<PAGE>

                                     FORM 10-K

                         SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20549

[X]                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

               For the fiscal year ended                 June 30, 1997
                                                 ----------------------------
                                        OR
[ ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the transition period                   to                      
                         ------------------     -------------------

                      Commission file number           0-7903
                                             --------------------------
                                Quixote Corporation
                    -------------------------------------------
               (Exact name of registrant as specified in its charter)

       DELAWARE                                     36-2675371
---------------------------                    -------------------
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                 Identification No.)

ONE EAST WACKER DRIVE, CHICAGO, ILLINOIS              60601
------------------------------------------       ---------------
(Address of principal executive offices)            (Zip Code)

Registrant's telephone number including area code:     (312) 467-6755
                                                     ------------------

Securities Registered Pursuant to Section 12(g) of the Act:

                        Common Stock     ($.01-2/3 Par Value)
                   -----------------------------------------------
                                   (Title of Class)

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

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

State the aggregate market value of the voting stock held by non-affiliates of
the registrant.  The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.

                            $59,500,740 as of August 29, 1997
                     ------------------------------------------------

                                          -1-

<PAGE>
                                   TABLE OF CONTENTS


PART I                                                                      PAGE
                                                                            ----
  Item  1.  Business......................................................   3-7

  Item  2.  Properties....................................................     8

  Item  3.  Legal Proceedings.............................................  9-12

  Item  4.  Submission of Matters to a Vote of Security Holders...........    12

PART II

  Item  5.  Market for the Registrant's Common Equity and Related 
              Stockholder Matters.........................................    13

  Item  6.  Selected Financial Data.......................................    13

  Item  7.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations......................... 14-16

  Item  8.  Financial Statements and Supplementary Data................... 16-30

  Item  9.  Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure.........................    30

PART III

  Item 10.  Directors and Executive Officers of the Registrant............    31

  Item 11.  Executive Compensation........................................    31

  Item 12.  Security Ownership of Certain Beneficial Owners
              and Management..............................................    31

  Item 13.  Certain Relationships and Related Transactions................    32

PART IV

  Item 14.  Exhibits, Financial Statement Schedules and Reports
              on Form 8-K................................................. 33-36

SIGNATURES................................................................    37

                                       -2-
<PAGE>
                                      PART I

                                    THE COMPANY

Quixote Corporation was originally incorporated under the laws of the State 
of Delaware in 1969 as Energy Absorption Systems, Inc.  In June, 1980, Energy 
Absorption Systems, Inc. changed its name to Quixote Corporation.  Unless 
otherwise indicated herein, the terms "Quixote" and the "Company" refer to 
Quixote Corporation and its subsidiaries.

Item 1.  Business
-----------------

Quixote Corporation and its subsidiaries develop, manufacture and market 
energy-absorbing highway crash cushions and other highway safety products for 
the protection of motorists and highway workers to both domestic and 
international markets.  

As of June 30, 1997, Quixote Corporation and its subsidiaries employed 
373 people.

                                       -3-
<PAGE>
HIGHWAY SAFETY DEVICES
----------------------


Description of Business
-----------------------
The Company's business is life safety with its current operating subsidiaries
concentrating on safety problems and their solutions for the highways.  There
are two broad categories of products for improving safety on the roads: products
which minimize the severity of crashes that occur and products designed to
prevent crashes from occurring.

In the category of reducing the severity of crashes, the patented highway crash
cushions manufactured by Energy Absorption Systems, Inc. were first conceived
and developed in 1969 in response to the high number of fatalities and serious
injuries suffered by occupants of errant vehicles in collisions with roadside
hazards, such as bridge abutments, overpass piers, overhead sign supports, lane
dividers, traffic islands and toll booths.  Since that time, various types of
Energy Absorption's highway crash cushions have been installed in front of
thousands of life-threatening roadside hazards.  The Federal Highway
Administration (FHWA) endorses the installation of highway crash cushions as an
effective safety program.  Crash cushions have saved an estimated 28,000 lives
since 1969.

Energy develops, manufactures and markets a line of patented highway crash
cushion systems and other barriers which absorb and dissipate the force of
impact in collisions between vehicles and fixed roadside objects.  The product
lines utilize the principles of momentum transfer and kinetic energy to safely
decelerate errant vehicles.  Energy absorption or energy dissipation is
accomplished by using different combinations of water, aluminum, steel, urethane
foam systems, cardboard, plastic structures, elastometric cylinders and sand.

While Energy Absorption's products minimize the severity of crashes that occur,
the products of its wholly-owned subsidiary, Safe-Hit Corporation, prevent
crashes and help control the flow of traffic.  Safe-Hit manufactures and markets
a line of flexible sign and guide post systems and a glare screen system through
distributors and catalog offerings.  The guide posts are extruded from
polypropylene and are used to delineate a travel way, channelize vehicles or
mark the location of an object.  The post features an in-ground anchor system
that permits inexpensive repair and replacement techniques.  The glare screen
system, also made from polypropylene, is installed on top of median barriers to
eliminate the distraction of lights from oncoming vehicles on roads where the
inside lanes are adjacent to the median barrier.  Both products are covered by
patents.

Spin-Cast Plastics, Inc., a wholly-owned subsidiary of Energy Absorption,
manufactures rotational molded plastic products including the
Energite-Registered Trademark- crash cushion system, plastic components used in
Energy Absorption's other product lines, as well as custom designed plastic
components for industrial products.

Products can be further broken down into permanent and construction zone
applications and, as such, are sold to those market segments.  Most of the
products for permanent and construction zone applications are approved as
acceptable highway hardware according to procedures in the National Cooperative
Highway Research Project number 230 or 350 which provide various test levels
depending on the application.  This approval is gained after a formal submission
to the FHWA makes the products eligible for federal aid highway projects.

Energy Absorption's products all have patented features and include the 
truck-mounted attenuator (TMA-TM-), the QuadGuard-Registered Trademark- 
System, the CushionWall-TM- , the BarrierGate-Registered Trademark-, the 
Energite System-Registered Trademark- and the Triton Barrier-Registered 
Trademark-.  

Energy Absorption provides product education, selection and application
assistance.  Energy Absorption generally does not perform site preparation or
installation for any of its products.  They are performed through a
distributor/contractor network. Most of Safe-Hit's products are 'catalog type'
and sold through distributors.   

Competition and Marketing
-------------------------

                                       -4-
<PAGE>

Energy Absorption's products are sold in all 50 U.S. states.  Six regional
managers supervise 28 domestic distributors and make direct sales in areas not
covered by distributors.  Although the Federal government provides matching
funds for the purchase of highway safety products made by state and local
governmental agencies, it is not a direct purchaser of Energy Absorption's
domestic products.  Energy Absorption sells its products principally to either
distributors or to contractors (on behalf of state and local governments) with
less than 5% sold directly to state and local government agencies.  Safe-Hit's
products are sold by their own regional mangers who supervise 48 domestic
distributors and make sales calls on certain state departments of transportation
and contracting firms.  

Many international governments are now beginning to recognize the need for crash
cushions as a method of reducing traffic fatalities.  Energy Absorption's
products are sold internationally through a network of 44 distributors who make
sales to municipal and national governments and contractors who are responding
to bids from their respective governments.  

Although Energy does experience competition in specific product lines,
particularly in the Energite, G-R-E-A-T and TMA lines, no other company
presently markets as broad a line of highway crash cushion systems designed to
shield as large a variety of fixed roadside hazards. A number of other companies
manufacture flexible guide posts.

Government Policies
-------------------

The market for crash cushions is directly affected by federal, state and local
governmental policies.  A large portion of Energy Absorption's sales is
ultimately financed by funds provided to the states by the federal government. 
Historically, these funds have covered 75% to 90% of the cost of highway safety
projects on roads constructed or maintained with federal assistance.  The
Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), expiring on
September 30, 1997, provides authorization for federal funding of highways and
highway safety.  Total funding of approximately $150 billion was available under
ISTEA over a six year period.  The states must set aside 10% of the federal
funds received each year under ISTEA for safety construction activities such as
hazard elimination.  In order for highway devices to be eligible for federal
funding, such devices must be approved by the FHWA.  Energy Absorption is
obligated to seek such approval for improvements or upgrades to such devices and
for any new devices.

A new highway bill to replace ISTEA is currently being discussed in Congress. 
While the Company believes that a new highway bill, or an extension of the
current ISTEA bill, will be signed into law, it appears likely it will be
delayed beyond September 30, 1997.  Such a delay could cause an interruption in
federal funding and may result in a temporary lack of funds for Energy
Absorption's products.

                                       -5-
<PAGE>


Backlog
-------

As of June 30, 1997, 1996 and 1995, Energy had a backlog of unfilled orders for
highway safety devices of $8,999,000, $8,591,000 and $10,200,000, respectively. 
The Company can usually fill an order within 6 to 8 weeks of receipt.

Research and Development; Patents
---------------------------------

Energy conducts its own research, development and testing of new products before
introducing them to the marketplace.  The expenditures for research and
development activities were $2,209,000, $1,536,000 and $1,545,000, in the years
1997, 1996 and 1995, respectively.

Energy Absorption develops new products by working with federal and state
highway officials to determine highway traffic safety needs, and then designs
products to satisfy those needs. Energy is also active in promoting cooperation
among state highway agencies, contractors and engineers to encourage
comprehensive repair and maintenance of roadside crash attenuating systems.  In
addition to developing new products within the impact technology area, Energy
Absorption is seeking to develop or to acquire new products which can be sold
through its existing distribution networks to its existing customers.

Energy owns a number of U.S. and foreign patents covering its major highway
safety products.  It actively seeks patent and trademark protection for new
developments.

Raw Materials
-------------

The principal raw materials used in the production of highway safety devices are
plastic and plastic resins, steel, aluminum and wood components.  These raw
materials are purchased from various suppliers and have been readily available
throughout the last year. Energy believes that adequate supplies of these
materials will continue to be available.

Major Customers
---------------

No single customer of Energy Absorption's highway safety business represents a
significant portion of total revenues.


Other
-----

Investment in FIP Joint Venture:
--------------------------------
During fiscal 1996, Energy Absorption entered into a joint venture with FIP
Industriale S.p.A. of Italy to market their seismic bridge bearings in the
United States.  The Company, accounting for this investment under the equity
method of accounting, took charges of $1,402,000 and $300,000 for 1997 and 1996
respectively.  In June 1997, the Company  decided to wind down the activities of
the joint venture due to the lack of revenues and progress to date.  The 1997
charge includes $502,000 in accrued costs to exit this venture. 

                                       -6-
<PAGE>
COMPACT DISC MANUFACTURING
--------------------------

In March 1997, the Company sold substantially all of the assets and transferred
significant operating liabilities of Disc Manufacturing, Inc. (DMI) to Cinram
Ltd. for $80,283,000 in cash.  The transaction excluded DMI's Huntsville,
Alabama land and building as well as certain DMI litigation. DMI was one of 
the largest independent manufacturers of compact discs and CD-Roms in the 
United States.

LEGAL TECHNOLOGIES
------------------

During 1996, the Company discontinued the operations of its legal technologies
businesses, which had been involved in the development, manufacture and sale of
products and systems for the legal community.  Under multiple arrangements the
Company sold certain assets of this segment for an aggregate sales price of
$5,981,000 and the assumption of certain liabilities.  Liabilities retained by
the Company at June 30, 1997 include certain repetitive stress injury litigation
and liabilities under certain lease obligations.

                                       -7-
<PAGE>

Item 2.  Properties
-------------------

                                                                       Owned or
Location                     Available Space   Purpose                 Leased
--------                     ---------------   -------                 --------

One East Wacker Drive        19,000 sq. ft.    Executive Offices         Leased
Chicago, Illinois

250 Bamberg Drive           160,000 sq. ft.    Manufacture of highway    Owned
Pell City, Alabama                             safety devices

3617 Cincinnati Avenue       22,000 sq. ft.    Warehouse and research    Owned
Rocklin, California                            and development facility
                                               for highway safety
                                               devices

3300 N. Kenmore Street       81,000 sq. ft.    Sale and manufacture of   Owned
South Bend, Indiana                            highway safety devices and
                                               other plastic products

739 College Drive            28,000 sq. ft.    Storage facility for      Owned
South Bend, Indiana                            highway safety devices

1930 West Winton Avenue      20,000 sq. ft.    Manufacture of extruded   Leased
Hayward, California                            plastic highway safety  
                                               devices

4905 Moores Mill Road       332,000 sq. ft.    Sublet                    Owned
Huntsville, Alabama             

200 Corporate Pointe         19,800 sq. ft.    Sublet                    Leased
Culver City, California

225 West Washington           5,300 sq. ft.    Sublet                    Leased
Chicago, Illinois 


Note:  Present facilities are believed to be adequate to support the Company's
       current and anticipated requirements.

                                       -8-
<PAGE>
Item 3.  Legal Proceedings
--------------------------

A.  DISC MANUFACTURING, INC. ET AL. v. MASSEY ET AL., CV-90-H-01029-NE (U.S.
District Court for the Northern District of Alabama).  On May 21, 1990, Quixote
and Disc Manufacturing, Inc. ("DMI"), a discontinued operation, filed this
lawsuit against Disctronics Limited, Disctronics (US) Inc., Disctronics, Inc.,
Moray Investments Limited ("Moray"), Memory-Tech, Inc. ("Memory-Tech") and
individuals Peter Massey, Kevin Donovan, David Mackie, and Douglas Adams.  This
lawsuit alleged that the individual defendants, each a DMI director until April
30, 1990, had in concert with Disctronics Limited and its affiliated companies
(the "Disctronics Group"), during the time that the Disctronics Group owned DMI,
misappropriated DMI's corporate opportunity to acquire Memory-Tech, a competing
compact disc manufacturer located in Plano, Texas.  The lawsuit also alleged
that the defendants had violated DMI's federal trademark rights in the name
"Disctronics". 

Certain of the defendants filed counterclaims alleging breach of contract,
economic duress, tortious interference with contract and business relations,
unjust enrichment, fraud, unfair competition and seizure of corporate
opportunity among other claims. On September 25, 1992, the Court dismissed all
of the defendants' state law counterclaims, in order to allow those claims to be
resolved in the parallel state court action.  This left only the parties'
(including defendants') federal trademark/Lanham Act claims, which were stayed,
pending resolution of the state court action, described in B below.

B.  DISC MANUFACTURING, INC. ET AL. v. MASSEY ET AL., CV90-1214L (Madison County
Circuit Court, Alabama).  On June 13, 1990, DMI and Quixote refiled their state
law corporate opportunity claims (described in A above), along with a claim
under the Alabama trademark law, in the Circuit Court for Madison County,
Alabama (Huntsville), the jurisdiction in which DMI was located.  Following a
preliminary injunction hearing, on July 30, 1990, the Court granted the motion
for preliminary injunction.  In connection with the preliminary injunction and
pending the final outcome of the action, Quixote and DMI were required to post a
$6 million certificate of deposit as injunction security.  (In March 1996, the
Court approved DMI's substitution of a $6 million surety bond backed by a 
$2 million letter of credit to replace the certificate of deposit).  The 
defendants appealed the entry of the preliminary injunction and on May 15, 
1992 the Alabama Supreme Court reversed the Circuit Court's issuance of the 
injunction, remanding the case for further proceedings. Quixote sought a 
rehearing which was denied on July 10, 1992.  On May 21, 1992, defendants 
filed a Motion for Partial Summary Judgment on all counts of the complaint, 
asserting breaches of fiduciary duty and using as its basis the Alabama 
Supreme Court decision. 

In addition, on March 4, 1991, the corporate defendants filed a counterclaim
against Quixote, DMI and James H. DeVries.  The counterclaim sought damages of
$73.8 million, to invalidate a 1989 Work-Out Agreement among the parties,
punitive damages and other relief.  

In April 1993, the Company and DMI filed a First Amended Complaint which added
claims for unjust enrichment, fraud and tortious interference.  Defendants moved
to dismiss the First Amended Complaint.

In May 1995, the Circuit Court ruled on various outstanding motions.  The Court
dismissed all of the defendants' claims except the following claims:  tortious
interference with contract and business relations; fraud; breach of contract
regarding a $300,000 escrow; a state dilution claim; and a claim for wrongfully
seeking injunctive relief.

In its May 1995 Order, the Circuit Court also dismissed all of the Company's and
DMI's corporate opportunity claims based on breaches of fiduciary duties, along
with the claims for unjust enrichment.  This left two counts of the Company's
and DMI's First Amended Complaint in the case:  a count for tortious
interference with contract and business relations and a count for fraud in
connection with the Disctronics' Memory-Tech Inc. transaction.

Both parties appealed the Court's May 1995 ruling.  In September 1996, the
Alabama Supreme Court ruled on the appeal, reinstating all of DMI's claims which
had been dismissed by the Circuit Court except the corporate opportunity to
acquire Memory-Tech Inc. and unjust enrichment claims and upholding the
dismissal of all of the defendants' claims except a "palming off" claim related
to use of the name "Disctronics".  Consequently, the Company 

                                       -9-
<PAGE>

and DMI have pending claims for breach of fiduciary duty, tortious 
interference and fraud. The defendants' pending claims are for wrongful 
injunction, "palming off", fraud, breach of contract and alleged interference 
cclaims.  Petitions for rehearing were denied in November 1996 and this 
decision is now final.

Defendants subsequently filed an amended counterclaim without seeking leave of
court which seeks to assert in slightly different form generically some of the
same claims as previously asserted and against which judgment has already been
granted and become final. Quixote and DMI have moved to dismiss those claims. 
Court ordered mediations have not been successful. 

C.  REPETITIVE STRESS INJURY LITIGATION.  Stenograph Corporation, a 
discontinued operation, is one of a number of manufacturers of keyboard and 
other equipment that have been sued by individuals for arm, wrist and hand 
injuries, including carpal tunnel syndrome.  All thirty cases filed to date 
against Stenograph, and in some cases the Company, contend that the 
Stenograph machine (or other keyboard equipment) was defectively designed and 
that Stenograph failed to provide adequate warnings about how the equipment 
should be used to avoid injury.  The cases request actual damages, in some 
cases specified as ranging from $500,000 to $1,000,000, and, in most of the 
cases, punitive damages, with some cases specifying an amount of $10,000,000. 
Of the 30 cases, six were dismissed in  April 1997 after a jury verdict in 
favor of Stenograph and an appeal is pending.

In additions, six cases have been dismissed with prejudice and ten cases have 
been dismissed without prejudice to refile the complaints.  All of the cases 
have been referred to the Company's insurance carriers and, at this time, the 
Company believes that liability resulting from these cases, if any, 
(excluding punitive damages) will be covered by its insurance policies. 

D.  RESORT VIDEO LTD. v. LASERVIDEO, INC.  In September 1990, DMI was sued by
Resort Video, Ltd. in the Superior Court of the State of California for the
County of Los Angeles in an action entitled RESORT VIDEO, LTD. v. LASERVIDEO,
INC., No. 74659.  Resort Video, a former start-up company, claimed DMI failed to
produce certain video discs on schedule, thereby injuring its business.  After a
trial, on August 25, 1992, the jury awarded Resort Video $975,000 in damages. 
DMI moved for a new trial which was granted in October 1992.  Plaintiff appealed
that decision and DMI cross-appealed the jury's decision.  In June 1995, the
California Court of Appeals affirmed the trial court's order granting a new
trial based on excessive damages.  Resort Video's petition for a rehearing was
denied.  Accordingly, the case has been returned to the trial court and a trial
on damages is set to begin in February 1998.

E.  THOMSON S.A. v TIME WARNER, ET AL.  In February 1994, Disc Manufacturing,
Inc., Quixote Corporation and a number of other companies were sued by Thomson
S.A. of France in the United States District Court for the District of Delaware
in an action entitled THOMSON S.A. v. TIME WARNER, INC., ET AL., No 94-83.  The
complaint charged that the defendants infringed four Thomson patents by making
and selling audio compact discs and requested an order prohibiting defendants
from making or selling compact discs which infringe on the patents.  No
specified damages were asked for although the complaint asked that damages be
trebled because it alleged the infringement was willful.  In the fall of 1994,
the Denon and Time Warner defendants entered into consent judgments with the
plaintiff.  After a trial, in July 1996, the jury found that the Thomson patents
were invalid.  Thomson moved for judgment as a matter of law or, in the
alternative, for a new trial, which was denied.  In July 1997, Thomson filed an
appeal which is pending.

                                       -10-
<PAGE>
F.  DISCOVISION ASSOCIATES v. DISC MANUFACTURING, INC.  In January 1995, Disc 
Manufacturing, Inc. was served in an action entitled DISCOVISION ASSOCIATES v.
DISC MANUFACTURING, INC., Case No. 95-21, U.S. District Court for the District
of Delaware.  The complaint alleges that DMI is infringing six DiscoVision
patents relating to optical storage discs by the manufacture and sale of compact
discs and seeks injunctive relief and unspecified damages, including punitive
damages, against DMI.  In August 1995, DiscoVision was granted leave to amend
its complaint to allege infringement by DMI of four additional patents. 
Plaintiffs subsequently dropped four patents from the case leaving six patents
in issue.  In April 1997, the District Court denied a motion by DiscoVision to
dismiss portions of the DMI antitrust case.  In August 1997, the District Court
granted a motion by DMI to limit the time period for which damages could be
asserted against DMI and denied DMI's motion to assert the doctrine of laches. 
The District Court, in September 1997, deconsolidated DMI's antitrust claims for
purposes of trial and issued its determination on claims interpretation.  Trial
is set to begin in October 1997.

G.  DISC MANUFACTURING, INC. v. PIONEER AND DISCOVISION.  In January 1995, DMI
filed a complaint against Pioneer Electronic Corp., Pioneer Electronics (USA)
Inc., Pioneer Capital Inc., and DiscoVision Associates in the U.S. District
Court for the Central District of California, Case No. 95-0306, alleging
violations of the antitrust laws and acts of unfair competition based on
unlawful activities and anticompetitive tactics involving patents related to
optical disc technology. DMI's complaint seeks damages, including punitive
damages, and injunctive relief.  This case has been transferred to the District
Court in Delaware and consolidated with DiscoVision Associates' case against DMI
pending in that jurisdiction (described in F. above).

H.  ESTATE OF THIEL v. ENERGY ABSORPTION SYSTEMS, INC.  In December 1994, Energy
Absorption Systems, Inc. was served in an action entitled FREDERICK W. THIEL AND
MAUREEN THIEL v. SLATTERY ASSOCIATES ET AL., Superior Court of New Jersey,
Docket No. MRS-L-1431-94.  The complaint arises from a March 1992 accident in
which the decendent lost control of his car and allegedly struck one of Energy's
crash cushions.  The complaint seeks unspecified damages from Energy Absorption
and numerous defendants, including the State of New Jersey, the U.S. Federal
Highway Administration and various other governmental entities.  The Company has
referred the case to its insurance carrier.  At this time, the Company believes
that liability resulting from this case, if any, will be covered by its
insurance policies.  Trial is scheduled for January 1998.

I.  ENERGY ABSORPTION SYSTEMS, INC. v. ROADWAY SAFETY.  In April 1993, Energy 
filed suit in U.S. District Court for the Northern District of Illinois in an 
action entitled ENERGY ABSORPTION SYSTEMS, INC. v. ROADWAY SAFETY SERVICE, 
INC., No. 93C 2147 for infringement of Energy's U.S. Patent No. 4,289,419 
seeking damages and an injunction.  Roadway counterclaimed for a declaratory 
judgment of non-infringement and invalidity.  In February 1996, the District 
Court entered judgment in favor of Roadway, holding that Energy's patent was 
invalid and not infringed and awarded attorneys' fees and costs to Roadway.  
The District Court later determined the award to be $280,386.  Energy 
Absorption filed an appeal and was successful in obtaining a decision from 
the Court of Appeals for the Federal Circuit reversing the District Court's 
judgments of invalidity, unenforceability and award of attorney's fees to 
Roadway.  The Court of Appeals affirmed and modified the District Court 
judgment of literal non-infringement and remanded for consideration of 
infringement under the doctrine of equivalents. 

J.  ERNEST CHICO v. ENERGY ABSORPTION SYSTEMS, INC.  On April 12, 1996 Energy
Absorption Systems, Inc. was served in an action entitled ERNEST CHICO V. THE
STATE OF INDIANA, ENERGY ABSORPTION SYSTEMS, INC. AND HOOSIER COMPANY IN LAKE
SUPERIOR COURT FOR THE STATE OF INDIANA, CAUSE NO. 45DO2-9605-CT-391 which
arises from an accident in which the plaintiff hit one of Energy's crash
cushions.  The Company has referred the case to its insurance carrier and at
this time believes that liability resulting from this case will be covered by
its insurance policies.  The Company has filed a motion for summary judgment
which is pending.

                                       -11-
<PAGE>
K.  FEATHER V. ENERGY ABSORPTION SYSTEMS, INC., In July 1997, plaintiff filed
this action in Superior Court of the State of California, Case No. SCV-6077 in
an action entitled SUSAN FEATHER V. ENERGY ABSORPTION SYSTEMS, INC. ET AL. 
Plaintiff claims special, general and punitive damages because of sexual
discrimination/harassment, retaliation, intentional infliction of emotional
distress, negligent infliction of emotional distress, and constructive discharge
while an employee of Energy Absorption.  The Company believes that most of the
claims will be covered by its insurance policies.  Discovery is proceeding.

The Company is involved in other legal actions, believes it has defenses for 
all claims, and is vigorously defending the actions.  In the opinion of 
management, based on the advice of legal counsel, liabilities, if any, 
arising from the Company's legal actions should not have a material effect on 
the Company's results of operations or financial condition.

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

There were no matters submitted to a vote of security holders during the 
fourth quarter of fiscal 1997.

                                       -12-

<PAGE>
                                PART II

Item 5.  Market for the Registrant's Common Equity and Related Stockholder
Matters
-------------------------------------------------------------------------------

The Company's common stock is quoted on the National Association of Securities
Dealers Automated Quotation System (NASDAQ) under the symbol QUIX.

Set forth are the daily high and low last sales prices for the Company's common
stock for the periods indicated, as reported by the National Quotations Bureau,
Inc.  These prices represent quotations between dealers in securities, do not
include retail markdowns or commissions, and do not necessarily represent actual
transactions.

Quarter Ending          9/30       12/31        3/31        6/30
--------------        -------     -------     --------    -------
FISCAL 1997
High                  $     8     $10-3/4     $ 9-7/8     $ 9-1/8
Low                     5-3/4       7-5/8       8-1/4       6-3/4

FISCAL 1996
High                  $13-1/4     $    12     $ 8-1/2     $ 8-1/2
Low                    10-1/2       7-1/4           6       5-3/4

The current quoted price of the stock is listed daily in The Wall Street 
Journal in the NASDAQ National Market System section.  As of August 4, 1997, 
there were approximately 5,775 shareholders including holders of shares held 
in street name.

Dividend Policy
---------------

During 1997, the Company declared semiannual cash dividends of twelve cents 
and thirteen cents per share each.  During 1996, the Company declared 
semiannual cash dividends of twelve cents per share each.

Item 6.  Selected Financial Data
--------------------------------
SELECTED FINANCIAL DATA

Dollar amounts in thousands, except per share data

<TABLE>
<CAPTION>


For the years ended June 30,                                1997         1996           1995           1994           1993
----------------------------                            --------      --------        -------        -------         ------
<S>                                                    <C>            <C>            <C>            <C>            <C>
Operating results:
Net sales                                              $ 45,037       $ 46,750       $ 46,522       $ 43,433       $ 35,648
Gross profit                                             22,249         24,291         23,382         23,453         20,454
Selling and administrative expenses                      14,264         15,059         13,662         13,825         11,146
Research and development                                  2,209          1,536          1,545          1,978          2,092
Other expense                                            (2,112)          (488)        (1,887)          (928)          (605)
Earnings from continuing operations                       2,907          4,390          4,470          4,989          3,342
Net (loss) earnings                                      (3,831)        (9,892)         5,950         11,644          9,441

Per share data:
Primary earnings from continuing operations             $   .36        $   .55        $   .55        $   .62        $   .42  
Net (loss) earnings                                        (.48)         (1.24)           .73           1.44           1.20  
Book value per common share                                5.24           5.99           7.49           6.94           5.53  
Cash dividends per common share                             .25            .24            .22            .21            .20  
Weighted average common and common equivalent shares
  outstanding                                         8,008,893      8,003,924      8,100,385      8,066,192      7,867,658

Financial position:
Total assets                                           $ 55,220       $118,888       $135,662       $ 98,999       $ 88,202  
Working capital                                          20,639          4,055          5,541          8,204          6,981  
Net property, plant and equipment                        12,903         13,113         10,645          8,532          8,075  
Long-term debt, net                                           0         58,000         68,000         38,975         40,000  
Shareholders' equity                                     41,655         47,619         58,915         54,069         41,898  

</TABLE>



NOTE:  OPERATING RESULTS AND FINANCIAL POSITION FOR ALL PERIODS PRESENTED HAVE
BEEN RESTATED TO REFLECT THE LEGAL TECHNOLOGIES  AND DISC MANUFACTURING SEGMENTS
AS DISCONTINUED OPERATIONS.

                                       -13-

<PAGE>


Item 7. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
of Operations
-------------
1997 Compared to 1996
---------------------

The Company's sales for 1997 decreased 4% to $45,037,000 from $46,750,000 in 
1996.  Sales declined in Energy Absorption's permanent system product lines 
which include the G-R-E-A-T-Registered Trademark- System as well as the newly 
introduced QuadGuard-Registered Trademark- System.  This was due to, among 
other things, increased competition which resulted in a decline in selling 
prices and to a lesser extent, a decrease in unit volume.  In addition, the 
Company believes that some customers may have postponed their purchases 
earlier in 1997 in anticipation of several new products introduced by Energy 
Absorption that qualify under the new federal testing and evaluation 
guidelines known as NCHRP 350, coupled with a delay in certifying one of 
these new products.  Sales of the Triton Barrier-Registered Trademark- and 
Safe-Hit delineator also declined. Somewhat offsetting these product line 
decreases were increases in the Energite7 III and truck-mounted attenuator 
(TMA) product lines.

The gross profit margin in 1997 decreased to 49.4% from 52.0% in 1996.  This 
was due to a decrease in the average selling prices of its permanent systems 
products and to a lesser extent, lower sales volume.  In addition, the gross 
margin also declined due to increased overhead from the expansion of Energy 
Absorption's Pell City, Alabama facility which was doubled in size to 150,000 
square feet.

Selling and administrative expenses in 1997 decreased 5% to $14,264,000 from 
$15,059,000 in 1996.  This decrease was due principally to last year's 
$800,000 write-off to discontinue the Company's sewer rehabilitation 
business.  Corporate level administrative expenses remained at a level 
consistent with last year.

Research and development expenses in 1997 increased 44% to $2,209,000 
compared to $1,536,000 in 1996.  This increase was due to expenditures for 
the development of new products as well as for the upgrade of the Company's 
existing product lines in order to meet the revised NCHRP 350 standards.  
These new Federal Highway Administration guidelines increase the safety 
standards to accommodate heavier and higher center of gravity vehicles such 
as sport utility vehicles.

Interest income in 1997 was $339,000 compared to $358,000 in 1996.  The 
interest income in 1997 was earned on the Company's cash of approximately $18 
million which is being invested in short-term money market instruments until 
it can be effectively deployed in the business.  The 1996 interest income is 
the result of the interest earned on a $6 million certificate of deposit 
posted as injunction security for certain litigation.  This certificate of 
deposit was redeemed in the third quarter of 1996 and replaced with a surety 
bond backed by a letter of credit.  Interest expense in 1997 decreased 71% to 
$497,000 from $1,726,000 in 1996.  This was due to a decrease in the average 
long-term debt outstanding in 1997 compared to 1996.  As discussed below in 
"Liquidity and Capital" Resources, the Company paid off all long-term debt 
upon the sale of DMI in March 1997.  In addition, as a result of the sale of 
DMI, total interest expense was allocated between continuing and discontinued 
operations based upon the net asset values of each.  The Company recorded a 
loss of $1,402,000 in 1997 related to the Company's investment in a seismic 
bridge bearing joint venture with FIP Industriale S.p.A.  This compares to a 
$300,000 loss from this venture in 1996. Due to the lack of sales and 
progress to date, the Company has decided to cease funding of this venture.  
Other expenses were $552,000 in 1997 compared to $454,000 in 1996.

The Company's effective tax rate decreased in 1997 to 20.7% from 39.1% in 
1996 due to the realization of certain tax benefits in the current year along 
with the settlement of certain tax contingencies.

As discussed in Note 3 to the Consolidated Financial Statements, on March 27, 
1997, the Company sold substantially all of the assets and transferred 
significant operating liabilities of DMI to Cinram Ltd. for $80.3 million in 
cash.  The transaction excludes the Huntsville, Alabama land and building as 
well as certain DMI litigation.  The sale, approved by the Company's 
shareholders, resulted in a loss of $4,507,000 which was net of

                                       -14-

<PAGE>

income tax benefits of $3,004,000.  DMI incurred a loss on operations for 
1997 and 1996 of $2,231,000 and $1,816000 which are net of income tax 
benefits of $957,000 and $1,888,000 respectively.  These results are 
presented as discontinued operations in the Company's Consolidated Statements 
of Operations.

The Company used a portion of the proceeds of the sale to repay all of its 
$37.2 million in bank debt, to redeem all of its $18 million of 8% 
Convertible Subordinated Debentures and the related accrued interest and to 
pay transaction costs.  The balance of the proceeds will be to invest in the 
highway safety and equipment business and in other opportunities deemed 
beneficial to stockholders, including the possible repurchase of a portion of 
the Company's common stock outstanding.

1996 COMPARED TO 1995
--------------------------------------------------------

The Company's sales for 1996 increased slightly to $46,750,000 from 
$46,522,000 in 1995.  Sales of Energy Absorption's permanent system product 
lines increased including the G-R-E-A-T-Registered Trademark-  System and 
G-R-E-A-T-Registered Trademark- CZ products as well as parts sales but were 
mostly offset by a decrease in TMA sales.  Sales of the Energite-Registered 
Trademark- also declined in 1996.  

The gross profit margin in 1996 increased to 52.0% from 50.3% in 1995.  This 
was due to a change in product mix and also to less outsourcing of component 
parts in 1996 than in 1995 as a result of the completion of Energy 
Absorption's plant expansion in 1996.

Selling and administrative expenses in 1996 increased 10% to $15,059,000 from 
$13,662,000 in 1995 due to an increase in marketing expenses and to the 
write-off of the investment in a sewer rehabilitation technology of $800,000. 
Corporate level expenses in 1996 remained at a level consistent with 1995.  

Research and development expenses in 1996 declined slightly to $1,536,000 
compared to $1,545,000 in 1995.  The Company increased R&D expenditures which 
were targeted towards the upgrade of its product line in order to meet the 
revised NCHRP 350 guidelines.  These increased R&D expenditures were largely 
offset by the suspension in development activities related to the Company's 
sewer rehabilitation technology.

Interest income in 1996 was $358,000 compared to $392,000 in 1995.  Interest 
income in both years relates to interest earned on a $6 million certificate 
of deposit posted as injunction security for certain litigation.  This 
certificate of deposit was redeemed in the third quarter of 1996.  Interest 
expense in 1996 decreased 13% to $1,726,000 from $1,976,000 in 1995.  This 
was due to a decrease in the average long-term debt outstanding in 1996 
compared to 1995.  In addition, total interest expense was allocated between 
continuing and discontinued operations based upon the net asset values of 
each.  Other expenses were $454,000 in 1996 compared to $303,000 in 1995.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------------------------------------------

The Company had cash and cash equivalents of $18,463,000 and access to 
additional funds of $40,000,000 under its bank arrangements as of June 30, 
1997. Operating activities used cash of $607,000 during 1997 due principally 
to the losses on the operations and sale of DMI.

Cash of $78,103,000 was provided by investing activities during the year.  
This was due principally to the sale of DMI which was completed in March of 
this year and which generated $80,283,000 in cash.  Offsetting this somewhat, 
the Company invested $1,321,000 in equipment for its highway safety business. 
 Cash of $900,000 was used related to the Company's investment in the FIP 
joint venture. Other miscellaneous activity provided cash of $41,000.

Financing activities used cash of $60,370,000 principally to repay all of the 
Company's bank debt of $40,000,000 and to redeem all of its 8% Convertible 
Subordinated Debentures of $18,000,000.  The Company also used cash to pay 
semiannual cash dividends of $1,903,000.  In addition, cash of $655,000 was 
used to purchase 88,514 shares of the Company's own Common Stock for the 
treasury. Additional shares may be purchased from time to time.  Cash of 
$188,000 was received for the exercise of stock options.      

                                       -15-

<PAGE>


During fiscal 1998, the Company anticipates needing less than $2,000,000 in 
cash for capital expenditures.  The Company may also need cash as it 
considers acquiring additional businesses that complement its existing 
operations.  Also, the Company will require additional investments in working 
capital to maintain growth and to fund certain obligations related to its 
discontinued operations. In addition, the Company may need funds to 
repurchase its own stock from time to time.  These expenditures will be 
financed either through the Company's invested cash, cash generated from its 
operations, or from borrowings available under the Company's revolving credit 
facility.  The Company believes its existing cash, cash generated from 
operations and funds available under its existing credit facility are 
sufficient for all planned operating and capital requirements.

Item 8.  Financial Statements and Supplementary Data
----------------------------------------------------


Report of Independent Accountants


To the Shareholders and the Board of Directors
of Quixote Corporation

We have audited the consolidated balance sheets of Quixote Corporation and 
Subsidiaries as of June 30, 1997 and 1996, and the related consolidated 
statements of income, shareholders' equity and cash flows for each of the 
three years in the period ended June 30, 1997.  We have also audited the 
financial statement schedule listed in Park IV of Form 10-K, Item 14(a)2 for 
each of the three years in the period ended June 30, 1997.  These financial 
statements and financial statement schedule are the responsibility of the 
Company's management. Our responsibility is to express an opinion on these 
financial statements and financial statement schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Quixote 
Corporation and Subsidiaries as of June 30, 1997 and 1996, and the 
consolidated results of their operations and their cash flows for each of the 
three years in the period ended June 30, 1997 in conformity with generally 
accepted accounting principles.  In addition, in our opinion, the financial 
statement schedule referred to above, when considered in relation to the 
basic financial statements taken as a whole, present fairly, in all material 
respects, the information required to be included therein.

/s/Coopers & Lybrand L.L.P.

Chicago, Illinois
August 8, 1997


                                       -16-

<PAGE>


CONSOLIDATED STATEMENTS OF OPERATIONS

Dollar amounts in thousands, except per share data

For each of the three years ended June 30,         1997       1996        1995
------------------------------------------    ---------  ---------  ----------
Net sales.................................    $  45,037  $  46,750  $   46,522
Cost of sales.............................       22,788     22,459      23,140
                                              ---------  ---------  ---------- 
Gross profit..............................       22,249     24,291      23,382
Operating expenses:
  Selling and administrative..............       14,264     15,059      13,662
  Research and development................        2,209      1,536       1,545
                                              ---------  ---------  ----------
                                                 16,473     16,595      15,207
                                              ---------  ---------  ----------
Operating profit..........................        5,776      7,696       8,175

Other income (expense):
  Interest income.........................          339        358         392
  Interest expense........................         (497)    (1,726)     (1,976)
  Gain on sales of assets.................                   1,634
  Loss on investment in FIP joint venture        (1,402)      (300)
  Other...................................         (552)      (454)       (303)
                                              ---------  ---------  ----------
                                                 (2,112)      (488)     (1,887)
                                              ---------  ---------  ----------
Earnings from continuing operations 
  before provision for income taxes.......        3,664      7,208       6,288
Provision for income taxes................          757      2,818       1,818
                                              ---------  ---------  ----------
Earnings from continuing operations.......        2,907      4,390       4,470
Discontinued operations:
  (Loss) earnings from operations,
     net of income taxes..................       (2,231)    (3,369)      1,480
    Loss on disposal, net of income taxes        (4,507)   (10,913)
                                              ---------  ---------  ----------
  (Loss) earnings from discontinued 
     operations...........................       (6,738)   (14,282)      1,480
                                              ---------  ---------  ----------
Net (loss) earnings.......................    $  (3,831) $  (9,892) $    5,950
                                              =========  =========  ==========

Primary earnings per share:
     Earnings from continuing operations..    $     .36  $     .55      $  .55
                                              =========  =========  ==========
     Net (loss) earnings..................    $   (.48)  $   (1.24)     $  .73
                                              =========  =========  ========== 
     Weighted average common and
       common equivalent shares outstanding  8,008,893   8,003,924   8,100,385
                                             =========   =========  ==========


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.

                                       -17-

<PAGE>

CONSOLIDATED BALANCE SHEETS
                                                            As of June 30,

Dollar amounts in thousands, except per share data            1997        1996
                                                         ---------   ---------
ASSETS
Current assets:
  Cash and cash equivalents......................        $  18,463     $ 1,337
  Accounts receivable, net of allowance for doubtful
    accounts of $165 in 1997 and 1996............            8,494       9,042
  Refundable income taxes........................            1,329       3,016
  Inventories....................................            4,224       3,356
  Deferred income tax assets.....................              887
  Other current assets...........................              241         490
                                                         ---------   ---------
    Total current assets.........................           33,638      17,241

Property, plant and equipment at cost:
  Land...........................................            1,215       1,215
  Buildings and improvements.....................            8,691       8,562
  Machinery and equipment........................            8,118       8,219
  Furniture and fixtures.........................            2,812       2,659
  Leasehold improvements.........................              519         493
                                                         ---------   ---------
                                                            21,355      21,148
    Less: accumulated depreciation and amortization         (8,452)     (8,035)
                                                         ---------   ---------
                                                            12,903      13,113

Other assets.....................................            2,765       3,158
Assets of discontinued operations................            5,914      85,376
                                                         ---------   ---------
                                                         $  55,220   $ 118,888
                                                         =========   =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable...............................           $1,743      $1,006
  Dividends payable..............................            1,039         946
  Accrued expenses:
    Payroll and commissions......................            1,366       1,466
    Other........................................            2,802       2,524
  Liabilities of discontinued operations.........            6,049       7,244
                                                         ---------   ---------
    Total current liabilities....................           12,999      13,186

Long-term debt...................................                       58,000
Deferred income tax liabilities..................              566          83
Commitments and contingent liabilities...........
Shareholders' equity:
  Preferred stock, no par value; 
     authorized 100,000 shares; none issued
  Common stock, par value $.01-2/3; authorized 
     15,000,000 shares; issued  8,753,333
     shares - 1997 and 8,671,101 shares - 1996...              146         145
  Capital in excess of par value of stock........           30,269      29,751
  Retained earnings..............................           17,368      23,196
  Treasury stock, at cost, 807,435 shares -
     1997 and 718,921 shares - 1996..............           (6,128)     (5,473)
                                                         ---------   ---------
     Total shareholders' equity..................           41,655      47,619
                                                         ---------   ---------
                                                         $  55,220  $  118,888
                                                         =========  ==========

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.

                                       -18-

<PAGE>

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                             For the three years ended June 30, 1997
<S>                                                                 <C>             <C>                  <C>           <C>
                                                                                    Capital in
                                                                      Common        Excess of Par        Retained      Treasury
                                                                      Stock         Value of Stock       Earnings      Stock
                                                                    ---------       --------------       ---------     ---------

Dollar amounts in thousands, except per share data:


BALANCES, JULY 1, 1994.....................................           $ 142             $28,551          $  30,749     $ (5,373)
Exercise of options for 41,922 common shares...............                                 285
Net earnings - 1995........................................                                                  5,950
Declaration of semiannual cash dividends
  ($.11 per share each)....................................                                                 (1,722)
Issuance of 34,679 shares pursuant
  to the stock retirement plan.............................               1                 432
Purchase of 6,661 common shares at $15.01 
  per share................................................                                                                (100)
                                                                    ---------       --------------       ---------     ---------
BALANCES, JUNE 30, 1995....................................             143              29,268             34,977       (5,473)
Exercise of options for 55,006 common shares...............               1                 250
Net loss - 1996............................................                                                 (9,892)
Declaration of semiannual cash dividends
  ($.12 per share each)....................................                                                 (1,889)
Issuance of 34,679 shares pursuant
  to the stock retirement plan.............................               1                 233
                                                                    ---------       --------------       ---------     ---------
BALANCES, JUNE 30, 1996....................................             145              29,751             23,196       (5,473)
Exercise of options for 39,847 common shares...............                                 188
Net loss - 1997............................................                                                 (3,831)
Declaration of semiannual cash dividends...................                                                 (1,997)
  ($.12 per share and $.13 per share)......................
Issuance of 42,385 shares pursuant
  to the stock retirement plan.............................               1                 330
Purchase of 88,514 common shares at
  $7.25 to $8.00 per share.................................                                                                (655)
                                                                    ---------       --------------       ---------     ---------
BALANCES, JUNE 30, 1997
8,753,333 common shares and 
  807,435 treasury shares.................................        $     146          $   30,269          $  17,368     $ (6,128)
                                                                    =========       ==============       =========     =========

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.

                                       -19-

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS


For each of the three years ended June 30,  

Dollar amounts in thousands                           1997      1996      1995
                                                 ----------   --------   -------

Earnings from continuing operations.........    $   2,907   $  2,574
Discontinued operations
  Loss from operations, net of income taxes        (2,231)    (1,553)
  Loss on disposal, net of income taxes            (4,507)   (10,913)
                                                ----------   --------   -------
Net (loss) earnings.........................       (3,831)    (9,892)   $ 5,950
ADJUSTMENTS TO RECONCILE NET (LOSS) EARNINGS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
  Depreciation and amortization.............        1,882     14,451     15,583
  Provision for losses on accounts receivable                    (71)       (27)
  Deferred income taxes.....................         (404)    (1,909)    (1,081)
  Changes in operating assets and liabilities:
     Accounts receivable....................          548      2,202        (68)
     Refundable income taxes................        1,687     (3,016)
     Inventories............................         (868)     1,448     (2,254)
     Other current assets...................          249     (1,505)      (528)
     Accounts payable and accrued expenses..          744     (1,769)     3,542
     Income taxes payable...................                  (4,110)       188
     Discontinued operations-noncash charges
      and working capital changes...........       (2,016)    18,348
  Loss on investment in the FIP joint venture       1,402        300
  Gain on sale of Quantic Industries, Inc...                  (1,287)
  Gain on sale of patent....................                    (347)
  Loss on sewer rehabilitation business.....                     601
                                                 ----------   --------  -------
     Net cash provided by (used in)
       operating activities.................         (607)    13,444     21,305
                                                 ----------   --------  -------

INVESTING ACTIVITIES:
  Purchase of property, plant and equipment        (1,321)   (24,419)   (38,415)
  Proceeds from sales of discontinued operations   80,283      5,981
  Investment in the FIP joint venture.......         (900)      (300)
  Proceeds from sale of investment in
    Quantic Industries, Inc.................                   8,050
  Proceeds from sale of patent..............                   1,960
  Capitalized and purchased systems,
    design and software costs...............                               (308)
  Decrease (increase) in funds deposited
    with IDB trustee........................                   2,719     (2,719)
  Cash paid for acquired businesses and
    equity investments......................                             (6,746)
  Other.....................................           41       (731)      (421)
                                                 ----------   --------  -------
    Net cash provided by (used in)
      investing activities                         78,103     (6,740)   (48,609)
                                                 ----------   --------  -------

FINANCING ACTIVITIES:
  Payments on revolving credit agreement....      (52,050)   (32,000)   (12,000)
  Proceeds from revolving credit agreement..       12,050     23,000     42,000
  Payments on convertible debentures........      (18,000)    (1,975)
  Proceeds from redemption of
    certificate of deposit..................                   6,000
  Payment of semi annual cash dividend......       (1,903)    (1,805)    (1,714)
  Proceeds from exercise of common stock options      188        251        285
  Repurchase of common stock for the treasury        (655)                 (100)
                                                 ----------   --------  -------
    Net cash provided by (used in)
      financing activities..................      (60,370)    (6,529)    28,471
                                                 ----------   --------  -------
Net change in cash and cash equivalents.....       17,126        175      1,167
Cash and cash equivalents at beginning of year      1,337      2,075      1,021
                                                 ----------   --------  -------
Cash and cash equivalents at end of year....    $  18,463    $ 2,250   $  2,188
                                                 ==========   ========  =======

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.

                                       -20-

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  NATURE OF BUSINESS

Quixote Corporation and its subsidiaries develop, manufacture and market 
energy-absorbing highway crash cushions and other highway safety products for 
the protection of motorists and highway workers to both domestic and 
international markets.  

2.  ACCOUNTING POLICIES

The principal accounting policies of the Company are as follows:

CONSOLIDATION

The consolidated financial statements include the accounts of Quixote
Corporation and its wholly-owned subsidiaries.

CASH AND CASH EQUIVALENTS

Cash in excess of operating requirements is invested in income-producing 
investments generally having initial maturities of three months or less.  
These investments are stated at market value.  The Company considers these 
short-term instruments to be cash equivalents.

Cash and cash equivalents in the consolidated statement of cash flows for 
1996 and 1995 includes cash related to discontinued operations.

INVENTORIES

Inventories are valued at the lower of cost (first-in, first-out method) or 
market.

PROPERTY, PLANT AND EQUIPMENT

The Company capitalizes expenditures for major renewals and betterments and 
charges current operations with the cost of maintenance and repairs.  
Provisions for depreciation and amortization have been computed on the 
straight-line method based on the expected useful lives of the assets as 
indicated below:

    Buildings and improvements              10 to 40 years
    Machinery and equipment                  3 to 12 years
    Furniture and fixtures                   3 to 10 years
    Leasehold improvements                   5 to 10 years

The cost and accumulated depreciation and amortization relating to assets 
retired or otherwise disposed of are eliminated from the respective accounts 
at the time of retirement or other disposition with the gain or loss credited 
or charged to earnings.

GOODWILL AND PATENTS

Goodwill and patents are amortized on a straight-line basis over lives of 7 
to 20 years.  The Company assesses at each balance sheet date whether there 
has been a permanent impairment in the value of these assets.  Such 
assessment includes consideration of possible obsolescence, demand, new 
technology, competition, and other pertinent economic factors and trends that 
may have an impact on the value or remaining lives of these assets.

INCOME TAXES

The Company recognizes deferred tax assets and liabilities for the expected 
future tax consequences of events that have been included in the financial 
statements or tax returns. Under this method, deferred tax assets and 
liabilities are determined based on the difference between the financial 
statement and tax bases of assets and liabilities using enacted tax rates in 
effect for the year in which the differences are expected to reverse.

                                       -21-

<PAGE>

In addition, the amount of any future tax benefits are reduced by a valuation 
allowance to the extent such benefits are not expected to be fully realized.

MANAGEMENT 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 the disclosure 
of contingent assets and liabilities at the date of the financial statements. 
Management's estimates also affect the reported amounts of revenues and 
expenses during the reporting period.  Actual results could differ from those 
estimates.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 1997, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standards No. 128, Earnings per Share (FAS 
128), which specifies the computation, presentation, and disclosure 
requirements for earnings per share in order to simplify the computation of 
earnings per share.  FAS 128 is effective for financial statements ending 
after December 15, 1997 and earlier application is not permitted.  After the 
effective date, all prior period earnings per share data shall be restated to 
conform with the provisions of FAS 128.  The adoption of FAS 128 is not 
expected to have a material impact on the Company's earnings per share data.

Statement of Financial Accounting Standards No. 129, Disclosure of 
Information about Capital Structure, (FAS 129), was also issued in February 
1997 and is effective for periods ending after December 15, 1997.  This 
statement establishes standards for disclosing information about an entity's 
capital structure by superseding and consolidating previously issued 
accounting standards.  The financial statements of the Company are prepared 
in accordance with the requirements of FAS 129.

In June 1997, the FASB issued FAS 130, Reporting Comprehensive Income.  This 
statement, effective for fiscal years beginning after December 15, 1997, 
would require the Company to report components of comprehensive income in a 
financial statement that is displayed with the same prominence as other 
financial statements.  Comprehensive income is defined by Concepts Statement 
No. 6, Elements of Financial Statements, as the change in equity of a 
business enterprise during a period from transactions and other events and 
circumstances from nonowner sources.  It includes all changes in equity 
during a period except those resulting from investments by owners and 
distributions to owners.  The Company has not yet determined its 
comprehensive income.  

Also in June 1997, the FASB issued FAS 131, Disclosures about Segments of an 
Enterprise and Related Information.  This statement, effective for financial 
statements for periods beginning after December 15, 1997, requires that a 
public business enterprise report financial and descriptive information about 
its reportable operating segments.  Generally, financial information is 
required to be reported on the basis that it is used internally for 
evaluating segment performance and deciding how to allocate resources to 
segments.  The Company is evaluating the effects of this pronouncement.

RECLASSIFICATIONS

Certain amounts for the years ended June 30, 1996 and 1995 were reclassified 
to conform to the current year presentation.  These reclassifications did not 
affect net income.

3.  ACQUISITIONS, DISPOSITIONS AND DISCONTINUED OPERATIONS

In March 1997, the Company sold substantially all of the assets and 
transferred significant operating liabilities of Disc Manufacturing, Inc. 
(DMI) to Cinram Ltd. for $80,283,000 in cash.  The transaction excluded DMI's 
Huntsville, Alabama land and building as well as certain DMI litigation.  The 
sale, approved by the Company's shareholders, resulted in a loss of 
$4,507,000 which was net of income tax benefits of $3,004,000.  In connection 
with the sale, stock and cash awards of approximately $1,200,000 were made to 
certain employees of the Company.

                                       -22-

<PAGE>

During 1996, the Company discontinued the operations of its legal 
technologies businesses, which had been involved in the development, 
manufacture and sale of products and systems for the legal community.  Under 
multiple arrangements the Company sold certain assets and liabilities for an 
aggregate sales price of $5,981,000.  The loss on disposal of $10,913,000 is 
net of income tax benefits of $7,275,000. 

The accompanying consolidated balance sheets and consolidated statements of 
operations have been restated in order to present the compact disc and legal 
technologies segments as discontinued operations for accounting purposes.  As 
part of this restatement, interest expense was allocated between continuing 
and discontinued operations based upon the net assets of each.  

The income tax provisions (benefits) for the results of discontinued 
operations for the years  ended 1997, 1996 and 1995 are ($957,000), 
($2,613,000) and $1,407,000, respectively.  Net sales for the discontinued 
businesses were $66,206,000 (1997), $109,919,000 (1996) and $138,889,000 
(1995).

As of June 30, 1997, the following assets and (liabilities) relate to
discontinued operations:
   
Dollar amounts in thousands

       Land and building (net)             $ 7,501 
       Deferred income taxes                 4,073 
       Accrued legal and accounting         (5,320)
       Lease obligations                    (2,590)
       Accrued royalties                      (848)
       Severance                              (280)
       Other accruals                       (2,671)
                                          --------
       Net liabilities of discontinued 
         operations                        $  (135)
                                          ========

These remaining assets and liabilities are valued based upon management's 
estimates, utilizing currently available information as of the balance sheet 
date.  It is reasonably possible, however, that these estimates could change 
materially.

During 1996; Energy Absorption entered into a joint venture with FIP 
Industriale S.p.A. of Italy to market their seismic bridge bearings in the 
United States. The Company, accounting for this investment under the equity 
method of accounting, took charges of $1,402,000 and $300,000 for 1997 and 
1996 respectively.  In June 1997 the Company decided to wind down the 
activities of the joint venture due to the lack of revenues and progress to 
date.  The 1997 charge includes $502,000 in accrued costs to exit this 
venture.

In January 1996, the Company sold to Barrier Systems, Inc. certain patents 
related to its movable traffic barrier system.  The sale price of $1,960,000 
resulted in a gain of $347,000 which is included in other income for 1996.

In April 1995 the Company acquired a 40% common stock interest in Quantic 
Industries, Inc. for $6.7 million including expenses.  The investment in 
Quantic, a manufacturer of electronic and pyrotechnic devices, was accounted 
for under the equity method of accounting.  In May 1996 the Company agreed to 
sell its 40% interest to the majority shareholders in Quantic for $8,050,000 
cash.  A gain of $1,287,000 was realized on the sale and is included in other 
income for 1996.

                                       -23-

<PAGE>


4.  INVENTORIES

Inventories consist of the following at June 30:

Dollar amounts in thousands                   1997           1996
                                          --------       --------
Finished Goods                            $    832       $    713
Work-in-process                                978            627
Raw materials                                2,414          2,016
                                         ---------      ---------
                                         $   4,224      $   3,356
                                         =========      =========

5. LONG-TERM DEBT

Long-term debt consists of the following at June 30:

Dollar amounts in thousands                   1997           1996
                                          --------       --------
Revolving credit note due October 31,
  2000, interest at variable rates        $      0       $ 40,000
  8% Convertible subordinated
  debentures due 2011, interest due
  semiannually, principal payable in
  annual sinking fund installments
  of $1,000                                      0         18,000
                                          --------       --------
Total long-term debt                      $      0       $ 58,000
                                          ========       ========

The Company has a three-year unsecured revolving credit agreement with three 
banks.  The agreement provides for a $40 million credit facility and contains 
both fixed and floating interest rate options, at the prime rate or lower, 
and contains affirmative and negative covenants including requirements that 
the Company maintain certain financial ratios and be profitable from 
continuing operations each year.  The agreement may be extended one 
additional year on each anniversary date upon mutual consent of the Company 
and the banks.

At any time during the three years, the Company may elect to 
convert the loan to a four year term with equal quarterly principal payments 
due throughout the term to amortize the loan in full.

In April 1997, the Company redeemed its convertible subordinated debentures 
at face value plus accrued interest.  The debentures were convertible by the 
holders at any time prior to maturity into shares of common stock of the 
Company at a conversion price of $19.00 per share.  Unamortized costs 
incurred in issuing the debentures at June 30, 1996 were $464,000 and are 
included in other assets.   The fair value of the debentures outstanding at 
June 30, 1996 is estimated to be $15,840,000 using available market 
information at that time.

During 1996 the Company satisfied its sinking fund requirements for both 1996 
and 1997 through the purchase of its debentures on the open market.  The  
gain of $257,000 is included in other income in 1996.

6.  STOCK OPTIONS AND STOCK TRANSACTIONS

The Company has stock option plans for directors and employees providing for 
grants of options as may be determined by the Audit/Compensation Committee of 
the Board of Directors.  Options under the Long-Term Stock Ownership 
Incentive Plan and the Director Stock Option Plan are to be granted at no 
less than 100% of the current market price at the date of the grant.  No 
charges are made to earnings in connection with the options.

                                       -24-

<PAGE>


Information for the year ended June 30, 1997 with respect to options under 
the Company's plans is as follows:

                                         Number of         Option Price
                                         Shares              per Share
                                         ---------    -----------------
Shares under option:
July 1, 1996                               897,949     $ 4.25 to $ 21.00
Granted                                    137,000                  9.00
Exercised                                 ( 54,500)      4.25 to    6.88
Cancelled or expired                      (108,175)      4.25 to   12.63
                                         ---------
June 30, 1997                              872,274     $ 4.25 to $ 21.00
                                         =========

Options outstanding at June 30, 1997 are all currently exercisable.  As of 
June 30, 1997, the Company has 968,090 common shares reserved for various 
conversion privileges and options.

During 1997, the Company was required to adopt Statement of Financial 
Accounting Standards No. 123, Accounting for Stock-Based Compensation (FAS 
123), which encourages entities to adopt a fair value based method of 
accounting for stock based compensation plans in place of the provisions of 
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to 
Employees (APB 25), for all arrangements under which employees receive shares 
of stock or other equity instruments of the employer.

As allowed by FAS 123, the Company will continue to apply the provisions of 
APB 25 in accounting for its stock-based employee compensation arrangements, 
and will disclose the pro forma net loss and loss per share information in 
its footnotes as if the fair value method suggested in FAS 123 had been 
applied.

The Company recognizes compensation cost for stock-based compensation 
arrangements equal to the difference between the quoted market price of the 
stock option at the date of grant and the price to be paid by the employee 
upon exercise in accordance with the provisions of APB 25.  Based upon the 
terms of Company's current stock option plans, the stock price on the date of 
grant and price paid upon exercise are the same, thus no compensation charge 
is required to be recognized.

Had compensation cost for the Company's Stock Option Plans been determined 
based on the fair value at grant date for awards in 1997 and 1996 consistent 
with the provisions of FAS 123, the Company's net loss and loss per share 
would have been increased to the pro forma amounts indicated below:

Dollar amounts in thousands
  except per share data                      1997           1996
                                           --------        --------
    Net loss, as reported                  $ (3,831)       $ (9,892)
    Net loss, pro forma                    $ (4,872)       $ (9,951)
    Loss per common share, as reported     $ (  .48)       $ ( 1.24)
    Loss per common  share, pro forma      $ (  .61)       $ ( 1.24)

The fair value of each option grant is estimated on the date of grant using 
the Black-Scholes option-pricing model with the following weighted-average 
assumptions used for grants in 1997: dividend yield of 1.65%; expected 
volatility of 52%; risk-free interest rate of 6.12%; and expected life of 4.2 
years.

The weighted average fair value of options granted in 1997 is $3.15 per 
share. The weighted average exercise price of the options outstanding is    
$10.34 and the weighted average remaining contractual life of those options 
is 3.6 years.

                               -25-
<PAGE>


7.  SHAREHOLDER RIGHTS PLAN

The Company has a Shareholder Rights Plan (the Plan) which was established to
deter coercive takeover tactics and to prevent an acquiror from gaining control
of the Company without offering a fair price to all of the Company's
stockholders.  The Plan calls for stockholders of record on July 25, 1988 to
receive a dividend distribution of one right for each outstanding share of the
Company's common stock.  Each share issued after that date is also granted a
right.  Each right entitles the holder, upon the occurrence of certain events,
to purchase a unit consisting of one one-thousandth of a share of Series A
Junior Participating Preferred Stock, no par value, for $25 per unit.  In
addition, if an acquiring person becomes the beneficial owner of more than 20
percent of the Company's outstanding common stock, each right will entitle the
holder (other than such acquiring person) to receive, upon exercise, common
stock of the Company having a value equal to two times the exercise price of the
right or $50.

If an acquiring person becomes the beneficial holder of more than 20 percent of
the Company's outstanding common stock, and then the Company is acquired in a
merger or other business combination in which the Company would not be the
surviving corporation or 50% or more of the Company's assets or earning power is
sold, each holder shall have the right to receive, upon exercise, common stock
of the acquiring corporation having a value equal to two times the exercise
price of the right or $50.  The Company may redeem the rights, for $.01 per
right, under certain circumstances.

8.  STOCK RETIREMENT PLAN

The Company's Long-Term Stock Ownership Incentive Plan contains a provision for
a retirement stock award program for certain key executives of the Company.  The
award consists of shares of the Company's common stock and cash ending with the
fiscal year in which the executive attains his or her 62nd birthday.  In order
to receive each year's stock award, the executive must remain employed with the
Company through the end of the fiscal year, unless excused by reason of death or
other involuntary termination.  Participants are also required to retain the
shares awarded for as long as they are employed by the Company or until age 65. 
The size of each participant's annual award is determined under accepted
actuarial principles to provide a retirement income based upon a percentage of
the executive's projected compensation and length of service at retirement, but
only if the Company's stock price appreciates at a sustained target rate.  The
Plan resulted in a charge to earnings of $561,000 (1997),  $463,000 (1996) and
$766,000 (1995).

9.  INCOME TAXES

The income tax provisions (benefits) from continuing operations are comprised of
the following for the three years ended June 30:

Dollar amounts in thousands                         1997       1996      1995
                                                  -------     -------   -------
Current:
Federal                                           $   496     $ 2,660   $ 1,750
State                                                 665         850       294
                                                 --------    --------   -------
                                                    1,161       3,510     2.044
                                                 --------    --------   -------
Deferred:
Federal                                               (26)       (536)     (175)
State                                                (378)       (156)      (51)
                                                 --------     --------  --------
                                                  $  (404)    $  (692)  $  (226)
                                                 --------     --------  --------

Income tax provision for continuing operations    $   757     $ 2,818   $ 1,818
                                                 --------     --------  --------
Income tax (benefit) provision from 
  discontinued operations                          (3,961)     (9,888)    1,407
                                                 --------     --------  --------
Total income tax (benefit) provision             $ (3,204)    $(7,070)  $ 3,225
                                                 ========     ========  ========

                                       -26-
<PAGE>
The components of the net deferred tax asset (liability) are as follows at June
30:

Dollar amounts in thousands                       1997        1996
                                                --------    --------
Deferred tax assets:
Accounts receivable allowance                   $     66    $     66
Inventory valuation                                  170         160 
Compensated absences and medical claims              130         374 
Tax over book basis in affiliates                  1,612       1,509 
Capital loss carryforwards                                       967 
Other liabilities and reserves                       879         641 
Net operating loss carryforwards                   2,527       2,951 
Various tax credit carryforwards                      12          30 
Contribution carryforwards                             9           9 
Provision for discontinued operations              4,064       2,589 
Valuation allowance                               (3,480)     (4,356)
                                                --------    --------
Total                                            $ 5,989     $ 4,940 
                                                ========    ========
Deferred tax liabilities:
Book over tax basis of capital assets            $ 1,595     $ 1,484 
                                                --------    --------
Net deferred tax asset                           $ 4,394     $ 3,456 
                                                ========    ========

The valuation allowance relates principally to deferred tax assets that the 
Company estimates may not be realizable, including portions of tax over book 
basis in affiliates, net operating loss carryforwards, and tax credit 
carryforwards.  The decrease in the valuation allowance is due principally to 
the expiration of unutilized net operating loss carryforwards and the 
utilization of capital loss carryforwards which previously were not expected 
to be realized.  The decrease was partially offset by an increase in the 
valuation allowance due to a reassessment of the realizability of certain net 
operating loss carryforwards as a result of the discontinued operations of 
the subsidiary which generated the net operating losses.

At June 30, 1997, certain subsidiaries of the Company have approximately 
$5,716,000 of federal and $337,500 of state net operating loss carryforwards 
for tax purposes substantially all of which arose in periods prior to 
acquisition by the Company.  Certain limitations on utilization are present 
and realization of a significant portion of the carryforwards is uncertain.  
These carryforwards expire in years from 1998 through 2005.

The net deferred tax asset (liability) is presented on the balance sheet as
follows at June 30:

Dollar amounts in thousands                              1997        1996 
                                                      --------    --------
Current deferred tax asset                            $   887             
Noncurrent deferred tax liability                        (566)    $   (83)
                                                      --------    --------
Net deferred tax asset (liability)  of continuing 
   operations                                             321         (83)
                                                      --------    --------
Current deferred tax asset of discontinued
  operations                                            2,458       
Noncurrent deferred tax asset of discontinued
  operations                                            1,615       3,539 
                                                      --------    --------
Net deferred tax asset of discontinued operations       4,073       3,539 
                                                      --------    --------
Net deferred tax asset                                $ 4,394     $ 3,456 
                                                      ========    ========

                                       -27-
<PAGE>

Income tax provisions differed from the taxes calculated at the statutory
federal tax rate as follows for the three years ended June 30:

Dollar amounts in thousands                   1997        1996       1995
                                            --------    --------    --------
 
Taxes at statutory rate                     $ 1,246     $ 2,451     $ 2,095 
State income taxes                              189         458         160 
Utilization of capital loss 
  carryforwards                                (822)       (561)   
Other                                           144         470        (437) 
                                            --------    --------    --------
Income tax  provision for          
  continuing operations:                    $   757     $ 2,818     $ 1,818 
                                            ========    ========    ========

10.  EARNINGS PER SHARE

Primary earnings per share are computed by dividing the net earnings for each 
period by the weighted average number of common and common equivalent shares 
outstanding.

For 1996 and 1995 fully diluted earnings per share is computed based on the 
assumption that all of the convertible debentures are converted into common 
shares.  Under this assumption, the weighted average number of shares is 
increased accordingly and net earnings is increased by the amount of interest 
expense and amortization of deferred debenture costs relating to the 
convertible debentures, less income tax benefits.  

11.  COMMITMENTS AND CONTINGENT LIABILITIES

Aggregate rental expense under operating leases, principally for office and 
manufacturing facilities used in continuing operations was $450,000 in 1997, 
$504,000 in 1996 and $469,000 in 1995.  These operating leases include 
options for renewal.  Annual minimum future rentals for lease commitments 
related to continuing operations range from approximately $480,000 in 1998 to 
$300,000 in 2002, an aggregate of $1,842,000 through 2002.

The Company has employment agreements with certain executives, which are 
designed to retain the services of key employees and to provide for 
continuity of management in the event of an actual or threatened change in 
control of the Company.  Upon occurrence of a triggering event after a change 
in control, as defined, the Company would be liable for payment of benefits 
under these agreements.

In 1990, Disc Manufacturing, Inc. (DMI), a discontinued operation, and the 
Company filed lawsuits in the federal and state courts in Alabama against the 
Disctronics Group, the former owners of DMI, relating to DMI's 
misappropriated corporate opportunity to acquire Memory Tech, a competing 
compact disc manufacturer located in Plano, Texas, and certain trademark 
infringement claims. In response to the two Alabama suits, the Disctronics 
Group filed counterclaims alleging breach of contract, economic duress, 
fraud, unfair competition and seizure of corporate opportunity, among others. 
In 1990, the Alabama state court issued a preliminary injunction in favor 
of the Company and DMI, precluding the Disctronics Group from transferring 
any interest in Memory Tech and other restrictions.  In connection with this 
injunction, the Company and DMI were required to post a $6,000,000 
certificate of deposit as injunction security.  The state court subsequently 
approved DMI's substitution of a $6,000,000 surety bond backed by a 
$2,000,000 letter of credit to replace the certificate of deposit.

In May 1992, the Alabama Supreme Court reversed the judge's 1990 order 
granting preliminary injunction.  In April 1993, the Company amended its 
complaint to add claims for unjust enrichment, fraud and tortious 
interference, which the defendants moved to dismiss.

In a May 1995 order, the court dismissed many of the defendants' and the 
Company's claims and the parties appealed.  In September 1996, the Alabama 
Supreme Court issued its opinion, reinstating all of DMI's claims which had 
been dismissed except the corporate opportunity to acquire Memory-Tech, Inc. 
and unjust enrichment claims.  The Supreme Court also upheld the dismissal of 
all of the claims of the Disctronics Group except a claim 

                                       -28-
<PAGE>

related to the use of the name "Disctronics".  Petitions for rehearing were 
denied and the decision is now final.  The Disctronics Group has filed an 
amended counterclaim, certain claims of which DMI has moved to dismiss.   
Court-appointed mediation has not been successful.

Several companies holding patents related to optical disc technology have 
contacted the Company to request that DMI enter into licensing arrangements 
with them, and two companies have filed suits against DMI for patent 
infringement in Delaware federal court.  In one of the cases, a federal jury 
ruled that the plaintiff's patents were invalid and the plaintiffs have 
appealed.  In the other case, DMI filed a lawsuit against the plaintiff for 
antitrust violations and DMI's lawsuit has been consolidated with the 
plaintiff's patent case for all purposes.  Trial is scheduled to begin in 
October 1997.  Royalties requested by the patent holders could result in a 
significant cost to the Company.

In September 1990, DMI was sued by a customer  that claimed DMI failed to 
produce certain video discs on schedule, thereby injuring its business.  
After a trial, on August 25, 1992, the jury awarded the plaintiff $975,000 in 
damages. In October 1992, the court granted DMI's motion for a new trial 
which was subsequently affirmed by the appellate court.  Trial is scheduled 
to begin in February 1998.

Stenograph Corporation, a discontinued operation, and a number of 
manufacturers of keyboards and related equipment have been sued by 
individuals for repetitive stress injuries.  The 30 cases against Stenograph, 
and in some cases the Company, request damages ranging from $500,000 to 
$1,000,000, and in most cases, punitive damages, with some plaintiffs 
claiming an amount of $10,000,000.  Of the 30 cases, six were dismissed in 
April 1997 after a jury verdict in favor of Stenograph and an appeal is 
pending.  In addition, six cases have been dismissed with prejudice and ten 
cases have been dismissed without prejudice to refile the complaints.  All 
cases have been referred to the Company's insurance carriers and the Company 
believes that any liability (excluding punitive damages and deductibles in 
certain years) will be covered under its insurance policies.  The Company 
does not believe there are grounds for the imposition of punitive damages and 
intends to vigorously defend all claims.

The Company is involved in these and other legal actions common to its 
businesses.  The Company has recorded loss contingencies where appropriate 
within the guidelines established by Statement of Financial Accounting 
Standards No. 5 Accounting for Contingencies.  The Company believes it has 
defenses for all such claims and is vigorously defending the actions.  In the 
opinion of management, based on the advice of legal counsel, liabilities, if 
any, arising from these legal actions should not have a material effect on 
the Company's results of operations or financial condition. 

12.  SUPPLEMENTAL CASH FLOW STATEMENT DISCLOSURES

Cash paid for interest was $3,825,000 (1997), $6,105,000 (1996) and 
$4,015,000 (1995).  The Company received a refund from income taxes of 
$3,954,000 in 1997. Cash paid for income taxes was $1,495,000 (1996) and 
$4,116,000 (1995).
    
13.  INDUSTRY SEGMENT INFORMATION

The Company's operations consist of one industry segment:  the manufacture 
and sale of highway safety products.  Substantially all the sales of highway 
safety devices are to contractors, or to federal, state and local 
governmental units, either direct or through distributors.

                                       -29-
<PAGE>

14.  QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for years 1997 and 1996 follows:

<TABLE>
<CAPTION>

                                                                             Three months Ended 1997,
Dollar amounts in thousands, except per share data                     9/30           12/31          3/31           6/30
                                                                    ----------     ----------     ----------     ----------
<S>                                                                 <C>            <C>            <C>            <C>
Net sales                                                           $  11,096      $   9,195      $  10,268      $  14,478
Gross profit                                                            5,594          4,311          4,797          7,547
Earnings (loss) from continuing operations                                691           (301)           189          2,328
Earnings (loss) from discontinued operations                              105          1,340         (8,183)
                                                                    ---------      ---------      ---------      ---------
Net earnings (loss)                                                 $     796      $   1,039      $  (7,994)     $   2,328
                                                                    ---------      ---------      ---------      ---------
Primary earnings (loss) per share:
  Continuing operations                                             $     .09      $    (.04)     $     .02      $     .29
                                                                    ---------      ---------      ---------      ---------
  Net earnings (loss)                                               $     .10      $     .13      $   (1.00)     $     .29
                                                                    ---------      ---------      ---------      ---------
Fully diluted earnings (loss) per share: 
  Continuing operations                                             $     .08      $    (.04)     $     .02      $     .29
                                                                    ---------      ---------      ---------      ---------
  Net earnings (loss)                                               $     .10      $     .13      $   (1.00)     $     .29
                                                                    ---------      ---------      ---------      ---------


                                                                             Three months Ended 1996,
Dollar amounts in thousands, except per share data                     9/30           12/31          3/31           6/30
                                                                    ----------     ----------     ----------     ---------

1996
Net sales                                                           $  12,214      $  10,074      $  10,953      $  13,509
Gross profit                                                            6,376          4,740          5,777          7,398
Earnings from continuing operations                                     1,080            228            538          2,544
Earnings (loss) from discontinued operations                          (11,642)            89         (2,339)          (390)
                                                                    ---------      ---------      ---------      ---------
Net earnings (loss)                                                 $ (10,562)     $     317      $  (1,801)     $   2,154
                                                                    ----------     ---------      ---------      ---------
Primary earnings (loss) per share:  
  Continuing operations                                             $     .13      $     .03      $     .07      $     .32
                                                                    ---------      ---------      ---------      ---------
  Net earnings (loss)                                               $   (1.32)     $     .04      $    (.23)     $     .27
                                                                    ---------      ---------      ---------      ---------
Fully diluted earnings (loss) per share:
  Continuing operations                                             $     .13      $     .03      $     .07      $     .29
                                                                    ---------      ---------      ---------      ---------
  Net earnings (loss)                                               $   (1.32)     $     .04      $    (.23)     $     .26
                                                                    ---------      ---------      ---------      ---------
</TABLE>


Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial
---------------------------------------------------------------------------
Disclosures
-----------

None.

                                       -30-
<PAGE>

                                     PART III

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

Some of the information required in response to this item regarding Directors 
of the Registrant is set forth under "Election of Directors" on pages 2 and 3 
of the Registrant's Definitive Proxy Statement for the Annual Meeting of 
Stockholders to be held on November 19, 1997 to be filed with the Commission 
on or about September 29, 1997 and is incorporated herein by reference.

The executive officers of the Company, their ages and offices held by each 
during fiscal 1997 are as follows:

Philip E. Rollhaus, Jr.    62     Chairman, Chief Executive Officer & 
                                  Director - Quixote Corporation
                                  Chairman, Energy Absorption Systems, Inc.
Leslie J. Jezuit           51     President, Chief Operating Officer & 
                                  Director - Quixote Corporation,
                                  Vice Chairman - Energy Absorption 
                                  Systems, Inc.
Daniel P. Gorey            46     Vice President, Chief Financial Officer &
                                  Treasurer - Quixote Corporation
Joan R. Riley              44     General Counsel & Secretary - Quixote
                                  Corporation 
George D. Ebersole         61     President, Energy Absorption Systems, Inc.

Mr. Rollhaus has been the Chairman and Chief Executive Officer and a Director of
the Company since its formation in July 1969.

Mr. Jezuit joined the Company as President and Chief Operating Officer of
Quixote Corporation in 1996.  Prior to that time, Mr. Jezuit served as President
and Chief Operating Officer of RobertShaw Controls Company.

Mr. Gorey joined the Company as Manager of Corporate Accounting in July 1985. 
He was made Controller of the Company in 1987, elected Vice President in 
1994, and was elected Chief Financial Officer and Treasurer 
in November 1996.

Ms. Riley joined the Company as Assistant General Counsel and Assistant
Secretary in 1991 and was elected General Counsel and Secretary in 1997.

Mr. Ebersole joined the Company as President of Energy Absorption Systems, Inc.
in 1980.

There is no family relationship between any of the officers described above.

Except as set forth in Item 3, none of the officers described above are party or
otherwise involved in any legal proceedings adverse to the Company or its
subsidiaries.


Item 11.  Executive Compensation
--------------------------------

The information required in response to this item is set forth under the caption
"Remuneration of Directors and Executive Officers" of the Registrant's
Definitive Proxy Statement for the Annual Meeting of Stockholders to be held on
November 19, 1997 to be filed with the Commission on or about September 29, 1997
and is incorporated herein by reference.


Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

The information required in response to this item is set forth under the caption
"Stock Ownership by Certain Beneficial Owners" of the Registrant's Definitive
Proxy Statement for the Annual Meeting of Stockholders to be held on November
19, 1997 to be filed with the Commission on or about September 29, 1997 and is
incorporated herein by reference.

                                       -31-
<PAGE>

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

The information required in response to this item is set forth under the caption
"Certain Transactions and Business Relationships" of the Registrant's Definitive
Proxy Statement for the Annual Meeting of Stockholders to be held on November
19, 1997 to be filed with the Commission on or about September 29, 1997 and is
incorporated herein by reference.

                                       -32-
<PAGE>
                                    PART IV

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


Item                                                         Page Number in
Number                                                         This Report
------                                                       --------------

(a).1.      Financial Statements
            --------------------

            Report of Independent Accountants                      16

            Consolidated Statements of Operations for the
             years ended June 30, 1997, 1996 and 1995              17

            Consolidated  Balance Sheets as of June 30,
             1997 and 1996                                         18

            Consolidated Statements of Shareholders'
             Equity for the years ended June 30, 1997,
             1996 and 1995                                         19

            Consolidated Statements of Cash Flows for the
             years ended June 30, 1997, 1996 and 1995              20

            Notes to Consolidated Financial Statements          21-30



(a).2.      Financial Statement Schedule
            -----------------------------

The financial statement schedule listed under Item 14(d) is filed as part of
this annual report.  All other schedules have been omitted because the required
information is included in the consolidated financial statements or notes
thereto or because they are not applicable or not required.

(a).3.      The exhibits listed under Item 14(c) are filed as part of
            this annual report.

(b).        Reports on Form 8-K
            -------------------

On April 10, 1997, the Company filed a report on Form 8-K dated March 27, 1997,
reporting under "Item 2 Acquisition or Disposition of Assets", that the Company
had completed the sale of substantially all of the assets of Disc Manufacturing,
Inc. to Cinram Inc. and Cinram Ltd.  The Company received $80.3 million in cash
from the sale which was used to repay all of its $37.2 million of bank debt, to
redeem all of its 8% Convertible Subordinated Debentures and the related accrued
interest and to pay transaction costs.  The Company reported that the balance
would be used to invest in the highway safety and equipment business or in other
opportunities deemed beneficial to stockholders, including repurchase of a
portion of the Company's outstanding common stock.  Included in the Form 8-K
filing was the pro forma financial information required pursuant to Article 11
of regulation S-X in connection with the sale.

The report on Form 8-K also reported under "Item 5 Other Events", the Company's
exercise of its optional redemption rights to redeem on April 30, 1997 all of
its 8% Convertible Subordinated Debentures.  Also reported was the amendment of
the Company's banking arrangements, including the reduction of its borrowing
availability from $65 million to $40 million.

                                       -33-
<PAGE>
(c).        Exhibits
            --------

            *Management contract or compensatory plan or agreement
    3.(a)   Restated Certificate of Incorporation dated June 27, 1980;
            Certificate of Amendment to Certificate of Incorporation dated 
            November 17, 1981; Certificate of Amendment to Certificate of 
            Incorporation dated February 15, 1985; Certificate of Amendment 
            to Certificate of Incorporation dated February 25, 1986; and 
            Certificate of Designations, Preferences and Rights of Series A 
            Junior Participating Preferred Stock dated July 27, 1988, filed 
            as Exhibit 3(a) to the Company's Form 10-K Report for the fiscal
            year ended June 30, 1991, File No. 0-7903, and incorporated herein
            by reference.

      (b)   Restated By-Laws of the Company as amended through January 23, 1996,
            filed as Exhibit 3(b) to the Company's Form 10-Q Report for the 
            quarter ended March 31, 1996, File No. 0-7903, and incorporated 
            herein by reference.

   4. (a)   Rights Agreement dated as of July 15, 1988, between the
            Company and First National Bank of Boston, as Rights Agent, filed as
            Exhibit 1 to the Company's Form 8-A Registration Statement dated
            July 25, 1988, File No. 0-7903, and incorporated herein by
            reference.

   10.(a)   Loan Agreement ("Loan Agreement") dated as of June 26, 1992 among
            the Company, Energy Absorption Systems, Inc. ("Energy"), Disc
            Manufacturing, Inc. ("DMI"), Stenograph Corporation ("Stenograph"),
            The Northern Trust Company ("Northern"), NBD Bank, N.A. ("NBD") 
            and LaSalle National Bank ("LaSalle") and First Amendment thereto
            dated as of June 30, 1992, filed as Exhibit 10(a) to the Company's
            Form 10-K Report for the fiscal year ended June 30, 1992, file 
            No. 0-7903, and incorporated herein by reference; Second Amendment 
            to Loan Agreement dated as of May 28, 1993 and Third Amendment to 
            Loan Agreement dated as of June 26, 1993, filed as Exhibit 10(a) to
            the Company's Form 10-K Report for the fiscal year ended June 30, 
            1993, File No. 0-7903, and incorporated herein by reference; Fourth 
            Amendment to Loan Agreement dated as of May 31, 1994, filed as
            Exhibit 10(a), to the Company's Form 10-K Report for the fiscal year
            ended June 30, 1994, File No. 0-7903, and incorporated herein by 
            reference; Fifth Amendment to Loan Agreement dated as of December 1,
            1994, filed as Exhibit 10(a) to the Company's Form 10-Q for the 
            quarter ended December 31, 1994, File No. 0-7903, and incorporated 
            herein by reference; Sixth Amendment to Loan Agreement dated as of 
            April 3, 1995, filed as Exhibit 10(a) to the Company's Form 10-Q 
            Report for the quarter ended March 31, 1995, File No. 0-7903, and 
            incorporated herein by reference;  Seventh Amendment to Loan 
            Agreement dated as of November 10, 1995, filed as Exhibit 10(a) to
            the Company's Form 10-Q Report for the quarter ended December 31, 
            1995, File No. 0-7903, and incorporated herein by reference;  
            Eighth Amendment to Loan Agreement effective as of March 31, 1996, 
            filed as Exhibit 10(a) to the Company's Form 10-K Report for the 
            fiscal year ended June 30, 1996, File No.0-7903, and incorporated 
            herein by reference; Ninth Amendment to Loan Agreement dated 
            March 24, 1997, filed as Exhibit 2.2 to the Company's Form 8-K
            Report dated March 27, 1997, File No. 0-7903, and incorporated 
            herein by reference; Revolving Credit Notes dated as of March 31, 
            1996 from the Company and its subsidiaries to the Northern, NBD and
            LaSalle, filed as Exhibit 10(a) to the Company's Form 10-K Report 
            for the fiscal year ended June 30, 1996, File No. 0-7903, and 
            incorporated herein by reference.

      (b)*  Restated 1972 Director Stock Option Plan, as amended through
            June 3, 1988, filed as Exhibit 4.3 to the Company's S-8 Registration
            Statement No. 33-22289, and incorporated herein by reference;
            Amendment dated February 12, 1989 to the Restated Director Stock
            Option Plan, filed as Exhibit 10(d) to the Company's Form 10-K 
            Report for the fiscal year ended June 30, 1989, File No. 0-7903, and
            incorporated herein by reference.
    
      (c)*  1991 Director Stock Option Plan, as amended through August 28, 1997,
            filed herewith.

                                       -34-
<PAGE>

      (d)*  1993 Long-Term Stock Ownership Incentive Plan, as amended
            through August 28, 1997, filed herewith; Retirement Award
            Agreements for Philip E. Rollhaus, Jr., James H. DeVries, Myron
            R. Shain and George D. Ebersole, dated June 30, 1993 and as
            amended on August 23, 1996, filed as Exhibit 12(f) to the
            Company's Form 10-K Report for the fiscal year ended June 30,
            1996, File No. 0-7903 and incorporated herein by reference;
            Retirement Award Agreement dated as of June 30, 1997 between the
            Company and Daniel P. Gorey, filed herewith.

      (e)   Lease Agreement between the Company and United Insurance
            Company of America ("Company Lease") dated July 2, 1993, filed as
            Exhibit 10(j) to the Company's Form 10-K Report for the fiscal year
            ended June 30, 1993, File No. 0-7903, and incorporated herein by
            reference; Lease Amendment to Company Lease dated as of May 17, 
            1994, filed as Exhibit 10(h) to the Company's Form 10-K Report for 
            the fiscal year ended June 30, 1994, File No. 0-7903, and 
            incorporated herein by reference; Second Amendment to Company Lease
            dated January 30, 1995 and Third Amendment to Company Lease dated
            December 15, 1995, filed as Exhibits 10(b) and 10(c) to the 
            Company's Form 10-Q Report for the quarter ended December 31, 1995,
            File No. 0-7903, and incorporated herein by reference; Fourth 
            Amendment to Company Lease dated as of September 18, 1996 filed as
            Exhibit 10(b) to the Company's Form 10-Q Report for the quarter 
            ended December 31, 1996 and incorporated herein by reference; 
            Office Lease between Amberjack, Ltd. and Litigation Sciences, Inc.
            dated July 2, 1990, filed as Exhibit 10(a) to the Company's 
            Form 10-Q Report for the quarter ended December 31, 1993, 
            File No. 0-7903 and incorporated herein by reference; First 
            Amendment to Office Lease between Amberjack Ltd. and 
            Stenograph Corporation dated as of June 23, 1994, filed as 
            Exhibit 10(h) to the Company's Form 10-K Report for the fiscal year 
            ended June 30, 1994, File No. 0-7903, and incorporated herein by 
            reference; Promissory Note dated December 31, 1996 from Quixote 
            Steno Corporation and Quixote Corporation to Coventry Fund III, 
            Ltd., filed herewith.

      (f)*  Employment agreement ("Employment Agreement") dated as of June 24,
            1991 between the Company and Philip E. Rollhaus, Jr., filed as 
            Exhibit 10(k) to the Company's Form 10-K Report for the fiscal year
            ended June 30, 1991, File No. 0-7903, and incorporated herein by 
            reference; Amended Executive Employment Agreement dated November 14,
            1996 to Employment Agreement and Second Amendment to Employment 
            Agreement dated January 12, 1997, filed as Exhibit 10(a) to the 
            Company's form 10-Q Report for the quarter ended December 31, 1996,
            File No. 0-7903, and incorporated herein by reference; Key Employee
            Severance Agreement between the Company and George D. Ebersole and 
            Trust Agreement dated March 3, 1989 between the Company and The 
            Northern Trust Company, as trustee, filed as Exhibits 28.4 and 28.5,
            respectively, to the Company's Form 8-K Report dated April 14, 1989,
            and incorporated herein by reference; Amendment to Key Employee 
            Severance Agreement dated January 12, 1997 between the Company and 
            George D. Ebersole, filed as Exhibit 10 (a) to the Company's 
            Form 10-Q Report for the quarter ended December 31, 1996, 
            File No. 0-7903, and incorporated herein by reference; Amendment to
            Trust Agreement dated November 9, 1989, filed as Exhibit 10(j) to 
            the Company's Form 10-K Report for the fiscal year ended June 30,
            1990, File No. 0-7903, and incorporated herein by reference; 
            Amendment to Trust Agreement dated as of June 13, 1991, filed as 
            Exhibit 10(k) to the Company's Form 10-K Report for the
            fiscal year ended June 30, 1991, File No. 0-7903, and incorporated
            herein by reference; Letter Agreement dated December 15, 1995 
            between the Company and Leslie J. Jezuit, filed as Exhibit 10(d) to
            the Company's Form 10-Q Report for the quarter ended December 31, 
            1995, File No. 0-7903, and incorporated herein by reference; Key 
            Employee Severance Agreement dated as of April 30, 1996 between the
            Company and Leslie J. Jezuit, filed as Exhibit 10(a) to the 
            Company's Form 10-Q Report for the quarter ended March 31, 1996, 
            File No. 0-7903, and incorporated herein by reference; Amendment to
            Key Severance Agreement dated January 12, 1997 between the Company 
            and Leslie J. Jezuit, filed as Exhibit 10 (a) to the Company's 
            Form 10-Q Report for the quarter ended December 31, 1996, 

                                       -35-
<PAGE>

            File No. 0-7903, and incorporated herein by reference; Key Employee
            Severance Agreement dated February 17, 1989 and Amendment to Key 
            Employee Severance Agreement dated January 10, 1997 between the 
            Company and Daniel P. Gorey, filed as Exhibit 10 (a) to the 
            Company's Form 10-Q Report for the quarter ended December 31,
            1996, File No. 0-7903, and incorporated herein by reference; Letter
            Agreement dated January 13, 1997 between the Company and Myron R.
            Shain, filed as Exhibit 10 (a) to the Company's Form 10-Q Report for
            the quarter ended March 31, 1997; File No. 0-7903, and incorporated
            herein by reference; Letter Agreement dated August 12, 1997 between
            the Company and James H. DeVries, filed herewith.

      (g)   Summary Plan Description for the Incentive Savings Plan of
            the Company Amended and Restated to Reflect Provisions Effective 
            July 1, 1993, filed as Exhibit 10(j) to the Company's Form 10-K 
            Report for the fiscal year ended June 30, 1994, File No. 0-7903, 
            and incorporated herein by reference.

      (h)   Agreements between the Company, Philip E. Rollhaus, Jr. and Yukio
            Endo dated May 5, 1986, filed as Exhibit 10(a) to the Company's 
            Form 10-Q Report for the quarter ended March 31, 1986, 
            File No. 0-7903, and incorporated herein by reference.
    
      (i)   Agreement for Purchase and Sale dated February 13, 1996 between
            Stenograph Acquisition Corp., IIS Acquisition Corp., Pettibone 
            Corp., and Quixote Corporation, Stenograph Corporation, 
            Legal Technologies, Inc., Legal Technologies Limited and 
            Integrated Information Services filed as Exhibit 2.1 to the 
            Company's 8-K Report dated March 4, 1996, File No. 0-7903, and
            incorporated herein by reference.

      (j)   Agreement for Purchase and Sale dated January 25, 1996 between
            Stenograph Corporation and LSI Acquisition, Inc. filed as 
            Exhibit 2.2 to the Company's 8-K Report dated March 4, 1996, 
            File No. 0-7903, and incorporated herein by reference.

      (k)   Agreement for Purchase and Sale of Assets dated July 3, 1996 between
            Integrated Information Services, Inc., Pettibone Corporation,
            Quixote Corporation and Discovery Products, Inc., filed as 
            Exhibit 10(k) to the Company's Form 10-K for the year ended 
            June 30, 1996, File No. 0-0793, and incorporated herein by 
            reference.

      (l)   Asset Purchase Agreement dated as of December 8, 1996 among the 
            Company, Disc Manufacturing, Inc., Cinram Ltd. and Cinram Inc.,
            filed as Exhibit 10 (c) to the Company's Form 10-Q for the quarter
            ended December 31, 1996, File No. 0-7903, and incorporated herein
            by reference.

   11.      Statement regarding computation of earnings per share

   21.      Subsidiaries of the Company

   23.      Consent of Coopers & Lybrand, L.L.P. as Independent
            Certified Public Accountants

   27.      Financial Data Schedule


(d)  Schedules: 
     --------- 

     II   -  Valuation and Qualifying Accounts and Reserves

                                       -36-
<PAGE>
                                    SIGNATURES


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


                                QUIXOTE CORPORATION
                                    (Registrant)


Dated:    September 26, 1997                    By: /s/ Philip E. Rollhaus, Jr. 
      --------------------------                --------------------------------
                                                Philip E. Rollhaus, Jr.,
Chairman


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


SIGNATURE                         TITLE                             DATE
---------                         -----                             ----

/s/ Philip E. Rollhaus, Jr.
---------------------------   Chairman and Director           September 26, 1997
Philip E. Rollhaus, Jr.       (Chief Executive Officer)

/s/ Leslie J. Jezuit
---------------------------   President and Chief Operating   September 26, 1997
Leslie J. Jezuit              Officer

/s/ Daniel P. Gorey
---------------------------   Vice President, Chief Financial September 26, 1997
Daniel P. Gorey               Officer and Treasurer (Chief 
                              Accounting and Financial Officer)
/s/ James H. DeVries          
---------------------------   Director                        September 26, 1997
James H. DeVries              

/s/ William G. Fowler
---------------------------   Director                        September 26, 1997
William G. Fowler

/s/ Lawrence C. McQuade
---------------------------   Director                        September 26, 1997
Lawrence C. McQuade

/s/ Robert D. van Roijen, Jr.
---------------------------   Director                        September 26, 1997
Robert D. van Roijen, Jr.

                                       -37-
<PAGE>
                            QUIXOTE CORPORATION & SUBSIDIARIES
               SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                    For the years ended June 30, 1997, 1996 and 1995

<TABLE>
<CAPTION>

Column A               Column B        Column C          Column D(a)      Column E
--------               --------        -----------       -----------      ---------

                                       Additions
                      Balance at       Charged to                        Balance at
                     Beginning of      Costs and                           End of
Description             Period          Expenses          Deductions       Period
-----------          ------------      ----------        -----------      ---------
<S>                  <C>              <C>                <C>             <C>
Deducted from
 Receivables:

Allowance for
 Doubtful Accounts:

Year ended 
 June 30, 1997       $  165,000        $    2,000        $    2,000      $ 165,000
                     ==========        ==========        ==========      ==========
Year ended
 June 30, 1996       $  160,000        $   21,000        $   16,000      $ 165,000
                     ==========        ==========        ==========      ==========
Year ended
 June 30, 1995       $  160,000        $    2,000        $    2,000      $ 160,000
                     ==========        ==========        ==========      ==========

</TABLE>

NOTES:

(a)  Column D represents accounts written off as uncollectable, net of 
     collections on accounts previously written off.

                                       -38-
<PAGE>

                                   EXHIBIT INDEX

EXHIBIT NUMBER           EXHIBITS
----------------------   -----------------------------------------------
 10(c)                   1991 DIRECTOR STOCK OPTION PLAN 
                         AMENDED AUGUST 28, 1997

 10(d)                   1993 LONG-TERM STOCK OWNERSHIP INCENTIVE PLAN
                         AMENDED AUGUST 28, 1997

 10(d)                   RETIREMENT AWARD AGREEMENT DATED AS OF JUNE 30, 
                         1997 BETWEEN QUIOXTE CORPORATION AND DANIEL P. GOREY
       
 10(e)                   PROMISSORY NOTE DATED DECEMBER 31, 1996 TO COVENTRY 
                         FUND III, LTD.
     
 10(f)                   LETTER AGREEMENT DATED AUGUST 12, 1997 BETWEEN
                         QUIXOTE CORPORATION AND JAMES H. DEVRIES
      
 11                      STATEMENT REGARDING COMPUTATION OF EARNINGS
                         PER SHARE.

 21                      SUBSIDIARIES OF THE COMPANY.

 23                      CONSENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
                         CERTIFIED PUBLIC ACCOUNTANTS.

 27                      FINANCIAL DATA SCHEDULE

                                                                              
                                       -39-