U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

(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, 2000


     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
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

                NEW JERSEY                             22-0743290
         ------------------------         ---------------------------------
         (State of incorporation)         (IRS Employer Identification No.)

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

     Issuer'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

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange  Act 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

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not  contained in this form,  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-KSB or any  amendment to
this Form 10-KSB. [ X ]

State issuer's revenues for its most recent fiscal year $28,008,000.

The  aggregate  market  value  of  common  equity  held  by  non-affiliates  was
$5,050,000 as of February 28, 2001, computed by reference to the average bid and
asked price of such common equity.

As of February  28, 2001,  there were  3,455,513  shares of the issuer's  common
stock outstanding.


<PAGE>

                                TABLE OF CONTENTS


        Part I
        ------

        Item   1.  Description of Business.

               2.  Description of Properties.

               3.  Legal Proceedings.

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

        Part II
        -------

        Item   5.  Market for the Company's Common Stock
                   and Related Stockholder Matters.

               6.  Management's Discussion and Analysis of Operations.

               7.  Financial Statements.

               8.  Changes in and Disagreements  with Accountants on Accounting
                   and Financial Disclosure.


        Part III
        --------

        Item   9.  Directors and Executive Officers of the Company, Compliance
                   with Section 16(a) of the Exchange Act.

               10. Executive Compensation.

               11. Security Ownership of Certain Beneficial Owners and
                   Management.

               12. Certain Relationships and Related Transactions.

               13. Exhibits and Reports on Form 8-K.


<PAGE>

                                     PART I
                                     ------

Item 1 - DESCRIPTION OF BUSINESS

(a) Business Development.

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

(b) Business of Issuer.

     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.

     In December 1989 the Company  adopted a plan to discontinue  the operations
of Ronson Metals  Corporation,  Newark,  New Jersey, one of the Company's wholly
owned  subsidiaries.  On January 8, 1997, Ronson Metals Corporation  amended its
Certificate of Incorporation  to change its corporation name to Prometcor,  Inc.
("Prometcor").  Prometcor had sizable losses in several years prior to 1987 with
reduced  losses  continuing in 1987 through 1989. In 1990  operations  ceased at
Prometcor and Prometcor  began  complying  with the New Jersey  Industrial  Site
Recovery Act ("ISRA"),  formerly ECRA, and all other applicable laws. As part of
the  plan to sell  the  properties  of the  Prometcor  discontinued  operations,
Prometcor has also been  involved in  termination  of its United States  Nuclear
Regulatory Commission ("NRC") license. Compliance with ISRA and NRC requirements
has continued through 2000 and into 2001. (See  Environmental  Matters below and
Item 6 - Management's Discussion and Analysis of Operations.)

     (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",  a spot  remover  under the  product  tradename  "Kleenol",  and a
surface protectant under the tradename  "GlossTek".  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.  A subsidiary of WalMart  Stores,
Inc. ("WalMart") is a significant  distributor for the consumer products segment
and, as such, supplies Ronson's products to numerous retailers.  Management does
not  believe  that this  segment is  substantially  dependent  on WalMart or its
distributor  subsidiary because of the presence of many other distributors which
provide  retailers with Ronson's  consumer  products.  Sales to various units of
WalMart  in  2000  and  1999  accounted  for  10%  and  13%,  respectively,   of
Consolidated  Net  Sales  of the  Company  and 18% and 20% of Net  Sales  of the
segment  in 2000  and  1999,  respectively,  most  of  which  were to  WalMart's
distributor subsidiary.

<PAGE>

     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  four lighter  products - the
"RONII"  refillable  butane  lighter;  the Ronson "WINDII" liquid fuel windproof
lighter;  the  Ronson  "Varaflame   Ignitor",   used  for  lighting  fireplaces,
barbecues,  camping  stoves and  candles;  and the "EURO  LITE" blue point flame
butane  lighter,  excellent  for pipes and  cigars.  The  lighter  products  are
marketed in the United States, Canada and Mexico.

     In 1995 Ronson  Consumer  Products  introduced a new lighter  product,  the
RONII refillable butane lighter, in both the United States and Canada. 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  and  unbranded  imports  from China and other Far  Eastern
countries.

     In 1997 Ronson  Consumer  Products  introduced a new lighter  product,  the
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 other nationally distributed brands and from unbranded imports.

     The WINDII lighter and Varaflame Ignitor are manufactured in China, both in
accordance with the design  specifications  of the Company.  The Company has the
exclusive  right to market  these  products  in the  United  States,  Canada and
Mexico, and does so through its distribution  channels. The Varaflame Ignitor is
refillable  with Ronson  butane  refills and is less  expensive  than most other
refillable  ignitors.  The Varaflame Ignitor  encounters strong competition from
imported disposable ignitors.

     In late 1999 Ronson  Consumer  Products  introduced  the new EURO LITE blue
point flame butane lighter,  in both the United States and Canada. The EURO LITE
uses Ronson  Multi-Fill  butane fuel  injectors.  It is manufactured in China in
accordance with the Company's design specifications.  The EURO LITE faces strong
competition from other nationally distributed brands and unbranded imports.

     (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, (3) Trenton, New Jersey). In
its  passenger and cargo  services,  Ronson  Aviation  operates a total of three
aircraft,  including a Citation II Jet and two twin-engine  turbo-prop airplanes
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 customer  service  facility  for Bell
Helicopter Textron.

<PAGE>

     At December 31,  2000,  Ronson  Aviation  had orders to purchase  three new
aircraft from Raytheon Aircraft  Corporation,  all of which are for resale.  The
total sales value of these aircraft is approximately $2,100,000.  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, located in Newark, New Jersey, and
to comply with ISRA (formerly  ECRA) and all other  applicable  laws. In October
1994  Prometcor  entered  into a  Memorandum  of  Agreement  with the New Jersey
Department  of  Environmental  Protection  ("NJDEP")  as to  its  NJDEP  related
environmental  compliance  activities  respecting  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 in the first  quarter  of
1997, areas of contamination in the groundwater  below a section of the property
were  identified.  Sampling and  delineation  have been  undertaken  and will be
continuing in this area of the property.

     Prometcor has also  proceeded  with  reporting to the NRC and has requested
that the NRC terminate the NRC license held by Prometcor. The Company's plan for
final  radiological  remediation  and clearance of the soil was  approved by the
NRC in 1998  and by the  NJDEP  in  1999.  The  implementation  of this  plan is
virtually complete.

     The Company's plan to resolve the  non-radiological  issues in the soil has
been  approved  by the NJDEP  and will be  implemented  in the first and  second
quarters of 2001.  The Company's plan to resolve the  groundwater  issue has not
yet been approved by the NJDEP. The Company expects that long-term monitoring of
groundwater will be required.

     The additional  sampling and remediation  required for the complete release
of the remaining  parcel of the Newark property are continuing.  The full extent
of the costs is not  determinable  until all testing and  remediation  have been
completed and accepted by the NJDEP and NRC.

<PAGE>

     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 believes that the effect will not be material.

     In  September  1998 the Company  received a "de minimis"  settlement  offer
("Settlement  Offer") from the United  States  Environmental  Protection  Agency
("USEPA")  related to waste  disposed of prior to 1980 at a landfill in Monterey
Park,  California,  which the USEPA had  designated  as a  Superfund  Site.  The
Company  has  offered to settle the  matter  for  $60,000,  payable in the third
quarter of 2001.  Although the USEPA's Settlement Offer includes various options
at costs of from  $307,000 to $376,000 and the Company has offered to settle the
matter for $60,000,  the Company's final  contribution is not yet  determinable.
The Company has accrued the amount of its offer and related expenses.

     The  Company   believes  that  compliance  with   environmental   laws  and
regulations  will not have a material  effect upon the Company's  future capital
expenditures.  Other  than the  cash  requirements  related  to  completing  the
Prometcor  environmental  clearance  and the fact  that the full  extent  of the
Prometcor costs is not yet  determinable,  the Company  believes that compliance
with environmental laws and regulations will not have a material effect upon the
Company's earnings 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.

     In 1999 the Company  registered the new trademark "ArTek" in many countries
in order to market products under the new brand.

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.


<PAGE>


RESEARCH ACTIVITIES

     The Company's  consumer products segment expensed  approximately  $288,000,
$232,000 and $164,000  during the fiscal years ended December 31, 2000, 1999 and
1998,  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, 2000, the Company and its subsidiaries  employed a total
of 129 persons.

CUSTOMER DEPENDENCE

     See above under "Consumer Products".


Item 2 - DESCRIPTION OF PROPERTIES

     (a) and (c) The  following  list sets forth the location and certain  other
information   concerning  the  Company's  principal   manufacturing  and  office
facilities.  The Company's  facilities are in relatively  modern buildings which
were designed for their present 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.  Management  believes that  insurance  coverage is adequate for all of its
facilities, as listed below.

     The facilities in Woodbridge,  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 Summit Bank.

     (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) 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.

     (3) 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.

<PAGE>

     (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.

     (4) 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.

     (5) Newark, New Jersey

     One parcel of vacant land.  Operations of these facilities have terminated.
The  Company  has  entered  into a  contract  for the  sale of the  parcel  upon
completion of environmental clearance.

     (b)  The  Company's  investments  are  limited  to  those  related  to  its
operations.  There are no  restrictions  which would limit  investments in other
areas, if determined by management.

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

RONSON CORPORATION v. THE HOME INDEMNITY COMPANY, ET AL
-------------------------------------------------------

     In the third  quarter of 1999,  the Company filed a lawsuit in the Superior
Court of New Jersey Law Division : Essex  County  against a number of its former
general  liability   insurance   carriers  seeking  recovery  for  environmental
investigation   and  remediation  costs  incurred  and  anticipated  at  various
locations, primarily Prometcor. Through February 28, 2001, Prometcor has reached
agreement with a few carriers totalling approximately $600,000. Discovery in the
case is in progress.  The  Company,  based on  statements  of its counsel in the
matter,  believes  additional  recoveries  are probable.  Further,  according to
statements to the Company by its counsel (who have  undertaken  the lawsuit on a
legal fee  contingency  basis),  the Company  has a  reasonable  possibility  of
obtaining a sizable  recovery  beyond the  settlements  reached and the probable
recovery amounts.

     See Item 1.  "Business -  Environmental  Matters" above for discussion of a
pending environmental matter involving a Superfund Site in California.

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

     (a) At the  Company's  Annual  Stockholders'  Meeting  (the  "Meeting")  on
December 5, 2000,  the matters set forth in the Company's 2000 Notice of Meeting
and Proxy Statement,  which is incorporated herein by reference,  were submitted
to the Company's stockholders.

     (b) Messrs.  Gerard J.  Quinnan and Saul H. Weisman were elected as Class I
directors for three-year terms by 87.4% 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 2000
was ratified by 89.3% of the votes cast at the Meeting.

     The number of affirmative  votes,  negative  votes and  abstentions on each
matter is set forth in the Report of Inspectors of Election,  a copy of which is
attached hereto as Exhibit 99(a).

<PAGE>

                                     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.

        2000
        ----------------------------------------------------
        Quarter            1st      2nd      3rd      4th
        ----------------------------------------------------
        High Bid          2 1/2    2 1/2    2 1/8    2 1/16
        Low Bid           1 7/8    1 15/16    2      1 1/16


        1999
        ----------------------------------------------------
        Quarter            1st      2nd      3rd      4th
        ----------------------------------------------------
        High Bid          3 1/4    3 5/16   3 1/4    2 7/8
        Low Bid           2 5/8    2 5/8    2 11/16    2


     b) At February 28,  2001,  there were 2,448  stockholders  of record of the
Company's common stock.

     c) No dividends  were declared or paid in the two years ended  December 31,
2000.

     d) 1) On July 21, 1998, the Company issued 20,000 common shares to Morrow &
Co.,  Inc.,  in  exchange  for  consulting   services  valued  at  $50,000.   No
underwriters  were  used  and no  discounts  or  commissions  were  paid.  These
securities  were exempt from  registration  under Section 4(2) of the Securities
Act of 1933, as amended, as a private offering.  The securities were issued to a
sophisticated investor.

        2) On March 23, 2000, the Company sold 227,500  restricted common shares
to Carl W.  Dinger III for cash at the price of $2.50 per share,  for a total of
$568,750.  No underwriters  were used and no discounts or commissions were paid.
These  securities  were  exempt  from  registration  under  Section  4(2) of the
Securities Act of 1933, as amended,  as a private offering.  The securities were
issued to a sophisticated investor.

        3) On January 21, 2000, the Company issued 25,628 common shares to Mario
Andretti in exchange for product promotion services in the amount of $65,000 for
thirteen months ($2.54 per share). No underwriters were used and no discounts or
commissions  were paid.  These  securities were exempt from  registration  under
Section 4(2) of the Securities Act of 1933, as amended,  as a private  offering.
The securities were issued to a sophisticated investor.

<PAGE>

Item 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

RESULTS OF OPERATIONS

2000 Compared to 1999

     The  Company's  Net  Sales  increased  in 2000 by 13% to  $28,008,000  from
$24,696,000 in 1999.

     The Company's Earnings from Continuing Operations before Interest and Other
Items  increased to  $1,558,000  in 2000 as compared to  $1,198,000  in 1999, an
increase of $360,000 or 30%.

     The Company's Earnings from Continuing  Operations before Income Taxes also
increased substantially in 2000 to $678,000, an increase of 74% from $390,000 in
1999.

     The Company's  Net Earnings of $434,000 in the year 2000  increased by over
$600,000  compared with the Net Loss of $194,000 in 1999,  which included a loss
of $486,000 from Prometcor's discontinued operations.

     Ronson Consumer Products
     ------------------------
     (in thousands)
                                                        Year Ended
                                                        December 31,
                                                      2000        1999
                                                      ----        ----
     Net sales                                     $ 16,081    $ 16,096
     Earnings before interest, other items,
       intercompany charges, and taxes                1,967       2,557
     Earnings before intercompany charges
       and taxes                                      1,696       2,326
     Non-recurring charges                               --        (187)

     Net Sales of consumer  products at Ronson Consumer  Products were unchanged
in 2000 compared to 1999. Cost of Sales, as a percentage of Net Sales, at Ronson
Consumer Products increased to 54% in 2000 compared to 51% in 1999 primarily due
to increases in 2000 in the cost of materials primarily related to the Company's
Ronsonol  fuel and  Multi-Fill  butane  products  due to rising oil  prices,  in
research and  development,  and in costs related to the ignitor utility lighter.
Selling,  Shipping  and  Advertising  Expenses  and General  and  Administrative
Expenses,  as a percentage of Net Sales,  increased slightly to 33% in 2000 from
32% in 1999  primarily  due to  increases  in  selling  expenses  in  2000.  The
non-recurring charge of $187,000 in 1999 was the adverse affect of the voluntary
short-term withdrawal of the ignitor from the Canadian market in 1999.

     Interest  Expense  at Ronson  Consumer  Products  increased  by  $43,000 to
$249,000 in 2000  primarily  due to  increases  in the prime rate,  upon which a
large portion of the Company's Interest Expense is based.

<PAGE>

     Ronson Aviation
     ---------------
     (in thousands)
                                                        Year Ended
                                                        December 31,
                                                      2000        1999
                                                      ----        ----
     Net sales                                     $ 11,927    $  8,600
     Earnings before interest, other items,
       intercompany charges, and taxes                  928         398
     Earnings before intercompany charges
       and taxes                                        587          52
     Non-recurring income                               110          --


     Net Sales at Ronson Aviation increased by 39% in 2000 from 1999,  primarily
due to increased  aircraft sales,  increased fuel sales,  and increased sales of
charter  services.  The increased sales of aviation fuel in 2000 was due both to
increased fuel volume sold and to higher fuel selling prices.

     Ronson Aviation's Cost of Sales, as a percentage of Net Sales, increased to
81% in 2000 as  compared  to 80% in  1999.  The  increase  in the  Cost of Sales
percentage  in 2000 was  primarily due to the change in mix of products sold and
to higher fuel costs.

     Ronson Aviation's  Selling,  Shipping and Advertising  Expenses and General
and Administrative Expenses, as a percentage of Net Sales, were reduced to 8% in
2000 from 11% in 1999 primarily due to the increased sales in 2000.

     The non-recurring  income of $110,000 at Ronson Aviation in 2000 was due to
settlement  of an  insurance  claim  related to a 1998 fuel spill.  In the third
quarter  of 2000,  Ronson  Aviation  settled  the claim for about  $144,000  and
recorded  income of $110,000,  net of related costs. In 1998 Ronson Aviation had
recognized costs of $135,000 related to the third quarter 1998 fuel spill.

Other Items

     The  General  and  Administrative  Expenses  of  Corporate  and Others were
reduced in 2000 primarily due to lower legal expenses.

     The Income Tax Provision  (Benefits)-Net increased by $146,000 from 1999 to
2000 primarily due to the Company's  increased usage of prior net operating loss
carryforwards in 2000.

Discontinued Operations

     The Loss from  Discontinued  Operations  included the costs recorded by the
Company related to the discontinuance of Prometcor, as follows (in thousands):

                                               Year Ended December 31,
                                               2000      1999      1998
                                               ----      ----      ----

        Insurance recovery income            $  645    $   --    $   --
        Discontinuance costs accrued            645        763     1,506
                                             ------    -------   -------
                                                 --        763     1,506
        Deferred income tax benefits             --       (277)     (557)
                                             ------    -------   -------
        Loss from Discontinued Operations    $   --    $   486   $   949
                                             ======    =======   =======


     In 1990  the  Company  discontinued  the  operations  of its  wholly  owned
subsidiary,  Ronson Metals  Corporation,  subsequently  renamed Prometcor,  Inc.
("Prometcor").  Upon the cessation of operations  in 1990,  Prometcor  began its
compliance with the environmental  requirements of the New Jersey  Environmental
Cleanup  Responsibility Act ("ECRA"),  now known as the Industrial Site Recovery
Act  ("ISRA"),  administered  by the  New  Jersey  Department  of  Environmental
Protection ("NJDEP") and other applicable laws with the objective of selling the
land and existing buildings previously used in the discontinued operations.  The
discontinuance  of operations  also required the  termination of a United States
Nuclear Regulatory Commission ("NRC") license for the storage and use on site of
a material used in a new product, the sales of which were minimal.

<PAGE>

     In 2000 and to date in 2001,  Prometcor  made  substantial  progress in the
environmental clearance of its property in Newark, N.J. In February 2000 the NRC
released  one of the two  remaining  parcels  for  unrestricted  use.  A similar
release  of this  parcel for  unrestricted  use was  received  from the NJDEP in
August 2000.  Prometcor's  manufacturing  buildings had stood on this site. This
parcel was sold under an existing sales contract for about $200,000.

     In  the  fourth   quarter  of  2000  and  January   2001,   all   remaining
radiologically  contaminated  soil was excavated and sent to a licensed disposal
site. The quantity of soil required to be excavated exceeded prior estimates. On
March 1, 2001,  the final  necessary  report was  submitted  to the NRC, and the
Company  requested final release of the property and termination of the license.
A similar release will be requested from the NJDEP.

     In addition, the plan relating to non-radiological cleanup and clearance of
the soil has been approved by the NJDEP and is expected to be implemented in the
second quarter of 2001. Following completion, the Company expects to receive the
necessary  releases  from the NJDEP,  and the sale of this  final  parcel of the
property will be closed under the existing sales contract for about $295,000.

     The Company's plan to resolve  groundwater issues has not yet been approved
by the NJDEP.  Further testing completed in 2000 resulted in increased estimates
of the range of costs to be  incurred.  These  costs  will be  incurred  over an
extended number of years.  In calculating and accruing these costs,  the Company
has  discounted  the costs to the  present  value.  The sale of the  property is
expected  to  proceed  in  the  next  few  months  with  the  Company  retaining
responsibility for the groundwater-related activities.

     While making this progress to complete clearance of the property, Prometcor
incurred greater than anticipated costs primarily due to the greater quantity of
soil  removed  and  disposed  of  at a  licensed  disposal  facility,  increased
estimates of future  groundwater-related  activities,  and an extended period of
time to complete  clearance.  Because of these  increases in costs  incurred and
anticipated,  Prometcor  accrued  additional  costs of  $645,000  in the  fourth
quarter of 2000.

     Since the termination of Prometcor's business operations in 1990, the total
costs and expenses  related to the  discontinued  operations,  less the expected
gain from the eventual sale of Prometcor's assets, have been estimated, based on
the latest available information, to be about $7,170,000.  These estimated costs
and expenses consist of:  Prometcor's  expenses for the completion of compliance
with the NJDEP and NRC environmental regulations; the termination of Prometcor's
business   operations;   environmental   consulting   costs,   legal  and  other
professional  fees;  and costs for the  maintenance  of the Prometcor  property,
including insurance and taxes. These costs and expenses,  net of deferred income
tax benefits,  have been charged  against the Company's  Loss from  Discontinued
Operations  and Net Earnings  (Loss)  between the beginning of 1990 and year end
2000.  The liability for these  estimated  costs and expenses as recorded in the
financial  statements at December 31, 2000, was based, in accordance with normal
accounting  practices,  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 approximately $600,000 above the lower limit.

     The full  extent of the  costs  and time  required  for  completion  is not
determinable  until the remediation and  confirmatory  testing of the properties
have been completed and accepted by the NJDEP and NRC.

<PAGE>

     In the second half of 1999, the Company filed a lawsuit  against several of
its  former  general   liability   insurance   carriers   seeking   recovery  of
environmental  investigation  and remediation  costs incurred and anticipated at
various  locations,  primarily  Prometcor.  In the fourth quarter of 2000 and to
date (February 27, 2001), the Company has reached  settlement  agreements with a
few of the insurance carriers involved. To date, these settlements have totalled
approximately  $600,000.  The Company, based on statements of its counsel in the
matter, believes additional recoveries are probable. Based on the settlements to
date and probable future  recoveries,  in the fourth quarter of 2000,  Prometcor
recognized  insurance  recovery income, a total of about $1,000,000 less related
costs of  $355,000.  In  addition,  according  to  statements  by the  Company's
counsel,  the  Company  has a  reasonable  possibility  of  obtaining  a sizable
recovery beyond the amount recognized in the fourth quarter of 2000.

1999 Compared to 1998

     The  Company's  Net  Sales  increased  in  1999 by 7% to  $24,696,000  from
$23,173,000 in 1998.

     The Company's Earnings from Continuing Operations before Interest and Other
Items were  $1,198,000 in 1999 as compared to $1,350,000 in 1998.  The Company's
1999 Net Sales and Earnings from Continuing Operations before Interest and Other
Items were adversely affected by sales returns, lost sales, and costs related to
a voluntary  short-term  withdrawal of the Company's  Varaflame  ignitor utility
lighter  ("ignitor")  from the Canadian  market.  As a result of the above,  the
operating  earnings in the second half of 1999 were  reduced by about  $187,000.

     Ronson Consumer Products
     ------------------------
     (in thousands)

                                                        Year Ended
                                                        December 31,
                                                      1999        1998
                                                      ----        ----
     Net sales                                     $ 16,096    $ 15,717
     Earnings before interest, other items,
       intercompany charges, and taxes                2,557       2,567
     Earnings before intercompany charges
       and taxes                                      2,326       2,349
     Non-recurring charges                             (187)         --

     Net Sales of consumer products at Ronson Consumer Products  increased by 2%
in 1999 compared to 1998 primarily due to the 73% increase in sales of Ronii and
Windii lighters in 1999. This increase was partially  offset by a $230,000 sales
reduction related to the Ronson-Canada ignitor matter discussed above.

     Cost of Sales, as a percentage of Net Sales,  at Ronson  Consumer  Products
was unchanged at 51% in 1999 and 1998, excluding the effect of the Ronson-Canada
utility  lighter  matter.  Selling,  Shipping  and  Advertising  Expenses,  as a
percentage of Net Sales, increased to 24% in 1999 from 22% in 1998 primarily due
to increased  advertising  expenses in 1999. The non-recurring charge in 1999 is
the adverse effect of the Ronson-Canada ignitor matter discussed above.

     Ronson Aviation
     ---------------
     (in thousands)
                                                         Year Ended
                                                         December 31,
                                                      1999         1998
                                                      ----         ----
     Net sales                                     $  8,600     $  7,456
     Earnings before interest, other items,
       intercompany charges, and taxes                  398          556
     Earnings before intercompany charges
       and taxes                                         52          295
     Non-recurring charges                               --         (135)

     Net Sales at Ronson Aviation increased by 15% in 1999 from 1998,  primarily
due to increased aircraft sales.


<PAGE>

     Ronson Aviation's Cost of Sales, as a percentage of Net Sales, increased to
80% in 1999 from 78% in 1998.  The increase in the Cost of Sales  percentage  in
1999 was primarily due to the change in mix of products sold,  particularly  the
increase in aircraft sales in 1999.

     Ronson  Aviation's  Selling,   Shipping  and  Advertising  Expenses,  as  a
percentage of Net Sales,  were  unchanged from 1998 to 1999.  Ronson  Aviation's
General and Administrative  Expenses, as a percentage of Net Sales, were reduced
in 1999 from 1998 primarily due to the increase in the Net Sales.

Other Items

     The  General  and  Administrative  Expenses  of  Corporate  and Others were
reduced in 1999 primarily due to lower pension expense.  The pension expense was
reduced  primarily due to the increased  earnings on pension  assets because the
assets exceeded the obligation in the Company's  principal  pension plan through
1999 and to the lower pension  amortization expense due to net gains in the plan
in 1998.

     Other-Net was lower in 1999 than in 1998 primarily because 1998's Other-Net
included costs accrued in the amount of $110,000  related to the Company's offer
to settle the California Superfund Site matter.

     The Income Tax Provisions (Benefits)-Net increased by $238,000 from 1998 to
1999. The year 1998 included  deferred income tax benefits of $170,000,  and the
year 1999 included deferred income tax expenses of $53,000,  a combined increase
in expenses of $223,000 in 1999.

Discontinued Operations

     In 1999 Prometcor made substantial progress in the environmental  clearance
of the  Prometcor  property  in  Newark,  N.J.  In the  first  quarter  of 1999,
Prometcor  received  NRC  license  amendments  and NJDEP  releases  to allow the
demolition of the major buildings on the site. The buildings were demolished and
removed in the first  through the third  quarters of 1999.  During the third and
fourth quarters of 1999, Prometcor completed excavation of contaminated material
in one  of the  two  remaining  parcels  of the  property.  Completion  of  this
excavation  resolved a significant  uncertainty as to the volume of contaminated
material below the ground level of the concrete floor of the buildings.

     While making this progress to complete clearance of the property, Prometcor
incurred greater than anticipated costs primarily due to a significant  increase
in the required  excavation and testing of the soil beneath the concrete  floors
of the buildings.  Prometcor also expects to incur higher costs than  previously
anticipated to dispose of the excavated soil due to the larger quantity of soil.
In addition,  the extended period of time to complete  clearance has resulted in
increased  costs.  Because of these increases in costs incurred and anticipated,
Prometcor took additional accruals of $763,000 in 1999.

INCOME TAXES

     In accordance  with Statement of Financial  Accounting  Standards  ("SFAS")
#109,  "Accounting for Income Taxes", in 1998, the Company  recognized  deferred
income tax benefits of $727,000,  as the result of  reductions  in the valuation
allowance related to the Company's  deferred income tax assets and to accrual of
costs  related  to  discontinued  operations.  In  2000  and  1999  the  Company
recognized  deferred income tax expenses of $236,000 and $53,000,  respectively,
related to continuing  operations  primarily due to the Earnings from Continuing
Operations  before Taxes.  The Company  recognized  deferred income tax benefits
related to  discontinued  operations  of  $277,000  in 1999 as the result of the
accruals of costs related to the discontinued operations.

<PAGE>

     Current  income  taxes in the years ended  December  31, 2000 and 1998,  of
$375,000 and $108,000,  respectively, were presented net of credits arising from
the  utilization  of available tax losses and loss  carryforwards  in accordance
with SFAS #109. In 2000,  1999,  and 1998,  current  income tax expenses were as
follows:

                                            Year Ended December 31,
                                            2000     1999     1998
                                            ----     ----     ----

                           Federal          $  8     $  -     $  -
                           State               8       45       30
                                            ----     ----     ----
                             Total          $ 16     $ 45     $ 30
                                            ====     ====     ====

     At December 31, 2000, the Company had net operating loss  carryforwards for
federal income tax purposes of approximately  $4,970,000 and alternative minimum
tax  credit  carryforwards  of  $70,000.  (Refer  to  Note  3 of  the  Notes  to
Consolidated Financial Statements.)

FINANCIAL CONDITION

     The Company's  Stockholders'  Equity improved to $2,859,000 at December 31,
2000,  from $2,420,000 at December 31, 1999. The improvement of $439,000 in 2000
Stockholders' Equity was primarily due to the proceeds of $569,000 from the sale
of newly issued  restricted common stock of the Company in March 2000 and to the
Net Earnings in 2000 of $434,000.  These  increases were  partially  offset by a
reduction  due to a loss,  net of related  income tax  benefits,  in the Minimum
Pension Liability  Adjustment component of Accumulated Other Comprehensive Loss.
The  Company's  deficiency  in working  capital  was  reduced to  $1,147,000  at
December 31, 2000,  as compared to a deficiency  of  $3,168,000  at December 31,
1999. The improvement of $2,021,000 in working capital was primarily due to:  1)
the Company's Net Earnings in 2000, 2) $672,000 from the  refinancing of certain
long-term  aircraft loans by Ronson Aviation described in more detail below, and
3) the proceeds from the sale of stock referred to above.

     The  Company's  finished  goods  inventories  were reduced to $1,605,000 at
December 31, 2000, from $3,572,000 at December 31, 1999,  primarily due to lower
aircraft  inventory at Ronson Aviation.  The Ronson Aviation aircraft  inventory
had increased in the fourth quarter of 1999 primarily because three new aircraft
were  delivered to Ronson  Aviation in December 1999 which  represented  the new
aircraft  delivery  schedule for all of 1999. The supplier of these aircraft had
experienced  difficulties  in  production,  delaying  the  deliveries  to Ronson
Aviation.  In the first quarter of 2000,  two of the three 1999 aircraft with an
inventory value of $1,212,000 were returned to the supplier at no cost to Ronson
Aviation.  As a result of the reduced  aircraft  inventory,  the short-term debt
related to aircraft inventory decreased by $1,854,000 in 2000.

     Accounts payable were reduced by $557,000 in 2000 to $2,167,000 at December
31, 2000, primarily due to the timing of purchases and payments and to the usage
of a portion of the proceeds from the sale of restricted  stock discussed above.
Cash increased  from changes in accounts  payable in 1999 and 1998 primarily due
to differences in timing of purchases and payments.

     In July  2000  Summit  Bank and  Ronson  Aviation  refinanced  two  charter
aircraft with long-term debt totalling $800,000,  payable over five years with a
final  payment of $400,000 on August 25, 2005.  The new loans  refinanced  notes
payable  with  a  balance  of  $463,000  at  August  25,   2000,   and  provided
approximately $337,000 in additional funds. The refinanced notes had been due to
expire in October 2000.

<PAGE>

     Based on the amount of the loans  outstanding  and the  levels of  accounts
receivable  and  inventory at December 31, 2000,  Ronson  Consumer  Products had
unused  borrowings  available at December 31, 2000 of about  $365,000  under the
Summit and  Canadian  Imperial  Bank of Commerce  lines of credit.  Based on the
level of accounts  receivable,  Ronson  Aviation had unused  borrowings of about
$257,000 under the Summit line of credit at December 31, 2000.

     The  increase  in Current  Assets of  Discontinued  Operations  in 2000 was
primarily due to the  recognition  of a receivable  for the  insurance  recovery
discussed above. The increase in Current Liabilities of Discontinued  Operations
in 2000 was primarily due to the accrual of  additional  expected  environmental
costs at Prometcor,  as described  above, and to the accrual of costs related to
the insurance recovery income.

     In  September  1998 the Company  received a "de minimis"  settlement  offer
("Settlement  Offer") from the United  States  Environmental  Protection  Agency
("USEPA")  related to waste  disposed of prior to 1980 at a landfill in Monterey
Park,  California,  which the USEPA had designated as a Superfund Site. Although
the USEPA's  Settlement Offer includes various options at costs of from $307,000
to $376,000  and the Company has offered to settle the matter for  $60,000,  the
Company's final  contribution is not yet  determinable.  The Company has accrued
the amount of its offer and related expenses.

     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,
established  external financial  arrangements,  potential  additional sources of
financing and existing cash balances.

FORWARD-LOOKING STATEMENTS

     This Management's  Discussion and Analysis of Operations and other sections
of this report contain forward-looking  statements that anticipate results based
on  management's  plans that are  subject to  uncertainty.  The use of the words
"expects",  "plans",  "anticipates"  and other similar words in conjunction with
discussions  of future  operations  of financial  performance  identifies  these
statements.

     Forward-looking  statements  are based on  current  expectations  of future
events.  The Company  cannot ensure that any  forward-looking  statement will be
accurate,  although  the Company  believes  that it has been  reasonable  in its
expectations  and  assumptions.  Investors  should  realize  that if  underlying
assumptions prove inaccurate or that unknown risks or uncertainties materialize,
actual results could vary materially from our  projections.  The Company assumes
no  obligation  to update any  forward-looking  statements as a result of future
events or developments.

     Investors are cautioned not to place undue reliance on such statements that
speak only as of the date made.  Investors also should understand that it is not
possible to predict or identify all such factors and should not consider this to
be a complete statement of all potential risks and uncertainties.

<PAGE>

Item 7 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Financial statements required by this item are included in Item 13.

Item 8 - CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

     There were no  disagreements  with  accountants in the years ended December
31, 2000, 1999, and 1998.

                                    PART III

Item 9 - 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   78       1952-      2002     President & Chief
                              Present              Executive Officer; Chairman
                                                   of Executive Committee;
                                                   Member of Nominating
                                                   Committee.

Robert A. Aronson     51       1993-      2001     Member of Audit Committee;
                              Present              Managing Member of
                                                   Independence Leather, L.L.C.,
                                                   Mountainside, NJ, the
                                                   principal business of which
                                                   is the import of leather
                                                   products, May 1996 to
                                                   present;  Senior Vice
                                                   President/Chief   Financial
                                                   Officer  of  Dreher,  Inc.,
                                                   Newark, NJ, the  principal
                                                   business of which was the
                                                   manufacture and import of
                                                   leather products, October
                                                   1987 to May 1996; son of the
                                                   President & Chief Executive
                                                   Officer of the Company.

Erwin M. Ganz         71       1976-      2001     Chairman of Audit
                              Present              Committee; Member of
                                                   Executive 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         55     December     2002     Attorney; Former partner
                              1999 -               in Shanley Fisher, P.C.,
                             Present               Attorneys at Law, Morris-
                                                   town, NJ.

<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)
-------------------   ---     --------  -------    ------------------------
Gerard J. Quinnan      72      1996-     2003      Consultant for the Company,
                              Present              1990 to present; Vice
                                                   President-General Manager of
                                                   Ronson Consumer Products
                                                   Corporation, 1981 to 1990.

Justin P. Walder       65      1972-     2001      Secretary; Assistant Cor-
                              Present              poration Counsel; Member of
                                                   Executive Committee and
                                                   Nominating Committee;
                                                   Principal in Walder, Sondak
                                                   & Brogan, P.A., Attorneys
                                                   at Law, Roseland, NJ.

 Saul H. Weisman       75      1978-     2003      Member of Executive
                              Present              Committee and Audit
                                                   Committee; 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.

(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, 2002:

                                                 Positions and Offices
                               Period Served        with Company;
       Name            Age      as Officer       Family Relationships
-------------------    ---     -------------     ---------------------
Louis V. Aronson II    78         1953-       President & Chief Executive
                                 Present      Officer; Chairman of Executive
                                              Committee; Director.

Daryl K. Holcomb       50         1996-       Vice President & Chief Financial
                                 Present      Officer, Controller and Treasurer.

                                1993-1996     Chief Financial Officer,
                                              Controller and Treasurer;

                                1988-1993     Controller and Treasurer; None.

Justin P. Walder       65         1989-       Secretary;
                                 Present

                                  1972-       Assistant Corporation Counsel;
                                 Present      Director; None.

<PAGE>

     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,  Sondak &
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.

Item 10 - EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     The Summary  Compensation Table presents  compensation  information for the
years ended December 31, 2000,  1999, and 1998, for the Chief Executive  Officer
and the other executive officers of the Company.

                           SUMMARY COMPENSATION TABLE

                                                             Long-Term
                                                             Compensa-   All
                                      Annual Compensation      tion     Other
        Name and                      -------------------    --------- Compen-
        Principal                     Salary        Bonus    Options/  sation
        Position              Year     ($)         ($)(1)    SARS (#)  ($)(2)
        ---------             ----    -------      ------    --------  -------
    Louis V. Aronson II       2000   $566,466     $47,990       --    $13,150
        President & Chief     1999    529,408      42,484    7,500     12,950
        Executive Officer     1998    494,773      51,535       --     11,204

    Daryl K. Holcomb          2000    148,500      17,293       --      3,266
        Vice President &      1999    138,500      14,800    4,500      3,119
        Chief Financial       1998    127,500      17,929       --      2,805
        Officer, Controller
        and Treasurer

    Justin P. Walder          2000     80,104          --       --      1,602
        Secretary &           1999     77,708          --    2,000      1,554
        Assistant Corporation 1998     74,583          --       --      1,492
        Counsel


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.

(2)  In 2000 All Other  Compensation  included  matching  credits by the Company
     under its Employees'  Savings Plan (Mr. L.V. Aronson,  $3,400; Mr. Holcomb,
     $3,266;  and Mr.  Walder,  $1,602);  and the  cost of term  life  insurance
     included  in  split-dollar  life  insurance  policies  (Mr.  L.V.  Aronson,
     $9,750).


OPTION GRANTS IN LAST FISCAL YEAR

     None.

<PAGE>

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, 2000.  "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

                                                                 Value of
                                          Number of            In-the-Money
                 Number of            Unexercised Options       Options at
                  Shares               at FY-End (2) (4)        FY-End (3)
                 Acquired             -------------------  -------------------
                    on     Value (1)  Exercis- Unexercis-  Exercis- Unexercis-
      Name       Exercise  Realized     able      able       able      able
      ----      ---------  ---------  -------- ----------  -------- ----------
L.V. Aronson II     --     $   --     30,000        --     $   --   $   --
D.K. Holcomb     5,500      2,577     14,500        --         --       --
J.P. Walder         --         --      7,000        --         --       --

Footnotes

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

(2)  The options held by the named executive  officers at December 31, 2000, are
     exercisable at any time and expire on June 26, 2001, and December 7, 2004.

(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, 2000, to the option prices.

(4)  The  exercise  prices of the options  held at December  31,  2000,  were as
     follows:

                                      Number        Exercise Price
                                     --------       --------------

          L.V. Aronson II             22,500         $ 3.1625
                                       7,500           2.68125

          D.K. Holcomb                10,000           2.875
                                       4,500           2.4375

          J.P. Walder                  5,000           2.875
                                       2,000           2.4375

<PAGE>

LONG-TERM INCENTIVE PLANS

     None.

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. Mr.
Ganz has a consulting  agreement with the Company for the period ending December
31, 2002,  which is cancellable at any time by either party with 180 days notice
and,  effective  January 1, 2001,  provides  compensation  at the annual rate of
$87,500 for the years ending December 31, 2001 and 2002, plus  participation  in
the Company's  health and life insurance plans and the use of an automobile.  In
the year ended  December  31,  2000,  Mr. Ganz was  compensated  $83,000 for his
services. Mr. Quinnan has a consulting agreement with the Company for the period
ending December 31, 2002,  which is cancellable at any time by either party with
60 days notice.  The agreement  provides  that Mr.  Quinnan  perform  consulting
services for the Company, Ronson Consumer Products, and Prometcor at a specified
daily rate. In 2000,  Mr. Quinnan was  compensated  $41,088 for his services and
was provided the use of an automobile.

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, and December 17, 1998,  provides for a term expiring December 31,
2002. The employment contract provides for the payment of a base salary which is
to be  increased  7% as of January 1 of each  year.  It also  provides  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. 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, a 7% salary increase
due January 1, 1991,  under the terms of the  contract  was waived.  During 1992
also, 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. Under the employment contract,  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  contract also  provides  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 contract.

<PAGE>

Item 11 - 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   865,899 (1)(2)  24.8% (1)(2)
    Campus Drive
    P.O. Box 6707
    Somerset, New Jersey 08875

 Ronson Corporation Retirement
 Plan                                Common   171,300 (2)      5.0% (2)
    Campus Drive
    P.O. Box 6707
    Somerset, New Jersey 08875

 Carl W. Dinger III                  Common   413,666 (3)     12.0% (3)
    7 Lake Trail West
    Morristown, New Jersey 07960

 Steel Partners II, L.P.             Common   316,199 (4)      9.2% (4)
    750 Lexington Avenue
    27th Floor
    New York, New York  10022

 Howard M. Lorber                    Common   269,340 (5)      7.8% (5)
    70 East Sunrise Highway
    Valley Stream, New York  11581

(1)  Includes  30,000  shares of  unissued  common  stock  issuable  to Mr. L.V.
     Aronson upon exercise of stock  options held by Mr. L.V.  Aronson under the
     Ronson Corporation 1996 Incentive Stock Option Plan.

(2)  The  Ronson  Corporation   Retirement  Plan  ("Retirement   Plan")  is  the
     beneficial  owner  of  171,300  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 1,037,199  shares,  or 29.8% 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 200,942 shares, or 5.8%
     of the class.  The  Retirement  Plan's  holdings  were  reported in 1988 on
     Schedule 13G, as amended September 22, 1997.

(3)  413,666 common shares owned directly.  This information was provided to the
     Company by Mr.  Dinger.  Mr.  Dinger has  provided the  Company's  Board of
     Directors  with  an  irrevocable  proxy  to vote  these  shares  (refer  to
     "Transactions with Management and Others" in Item 12 below).

(4)  316,199  common  shares 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 filed with the SEC by Steel
     Partners II, L.P., and Mr. Lichtenstein.

(5)  269,340 common shares owned directly by Mr. Lorber.  This  information  was
     obtained  from a Schedule 13D filed with the SEC on January 27, 2000 by Mr.
     Lorber.

<PAGE>

(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  and the  percentage  of the total  shares of common  stock
outstanding  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           865,899 (3)              24.8%
        Robert A. Aronson               6,995                   (1)
        Erwin M. Ganz                  29,642 (3)               (1)
        I. Leo Motiuk                     500                   (1)
        Gerard J. Quinnan               3,500                   (1)
        Justin P. Walder               50,003                   1.4%
        Saul H. Weisman                15,343                   (1)
        Daryl K. Holcomb               37,770                   1.1%

        All Directors and
        Officers as a group
        (nine (9) individuals
        including those named
        above)                      1,014,352                  28.9%

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

(2)  Shares listed as owned beneficially include 55,000 shares subject to option
     under the Ronson Corporation 1996 Incentive Stock Option Plan as follows:

                                          Common Shares
                                           Under Option
                                          -------------
         Louis V. Aronson II                 30,000
         Justin P. Walder                     7,000
         Daryl K. Holcomb                    14,500

         All Directors and Officers
         as a group (nine (9)
         individuals including
         those named above)                  55,000

(3)  Does not  include  171,300  shares  of  issued  common  stock  owned by the
     Retirement  Plan. The shares held by the  Retirement  Plan are voted by the
     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 1,037,199 shares, or 29.8%
     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
     200,942 shares, or 5.8% 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.

<PAGE>

Item 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a) Transactions with management and others.

     During the year ended  December 31, 2000,  the Company and Ronson  Consumer
Products were provided printing services by Michael Graphics, Inc., a New Jersey
corporation,  amounting to $82,077.  A greater than 10%  shareholder  of Michael
Graphics, Inc. is the son-in-law of the Company's President.

     During the year ended  December 31,  2000,  the  Company,  Ronson  Consumer
Products,  Ronson Aviation and Prometcor  retained the firm of Walder,  Sondak &
Brogan,  P.A.,  Attorneys  at Law,  to perform  legal  services in the amount of
$40,787.  Justin P. Walder,  a principal in that firm, is a director and officer
of the Company.

     In October 1998 the Company  entered into a consulting  agreement  with Mr.
Carl W. Dinger III, a 5% shareholder of the Company. The agreement provides that
Mr. Dinger will perform certain consulting services for the Company for a period
of 18 months  expiring on April 7, 2000, at a fee of $4,500 per month.  On March
6, 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 at a fee of $7,000 per month.  During
the year ended December 31, 2000, Mr. Dinger was  compensated  $76,500 under the
agreement.

     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.  The cost of the option was $5,500 per month for
the  period of the  option or until  exercised.  On March 6,  2000,  Mr.  Dinger
granted a new option to the  Company,  to  purchase  the  413,666  shares of the
Company's common stock now held by Mr. Dinger.  The option is for a period of 48
months.  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. On March 6, 2000, Mr. Dinger notified the Company
that he would purchase 227,500 shares of newly issued restricted common stock of
the  Company at the price of $2.50 per share or market (as  determined  March 6,
2000),  whichever  is higher.  The sale was  completed  on March 23,  2000.  The
Company incurred a cost for the option of $52,500 during the year ended December
31, 2000.

(d) Transactions with promoters.

    Not applicable.

<PAGE>

Item 13 - EXHIBITS AND REPORTS ON FORM 8-K

(a) 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.

     (10) Material contracts.

     On  January 6, 1995,  RCPC  entered  into an  agreement  with  Summit 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
amended  to provide  additional  loan  availability.  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).

     On December 1, 1995,  the Company  and RCPC  entered  into a mortgage  loan
agreement  with Summit.  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 August 28, 1997,  Ronson Aviation  entered into an agreement with Summit
for a Revolving  Loan and a Term Loan.  On May 13,  1999,  Ronson  Aviation  and
Summit extended the Revolving Loan and Term Loan to June 30, 2002. 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).

     For further information on 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, 2000, filed with
this report pursuant to Item 7, 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,
and December  17, 1998.  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 December 17, 1998, was attached to the
Company's 1998 Form 10-K as Exhibit 10(a).

<PAGE>

     (20) Other documents or statements to security holders.

     The Ronson  Corporation  Notice of Meeting of Stockholders held on December
5, 2000, and Proxy  Statement was filed on November 3, 2000, and is incorporated
herein by reference.

     (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
   Prometcor, Inc. (formerly known as                   New Jersey
        Ronson Metals Corporation)

   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).

     (99) Additional exhibits.

          (a)  Report of  Inspectors  of  Election  from the Ronson  Corporation
               Annual Meeting of Stockholders on December 5, 2000.

(b)  Reports on Form 8-K filed in the fourth quarter of 2000.

     None.

<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 12, 2001           By:  /s/ Louis V. Aronson II
                                    ------------------------------------
                                    Louis V. Aronson II, President and
                                    Chief Executive Officer and Director


   Dated:  March 12, 2001           By:  /s/ Daryl K. Holcomb
                                    ------------------------------------
                                    Daryl K. Holcomb, Vice President &
                                    Chief Financial Officer, Controller
                                    and Treasurer


   Dated:  March 12, 2001           By:  /s/ Justin P. Walder
                                    ------------------------------------
                                    Justin P. Walder, Secretary and
                                    Director


   Dated:  March 12, 2001           By:  /s/ Robert A. Aronson
                                    ------------------------------------
                                    Robert A. Aronson, Director


   Dated:  March 12, 2001           By:  /s/ Erwin M. Ganz
                                    ------------------------------------
                                    Erwin M. Ganz, Director


   Dated:  March 12, 2001           By:  /s/  I. Leo Motiuk
                                    ------------------------------------
                                    I. Leo Motiuk, Director


   Dated:  March 12, 2001           By: /s/ Gerard J. Quinnan
                                    ------------------------------------
                                    Gerard J. Quinnan, Director


   Dated:  March 12, 2001           By: /s/ Saul H. Weisman
                                    ------------------------------------
                                    Saul H. Weisman, Director


<PAGE>

                          ANNUAL REPORT ON FORM 10-KSB

                                     ITEM 7

                              FINANCIAL STATEMENTS


                          YEAR ENDED DECEMBER 31, 2000




                               RONSON CORPORATION

                              SOMERSET, NEW JERSEY


<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 7:


     Consolidated Balance Sheets - December 31, 2000 and 1999

     Consolidated Statements of Operations - Years Ended
              December 31, 2000, 1999 and 1998

     Consolidated  Statements  of  Changes in  Stockholders'  Equity - Years
              Ended December 31, 2000, 1999 and 1998

     Consolidated  Statements of Cash Flows - Years Ended December 31, 2000,
              1999 and 1998

     Notes to Consolidated Financial Statements


<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, 2000 and 1999,  and the
related  consolidated  statements of operations,  changes in  stockholders'
equity and cash flows for each of the years in the three-year  period ended
December 31, 2000. These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards  require that we plan and perform the 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, 2000 and 1999,  and the
consolidated  results  of their  operations  and cash flows for each of the
years in the three-year  period ended December 31, 2000 in conformity  with
generally accepted accounting principles.

DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
February 27, 2001


<PAGE>


RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
---------------------------
Dollars in thousands

<TABLE>
<CAPTION>

                                     ASSETS
                                     ------                      December 31,
                                                                 ------------
                                                               2000        1999
                                                               ----        ----
<S>                                                            <C>         <C>
CURRENT ASSETS:
Cash and cash equivalents ................................   $    81     $   187
Accounts receivable, less allowances for doubtful accounts
  of: 2000, $40 and 1999, $57 ............................     2,102       2,003

Inventories:
  Finished goods .........................................     1,605       3,572
  Work in process ........................................       107          91
  Raw materials ..........................................       404         371
                                                             -------     -------
                                                               2,116       4,034
Other current assets .....................................       828         786

Current assets of discontinued operations ................     1,339         562
                                                             -------     -------
      TOTAL CURRENT ASSETS ...............................     6,466       7,572





PROPERTY, PLANT AND EQUIPMENT:
Land .....................................................        19          19
Buildings and improvements ...............................     4,570       4,374
Machinery and equipment ..................................     8,199       7,929
Construction in progress .................................        59          70
                                                             -------     -------
                                                              12,847      12,392

Less accumulated depreciation and amortization ...........     7,101       6,446
                                                             -------     -------
                                                               5,746       5,946



INTANGIBLE PENSION ASSETS ................................       139         193


OTHER ASSETS .............................................     1,435       1,370


OTHER ASSETS OF DISCONTINUED OPERATIONS ..................     1,574       1,811


                                                             -------     -------
                                                             $15,360     $16,892
                                                             =======     =======
</TABLE>

See notes to consolidated financial statements.

<PAGE>


RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
---------------------------
Dollars in thousands (except share data)

<TABLE>
<CAPTION>

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------                           December 31,
                                                                                     ------------
                                                                                  2000           1999
                                                                                  ----           ----
<S>                                                                             <C>            <C>
CURRENT LIABILITIES:
Short-term debt ..........................................................      $  1,697       $  3,910
Current portion of long-term debt ........................................           453            820
Current portion of lease obligations .....................................            27             96
Accounts payable .........................................................         2,167          2,724
Accrued expenses .........................................................         1,701          1,846
Current liabilities of discontinued operations ...........................         1,568          1,344
                                                                                --------       --------
     TOTAL CURRENT LIABILITIES ...........................................         7,613         10,740

LONG-TERM DEBT ...........................................................         3,689          3,425

LONG-TERM LEASE OBLIGATIONS ..............................................           106             68

PENSION OBLIGATIONS ......................................................           840             31

OTHER LONG-TERM LIABILITIES ..............................................            34             35

LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS .........................           219            173

COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' EQUITY:
Preferred stock, no par value, authorized 5,000,000 shares:
  12% cumulative convertible, $0.01 stated value;
  outstanding, 2000 and 1999, 35,918 .....................................            --             --

Common stock par value $1
                                           2000            1999
                                           ----            ----
     Authorized shares...............   11,848,106      11,848,106
     Reserved shares.................      140,118         145,368
     Issued (including treasury).....    3,518,735       3,260,107                 3,519          3,260


Additional paid-in capital ...............................................        29,270         28,941
Accumulated deficit ......................................................       (27,202)       (27,636)
Accumulated other comprehensive loss .....................................        (1,132)          (551)
                                                                                --------       --------
                                                                                   4,455          4,014
Less cost of treasury shares:
  2000, 63,222 and 1999, 62,378 ..........................................         1,596          1,594
                                                                                --------       --------
  TOTAL STOCKHOLDERS' EQUITY .............................................         2,859          2,420
                                                                                --------       --------
                                                                                $ 15,360       $ 16,892
                                                                                ========       ========
</TABLE>

See notes to consolidated financial statements.



<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                                         -----------------------
                                                                    2000          1999            1998
                                                                    ----          ----            ----
<S>                                                               <C>           <C>            <C>
NET SALES ..................................................      $ 28,008      $ 24,696       $ 23,173
                                                                  --------      --------       --------
Cost and expenses:
  Cost of sales ............................................        18,073        15,230         13,865
  Selling, shipping and advertising ........................         3,915         3,895          3,586
  General and administrative ...............................         3,779         3,791          3,840
  Depreciation and amortization ............................           683           582            532
                                                                  --------      --------       --------
                                                                    26,450        23,498         21,823
                                                                  --------      --------       --------
EARNINGS FROM CONTINUING OPERATIONS BEFORE
  INTEREST AND OTHER ITEMS .................................         1,558         1,198          1,350
                                                                  --------      --------       --------
Other expense:
  Interest expense .........................................           729           664            645
  Other-net ................................................           151           144            185
                                                                  --------      --------       --------
                                                                       880           808            830
                                                                  --------      --------       --------
EARNINGS FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES ......................................           678           390            520

Income tax provisions (benefits)-net .......................           244            98           (140)
                                                                  --------      --------       --------
EARNINGS FROM CONTINUING OPERATIONS ........................           434           292            660

Loss from discontinued operations (net of tax
  benefits of: 1999, $277 and 1998, $557) ..................            --          (486)          (949)
                                                                  --------      --------       --------

NET EARNINGS (LOSS) ........................................      $    434      $   (194)      $   (289)
                                                                  ========      ========       ========

EARNINGS (LOSS) PER COMMON SHARE:

Basic:
  Earnings from continuing operations ......................      $   0.13      $   0.09      $    0.20
  Loss from discontinued operations ........................            --         (0.15)         (0.30)
                                                                  --------      --------      ---------
  Net earnings (loss) ......................................      $   0.13      $  (0.06)     $   (0.10)
                                                                  ========      ========      =========
Diluted:
  Earnings from continuing operations ......................      $   0.13      $   0.09      $    0.20
  Loss from discontinued operations ........................            --         (0.15)         (0.30)
                                                                  --------      --------      ---------
  Net earnings (loss) ......................................      $   0.13      $  (0.06)     $   (0.10)
                                                                  ========      ========      =========
</TABLE>


See notes to consolidated financial statements.

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
For the Years Ended December 31, 2000, 1999 and 1998
Dollars in thousands

<TABLE>
<CAPTION>
                                                                                                                  Accumulated
                                   12% Cumulative                    Additional                                      Other
                                     Convertible                      Paid-in      Accumulated    Comprehensive  Comprehensive
                                   Preferred Stock   Common Stock     Capital        Deficit      Income (Loss)       Loss
                                   ---------------   ------------    ----------    -----------    -------------  -------------
<S>                                    <C>            <C>            <C>            <C>             <C>            <C>
Balance at December 31, 1997           $   --         $    3,226     $   28,991    $  (27,153)                     $     (989)
                                       ------         ----------     ----------    ----------                      ----------
Net loss - 1998                                                                          (289)      $     (289)
                                                                                                    ----------
Translation adjustment                                                                                     (35)
Pensions, net of tax                                                                                       334
                                                                                                    ----------
Other comprehensive income                                                                                 299            299
                                                                                                    ----------
Comprehensive income                                                                                $       10
                                                                                                    ==========
Shares issued for:
  Stock options exercised                                     14              3
  Other                                                       20             30
Stock option purchased                                                      (17)
                                       ------         ----------     ----------    ----------                      ----------
Balance at December 31, 1998               --              3,260         29,007       (27,442)                           (690)
                                       ------         ----------     ----------    ----------                      ----------
Net loss - 1999                                                                          (194)      $     (194)
                                                                                                    ----------
Translation adjustment                                                                                      15
Pensions, net of tax                                                                                       124
                                                                                                    ----------
Other comprehensive income                                                                                 139            139
                                                                                                    ----------
Comprehensive loss                                                                                  $      (55)
                                                                                                    ==========
Stock option purchased                                                      (66)
                                       ------        -----------     ----------    ----------                      ----------
Balance at December 31, 1999               --              3,260         28,941       (27,636)                           (551)
                                       ------        -----------     ----------    ----------                      ----------
Net earnings - 2000                                                                       434       $      434
                                                                                                    ----------
Translation adjustment                                                                                     (16)
Pensions, net of tax                                                                                      (565)
                                                                                                    ----------
Other comprehensive loss                                                                                  (581)          (581)
                                                                                                    ----------
Comprehensive loss                                                                                  $     (147)
                                                                                                    ==========
Shares issued for:
  Sale of restricted stock                                   228            341
  Stock options exercised                                      5              2
  Other                                                       26             39
Stock option purchased                                                      (53)
Treasury shares
                                      -------        -----------     ----------    --------                        ----------
Balance at December 31, 2000          $    --        $     3,519     $   29,270    $(27,202)                       $   (1,132)
                                      =======        ===========     ==========    ========                        ==========
<CAPTION>

                                     Treasury Stock
                                        (at cost)           Total
                                     --------------         -----
<S>                                     <C>               <C>
Balance at December 31, 1997            $  (1,594)        $   2,481
                                       ----------         ---------
Net loss - 1998                                                (289)

Translation adjustment
Pensions, net of tax

Other comprehensive income                                      299

Comprehensive income

Shares issued for:
  Stock options exercised                                        17
  Other                                                          50
Stock option purchased                                          (17)
                                        ---------         ---------
Balance at December 31, 1998               (1,594)            2,541
                                        ---------         ---------
Net loss - 1999                                                (194)

Translation adjustment
Pensions, net of tax

Other comprehensive income                                      139

Comprehensive loss

Stock option purchased                                          (66)
                                        ---------         ---------
Balance at December 31, 1999               (1,594)            2,420
                                        ---------         ---------
Net earnings - 2000                                             434

Translation adjustment
Pensions, net of tax

Other comprehensive loss                                       (581)

Comprehensive loss

Shares issued for:
  Sale of restricted stock                                      569
  Stock options exercised                                         7
  Other                                                          65
Stock option purchased                                          (53)
Treasury shares                                (2)               (2)
                                       ----------        ----------
Balance at December 31, 2000           $   (1,596)       $    2,859
                                       ==========        ==========
</TABLE>


<TABLE>
<CAPTION>
                                                       SHARE ACTIVITY
                                    ----------------------------------------------------
                                    12% Cumulative
                                      Convertible
                                    Preferred Stock     Common Stock      Treasury Stock
                                    ---------------     ------------      --------------
<S>                                    <C>                <C>               <C>
Balance at December 31, 1997           36,518             3,225,607          62,332
Shares issued for:
  Stock options exercised                                    13,900
  Other                                                      20,000
Treasury Shares                                                                  33
                                       ------             ---------          ------
Balance at December 31, 1998           36,518             3,259,507          62,365
Conversion                               (600)                  600
Treasury Shares                                                                  13
                                       ------             ---------          ------
Balance at December 31, 1999           35,918             3,260,107          62,378
Shares issued for:
  Sale of restricted stock                                  227,500
  Stock options exercised                                     5,500
  Other                                                      25,628
Treasury Shares                                                                 844
                                       ------             ---------          ------
Balance at December 31, 2000           35,918             3,518,735          63,222
                                       ======             =========          ======
</TABLE>

See notes to consolidated financial statements.

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Dollars in thousands

<TABLE>
<CAPTION>

                                                                           Year Ended December 31,
                                                                           -----------------------
                                                                   2000             1999             1998
                                                                   ----             ----             ----
<S>                                                              <C>              <C>              <C>
Cash Flows from Operating Activities:
Net earnings (loss) ....................................         $   434          $  (194)         $  (289)
Adjustments to reconcile net earnings (loss) to net
   cash provided by (used in) operating activities:
   Depreciation and amortization .......................             683              582              532
   Deferred income tax provisions (benefits) ...........             236             (224)            (727)
   Increase (decrease) in cash from changes in:
      Accounts receivable ..............................             (99)            (226)              88
      Inventories ......................................           1,918           (1,350)             426
      Other current assets .............................             (40)              80              (93)
      Accounts payable .................................            (557)             783              417
      Accrued expenses .................................              25               66               21
   Net change in pension-related accounts ..............              (2)             (95)             209
   Other ...............................................               5              (24)             (54)
   Discontinued operations .............................            (416)            (435)             864
                                                                 -------          -------          -------
      Net cash provided by (used in)
         operating activities ..........................           2,187           (1,037)           1,394
                                                                 -------          -------          -------
Cash Flows from Investing Activities:
      Net cash used in investing activities,
         capital expenditures ..........................            (396)            (652)            (845)
                                                                 -------          -------          -------

Cash Flows from Financing Activities:
Proceeds from long-term debt ...........................             337              629              489
Proceeds from short-term debt ..........................           1,217            2,595            1,085
Proceeds from issuance of common stock .................             576               --               67
Payments of long-term debt .............................            (440)            (425)            (377)
Payments of long-term lease obligations ................            (104)            (109)             (93)
Payments of short-term debt ............................          (3,430)            (894)          (1,589)
Other ..................................................             (53)             (66)             (17)
                                                                  ------           ------           ------
      Net cash provided by (used in)
         financing activities ..........................          (1,897)           1,730             (435)
                                                                 -------          -------          -------
Net increase (decrease) in cash ........................            (106)              41              114

Cash at beginning of year ..............................             187              146               32
                                                                 -------          -------          -------

Cash at end of year ....................................         $    81          $   187          $   146
                                                                 =======          =======          =======
</TABLE>

See notes to consolidated financial statements.

<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.  All significant  intercompany  accounts and transactions have been
     eliminated in consolidation.

         Estimates - The preparation of financial  statements in conformity with
     generally  accepted  accounting  principles  requires  management  to  make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     expenses  during  the  period.  Actual  results  could  differ  from  those
     estimates.

         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 these aircraft are also classified as long-term debt.

         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.

         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, accounts  receivable,  accounts payable,  accrued
     expenses and other current  liabilities and long-term debt. The book values
     of cash,  accounts  receivable,  accounts  payable and accrued expenses and
     other current  liabilities 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 current market rates and conditions.

         Research  and  Development  Costs - Costs of  research  and new product
     development   are  charged  to  operations  as  incurred  and  amounted  to
     approximately $288,000,  $232,000 and $164,000 for the years ended December
     31, 2000, 1999 and 1998, respectively.

         Advertising  Costs - Costs of advertising  are expensed as incurred and
     amounted to  approximately  $432,000,  $476,000  and $295,000 for the years
     ended December 31, 2000, 1999 and 1998, respectively.

<PAGE>


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

                                            Year Ended December 31, 2000
                                                                   Per Share
                                         Earnings     Shares        Amount
                                         --------     ------       ---------
Earnings from continuing
  operations .....................       $ 434
Less accrued dividends on
  preferred stock ................          (8)
                                         -----
Continuing operations ............         426        3,401       $   0.13
Loss from discontinued operations           --        3,401             --
                                         -----                    --------
  BASIC ..........................       $ 426        3,401       $   0.13
                                         =====        =====       ========

Effect of dilutive securities (1):
  Stock options ..................                       --
  Cumulative convertible
   preferred stock ...............          --           --
                                         -----        -----
Continuing operations ............       $ 426        3,401       $   0.13
Loss from discontinued operations           --        3,401             --
                                         -----                    --------
  DILUTED ........................       $ 426        3,401       $   0.13
                                         =====        =====       ========


                                              Year Ended December 31, 1999
                                            Earnings                 Per Share
                                             (Loss)      Shares       Amount
                                            --------     ------      ---------
Earnings from continuing
  operations .....................          $ 292
Less accrued dividends on
  preferred stock ................             (8)
                                            -----
Continuing operations ............            284        3,198       $   0.09
Loss from discontinued operations            (486)       3,198          (0.15)
                                            -----                    --------
  BASIC ..........................          $(202)       3,198       $  (0.06)
                                            =====        =====       ========
Effect of dilutive securities (1):
  Stock options ..................                          --
  Cumulative convertible
   preferred stock ...............             --           --
                                            -----        -----
Continuing operations ............            284        3,198       $   0.09
Loss from discontinued operations            (486)       3,198          (0.15)
                                            -----                    --------
  DILUTED ........................          $(202)       3,198       $  (0.06)
                                            =====        =====       ========
<PAGE>


                                               Year Ended December 31, 1998
                                            Earnings                  Per Share
                                             (Loss)     Shares         Amount
                                            --------    ------        ---------
Earnings from continuing
  operations .....................          $ 660
Less accrued dividends on
  preferred stock ................             (8)
                                            -----
Continuing operations ............            652        3,183       $   0.20
Loss from discontinued operations            (949)       3,183          (0.30)
                                            -----                    --------
  BASIC ..........................          $(297)       3,183       $  (0.10)
                                            =====        =====       ========
Effect of dilutive securities (1):
  Stock options ..................                          --
  Cumulative convertible
   preferred stock ...............             --           --
                                            -----        -----
Continuing operations ............            652        3,183       $   0.20
Loss from discontinued operations            (949)       3,183          (0.30)
                                            -----                    --------
  DILUTED ........................          $(297)       3,183       $  (0.10)
                                            =====        =====       ========


     (1)  The assumed  conversion  of preferred  shares to common shares and the
          stock options were  anti-dilutive  for all the years  presented,  and,
          therefore,  were excluded from the calculation and  reconciliation  of
          Diluted Earnings (Loss) per Common Share.

         Stock Options - The Company has elected to follow Accounting Principles
     Board Opinion #25,  "Accounting  for Stock Issued to Employees"  (APB #25),
     and related  Interpretations  in accounting  for its employee stock options
     because, as discussed below, the alternative fair value accounting provided
     for under SFAS #123,  "Accounting for Stock-Based  Compensation",  requires
     use of option  valuation  models that were not developed for use in valuing
     employee  stock options.  Under APB #25,  because the exercise price of the
     Company's  employee stock options equals or exceeds the market price of the
     underlying  stock  on  the  date  of  grant,  no  compensation  expense  is
     recognized.

         At December  31, 2000,  the Company had  outstanding  35,918  shares of
     preferred stock and 3,455,513 shares of common stock.

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


<PAGE>

     Note 2.  DISCONTINUED OPERATIONS:

         The Loss from  Discontinued  Operations  included the costs recorded by
     the  Company  related to the  discontinuance  of  Prometcor  as follows (in
     thousands):

                                               Year Ended December 31,
                                              2000        1999      1998
                                              ----        ----      ----

        Insurance recovery income accrued,
          net.............................. $  645      $   --    $   --
        Discontinuance costs accrued.......    645         763     1,506
                                            ------      ------    ------
                                                --         763     1,506
        Deferred income tax benefit........     --        (277)     (557)
                                            ------      ------    ------
        Loss from Discontinued Operations.. $   --      $  486    $  949
                                            ======      ======    ======

          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 the New Jersey
     Industrial  Site  Recovery  Act  ("ISRA"),  administered  by the New Jersey
     Department of Environmental Protection ("NJDEP"), and other applicable laws
     with the  objective of selling the land and existing  buildings  previously
     used in the discontinued operations.  The discontinuance of operations also
     required the termination of a United States Nuclear  Regulatory  Commission
     ("NRC") license for the storage and use on site of a material used in a new
     product, the sales of which were minimal.

         The total costs and expenses  related to the termination of Prometcor's
     business  operations in 1990, less the expected gain from the eventual sale
     of Prometcor's assets,  have been estimated,  based on the latest available
     information,  to be about  $7,174,000.  These  estimated costs and expenses
     consist of: Prometcor's  expenses for the completion of compliance with the
     NJDEP and NRC  environmental  regulations;  the  termination of Prometcor's
     business  operations;  environmental  consulting  costs,  legal  and  other
     professional fees; and costs for the maintenance of the Prometcor property,
     including  insurance and taxes.  These costs and expenses,  net of deferred
     income tax  benefits,  have been charged  against the  Company's  Loss from
     Discontinued  Operations  and Net Earnings  (Loss) between the beginning of
     1990 and year end  2000.  The  liability  for  these  estimated  costs  and
     expenses as recorded in the financial  statements at December 31, 2000, was
     based on the lower limit of the range of costs as projected by the Company.
     The estimated upper limit of the range of costs is  approximately  $600,000
     above the lower limit.

          The full extent of the costs and time  required for  completion is not
     determinable  until  the  remediation  and  confirmatory   testing  of  the
     properties have been completed and accepted by the NJDEP and NRC.

          In the second  half of 1999,  the  Company  filed a lawsuit  against a
     number of its former general liability  insurance carriers seeking recovery
     of  environmental   investigation   and  remediation   costs  incurred  and
     anticipated  at  various  locations,  primarily  Prometcor.  In the  fourth
     quarter of 2000 and to date  (February 27,  2001),  the Company has reached
     settlement  agreements with a few of the insurance  carriers  involved.  To
     date, these settlements have totalled approximately  $600,000. The Company,
     based on  statements  of its  counsel in the  matter,  believes  additional
     recoveries  are  probable.  Based on the  settlements  to date and probable
     future  recoveries,  in the fourth  quarter of 2000,  Prometcor  recognized
     insurance recovery income totalling about $1,000,000, less related costs of
     $355,000.  In addition,  according to statements by the Company's  counsel,
     the Company has a reasonable  possibility  of obtaining a sizable  recovery
     beyond the amount recognized in the fourth quarter of 2000.


<PAGE>

         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 Operations  and
     other related operating statement data.

         The  assets   and   liabilities  of  Prometcor  are  reflected  in  the
     Consolidated  Balance Sheets under assets and  liabilities of  discontinued
     operations. At December 31, 2000, Current Assets of Discontinued Operations
     consisted  primarily of insurance  settlements  receivable and net deferred
     income tax assets,  and Other Assets of Discontinued  Operations  consisted
     primarily  of land and  buildings  and net  deferred  income  tax assets of
     Prometcor.  The Current Liabilities of Discontinued  Operations at December
     31, 2000,  consisted  principally of $1,330,000 of accrued costs related to
     the  environmental  compliance  of Prometcor  and accrued  costs related to
     discontinuance of Prometcor.

     Note 3. INCOME TAXES:

         At December 31, 2000, the Company had, for federal income tax purposes,
     net operating loss carryforwards of approximately  $4,970,000,  expiring as
     follows: $20,000 in 2001; $1,750,000 in 2005 to 2007; $1,950,000 in 2010 to
     2012; and  $1,250,000 in 2019.  The Company also had available  alternative
     minimum tax credit carryforwards of approximately $70,000.

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

                                                   Year Ended December 31,
                                                    2000     1999    1998
                                                    ----     ----    ----
   Current:
     Federal. . . . . . . . . . . . . . . . . . .  $   8    $  --   $  --
     State. . . . . . . . . . . . . . . . . . . .      8       45      30
                                                   -----    -----   -----
                                                      16       45      30
                                                   -----    -----   -----
   Deferred:
     Federal. . . . . . . . . . . . . . . . . . .    203     (181)   (498)
     State. . . . . . . . . . . . . . . . . . . .     33      (43)   (229)
                                                   -----    -----   -----
                                                     236     (224)   (727)
                                                   -----    -----   -----
                                                     252     (179)   (697)
   Allocated to discontinued operations . . . . .     --     (277)   (557)
                                                   -----    -----   -----
     Income tax expenses (benefits)-net . . . . .  $ 252    $  98   $(140)
                                                   =====    =====   =====

<PAGE>


         Current  income taxes in the years ended December 31, 2000 and 1998, of
     $375,000 and $108,000,  respectively, were presented net of credits arising
     from the  utilization  of available  tax losses and loss  carryforwards  in
     accordance with Statement of Financial Accounting Standards ("SFAS") #109.

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

                                                   Year Ended December 31,
                                                    2000     1999    1998
                                                    ----     ----    ----
   Tax expense amount computed using
     statutory rate. . . . . . . . . . . . . . . . $ 231    $ 132   $ 177
   State taxes, net of federal benefit . . . . . .     5       30      20
   Operations outside the US . . . . . . . . . . .    --       23     (27)
   Recognition of deferred income tax assets:
     Federal . . . . . . . . . . . . . . . . . . .   203     (181)   (498)
     State . . . . . . . . . . . . . . . . . . . .    33      (43)   (229)
   Discontinued operations and other . . . . . . .  (220)     137     417
                                                   -----    -----   -----
     Income tax expenses (benefits)-net. . . . . . $ 252    $  98   $(140)
                                                   =====    =====   =====

         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):

                                                                December 31,
                                                                2000    1999
                                                                ----    ----
   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. . . . . . . . . . . . . $  104  $  118
      Compensated absences, principally due to accrual for
        financial reporting purposes. . . . . . . . . . . . .    130     129
      Compensation, principally due to accrual
        for financial reporting purposes. . . . . . . . . . .    119     103
      Accrual of projected environmental costs, principally
        related to Prometcor's compliance with NJDEP and NRC
        requirements. . . . . . . . . . . . . . . . . . . . .    403     409
      Net operating loss carryforwards. . . . . . . . . . . .  2,311   2,666
      Alternative minimum tax and investment tax credit
        carryforwards . . . . . . . . . . . . . . . . . . . .     69      72
      Unrecognized net loss on pension plan . . . . . . . . .    688     312
      Other . . . . . . . . . . . . . . . . . . . . . . . . .     62      79
                                                              ------  ------
        Total gross deferred income tax assets. . . . . . . .  3,886   3,888
        Less valuation allowance. . . . . . . . . . . . . . .    227     324
                                                              ------  ------
        Net deferred income tax assets. . . . . . . . . . . .  3,659   3,564
                                                              ------  ------
    Deferred income tax liabilities:
      Pension expense, due to contributions in excess of
        net accruals. . . . . . . . . . . . . . . . . . . . .    492     504
      Other . . . . . . . . . . . . . . . . . . . . . . . . .    109     142
                                                              ------  ------
        Total gross deferred income tax liabilities . . . . .    601     646
                                                              ------  ------
        Net deferred income taxes . . . . . . . . . . . . . . $3,058  $2,918
                                                              ======  ======

<PAGE>


         A valuation  allowance is provided when it is more likely than not that
     some portion or all of the deferred income tax assets will not be realized.
     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.  Management  has  assessed  the  Company's  recent
     operating  earnings  history and expected future  earnings.  Based on these
     past and future  earnings,  on the expected  completion  of  compliance  by
     Prometcor with  environmental  regulations and on tax planning  strategies,
     although realization is not assured,  management believes it is more likely
     than  not  that  $3,659,000  of the  deferred  income  tax  assets  will be
     realized.  The ultimate  realization of the deferred income tax assets will
     require aggregate  taxable income of approximately  $5,300,000 in the years
     prior to the  expiration of the net operating loss  carryforwards  in 2019.
     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 valuation
     allowance  was reduced from  $324,000 at December 31, 1999,  to $227,000 at
     December 31, 2000, and from $1,400,000 at December 31, 1998, to $324,000 at
     December 31, 1999.

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

                                                                 December 31,
                                                                 2000    1999
                                                                 ----    ----
      Current:
        Other current assets. . . . . . . . . . . . . . . . .  $  430  $  428
        Current assets of discontinued operations . . . . . .     368     321
                                                               ------  ------
          Total current . . . . . . . . . . . . . . . . . . .     798     749
                                                               ------  ------
      Long Term:
        Other assets. . . . . . . . . . . . . . . . . . . . .     949     665
        Other assets of discontinued operations . . . . . . .   1,311   1,504
                                                               ------  ------
          Total long term . . . . . . . . . . . . . . . . . .   2,260   2,169
                                                               ------  ------
      Total net deferred income tax assets. . . . . . . . . .  $3,058  $2,918
                                                               ======  ======

     Note 4. SHORT-TERM DEBT:

            Composition (in thousands):                     December 31,
                                                          2000       1999
                                                         -------   -------
        Revolving loans. . . . . . . . . . . . . . . . . $ 1,697   $ 2,056
        Notes payable, commercial finance company. . . .      --     1,575
        Note payable, bank . . . . . . . . . . . . . . .      --       279
                                                         -------   -------
        Total short-term debt. . . . . . . . . . . . . . $ 1,697   $ 3,910
                                                         =======   =======

<PAGE>

         In 1995 RCPC entered into an agreement with Summit Bank  ("Summit") for
     a Revolving  Loan. In May 1999 RCPC and Summit  extended  RCPC's  Revolving
     Loan to June 30, 2002. The extended  agreement  also amended  certain other
     terms of the Revolving Loan agreement.  The Revolving Loan of $1,432,000 at
     December 31, 2000, 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 1.5% above Summit's prime rate
     (9.5% at December 31, 2000).  The Revolving Loan is payable on demand under
     an agreement  which expires June 30, 2002. The Revolving Loan 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  Summit  agreement  also  has  restrictive
     covenants which,  among other things,  limit the transfer of assets between
     the Company and its subsidiaries.

         In November 1999 RCPC and Summit  amended the Revolving  Loan agreement
     to  provide  $300,000  in  additional  loan   availability.   The  $300,000
     additional  loan  availability  is being  amortized  from February 1, 2000,
     through June 30, 2001, at the rate of approximately  $17,000 per month. The
     outstanding amount under the agreement for the additional available loan of
     $117,000  as of  December  31,  2000,  is  included  in the  balance of the
     Revolving Loan in the paragraph above.

         In 1995 Ronson-Canada  entered into an agreement with Canadian Imperial
     Bank of  Commerce  ("CIBC")  for a line of  credit  of  C$250,000.  In 2000
     Ronson-Canada and CIBC extended Ronson-Canada's Revolving Loan to 2001. The
     extended  agreement also amended  certain other terms of the Revolving Loan
     agreement.  The Revolving Loan balance of $115,000  (C$172,000) at December
     31, 2000,  under the line of credit 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 and inventory. The loan bears
     interest  at the rate of 1.25% over the CIBC  prime rate (7.5% at  December
     31,  2000).  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.

         Based on the amount of the loans outstanding and the levels of accounts
     receivable and inventory at December 31, 2000, Ronson Consumer Products had
     unused  borrowings  available at December 31, 2000, of about $365,000 under
     the Summit 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 August 1997 Ronson  Aviation  entered into an agreement  with Summit
     for a Revolving  Loan and a Term Loan (refer to Note 5 below  regarding the
     Term  Loan).  In May  1999  Ronson  Aviation  and  Summit  extended  Ronson
     Aviation's  Revolving Loan to June 30, 2002. The Revolving Loan of $150,000
     at December  31,  2000,  is under a line of credit up to $400,000 to Ronson
     Aviation based on the level of its accounts receivable.  The Revolving Loan
     currently  bears  interest  at the rate of 1.5% above  Summit's  prime rate
     (9.5% at December 31, 2000). The Revolving Loan is payable on demand and is
     secured by the accounts  receivable,  inventory  (excluding  aircraft)  and
     machinery and equipment  (excluding  aircraft) of Ronson Aviation;  and the
     guarantees  of the Company and RCPC.  The Summit  agreement  also  contains
     restrictive covenants.

         Based on the amount of the loan  outstanding  and the level of accounts
     receivable  at December 31,  2000,  Ronson  Aviation had unused  borrowings
     available at December 31, 2000, of about  $257,000 under the Summit line of
     credit described above.

         At December 31, 2000, the weighted  average interest rate for the total
     short-term debt was 10.9%.

<PAGE>


     Note 5.  LONG-TERM DEBT:

            Composition (in thousands):                        December 31,
                                                             2000       1999
                                                             ----       ----

          Mortgage loan payable, Summit (a) . . . . . . . $ 1,659    $ 1,721
          Term note payable, Summit (b) . . . . . . . . .     100        157
          Notes payable, Summit (c) . . . . . . . . . . .   2,173      2,131
          Promissory term note payable (d). . . . . . . .     206        227
          Other . . . . . . . . . . . . . . . . . . . . .       4          9
                                                          -------    -------
                                                            4,142      4,245
          Less portion in current liabilities . . . . . .     453        820
                                                          -------    -------
          Balance of long-term debt . . . . . . . . . . . $ 3,689    $ 3,425
                                                          =======    =======


         (a) In May 1999  RCPC and  Summit  entered  into an  agreement,  in the
     original amount of $1,760,000,  which refinanced the existing Mortgage Loan
     agreement on the RCPC property. The Mortgage Loan balance was $1,659,000 at
     December  31,  2000.  The  Mortgage  Loan  agreement  is secured by a first
     mortgage on the land, buildings and improvements of RCPC, and is payable in
     sixty monthly  installments of $17,218,  including  interest,  with a final
     installment  on May 1, 2004, of  approximately  $1,389,000.  The loan bears
     interest at a fixed rate of 8.39%.

         (b) In 1997 Ronson  Aviation  entered into a Term Loan  agreement  with
     Summit in the original amount of $285,000.  In May 1999 Ronson Aviation and
     Summit  amended the Term Loan agreement to extend the payment terms for two
     years to June 30,  2002.  The Term  Loan  with a  balance  of  $100,000  at
     December  31,  2000,  is  payable in monthly  installments  of $4,750  plus
     interest,  with a final installment on June 30, 2002, of $14,250.  The Term
     Loan bears interest at the rate of 1.5% above  Summit's prime rate.  (Refer
     to Note 4 above.)

         (c) The notes payable,  Summit, consisted of five term loans payable by
     Ronson Aviation to Summit. The notes bear interest at the rate of 1.5% over
     the prime rate, are  collateralized by specific aircraft and are guaranteed
     by the  Company.  Two of the notes,  in the  original  amount of  $800,000,
     refinanced  long-term debt collateralized by two charter aircraft which had
     been due to expire in October 2000. The refinanced notes, with a balance of
     approximately  $767,000  at  December  31,  2000,  are  payable  in monthly
     installments  totalling $6,671 plus interest through July 2005 with a final
     payment of $400,000 on August 25, 2005. The refinanced  notes bear interest
     at the rate of 1.5% above  Summit's  prime rate and provided  approximately
     $337,000  in  additional  funds.  One  of  the  notes,  in  the  amount  of
     approximately   $36,000  at  December  31,  2000,  is  payable  in  monthly
     installments of $2,090 plus interest  through May 1, 2002.  Another note in
     the amount of approximately  $1,194,000 at December 31, 2000, is payable in
     monthly  installments of $14,389 plus interest  through October 2002 with a
     final payment of about $878,000 on November 19, 2002. One other note in the
     amount of  approximately  $176,000  at  December  31,  2000,  is payable in
     monthly  installments of $1,875 plus interest through September 2003 with a
     final payment of about $114,000 on October 29, 2003.

         (d) In  1998  Ronson  Aviation  entered  into a  Promissory  Term  Note
     agreement with Texaco  Refining and Marketing,  Inc. in the original amount
     of  $250,000.  The  Promissory  Term Note,  with a balance of  $206,000  at
     December 31, 2000, is payable in monthly  installments of $2,775  including
     interest,  through  September  14,  2008.  The  Promissory  Term Note bears
     interest at the rate of 6% per annum,  is secured by the leased premises of
     Ronson Aviation's new aircraft fueling  facilities  complex and all related
     equipment, and also contains restrictive covenants.

<PAGE>

         Net  assets  of  consolidated   subsidiaries,   excluding  intercompany
     accounts,  amounted  to  approximately  $2,750,000  at December  31,  2000,
     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, 2000.

         Long-term debt matures as follows:  2001, $453,000;  2002,  $1,277,000;
     2003, $319,000;  2004,  $1,535,000;  2005, $474,000; and 2006 through 2008,
     $84,000.

     Note 6.  LEASE OBLIGATIONS:

         Lease expenses consisting  principally of office and warehouse rentals,
     totalled  $469,000,  $468,000 and $476,000 for the years ended December 31,
     2000, 1999 and 1998, respectively.

         At December 31, 2000, 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:
       2001 . . . . . . . . . . .     $  338        $  294         $  44
       2002 . . . . . . . . . . .        336           295            41
       2003 . . . . . . . . . . .        296           256            40
       2004 . . . . . . . . . . .        290           256            34
       2005 . . . . . . . . . . .        271           257            14
       2006 . . . . . . . . . . .        105           105            --
                                      ------        ------         -----
       Total obligations. . . . .     $1,636        $1,463           173
                                      ======        ======


       Less:  Amount representing
              interest. . . . . .                                     40
                                                                   -----
       Present value of capitalized
          lease obligations . . .                                  $ 133
                                                                   =====
         Capitalized lease property included in the Consolidated
   Balance Sheets is presented below (in thousands):

                                                   December 31,
                                                 2000       1999
                                                 ----       ----
       Machinery and equipment . . . . . . . .  $ 166      $ 534
       Less accumulated amortization . . . . .     32        148
                                                -----      -----
                                                $ 134      $ 386
                                                =====      =====

     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  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.  The  Company's  two  remaining
     defined benefit plans were merged in 2000.

         Plan assets primarily include  widely-held common stocks, U.S. Treasury
     Securities, 171,300 shares of common stock of the Company, and money market
     funds.

<PAGE>

         The following table sets forth the plans'  aggregate  funded status and
     amounts  recognized  in  the  Company's  Consolidated  Balance  Sheets  (in
     thousands):


                                                       December 31,
                                                    2000          1999
                                                    ----          ----

   Change in Benefit Obligation:
     Benefit obligation at beginning of year.... $ 4,640       $ 4,916
     Service cost...............................      14            16
     Interest cost..............................     325           320
     Actuarial loss.............................     155            55
     Increase (decrease) in benefit obligation
       due to decreased (increased) discount rate    157          (167)
     Benefits paid..............................    (611)         (500)
                                                 -------       -------
     Benefit obligation at end of year..........   4,680         4,640
                                                 -------       -------
   Change in Plan Assets:
     Fair value of plan assets at beginning
       of year..................................   4,892         4,802
     Actual return on plan assets...............    (365)          332
     Employer contributions.....................     130           258
     Benefits paid..............................    (611)         (500)
                                                 -------       -------
     Fair value of plan assets at end of year...   4,046         4,892
                                                 -------       -------
     Funded status..............................    (634)          252
     Unrecognized actuarial loss................   1,723           782
     Unrecognized prior service cost and
       transition obligation....................     139           193
                                                 -------       -------
   Net amount recognized........................ $ 1,228       $ 1,227
                                                 =======       =======

   Amounts Recognized in the Consolidated
     Balance Sheets Consist of:
       Prepaid benefit cost..................... $   206       $   448
       Accrued benefit liability................    (840)         (196)
       Intangible asset.........................     139           193
       Accumulated other comprehensive loss,
         excluding the income tax effect........   1,723           782
                                                 -------       -------
   Net amount recognized........................ $ 1,228       $ 1,227
                                                 =======       =======

<PAGE>

                                                      December 31,
                                                  2000            1999
                                                  ----            ----
   Weighted-average assumptions:
     Discount rate.............................. 6.50%            7.00%
     Expected return on plan assets............. 6.00%            6.00%

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

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


                                                Year Ended December 31,
                                             2000        1999        1998
                                             ----        ----        ----
   Components of net periodic benefit cost:
     Service cost. . . . . . . . . . .     $   14      $   16      $   15
     Interest cost . . . . . . . . . .        325         320         330
     Expected return on plan assets. .       (294)       (288)       (257)
     Amortization of prior service
       cost and transition obligation.         54          63          63
     Recognized actuarial loss . . . .         30          52         163
                                           ------      ------      ------
     Net pension expense . . . . . . .     $  129      $  163      $  314
                                           ======      ======      ======

          The accumulated  benefit  obligation and fair value of plan assets for
     the pension plan which has an accumulated  benefit  obligation in excess of
     plan assets were  $4,269,000 and $3,428,000,  respectively,  as of December
     31, 2000.  If the two defined  benefit plans had been merged as of December
     31, 1999, there would have been no accumulated benefit obligation in excess
     of plan assets at December 31, 1999.

          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  $70,000,  $71,000  and
     $71,000 for this plan were recorded in 2000, 1999 and 1998, respectively.

<PAGE>

     Note 8.  COMMITMENTS AND CONTINGENCIES:

          In the  second  half of 1999,  the  Company  filed a  lawsuit  against
     several of its former general liability insurance carriers seeking recovery
     of  environmental   investigation   and  remediation   costs  incurred  and
     anticipated  at  various  locations,  primarily  Prometcor.  In the  fourth
     quarter of 2000 and to date  (February 27,  2001),  the Company has reached
     settlement  agreements with a few of the insurance  carriers  involved.  To
     date, these settlements have totalled approximately  $600,000. The Company,
     based on  statements  of its  counsel in the  matter,  believes  additional
     recoveries  are  probable.  Based on the  settlements  to date and probable
     future  recoveries,  in the fourth  quarter of 2000,  Prometcor  recognized
     insurance  recovery income totalling about $1,000,000 less related costs of
     $355,000.  In addition,  according to statements by the Company's  counsel,
     the Company has a reasonable  possibility  of obtaining a sizable  recovery
     beyond the amount recognized in the fourth quarter of 2000.

          In September 1998 the Company received a "de minimis" settlement offer
     ("Settlement Offer") from the United States Environmental Protection Agency
     ("USEPA")  related  to waste  disposed  of prior to 1980 at a  landfill  in
     Monterey  Park,  California,  which the USEPA had designated as a Superfund
     Site ("Site").  In August 1995 the Company received a General Notice Letter
     from the USEPA notifying the Company that the USEPA  considered the Company
     one of about four thousand  Potentially  Responsible  Parties ("PRP's") for
     waste  disposed  of prior to 1980 at a landfill  at the Site.  The  Company
     offered to settle the matter for $60,000,  payable in the third  quarter of
     2001.  Although the USEPA's  Settlement  Offer includes  various options at
     costs of from  $307,000 to  $376,000  and the Company has offered to settle
     the  matter  for  $60,000,  the  Company's  final  contribution  is not yet
     determinable.  The  Company has accrued the amount of its offer and related
     expenses.

          In February 1999 Ronson Aviation  completed the  installation of a new
     58,500 gallon fueling  facility at a total cost of  approximately  $430,000
     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 the  fourth  quarter  of 1999  as  required  by the New  Jersey
     Department of Environmental Protection ("NJDEP"). Related contaminated soil
     was removed and remediated.  In October 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  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.


<PAGE>


         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 employment contracts with an officer of the Company and
     an officer of a subsidiary. The contracts expire on December 31, 2002. Base
     salaries  in  the  years  2001  and  2002  are   $761,119   and   $800,547,
     respectively.  The contract  with the officer of the Company also  provides
     for additional  compensation and benefits,  including a death benefit equal
     to two years' salary.

     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
     ($63,000 at December 31, 2000, 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 one share of common  stock
     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.

         Dividends in arrears at December 31, 2000,  totalled  $1.7325 per share
     of  preferred  stock  (thirty-three  quarters  at  $0.0525  per  share  per
     quarter), or approximately $62,000 in the aggregate.

         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.

<PAGE>

     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  and other key  employees of the Company
     and its subsidiaries (including directors if they are also employees of the
     Company  or one of its  subsidiaries)  at not  less  than  100% of the fair
     market value on the date on which  options are granted.  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 100,000
     shares of  common  stock.  In August  1987 the  stockholders  approved  the
     adoption of the Company's 1987 Incentive Stock Option Plan,  which provides
     for the grant of options  for up to 66,666  shares of common  stock.  After
     January 21, 1997, no further options were permitted to be granted under the
     1987 plan.  Options granted under the 1987 plan are exercisable at any time
     within  five  years  from the date of grant,  at which  time  such  options
     expire.  Options  granted  under  the 1996 plan 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.

         Pro forma  information  regarding  earnings  (loss) per common share is
     required  by SFAS  #123,  and has been  determined  as if the  Company  had
     accounted  for its employee  stock  options  under the fair value method of
     that  statement.  The fair value for  options  granted in 2000 and 1999 was
     estimated at the date of grant using a  Black-Scholes  option pricing model
     with the following weighted average assumptions:

                                                      Year Ended December 31,
                                                          2000       1999
                                                          ----       ----

     Risk-free interest rate                              5.0%       6.5%
     Dividend yield                                         0%         0%
     Volatility factor -
       expected market price of Company's common stock     0.4        0.4
     Weighted average expected life of options           5 years    5 years


         No options  were  granted by the Company in 1998,  and,  therefore,  no
     estimated compensation would be applicable in 1998.

         The  Black-Scholes  option  valuation  model was  developed  for use in
     estimating the fair value of traded  options which are fully  transferable.
     In addition, option valuation models require the input of highly subjective
     assumptions  including  the expected  stock price  volatility.  Because the
     Company's  employee  stock  options  have   characteristics   significantly
     different  from  those  of  traded  options,  and  because  changes  in the
     subjective input assumptions can materially affect the fair value estimate,
     in management's  opinion,  the existing models do not necessarily provide a
     reliable single measure of the fair value of its employee stock options.

<PAGE>

         The Company's pro forma results of operations  after adjustment for the
     estimated  compensation  expense  under  SFAS  #123  were  as  follows  (in
     thousands, except per share data):

                                                    Year Ended December 31,
                                                 2000(1)   1999(1)     1998
                                                 ------    ------      ----

   Pro forma Results of Operations:
     Earnings from continuing operations.....   $   433    $   276   $   660
     Loss from discontinued operations.......        --       (486)     (949)
                                                -------    -------   -------
     Net earnings (loss).....................   $   433    $  (210)  $  (289)
                                                =======    =======   =======

   Pro forma Earnings (Loss) per Common Share:
     Basic:
       Earnings from continuing operations...   $  0.13    $  0.08   $  0.20
       Loss from discontinued operations.....        --      (0.15)    (0.30)
                                                -------    -------   -------
       Net earnings (loss)...................   $  0.13    $ (0.07)  $ (0.10)
                                                =======    =======   =======
     Diluted:
       Earnings from continuing operations...   $  0.13    $  0.08   $  0.20
       Loss from discontinued operations.....        --      (0.15)    (0.30)
                                                -------    -------   -------

       Net earnings (loss)...................   $  0.13    $ (0.07)  $ (0.10)
                                                =======    =======   =======

     (1)  Pro forma Results of Operations in 2000 and 1999 have been adjusted to
          reflect  pro forma  increases  in  compensation  expense of $1,000 and
          $16,000,  respectively,  (net  of  taxes)  due to  issuance  of  stock
          options.

<PAGE>

         A  summary  of  the  Company's   stock  option   activity  and  related
     information for the three years ended December 31, 2000, is as follows:


                                                Number of    Weighted Average
                                                 Options      Exercise Price
                                                ---------    ----------------

        Outstanding at December 31, 1997........ 103,100         $ 2.58
          Exercised............................. (13,900)          1.20
          Expired...............................    (500)          2.88
                                                 -------

        Outstanding at December 31, 1998........  88,700           2.80
          Granted...............................  23,800           2.51
          Expired...............................  (3,050)          2.88
                                                 -------

        Outstanding at December 31, 1999........ 109,450           2.74
          Granted...............................   2,500           2.17
          Exercised.............................  (5,500)          1.63
          Expired/Cancelled.....................  (2,250)          2.78
                                                 -------
        Outstanding and Exercisable at
          December 31, 2000..................... 104,200           2.78
                                                 =======           ====

        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........                  $0.93
                                                                  =====

         Exercise prices for options outstanding as of December 31, 2000, ranged
     as follows:  12,500  options from $2.17 to $2.25 per share,  23,300 options
     from  $2.44 to $2.68 per share and 68,400  options  from $2.88 to $3.16 per
     share.  The  weighted  average  contractual  life of those  options was 1.4
     years.

<PAGE>


     Note 11.  STATEMENTS OF CASH FLOWS:

         Certificates of deposit that have a maturity of 90 days or more are not
     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,
                                                 2000      1999     1998
                                                 ----      ----     ----
        Cash Payments for:
          Interest.  .  .  .  .  .  .  .  .  .  $ 705     $ 633    $ 615
          Income taxes. .  .  .  .  .  .  .  .      8        71       26

        Financing & Investing Activities
          Not Affecting Cash:
          Capital lease obligations incurred .     72        65       28
          Issuance of 25,628 shares of common
            stock for services.  .  .  .  .  .     65        --       --


     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 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 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.

<PAGE>

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

                                           Year Ended December 31,
                                     2000           1999             1998
                                     ----           ----            -----
Net sales:
  Consumer Products .......       $ 16,081        $ 16,096        $ 15,717
  Aviation Services .......         11,927           8,600           7,456
                                  --------        --------        --------
    Consolidated ..........       $ 28,008        $ 24,696        $ 23,173
                                  ========        ========        ========
Earnings (loss) before
  interest, other items
  and intercompany charges:
  Consumer Products .......       $  1,967        $  2,557        $  2,567
  Aviation Services .......            928             398             556
                                  --------        --------        --------
  Total Reportable Segments          2,895           2,955           3,123
  Corporate and others ....         (1,447)         (1,570)         (1,638)
  Non-recurring
    income (charges) ......            110            (187)           (135)
                                  --------        --------        --------
    Consolidated ..........       $  1,558        $  1,198        $  1,350
                                  ========        ========        ========
Interest expense:
  Consumer Products .......       $    249        $    206        $    206
  Aviation Services .......            329             319             290
                                  --------        --------        --------
  Total Reportable Segments            578             525             496
  Corporate and others ....            151             139             149
                                  --------        --------        --------
    Consolidated ..........       $    729        $    664        $    645
                                  ========        ========        ========
Depreciation and
  amortization:
  Consumer Products .......       $    252        $    236        $    234
  Aviation Services .......            396             327             280
                                  --------        --------        --------
  Total Reportable Segments            648             563             514
  Corporate and others ....             35              19              18
                                  --------        --------        --------
    Consolidated ..........       $    683        $    582        $    532
                                  ========        ========        ========
Earnings (loss) from
  continuing operations
  before intercompany
  charges and taxes:
  Consumer Products .......       $  1,696        $  2,326        $  2,349
  Aviation Services .......            587              52             295
                                  --------        --------        --------
  Total Reportable Segments          2,283           2,378           2,644
  Corporate and others ....         (1,715)         (1,801)         (1,879)
  Non-recurring
    income (charges) ......            110            (187)           (245)
                                  --------        --------        --------
    Consolidated ..........       $    678        $    390        $    520
                                  ========        ========        ========
Segment assets:
  Consumer Products .......       $  5,596        $  5,659        $  5,254
  Aviation Services .......          5,803           7,806           6,586
                                  --------        --------        --------
  Total Reportable Segments         11,399          13,465          11,840
  Corporate and others ....          1,048             742             797
  Discontinued operations .          2,913           2,373           1,965
                                  --------        --------        --------
    Consolidated ..........       $ 15,360        $ 16,580        $ 14,602
                                  ========        ========        ========
Segment expenditures for
  long-lived assets:
  Consumer Products .......       $    258        $    159        $    134
  Aviation Services .......            201             526             727
                                  --------        --------        --------
  Total Reportable Segments            459             685             861
  Corporate and others ....             10              31              12
                                  --------        --------        --------
    Consolidated ..........       $    469        $    716        $    873
                                  ========        ========        ========

<PAGE>


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

                                              Year Ended December 31,
                                           2000          1999        1998
                                           ----          ----        ----
   Net Sales (1):

   United States.....................  $ 26,233      $ 23,232    $ 21,448
   Canada............................     1,665         1,386       1,664
   Other foreign countries...........       110            78          61
                                       --------      --------    --------
                                       $ 28,008      $ 24,696    $ 23,173
                                       ========      ========    ========


                                                      December 31,
                                                  2000          1999
                                                  ----          ----
   Long-Lived Assets:

   United States............................  $  5,983      $  6,211
   Canada...................................        26            42
                                              --------      --------
                                              $  6,009      $  6,253
                                              ========      ========

     (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, 2000,  1999 and 1998, net sales which
     amounted  to   approximately   $2,832,000,   $3,176,000   and   $2,770,000,
     respectively,  of  Consolidated  Net Sales  were  made by  Ronson  Consumer
     Products  to  various  units of one  customer.  As of  December  31,  2000,
     accounts  receivable from that customer  amounted to  approximately  12% 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, 2000, 1999 and 1998.

<PAGE>

     Note 13.  COMPREHENSIVE INCOME:

         Comprehensive  Income  is the  change in  equity  during a period  from
     transactions  and other  events  from  nonowner  sources.  The  Company  is
     required  to  classify  items of other  comprehensive  income in  financial
     statements and to display the  accumulated  balance of other  comprehensive
     income (loss) separately in the equity section of the Consolidated  Balance
     Sheets.

         Changes in the components of Other  Comprehensive  Income (Loss) and in
     Accumulated  Other  Comprehensive  Loss for  2000,  1999  and 1998  were as
     follows (in thousands):



                         Foreign Currency   Minimum Pension   Accumulated Other
                           Translation         Liability       Comprehensive
                            Adjustment        Adjustment(1)      Loss (1)
                         ----------------   ---------------   -----------------
     Balance at
     December 31, 1997....   $  (61)          $  (928)           $  (989)
     Change during 1998...      (35)              334                299
                             ------           -------            -------
     Balance at
     December 31, 1998....      (96)             (594)              (690)
     Change during 1999...       15               124                139
                             ------           -------            -------
     Balance at
     December 31, 1999....      (81)             (470)              (551)
     Change during 2000...      (16)             (565)              (581)
                             ------           -------            -------
     Balance at
     December 31, 2000....   $  (97)          $(1,035)           $(1,132)
                             ======           =======            =======

     (1)  The  minimum  pension   liability   component  of  Accumulated   Other
          Comprehensive  Loss is presented  above net of related tax benefits of
          $688,000,  $312,000,  $396,000  and  $617,000 as of December 31, 2000,
          1999,  1998 and 1997,  respectively.  For the years ended December 31,
          2000,  1999 and 1998,  the  change in the  minimum  pension  liability
          component   are  presented   above  net  of  related  tax   provisions
          (benefits) of ($376,000), $84,000, and $221,000, respectively. In  the
          year 2000,  the income tax benefits  were  reclassified,  resulting in
          increased  deferred  tax  assets and  reduced  the  Accumulated  Other
          Comprehensive Loss by the above $688,000.

     Note 14.  CONCENTRATIONS:

          At December 31, 2000, the Company and one of its subsidiaries had cash
     balances  in a bank  which  exceeded  the  insured  limit by  approximately
     $158,000.

          Ronson Consumer  Products  currently  purchases  lighter products from
     manufacturers  in Spain and Peoples  Republic  of China.  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, possibly, a short-term loss in sales which could have
     a short-term adverse effect on operating results.


<PAGE>



     Note 15.  RELATED PARTY TRANSACTIONS:

          In October 1998 the Company  entered into a consulting  agreement with
     Mr. Carl W. Dinger III, a 5%  shareholder  of the  Company.  The  agreement
     provides that Mr. Dinger will perform certain  consulting  services for the
     Company for a period of 18 months  expiring  on April 7, 2000,  at a fee of
     $4,500 per month. On March 6, 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 at a fee of $7,000 per month.  During the years ended  December  31,
     2000,  1999 and 1998,  Mr. Dinger was  compensated  $76,500,  $54,000,  and
     $13,500, respectively, under the agreements.

          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.  The cost of the
     option  was  $5,500  per  month  for the  period  of the  option  or  until
     exercised.  On March 6,  2000,  Mr.  Dinger  granted  a new  option  to the
     Company,  to purchase the 413,666 shares of the Company's  common stock now
     held by Mr. Dinger.  The option is for a period of 48 months.  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. On March 6, 2000, Mr. Dinger notified
     the  Company  that  he  would  purchase  227,500  shares  of  newly  issued
     restricted  common  stock of the Company at the price of $2.50 per share or
     market (as  determined  March 6, 2000),  whichever is higher.  The sale was
     completed on March 23, 2000.  The Company  incurred costs for the option of
     $52,500, $66,000 and $16,500 during the years ended December 31, 2000, 1999
     and 1998, respectively, which were charged to Additional Paid-in Capital.

         The Company  incurred  costs for consulting  services under  agreements
     with two directors of the Company of $124,000, $123,000 and $100,000 in the
     years ended  December 31, 2000,  1999 and 1998,  respectively.  The Company
     incurred costs of $41,000,  $64,000 and $47,000 in the years ended December
     31, 2000,  1999 and 1998,  respectively,  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.