manufactured in
China in accordance with the Company's engineering and quality specifications.
The COMET will be priced competitively with leading brand name disposable
lighters, but has strong competition from several other brands of disposable
lighters as well as much lower priced unbranded imports from China and other Far
Eastern countries.

          Also in 2004,  the Company  expects to introduce the new AERO TORCH, a
torch  with a larger  flame  for  greater  heat  output.  The new AERO  TORCH is
manufactured  in  Taiwan  for the  Company  in  accordance  with  the  Company's
engineering and quality  specifications.  The AERO TORCH faces  competition from
other  nationally  distributed  brands of torches,  but the Company believes the
AERO TORCH is a unique product in the marketplace.


                                       5

<PAGE>

     (2)  Aviation - Fixed Wing Operations and Services and Helicopter Services

          Ronson Aviation, Inc. ("Ronson Aviation"), a wholly owned subsidiary
of the Company, headquartered at Trenton-Mercer Airport, Trenton, New Jersey,
provides a wide range of general aviation services to the general public and to
government agencies. Services include air charter, air cargo, cargo handling,
avionics, management aviation services, new and used aircraft sales, aircraft
repairs, aircraft fueling, storage and office rental. This subsidiary's facility
is located on 18 acres, exclusive of four acres on which Ronson Aviation has a
first right of refusal, and includes a 52,000 square foot hangar/office complex,
two aircraft storage units ("T" hangars) and a 58,500 gallon fuel storage
complex (refer to Item 2-Description of Properties, (4) Trenton, New Jersey). In
its passenger and cargo services, Ronson Aviation operates a Citation II Jet
airplane in charter operations. Ronson Aviation is an FAA approved repair
station for major and minor airframe and engine service and an avionics repair
station for service and installations. Ronson Aviation is an authorized Raytheon
Aircraft and Parts Sales and Service Center and a Cessna Aircraft service
station.

          At December 31, 2003, Ronson Aviation had orders to purchase two new
aircraft from Raytheon Aircraft Corporation, both of which are for resale. The
total sales value of these aircraft is approximately $1,500,000. The orders are
subject to cancellation by Ronson Aviation.

          Ronson Aviation is subject to extensive competition in its air charter
activities, but Ronson Aviation is the only provider of aviation services to the
private, corporate and commercial flying public at Trenton-Mercer Airport in
Trenton, New Jersey.

ENVIRONMENTAL MATTERS

          In the conduct of certain of its manufacturing operations, the Company
is required to comply with various environmental statutes and regulations
concerning the generation, storage and disposal of hazardous materials.
Additionally under New Jersey's "ISRA" law, operators of particular facilities
classified as industrial establishments are required to ensure that their
facility complies with environmental laws, including implementation of remedial
action, if necessary, before selling or closing a facility.

          In December 1989 the Company adopted a plan to discontinue the
operations in 1990 of one of its facilities, Prometcor, Inc. ("Prometcor")
located in Newark, New Jersey, and to comply with all applicable laws. In
October 1994 Prometcor entered into a Memorandum of Agreement with the New
Jersey Department of Environmental Protection ("NJDEP") as to its environmental
compliance activities at its Newark facility. As the result of sampling and the
evaluation of the results by the Company's environmental consultants and the
NJDEP in 1996 and 1997, areas of contamination in the groundwater below a
section of the property were identified. The sampling and delineation have been
undertaken and will continue in this area of the property. The Company's plan
related to the groundwater issue has not yet been approved by the NJDEP.
Long-term monitoring of groundwater may be required. The extent of the remaining
costs associated with groundwater is not determinable until testing and
remediation have been completed and accepted by the NJDEP.

          In October 2000 Ronson Aviation completed installation and initial
testing of monitoring wells in the area where Ronson Aviation had removed and
abandoned in place its former fuel tanks. Ronson Aviation's environmental
advisors believe that the preliminary results of the testing indicate that no
further testing should be required. The final extent of costs cannot be
determined until the results of testing have been completed and accepted by the
NJDEP. Therefore, the amount of additional costs, if any, cannot be fully
determined at this time, but management


                                       6

<PAGE>

believes that the effect will not be material.

          The Company believes that compliance with environmental laws and
regulations will not have a material adverse effect upon the Company's future
capital expenditures or competitive position.

PATENTS AND TRADEMARKS

          The Company maintains numerous patents and trademarks for varying
periods in the United States, Canada, Mexico and a limited number of other
countries. While both industry segments may benefit from the Company's name as a
registered trademark, the patents and trademarks which are held principally
benefit the consumer products segment of the Company's business.

SEASONALITY AND METHODS OF COMPETITION

          No material portion of the Company's business is seasonal. The Company
uses various methods of competition as appropriate in both of its industry
segments, such as price, service and product performance.

RESEARCH ACTIVITIES

          The Company's consumer products segment expensed approximately
$339,000, $348,000, and $227,000 during the fiscal years ended December 31,
2003, 2002 and 2001, respectively, on research activities relating to the
development of new products and the improvement of existing products, all of
which were Company sponsored.

NUMBER OF EMPLOYEES

          As of December 31, 2003, the Company and its subsidiaries employed a
total of 107 persons.

CUSTOMER DEPENDENCE

          See above under "Consumer Products".

SALES AND REVENUES

          The following table sets forth the percentage of total sales
contributed by each of the Company's classes of similar products which
contributed to total sales during the last three fiscal years.

                                                  Consumer   Aviation Operations
                                                  Products       and Services
                                                  --------   -------------------
2003                                                 63%             37%
2002                                                 60%             40%
2001                                                 55%             45%

(d)  Financial Information About Geographic Areas.

          Refer to Note 12 of the Notes to Consolidated Financial Statements.

Item 2 - DESCRIPTION OF PROPERTIES

          The following list sets forth the location and certain other
information concerning the Company's manufacturing and office facilities. The
Company's facilities are in relatively modern buildings which were designed for
their present


                                       7

<PAGE>

purpose. The Company believes its manufacturing and other facilities to be
suitable for the operations conducted. In the list below, "medium" facilities
are those which have between 20,000 and 100,000 square feet; and "small"
facilities are those which have less than 20,000 square feet.

          The facilities in Woodbridge and South Brunswick, New Jersey, and
Canada comprise the consumer products segment. The Trenton, New Jersey,
facilities are used by the aviation services segment.

          (1)  Woodbridge, New Jersey

          Facilities included in (a) and (b) below are owned subject to first
and second mortgages in favor of Fleet Capital Corporation.

          (a) One medium facility for manufacturing consumer products. This
facility is owned and is constructed of brick, steel and cinder block.

          (b) One small facility for storage. This facility is owned and is
constructed of metal, cinder block and cement.

          (2)  South Brunswick, New Jersey

          One small facility for shipping and storage of finished goods. In
March 2004 RCPC began to occupy this facility which is subject to a lease
expiring in March 2013, with two additional three-year options.

          (3) Somerset, New Jersey

          One small facility for executive and consumer products offices. This
facility is subject to a lease which expires in June 2006. The facility is
constructed of metal, cinder block and cement.

          (4) Trenton, New Jersey

          (a) One medium facility for fixed wing operations and services and
helicopter services, sales and office space leased to others. This building is
owned and is constructed of steel and concrete. The land on which this building
is located is leased under a leasehold with six five-year terms automatically
renewed, with the last five-year term expiring in November 2007. The lease may
be extended for five additional five-year terms through November 2032, provided
that during the five-year term ending November 2007, Ronson Aviation invests
$1,500,000 in capital improvements. In March 2004 Ronson Aviation announced
plans for the expansion of its facilities more than sufficient to extend the
lease for five additional five-year terms.

          (b) One medium facility - "T" hangars. These structures are owned and
are constructed of aluminum and concrete. The land upon which these structures
are located is leased under a leasehold on the same terms as in 3 (a) above.

          (5) Mississauga, Ontario, Canada

          One small facility for sales and marketing, distribution center and
storage. This facility is subject to a lease which expires in March 2006. This
facility is constructed of brick and cinder block.

Item 3 - LEGAL PROCEEDINGS

          The Company is involved in various product liability claims. The
claimants have claimed unspecified damages. The ultimate liability cannot now be
determined because of the considerable uncertainties that exist. Therefore, it
is possible that results of operations or liquidity in a particular period could
be materially affected by these matters. However, based on facts currently
available, management


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<PAGE>

believes that damages awarded, if any, would be well within existing insurance
coverage.

Steel Partners II, L.P., et al v. Louis V. Aronson II, Robert A. Aronson, Erwin
-------------------------------------------------------------------------------
M. Ganz, I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder, Saul H. Weisman,
-----------------------------------------------------------------------------
Carl W. Dinger III and Ronson Corporation
-----------------------------------------

On March 25, 2003, a derivative lawsuit was filed against the directors of
Ronson in the Superior Court of New Jersey, Chancery Division, Essex County by
Steel Partners II, L.P. and Warren G. Lichtenstein. The lawsuit alleges, among
other matters, breach of fiduciary duty and an absence of disinterestedness by
the defendants, and use of corporate control to advance their own interests. The
lawsuit seeks monetary damages on behalf of Ronson as well as equitable relief
to invalidate the Company's shareholder rights agreement and certain consulting
agreements, to enjoin performance of agreements with certain directors and to
require the Company's President and C.E.O. to divest those shares acquired, and
not to acquire additional shares while the shareholder rights agreement has been
or remains in place. A special committee of two outside directors was created by
the Board of Directors of the Company to investigate and evaluate the
allegations made in the lawsuit. The committee concluded that none of the
directors breached any fiduciary duty owed to the Company or its shareholders,
that it is not in the best interests of the Company or its shareholders to
continue legal action against the directors on any of the claims asserted in the
derivative complaint and that the Company seek to dismiss the derivative action.
The Company's directors have vigorously denied the claims and have moved to have
the complaint dismissed. That motion to dismiss was denied in February 2004. The
Company's directors will continue to contest and to vigorously defend against
the claims.

Ronson Corporation, Louis V. Aronson II, Robert A. Aronson, Erwin M. Ganz,
--------------------------------------------------------------------------
Gerard J. Quinnan, and Justin P. Walder v. Steel Partners II, L.P., Steel
-------------------------------------------------------------------------
Partners, L.L.C., Warren G. Lichtenstein, Jack Howard, Howard M. Lorber, Ronald
-------------------------------------------------------------------------------
Hayes, Travis Bradford, et al
--------------------------------------------------------------------------

In June 2003 the Company and certain members of its Board of Directors filed a
complaint in the United States District Court, District of New Jersey, against
Steel Partners II, L.P., Steel Partners L.L.C., Warren G. Lichtenstein, and
others (i) claiming that Steel Partners II, L.P., Steel Partners L.L.C., and
others acting in concert with them had failed to comply with their disclosure
obligations under the federal securities law, and thereby violated Section 13D
of the Securities Exchange Act of 1934, as amended, (ii) seeking a declaration
that the defendants have beneficial ownership in excess of twelve percent of the
Company's common stock and, accordingly, are an "acquiring person" as defined in
the Company's shareholder rights agreement, (iii) seeking a further declaration
that defendants are an "interested stockholder" for purposes of the New Jersey
Shareholders Protection Act, and, accordingly, are subject to specified
prohibitions there under and (iv) seeking damages for defendants alleged
tortious interference with the Company's prospective economic advantage. Several
of the named defendants have moved to dismiss the complaint, which motion was
granted in December 2003 on the basis of the Court's conclusion that plaintiff's
federal securities claims were "time-barred" by the statute of limitations, and
the Court declined to exercise jurisdiction over the plaintiffs' state law
claims. The merits of the complaint were not considered by the Court. The
Company has announced its intent to appeal the decision, and the plaintiffs will
vigorously pursue their rights in this litigation.

Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          (a) At the Company's Annual Stockholders' Meeting (the "Meeting") on
December 3, 2003, the matters set forth in the Company's 2003 Notice of Meeting
and Proxy Statement, which is incorporated herein by reference, were submitted
to the Company's stockholders.


                                       9

<PAGE>

          (b) Messrs. Gerard J. Quinnan and Saul H. Weisman were elected as
Class I directors for three-year terms by 88.7% or more of the votes cast at the
Meeting.

          (c) The appointment of Demetrius & Company, L.L.C., independent
auditors, to audit the consolidated financial statements of the Company for the
year 2003 was ratified by 88.9% of the votes cast at the Meeting.

     The number of affirmative votes, negative votes and abstentions on each
matter is set forth below:

1. ELECTION OF DIRECTORS

   Class I (terms expire at 2006 Annual Meeting of Stockholders):

                                                 FOR        %    WITHHOLD     %
                                              ---------   ----   --------   ----
Gerard J. Quinnan                             3,151,011   88.7    402,588   11.3

Saul H. Weisman                               3,151,230   88.7    402,369   11.3

2. To ratify the appointment of DEMETRIUS & COMPANY, L.L.C., as independent
auditors for the year 2003.

   FOR        %    AGAINST     %    ABSTAIN    %
---------   ----   -------   ----   -------   ---
3,159,773   88.9   388,993   10.9    4,833    0.1

                                     PART II

Item 5 - MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

          a) The principal market for trading in Ronson common stock is the
Nasdaq SmallCap Market. Market data for the last two fiscal years are listed
below for information and analysis. The data presented reflect inter-dealer
prices, without retail markup, markdown or commission and may not necessarily
represent actual transactions.

2003
--------------------------------------------------------------------------------
Quarter                                             1st     2nd     3rd     4th
--------------------------------------------------------------------------------
High Bid                                           $0.98   $1.12   $2.75   $3.05
Low Bid                                            $0.82   $0.68   $1.00   $1.85

2002
--------------------------------------------------------------------------------
Quarter                                             1st     2nd     3rd     4th
--------------------------------------------------------------------------------
High Bid                                           $1.51   $1.28   $1.36   $0.99
Low Bid                                            $1.13   $1.00   $0.90   $0.82

          b) At March 19, 2004, there were 2,310 stockholders of record of the
Company's common stock.

          c) No cash dividends were declared or paid on the Company's common
stock in the two years ended December 31, 2003. On February 12, 2004, the
Company's Board of Directors declared a 5% stock dividend on the Company's
outstanding common stock. On March 18, 2003, the Company's Board of Directors
had also previously declared a 5% stock dividend on the Company's outstanding
common stock. Information regarding the number of shares and per share amounts
has been retroactively adjusted to reflect the stock dividends.


                                       10

<PAGE>

          d) See Item 12 below for information as to securities authorized for
issuance under equity compensation plans.

Item 6 - SELECTED FINANCIAL DATA

          The information required by this item is filed with this report on
page 40 and is incorporated herein by reference.

Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

2003 Compared to 2002

          The Company's Net Earnings in the year 2003 were $703,000 as compared
to $212,000 in the year 2002, an increase of over 200%. The Net Earnings in the
year 2002 included Earnings from Discontinued Operations of $170,000 due to
income from an environmental insurance settlement.

          The Company's Net Sales were $26,740,000 in the year 2003 as compared
to $23,601,000 in the year 2002, an increase of 13%.

          The Company's Earnings from Continuing Operations in the year 2003
increased to $703,000 from $42,000 in the year 2002. The Company's Operating
Earnings (Earnings from Continuing Operations before Non-recurring Expenses,
Interest, Other Items, and Income Taxes) more than tripled for the year 2003 to
$1,921,000 from $599,000 in the year 2002.

          The Company's Earnings from Continuing Operations before Other
Charges, Expenses and Income Taxes increased to $1,611,000 in the year 2003 from
$112,000 in the year 2002. Earnings from Continuing Operations for the year 2003
included expenses of $460,000 (before income taxes) due to litigation costs
related to a shareholder derivative action, net of the associated insurance
reimbursements of about $302,000 in the year 2003. In 2003, prior to the
insurance reimbursements, the litigation costs totaled $762,000.

Ronson Consumer Products
(in thousands)

                                                                   Year Ended
                                                                  December 31,
                                                                 2003      2002
                                                               -------   -------
Net sales                                                      $16,773   $14,232
Earnings before interest, other items, intercompany charges,
   and taxes                                                     2,610     1,201
Earnings before intercompany charges and taxes                   2,521     1,019

          Net Sales of consumer products at Ronson Consumer Products increased
by 18% in 2003 compared to 2002 primarily due to sales of the new Ronson Tech
Torch to Wal-Mart which began in May 2003 and to increased sales of flame
accessory products.

          Cost of Sales, as a percentage of Net Sales, at Ronson Consumer
Products decreased to 56% in 2003 from 58% due primarily to the increased sales,
to reduced packaging costs on certain products, and to improved packaging
processes in 2003.

          Selling, Shipping and Advertising Expenses at Ronson Consumer
Products, as a percentage of Net Sales, decreased to 19% in 2003 from 23% in
2002 primarily due to the higher sales in 2003 and to a reduction in
personnel-related costs. General and


                                       11

<PAGE>

Administrative Expenses, as a percentage of Net Sales, were reduced to 8% in
2003 from 9% in 2002, primarily due to the higher Net Sales in 2003.

          Interest Expense at Ronson Consumer Products decreased by $31,000 to
$85,000 in 2003 from 2002 primarily due to decreases in the level of borrowings.

Ronson Aviation
(in thousands)

                                                                    Year Ended
                                                                   December 31,
                                                                  2003     2002
                                                                 ------   ------
Net sales                                                        $9,967   $9,369
Earnings before interest, other items, intercompany charges,
   and taxes                                                      1,454    1,370
Earnings before intercompany charges and taxes                    1,374    1,305

          Net Sales at Ronson Aviation increased by 6% in 2003 from 2002
primarily because increases in aircraft fuel sales, sales of aircraft
maintenance services, and space rentals were partially offset by lower sales of
aircraft and of charter services.

          Ronson Aviation's Cost of Sales, as a percentage of Net Sales, were
unchanged at 71% in 2003 and 2002. Ronson Aviation's Selling, Shipping and
Advertising Expenses and General and Administrative Expenses, as a percentage of
Net Sales, were unchanged at 11% in 2003 and 2002.

Other Items

          The General and Administrative Expenses of Corporate and Others were
higher at $2,143,000 in 2003 as compared to $1,972,000 in 2002 primarily due to
higher pension expenses as the result of increased amortization related to
pension asset reductions in 2002 and to increased insurance costs in 2003.

          The net Other Charges of $460,000 in 2003 were the legal fees incurred
in 2003 as a result of the derivative action filed by a stockholder. The net
shareholder litigation expenses are included in General and Administrative
Expenses in the Consolidated Statements of Earnings. These litigation expenses
were net of the associated insurance reimbursements of about $302,000. In 2003,
prior to the insurance reimbursements, these litigation costs totaled about
$762,000.

          In 2003 Other-Net included a gain of $63,000 from the sale of vacant
land at Delaware Water Gap, PA.

Discontinued Operations

          In March 2002 the Company reached settlement with the last insurance
carrier in the Company's 1999 lawsuit to recover incurred and anticipated
environmental cleanup costs, primarily relating to the Company's discontinued
Prometcor operations. The Company had settled with the other insurance carriers
in 2000 and 2001. This last settlement amounted to $600,000, bringing total
recoveries to over $1.8 million. As a result of this final settlement, the
Company had Earnings from Discontinued Operations of $285,000 after related
expenses and before income taxes ($170,000 after taxes) in 2002.

2002 Compared to 2001

          The Company's Net Earnings in 2002, after Earnings from Discontinued
Operations of $170,000, were $212,000, as compared to $531,000 in 2001.


                                       12

<PAGE>

          The Company's Net Sales were $23,601,000 in 2002 compared to
$28,705,000 in 2001. The Net Sales in 2001 included sales of $1,350,000 for two
charter aircraft at Ronson Aviation.

          The Company's Earnings from Continuing Operations before Interest,
Other Items, and Other Charges were $599,000 in the year 2002, as compared to
$1,733,000 in the year 2001. Approximately $260,000, or 23%, of the reduction in
earnings in 2002 from 2001 was due to increases in the Company's cost of
insurance coverage.

          The Company's Earnings from Continuing Operations before Income Taxes
and Non-recurring Items were $112,000 in the year 2002 as compared to $1,088,000
in 2001.

Ronson Consumer Products
(in thousands)

                                                                   Year Ended
                                                                  December 31,
                                                                 2002      2001
                                                               -------   -------
Net sales                                                      $14,232   $15,709
Earnings before interest, other items, intercompany charges,
   and taxes                                                     1,201     1,952
Earnings before intercompany charges and taxes                   1,019     1,755

          Net Sales of consumer products at Ronson Consumer Products decreased
by 9% in 2002 compared to 2001 primarily due to decreased sales of flame
accessory products.

          Cost of Sales, as a percentage of Net Sales, at Ronson Consumer
Products increased to 58% in 2002 from 55% in 2001. The increase in the Cost of
Sales percentage was due primarily to the lower sales and to increased
manufacturing costs, the largest of which was insurance costs, partially offset
by lower material costs.

          Selling, Shipping and Advertising Expenses at Ronson Consumer
Products, as a percentage of Net Sales, increased to 23% in 2002 from 22% in
2001 because a 4% reduction in costs in 2002 was more than offset by the effect
of the lower Net Sales in 2002.

          General and Administrative Expenses, as a percentage of Net Sales, was
unchanged at 9% in 2002 and 2001 because a reduction in expenses, primarily
personnel costs and professional fees, in 2002 was offset by the effect of the
lower sales in 2002.

          Interest Expense at Ronson Consumer Products decreased by $56,000 to
$116,000 in 2002 from 2001 primarily due to decreases in the prime rate of
interest.

Ronson Aviation
(in thousands)

                                                                  Year Ended
                                                                 December 31,
                                                                2002      2001
                                                               ------   -------
Net sales                                                      $9,369   $12,996
Earnings before interest, other items, intercompany charges,
   and taxes                                                    1,370     1,518
Earnings before intercompany charges and taxes                  1,305     1,316
Other charges                                                      --      (232)

          Net Sales at Ronson Aviation decreased by 28% in 2002 from 2001. The
decrease is primarily because: 1) of lower sales of aircraft in 2002 by
$1,664,000; 2) the sales in 2001 included $1,350,000 for two turbo prop C-99
charter aircraft; and 3)


                                       13

<PAGE>

Net Sales in 2001 included charter sales of $821,000 utilizing the two C-99
aircraft which were sold in the fourth quarter of 2001.

          Ronson Aviation's Cost of Sales, as a percentage of Net Sales,
decreased to 71% in 2002 as compared to 77% in 2001. The decrease in the Cost of
Sales percentage in 2002 was primarily due to the change in mix of products
sold, partially offset by an increase in insurance costs of approximately
$100,000.

          Ronson Aviation's Selling, Shipping and Advertising Expenses and
General and Administrative Expenses, as a percentage of Net Sales, increased to
10% in 2002 from 8% in 2001 primarily because a 9% reduction in expenses,
primarily personnel costs, was more than offset by the effect of the lower Net
Sales.

          The other charges in 2001 relate to the sale of Ronson Aviation's two
turbo prop C-99 charter aircraft and the related reduction in personnel. Sales
in the year 2001 included the proceeds of $1,350,000 from the sale of the two
charter aircraft. The 2001 other charges of $232,000 consisted of a loss on the
two C-99 aircraft sales of $140,000 and the related costs of $92,000.

          Interest Expense at Ronson Aviation decreased by $118,000 to $80,000
in 2002 from 2001 due to decreases in the prime rate of interest and to reduced
debt, primarily as a result of the sale of the two C-99 charter aircraft in the
fourth quarter of 2001.

Other Items

          The General and Administrative Expenses of Corporate and Others were
higher in 2002 as compared to 2001 primarily due to higher pension expense as
the result of increased amortization related to pension asset reductions in 2001
and to increased professional fees in 2002.

Discontinued Operations

          The Earnings from Discontinued Operations included Insurance Recovery
Income and the Discontinuance Costs recorded by the Company related to the
discontinuance of Prometcor, as follows (in thousands):

                                                         Year Ended December 31,
                                                             2002       2001
                                                             ----       ----
Insurance recovery income                                    $355       $175
Discontinuance costs accrued                                   70        175
                                                             ----       ----
                                                              285         --
Deferred income tax benefits                                  115         --
                                                             ----       ----
Earnings from discontinued operations                        $170       $ --
                                                             ====       ====

          In the second half of 1999, the Company filed a lawsuit against twelve
of its former general liability insurance carriers seeking recovery of
environmental investigation and remediation costs incurred and anticipated at
various locations, primarily Prometcor. In 2000 and 2001 the Company reached
settlement agreements with eleven of the twelve insurance carriers involved. On
March 6, 2002, the Company reached a settlement with the last remaining
insurance company in the above matter. These settlements totaled approximately
$1,830,000. After related costs, the Company recognized insurance recovery
income in 2002 and 2001 of $355,000 and $175,000, respectively.


                                       14

<PAGE>

Income Taxes

          In accordance with Statement of Financial Accounting Standards
("SFAS") #109, "Accounting for Income Taxes", in 2003, 2002, and 2001, the
Company recognized deferred income tax expenses of $313,000, $20,000, and
$320,000, respectively, related to continuing operations primarily due to the
Earnings from Continuing Operations before Taxes. The Company recognized
deferred income tax expenses related to discontinued operations of $115,000 in
2002 as the result of the insurance recovery income discussed above.

          Current income taxes in the years ended December 31, 2003, 2002, and
2001, were presented net of credits of $420,000, $29,000, and $322,000,
respectively, arising from the utilization of available tax losses and loss
carryforwards in accordance with SFAS #109. In 2003, 2002 and 2001, current
income tax expenses (benefits) were as follows (in thousands):

                                                         Year Ended December 31,
                                                            2003   2002   2001
                                                            ----   ----   ----

Federal                                                     $ 20   $ (5)  $  5
State                                                        110     47    (11)
Foreign                                                        5      8     11
                                                            ----   ----   ----
   Total                                                    $135   $ 50   $  5
                                                            ====   ====   ====

          At December 31, 2003, the Company had net operating loss carryforwards
for federal income tax purposes of approximately $3,090,000 and federal and
state alternative minimum tax credit carryforwards of $86,000. (Refer to Note 3
of the Notes to Consolidated Financial Statements.)

          The Company's effective income tax rate related to Continuing
Operations was 39% in 2003, 63% in 2002, and 38% in 2001. The increase in the
tax rate in 2002 was due to foreign income taxes, to non-deductible expenses,
and to increased minimum state income taxes.

FINANCIAL CONDITION

          The Company's Stockholders' Equity was $3,475,000 at December 31,
2003, compared to $2,458,000 at December 31, 2002. The increase in Stockholders'
Equity in 2003 was primarily due to the Net Earnings of $703,000 in 2003, and to
a reduction, net of related income tax benefits, in the Minimum Pension
Liability Adjustment component of Accumulated Other Comprehensive Loss. This
reduction was primarily due to earnings on Retirement Plan assets greater than
Plan assumptions and to amortization of prior unrecognized losses.

          In 2003 the Company's working capital improved to $137,000 at December
31, 2003, from a deficiency of $557,000 at December 31, 2002. The improvement of
$694,000 in working capital was primarily due to the Company's Net Earnings and
depreciation in 2003, partially offset by a reduction in 2003 in the long-term
portion of Pension Obligation of $660,000 and the long-term portion of long-term
debt and leases of $327,000.

          The Company's cash balances increased in 2003 to $664,000 from
$313,000 in 2002, and the Company's Short-Term Debt decreased to $847,000 in
2003 from $1,654,000 in 2002. These improvements were both primarily due to the
Net Earnings in 2003. The Company's cash balances increased in 2001 to $689,000
from $81,000 in 2000, and the Company's Short-Term Debt decreased to $858,000 in
2001 from $1,697,000 in 2000. These improvements were both primarily due to the
Net Earnings in 2001, the sales by Ronson Aviation of the two charter aircraft
and the proceeds from the insurance settlements related to the Prometcor
groundwater costs.


                                       15

<PAGE>

          In 2003 the Company's Accounts Receivable increased and the Finished
Goods Inventory decreased due to increased sales in the fourth quarter of 2003
as compared to the fourth quarter of 2002.

          In 2002 Finished Goods Inventory and Short-Term Debt increased due to
Ronson Aviation's receiving delivery of an aircraft in 2002 for resale in 2003.

          In 2002 the Company's capital expenditures increased primarily due to
Ronson Aviation's replacement of an engine on its Citation II charter aircraft
at a cost of about $400,000.

          In 2003 the Company's Other Assets decreased by $435,000 primarily due
to reduced net deferred tax assets. This decrease in net deferred tax assets was
primarily due to utilization of net operating loss carryforwards in 2003 (refer
to Note 3 to Consolidated Financial Statements).

          The Increase in Cash from Changes in Inventories of $1,762,000 in 2001
was primarily due to the sale of the two C-99 charter aircraft by Ronson
Aviation, for a total of $1,350,000. The aircraft had been transferred to
inventory from fixed assets at the book value of $1,490,000.

          Accrued Expenses increased in 2003 primarily due to increases in
accrued pension costs and in accrued other compensation.

          The Increase in Cash from Discontinued Operations in 2002 was due to
the proceeds of $600,000 from the final insurance settlement and the proceeds of
$295,000 from the sale of the final parcel of the Prometcor property. Those
proceeds were partially offset by payment of costs related to the insurance
settlements, costs related to the sale of the property, and previously accrued
environmental costs. Substantially all of the payments for the costs related to
Prometcor's environmental clearance were completed in 2002, with the exception
of the costs related to groundwater which is expected to be incurred over a
period of many years.

          Based on the amount of the loans outstanding and the levels of
accounts receivable and inventory at December 31, 2003, Ronson Consumer Products
had unused borrowings available at December 31, 2003, of about $988,000 under
the Fleet Capital Corporation ("Fleet") and Canadian Imperial Bank of Commerce
lines of credit. Based on the level of accounts receivable, Ronson Aviation had
unused borrowings of about $297,000 under the Fleet line of credit at December
31, 2003.

          In December 2003 the Company, RCPC and Fleet extended the RCPC
Mortgage Loan. The loan had been due to expire on May 1, 2004, and was extended
to December 1, 2008. The loan extension amended certain other terms of the
Mortgage Loan, including changing the interest rate to prime plus .5%. In order
to fix the interest rate, the Company entered into an interest rate swap
agreement with Fleet in an amount and term equal to the Mortgage Loan which
effectively converts the Mortgage Loan to a fixed-rate loan with an interest
rate of 7.45%.

          In October 2003 RCPC entered into a lease agreement for a warehouse
facility to be utilized by RCPC for finished goods storage and products
shipments. The lease has an initial term of nine years and two three-year
renewal options, with rent expense in the initial three years of the lease of
approximately $10,800 per month, increasing to approximately $11,000 per month
in the second three years and approximately $11,500 in the final three years of
the initial term. In connection with the lease, the landlord provided
improvements totaling $440,000. The landlord has provided RCPC with a long-term
loan for the improvements, bearing interest at 8.25%, is payable at $4,800 per
month, including interest, with a final payment of $150,000 due at the end of
the initial term, and is secured by a letter of credit in the amount of
$150,000.

          In March 2004 RCPC issued purchase orders for the purchase of
manufacturing equipment to replace its existing filling line for the Multi-Fill
Butane refills.


                                       16

<PAGE>

The purchase orders total approximately $800,000 and the total project is
expected to cost about $1,100,000, which the Company intends to finance with
long-term debt. The new, more efficient filling line is to be operational in the
fourth quarter of 2004.

          Ronson Aviation's property is subject to a long-term lease with an
existing expiration of November 2007. The lease may be extended by Ronson
Aviation for an additional 25 years with an investment in capital improvements
of $1,500,000. In March 2004 Ronson Aviation announced plans to proceed with an
expansion of its facilities to be completed in the second half of 2006 which
will meet the requirements of the lease extension.

          The Company has continued to meet its obligations as they have matured
and management believes that the Company will continue to meet its obligations
through internally generated funds from future net earnings and depreciation,
current and future borrowing availability under established external financial
arrangements, potential additional sources of financing and existing cash
balances.

          The Company's capital commitments including long-term debt and leases
are discussed more fully in Notes 5 and 6 of the Notes to Consolidated Financial
Statements. A summary of the maturities of contractual obligations and other
commitments is as follows (in thousands):

                                             Payments Due by Period
                                  ----------------------------------------------
Contractual                                Less than     2-3      4-5     After
Obligations                        Total     1 year     years    years   5 years
-----------                       ------   ---------   ------   ------   -------

Long-term debt (1)                $2,659     $  310    $  830   $1,206    $  313
Capital lease
   obligations                        56         37        19       --        --
Operating leases (1)               1,935        421       679      268       567
Other long-term
   obligations (2)                 2,819        794     1,342      683        --
                                  ------     ------    ------   ------    ------
Total contractual
   obligations                    $7,469     $1,562    $2,870   $2,157    $  880
                                  ======     ======    ======   ======    ======

Pension obligations (3)                      $  647    $1,676   $  728    $  148
                                             ======    ======   ======    ======

(1)  Long-term debt and operating leases include the amounts payable under the
     RCPC agreement to lease new warehouse space, beginning March 1, 2004.

(2)  Other long-term obligations include amounts due under employment
     agreements, consulting agreements and a stock option agreement.

(3)  The payments of pension obligations assume necessary required contributions
     are made annually and that the plan incurs no actuarial or asset gains or
     losses. Any actuarial gains and losses cannot be estimated at this time.

          Other commercial commitments include outstanding letters of credit of
$26,000 for the importation of consumer products, a $60,000 standby letter of
credit related to Ronson Aviation aircraft on order from Raytheon Aircraft
Corporation, and a standby letter of credit of $150,000 related to the RCPC
lease of additional warehouse space.

          The Company has no off-balance sheet financing arrangements other than
the operating leases discussed above, no guarantees of the obligations of
others, and no unconsolidated subsidiaries or special purpose entities.

CRITICAL ACCOUNTING POLICIES

          The Company's consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America which requires that certain estimates and assumptions be made that
affect the


                                       17

<PAGE>

amounts and disclosures reported in those financial statements and the related
accompanying notes. Actual results could differ from these estimates and
assumptions. Management uses its best judgment in valuing these estimates and
may, as warranted, solicit external professional advice. Estimates are based on
current facts and circumstances, prior experience and other assumptions believed
to be reasonable. The following critical accounting policies, some of which are
impacted significantly by judgments, assumptions and estimates, affect the
Company's consolidated financial statements.

Allowance For Doubtful Accounts

          The preparation of financial statements requires our management to
make estimates and assumptions relating to the collectibility of our accounts
receivable. Management specifically analyzes historical bad debts, customer
credit worthiness, current economic trends and changes in our customer payment
terms when evaluating the adequacy of the allowance for doubtful accounts.

Accounting For Sales Incentives

          The Company records sales incentives as a reduction of sales in our
statements of operations. Sales incentives include rebates, consideration and
allowances given to retailers for space in their stores (slotting fees),
consideration and allowances given to obtain favorable display positions in the
retailer's stores and other promotional activity. The Company records these
promotional incentives in the period during which the related product is shipped
to the customer, or when the expense is incurred.

          Estimated sales incentives are calculated and recorded at the time
related sales are made and are based primarily on historical rates and
consideration of recent promotional activities. We review our assumptions and
adjust our allowances quarterly. Our financial statements could be materially
impacted if the actual promotion costs fluctuate from the standard rate. The
allowances are classified as a reduction of accounts receivable.

Revenue Recognition

          The Company records revenue upon the shipment of its consumer products
to customers and upon the delivery of the aviation products or services.

Inventory Valuations

          Inventories are valued at lower of cost or market determined by the
average cost method. Management regularly reviews inventory for salability and
establishes obsolescence reserves to absorb estimated lower market values. On an
annual basis, the Company takes a physical inventory verifying the units on hand
and comparing its perpetual records to physical counts.

Impairment Of Long-Lived Assets

          The Company periodically evaluates whether events or circumstances
have occurred that indicate long-lived assets may not be recoverable or that the
remaining useful life may warrant revision. When such events or circumstances
are present, the Company assesses the recoverability of long-lived assets by
determining whether the carrying value will be recovered through the estimated
undiscounted future cash flows resulting from the use of the asset. In the event
the sum of the estimated undiscounted future cash flows is less than the
carrying value of the asset, an impairment loss equal to the excess of the
asset's carrying value over its fair value is recorded.


                                       18

<PAGE>

Other Loss Accruals

          The Company has a number of other potential loss exposures incurred in
the ordinary course of business such as environmental claims, product liability,
litigation, and appeal of a tax audit by the State of New Jersey. Establishing
accruals for these matters required management's estimate and judgment with
regard to maximum risk exposure and ultimate liability or realization. As a
result, these estimates are often developed with the Company's counsel, or other
appropriate advisors, and are based on management's current understanding of the
underlying facts and circumstances. Because of uncertainties related to the
ultimate outcome of these issues or the possibility of changes in the underlying
facts and circumstances, additional charges related to these issues could be
required in the future.

Pension Plans

          The valuation of our pension plans requires the use of assumptions and
estimates that are used to develop actuarial valuation of expenses, assets and
liabilities. These assumptions include discount rates, investment returns, and
mortality rates. The actuarial assumptions used in our pension reporting are
reviewed annually by management and the Company's independent actuary and
compared with external benchmarks to ensure that they accurately account for our
future pension obligations. Changes in assumptions and future investment returns
could potentially have a material impact on pension expenses and related funding
requirements.

Accounting for Income Taxes

          The Company assesses the need for a valuation allowance against
deferred tax assets by considering future taxable income and ongoing prudent and
feasible tax planning strategies. Should we determine that we would not be able
to realize all or part of our deferred tax assets in the future, an adjustment
to the valuation allowance against the deferred tax assets would be charged to
income in the period such determination was made.

Item 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          The Company is exposed to changes in prevailing market interest rates
affecting the return on its investments, but does not consider this interest
rate market risk exposure to be material to its financial condition or results
of operations. The Company invests primarily in highly liquid debt instruments
with strong credit ratings and very short-term (less than 90 days) maturities.
The carrying amount of these investments approximates fair value.

          All of the Company's short-term debt carries a variable rate of
interest, and, therefore, the carrying value of the short-term debt approximates
fair value. The Company's outstanding long-term debt as of December 31, 2003,
consisted of indebtedness in the amount of $785,000 with a variable rate of
interest and $1,434,000 with a fixed rate of interest which is not subject to
change based upon changes in prevailing market interest rates. Of the long-term
debt with fixed interest rates, the $1,431,000 mortgage loan effectively carries
a fixed rate of 7.45% due to an interest rate swap contract even though the loan
has a variable rate. Because the interest rate swap contract is 100% effective,
the contract will result in no future gains or losses being recognized.

          Under its current policies, except for an interest rate swap contract
noted above, the Company does not use derivative financial instruments,
derivative commodity instruments or other financial instruments to manage its
exposure to changes in interest rates, foreign currency exchange rates,
commodity prices or equity prices.


                                       19

<PAGE>

OTHER RISK FACTORS:

          Political and Economic Risks

               The Company's operations are exposed to the risk of political and
economic uncertainties. Changes in political and economic conditions may affect
product cost, availability, distribution, pricing, purchasing, and consumption
patterns. While the Company seeks to manage its business in consideration of
these risks, there can be no assurance that the Company will be successful in
doing so.

          Operating Results and Net Earnings May Not Meet Expectations

               The Company cannot be sure that its operating results and net
earnings will meet its expectations. If the Company's assumptions and estimates
are incorrect or do not come to fruition, or if the Company does not achieve all
of its key goals, then the Company's actual performance could vary materially
from its expectations. The Company's operating results and net earnings may be
influenced by a number of factors, including the following:

          o    the introduction of new products and line extensions by the
               Company or its competitors;

          o    the Company's ability to control its internal costs and the cost
               of raw materials;

          o    the effectiveness of the Company's advertising, marketing and
               promotional programs;

          o    the changes in product pricing policies by the Company or its
               competitors;

          o    the ability of the Company to achieve business plans, including
               volume and pricing plans, as a result of high levels of
               competitive activity;

          o    the ability to maintain key customer relationships;

          o    the ability of major customers and other creditors to meet their
               obligations as they come due;

          o    the ability to successfully manage regulatory, tax and legal
               matters, including resolution of pending matters within current
               estimates;

          o    the ability of the Company to attract and retain qualified
               personnel;

          o    the costs, distraction of management, and disruption that may be
               incurred due to the actions of a dissident shareholder / hedge
               fund.

          Regulatory Risks

               The Company is subject to numerous environmental laws and
regulations that impose various environmental controls on its business
operations, including among other things, the discharge of pollutants into the
air and water, the handling, use, treatment, storage and clean-up of solid and
hazardous wastes, and the investigation and remediation of soil and groundwater
affected by hazardous substances. Such laws and regulations may otherwise relate
to various health and safety matters that impose burdens upon the Company's
operations. These laws and regulations govern actions that may have adverse
environmental effects and also require compliance with certain practices when
handling and disposing of hazardous wastes. These laws and regulations also
impose strict and joint and several liability for the costs of, and damages
resulting from, cleaning up current sites, past spills, disposal and other
releases of hazardous substances. The Company believes that its expenditures
related to environmental matters are not currently


                                       20

<PAGE>

expected to have a material adverse effect on its financial condition, results
of operations or cash flows. However, the environmental laws under which the
Company operates are complicated and often increasingly more stringent, and may
be applied retroactively. Accordingly, there can be no assurance that the
Company will not be required to make additional expenditures to remain in or to
achieve compliance with environmental laws in the future or that any such
additional expenditures will not have a material adverse effect on the Company's
financial condition, results of operations and cash flows.

               Certain of the Company's products have chemical compositions that
are controlled by various state, federal and international laws and regulations.
The Company complies with these laws and regulations and seeks to anticipate
developments that could impact the Company's products. These laws and
regulations could have a material adverse effect on the Company's financial
condition, results of operations and cash flows.

          Volatility in the Insurance Market

               The Company evaluates its insurance coverage annually. Trends in
the insurance industry suggest that such coverage may be much more expensive,
less protective or even unavailable which could have a material adverse effect
on the Company's financial condition, results of operations and cash flows. In
such a case, the Company may decide to self-insure more, thereby undertaking
additional risks.

Ronson Consumer Products:

          Component Supply Risk

               Ronson Consumer Products depends upon its vendors for the supply
of the primary components for its flame accessory and chemical products. Certain
of these components are subject to significant price volatility beyond the
control or influence of the Company. Petroleum products have had significant
price volatility in the past and may in the future. Rising oil prices can also
impact the Company's cost of transporting its products. The Company has
historically been successful in managing its component costs and product pricing
to maintain historical gross margins. Additionally, the Company has generally
found alternative sources of constituent chemicals for its products readily
available. As component and raw material costs are the main contribution to cost
of goods sold for all of the Company's products, any significant fluctuation in
the costs of components could also have a material impact on the gross margins
realized on the Company's products. Increases in the prices for the components
could have a material adverse effect on the Company's business, operating
results, financial position and cash flows.

          Reliance on Supply Chain

               Each of Ronson Consumer Products' lighter and torch products is
manufactured by a single vendor. Since there are a number of sources of similar
lighter products, the Company believes that other suppliers could provide
lighters and torches on comparable terms. The loss of any of these suppliers or
manufacturers could, however, temporarily disrupt or interrupt the production of
the Company's products.

          Competition

               The market for the Company's products is highly competitive and
is expected to continue to be competitive in the future. The Company's products
compete both within their own product classes as well as within product
distribution channels, competing with many other products for store placement
and shelf space. The Company is aware of many competing products, some of which
sell for lower prices; however, the Company relies on the awareness of its
brands among consumers, the value


                                       21

<PAGE>

offered by those brands as perceived by consumers, and competitive pricing as
its primary competitive strategies.

               These considerations as well as increased competition generally
could result in price reductions, reduced gross margins, and a loss of market
share, any of which could have a material adverse effect on the Company's
business, operating results, financial position and cash flows. In addition,
many of the Company's competitors have significantly greater financial,
technical, product development, marketing and other resources. There can be no
assurance that the Company will be able to compete successfully against current
and future competitors. Competitive pressures faced by the Company could have a
material adverse effect on its business, operating results, financial position
and cash flows.

          Business Risks

               With the trend toward consolidation in the retail marketplace,
the Company's customer base is shifting toward fewer, but larger, customers who
purchase in larger volumes. The loss of, or reduction in, orders from any of the
Company's most significant customers could have a material adverse effect on the
Company's business and its financial results.

               Large customers also seek price reductions, added support, or
promotional concessions. To support this trend, the Company has had to expand
its use of customer and market-specific promotions and allowances which has
negatively impacted, and will continue to impact, the Company's ability to
maintain existing profit margins.

               In addition, the Company is subject to changes in customer
purchasing patterns. These types of changes may result from changes in the
manner in which customers purchase and manage inventory levels, or display and
promote products within their stores. Other potential factors such as customer
disputes regarding shipments, fees, merchandise condition or related matters may
also impact operating results.

               The manufacture, packaging, storage, distribution and labeling of
the Company's products and the Company's business operations all must comply
with extensive federal and state laws and regulations. It is possible that the
government will increase regulation of the transportation, storage or use of
certain chemicals, to enhance homeland security or protect the environment and
that such regulation could negatively impact raw material supply or costs.

               Some of the Company's consumer products are associated in part
with tobacco. These products are also utilized for other purposes such as
replacing the match. The Company's research and development department is
continuing to develop products utilizing the Company's fuels with products not
associated with tobacco. The potential decline in smoking, however, may have a
negative impact on the Company.

          Protection of Intellectual Property

               The Company relies on trademark, trade secret, patent and
copyright laws to protect its most important asset, the Ronson brand name, and
its other intellectual property. The Company cannot be certain that the
intellectual property rights will be successfully asserted in the future or that
they will not be invalidated or circumvented.

Ronson Aviation:

          Supply Risk

               Ronson Aviation depends upon its vendors for the supply of its
principal products. Aircraft fuels are subject to significant price volatility.
Ronson


                                       22

<PAGE>

Aviation has been successful in the pricing of its fuel to maintain its gross
margins. Increases in the price of the aircraft fuels could have an adverse
effect on the demand for Ronson Aviation products and aviation services, and on
its operating results, financial position and cash flows.

               Ronson Aviation relies on Raytheon Aircraft Corporation as its
sole supplier of new aircraft for sale. Loss of availability of aircraft and
delays in deliveries of aircraft has had from time to time, and may in the
future temporarily have, an adverse effect on Ronson Aviation's Net Sales.

          Business Risk

               Ronson Aviation depends upon demand for general aviation
services, including corporate air travel and private charter. Increased security
requirements and concerns may have an adverse effect on Ronson Aviation's future
operating results, financial position and cash flows.

Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          Financial statements required by this item are included in Item 15.

Item 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

          There were no disagreements with accountants in the years ended
December 31, 2003, 2002 and 2001.

Item 9A - CONTROLS AND PROCEDURES

          a) Evaluation of Disclosure Controls and Procedures. The Company's
Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have
evaluated the effectiveness of the Company's disclosure controls and procedures
(as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this annual report (the "Evaluation Date"). Based on such
evaluation, such officers have concluded that, as of the Evaluation Date, the
Company's disclosure controls and procedures are effective and designed to
ensure that the information relating to the Company (including its consolidated
subsidiaries) required to be included in the Company's reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the requisite time periods.

          The Company's management, including the CEO and CFO, does not expect
that our Disclosure Controls will prevent all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake. The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions.

          b) Changes in Internal Controls. There have not been any changes in
the Company's internal controls over financial reporting that have materially
affected, or are reasonably likely to materially affect, such controls.


                                       23

<PAGE>

                                    PART III

Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY, COMPLIANCE WITH
          SECTION 16(a) OF THE EXCHANGE ACT

     (a)  Identification of directors.

          The following table indicates certain information about the Company's
     seven (7) directors:

                                                      Positions and Offices
                                                         with Company
                                                      Presently Held (other
                                                     than that of Director);
                             Period                    Business Experience
                             Served     Term as      During Past Five Years
                               as      Director       (with Company unless
Name of Director      Age   Director    Expires         otherwise noted)
-------------------   ---   --------   --------   ------------------------------
Louis V. Aronson II    81   1952-        2005     President & Chief
                            Present               Executive Officer; Chairman
                                                  of Executive Committee;
                                                  Member of Nominating
                                                  Committee.

Robert A. Aronson      54   1993-        2004     Managing Member of
                            Present               Independence Leather,
                                                  L.L.C., Mountainside, NJ,
                                                  the principal business of
                                                  which is the import of
                                                  leather products, 1996
                                                  to present; son of
                                                  the President & Chief
                                                  Executive Officer of the
                                                  Company.

Erwin M. Ganz          74   1976-        2004     Member of Executive
                            Present               Committee and Nominating
                                                  Committee; Consultant
                                                  for the Company, 1994 to
                                                  present; Executive Vice-
                                                  President-Industrial
                                                  Operations, 1975 to 1993;
                                                  Chief Financial Officer,
                                                  1987 to 1993.

 I. Leo Motiuk         58   1999-        2005     Member of Audit Committee;
                            Present               Attorney; Counsel-Windels,
                                                  Marx, Lane & Mittendorf, LLP,
                                                  New Brunswick, NJ, 2004-
                                                  present; Former partner in
                                                  Shanley Fisher, P.C.,
                                                  Attorneys at Law, Morristown,
                                                  NJ, 1990-1999.

Gerard J. Quinnan      75   1996-        2006     Member of Audit Committee;
                            Present               Consultant for the Company,
                                                  1990 to present; Vice
                                                  President-General Manager
                                                  of Ronson Consumer
                                                  Products Corporation,
                                                  1981 to 1990.


                                       24

<PAGE>

                                                     Positions and Offices
                                                         with Company
                                                     Presently Held (other
                                                    than that of Director);
                             Period                   Business Experience
                             Served     Term as      During Past Five Years
                               as      Director      (with Company unless
Name of Director      Age   Director   Expires          otherwise noted)
-------------------   ---   --------   --------   ------------------------------
Justin P. Walder       68   1972-        2004     Secretary; Assistant
                            Present               Corporation Counsel; Member of
                                                  Executive Committee and
                                                  Nominating Committee;
                                                  Principal in Walder, Hayden
                                                  & Brogan, P.A., Attorneys
                                                  at Law, Roseland, NJ.

Saul H. Weisman        78   1978-        2006     Member of Audit Committee;
                            Present               Retired President, Jarett
                                                  Industries, Inc., Cedar
                                                  Knolls, NJ, the principal
                                                  business of which is the
                                                  sale of hydraulic and
                                                  pneumatic equipment to
                                                  industry, 1955 to 1997.


          No director also serves as a director of another company registered
under the Securities Exchange Act of 1934.

          The Board of Directors of the Company has determined  that it does not
have at least  one  "audit  committee  financial  expert"  serving  on its audit
committee.  Messrs.  R. A. Aronson and Ganz also attend,  as in past years,  the
meetings of the Company's audit committee.  The Board recognizes that Messrs. R.
A. Aronson and Ganz meet the  Securities  and Exhange  Commission  definition of
"audit committee financial expert",  but do not meet the Securities and Exchange
Commission definition of independent director.  The Board has, to date, not been
successful  in  identifying  a nominee  as a new  director  who  would  meet the
Securities  and Exchange  Commission  definition of "audit  committee  financial
expert".  The Board expects that it will have added an  independent  director to
the audit committee who meets that definition by October 15, 2004.

     (b)  Identification of executive officers.

          The following table sets forth certain information concerning the
executive officers of the Company, each of whom is serving a one-year term of
office, except Mr. Louis V. Aronson II, who is a party to an employment contract
with the Company which expires on December 31, 2007:


                                       25

<PAGE>

                                                 Positions and Offices
                             Period Served           with Company;
Name                   Age     as Officer         Family Relationships
-------------------    ---   -------------   -----------------------------

Louis V. Aronson II    81    1953-           President & Chief Executive
                             Present         Officer; Chairman of
                                             Executive Committee;
                                             Director.

Daryl K. Holcomb       53    1996-           Vice President & Chief
                             Present         Financial Officer, Controller
                                             & Treasurer;

                             1993-1996       Chief Financial Officer,
                                             Controller & Treasurer;

                             1988-1993       Controller & Treasurer; None.

Justin P. Walder       68    1989-           Secretary;
                             Present

                             1972-           Assistant Corporation
                             Present         Counsel; Director; None.

          Messrs. L.V. Aronson and Holcomb have been employed by the Company in
executive and/or professional capacities for at least the five-year period
immediately preceding the date hereof. Mr. Walder has been Assistant Corporation
Counsel and a director of the Company and a principal in Walder, Hayden &
Brogan, P.A., Attorneys at Law, for at least the five-year period immediately
preceding the date hereof.

     (c)  Section 16(a) Beneficial Ownership Reporting Compliance.

          Under Securities and Exchange Commission ("SEC") rules, the Company is
required to review copies of beneficial ownership reports filed with the Company
which are required under Section 16(a) of the Exchange Act by officers,
directors and greater than 10% beneficial owners. Based solely on the Company's
review of forms filed with the Company, the Company believes no information is
required to be reported under this item.

     (d)  Code of ethics.

          The company has adopted a code of ethics entitled, Standards of
Integrity, applicable to it and all its subsidiaries. The Standards of Integrity
are an integral part of the Company's business conduct compliance program and
embody the committment of the Company and its subsidiaries to conduct operations
in accordance with the hightest legal and ethical standards. A copy of the
Standards of Integrity may be obtained without charge upon written request to:
Investor Relations, Ronson Corporation, P.O. Box 6707, Somerset, NJ 08875-6707.

Item 11 - EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

          The Summary Compensation Table presents compensation information for
the years ended December 31, 2003, 2002, and 2001, for the Chief Executive
Officer and the other executive officer of the Company whose salary and bonus
exceeded $100,000.


                                       26

<PAGE>

                           SUMMARY COMPENSATION TABLE

                                                            Long-Term
                                     Annual Compensation    Compensa-      All
                                     -------------------      tion        Other
      Name and                                             ---------    Compen-
      Principal                       Salary     Bonus      Options/     sation
      Position                Year     ($)       ($)(1)    SARS(#)(2)    ($)(3)
---------------------         ----   --------   -------    ----------   --------
Louis V. Aronson II           2003   $616,120   $70,570          --      $19,005
  President & Chief           2002    618,822        --      22,050       16,911
  Executive Officer           2001    606,119    59,755      26,047       14,305

Daryl K. Holcomb              2003    157,813    25,454          --        3,156
  Vice President &            2002    157,500        --      11,025        3,575
  Chief Financial             2001    155,500    21,234      11,575        3,400
  Officer, Controller
  & Treasurer

Footnotes

(1) The compensation included in the bonus column is an incentive payment
resulting from the attainment by the Company's operating subsidiaries of certain
levels of net sales and profits before taxes. The incentive compensation,
however, earned in 2002 by Messrs. L.V. Aronson and Holcomb of $37,421 and
$12,995, respectively, was waived by them.

(2) The options included in Long-Term Compensation have been retroactively
adjusted to reflect the 5% common stock dividends declared February 12, 2004.

(3) In 2003 All Other Compensation included matching credits by the Company
under its Employees' Savings Plan (Mr. L.V. Aronson, $4,000; Mr. Holcomb,
$3,156) and the cost of term life insurance included in split-dollar life
insurance policies (Mr. L.V. Aronson, $15,005).

OPTION GRANTS IN LAST FISCAL YEAR

None.

AGGREGATED OPTION EXERCISES AND YEAR END OPTION VALUES

          The following table summarizes, for each of the named executive
officers, options exercised during the year and the number of stock options
unexercised at December 31, 2003. "In-the-Money" options are those where the
fair market value of the underlying securities exceeds the exercise price of the
options.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

<TABLE>
<CAPTION>
                                                                         Value of
                                               Number of               In-the-Money
                  Number of                Unexercised Options           Options at
                   Shares                   at FY-End (4)(5)            FY-End (3)
                  Acquired                ---------------------   ---------------------
                     on       Value (1)   Exercis-   Unexercis-   Exercis-   Unexercis-
      Name        Exercise    Realized    able (2)      able        able       able
      ----        ---------   ---------   --------   ----------   --------   ----------
<S>                <C>         <C>         <C>           <C>       <C>          <C>
L.V. Aronson II    22,050      $32,943      8,682        --        $    --      $--
D.K. Holcomb           --           --     25,605        --         25,642       --
</TABLE>

Footnotes

(1) The value realized equals the market value of the common stock acquired on
the date of exercise minus the exercise price.


                                       27

<PAGE>

(2) The exercisable options held by the named executive officers at December 31,
2003, are exercisable at any time and expire on December 7, 2004, July 6, 2006,
and September 12, 2007.

(3) The value of the unexercised options was determined by comparing the average
of the bid and ask prices of the Company's common stock at December 31, 2003, to
the option prices.

(4) The exercise prices of the options held at December 31, 2003, were as
follows:

                                                         Number   Exercise Price
                                                         ------   --------------
L.V. Aronson II                                           8,682       $2.3047

D.K. Holcomb                                              5,209        2.0950
                                                          9,371        1.0400
                                                         11,025        1.0314

(5) The number of shares acquired on exercise and of unexercised options held at
December 31, 2003, has been adjusted for the 5% common stock dividends declared
February 12, 2004.

LONG-TERM INCENTIVE PLANS

          None.

PENSION PLANS

          No named executive officer is a participant in the Company's defined
benefit pension plan.

COMPENSATION OF DIRECTORS

          Directors who are not officers of the Company receive an annual fee of
$8,500 and, in addition, are compensated at the rate of $650 for each meeting of
the Company's Board of Directors actually attended and $400 for each meeting of
a Committee of the Company's Board of Directors actually attended. Officers
receive no compensation for their services on the Board or on any Committee.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS

          Mr. L.V. Aronson II is a party to an employment contract with the
Company dated September 21, 1978, which, as amended on July 24, 1980, July 1,
1982, October 11, 1985, July 7, 1988, May 10, 1989, August 22, 1991, May 22,
1995, June 11, 1997, December 17, 1998, and September 19, 2001, provides for a
term expiring December 31, 2004. The employment contract provides for the
payment of a base salary which is to be increased 7% as of January 1 of each
year. Mr. L.V. Aronson waived a 7% salary increase due January 1, 2004. Also,
Mr. L.V. Aronson had waived a 7% salary increase due January 1, 2003, under the
terms of the existing contract. In addition, in February 2002 Mr. L.V. Aronson
offered and accepted a 5% reduction in his base salary provided for by the terms
of his employment contract. Previously, Mr. L.V. Aronson had offered and
accepted other reductions in his base salary provided by the terms of his
employment contract. During 1990 Mr. L.V. Aronson offered and accepted a 5%
reduction in his base salary provided for by the terms of his employment
contract, and, in addition, waived a 7% salary increase due January 1, 1991,
under the terms of the contract. During 1992 Mr. L.V. Aronson offered and
accepted a 7% reduction in his base salary. Effective September 1, 1993, Mr.
L.V. Aronson offered and accepted a further 5% reduction in his base salary.

          On November 24, 2003, the Company and Mr. L.V. Aronson entered into a
new employment agreement to be effective upon the December 31, 2004 expiration
of the


                                       28

<PAGE>

existing agreement. The new three-year agreement provides for a term expiring on
December 31, 2007, and provides for the payment of a base salary which is to be
increased 3.5% as of January 1 of each year beginning in 2005, subject to the
Company reporting operating earnings in the year prior to each increase. Both
the existing and new contracts also provide that the Company shall reimburse Mr.
L.V. Aronson for expenses, provide him with an automobile, and pay a death
benefit equal to two years' salary. Under both of the employment contracts, Mr.
L.V. Aronson's full compensation will continue in the event of Mr. L.V.
Aronson's disability for the duration of the agreement or one full year,
whichever is later. The employment contracts also provide that if, following a
Change in Control (as defined in the employment contract), Mr. L.V. Aronson's
employment with the Company terminated under prescribed circumstances as set
forth in the employment contract, the Company will pay Mr. L.V. Aronson a lump
sum equal to the base salary (including the required increases in base salary)
for the remaining term of the employment contracts.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

          The Board of the Company, as a whole, provides overall guidance of the
Company's executive  compensation  program. All members of the Board participate
in the review and approval of each of the components of the Company's  executive
compensation  program  described  below,  except that no director  who is also a
Company  employee  participates in the review and approval of his  compensation.
Directors  of the  Company  who are also  current  employees  of the Company are
Messrs.  L.V.  Aronson and Walder.  Directors of the Company who are also former
employees of the Company are Messrs.  R.A.  Aronson,  whose  employment with the
Company ceased in 1987, Ganz, who retired from the Company in 1993, and Quinnan,
who retired  from Ronson  Consumer  Products in 1990.  Mr. Ganz has a consulting
agreement  with the Company for the period  ending  December 31, 2004,  which is
cancelable  at any  time by  either  party  with 180 days  notice  and  provides
compensation at the annual rate of $87,500,  plus participation in the Company's
health and life insurance plans and the use of an automobile.  In the year ended
December  31,  2003,  Mr. Ganz was  compensated  $87,500 for his  services.  Mr.
Quinnan's consulting agreement with the Company expired on December 31, 2003. In
2003 Mr. Quinnan was  compensated  $40,800 for his services and was provided the
use of an automobile.  Mr. Quinnan is expected to continue to perform consulting
services for the Company at a specified daily rate.

REPORT ON EXECUTIVE COMPENSATION

          As stated above, the Board, as a whole, provides overall guidance of
the Company's executive compensation program. The program covers the named
executive officers, all other executive officers and other key employees. The
program has three principal components: base salary, annual cash incentives
under the Company's Management Incentive Plan ("MIP"), and stock options under
the Company's Incentive Stock Option Plans ("ISO Plans"). Mr. L.V. Aronson's
base salary is determined by the terms of his employment contract discussed
above, except for the reductions which have been offered and accepted from time
to time by Mr. L.V. Aronson. The amendments, also detailed above, to Mr. L.V.
Aronson's employment contract and the reductions offered and accepted from time
to time by Mr. L.V. Aronson have been reviewed and approved by the Board. The
Board also reviews and approves the salaries of all of the other executive
officers. Prior to the beginning of the fiscal year, the Board reviews and
approves which employees participate in the Company's MIP and the criteria which
will determine the cash awards under the plan to the participants after the
close of the fiscal year. The Board also reviews and approves all awards under
the Company's ISO Plans.

          The base salaries are intended to meet the requirements of the
employment contract in effect for Mr. L.V. Aronson and to fairly compensate all
the officers of the Company for the effective exercise of their
responsibilities, their management of the business functions for which they are
responsible, their extended period of service to the Company and their
dedication and diligence in carrying out their responsibilities for the Company
and its subsidiaries. In 2003 and prior years, increases have been granted to
Mr. L.V. Aronson in accordance with terms of the


                                       29

<PAGE>

employment contract, except for the above mentioned salary reductions offered
and accepted from time to time by him. In 2003 and prior years, the Board, after
review, has approved increases to the other executive officers.

          The Company's MIP is based on the financial performance of the
Company's subsidiaries and is adopted annually, after review, for the ensuing
year by the Board. Each year the Board sets the formula for determining
incentive compensation under the MIP for the Company and each subsidiary based
upon (1) the amount net sales exceed thresholds established by the Board and (2)
pretax profits as a percent of net sales. The Board determines who of the
Company's and its subsidiaries' key employees are eligible to participate in the
MIP and what each employee's level of participation may be. The thresholds set
by the Board must be met by the end of the fiscal year in order for each
eligible employee to receive an award under the MIP for that year.

          The stock options granted under the Company's ISO Plans are designed
to create a proprietary interest in the Company among its executive officers and
other key employees and reward these executive officers and other key employees
directly for appreciation in the long-term price of the Company's Common Stock.
The ISO Plans directly link the compensation of executive officers and other key
employees to gains by the stockholders and encourages the executive officers,
directors, and other key employees to adopt a strong stockholder orientation in
their work. In 2003 no options were granted to key employees and directors of
the Company.

          The above report is presented by the Board of Directors:

          Louis V. Aronson II   Gerard J. Quinnan
          Robert A. Aronson     Justin P. Walder
          Erwin M. Ganz         Saul H. Weisman
          I.Leo Motiuk

PERFORMANCE GRAPH

          The following table compares the yearly percentage change in the
cumulative total stockholder returns on the Company's common stock during the
five fiscal years ended December 31, 2003, with the cumulative total returns of
the NASDAQ Stock Market (U.S. Companies) Index and the Russell 2000 Index.

                COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
                  AMONG THE COMPANY, NASDAQ STOCK MARKET INDEX
                             AND RUSSELL 2000 INDEX
                                 TABLE OF VALUES

                                         Value as of December 31,
                          1998      1999      2000      2001     2002      2003
                        -------   -------   -------   -------   ------   -------
Ronson Corporation      $100.00   $ 70.50   $ 40.00   $ 57.60   $34.94   $ 83.44
NASDAQ Stock Market
 Index                   100.00    185.43    111.83     88.76    61.37     91.75
Russell 2000 Index       100.00    121.26    117.59    120.52    95.83    141.11

          This comparison assumes that $100 was invested in the Company's common
stock on December 31, 1998, in the NASDAQ Stock Market (U.S. Companies) Index
and in the Russell 2000 Index, and that dividends are reinvested.

          The Company has determined that it is not possible to identify a
published industry or line-of-business index or a peer group of companies since
the Company has two distinct lines of business. The Company has selected the
Russell 2000 Index since it is composed of companies with small capitalizations.


                                       30

<PAGE>

Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     (a)  Security ownership of certain beneficial owners.

          Set forth below are the persons who, to the best of management's
knowledge, own beneficially more than five percent of any class of the Company's
voting securities, together with the number of shares so owned and the
percentage which such number constitutes of the total number of shares of such
class presently outstanding:

             Name and Address
               of Beneficial             Title of   Beneficially     Percent of
                   Owner                   Class       Owned            Class
     ---------------------------------   --------   ------------     ----------
     Louis V. Aronson II                  Common    1,117,578(1)(2)  27.5%(1)(2)
        Campus Drive
        P.O. Box 6707
        Somerset, New Jersey 08875

     Carl W. Dinger III                   Common      478,870(3)     11.8%(3)
        55 Loantaka Lane North
        Morristown, New Jersey 07960

     Steel Partners II, L.P.              Common      398,612(4)      9.8%(4)
        590 Madison Avenue
        32nd Floor
        New York, New York 10022

     Howard M. Lorber                     Common      311,794(5)      7.7%(5)
        70 East Sunrise Highway
        Valley Stream, New York 11581

     (1)  Includes 8,682 shares of common stock issuable to Mr. L.V. Aronson
          upon exercise of stock options held by Mr. L.V. Aronson under the
          Ronson Corporation 1996 and 2001 Incentive Stock Option Plans.

     (2)  The Ronson Corporation Retirement Plan ("Retirement Plan") is the
          beneficial owner of 199,301 common shares. The shares held by the
          Retirement Plan are voted by the Retirement Plan's trustees, Messrs.
          L.V. Aronson and Ganz. If the shares held by the Retirement Plan were
          included in Mr. L.V. Aronson's beneficial ownership, Mr. L.V.
          Aronson's beneficial ownership would be 1,315,879 shares, or 32.4% of
          the class. If the shares held by the Retirement Plan were included in
          Mr. Ganz's beneficial ownership, Mr. Ganz's beneficial ownership would
          be 241,761 shares, or 6.0% of the class. The Retirement Plan's
          holdings were reported in 1988 on Schedule 13G, as amended September
          22, 1997, adjusted for the 5% common stock dividends declared February
          12, 2004.

     (3)  478,870 shares of common stock owned directly, adjusted for the 5%
          common stock dividends declared February 12, 2004. This information
          was provided to the Company by Mr. Dinger. Mr. Dinger has provided the
          Company's Board of Directors an irrevocable proxy to vote these
          shares. (Refer to "Transactions with Management and Others" in Item 13
          below.)

     (4)  397,338 shares of common stock and 1,274 shares of common stock
          issuable upon conversion of 1,100 shares of 12%, cumulative
          convertible preferred stock owned by Steel Partners II, L.P., Steel
          Partners, L.L.C., the general partner of Steel Partners II, L.P., and
          Mr. Warren G. Lichtenstein, the sole executive officer and managing
          member of Steel Partners, L.L.C., are also beneficial owners of the
          shares. This information was obtained from a Schedule 13D/A filed with
          the SEC on June 25, 2002, by Steel Partners II, L.P., and Mr.
          Lichtenstein, adjusted for the 5% common stock dividends declared
          through February 12, 2004.


                                       31

<PAGE>

     (5)  311,794 shares of common stock owned directly by Mr. Lorber. This
          information was obtained from a Schedule 13D filed with the SEC on
          January 27, 2000, by Mr. Lorber, adjusted for the 5% common stock
          dividends declared through February 12, 2004.

     (b)  Security ownership of management.

          The following table shows the number of shares of common stock
beneficially owned by each director, each named executive officer, and by all
directors and officers as a group as of March 19, 2004, and the percentage of
the total shares of common stock outstanding on March 19, 2004, owned by each
individual and by the group shown in the table. Individuals have sole voting and
investment power over the stock shown unless otherwise indicated in the
footnotes:

          Name of Individual or         Amount and Nature of     Percent of
            Identity of Group          Beneficial Ownership(2)      Class
     -------------------------------   -----------------------   ----------
     Louis V. Aronson II                     1,117,578(3)          27.5%
     Robert A. Aronson                          13,608               (1)
     Erwin M. Ganz                              43,465(3)           1.1%
     I. Leo Motiuk                               8,406               (1)
     Gerard J. Quinnan                           9,563               (1)
     Justin P. Walder                           66,153              1.6%
     Saul H. Weisman                            23,273               (1)
     Daryl K. Holcomb                           54,746              1.3%

     All directors and officers as a
     group (eight (8) individuals
     including those named above)            1,336,792             32.4%

     (1)  Shares owned beneficially are less than 1% of total shares
          outstanding.

     (2)  Shares listed as owned beneficially include 75,192 shares subject to
          option under the Ronson Corporation 1996 and 2001 Incentive Stock
          Option Plans as follows:

                                                         Number of Common Shares
                                                               Under Option
                                                         -----------------------
           Louis V. Aronson II                                     8,682
           Robert A. Aronson                                       5,513
           Erwin M. Ganz                                           8,269
           I.Leo Motiuk                                            5,513
           Gerard J. Quinnan                                       5,513
           Justin P. Walder                                       10,584
           Saul H. Weisman                                         5,513
           Daryl K. Holcomb                                       25,605

           All directors and officers as a
           group (eight (8) individuals including
           those named above)                                     75,192

     (3)  Does not include 199,301 shares of issued common stock owned by the
          Retirement Plan. The shares held by the Retirement Plan are voted by
          the Retirement Plan's trustees, Messrs. L.V. Aronson and Ganz. If the
          shares held by the Retirement Plan were included in Mr. L.V. Aronson's
          beneficial ownership, Mr. L.V. Aronson's beneficial ownership would be
          1,315,879 shares, or 32.4% of the class. If the shares held


                                       32

<PAGE>

          by the Retirement Plan were included in Mr. Ganz's beneficial
          ownership, Mr. Ganz's beneficial ownership would be 241,766 shares, or
          6.0% of the class.

     (c)  Changes in control.

          The Company knows of no contractual arrangements which may operate at
a subsequent date to result in a change in control of the Company.

     (d)  Securities authorized for issuance under equity compensation plans.

<TABLE>
<CAPTION>
                      Equity Compensation Plan Information
---------------------------------------------------------------------------------------------
                                                                       Number of Securities
                                                                       Remaining Available
                                                                       For Future Issuance
                         Number of Securities                             under Equity
                          to Be Issued upon       Weighted-average       Compensation Plans
                             Exercise of          Exercise Price of     (excluding Securities
                         Outstanding Options,   Outstanding Options,    Reflected in Column
Plan Category            Warrants and Rights     Warrants and Rights             (a))
---------------------------------------------------------------------------------------------
                                  (a)                    (b)                     (c)
---------------------------------------------------------------------------------------------
<S>                            <C>                      <C>                    <C>
Equity compensation
   plans approved by
   security holders            136,550                  $1.25                  67,826

Equity compensation
   plans not approved
   by security holders            None                    N/A                    None

      Total                    136,550                  $1.25                  67,826
</TABLE>

Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a)  Transactions with management and others.

          In October 1998 the Company entered into a consulting agreement with
Mr. Carl W. Dinger III, a greater than 5% shareholder of the Company. The
agreement provided that Mr. Dinger perform certain consulting services for the
Company for a period of 18 months expiring on April 7, 2000. On March 6, 2000,
the Company and Mr. Dinger entered into a new consulting agreement effective
upon the expiration date of the original agreement. The new agreement provides
that Mr. Dinger continue to perform consulting services for the Company for a
period of 48 months at a fee of $7,000 per month, expiring April 7, 2004. During
the year ended December 31, 2003, Mr. Dinger was compensated $84,000 under the
agreement. In March 2004 this agreement was extended for 30 days.

          In October 1998 Mr. Dinger granted an option to the Company to
purchase the 205,248 shares of the Company's common stock held by Mr. Dinger.
The option was for a period of 18 months expiring on April 7, 2000, and the
exercise price of the option was $5.25 per share. On March 6, 2000, Mr. Dinger
granted a new option to the Company, to purchase the 456,067 shares of the
Company's common stock now held by Mr. Dinger. The option is for a period of 48
months expiring April 7, 2004. The exercise price of the option is $5.25 per
share for the first two years, and the option price in the second two-year
period is $7.50 per share. The cost of the option is $4,000 per month for the
period of the option or until exercised. As part of the new option agreement,
Mr. Dinger has granted the Board of Directors of the Company an irrevocable
proxy to vote the optioned shares during the term of the option. In March 2000
Mr. Dinger purchased 250,819 shares of newly issued restricted


                                       33

<PAGE>

common stock of the Company at a price of $2.26 per share. The Company expended
$48,000 for the option during the year ended December 31, 2003. In March 2004
this agreement was extended for 30 days.

          Refer to Item 11 above for additional information regarding this item.

     (b)  Certain business relationships.

          Refer to Item 11 above for information regarding this item.

     (c)  Indebtedness of management.

          None.

     (d)  Transactions with promoters.

          Not applicable.

Item 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

          The fees billed for services provided to the Company by Demetrius &
Company, L.L.C., for the year ended December 31, 2003 and 2002, were as follows:

                                                                 2003      2002
                                                               -------   -------
      Audit fees                                               $82,600   $76,000
      Audit-related fees                                            --        --
      Tax fees, principally related to tax
        return preparation                                      15,900    16,100
      All other fees                                               575        --

          The Audit Committee of the Board of the Directors pre-approves
substantially all of the services of the Company's auditing firm. These
pre-approved services are approved by the Audit Committee based upon "not to
exceed" proposals in advance of the Company's Annual Meeting of Stockholders. In
the years ended December 31, 2003 and 2002, fees from services provided which
had not been pre-approved, but were subsequently reviewed and approved, were
$1,000 and $1,475, respectively.

                                     PART IV

Item 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a) (1) and (2) - The response to this portion of Item 15 is submitted as a
separate section of this report.

          (3) Listing of exhibits, as applicable:

          (3) Articles of incorporation are incorporated herein by reference.
The By-Laws of the Company were amended on March 5, 1997, to include a new
Section 9 of Article I, Nomination for Board of Directors. The amended By-Laws
were filed as Exhibit 3 with the 1996 Form 10-K and are incorporated herein by
reference.

          Reference is made to Company's Form S-2 filed on September 18, 1987,
and incorporated herein by reference.

          Reference is made to Company's Form S-2 filed on April 8, 1988, and
incorporated herein by reference.


                                       34

<PAGE>

     (10) Material contracts.

          On January 6, 1995, RCPC entered into an agreement with Summit
Business Capital Corp., doing business as Fleet Capital, ("Fleet") for a
Revolving Loan and a Term Loan. On March 6, 1997, the Revolving Loan was amended
and extended to June 30, 2000. On May 13, 1999, the Revolving Loan was further
extended to June 30, 2002. On June 30, 2002, the Revolving Loan was amended and
further extended to June 30, 2005. The 1995 agreements were attached to the
Company's 1994 Form 10-K as Exhibits 10(a)-10(f). The March 1997 amendments to
the Revolving Loan were attached to the Company's 1996 Form 10-K as Exhibits
10(a)-10(c). A July 1997 amendment was attached to the Company's September 30,
1997, Form 10-Q as Exhibit 10(g). The May 1999 amendment was attached to the
Company's June 30, 1999, Form 10-Q as Exhibits 10(a) and 10(f). The June 2002
amendment was attached to the Company's June 30, 2002, Form 10-Q as Exhibits
10(a)-10(d).

          On December 1, 1995, the Company and RCPC entered into a mortgage loan
agreement with Fleet. The agreement and note were attached to the Company's 1995
Form 10-K as Exhibits 10(a) and 10(b). On May 13, 1999, the Company and RCPC
refinanced the existing mortgage. The new mortgage loan was attached to the
Company's June 30, 1999, Form 10-Q as Exhibits 10(b)-10(e). On December 3, 2003,
the Company, RCPC and Fleet extended the mortgage loan. The amendments to the
mortgage loan were attached to the Company's Form 8-K filed January 6, 2004, as
Exhibits 10(a)-10(d).

          On August 28, 1997, Ronson Aviation entered into an agreement with
Fleet for a Revolving Loan and a Term Loan. On May 13, 1999, Ronson Aviation and
Fleet extended the Revolving Loan and Term Loan to June 30, 2002. On June 30,
2002, the Revolving Loan and Term Loan were further extended to June 30, 2005.
The Revolving Loan and Term Loan agreements were attached to the Company's
September 30, 1997, Form 10-Q as Exhibits 10(a)-10(f). The May 1999 amendment
agreements were attached to the Company's June 30, 1999, Form 10-Q as Exhibits
10(g)-10(k). The June 2002 amendment agreements were attached to the Company's
June 30, 2002, Form 10-Q as Exhibits 10(e)-10(i).

          For further information on the Company's loan agreements, reference is
made to Notes 4 and 5 of the Notes to Consolidated Financial Statements
contained in the Company's financial statements for the year ended December 31,
2003, filed with this report pursuant to Item 8, which is incorporated herein by
reference.

          The Company is a party to an employment contract with Mr. Louis V.
Aronson II dated December 21, 1978, as amended July 24, 1980, July 1, 1982,
October 11, 1985, July 7, 1988, May 10, 1989, August 22, 1991, May 22, 1995,
June 11, 1997, December 17, 1998, and September 19, 2001. This contract is
incorporated herein by reference as filed as Exhibit 10.16 to Registration
Statement No. 33-13696 on Form S-2 dated September 18, 1987. The amendment dated
September 19, 2001, was attached to the Company's Form 8-K filed on October 23,
2001, as Exhibit 10. On November 24, 2003, the Company and Mr. Aronson entered
into a new three-year employment agreement to be effective upon the December 31,
2004 expiration of the existing agreement. The new agreement provides for a term
expiring on December 31, 2007. The new agreement was attached to the Company's
Form 8-K filed January 6, 2004, as Exhibit 10(e).

     (20) Other documents or statements to security holders.

          The Ronson Corporation Notice of Meeting of Stockholders held on
December 3, 2003, and Proxy Statement was filed on November 3, 2003, and is
incorporated herein by reference.


                                       35

<PAGE>

     (21) Subsidiaries of the Company.

          The Company is the owner of 100% of the voting power of the following
subsidiaries, each of which is included in the consolidated financial statements
of the Company:

               Wholly Owned Subsidiary           State or Other Jurisdiction
                  and Business Name            of Incorporation or Organization
        ------------------------------------   --------------------------------

        Domestic

        Ronson Consumer Products Corporation               New Jersey
        Ronson Aviation, Inc.                              New Jersey

        Foreign

        Ronson Corporation of Canada Ltd.                    Canada

          The Company also holds 100% of the voting power of five additional
subsidiaries which are included in its consolidated financial statements and
which, if considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary.

     (23) Consent of experts and counsel attached hereto as Exhibit 23(a).

          31.1(a) and (b) Rule 13a-14(a)/15d-14(a) Certifications pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

          32.1 Section 1350 Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished but not filed for purposes of the
Securities Exchange Act of 1934).

      (99) Additional exhibits.

               (a)  None.

               (b)  Reports on Form 8-K filed.

                    On October 7, 2003, the Company filed a report on Form 8-K
with the Securities and Exchange Commission providing information in response to
Item 5 of such report. No financial statements or pro forma financial
information were included in the report.

                    On October 31, 2003, the Company filed a report on Form 8-K
with the Securities and Exchange Commission providing information in response to
Item 5 of such report. No financial statements or pro forma financial
information were included in the report.

                    On January 6, 2004, the Company filed a report on Form 8-K
with the Securities and Exchange Commission providing information in response to
Item 5 of such report. No financial statements or pro forma financial
information were included in the report.

                    On January 29, 2004, the Company filed a report on Form 8-K
with the Securities and Exchange Commission providing information in response to
Item 5 of such report. No financial statements or pro forma financial
information were included in the report.

                    On February 3, 2004, the Company filed a report on Form 8-K
with the Securities and Exchange Commission providing information in response to
Item 5 of such report. No financial statements or pro forma financial
information were included in the report.


                                       36

<PAGE>

                    On February 18, 2004, the Company filed a report on Form 8-K
with the Securities and Exchange Commission providing information in response to
Item 5 of such report. No financial statements or pro forma financial
information were included in the report.


                                       37

<PAGE>

                                   SIGNATURES

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

                               RONSON CORPORATION


Dated: March 30, 2004                   By: /s/ Louis V. Aronson II
                                            ------------------------------------
                                            Louis V. Aronson II, President &
                                            Chief Executive Officer and Director


Dated: March 30, 2004                   By: /s/ Daryl K. Holcomb
                                            ------------------------------------
                                            Daryl K. Holcomb, Vice President &
                                            Chief Financial Officer, Controller
                                            and Treasurer


Dated: March 30, 2004                   By: /s/ Justin P. Walder
                                            ------------------------------------
                                            Justin P. Walder, Secretary and
                                            Director


Dated: March 30, 2004                   By: /s/ Robert A. Aronson
                                            ------------------------------------
                                            Robert A. Aronson, Director


Dated: March 30, 2004                   By: /s/ Erwin M. Ganz
                                            ------------------------------------
                                            Erwin M. Ganz, Director


Dated: March 30, 2004                   By: /s/ I. Leo Motiuk
                                            ------------------------------------
                                            I. Leo Motiuk, Director


Dated: March 30, 2004                   By: /s/ Gerard J. Quinnan
                                            ------------------------------------
                                            Gerard J. Quinnan, Director


Dated: March 30, 2004                   By: /s/ Saul H. Weisman
                                            ------------------------------------
                                            Saul H. Weisman, Director


                                       38

<PAGE>

                           ANNUAL REPORT ON FORM 10-K

                                     ITEM 8

                              FINANCIAL STATEMENTS

                          YEAR ENDED DECEMBER 31, 2003

                               RONSON CORPORATION

                              SOMERSET, NEW JERSEY


                                       39

<PAGE>

RONSON CORPORATION FIVE-YEAR SELECTED FINANCIAL DATA
Dollars in thousands (except per share data)

                                       2003     2002     2001     2000     1999
                                      ------   ------   ------   ------   ------

Net sales                             26,740   23,601   28,705   27,759   24,426

Earnings from continuing
   operations                            703       42      531      434      292

Total assets                          12,603   12,888   12,627   15,192   16,728

Long-term obligations                  3,317    4,321    4,460    4,681    3,701

Per common share (1,2):
   Earnings from continuing
      operations:
      Basic                             0.17     0.01     0.13     0.11     0.08
      Diluted                           0.17     0.01     0.13     0.11     0.08

(1)  Basic Net Earnings per Common Share provides for quarterly cumulative
     preferred dividends with no conversion of preferred shares to common
     shares. Diluted Net Earnings per Common Share assumes no provision for the
     quarterly cumulative preferred dividends with full conversion of all
     preferred shares to common shares and includes the dilutive effect of
     outstanding stock options. The assumed conversion of preferred to common
     and the stock options were anti-dilutive for the years ended December 31,
     2002, 2001, 2000 and 1999, and, therefore, were excluded from the
     computation of Diluted Net Earnings Per Common Share for those years.

(2)  A 5% stock dividend on the Company's outstanding common stock was declared
     on February 12, 2004, payable on April 15, 2004. Previously, 5% stock
     dividends on the Company's outstanding common stock were issued on April
     15, 2003, and 2002. No other dividends on common stock were declared or
     paid during the five years ended December 31, 2003.


                                       40
<PAGE>

     RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
     LIST OF FINANCIAL STATEMENTS

          The following consolidated financial statements of Ronson Corporation
          and its wholly owned subsidiaries are included in Item 8:

          Consolidated Balance Sheets - December 31, 2003 and 2002

          Consolidated Statements of Earnings - Years Ended

               December 31, 2003, 2002 and 2001

          Consolidated Statements of Changes in Stockholders' Equity -

               Years Ended December 31, 2003, 2002 and 2001

          Consolidated Statements of Cash Flows - Years Ended

               December 31, 2003, 2002 and 2001

     Notes to Consolidated Financial Statements


                                       41

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Ronson Corporation

We have audited the accompanying consolidated balance sheets of Ronson
Corporation and subsidiaries as of December 31, 2003 and 2002, and the related
consolidated statements of earnings, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2003.
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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Ronson Corporation
and subsidiaries as of December 31, 2003 and 2002, and the consolidated results
of their operations and cash flows for each of the years in the three-year
period ended December 31, 2003 in conformity with accounting principles
generally accepted in the United States of America.

DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
February 25, 2004


                                       42

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
Dollars in thousands

                                     ASSETS

                                                                  December 31,
                                                               -----------------
                                                                 2003      2002
                                                               -------   -------
CURRENT ASSETS:
Cash and cash equivalents ..................................   $   664   $   313
Accounts receivable, less allowances for doubtful accounts
   of: 2003, $76 and 2002, $56 .............................     2,198     1,754
Inventories:
   Finished goods ..........................................     1,495     1,874
   Work in process .........................................        25       103
   Raw materials ...........................................       383       360
                                                               -------   -------
                                                                 1,903     2,337

Other current assets .......................................     1,183     1,148
                                                               -------   -------
      TOTAL CURRENT ASSETS .................................     5,948     5,552

PROPERTY, PLANT AND EQUIPMENT:
Land .......................................................         6        19
Buildings and improvements .................................     4,782     4,740
Machinery and equipment ....................................     7,232     6,938
Construction in progress ...................................        53        28
                                                               -------   -------
                                                                12,073    11,725

Less accumulated depreciation and amortization .............     8,029     7,435
                                                               -------   -------
                                                                 4,044     4,290

OTHER ASSETS ...............................................     2,611     3,046
                                                               -------   -------
                                                               $12,603   $12,888
                                                               =======   =======

See notes to consolidated financial statements.


                                       43

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
Dollars in thousands (except share data)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                           -------------------
                                                                                             2003       2002
                                                                                           --------   --------
<S>                                                                                        <C>        <C>
CURRENT LIABILITIES:
Short-term debt ..............................................                             $    847   $  1,654
Current portion of long-term debt ............................                                  293        282
Current portion of lease obligations .........................                                   32         35
Accounts payable .............................................                                1,632      1,629
Accrued expenses .............................................                                2,683      2,155
Current liabilities of discontinued operations ...............                                  324        354
                                                                                           --------   --------
      TOTAL CURRENT LIABILITIES                                                               5,811      6,109

LONG-TERM DEBT ...............................................                                1,926      2,219
LONG-TERM LEASE OBLIGATIONS ..................................                                   20         54
PENSION OBLIGATIONS ..........................................                                1,132      1,792
OTHER LONG-TERM LIABILITIES ..................................                                   58         64
LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS .............                                  181        192

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Preferred stock, no par value, authorized 5,000,000 shares:
   12% cumulative convertible, $0.01 stated value;
   outstanding, 2003 and 2002, 34,875 (liquidation preference,
   $61 in aggregate) .........................................                                   --         --

Common stock, par value $1
<CAPTION>
                                                                    2003         2002
                                                                 ----------   ----------
<S>                                                              <C>          <C>          <C>        <C>
   Authorized shares .........................................   11,848,106   11,848,106
   Reserved shares ...........................................      176,922      200,361
   Issued (including treasury) ...............................    4,128,455    4,106,405      4,128      4,106
Additional paid-in capital ...................................                               29,510     29,556
Accumulated deficit ..........................................                              (26,770)   (27,466)
Accumulated other comprehensive loss .........................                               (1,796)    (2,141)
                                                                                           --------   --------
                                                                                              5,072      4,055
Less cost of treasury shares:
   2003, and 2002, 73,232 ....................................                                1,597      1,597
                                                                                           --------   --------
      TOTAL STOCKHOLDERS' EQUITY .............................                                3,475      2,458
                                                                                           --------   --------
                                                                                           $ 12,603   $ 12,888
                                                                                           ========   ========
</TABLE>

See notes to consolidated financial statements.


                                       44

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
Dollars in thousands (except per share data)

<TABLE>
<CAPTION>
                                                         Year Ended December 31,
                                                       ---------------------------
                                                         2003      2002      2001
                                                         ----      ----      ----
<S>                                                    <C>       <C>       <C>
NET SALES...........................................   $26,740   $23,601   $28,705
                                                       -------   -------   -------

Cost and expenses:
   Cost of sales....................................    16,451    14,874    18,850
   Selling, shipping and advertising................     3,164     3,304     3,430
   General and administrative.......................     5,006     4,153     4,198
   Depreciation and amortization....................       658       671       726
                                                       -------   -------   -------
                                                        25,279    23,002    27,204
                                                       -------   -------   -------
EARNINGS FROM CONTINUING OPERATIONS
   BEFORE INTEREST AND OTHER ITEMS..................     1,461       599     1,501
                                                       -------   -------   -------

Other expense:
   Interest expense.................................       308       354       533
   Other-net........................................         2       133       112
                                                       -------   -------   -------
                                                           310       487       645
                                                       -------   -------   -------
EARNINGS FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES..............................     1,151       112       856

Income tax provisions...............................       448        70       325
                                                       -------   -------   -------

EARNINGS FROM CONTINUING OPERATIONS.................       703        42       531

Earnings from discontinued operations (net of tax
   provision of $115)...............................        --       170        --
                                                       -------   -------   -------
NET EARNINGS........................................   $   703   $   212   $   531
                                                       =======   =======   =======

EARNINGS PER COMMON SHARE:

Basic:
   Earnings from continuing operations..............   $  0.17   $  0.01   $  0.13
   Earnings from discontinued operations............        --      0.04        --
                                                       -------   -------  --------
   Net earnings.....................................   $  0.17   $  0.05   $  0.13
                                                       =======   =======   =======

Diluted:
   Earnings from continuing operations..............   $  0.17   $  0.01   $  0.13
   Earnings from discontinued operations............        --      0.04        --
                                                       -------   -------   -------
   Net earnings.....................................   $  0.17   $  0.05   $  0.13
                                                       =======   =======   =======
</TABLE>

See notes to consolidated financial statements.


                                       45

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Years Ended December 31, 2003, 2002 and 2001
Dollars in thousands

<TABLE>
<CAPTION>
                                           12%
                                       Cumulative                                     Accumulated                      Compre-
                                       Convertible          Additional                   Other       Treasury          hensive
                                        Preferred   Common    Paid-in   Accumulated  Comprehensive    Stock            Income
                                          Stock      Stock    Capital     Deficit         Loss      (at cost)   Total  (Loss)
                                       -----------  ------  ----------  -----------  -------------  ---------  ------  -------
<S>                                        <C>      <C>       <C>        <C>            <C>          <C>       <C>      <C>
Balance at December 31, 2000.........      $--      $4,071    $29,648    $(28,132)      $(1,093)     $(1,596)  $2,898
                                           ----     ------    -------    --------       -------      -------   ------

Net earnings - 2001..................                                         531                                 531   $  531
                                                                                                                        ------

Translation adjustment, net of tax...                                                                                      (12)
Pensions, net of tax.................                                                                                     (497)
                                                                                                                        ------
Other comprehensive loss.............                                                      (509)                 (509)    (509)
                                                                                                                        ------

Comprehensive income.................                                                                                   $   22
                                                                                                                        ======
Conversion...........................                    1         (1)
Stock option purchased...............                             (48)                                            (48)
                                           ----     ------    -------    --------       -------      -------   ------

Balance at December 31, 2001.........       --       4,072     29,599     (27,601)       (1,602)      (1,596)   2,872
                                           ----     ------    -------    --------       -------      -------   ------

Net earnings - 2002..................                                         212                                 212   $  212
                                                                                                                        ------
Dividends............................                                         (77)                                (77)

Translation adjustment, net of tax...                                                                                       --
Pensions, net of tax.................                                                                                     (539)
                                                                                                                        ------
Other comprehensive loss.............                                                      (539)                 (539)    (539)
                                                                                                                        ------

Comprehensive loss...................                                                                                   $ (327)
                                                                                                                        ======

Shares issued for:
      Stock options exercised........                   34          5                                              39
Stock option purchased...............                             (48)                                            (48)
Treasury shares......................                                                                     (1)      (1)
                                           ----     ------    -------    --------       -------      -------   ------
Balance at December 31, 2002.........       --       4,106     29,556     (27,466)       (2,141)      (1,597)   2,458
                                           ----     ------    -------    --------       -------      -------   ------

Net earnings - 2003..................                                         703                                 703   $  703
                                                                                                                        ------
Dividends............................                                          (7)                                 (7)

Translation adjustment, net of tax...                                                                                       58
Pensions, net of tax.................                                                                                      287
                                                                                                                        ------
Other comprehensive income...........                                                       345                   345      345
                                                                                                                        ------
   Comprehensive income..............                                                                                   $1,048
                                                                                                                        ======

Shares issued for:
   Stock options exercised...........                   22          2                                              24
Stock option purchased...............                             (48)                                            (48)
                                           ----     ------    -------    --------       -------      -------   ------

Balance at December 31, 2003.........      $--      $4,128    $29,510    $(26,770)      $(1,796)     $(1,597)  $3,475
                                           ====     ======    =======    ========       =======      =======   ======
</TABLE>

                                                SHARE ACTIVITY
                                       --------------------------------
                                           12%
                                        Cumulative
                                       Convertible
                                        Preferred     Common   Treasury
                                          Stock       Stock      Stock
                                       -----------  ---------  --------
Balance at December 31, 2000.........     35,918    4,071,157   73,118
Conversion...........................     (1,043)       1,208
Treasury shares......................                              114
                                          ------    ---------   ------

Balance at December 31, 2001.........     34,875    4,072,365   73,232
Shares issued for:
   Stock options exercised...........                  34,040
                                          ------    ---------   ------

Balance at December 31, 2002.........     34,875    4,106,405   73,232
Shares issued for:
   Stock options exercised...........                  22,050
                                          ------    ---------   ------

Balance at December 31, 2003.........     34,875    4,128,455   73,232
                                          ======    =========   ======

See notes to consolidated financial statements.


                                       46

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in thousands

<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                          --------------------------
                                                            2003     2002     2001
                                                          -------   ------   -------
<S>                                                       <C>       <C>      <C>
Cash Flows from Operating Activities:
Earnings from continuing operations ...................   $   703   $   42   $   531
Adjustments to reconcile earnings from continuing
   operations to net cash provided by operating
   activities:
   Depreciation and amortization ......................       658      671       726
   Deferred income tax provisions .....................       313       20       320
   Increase (decrease) in cash from changes in:
      Accounts receivable .............................      (404)     (31)      379
      Inventories .....................................       434     (499)    1,762
      Other current assets ............................        36      (17)      (50)
      Accounts payable ................................       (37)      34      (574)
      Accrued expenses ................................       331     (235)      239
   Net change in pension-related accounts .............       (24)    (103)       80
   Other ..............................................      (114)      25       (39)
   Discontinued operations ............................       (42)     451      (173)
                                                          -------   ------   -------
      Net cash provided by operating activities .......     1,854      358     3,201
                                                          -------   ------   -------
Cash Flows from Investing Activities:
Capital expenditures ..................................      (422)    (908)     (538)
Proceeds from sale of property, plant & equipment .....        76       --        --
                                                          -------   ------   -------
      Net cash used in investing activities ...........      (346)    (908)     (538)
                                                          -------   ------   -------
Cash Flows from Financing Activities:
Proceeds from long-term debt ..........................        --        8        --
Proceeds from short-term debt .........................       495    1,764        --
Proceeds from issuance of common stock ................        24       39        --
Payments of long-term debt ............................      (282)    (510)   (1,139)
Payments of long-term lease obligations ...............       (37)     (33)      (29)
Payments of short-term debt ...........................    (1,302)    (968)     (839)
Payments of preferred dividends .......................        (7)     (77)       --
Other .................................................       (48)     (49)      (48)
                                                          -------   ------   -------
      Net cash provided by (used in) financing
         activities ...................................    (1,157)     174    (2,055)
                                                          -------   ------   -------
Net increase (decrease) in cash and cash equivalents...       351     (376)      608

Cash and cash equivalents at beginning of year ........       313      689        81
                                                          -------   ------   -------
Cash and cash equivalents at end of year ..............   $   664   $  313   $   689
                                                          =======   ======   =======
</TABLE>

See notes to consolidated financial statements.


                                       47

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          Principles of Consolidation - The consolidated financial statements
include the accounts of Ronson Corporation (the "Company") and its subsidiaries,
all of which are wholly owned. Its principal subsidiaries are Ronson Consumer
Products Corporation ("RCPC"), Woodbridge, New Jersey; Ronson Corporation of
Canada Ltd. ("Ronson-Canada"), Mississauga, Ontario, Canada (these together are
"Ronson Consumer Products"); Ronson Aviation, Inc. ("Ronson Aviation"), Trenton,
New Jersey; and Prometcor, Inc., ("Prometcor"), formerly known as Ronson Metals
Corporation, Newark, New Jersey, now discontinued. All significant intercompany
accounts and transactions have been eliminated in consolidation.

          Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
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 period. Actual results could differ from those
estimates.

          Allowances for Doubtful Accounts and Sales Incentives - Management
must make estimates of the uncollectibility of accounts receivable. Management
specifically analyzes accounts receivable and analyzes historical bad debts,
customer concentrations, customer credit-worthiness, current economic trends and
changes in customer payment terms when evaluating the adequacy of the allowance
for doubtful accounts.

          Estimated sales incentives are calculated and recorded at the time
related sales are made and are based primarily on historical rates and in
consideration of recent promotional activities. In the Company's financial
statements, the allowance for sales incentives is classified as a reduction of
accounts receivable.

          Inventories - Inventories, other than aircraft, are valued at the
lower of average cost or market. Aircraft inventory is carried at the lower of
cost, specific identification, or market.

          Property and Depreciation - Property, plant and equipment are carried
at cost and are depreciated over their estimated useful lives using the
straight-line method. Capitalized leases are amortized over their estimated
useful lives using the straight-line method. Leasehold improvements are
amortized over their estimated useful lives or the remaining lease terms,
whichever is shorter. Aircraft and other related costs utilized by Ronson
Aviation in its charter operations and held for more than one year are
classified as property, plant and equipment. The term notes payable secured by
this aircraft are also classified as long-term debt.

          Foreign Currency Translation - All balance sheet accounts of the
Company's foreign subsidiary, Ronson-Canada, are translated at the current
exchange rate as of the end of the year. All income statement accounts are
translated at average currency exchange rates. Stockholders' Equity accounts are
translated at historical exchange rates. The resulting translation adjustment is
recorded as part of Accumulated Other Comprehensive Loss in Stockholders'
Equity. Transaction gains and losses are not significant in the periods
presented.

          Fair Value of Financial Instruments - The Company's financial
instruments include cash, cash equivalents, accounts receivable, accounts
payable, accrued expenses, other current liabilities and short-term and
long-term debt. The book values of cash, cash equivalents, accounts receivable,
accounts payable, accrued expenses, other current liabilities, and short-term
debt are representative of their fair values due to the short-term maturity of
these instruments. The book value of the Company's long-term debt is considered
to approximate its fair value based on


                                       48

<PAGE>

current market rates and conditions (refer to Note 5 below).

          Derivative Financial Instruments - The Company utilizes a derivative
instrument, an interest rate swap, to modify the Company's exposure to interest
rate risk. The Company accounts for this derivative instrument under the
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 requires that all
derivative instruments be recognized in the financial statements and measured at
fair value regardless of the purpose or intent for holding them. For derivatives
that are designated as a hedge and used to hedge an existing asset or liability,
both the derivative and hedged item are recognized at fair value with any
changes recognized immediately in the Statements of Consolidated Earnings. By
policy, the Company has not historically entered into derivative financial
instruments for trading purposes or for speculation.

          The Company has entered into an interest rate swap agreement (see Note
5). The interest rate swap agreement effectively modifies the Company's exposure
to interest risk by converting a portion of the Company's floating-rate
long-term debt to a fixed rate. Based on criteria defined in SFAS 133, the
interest rate swap is considered a cash flow hedge and is 100% effective. The
interest rate swap and instrument being hedged is marked to market in the
balance sheet. The mark-to-market value of both the cash flow hedging
instruments and the underlying debt obligations are recorded as equal and
offsetting gains or losses in other expense. If the contract is terminated prior
to maturity, the amount paid or received in settlement is established by
agreement at the time of termination, and usually represents the net present
value, at current rates of interest, of the remaining obligations to exchange
payments under the terms of the contract. Any gains or losses upon the early
termination of the interest rate swap contracts would be deferred and recognized
over the remaining life of the contract.

          Declaration of 5% Common Stock Dividend - The Company's Board of
Directors on February 12, 2004, declared a 5% stock dividend on the Company's
outstanding common stock. The 5% stock dividend is payable on April 15, 2004, to
stockholders of record April 1, 2004. The 5% stock dividend will increase the
outstanding common shares of the Company by about 193,000 to about 4,055,000
shares.

          Revenue Recognition - Net Sales are recognized by Ronson Consumer
Products on the date of shipment of the product to customers. Net Sales at
Ronson Aviation are recognized on the date of delivery of the product or service
to customers.

          Research and Development Costs - Costs of research and new product
development are charged to operations as incurred and amounted to approximately
$339,000, $348,000, and $227,000, for the years ended December 31, 2003, 2002,
and 2001, respectively.

          Shipping and Handling Costs - The Company records shipping and
handling costs within Selling, Shipping and Advertising Expenses. Such costs
amounted to $1,176,000, $1,152,000, and $1,226,000 for the years ended December
31, 2003, 2002, and 2001, respectively.

          Advertising Costs - Costs of advertising are expensed as incurred and
amounted to approximately $131,000, $161,000, and $173,000 for the years ended
December 31, 2003, 2002 and 2001, respectively.

          Accrued Expenses - On December 31, 2003, Accrued Expenses included:
accrued vacation pay and other compensation, $802,000; accrued pension costs,
$647,000; and accrued professional fees, $310,000. No other item amounted to
greater than 5% of total current liabilities.

          Other Current Assets - On December 31, 2003, Other Current Assets
included deferred income tax assets of $662,000 and prepaid insurance of
$359,000. No other item amounted to greater than 5% of total current assets.


                                       49

<PAGE>

          Stock Options - In 2003 the Company adopted SFAS No. 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure, an amendment of FASB
Statement No. 123". SFAS No. 148 amended SFAS No. 123 to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for employee stock-based compensation. The Company has elected to
apply the prospective method as permitted by SFAS No. 148. Accordingly all
options granted on and after January 1, 2003 are charged against income at their
fair value. Those issued prior to adoption are accounted for on the intrinsic
method in accordance with Accounting Principles Board Opinion (APB) No. 25. See
Note 10 to the Consolidated Financial Statements.

          Per Common Share Data - The calculation and reconciliation of Basic
and Diluted Earnings per Common Share were as follows (in thousands except per
share data):

                                                    Year Ended December 31, 2003
                                                                       Per Share
                                                   Earnings   Shares     Amount
                                                   --------   ------   ---------
                                                                (2)       (2)
Earnings from continuing operations ............     $703
Less accrued dividends on preferred stock ......       (7)
                                                     ----
Continuing operations ..........................      696      4,039     $0.17
   Earnings from discontinued operations .......       --      4,039        --
                                                     ----                -----

   BASIC .......................................     $696      4,039     $0.17
                                                     ====      =====     =====

Effect of dilutive securities (1):
   Stock options ...............................                  37
   Cumulative convertible preferred stock ......     $  7         40
                                                     ----      -----
Continuing operations ..........................      703      4,116     $0.17
   Earnings from discontinued operations .......       --      4,116        --
                                                     ----                -----

   DILUTED .....................................     $703      4,116     $0.17
                                                     ====      =====     =====


                                       50

<PAGE>

                                                    Year Ended December 31, 2002
                                                                       Per Share
                                                   Earnings   Shares     Amount
                                                   --------   ------   ---------
                                                                (2)       (2)
Earnings from continuing operations ............     $ 42

Less accrued dividends on preferred stock ......       (7)
                                                     ----
   Continuing operations .......................       35      4,011     $0.01
   Earnings from discontinued operations .......      170      4,011      0.04
                                                     ----                -----

   BASIC .......................................     $205      4,011     $0.05
                                                     ====      =====     =====

Effect of dilutive securities (1):
   Stock options ...............................                  --
   Cumulative convertible preferred stock ......     $ --         --
                                                     ----      -----
   Continuing operations .......................       35      4,011     $0.01
   Earnings from discontinued operations .......      170      4,011      0.04
                                                     ----                -----

   DILUTED .....................................     $205      4,011     $0.05
                                                     ====      =====     =====

                                                    Year Ended December 31, 2001
                                                                       Per Share
                                                   Earnings   Shares     Amount
                                                   --------   ------   ---------
                                                                (2)       (2)

Earnings from continuing operations ............     $531
Less accrued dividends on preferred stock ......       (7)
                                                     ----
   Continuing operations .......................      524      4,000     $0.13
   Earnings from discontinued operations .......       --      4,000        --
                                                     ----                -----
   BASIC .......................................     $524      4,000     $0.13
                                                     ====      =====     =====

Effect of dilutive securities (1):
   Stock options ...............................                  --
   Cumulative convertible preferred stock ......     $ --         --
                                                     ----      -----
   Continuing operations .......................      524      4,000     $0.13

   Earnings from discontinued operations .......       --      4,000        --
                                                     ----                -----

   DILUTED .....................................     $524      4,000     $0.13
                                                     ====      =====     =====

          (1)  The assumed conversion of preferred shares to common shares and
               the stock options were anti-dilutive for the years ended December
               31, 2002 and 2001, and, therefore, were excluded from the
               calculation and reconciliation of Diluted Earnings per Common
               Share for those years.

          (2)  Information as to the number of shares and per share amounts has
               been retroactively adjusted to reflect the 5% stock dividends on
               common stock declared February 14, 2004.

          At December 31, 2003, the Company had outstanding 34,875 shares of
preferred stock and 4,055,223 shares of common stock, after the 5% stock
dividend declared on February 12, 2004.

          Reclassification - Certain reclassifications of prior years' amounts
have been made to conform with the current year's presentation.


                                       51

<PAGE>

Note 2. DISCONTINUED OPERATIONS:

          The Earnings from Discontinued Operations included the insurance
recovery income and the discontinuance costs recorded by the Company related to
the discontinuation of Prometcor as follows (in thousands):

                                                         Year Ended December 31,
                                                               2002   2001
                                                               ----   ----

Insurance recovery income accrued, net ...............         $355   $175
Discontinuance costs accrued .........................           70    175
                                                               ----   ----
                                                                285     --
Deferred income tax benefits .........................          115     --
                                                               ----   ----

Earnings from discontinued operations ................         $170   $ --
                                                               ====   ====

          In December 1989 the Company adopted a plan to discontinue the
operations of its wholly owned subsidiary, Ronson Metals Corporation,
subsequently renamed Prometcor. Upon the cessation of operations, Prometcor
began its compliance with the environmental requirements of all applicable laws
with the objective of selling the property previously used in the discontinued
operations. The costs and expenses related to the termination of Prometcor's
business operations in 1990, less the gain from the sale of Prometcor's assets,
net of deferred income tax benefits, have been charged against the Company's
Earnings (Loss) from Discontinued Operations and Net Earnings (Loss) between
1990 and 2002.

          Prometcor is being accounted for as a discontinued operation, and,
accordingly, its operating results are reported in this manner in all years
presented in the accompanying Consolidated Statements of Earnings and other
related operating statement data.

          The full extent of the costs and time required for completion is not
determinable until the remediation, if any is required, and confirmatory testing
related to the remaining groundwater matter have been completed and accepted by
the New Jersey Department of Environmental Protection ("NJDEP"). The liability
for these estimated costs and expenses as recorded in the financial statements
at December 31, 2003, was based on the lower limit of the range of costs as
projected by the Company and its consultants. The estimated upper limit of the
range of costs is discounted at approximately $600,000 above the lower limit.

Note 3. INCOME TAXES:

          At December 31, 2003, the Company had, for federal income tax
purposes, net operating loss carryforwards of approximately $3,090,000, expiring
as follows: $1,700,000 in 2010 to 2012; and $1,390,000 in 2018 to 2022. The
Company also had available federal and state alternative minimum tax credit
carryforwards of approximately $86,000.


                                       52

<PAGE>

          The income tax expenses (benefits) consisted of the following (in
thousands):

                                                         Year Ended December 31,
                                                            2003   2002   2001
                                                            ----   ----   ----
Current:
   Federal ...........................................      $ 20   $ (5)  $  5
   State .............................................       110     47    (11)
   Foreign ...........................................         5      8     11
                                                            ----   ----   ----
                                                             135     50      5
                                                            ----   ----   ----

Deferred:
   Federal ...........................................       343     28    237
   State .............................................       (30)    (8)    83
                                                            ----   ----   ----
                                                             313     20    320
                                                            ----   ----   ----
                                                             448     70    325
Allocated to discontinued operations .................        --    115     --
                                                            ----   ----   ----
   Income tax expenses-net ...........................      $448   $185   $325
                                                            ====   ====   ====

          Current income taxes in the years ended December 31, 2003, 2002, and
2001, were presented net of credits of $420,000, $29,000, and $322,000,
respectively, arising from the utilization of available tax losses and loss
carryforwards in accordance with SFAS #109.

          The reconciliation of estimated income taxes attributed to continuing
operations at the United States statutory tax rate to reported income tax
expenses was as follows (in thousands):

                                                         Year Ended December 31,
                                                            2003   2002   2001
                                                            ----   ----   ----

Tax expense amount computed using statutory rate .....      $392   $ 38   $291
State taxes, net of federal benefit ..................        70    (26)    (4)
Operations outside the US ............................       (33)     8      4
Discontinued operations and other ....................        19    165     34
                                                            ----   ----   ----
Income tax expenses-net ..............................      $448   $185   $325
                                                            ====   ====   ====


                                       53

<PAGE>

          The tax effects of temporary differences that give rise to significant
portions of the deferred income tax assets and deferred income tax liabilities
are presented below (in thousands):

<TABLE>
<CAPTION>
                                                                       December 31,
                                                                      2003     2002
                                                                     ------   ------
<S>                                                                  <C>      <C>
Deferred income tax assets:
   Inventories, principally due to additional costs
      inventoried for tax purposes pursuant to the Tax
      Reform Act of 1986 and valuation reserves for
      financial reporting purposes ...............................   $   85   $  108
   Compensated absences, principally due to accrual for
      financial reporting purposes ...............................      138      133
   Compensation, principally due to accrual for financial
      reporting purposes .........................................      158       79
   Accrual of projected environmental costs, principally
      related to Prometcor's compliance with NJDEP
      requirements ...............................................      202      213
   Net operating loss carryforwards ..............................    1,554    1,960
   Alternative minimum tax credit carryforwards ..................       86       89
   Unrecognized net loss on pension plan .........................    1,187    1,377
   Other .........................................................      136      122
                                                                     ------   ------
      Total gross deferred income tax assets .....................    3,546    4,081
      Less valuation allowance ...................................      183      176
                                                                     ------   ------
      Net deferred income tax assets .............................    3,363    3,905
                                                                     ------   ------
Deferred income tax liabilities:
   Pension expense, due to contributions in excess of
      net accruals ...............................................      524      501
   Other .........................................................       33       56
                                                                     ------   ------
      Total gross deferred income tax liabilities ................      557      557
                                                                     ------   ------
      Net deferred income taxes ..................................   $2,806   $3,348
                                                                     ======   ======
</TABLE>

          A valuation allowance has been established based on the likelihood
that a portion of the deferred income tax assets will not be realized.
Realization is dependent on generating sufficient taxable income prior to
expiration of the loss carryforwards. The ultimate realization of the deferred
income tax assets will require aggregate taxable income of approximately
$3,400,000 in the years prior to the expiration of the net operating loss
carryforwards in 2022. The amount of the deferred income tax assets considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward periods are reduced. A portion of the
deferred income tax asset is the result of a tax planning strategy for state
income tax purposes of merging certain of the Company's subsidiaries resulting
in realization of net operating loss carryforwards.

          The net deferred income tax assets were classified in the Consolidated
Balance Sheets as follows (in thousands):

                                                                  December 31,
                                                                 2003     2002
                                                                ------   ------
Current:
   Other current assets .....................................   $  460   $  470
   Current assets of discontinued operations ................      202      213
                                                                ------   ------
      Total current .........................................      662      683
                                                                ------   ------

Long Term:
   Other assets .............................................    1,153    1,467
   Other assets of discontinued operations ..................      991    1,198
                                                                ------   ------
      Total long term .......................................    2,144    2,665
                                                                ------   ------
Total net deferred income tax assets ........................   $2,806   $3,348
                                                                ======   ======


                                       54

<PAGE>

Note 4. SHORT-TERM DEBT:

          Composition (in thousands):

                                                                    December 31,
                                                                   2003    2002
                                                                   ----   ------
Revolving loans (a) ............................................   $378   $1,140
Note payable, commercial finance company (b)  ..................    469      514
                                                                   ----   ------
                                                                   $847   $1,654
                                                                   ====   ======

          (a) In 1995 RCPC entered into an agreement with Fleet Capital
Corporation ("Fleet") for a Revolving Loan. In June 2002 RCPC and Fleet extended
RCPC's Revolving Loan to June 30, 2005. The extended agreement also amended
certain other terms of the Revolving Loan agreement. The Revolving Loan of
$378,000 at December 31, 2003, provides a line of credit up to $2,500,000 to
RCPC based on accounts receivable and inventory. The balance available under the
Revolving Loan is determined by the level of receivables and inventory. The
Revolving Loan bears interest at the rate of 1.0% above Fleet's prime rate
(4.00% at December 31, 2003). The Revolving Loan interest rate is subject to an
increase to 1.5% above Fleet's prime rate based on compliance with loan
covenants. The Revolving Loan is payable on demand and is secured by the
accounts receivable, inventory and machinery and equipment of RCPC; a second
mortgage on the land, buildings and improvements of RCPC; and the guarantee of
the Company. The Fleet agreement also has restrictive covenants which, among
other things, limit the transfer of assets between the Company and its
subsidiaries.

          In 1995 Ronson-Canada entered into an agreement with Canadian Imperial
Bank of Commerce ("CIBC") for a line of credit of C$250,000. The Revolving Loan
is secured by the accounts receivable and inventory of Ronson-Canada, and the
amounts available under the line are based on the level of accounts receivable.
The loan bears interest at the rate of 1.25% over the CIBC prime rate (4.25% at
December 31, 2003). The line of credit, payable on demand, is guaranteed by the
Company. The CIBC agreement has restrictive covenants which, among other things,
limit the transfer of assets from Ronson-Canada to RCPC and the Company. At
December 31, 2003, Ronson-Canada utilized no borrowings under the Revolving
Loan.

          Based on the amount of the loans outstanding and the levels of
accounts receivable and inventory at December 31, 2003, Ronson Consumer Products
had unused borrowings available at December 31, 2003, of about $988,000 under
the Fleet and CIBC lines of credit described above. (Refer to Note 5 below for
information regarding the book value of assets pledged as collateral for the
debt above.)

          In 1997 Ronson Aviation entered into an agreement with Fleet for a
Revolving Loan. On June 30, 2002, Ronson Aviation and Fleet extended Ronson
Aviation's Revolving Loan to June 30, 2005. The extended agreement also amended
certain other terms of the Revolving Loan agreement. The Revolving Loan is under
a line of credit up to $500,000 to Ronson Aviation based on the level of its
accounts receivable. The Revolving Loan currently bears interest at the rate of
1.0% above Fleet's prime rate (4.00% at December 31, 2003). The Revolving Loan
is payable on demand and is secured by the accounts receivable, inventory and
machinery and equipment (excluding aircraft) of Ronson Aviation; and the
guarantees of the Company and RCPC. The Fleet agreement also contains
restrictive covenants. At December 31, 2003, Ronson Aviation utilized no
borrowings under the Revolving Loan.

          Based on no loan outstanding and the level of accounts receivable at
December 31, 2003, Ronson Aviation had unused borrowings available at December
31, 2003, of about $297,000 under the Fleet line of credit described above.

          (b) At December 31, 2003, the note payable, commercial finance
company, was a note payable by Ronson Aviation in the amount of $469,000 due to
Raytheon Aircraft Credit Corp. ("Raytheon"). The note payable by Ronson Aviation
is collateralized by a specific aircraft, and the note will be repaid from the
proceeds from the sale of


                                       55

<PAGE>

the aircraft. The Raytheon note was interest-free through December 9, 2003, and,
thereafter, bears interest at a rate of 1.5% over the prime rate (4.00% at
December 31, 2003). The note is secured by aircraft inventory of Ronson Aviation
with a book value of $520,000 at December 31, 2003.

          At December 31, 2003, the weighted average interest rate for the total
short-term debt was 5.28%.

          The Company had outstanding letters of credit totaling $236,000 which
were issued by Fleet under the Company's lines of credit as follows: $26,000 for
the importation of consumer products, a $60,000 standby letter of credit related
to Ronson Aviation aircraft on order from Raytheon Aircraft Corporation, and a
standby letter of credit of $150,000 related to the RCPC lease of additional
warehouse space.

Note 5. LONG-TERM DEBT:

Composition (in thousands):

                                                                   December 31,
                                                                  2003     2002
                                                                 ------   ------
Mortgage loan payable, Fleet (a) .............................   $1,431   $1,514
Notes payable, Fleet (b) .....................................      785      980
Term note payable ............................................        3        7
                                                                 ------   ------
                                                                  2,219    2,501
Less portion in current liabilities ..........................      293      282
                                                                 ------   ------
Balance of long-term debt ....................................   $1,926   $2,219
                                                                 ======   ======

          (a) In May 1999 the Company, RCPC and Fleet entered into an agreement,
in the original amount of $1,760,000, which refinanced an existing Mortgage Loan
agreement on the RCPC property in Woodbridge, New Jersey. On December 1, 2003,
the Company, RCPC and Fleet amended the Mortgage Loan, extending the expiration
to December 1, 2008. The Mortgage Loan balance was $1,431,000 at December 31,
2003. The Mortgage Loan agreement is secured by a first mortgage on the land,
buildings and improvements of RCPC, and is payable in fifty-nine monthly
installments of $7,951, plus interest, with a final installment on December 1,
2008, of approximately $962,000. The loan bears interest at the rate of 0.5%
above Fleet's prime rate.

          (b) The Notes Payable, Fleet, consisted of two term loans payable by
Ronson Aviation to Fleet with balances at December 31, 2003, totaling
approximately $785,000. The notes bear interest at the rate of 1% over the prime
rate, are collateralized by a specific aircraft and are guaranteed by the
Company. On June 30, 2002, Ronson Aviation and Fleet amended the term loans to
extend the payment terms to June 30, 2005. The notes are payable in monthly
installments totaling $16,264 plus interest through June 2005 with final
payments totaling about $492,000 on June 30, 2005.

          At December 31, 2003, fixed assets with a net book value of $3,187,000
and accounts receivable and inventories of $4,107,000 are pledged as collateral
for the debt detailed in Notes 4 and 5.

          Net assets of consolidated subsidiaries, excluding intercompany
accounts, amounted to approximately $3,800,000 at December 31, 2003,
substantially all of which was restricted as to transfer to the Company and its
other subsidiaries due to various covenants of their debt agreements at December
31, 2003.

          Long-term debt matures as follows: 2004, $293,000; 2005, $685,000;
2006, $95,000; 2007, $96,000; and 2008, $1,050,000.

          In December 2003, the Company entered into an interest rate swap
agreement in order to manage interest rate exposure. Effectively, the Company
converted its Mortgage Loan payable of variable-rate debt to fixed-rate debt
with an effective interest rate of 7.45%. The interest rate swap is considered a
cash flow hedge and


                                       56

<PAGE>

is 100% effective. As a result, the mark-to-market value of both the fair value
hedging instrument and the underlying debt obligation are recorded as equal and
offsetting gains or losses in other expense. The interest rate swaps had a fair
value of $(44,000) recorded in other noncurrent liabilities with the
corresponding and offsetting adjustment to long-term debt also included in other
noncurrent liabilities. The fair value of interest rate swap agreement, obtained
from the financial institution, is based on current rates of interest and is
computed as the net present value of the remaining exchange obligations under
the terms of the contract.

Note 6. LEASE OBLIGATIONS:

          Lease expenses consisting principally of office and warehouse rentals,
totaled $514,000, $500,000 and $498,000 for the years ended December 31, 2003,
2002 and 2001, respectively.

          At December 31, 2003, the Company's future minimum lease payments
under operating and capitalized leases with initial or remaining noncancellable
lease terms in excess of one year are presented in the table below (in
thousands):

                                                         Operating   Capitalized
                                                 Total     Leases       Leases
                                                 -----   ---------   -----------
Year Ending December 31:
2004 .........................................    $374      $337         $37
2005 .........................................     321       305          16
2006 .........................................     121       118           3
2007 .........................................       4         4          --
                                                  ----      ----         ---
Total obligations ............................    $820      $764          56
                                                  ====      ====
Less: Amount representing
      interest ...............................                             4
                                                                         ---

Present value of capitalized lease
   obligations ...............................                           $52
                                                                         ===

          Capitalized lease property included in the Consolidated Balance Sheets
is presented below (in thousands):

                                                                    December 31,
                                                                     2003   2002
                                                                     ----   ----
Machinery and equipment .........................................    $172   $172
Less accumulated amortization ...................................     118     86
                                                                     ----   ----
                                                                     $ 54   $ 86
                                                                     ====   ====

          Ronson Aviation leases land under a leasehold consisting of six
five-year terms automatically renewed, with the last five-year term expiring in
November 2007. The lease may be extended for up to five additional five-year
terms through November 2032, provided that during the five-year term ending
November 2007, Ronson Aviation invests from $600,000 to over $1,500,000 in
capital improvements.

          In October 2003 RCPC entered into a lease agreement for a warehouse
facility to be utilized by RCPC for finished goods storage and products
shipments. The lease is to be effective upon completion by the landlord of
agreed improvements, expected in the first quarter of 2004. The lease has an
initial term of nine years and two three-year renewal options, with rent expense
of approximately $11,000 per month.

Note 7. RETIREMENT PLANS:

          The Company and its subsidiaries have trusteed retirement plans
covering substantially all employees. The Company's funding policy is to make
minimum annual


                                       57

<PAGE>

contributions as required by applicable regulations. The Plan covering union
members generally provides benefits of stated amounts for each year of service.
The Company's salaried pension plan provides benefits using a formula which is
based upon employee compensation. On June 30, 1985, the Company amended its
salaried pension plan so that benefits for future service would no longer
accrue. A defined contribution plan was established on July 1, 1985, in
conjunction with the amendments to the salaried pension plan.

          Plan assets primarily included common stocks (75%), a guaranteed
annuity contract (9%), and 198,300 shares of common stock of the Company (14%).
The stock of the Company held by the Plan was valued at $447,000 and $187,000 at
December 31, 2003 and 2002, respectively.

          The Company uses a measurement date of December 31 for its pension
plans. The benefit obligations below are equal to the accumulated benefit
obligations. The following table sets forth the plan's aggregate funded status
and amounts recognized in the Company's Consolidated Balance Sheets (in
thousands):

                                                         Year Ended December 31,
                                                              2003      2002
                                                            -------   -------
Change in Benefit Obligation:
   Benefit obligation at beginning of year ...........      $ 4,883   $ 4,848
   Service cost ......................................           22        17
   Interest cost .....................................          269       291
   Benefit increase ..................................           57        --
   Actuarial loss ....................................          174        44
   Increase in benefit obligation due to
      decreased discount rate ........................           --       168
   Benefits paid .....................................         (425)     (485)
                                                            -------   -------
   Benefit obligation at end of year .................        4,980     4,883
                                                            -------   -------

Change in Plan Assets:
   Fair value of plan assets at beginning
      of year ........................................        2,641     3,353
   Actual return on plan assets ......................          491      (710)
   Employer contributions ............................          493       483
   Benefits paid .....................................         (425)     (485)
                                                            -------   -------
   Fair value of plan assets at end of year ..........        3,200     2,641
                                                            -------   -------

   Funded status .....................................       (1,780)   (2,242)
   Unrecognized actuarial loss .......................        2,972     3,447
   Unrecognized prior service cost ...................           83        46
                                                            -------   -------
Net amount recognized ................................      $ 1,275   $ 1,251
                                                            =======   =======

Amounts Recognized in the Consolidated
   Balance Sheets Consist of:
      Accrued benefit liability ......................      $(1,780)  $(2,242)
      Intangible asset ...............................           83        46
      Accumulated other comprehensive loss,
         excluding the income tax effect .............        2,972     3,447
                                                            -------   -------
Net amount recognized ................................      $ 1,275   $ 1,251
                                                            =======   =======

          The weighted-average assumptions used in the benefit obligations were
as follows:

                                                         Year Ended December 31,
                                                               2003   2002
                                                               ----   ----
Discount rate.........................................         5.50%  5.50%

          If the additional minimum liability recorded exceeds the unrecognized
prior service cost and the unrecognized net obligation at transition, that
difference, an unrecognized net loss, is to be reported as a separate component
of Stockholders'


                                       58

<PAGE>

Equity. This unrecognized net loss is being amortized over future periods as a
component of pension expense.

          The Company's Consolidated Statements of Earnings included pension
expense consisting of the following components (in thousands):

                                                         Year Ended December 31,
                                                           2003    2002    2001
                                                          -----   -----   -----
Components of net periodic benefit cost:
   Service cost ......................................    $  22   $  17   $  15
   Interest cost .....................................      269     291     304
   Expected return on plan assets ....................     (132)   (185)   (223)
   Amortization of prior service cost ................       20      46      47
   Recognized actuarial loss .........................      291     210     134
                                                          -----   -----   -----
   Net pension expense ...............................    $ 470   $ 379   $ 277
                                                          =====   =====   =====

          The weighted average assumptions used in computing the net period
benefit cost were as follows:

                                                         Year Ended December 31,
                                                            2003   2002   2001
                                                            ----   ----   ----

Discount rate                                               5.5%   6.0%   6.5%
Expected long-term rate of return
   on plan assets                                           5.0%   5.5%   5.5%

          Contributions to the pension plan during 2004 are expected to be
between $647,000 and $700,000.

          Investment objectives for the Company's U.S. plan assets are to:

          (1)  optimize the long-term return on plan assets at an acceptable
               level of risk;

          (2)  maintain diversification across asset classes;

          (3)  maintain control of the risk level within each asset class; and

          (4)  focus on a long-term return objective.

          The Plan engages investment managers to manage the Plan's investments
in equities, other than in the Company's stock. Investment guidelines are
established with each investment manager. Unless exceptions have been approved,
investment managers are prohibited from buying or selling commodities, futures
or option contracts, as well as from short selling of securities. The Company
does not expect to make further investments in the guaranteed annuity contract
or in the stock of the Company. To determine the expected long-term rate of
return assumption on plan assets, the Company uses a conservative estimate of
future returns.

          The Company contributes to its defined contribution plan at the rate
of 1% of each covered employee's compensation. The Company also contributes an
additional amount equal to 50% of a covered employee's contribution to a maximum
of 1% of compensation. Expenses of about $59,000, $68,000 and $70,000 for this
plan were recorded in 2003, 2002 and 2001, respectively.

Note 8. COMMITMENTS AND CONTINGENCIES:

          In 1999 Ronson Aviation completed the installation of a new fueling
facility and ceased use of most of its former underground storage tanks. The
primary underground fuel storage tanks formerly used by Ronson Aviation were
removed in 1999 as required by the NJDEP. Related contaminated soil was removed
and remediated. In 2000 initial groundwater tests were completed. Ronson
Aviation's environmental consultants have advised the Company that preliminary
results of that testing indicate that no further actions should be required. The
extent of groundwater


                                       59

<PAGE>

contamination cannot be determined until final testing has been completed and
accepted by the NJDEP. The Company intends to vigorously pursue its rights under
the leasehold and under the statutory and regulatory requirements. Since the
amount of additional costs, if any, and their ultimate allocation cannot be
fully determined at this time, the effect on the Company's financial position or
results of future operations cannot yet be determined, but management believes
that the effect will not be material.

          The Company is involved in a State of New Jersey Corporation Business
Tax audit for the years ended December 31, 1997 through December 31, 2000. The
total claimed by the State of New Jersey is approximately $144,000, related to
availability of net operating loss carryforwards from 1995. The Company has
appealed the determination by the New Jersey Division of Taxation. Management
believes that the Company will not be liable for the assessment. The Company has
accrued the expected cost of defense in the matter.

          The Company is involved in a shareholders derivative action, and the
Company incurred approximately $460,000 in net legal costs related to the matter
in 2003. These costs were net of the associated insurance reimbursement of about
$302,000. The Company believes that its directors' and officers' liability
insurance coverage is adequate to meet the future direct costs of the
litigation; however, the Company is not able to estimate at this time the extent
to which it will incur additional legal or other expenses, which may be
substantial, in connection with this proceeding.

          The Company is involved in various lawsuits and claims. While the
amounts claimed may be substantial, the ultimate liability cannot now be
determined because of the considerable uncertainties that exist. Therefore, it
is possible that results of operations or liquidity in a particular period could
be materially affected by certain contingencies. However, based on facts
currently available including the insurance coverage that the Company has in
place, management believes that the outcome of these lawsuits and claims will
not have a material adverse effect on the Company's financial position.

          The Company has an employment contract with an officer of the Company
which expires on December 31, 2004, which, upon its expiration on that date,
will be replaced by an employment contract expiring December 31, 2007. Base
salaries in the years 2004, 2005, 2006, and 2007 are $616,119, $637,683,
$660,002, and $683,102, respectively, with the increases subject to the Company
reporting operating earnings in the year prior to each increase. Both the
existing and new contracts also provide for additional compensation and
benefits, including a death benefit equal to two years' salary. The Company has
purchased term insurance to provide coverage for a substantial portion of the
potential death benefit.

Note 9. PREFERRED STOCK:

          Each share of 12% Cumulative Convertible Preferred Stock has a stated
value of $0.01 per share and a liquidation preference of $1.75 per share
($61,000 at December 31, 2003, in the aggregate) plus accrued dividends. The
shares are non-voting and have a right to cumulative dividends at the annual
rate of $0.21 per share. The holders of the preferred shares may, at any time,
convert each preferred share into 1.1025 shares of common stock (1.157625 shares
of common stock after April 15, 2004) unless the preferred shares were
previously redeemed. The Company has the option to redeem all or part of the
preferred stock at $2.25 per share plus accrued dividends. There were no
dividends in arrears at December 31, 2003.

          On February 12, 2004, the Company's Board of Directors approved the
redemption of the 34,875 shares of the Company's 12% Cumulative Convertible
Preferred Stock which remains outstanding. In accordance with the terms of the
preferred stock, the redemption price is $2.25 per share. The Company expects to
mail the related information to the holders of preferred shares in early April
2004, and the


                                       60

<PAGE>

redemption to be completed on May 15, 2004. Prior to its redemption, the
preferred stock will continue to be convertible into common stock, at the rate
of 1.157625 common shares per preferred share, after adjustment for the 5% stock
dividend payable April 15, 2004. Fractional shares of common stock issuable upon
conversion will be paid for in cash at the closing market price of the Company's
common stock on April 15, 2004.

          In 1998 the Company declared a dividend of one Preferred Stock
Purchase Right ("Right") for each outstanding share of the Company's common
stock. The Rights are not presently exercisable. Each Right entitles the holder,
upon the occurrence of certain specified events, to purchase from the Company
one one-thousandth of a share of Series A Preferred Stock at a purchase price of
$20 per share. The Rights further provide that each Right will entitle the
holder, upon the occurrence of certain other specified events, to purchase from
the Company, common stock having a value of twice the exercise price of the
Right and, upon the occurrence of certain other specified events, to purchase
from another person into which the Company was merged or which acquired 50% or
more of the Company's assets or earnings power, common stock of such other
person having a value of twice the exercise price of the Right. The Rights may
be generally redeemed by the Company at a price of $0.01 per Right. The Rights
expire on October 27, 2008.

Note 10. STOCK OPTIONS:

          The Company has two incentive stock option plans which provide for the
grant of options to purchase shares of the Company's common stock. The options
may be granted to officers, directors and other key employees of the Company and
its subsidiaries at not less than 100% of the fair market value on the date on
which options are granted. On November 27, 2001, the stockholders approved the
adoption of the Company's 2001 Incentive Stock Option Plan which provides for
the grant of options for up to 144,703 shares of common stock. In August 1996
the stockholders approved the adoption of the Company's 1996 Incentive Stock
Option Plan which provides for the grant of options for up to 115,763 shares of
common stock. Options granted under the plans are exercisable after six months
from the date of the grant and within five years of the grant date, at which
time such options expire. All options are vested on the date of the grant.

          Prior to 2003, the Company measured stock compensation cost using the
intrinsic value method of accounting prescribed by APB Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations.
Accordingly, no compensation cost was recognized for stock option awards
Granted in 2002 and 2001. The following table illustrates the effect on net
earnings and earnings per share if the fair value based method had been applied
to the awards made in, 2002 and 2001 consistent with the provisions of SFAS No.
123 (in thousands, except per share data):


                                       61

<PAGE>

                                                         Year Ended December 31,
                                                           2003   2002   2001
                                                           ----   ----   ----
Earnings from Continuing Operations, as
   reported                                                $703   $ 42   $531

Add: Stock-based employee compensation
   expense included in reported net income,
   net of related tax effects                                --     --     --

Deduct: Total stock-based employee compen-
   sation expense determined under fair value
   based method for all awards, net of related
   tax effects                                               --    (27)   (21)
                                                           ----   ----   ----

Pro forma Earnings from Continuing Operations               703     15    510

Earnings from Discontinued Operations                        --    170     --
                                                           ----   ----   ----
Pro forma Net Earnings                                     $703   $185   $510
                                                           ====   ====   ====
Basic Net Earnings per share:
   As reported                                             $.17   $.05   $.13
   Pro forma                                                .17    .04    .13

Diluted Net Earnings per share:
   As reported                                             $.17   $.05   $.13
   Pro forma                                                .17    .04    .13

          The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model average assumptions:

                                                       Year Ended December 31,
                                                     2003       2002      2001
                                                    -------   -------   --------
Risk-free interest rate                                3.25%      2.5%      4.0%
Dividend yield                                            0%        0%        0%
Volatility factor -
   expected market price of Company's
   common stock                                         0.8       0.5       0.5
Weighted average expected life
   of options                                       5 years   5 years   5 years

          A summary of the Company's stock option activity and related
information for the three years ended December 31, 2003, were as follows:

                                                    Number of   Weighted Average
                                                     Options     Exercise Price
                                                    ---------   ----------------
Outstanding at December 31, 2000 ................    120,625          $2.39
   Granted ......................................     71,425           1.08
   Expired/Cancelled ............................    (93,939)          2.46

Outstanding at December 31, 2001 ................     98,111           1.37
   Granted ......................................     95,918           1.06
   Exercised ....................................    (34,040)          1.11
                                                     -------

Outstanding at December 31, 2002 ................    159,989           1.24
   Granted ......................................         --
   Exercised ....................................    (22,050)          1.13
   Expired ......................................     (1,389)          1.04
                                                     -------

Outstanding at December 31, 2003 ................    136,550          $1.25
                                                     =======          =====

Exercisable at December 31, 2003 ................    136,550          $1.25
                                                     =======          =====

Weighted average fair value of options
   granted during the year for options
   on which the exercise price:
Equals the market price on the grant date           (1)  $
                                                          ======

Exceeds the market price on the grant date          (1)  $
                                                          ======

          (1) No options were granted in the year ended December 31, 2003.

          Exercise prices for options outstanding as of December 31, 2003,
ranged as follows: 109,869 options from $1.03 to $1.04 per share, and 26,681
options from $2.09 to $2.30 per share. The weighted average contractual life of
those options was 2.85 years.


                                       62

<PAGE>

Note 11. STATEMENTS OF CASH FLOWS:

          Certificates of deposit that have a maturity of less than 90 days are
considered cash equivalents for purposes of the accompanying Consolidated
Statements of Cash Flows.

          Supplemental disclosures of cash flow information are as follows (in
thousands):

                                                         Year Ended December 31,
                                                            2003   2002   2001
                                                            ----   ----   ----
Cash Payments for:
   Interest...........................................      $283   $291   $492
   Income taxes.......................................        54     12     27

Financing & Investing Activities
   Not Affecting Cash:
   Capital lease obligations incurred.................        --     18     --

          In 2001 charter aircraft with a book value of $1,490,000 were
transferred from fixed assets to inventory. The aircraft were later sold.

Note 12. INDUSTRY SEGMENTS INFORMATION:

          The Company has two reportable segments: consumer products and
aviation services. The Company's reportable segments are strategic business
units that offer different products and services.

          The consumer products segment produces packaged fuels, flints,
refillable lighters and ignitors, a torch, a penetrant spray lubricant, a spot
remover, and a surface protectant, which are distributed through distributors,
food brokers, mass merchandisers, drug chains, convenience stores, and
automotive and hardware representatives. Ronson Consumer Products is a principal
supplier of packaged flints and lighter fuels in the United States and Canada.

          The aviation services segment represents the fueling, chartering,
servicing and sales of fixed wing aircraft and servicing of helicopters.
Aircraft are sold through Company sales personnel. Ronson Aviation provides a
wide range of general aviation services to the general public and to government
agencies located in the vicinity of its facilities in Trenton, New Jersey.

          The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. The Company
evaluates performance based on profit or loss from continuing operations before
intercompany charges and income taxes.


                                       63

<PAGE>

          Financial information by industry segment is summarized below (in
thousands):

                                                      2003      2002      2001
                                                      ----      ----      ----
Net sales:
   Consumer Products ............................   $16,773   $14,232   $15,709
   Aviation Services ............................     9,967     9,369    12,996
                                                    -------   -------   -------
      Consolidated ..............................   $26,740   $23,601   $28,705
                                                    =======   =======   =======

Earnings (loss) before interest, other
   items, and intercompany charges:
   Consumer Products ............................   $ 2,610   $ 1,201   $ 1,952
   Aviation Services ............................     1,454     1,370     1,518
                                                    -------   -------   -------
   Total Reportable Segments ....................     4,064     2,571     3,470
   Corporate and others .........................    (2,143)   (1,972)   (1,737)
   Other charges ................................      (460)       --      (232)
                                                    -------   -------   -------
      Consolidated ..............................   $ 1,461   $   599   $ 1,501
                                                    =======   =======   =======

Interest expense:
   Consumer Products ............................   $    85   $   116   $   172
   Aviation Services ............................        67        80       198
                                                    -------   -------   -------
   Total Reportable Segments ....................       152       196       370
   Corporate and others .........................       156       158       163
                                                    -------   -------   -------
      Consolidated ..............................   $   308   $   354   $   533
                                                    =======   =======   =======

Depreciation and amortization:
   Consumer Products ............................   $   252   $   256   $   259
   Aviation Services ............................       398       405       428
                                                    -------   -------   -------
   Total Reportable Segments ....................       650       661       687
   Corporate and others .........................         8        10        39
                                                    -------   -------   -------
      Consolidated ..............................   $   658   $   671   $   726
                                                    =======   =======   =======

Earnings (loss) from continuing
   operations before intercompany
   charges and taxes:
   Consumer Products ............................   $ 2,521   $ 1,019   $ 1,755
   Aviation Services ............................     1,374     1,305     1,316
                                                    -------   -------   -------
   Total Reportable Segments ....................     3,895     2,324     3,071
   Corporate and others .........................    (2,284)   (2,212)   (1,983)
   Other charges ................................      (460)       --      (232)
                                                    -------   -------   -------
      Consolidated ..............................   $ 1,151   $   112   $   856
                                                    =======   =======   =======

Segment assets:
   Consumer Products ............................   $ 4,569   $ 4,652   $ 4,660
   Aviation Services ............................     5,281     5,133     4,793
                                                    -------   -------   -------
   Total Reportable Segments ....................     9,850     9,785     9,453
   Corporate and others .........................     1,551     1,691     1,391
   Discontinued operations ......................     1,202     1,412     1,783
                                                    -------   -------   -------
      Consolidated ..............................   $12,603   $12,888   $12,627
                                                    =======   =======   =======

Segment expenditures for
   long-lived assets:
   Consumer Products ............................   $   152   $   323   $   151
   Aviation Services ............................       267       600       384
                                                    -------   -------   -------
   Total Reportable Segments ....................       419       923       535
   Corporate and others .........................         3         3         3
                                                    -------   -------   -------
      Consolidated ..............................   $   422   $   926   $   538
                                                    =======   =======   =======


                                       64

<PAGE>

          Geographic Information regarding the Company's net sales and
long-lived assets was as follows (in thousands):

                                                       Year Ended December 31,
                                                       2003      2002      2001
                                                       ----      ----      ----
Net Sales (1):
United States ....................................   $24,826   $21,809   $26,847
Canada ...........................................     1,534     1,538     1,645
Other foreign countries ..........................       380       254       213
                                                     -------   -------   -------
                                                     $26,740   $23,601   $28,705
                                                     =======   =======   =======

                                                                  December 31,
                                                                  2003     2002
                                                                  ----     ----
Long-Lived Assets:
United States ................................................   $4,029   $4,274
Canada .......................................................       15       16
                                                                 ------   ------
                                                                 $4,044   $4,290
                                                                 ======   ======

          (1)  Net sales are attributed to countries based on location of
               customer.

          The Company performs ongoing credit evaluations of its customers'
financial condition and generally requires no collateral from its customers.

          For the years ended December 31, 2003 and 2002, net sales which
amounted to approximately $4,276,000 and $3,675,000, respectively, of
Consolidated Net Sales were made by Ronson Consumer Products to one customer. As
of December 31, 2003 and 2002, accounts receivable from that customer amounted
to approximately 21% and 22%, respectively, of Consolidated Accounts Receivable.
No other customer accounted for more than 10% of Consolidated Net Sales or
Consolidated Accounts Receivable for the years ended December 31, 2003 and 2002.
For the year ended December 31, 2001, no customer accounted for more than 10% of
Consolidated Net Sales or Consolidated Accounts Receivable.

Note 13. ACCUMULATED OTHER COMPREHENSIVE LOSS:

          Comprehensive income is included in the Statements of Consolidated
Stockholders' Equity. The components of Accumulated Other Comprehensive Loss as
shown on the Consolidated Balance Sheets were as follows:

                               Foreign Currency    Minimum    Accumulated Other
                                  Translation      Pension      Comprehensive
                                  Adjustments     Liability         Loss
                               ----------------   ---------   -----------------
Balance at December 31, 2000         $ 58          $1,035          $1,093
Current period change                  20             828             848
Income tax benefit                     (8)           (331)           (339)
                                     ----          ------          ------

Balance at December 31, 2001           70           1,532           1,602
Current period change                   1             897             898
Income tax benefit                     (1)           (358)           (359)
                                     ----          ------          ------

Balance at December 31, 2002           70           2,071           2,141
Current period change                 (96)           (477)           (573)
Income tax benefit                     38             190             228
                                     ----          ------          ------

Balance at December 31, 2003         $ 12          $1,784          $1,796
                                     ====          ======          ======


                                       65

<PAGE>

Note 14. CONCENTRATIONS:

          During 2003 and at year-end a subsidiary had cash deposits in a bank
in excess of FDIC insured limits. The Company periodically reviews the financial
condition of the bank to minimize its exposure.

          Ronson Consumer Products currently purchases lighter products and
torches from manufacturers in Spain, Peoples Republic of China and Taiwan. Since
there are a number of sources of similar lighter products, management believes
that other suppliers could provide lighters on comparable terms. A change of
suppliers, however, might cause a delay in delivery of the Company's lighter
products and torches and, possibly, a short-term loss in sales which could have
a short-term adverse effect on operating results.

Note 15. RELATED PARTY TRANSACTIONS:

          In October 1998 the Company entered into a consulting agreement with
Mr. Carl W. Dinger III, a greater than 5% shareholder of the Company. The
agreement provided that Mr. Dinger perform certain consulting services for the
Company for a period of 18 months expiring on April 7, 2000. The Company and Mr.
Dinger entered into a new consulting agreement to be effective upon the
expiration date of the original agreement. The new agreement provides that Mr.
Dinger will continue to perform consulting services for the Company for a period
of 48 months through April 7, 2004 at a fee of $7,000 per month. Mr. Dinger was
compensated $84,000 during each of the years ended December 31, 2003, 2002 and
2001, under the agreements. In March 2004 this agreement was extended for 30
days.

          In October 1998 Mr. Dinger granted an option to the Company to
purchase the 186,166 shares of the Company's common stock held by Mr. Dinger.
The option was for a period of 18 months expiring on April 7, 2000, and the
exercise price of the option was $5.25 per share. In 2000 Mr. Dinger granted a
new option to the Company, to purchase the 478,870 shares of the Company's
common stock now held by Mr. Dinger. The option is for a period of 48 months,
expiring April 7, 2004. The exercise price of the option was $5.25 per share for
the first two years, and the option price in the second two-year period is $7.50
per share. The cost of the option is $4,000 per month for the period of the
option or until exercised. As part of the new option agreement, Mr. Dinger has
granted the Board of Directors of the Company an irrevocable proxy to vote the
optioned shares during the term of the option. In March 2000 Mr. Dinger
purchased 263,360 shares of newly issued restricted common stock of the Company
at a price of $2.16 per share. The Company expended $48,000 for the options
during each of the years ended December 31, 2003, 2002 and 2001, which were
charged to Additional Paid-in Capital. In March 2004 this agreement was extended
for 30 days.

          The Company incurred costs for consulting services under agreements
with two directors of the Company of $128,000, $128,000, and $133,000, in the
years ended December 31, 2003, 2002 and 2001, respectively. The Company incurred
costs of $2,000 and $26,000 in the years ended December 31, 2002 and 2001,
respectively, (none in 2003) for legal fees to a firm having a member who is
also a director and an officer of the Company, with these fees primarily related
to the Prometcor environmental matters.


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<PAGE>

          FORM 10-K -- ITEM 15 (a) (2) and (d)

          RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

          LIST OF FINANCIAL STATEMENT SCHEDULES

               Schedule I   Condensed Financial Information
                                      of Company


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<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
   Ronson Corporation:

Under date of February 25, 2004, we reported on the consolidated balance sheets
of Ronson Corporation and subsidiaries as of December 31, 2003 and 2002, and the
related consolidated statements of operations, and cash flows for each of the
years in the three year period ended December 31, 2003 as contained in the
annual report on Form 10-K for the year 2003. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedule as listed in the accompanying index. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement schedule
based on our audits.

In our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth herein.

DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
February 25, 2004


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<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                               RONSON CORPORATION
--------------------------------------------------------------------------------

CONDENSED BALANCE SHEETS
(dollars in thousands)

                                                                December 31,
                                                            -------------------
                                                              2003       2002
                                                            --------   --------
                         ASSETS
CURRENT ASSETS:
Cash ....................................................   $     --   $     29
Other current assets ....................................        298        233
                                                            --------   --------
      Total Current Assets ..............................        298        262

Property, plant, and equipment ..........................        154        252
Less accumulated depreciation and amortization ..........        143        236
                                                            --------   --------
                                                                  11         16
Other assets ............................................      5,729      4,975
                                                            --------   --------
TOTAL ASSETS ............................................   $  6,038   $  5,253
                                                            ========   ========

         LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of lease obligations ....................   $      5   $      5
Accounts payable ........................................        276        171
Other current liabilities ...............................      1,169        843
                                                            --------   --------
      Total Current Liabilities .........................      1,450      1,019

Long-term lease obligations .............................         --          5
Pension obligation ......................................      1,113      1,771

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Preferred stock .........................................         --         --
Common stock ............................................      4,128      4,106
Additional paid-in capital ..............................     29,510     29,556
Accumulated deficit .....................................    (26,770)   (27,466)
Accumulated other comprehensive loss ....................     (1,796)    (2,141)
                                                            --------   --------
                                                               5,072      4,055
Less cost of treasury shares:
   2003 and 2002, 73,232 common shares ..................      1,597      1,597
                                                            --------   --------
                                                               3,475      2,458
                                                            --------   --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..............   $  6,038   $  5,253
                                                            ========   ========

The Notes to Consolidated Financial Statements of Ronson Corporation and Its
Wholly Owned Subsidiaries are an integral part of these statements. See
accompanying Notes to Condensed Financial Information of Registrant.


                                       69

<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                               RONSON CORPORATION
--------------------------------------------------------------------------------

CONDENSED STATEMENTS OF EARNINGS
(dollars in thousands)

                                                         YEAR ENDED DECEMBER 31,
                                                         2003     2002     2001
                                                        ------   ------   ------
Management administration (from wholly
   owned subsidiaries eliminated in consolidation) ..   $2,909   $2,279   $2,370
                                                        ------   ------   ------

Costs and expenses:
   General and administrative expenses ..............    2,602    1,968    1,734
   Interest expense (includes intercompany
      interest expense of $ 100, $ 100 and $ 113
      in 2003, 2002 and 2001, respectively,
      eliminated in consolidation) ..................      155      157      162
   Non-operating expense - net ......................       48       82       83
                                                        ------   ------   ------
                                                         2,805    2,207    1,979
                                                        ------   ------   ------

EARNINGS BEFORE INCOME TAXES AND EQUITY IN NET
   EARNINGS OF SUBSIDIARIES .........................      104       72      391

Income tax provisions (benefits) ....................       48      (70)     106

Equity in net earnings of subsidiaries
   (includes earnings from discontinued operations of
   $ 170 in 2002) ...................................      647       70      246
                                                        ------   ------   ------
NET EARNINGS ........................................   $  703   $  212   $  531
                                                        ======   ======   ======

The Notes to Consolidated Financial Statements of Ronson Corporation and Its
Wholly Owned Subsidiaries are an integral part of these statements. See
accompanying Notes to Condensed Financial Information of Registrant.


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<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                               RONSON CORPORATION
--------------------------------------------------------------------------------

CONDENSED STATEMENTS OF CASH FLOWS
     (dollars in thousands)

                                                         YEAR ENDED DECEMBER 31,
                                                           2003    2002    2001
                                                          -----   -----   -----

Cash Flows from Operating Activities:
Net earnings .........................................    $ 703   $ 212   $ 531
Adjustments to reconcile net earnings to net cash
   provided by operating activities:
   Equity in net earnings of subsidiaries ............     (647)    (70)   (246)
   Depreciation and amortization .....................        8      10      19
   Deferred income tax expenses (benefits) ...........       22      85     (30)
   Increase (decrease) in cash from changes in
      current assets and current liabilities .........      170      10     (13)
   Decrease (increase) in net advances to
      subsidiaries ...................................     (158)     75    (272)
   Net change in pension-related accounts ............      (71)   (126)     65
   Other .............................................      (17)    (72)      1
                                                          -----   -----   -----
      Net cash provided by operating activities ......       10     124      55
                                                          -----   -----   -----

Cash Flows from Investing Activities:
      Net cash used in investing activities,
         capital expenditures ........................       (3)     (3)     (3)
                                                          -----   -----   -----

Cash Flows from Financing Activities:
Proceeds from issuance of common stock ...............       24      39      --
Payments of long-term lease obligations ..............       (5)     (5)     (4)
Payments of preferred dividends ......................       (7)    (77)     --
Other ................................................      (48)    (49)    (48)
                                                          -----   -----   -----
      Net cash used in financing activities ..........      (36)    (92)    (52)
                                                          -----   -----   -----
Net increase (decrease) in cash ......................      (29)     29      --

Cash at beginning of year ............................       29      --      --
                                                          -----   -----   -----

Cash at end of year ..................................    $  --   $  29   $  --
                                                          =====   =====   =====

The Notes to Consolidated Financial Statements of Ronson Corporation and Its
Wholly Owned Subsidiaries are an integral part of these statements. See
accompanying Notes to Condensed Financial Information of Registrant.


                                       71

<PAGE>

 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT RONSON CORPORATION
--------------------------------------------------------------------------------

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE A: Condensed Financial Statements.

          The accompanying financial statements should be read in conjunction
with the consolidated financial statements of the Registrant, Ronson Corporation
(the "Company") and its subsidiaries included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2003.

          The Company's wholly owned subsidiaries in the condensed financial
statements are accounted for by the equity method of accounting.

          The Company has authorized 5,000,000 shares of preferred stock with no
par value. Outstanding shares of 12% Cumulative Convertible Preferred Stock were
34,875 at December 31, 2003 and 2002.

          The Company has authorized 11,848,106 shares of common stock with a
par value of $1.00, of which 4,055,223 and 4,033,173 were outstanding at
December 31, 2003 and 2002, respectively, adjusted for a 5% stock dividend
declared February 12, 2004.

NOTE B: Other Assets.

                                                                  December 31,
                                                                 (in thousands)
                                                                  2003     2002
                                                                 ------   ------
Investment in subsidiaries                                       $3,509   $2,752
Deferred income tax assets, net                                     934    1,112
Net advances to subsidiaries                                      1,001      843
Other                                                               285      268
                                                                 ------   ------
                                                                 $5,729   $4,975
                                                                 ======   ======

          Investment in subsidiaries was eliminated in consolidation. The net
advances to subsidiaries of $1,001,000 and $843,000 at December 31, 2003 and
2002, respectively, were eliminated in consolidation.

NOTE C: Unrecognized Net Loss on Pension Plans.

          SFAS #87 requires that if the additional minimum liability recorded
exceeds unrecognized prior service cost and the unrecognized net obligation at
transition, that difference, an unrecognized net loss, is to be reported, net of
tax, as a separate component of Stockholders' Equity. This unrecognized net loss
is being amortized over future periods as a component of pension expense.

NOTE D: Income Taxes.

          The Company and its domestic subsidiaries have elected to allocate
consolidated federal income taxes on the separate return method. Under this


                                       72

<PAGE>

method of allocation, income tax expenses (benefits) are allocated to the
Company and each subsidiary based on its taxable income (loss) and net operating
loss carryforward.

          In accordance with SFAS #109, "Accounting for Income Taxes" the
Company is to record a deferred income tax asset for net operating loss and
credit carryforwards when the ultimate realization is more likely than not. In
2003, 2002 and 2001, the Company and its subsidiaries recorded the expenses
(benefits) of net deferred income tax assets of $313,000, $20,000, and $320,000,
respectively, of which $22,000, $85,000 and $(30,000), respectively, were
allocated to the Company.

NOTE E: Statements of Cash Flows.

          Certificates of deposit that have a maturity of less than 90 days are
considered cash equivalents for purposes of the accompanying Condensed
Statements of Cash Flows.


                                       73