<PAGE>

                                 UNITED STATES
                        SECURITIES & EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                            _______________________

                                   FORM 10-K
                                   _________


[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange 
     Act of 1934 
     FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
                                       OR
[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities 
     Exchange Act of 1934 
     For the Transition Period From __________ to __________


                         COMMISSION FILE NUMBER 0-27748
                         ______________________________

                                   OCAL, INC.
             (Exact name of registrant as specified in its charter)

               DELAWARE                               95-4544569
    (State or other jurisdiction of      (I.R.S. Employer Identification No.)
     incorporation or organization)

                              14538 KESWICK STREET
                          VAN NUYS, CALIFORNIA  91405
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (818) 782-0711

          Securities registered pursuant to Section 12(b) of the Act:
                                      NONE

          Securities registered pursuant to Section 12(g) of the Act:
                         COMMON STOCK, $0.001 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 periods 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 the Form 10-K or any amendment to this 
Form 10-K. [ ] 

As of March 2, 1998, the aggregate market value of the voting stock held by 
non-affiliates of the registrant, based upon the last reported sales price of 
the Common Stock as reported by Nasdaq, was approximately $4,271,000. Shares of 
Common Stock held by each officer and director and by each person who owns 10% 
or more of the outstanding Common Stock have been excluded in that such persons 
may be deemed to be affiliates. This determination of affiliate status is not 
necessarily a conclusive determination for other purposes.  

There were 5,691,000 shares of the Registrant's Common Stock outstanding as of 
March 2, 1998.  

<PAGE>

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement of the Registrant for the 
Registrant's 1998 Annual Meeting of Stockholders, which definitive proxy 
statement will be filed with the Securities and Exchange Commission not later 
than 120 days after the Registrant's fiscal year end of December 31, 1997, are 
incorporated by reference into Part III.

<PAGE>
                                     PART I 

  This Report contains "forward-looking statements" within the meaning of the 
Private Securities Litigation Reform Act of 1995 which involve risks and 
uncertainties. The actual results of Ocal, Inc. (together with its wholly-owned 
subsidiaries, "Ocal" or the "Company") could differ materially from those 
anticipated in these forward-looking statements as a result of certain factors, 
including, without limitation, competition from other manufacturers of PVC-
coated conduit and from manufacturers of alternative conduit products, downward 
pressure on product pricing and gross margin, nominal growth in the Company's 
industry, dependence on key personnel, control by the Company's majority 
stockholder, cyclicality of plant expansion activities by the Company's end 
users, general economic conditions, and risks associated with the financing and 
integration of potential future acquisitions (including the potential dilutive 
effect and other financial impact of such acquisitions), as well as the factors 
set forth under the caption "Risk Factors" in the Company's IPO Prospectus 
filed with the Securities and Exchange Commission pursuant to Rule 424(b) on 
March 12, 1996, and in this Form 10-K and the Company's other Securities and 
Exchange Commission filings. See Item 7, Management's Discussion and Analysis 
of Financial Condition and Results of Operations.  

 
ITEM 1.  BUSINESS.

 
GENERAL
_______
 
  Ocal, Inc., a Delaware corporation, is a leading domestic manufacturer of 
polyvinyl chloride ("PVC") coated rigid steel conduit ("PVC-coated conduit"), 
elbows, and fittings. The Company's products are primarily used in the new 
construction and maintenance of plants operating in highly corrosive 
environments which require the highest level of protection of electrical wiring 
systems against corrosion and physical damage, such as sewage treatment, water 
treatment, electric power, oil refining, chemical and pharmaceutical, pulp and 
paper, and food processing plants.  
                  
INDUSTRY OVERVIEW
_________________
 
  MARKET DEMAND.  The demand for conduit stems from the need to comply with 
building codes in the United States which require protection for electrical 
wiring systems. Alternative forms of protection include PVC-coated conduit, 
rigid steel conduit ("RSC"), plastic conduit, aluminum conduit, cable tray 
(metal or fiberglass trays in which wire is laid, but not enclosed), pre-wired 
armored cable integrating the functions of electrical wire and conduit into one 
system, thinner-walled versions of metal conduit called intermediate metallic 
conduit ("IMC") and electrical metallic tubing ("EMT"). Of the various 
commercially available forms of protection for electrical wiring systems,
PVC-coated conduit is the most expensive. It is also the most durable in 
corrosive environments due to the combination of the corrosion protection of 
PVC coating and galvanizing with the physical protection of steel pipe.  
Although alternative products generally have an initial product and 
installation cost advantage over PVC-coated conduit, the Company's PVC-coated 
conduit compares favorably on a life-cycle cost basis in corrosive 
environments.  
 
  SALES AND DISTRIBUTION IN THE ELECTRICAL INDUSTRY.  The sales and 
distribution structure in the electrical industry consists of independent sales 
representatives, distributors, electrical contractors, end users and project 
engineers. End users include industrial companies such as International Paper 
Company, OxyChem, Weyerhaeuser Company, and Merck & Company, Inc. When an end 
user is planning to build a new plant, it hires an engineering firm to design, 
among other things, the infrastructure and electrical system for the plant. The 
end user will then hire an electrical contractor through a bidding process.  
Each bidding electrical contractor generally requests one or more distributors 
to price the components needed to construct the electrical system, and the 
distributors bid for the contractor's order. In the electrical industry, 
substantially all sales of conduit, elbows, fittings and related products are 
made by the manufacturer to the distributor, who in turn sells the products to 
the contractor or end user.  

BUSINESS STRATEGY
_________________

  The Company's business strategy is designed to increase penetration of its 
traditional corrosive environment market while expanding into other markets 
where the life-cycle cost and additional features of its products provide a 
cost-effective solution to customer needs. The Company seeks to implement this 
strategy based upon the following strengths: 
 
  INDUSTRY LEADERSHIP.  The Company believes it is a leading manufacturer of 
PVC-coated conduit, elbows, and fittings. In terms of sales volume, management 
believes the Company's total sales of $24.3 million for the year ended December 
31, 1997 place it among the two largest domestic manufacturers of PVC-coated 
conduit in the industry.  
 
  MARKETING FOCUS.  The Company focuses its marketing on engineers and end 
users to educate them regarding the technological advantages and long-term 
savings of PVC-coated conduit as compared to alternative conduit products, and 
to illustrate the features of the Company's products which its competitors do 
not provide. The Company's goal is to have PVC-coated conduit generally, and 
where possible, the features of the Company's products in particular, specified 
by engineers and end users in engineering designs for particular projects.  
 
  LEADERSHIP IN PRODUCT QUALITY.  The Company's products have protection 
features which its competitors do not provide. The Company believes it is the 
only manufacturer of conduit that hot dip galvanizes its own conduit after 
threading, increasing the corrosion protection and life of electrical conduit 
systems. In addition, the Company double coats its fittings with both blue 
urethane and PVC, providing additional protection unavailable elsewhere in the 
industry.  
 
  LOW-COST, PROPRIETARY MANUFACTURING.  Management believes the Company's 
proprietary manufacturing technology used in its equipment and processes allows 
it to be one of the lowest-cost producers in the industry. Much of the 
machinery used in the Company's manufacturing process was designed and 
constructed by company personnel with minimal capital investment, labor, and 
material costs. The Company galvanizes its own pipe, and purchases ungalvanized 
pipe in large volumes, which often enables the Company to negotiate 
advantageous purchase prices. In addition, the Company compounds its own PVC, 
primer, and urethane, which allows the Company to provide these features at a 
lower cost than its competitors.  
 
  COMPREHENSIVE CUSTOMER SERVICE.  The Company provides a broad range of 
customer support services, including assistance from senior Company employees 
with respect to installation and maintenance of conduit, free installation 
training, and a toll-free installation hotline.  
 
  EXPANSION INTO RELATED OR COMPLEMENTARY BUSINESSES.  The Company intends to 
explore expansion into related or complementary businesses internally or 
through acquisitions, building on its expertise in marketing and manufacturing 
in the electrical conduit industry.  

PRODUCTS
________ 
 
  The Company sells and manufactures a full line of PVC-coated conduit, elbows, 
fittings, RSC, PVC-coated aluminum conduit and uncoated conduit elbows, all of 
which range in diameter from 1/2" to 6", as well as installation tools. The 
following is a more detailed description of the product lines the Company 
offers: 
 
  RIGID STEEL CONDUIT is the heaviest wall conduit in use in the world and 
provides the highest level of physical protection commercially available for 
electrical systems. It can be used underground, in concrete, and wherever a 
high level of physical protection of electrical wiring is required. The Company 
believes it is the only manufacturer producing this conduit that hot dip 
galvanizes the threads together with the rest of the pipe, a process developed 
by the Company. The RSC manufactured by the Company is threaded at both ends, 
is 10' in length, and overall wall thicknesses range from .109" to .280". The 
Company is one of the few suppliers of 6" diameter RSC and PVC-coated conduit 
made from domestically produced steel pipe. Some of Ocal's customers for this 
product need domestically produced 6" conduit in order to comply with the 
requirements of projects funded by the federal government. All federally-funded 
or federally-aided projects must comply with the Buy American Act, which 
requires that more than 50% of the total cost of a given product's components 
be attributable to components mined, produced, or manufactured in the United 
States.  
 
  PVC-COATED RIGID STEEL CONDUIT is RSC coated with .040 inches ("40 mils") of 
bonded PVC on the exterior of the pipe and 2 mils of blue urethane on the 
interior. It is used in environments that are too corrosive to use RSC, but 
where the physical protection offered by RSC is required or prudent.  
 
  PVC-COATED ALUMINUM CONDUIT is aluminum pipe coated with 40 mils of bonded 
PVC on the exterior of the pipe and 2 mils of blue urethane on the interior. It 
is used in environments where lighter weight conduit is required.  
 
  CONDUIT ELBOWS are short lengths of curved RSC or PVC-coated conduit, bent to 
90, 60, 45, or 30 degrees and threaded at both ends. Various radiuses are 
available.  
 
  PVC-COATED FITTINGS AND ACCESSORIES include couplings (which have PVC sleeves 
to seal the connection), liquidtight connectors, conduit bodies, beam clamps, 
pulling elbows, nipples, and strut channel accessories. The Company's fittings 
are coated with blue urethane on the inside and both blue urethane and PVC on 
the outside, which provides added protection. The ability to bond PVC to blue 
urethane is achieved through a proprietary process developed by the Company.  
All of the accessories are PVC-coated and provide a complete corrosion 
protection solution for the Company's end users.  
 
  INSTALLATION TOOLS offered by the Company include electric benders used for 
bending PVC-coated conduit of 1/2" to 2", threaders for 1/2" to 4" conduit, 
hickeys to bend 1/2" to 1" PVC-coated conduit, impact sockets, wrenches and 
other tools to assist in the installation of its conduit.  
 
MARKETING, DISTRIBUTION AND CUSTOMER SERVICE 
____________________________________________ 
 
  IN-HOUSE MARKETING.  The Company established an in-house marketing group in 
1993 with individuals experienced in sales and marketing in the electrical 
industry. The group currently consists of three individuals. The Company 
specifically focuses marketing efforts at the project engineer and end user 
level, educating them as to the technological advantages and lower life-cycle 
cost of the Company's PVC-coated conduit as compared to alternative conduit 
products.  
 
  INDEPENDENT SALES AGENTS.  In addition to education of engineers and 
contractors so that Ocal products will be specified, the Company's marketing 
group works hand-in-hand with independent regional sales agents. The Company 
markets and sells its products to approximately 700 distributors or chains of 
distributors through approximately 35 independent regional sales agents 
throughout the United States and Canada. Shipments to customers outside of the 
United States and Canada are done through an international sales agent 
experienced in the exportation of electrical materials. Independent sales 
agents are the functional equivalent of a manufacturer's internal sales force 
in other industries. The agents market the Company's products to distributors 
and handle the purchase orders from the distributors. Some agents warehouse the 
Company's products, which can expedite delivery since inventory is stored at 
various locations throughout the United States. Sales agents do not market the 
Company's products exclusively, but they do not sell products which are in 
direct competition with the Company's products. Sales agents receive 
commissions, with higher commissions paid to those agents that warehouse the 
Company's products at their facilities.  
 
  The Company permits the return of products within certain time limits and 
under certain conditions subject to a restocking charge. The Company warrants 
all of its products from defect for six years.  
 
  CUSTOMER SERVICE.  Another key aspect of the Company's marketing is the 
customer support services it provides. Senior management and other Company 
employees are available to answer questions from contractors, end users and 
engineers regarding installation procedures, maintenance, product applications 
and other technical areas. The Company offers free training on proper 
installation of its products, sells a variety of installation tools designed to 
assist in the installation of its products, and has established a toll-free 
installation hotline.  
 
CUSTOMERS
_________
 
  The Company's four largest customers are multiple location distributors. 
These customers are comprised of chains of individual distributors who make 
independent purchasing decisions. In 1997, sales to one customer represented 
10.2% of the Company's net sales. During 1996, sales to any individual customer 
did not exceed 10% of the Company's net sales. During 1995, there were two 
individual customers that represented 15.3% and 11.4%, respectively, of the 
Company's net sales. Management believes that the loss of any one of these 
distributors would not have a material adverse effect on the Company. 
 
BACKLOG AND SEASONALITY
_______________________
 
  The Company's business is characterized by short-term order and shipment 
schedules rather than volume purchase contracts. After a distributor sends a 
purchase order to the Company, the product is typically shipped within 10 to 15 
days. Accordingly, the Company does not consider backlog at any given date to 
be indicative of future sales. The short term delivery requirements and the 
nature of the Company's business preclude any significant backlog. The 
Company's business is not seasonal.  
 
MANUFACTURING
_____________ 
 
  RAW MATERIALS AND SUPPLIERS. The Company's principal raw materials are carbon 
steel pipes which it obtains from a number of domestic primary steel pipe 
producers, conduit fittings, plastics and chemicals for coating, and zinc for 
galvanizing. Because the Company galvanizes its own pipe, it can purchase pipe 
directly from a number of steel pipe manufacturers. Wherever practical, vendor 
purchases are made in large volumes to maximize volume discounts and optimize 
payment terms. The Company believes that the market is extremely competitive, 
and that its relationship with suppliers is good.  

COMPETITION
___________
 
  The Company's principal competitors in the PVC-coated conduit business are 
Robroy Industries, Inc. ("Robroy") and Perma-Cote Industries. Robroy is a 
diversified business and has greater financial resources than the Company. The 
Company faces substantial competition in its RSC business from large, 
established companies such as Allied Tube & Conduit Company, Wheatland Tube 
Company, the LTV Corporation, and Western Tube, all of which have greater 
financial and managerial resources than the Company. These competitors also 
produce IMC and EMT. Companies which produce alternative conduit products 
include Easco Aluminum, Inc. and VAW of America, Inc. in aluminum conduit; 
Certain Teed Incorporated and Carlon in plastic conduit; T.J. Cope, B-Line 
Systems, Inc. and Enduro Fiberglass Systems in cable tray; and AFC Cable 
Systems and Alflex Corporation in armored cable.  
 
  With respect to PVC-coated conduit, RSC, IMC, and EMT, as well as alternative 
conduit products, the Company competes based upon product performance, quality, 
availability of product, speed of delivery, customer support, and price. The 
Company believes it is competitive with respect to each of these factors and 
that its principal competitive advantages are product performance, quality, and 
price.  
 
EMPLOYEES
_________
 
  As of December 31, 1997, the Company employed 159 people, comprised of 142 in 
manufacturing, 14 in administration, and 3 in marketing and sales. All of these 
were full-time employees. None of the Company's employees is represented by 
labor unions and the Company believes that its relations with its employees are 
good.  

 
ITEM 2. PROPERTIES

 
  The Company leases its corporate office and manufacturing plant. The Company 
believes that its facilities are adequately maintained, in good operating 
condition, and adequate for the Company's present needs.  
 
  The Company's principal executive office is located in Van Nuys, California, 
consisting of approximately 3,000 square feet of office space, which the 
Company leases from a partnership in which the Company's majority stockholder 
is the general partner, at an annual rental of $36,000 per year. The lease for 
this property expires on December 31, 1998.  
 
  The Company's 300,000 square foot manufacturing facility is located in 
Mobile, Alabama, and contains a building of approximately 100,000 square feet 
on the property. The lease contains certain rent escalation clauses and 
provides the Company with an option to extend the lease through December 31, 
2002.  
 
 
ITEM 3. LEGAL PROCEEDINGS

 
  The Company is a party to various lawsuits arising in the ordinary course of 
business. The Company does not believe that the outcome of any of these 
lawsuits will have a material adverse effect on the Company's business or 
financial condition.  
 

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

 
  No matters were submitted to a vote of the security holders of the Company 
during the fourth quarter of 1997.  


<PAGE>

                                    PART II
 
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS

 
MARKET INFORMATION
__________________
 
  The Company's Common Stock commenced trading on the NASDAQ National Market 
System under the symbol "OCAL" on March 18, 1996, and no established public 
trading market existed prior to that date. The quarterly market price ranges of 
the Common Stock were as follows: 

<TABLE> 
<CAPTION>
                                            1997                   1996
                                    ____________________   ____________________
                                      HIGH       LOW         HIGH       LOW
                                      ____       ___         ____       ___
  <S>                               <C>        <C>         <C>        <C>
  First Quarter .................   $ 4-1/4    $ 3-1/4     $ 6-7/8    $ 6-1/4
  Second Quarter.................     3-15/16    3           6-7/8      5
  Third Quarter..................     3-1/2      2-3/8       5-1/2      3-1/16
  Fourth Quarter.................     3-1/4      2-3/8       4          3
</TABLE>

  As of March 2, 1998, there were approximately 45 holders of record of Common 
Stock, and the Company estimates that there were approximately 1,500 beneficial 
owners holding stock in nominee or "street" name on that date.  
 
DIVIDEND POLICY
_______________
 
  The Company has not paid any cash dividends on its Common Stock since its 
formation and does not anticipate paying any such dividends in the foreseeable 
future. The Company plans to reinvest earnings and other cash resources of the 
Company in the development and expansion of its business. The declaration of 
dividends in the future will be at the discretion of the Board of Directors and 
will depend upon earnings, capital requirements, the financial position of the 
Company, general economic conditions and other pertinent factors. The terms of 
the Company's bank line of credit restrict the Company's ability to pay cash 
dividends. Future credit agreements may also contain restrictions on the 
Company's ability to pay dividends.  

<PAGE>
<TABLE>
ITEM 6.  SELECTED FINANCIAL DATA

  The following is a summary of selected financial data of the Company and its subsidiaries, as described in Note 1 of the 
consolidated financial statements appearing elsewhere herein (amounts in thousands except per share data). The financial data 
for the years ended December 31, 1997, 1996, and 1995 and as of December 31, 1997 and 1996 have been derived from the audited 
financial statements of the Company appearing elsewhere herein, and should be read in conjunction with such statements and the 
notes thereto. The remainder of the financial data has been derived from audited financial statements of the Company which are 
not included herein.  

<CAPTION>
                                                                                         FIVE MONTHS    YEAR
                                                                                            ENDED      ENDED
                                                          YEAR ENDED DECEMBER 31,        DECEMBER 31, JULY 31,
                                                   ______________________________________
STATEMENT OF OPERATIONS DATA:                        1997      1996      1995      1994    1993<F1>     1993 
                                                   ________  ________  ________  ________  ________  ________
<S>                                                <C>       <C>       <C>       <C>       <C>       <C>     
Net sales                                          $ 24,279  $ 25,000  $ 24,885  $ 19,123  $  8,361  $ 17,165
Gross margin                                          6,651     7,859     8,240     6,842     2,906     4,801
Stockholders' compensation<F2>                          347       313     2,806     1,605       879     2,108
Operating income (loss)                               2,316     3,519     1,489     1,700       481      (236)
Provision (benefit) for income taxes<F3>                867     1,180        22         8       (11)      208 
Net income (loss)                                     1,508     2,356     1,081     1,384       410      (310)
Basic and diluted earnings per share<F4>               0.26      0.45      0.33        --        --        --
                                                                                                   
PRO FORMA STATEMENT OF OPERATIONS DATA<F5>:
Net income                                                      2,116     2,158
Basic and diluted earnings per share                             0.41      0.66

Weighted average shares - basic and diluted<F6>       5,762     5,224     3,250

<CAPTION>
BALANCE SHEET DATA:                                               AS OF DECEMBER 31,                   AS OF
                                                   ________________________________________________   JULY 31,
                                                      1997      1996      1995      1994      1993      1993
                                                   ________  ________  ________  ________  ________  ________
<S>                                                <C>       <C>       <C>       <C>       <C>       <C>     
Working capital                                    $ 14,170  $ 13,018  $  3,373  $  2,632  $  1,134  $  1,002
Total assets                                         17,635    18,282    14,298    10,379     8,911     8,432
Total debt                                            1,757     3,257     6,179     4,320     4,851     3,796
Stockholders' equity                                 13,992    12,715     5,259     4,175     2,791     2,381
___________________________

<FN>
<F1>
Effective August 1, 1993, the Company changed its fiscal year end from July 31 to December 31.

<F2>
Stockholders' compensation expense consists of salaries and bonuses paid to certain stockholders whose compensation is 
classified as such in the financial statements.  

<F3>
Prior to March 18, 1996, Ocal Alabama and Ocal Data were S corporations, and their net income (loss) did not include a provision 
(benefit) for federal income taxes since they were not subject to federal income taxes. Their net income (loss) for those 
periods included a provision for state income taxes based upon income tax rates applicable to S corporations. Net income (loss) 
attributable to Occidental and Ocal Transport, C corporations for all periods, includes federal and state income taxes based 
upon statutory rates. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview." 

<F4>
The earnings per share amounts prior to 1997 have been recalculated to comply with Statement of Financial Accounting Standards 
No. 128, "Earnings per Share," which did not change amounts previously reported. For further discussion of earnings per share 
and the impact of Statement No. 128, see note 2 of the consolidated financial statements.  

<F5>
Pro forma statement of operations data includes adjustments (i) to reduce stockholders' compensation expense, relating to 
salaries and bonuses paid to certain stockholders, by $2,493,000 for the year ended December 31, 1995 and (ii) to provide for 
related income taxes as if all of the Company's income during the pro forma periods presented were taxed at C corporation rates 
based upon pro forma income before income taxes.  

<F6>
Weighted average common shares outstanding for the year ended December 31, 1995 is based upon the assumed issuance of 3,250,000 
shares of Common Stock at the beginning of the year.  

</FN>
</TABLE>
<PAGE>


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


OVERVIEW
________

  In March and April of 1996, the Company completed an initial public offering 
("IPO") of its stock. Prior to the IPO, the Company's operations were conducted 
by a number of affiliated companies formed at various times in the past. The 
most significant of these operating entities elected to be taxed as S 
corporations under the provisions of the Internal Revenue Code. Pursuant to 
such elections, stockholders of these companies included their proportionate 
share of the taxable income of these companies in their personal tax returns 
and the operating results of these companies reflected no provision for federal 
taxes. Stockholders' compensation expense for 1995 includes amounts distributed 
to these stockholders to facilitate the payment of their personal income taxes.
 
  Occidental Coating Company ("Occidental"), a California corporation, was 
incorporated on December 15, 1965 to manufacture and sell PVC-coated conduit 
and fittings. On November 30, 1987, OCAL, Incorporated, an Alabama corporation 
("Ocal Alabama"), was formed in Mobile, Alabama initially as a place for the 
importation and distribution of conduit manufactured in Costa Rica by an 
affiliate of Occidental. In 1988, the California and Costa Rica plants were 
consolidated and relocated to Mobile, Alabama, when the Company determined that 
the advantages of manufacturing in Costa Rica could not be fully realized. On 
August 1, 1993, the operations of Occidental and Ocal Alabama were consolidated 
through the acquisition by Ocal Alabama of substantially all of the assets and 
liabilities of Occidental at net book value. On August 24, 1995, the Company 
was incorporated in Delaware under the name Ocal, Inc.  
 
  On March 18, 1996, all of the outstanding capital stock of Ocal Alabama, 
Occidental, Ocal Data Company ("Ocal Data"), and Ocal Transport Co. ("Ocal 
Transport") was acquired by the Company through capital contributions by the 
respective stockholders in exchange for an aggregate of 3,250,000 shares of the 
Company's common stock (the "Reorganization"). As part of this Reorganization, 
Ocal Alabama declared a $4,600,000 distribution to its former stockholders, 
which represented estimated undistributed S corporation retained earnings. Of 
this distribution, $1,600,000 was paid by the Company in cash in March 1996 and 
the remainder of the distribution was in the form of $3,000,000 of interest-
bearing notes payable. The total amount of the distribution was finalized as 
$4,900,000 upon completion of the final tax return for Ocal Alabama, and the 
additional $300,000 distribution was paid in cash to the former stockholders in 
February 1997. In September of 1997, $1,500,000 principal amount of the notes 
was repaid in cash and at December 31, 1997, $1,500,000 principal amount of the 
notes (which is due on March 18, 1999) remained outstanding.  

RESULTS OF OPERATIONS
_____________________

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

  NET SALES.  The Company's net sales for 1997 were $24,279,000, which 
represented a decrease of $721,000 (2.9%) compared to net sales of the prior 
year. The decrease in net sales is due primarily to a general slowdown in the 
Company's industry, which has caused an increase in the competitive nature of 
the pricing. Average selling prices of Company products decreased by 
approximately 3% from 1996 to 1997. Unit shipment volumes were approximately 
the same in 1997 as in 1996, with decreases of approximately 5% in pipe volumes 
being offset by equivalent increases in the volumes of fittings. Sales volume 
is also impacted by major end user and project activity. Net sales to a major 
end user decreased from approximately $1,100,000 in 1996 to $400,000 in 1997, a 
decrease of $700,000. While the end user continues to do business with the 
Company, it had fewer plant expansions in 1997 than in 1996.  
 
  GROSS MARGIN.  The Company's gross margin for 1997 was $6,651,000, which 
represented a decrease of $1,208,000 (15.4%) compared to gross margin of the 
prior year. The Company's gross margin as a percentage of sales decreased to 
27.4% in 1997 from 31.4% in 1996 due to a combination of a 3% decrease in 
average selling prices due to competition, and increased factory labor costs.  
At the beginning of the second quarter of 1997, the Company implemented wage 
increases of approximately 20% for factory personnel in order to remain 
competitive with wages paid by other local employers and to help reduce 
employee turnover. As part of the Company's strategy to maintain and increase 
its market share, it has reduced prices in competitive situations and may 
continue to do so in 1998.  
 
 SELLING, GENERAL AND ADMINISTRATIVE ("SG&A").  SG&A expenses for 1997 were 
$3,988,000, which represented a decrease of $39,000 (1.0%) compared to SG&A 
expenses of the prior year. As a percentage of net sales, SG&A expenses were 
16.4% in 1997 compared to 16.1% in 1996. The net decrease in expenses from 1997 
to 1996 is due to a reduction in legal expenses, partially offset by higher 
sales and administrative salaries and expenses associated with the Company's 
first annual report. During 1997, the Company received a one-time insurance 
refund of approximately $80,000 relating to legal expenses incurred in 1996.  
Without this refund, SG&A expenses would have been 16.8% of sales in 1997. SG&A 
expenses in absolute dollars for 1998 are expected to be higher than in 1997 
due to the absence of the insurance refund.  
 
  STOCKHOLDERS' COMPENSATION.  Stockholders' compensation expenses for 1997 
were $347,000, which represented an increase of $34,000 (10.9%) compared to the 
prior year. During the second quarter of 1997, the Company's Compensation 
Committee approved salary increases to these former stockholders of Ocal 
Alabama.  
 
  INTEREST EXPENSE.  Interest expense for 1997 was $184,000, which represented 
a decrease of $74,000 (28.7%) compared to the prior year. During 1996, the 
Company had outstanding bank debt until its IPO. During 1997, the Company had 
no outstanding bank debt and also paid off the current portion ($1,500,000) of 
notes payable to former stockholders of Ocal Alabama on September 18, 1997.  
 
  INTEREST INCOME.  Interest income for 1997 was $243,000, which represented a 
decrease of $32,000 (11.7%) compared to the prior year. During the fourth 
quarter of 1996, the Company decided to invest excess cash in federally tax-
free instruments, which had a lower pre-tax yield than taxable investments 
which were made during the second and third quarters of 1996.  
 
  INCOME TAX EXPENSE.  Income tax expense for 1997 was $867,000, which 
represented a decrease of $313,000 (26.5%) compared to the prior year, 
primarily due to reduced income before income taxes. The Company's effective 
income tax rate increased to 36.5% for 1997 compared to 33.4% for 1996. In the 
first quarter of 1996, prior to the Company's Reorganization and IPO, Ocal 
Alabama and Ocal Data were taxed as S corporations under the provisions of the 
Internal Revenue Code, and accordingly, no provision was made for federal 
income taxes for these operations. Subsequent to that date, the Company and all 
of its subsidiaries became C corporations subject to state and federal income 
taxes at statutory rates.  
 
  NET INCOME.  Net income for 1997 of $1,508,000 decreased by $848,000 (36.0%) 
compared to net income for the prior year. The decrease was due primarily to 
reduced gross margin, partially offset by lower income taxes.  
 
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
 
  NET SALES.  The Company's net sales for 1996 were $25,000,000, which 
represented an increase of $115,000 (0.5%) compared to sales of the prior year.
Although unit volumes in 1996 increased compared to 1995, there was an 
offsetting decline in selling prices due to competitive product pricing. The 
Company lost an account which represented approximately 4% of 1995 sales during 
1996, and replaced the lost sales by obtaining new customers with aggressive 
product pricing.  
 
  GROSS MARGIN.  The Company's gross margin for 1996 was $7,859,000, which 
represented a decrease of $381,000 (4.6%) compared to gross margin of the prior 
year. The Company's gross margin as a percentage of sales decreased to 31.4% in 
1996 from 33.1% in 1995 due to competitive pricing pressures on the Company's 
net sales, as well as increased costs of raw materials.  
 
  SELLING, GENERAL AND ADMINISTRATIVE ("SG&A").  SG&A expenses for 1996 were 
$4,027,000, which represented an increase of $82,000 (2.1%) compared to SG&A 
expenses of the prior year. The increase was due to certain expenses associated 
with being a public company, such as public relations costs and directors and 
officers liability insurance, as well as increased expenses of the in-house 
marketing group. Overall SG&A expenses as a percentage of net sales increased 
to 16.1% in 1996 from 15.9% in the prior year.  
 
  STOCKHOLDERS' COMPENSATION.  Stockholders' compensation expenses for 1996 
were $313,000, which represented a decrease of $2,493,000 (88.8%) compared to 
expenses of the prior year. The decrease was due to a reduction in salaries and 
bonuses paid to those stockholders in 1996. As described in the Overview 
section above, the 1995 expense includes amounts to facilitate the payment by 
these stockholders of their personal income taxes, mainly attributable to S 
corporation income on their personal tax returns.  
 
  INTEREST EXPENSE.  Interest expense for 1996 was $258,000, a reduction of 
$128,000 (33.2%) compared to the prior year. The reduction was due to the 
repayment of bank debt with a portion of the cash proceeds from the Company's 
IPO.  
 
  INTEREST INCOME.  Interest income for 1996 was $275,000, earned from excess 
cash proceeds available after the Company's IPO. In 1995, all excess cash from 
operations was used to pay down the Company's bank debt, and therefore, no 
interest income was recognized.  
 
  INCOME TAX EXPENSE.  Income tax expense for 1996 was $1,180,000 (an effective 
rate of 33.4%) compared to $22,000 for the prior year. Prior to the Company's 
Reorganization and IPO, Ocal Alabama and Ocal Data were taxed as S corporations 
under the provisions of the Internal Revenue Code, and accordingly, no 
provision was made for federal income taxes for these operations. Subsequent to 
that date, the Company and all of its subsidiaries became C corporations 
subject to state and federal income taxes at statutory rates.  
 
  NET INCOME.  Net income for 1996 was $2,356,000, which represented an 
increase of $1,275,000 (117.9%) compared to the prior year. The increase was 
due primarily to reduced stockholders' compensation expense, partially offset 
by an increased provision for income taxes.  

LIQUIDITY AND CAPITAL RESOURCES
_______________________________ 
 
  Historically, working capital needed to finance the Company's operations and 
growth has been provided by cash flows from operations, bank debt, and long- 
and short-term notes from related parties and a supplier. In March and April of 
1996, the Company completed an initial public offering of 2,530,000 shares of 
its common stock, which resulted in net proceeds to the Company, after 
deduction of underwriters' discounts, commissions, and expenses, of 
$10,000,000. In March of 1996, a portion of the proceeds of the IPO was used to 
pay off the $3,948,000 balance remaining on the Company's revolving bank line 
of credit and to pay the $1,600,000 cash portion of Ocal Alabama's $4,600,000 
distribution of its S corporation retained earnings to prior S corporation 
stockholders. The balance of the proceeds was added to the Company's working 
capital during March and April of 1996.  

  As part of the Reorganization which occurred immediately prior to the IPO, 
Ocal Alabama declared the above-mentioned $4,600,000 distribution to its former 
stockholders. Of this amount, $1,600,000 was paid by the Company in cash in 
March 1996 and the remaining $3,000,000 was paid by the issuance of notes 
payable bearing interest at the rate of 6.5% per annum, with $1,500,000 
principal amount due (and paid in cash) on September 18, 1997 and $1,500,000 
principal amount due on March 18, 1999.  The total amount of the distribution 
was finalized as $4,900,000 upon completion of the final tax return for Ocal 
Alabama, and the additional $300,000 distribution was paid in cash to the 
former stockholders in February 1997.  
 
  At December 31, 1997, working capital was $14,170,000, compared to 
$13,018,000 at December 31, 1996, an increase of $1,152,000 (8.9%). The most 
significant components of the increase were increases in inventories of 
$813,000 and prepaid taxes of $253,000, decreases in distributions and current 
notes payable to former S corporation stockholders of $1,800,000, partially 
offset by a decrease in cash and cash equivalents of $2,090,000. During 1997, 
the Company was able to obtain advantageous pricing of steel pipe by purchasing 
large quantities on a periodic basis. The parts purchased are regular stock 
items with little or no risk of obsolescence, and the Company intends to 
continue to make such purchases in the future. Inventory turnover decreased 
from 2.6 times in 1996 to 2.3 times in 1997.  
 
  The Company generated net cash from operating activities of $558,000 in 1997, 
compared to $2,148,000 in 1996 and $483,000 in 1995. The $1,590,000 decrease 
from 1996 to 1997 was due primarily to a decrease in net income of $848,000 and 
an increase in inventory of $813,000. The $1,665,000 increase from 1995 to 1996 
was due primarily to an increase in net income of $1,275,000 and reductions in 
accounts receivable and inventories, which were offset by increases in accounts 
payable and accrued expenses.  
 
  Net cash used by investing activities was $617,000 in 1997, compared to net 
cash provided by investing activities of $1,256,000 in 1996 and net cash used 
by investing activities of $1,804,000 in 1995. Capital expenditures in 1997 
were $617,000, compared to $389,000 in 1996 and $159,000 in 1995. During 1997, 
the Company made significant investments to increase its production workflow 
and output, acquiring machinery that enables in-house production of tooling and 
automatic injection molding of parts formerly produced manually. Prior to 1996, 
due to cash constraints, the Company did not make significant capital 
investments unless absolutely necessary. The Company expects capital 
expenditures during 1998 to be in the range of $400,000 to $600,000. During 
March of 1996, in conjunction with the Reorganization, the majority stockholder 
repaid a $1,645,000 loan from the Company made during 1995. The loan was used 
by the majority stockholder in 1995 to purchase a $2,000,000 certificate of 
deposit which was pledged as a personal guarantee to secure the Company's 
revolving bank line of credit.  

  Net cash used by financing activities was $2,031,000 in 1997, compared to net 
cash provided by financing activities of $3,088,000 in 1996 and $1,369,000 in 
1995. During 1997, the Company paid in cash $1,800,000 of distributions and 
notes payable to prior S corporation stockholders and also purchased 79,000 
shares of treasury stock at a cost of $231,000 under a stock repurchase 
program. In January of 1997, the Company's Board of Directors approved the 
stock repurchase program under which the Company is authorized to purchase up 
to $500,000 of Company stock from time to time on the open market. The Company 
intends to continue to make purchases of Company stock from time to time under 
the terms of this program. In 1996, the Company generated $3,088,000 of cash 
from financing activities, consisting of $10,490,000 of proceeds from the 
issuance and sale of common stock in the Company's IPO, offset in part by 
repayment of bank debt of $5,802,000 and the distribution of $1,600,000 of Ocal 
Alabama's S corporation retained earnings to prior S corporation stockholders.  
 
  The Company has a revolving bank line of credit with SouthTrust Bank, 
National Association that expires on July 31, 2000 and provides for maximum 
borrowings of $6,500,000 (subject to certain specified percentages of the 
Company's accounts receivable and inventories). The related credit agreement 
requires the maintenance of certain financial ratios and tangible net worth 
amounts and provides for various restrictions, including limitations on capital 
expenditures, additional indebtedness, salaries of certain officers of the 
Company, and payment of dividends by the Company. Interest on borrowings 
outstanding under the bank line is based, at the Company's option, on the 
London Interbank Offered Rate ("LIBOR") or the bank's prime rate (8.5% at 
December 31, 1997). At December 31, 1997, the annual interest rate based on the 
LIBOR pricing option was LIBOR plus 2.0%, and the annual interest rate based on 
the prime rate was prime. At December 31, 1997, there were no borrowings 
outstanding under the bank line of credit, and the amount of unused credit 
available, based upon the Company's collateral, was $4,861,000.  

  The Company believes that cash provided by operating activities, existing 
cash and cash equivalents, and available credit will be sufficient to fund the 
Company's future operating and capital cash needs for the next 12 to 18 months.
The Company intends to pursue a strategy of growth by selective acquisitions 
that complement the Company's strengths in the electrical conduit industry.  
Such acquisitions may necessitate the issuance of additional debt or equity 
securities of the Company. The Company intends to pursue this strategy with 
careful regard for profitability, the need for liquidity, and the potential 
dilutive effect of any additional issuance of equity securities. There can be 
no assurance, however, that any acquisitions will occur or that an acquisition 
that does occur will not adversely affect the Company's net income or 
liquidity.  

  The Company's principal commitments at December 31, 1997 consisted of 
obligations under operating leases for facilities.  

IMPACT OF THE YEAR 2000
_______________________

  The Company has completed a study of the impact of the year 2000 on its 
business and operational systems. A solution was developed and implemented 
during 1997 and the cost did not have a material impact on the Company's 
financial results.  


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.


<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors of Ocal, Inc.

  We have audited the accompanying consolidated balance sheets of Ocal, Inc. as 
of December 31, 1997 and 1996, and the related consolidated statements of 
income, stockholders' equity, and cash flows for each of the three years in the 
period ended December 31, 1997. These financial statements are the 
responsibility of the Company's management. Our responsibility is to express an 
opinion on these financial statements based on our audits.  

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

  In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Ocal, Inc. as of 
December 31, 1997 and 1996, and the consolidated results of its operations and 
its cash flows for each of the three years in the period ended December 31, 
1997, in conformity with generally accepted accounting principles.  



                                        ERNST & YOUNG LLP

January 27, 1998
Los Angeles, California
<PAGE>
<TABLE>

                                   OCAL, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share data)


<CAPTION>
                                              For the Years Ended December 31,
                                              ________________________________
                                                1997        1996        1995
                                                ____        ____        ____

<S>                                           <C>         <C>         <C>
Net sales                                     $ 24,279    $ 25,000    $ 24,885
Cost of goods sold                              17,628      17,141      16,645
                                              ________    ________    ________

Gross margin                                     6,651       7,859       8,240
Operating expenses:
   Selling, general and administrative           3,988       4,027       3,945
   Stockholders' compensation                      347         313       2,806
                                              ________    ________    ________

Operating income                                 2,316       3,519       1,489
Interest expense                                   184         258         386
Interest income                                   (243)       (275)         --
                                              ________    ________    ________

Income before income taxes                       2,375       3,536       1,103
Provision for income taxes                         867       1,180          22
                                              ________    ________    ________

Net income                                    $  1,508    $  2,356    $  1,081
                                              ========    ========    ========

Basic and diluted earnings per share          $   0.26    $   0.45    $   0.33
                                              ========    ========    ========

Pro forma net income                                      $  2,116    $  2,158
                                                          ========    ========

Pro forma basic and diluted earnings
   per share                                              $   0.41    $   0.66
                                                          ========    ========
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>

                                                  OCAL, INC.
                                         CONSOLIDATED BALANCE SHEETS
                                      (In thousands, except share data)

<CAPTION>
                                                                                December 31,    December 31,
                                                                                    1997            1996
                                                                                ____________    ____________
                                                   ASSETS
<S>                                                                             <C>             <C>
CURRENT ASSETS
   Cash and cash equivalents                                                    $      4,529    $      6,619
   Accounts receivable, net of allowance for doubtful
      accounts of $127 ($122 in 1996)                                                  2,751           2,580
   Inventories                                                                         7,760           6,947
   Prepaid expenses and other current assets                                             201             171
   Prepaid income taxes                                                                  253              --
   Deferred income taxes                                                                 275             293
                                                                                ____________    ____________
      Total current assets                                                            15,769          16,610

Property and equipment, net                                                            1,819           1,524
Other assets                                                                              47             148
                                                                                ____________    ____________
TOTAL ASSETS                                                                    $     17,635    $     18,282
                                                                                ============    ============

<CAPTION>
                                    LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                             <C>             <C>
CURRENT LIABILITIES
   Accounts payable                                                             $        922    $      1,167
   Commissions payable                                                                   534             452
   Accrued expenses                                                                      143             136
   Income taxes payable                                                                   --              37
   Distribution payable - stockholders                                                    --             300
   Current maturities of notes payable - stockholders                                     --           1,500
                                                                                ____________    ____________
      Total current liabilities                                                        1,599           3,592

Long-term notes payable - stockholders                                                 1,757           1,757
Deferred income taxes                                                                    287             218
                                                                                ____________    ____________
      Total liabilities                                                                3,643           5,567

Commitments and contingencies                                                             --              --

STOCKHOLDERS' EQUITY
   Preferred stock, $.001 par value; 5,000,000 shares            
      authorized; no shares issued                                                        --              --
   Common stock, $.001 par value; 15,000,000 shares
      authorized; 5,704,000 shares issued and             
      outstanding (5,780,000 in 1996)                                                      6               6
   Additional paid-in capital                                                         10,486          10,708
   Retained earnings                                                                   3,509           2,001
   Treasury stock at cost, 3,000 shares                                                   (9)             --
                                                                                ____________    ____________
      Total stockholders' equity                                                      13,992          12,715
                                                                                ____________    ____________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $     17,635    $     18,282
                                                                                ============    ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
                                                         OCAL, INC.
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (In thousands)

<CAPTION>
                                                                                     For the Years Ended December 31,
                                                                               ____________________________________________
                                                                                   1997            1996            1995     
<S>                                                                            ____________    ____________    ____________ 
CASH FLOWS FROM OPERATING ACTIVITIES:                                          <C>             <C>             <C>          
   Net income                                                                  $      1,508    $      2,356    $      1,081 
   Adjustments to reconcile net income to net
   cash provided by operating activities:
      Depreciation and amortization                                                     322             261             306
      Deferred income taxes                                                              87             (75)             --
      Changes in assets and liabilities:
         Accounts receivable, net                                                      (171)            510            (963)
         Inventories                                                                   (813)            301            (851)
         Prepaid expenses and other                                                      71            (137)            (65)
         Accounts payable                                                              (245)           (908)            808
         Commissions payable                                                             82             (24)            138
         Accrued expenses                                                                 7            (162)             18
         Income taxes                                                                  (290)             26              11
                                                                               ____________    ____________    ____________
Net cash provided by operating activities                                               558           2,148             483

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                                                 (617)           (389)           (159)
   Repayment by (loan to) stockholder and related parties                                --           1,645          (1,645)
                                                                               ____________    ____________    ____________
Net cash provided by (used in) investing activities                                    (617)          1,256          (1,804)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings from (repayment of) notes payable - bank                                   --          (5,802)          4,959 
   Repayment of notes payable - supplier                                                 --              --            (700)
   Repayment of notes payable - related parties                                          --              --          (2,400)
   Net proceeds from (costs of) issuance of common stock                                 --          10,490            (490)
   Purchases of treasury stock                                                         (231)             --              --
   Distribution of S corporation retained earnings
      to prior S corporation stockholders                                              (300)         (4,900)             -- 
   Additions to (repayment of) notes payable - stockholders                          (1,500)          3,300              -- 
                                                                               ____________    ____________    ____________
Net cash provided by (used in) financing activities                                  (2,031)          3,088           1,369 

Net increase (decrease) in cash and cash equivalents                                 (2,090)          6,492              48 
Cash and cash equivalents at beginning of year                                        6,619             127              79 
                                                                               ____________    ____________    ____________
Cash and cash equivalents at end of year                                       $      4,529    $      6,619    $        127
                                                                               ============    ============    ============
  
Supplemental disclosure of cash flow information:
   Cash paid during the year for:
      Interest                                                                 $        192    $        242    $        416
      Income taxes                                                             $      1,040    $      1,229    $         24

<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
                                                  OCAL, INC.
                               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 FOR THE THREE YEARS ENDED DECEMBER 31, 1997
                                                (In thousands)


<CAPTION>
                                             Common Stock    Additional              Treasury Stock
                                           ________________    Paid-in    Retained   ______________
                                           Shares    Amount    Capital    Earnings   Shares   Amount     Total
                                           _______  _______  __________  __________  ______  _______  __________
<S>                                        <C>      <C>      <C>         <C>         <C>     <C>      <C>

Balance at December 31, 1994                3,250    $   3    $    711    $  3,464      --    $  --    $  4,178

Net income                                     --       --          --       1,081      --       --       1,081
                                           _______  _______  __________  __________  ______  _______  __________

Balance at December 31, 1995                3,250        3         711       4,545      --       --       5,259

Shares issued in initial public
  offering                                  2,530        3       9,997          --      --       --      10,000
Distributions of S corporation
  retained earnings to prior
  S corporation stockholders                   --       --          --      (4,900)     --       --      (4,900)
Net income                                     --       --          --       2,356      --       --       2,356
                                           _______  _______  __________  __________  ______  _______  __________

Balance at December 31, 1996                5,780        6      10,708       2,001      --       --      12,715

Purchases of treasury stock                    --       --          --          --      79     (231)       (231)
Retirements of treasury stock                 (76)      --        (222)         --     (76)     222          --
Net income                                     --       --          --       1,508      --       --       1,508
                                           _______  _______  __________  __________  ______  _______  __________

Balance at December 31, 1997                5,704    $   6    $ 10,486    $  3,509       3    $  (9)   $ 13,992
                                           =======  =======  ==========  ==========  ======  =======  ==========  

<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>

                                   OCAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  (A)  Basis of Presentation:  Concurrent with the closing of the Company's 
initial public offering of common stock on March 18, 1996 (Note 4), all of the 
outstanding capital stock of OCAL, Incorporated ("Ocal Alabama"), Occidental 
Coating Company ("Occidental"), Ocal Data Company ("Ocal Data"), and Ocal 
Transport Co. ("Ocal Transport") was acquired by the Company through capital 
contributions by their respective prior stockholders in exchange for an 
aggregate of 3,250,000 shares of the Company's common stock (the 
"Reorganization"). The Company's Chairman, CEO and President was the sole or 
majority stockholder of each of the contributed companies and is the 53.8% 
stockholder of the Company as of December 31, 1997.  

  The accounts of Ocal Alabama, Occidental, Ocal Data and Ocal Transport are 
included in the accompanying consolidated financial statements of the Company 
on their historical basis. The stockholders' equity section of the consolidated 
financial statements for prior periods has been retroactively restated from 
that reported in the Registration Statement and Prospectus related to the 
Company's initial public offering to reflect the Company's capital structure 
and the Reorganization with the common stock of these entities classified as 
paid-in capital.  

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

  (B)  Description of Business:  The Company manufactures PVC-coated rigid 
steel conduit, elbows and fittings which are sold principally in the United 
States to distributors who resell the products for ultimate use principally in 
new construction or as replacement parts.  

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

  (D)  Cash and Cash Equivalents:  At December 31, 1997, cash equivalents 
include highly liquid investments of approximately $4,200,000 invested 
primarily in tax-exempt municipal securities and high-grade commercial paper.  
These investments are stated at cost which approximates fair value. The Company 
considers all highly liquid instruments purchased with a remaining maturity of 
three months or less to be cash equivalents.  

  (E)  Inventories:  Inventories are stated at the lower of cost (first-in, 
first-out method) or market and consist of the following (amounts in 
thousands): 

<TABLE>
<CAPTION>
                                       December 31,
                                       ____________           
                                     1997        1996
                                   _______     _______          
         <S>                       <C>         <C>
         Raw materials             $ 3,344     $ 3,038
         Finished goods              4,416       3,909
                                   _______     _______
                                   $ 7,760     $ 6,947
                                   =======     =======
</TABLE>

  (F)  Property and Equipment:  Property and equipment are recorded at cost and 
are depreciated using the straight-line method over the following estimated 
useful lives: 

  Galvanizer                                                  20 years
  Other manufacturing equipment and molds                      7 years
  Office equipment                                           5-7 years
  Vehicles                                                     3 years
  Leasehold improvements                       Remaining life of lease

  (G)  Revenue Recognition:  The Company recognizes revenue from product sales 
to customers upon shipment. The Company warrants its products against defects 
for six years and has policies permitting customers to return products under 
certain circumstances. In addition, certain of the Company's distributors and 
agents are entitled to rebates upon attaining specified sales levels. A 
provision has been made for the estimated amount of product returns and rebates 
that may occur under these programs.  

  (H)  Income Taxes:  The Company accounts for income taxes under Statement of 
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 
109). SFAS 109 is an asset and liability approach that requires the recognition 
of deferred tax assets and liabilities for the expected future tax consequences 
of events that have been recognized in the Company's financial statements or 
tax returns. In estimating future tax consequences, SFAS 109 generally 
considers all expected future events other than enactments of changes in the 
tax law or rates.  

  Prior to the Reorganization, Ocal Alabama had elected to be taxed as an S 
corporation under the provisions of the Internal Revenue Code. Under those 
provisions, Ocal Alabama did not pay federal or state corporate income taxes on 
its taxable income. Instead, the stockholders were liable for federal and state 
income taxes on Ocal Alabama's taxable income. The State of California adopted 
the provisions of the S corporation election but charged a franchise tax at the 
corporate level. In connection with the Company's initial public offering, Ocal 
Alabama's Subchapter S election was terminated, and accordingly, the Company 
then became subject to federal and state income taxes. For information 
purposes, the pro forma financial information (see Note 3) includes pro forma 
amounts for the income taxes that would have been recorded as if all of the 
Company's income during the pro forma periods presented were taxed at C 
corporation rates.  

  (I)  Fair Value of Financial Instruments:  The carrying values of the 
Company's financial instruments, which consist of cash and cash equivalents and 
notes payable - stockholders, approximate their fair values.  

  (J)  Reclassifications:  Certain previously reported amounts have been 
reclassified to conform to the current period presentation.  

  (K)  New Accounting Standard:  In 1997, the Financial Accounting Standards 
Board issued Statement No. 128, "Earnings per Share," which replaced the 
calculation of primary and fully diluted earnings per share with basic and 
diluted earnings per share. Unlike primary earnings per share, basic earnings 
per share excludes any dilutive effects of options, warrants and convertible 
securities. Diluted earnings per share is very similar to the previously 
reported fully diluted earnings per share. All earnings per share amounts 
presented have been recalculated to comply with Statement 128's requirements, 
which did not change amounts previously reported.  The effect of adopting 
Statement 128 was not material.  

2.  EARNINGS PER SHARE 

  The following table sets forth the computation of basic and diluted earnings 
per share (amounts in thousands, except per share data): 

<TABLE>
<CAPTION>  
                                              1997         1996         1995
                                            _______      _______      _______
<S>                                         <C>          <C>          <C>
Numerator: Net income for basic
  and diluted earnings per share            $ 1,508      $ 2,356      $ 1,081

Denominator:
  Weighted average shares                     5,762        5,224        3,250

Effect of dilutive securities:
  Warrants                                       --           --           --
  Stock options                                  --           --           -- 
                                            _______      _______      _______
Dilutive potential common shares                 --           --           --

Denominator for basic and
  diluted earnings per share                  5,762        5,224        3,250
                                            =======      =======      =======

Basic and diluted earnings per share        $  0.26      $  0.45      $  0.33
                                            =======      =======      =======
</TABLE>

  For additional disclosures regarding the stock options and warrants, see
Note 8. All options and warrants were excluded from the computation of diluted 
earnings per share because the exercise prices for both the options and 
warrants were greater than the average market price of the common shares during 
the relevant periods, and therefore, the effect would be antidilutive.  

3.  PRO FORMA FINANCIAL INFORMATION (UNAUDITED) 

  The pro forma financial information is prepared on a basis consistent with 
pro forma information disclosed in the Registration Statement and Prospectus 
related to the Company's initial public offering. The pro forma financial 
information includes adjustments (i) to reduce stockholders' compensation 
expense, relating to salaries and bonuses paid to certain stockholders, by 
$2,493,000 for the year ended December 31, 1995, and (ii) to provide for 
related income taxes as if all of the Company's income during the pro forma 
periods presented were taxed at C corporation rates based upon pro forma income 
before income taxes. Reconciliations between historical and pro forma results 
of operations follow (in thousands except per share amounts): 

<TABLE>
<CAPTION>  
                                                  For the Years Ended December 31,
                                                  ________________________________
                                                           1996         1995
                                                         _______      _______
<S>                                                      <C>          <C>
Income before income taxes                               $ 3,536      $ 1,103
Pro forma adjustments (described above)
(i) Stockholders' compensation                                --        2,493
                                                         _______      _______
Pro forma income before income taxes                       3,536        3,596
(ii) Tax provision                                        (1,420)      (1,438)
                                                         _______      _______
Pro forma net income                                     $ 2,116      $ 2,158
                                                         =======      =======
Pro forma basic and diluted earnings per share           $  0.41      $  0.66
                                                         =======      =======
Weighted average shares outstanding                        5,224        3,250
                                                         =======      =======
</TABLE>

4.  INITIAL PUBLIC OFFERING 

  On March 18, 1996, the Company completed the initial public offering of 
2,200,000 shares of its common stock at a price of $5.00 per share. On April 
25, 1996, the underwriters exercised their overallotment option by purchasing 
an additional 330,000 shares of the Company's common stock at a price of $5.00 
per share. After underwriters' discounts, commissions and expenses, the net 
proceeds of the offering and overallotment exercise to the Company were 
$10,000,000.  

5.  PROPERTY AND EQUIPMENT 

  Property and equipment consist of the following (amounts in thousands): 

<TABLE>
<CAPTION>    

                                                          December 31,
                                                          ____________
                                                        1997        1996
                                                      _______     _______
<S>                                                   <C>         <C>
Machinery and equipment                               $ 2,015     $ 1,556
Office equipment                                          377         365
Leasehold improvements                                    321         311
Molds                                                     528         429
Vehicles                                                  178         148
                                                      _______     _______
                                                        3,419       2,809
Less accumulated depreciation and amortization         (1,600)     (1,285)
                                                      _______     _______
Property and equipment - net                          $ 1,819     $ 1,524
                                                      =======     =======
</TABLE>

6.  REVOLVING BANK LINE OF CREDIT 

  The Company has a revolving bank line of credit with SouthTrust Bank, 
National Association that expires July 31, 2000 and provides for maximum 
borrowings of $6,500,000 (subject to certain specified percentages of the 
Company's accounts receivable and inventories). The related credit agreement 
requires the maintenance of certain financial ratios and tangible net worth 
amounts and provides for various restrictions, including limitations on capital 
expenditures, additional indebtedness, salaries of certain officers of the 
Company, and payment of dividends by the Company. Interest on borrowings 
outstanding under the bank line is based, at the Company's option, on the 
London Interbank Offered Rate ("LIBOR") or the bank's prime rate (8.5% at 
December 31, 1997). At December 31, 1997, the annual interest rate based on the 
LIBOR pricing option was LIBOR plus 2.0%, and the annual interest rate based on 
the prime rate was prime. At December 31, 1997, there were no borrowings 
outstanding under the bank line of credit, and the amount of unused credit 
available, based upon the Company's collateral, was $4,861,000.  

7.  TRANSACTIONS WITH RELATED PARTIES 

Notes Payable 

  Notes payable - stockholders consist of the following (amounts in thousands): 

<TABLE>
<CAPTION>

                                                                        December 31,
                                                                        ____________
                                                                      1997        1996
                                                                    _______     _______
<S>                                                                 <C>         <C>
6.5% unsecured note payable to the majority stockholder
  of the Company, due on March 18, 1999                             $   257     $   257
6.5% unsecured notes payable due to former stockholders
  of Ocal Alabama -  see (ii) below                                   1,500       3,000
                                                                    _______     _______
Total                                                                 1,757       3,257
Less: portion due within one year                                        --       1,500
                                                                    _______     _______
Long-term portion                                                   $ 1,757     $ 1,757
                                                                    =======     =======
</TABLE>

  As part of the Reorganization on March 18, 1996, Ocal Alabama declared a 
distribution to its then stockholders in an amount of $4,600,000, which was an 
estimate of all of its undistributed S corporation retained earnings as of that 
date. The distribution by the Company on Ocal Alabama's behalf was paid as 
follows: 

  (i)  $1,600,000 was paid in cash on March 25, 1996; and 

  (ii) $3,000,000 in notes payable were issued to the stockholders of Ocal 
       Alabama, bearing interest at the rate of 6.5% per annum. On September 
       18, 1997, $1,500,000 principal amount of the notes were repaid in cash, 
       and the remaining $1,500,000 principal amount of the notes are payable 
       on March 18, 1999.  

  The amount of undistributed S corporation retained earnings as of March 18, 
1996 was finalized as $4,900,000 after Ocal Alabama's income tax return for the 
period from January 1, 1996 through March 18, 1996 was completed. The 
additional $300,000 of undistributed S corporation retained earnings, 
classified as a distribution payable to stockholders, was paid in cash to 
former stockholders in February 1997 and reflected in current liabilities at 
December 31, 1996.  

Other 

  The Company's corporate office is leased (at an annual rent of $36,000) from 
a partnership in which the Company's majority stockholder is the general 
partner, and the lease expires on December 31, 1998.  

Summary 

  Amounts of these related party transactions charged to expense are as follows 
(amounts in thousands): 

<TABLE>
<CAPTION>
                                             Years Ended December 31,
                                         ________________________________
                                           1997         1996        1995
                                         _______      _______     _______ 
<S>                                      <C>          <C>         <C>
Rent expense                             $    36      $    36     $    66
Interest expense                         $   184      $   170     $    88

</TABLE>

8.  CAPITAL STOCK 

Preferred Stock 

  The Company's Board of Directors is authorized to issue up to 5,000,000 
shares of preferred stock, in series, to fix dividend rates, conversion rights, 
voting rights, terms of redemption, liquidation preferences, and to increase or 
decrease the number of shares in any series. No preferred stock is currently 
outstanding, and the Company has no present plans to issue any preferred stock.
Specific rights granted to future holders of preferred stock could be used to 
restrict the Company's ability to merge with, or sell its assets to, a third 
party. The ability of the Board of Directors to issue preferred stock could 
discourage, delay or prevent a takeover of the Company, thereby preserving 
control of the Company by the current stockholders.  

Stock Options 

  In August 1995, the Board of Directors adopted, and the stockholders of the 
Company approved, the Ocal, Inc. 1995 Stock Option Plan (the "Plan"). The Plan 
provides for the award of incentive stock options to employees and the award of 
non-qualified stock options to employees, independent contractors, directors 
and consultants. The Company reserved 400,000 shares of Common Stock under the 
Plan. Options to purchase Common Stock are generally conditioned upon continued 
employment or service to the Company, expire from five to ten years after the 
grant date, and become exercisable commencing with the first anniversary date 
of the grant. Stock options under the Plan are granted at prices not less than 
the fair market value on the date of the grant.  

  There were no options outstanding prior to the Company's initial public 
offering on March 18, 1996. The following is a summary of stock option activity 
under the Plan: 

<TABLE>
<CAPTION>
                                              1997                   1996
                                      ____________________   ____________________
                                                 Weighted               Weighted
                                       Number     Average     Number     Average
                                         of      Exercise       of      Exercise
                                       Shares      Price      Shares      Price
                                      _________  _________   _________  _________
<S>                                   <C>        <C>         <C>        <C>

Outstanding, beginning of year         105,000    $  5.32          --    $    --
Granted                                 60,500    $  3.19     108,000    $  5.31
Expired or canceled                    (10,000)   $  5.00      (3,000)   $  5.00
                                      _________              _________
Outstanding, end of year               155,500    $  4.51     105,000    $  5.32
                                      =========              =========           

Exercisable at year-end                 31,667    $  5.36      10,000    $  5.00
                                      =========              =========

Available for grant                    244,500                295,000
                                      =========              =========

Weighted-average fair value of
  options granted during the year                 $  1.46                $  2.50

</TABLE>

  The 155,500 options outstanding at December 31, 1997 have a weighted average 
remaining contractual life of 8.89 years and the exercise prices range from 
$3.19 to $5.94 per share.  

  On February 17, 1998, the Stock Option Committee of the Company's Board of 
Directors passed a resolution to cancel all of the outstanding options under 
the Plan and replace them with new option grants, effective February 18, 1998.  
The new options expire ten years after the grant date, maintain the original 
vesting schedule of the options they replace, and have an exercise price of 
$2.375 per share.  

Pro Forma Fair Value Disclosures 

  The Company accounts for its stock options using the intrinsic value method 
prescribed in Accounting Principles Board Opinion No. 25 (APB 25), "Accounting 
for Stock Issued to Employees", and related Interpretations. Accordingly, no 
compensation expense related to these plans has been recognized in the 
Company's financial statements. The table below sets out the pro forma amounts 
of net income and net income per share that would have resulted if the Company 
accounted for its stock options under the fair value recognition provisions of 
SFAS No. 123, "Accounting for Stock-Based Compensation" and excludes the 
effects of the above-mentioned cancellation and replacement of options (in 
thousands except per share amounts): 

<TABLE>
<CAPTION>

                                                            1997        1996
                                                          ________    ________
<S>                                                       <C>         <C>
Net income as reported                                     $ 1,508     $ 2,356
Net income - pro forma                                       1,435       2,310
Primary and diluted earnings per share - as reported          0.26        0.45
Primary and diluted earnings per share - pro forma         $  0.25     $  0.44

</TABLE>

  For purposes of pro forma disclosures, the estimated fair value of the 
options is amortized over the options' vesting periods. The fair value of each 
option grant is estimated on the date of grant using the Black-Scholes option-
pricing model with the following assumptions: 

<TABLE>
<CAPTION>
                                                  1997                1996
                                                ________            ________
<S>                                       <C>                 <C>
Expected dividend yield                            0.00%               0.00%
Expected stock price volatility                    43.0%               46.4%
Risk-free interest rate                            5.70%               6.70%
Expected life of options                         5 years             5 years
Vesting assumption                        33.3% per year      33.3% per year

</TABLE>

  The Black-Scholes option valuation model was developed for use in estimating 
the fair value of traded options. The Company's stock options have 
characteristics significantly different from those of traded options such as 
vesting restrictions and extremely limited transferability. In addition, the 
assumptions used in option valuation models are highly subjective, particularly 
the expected stock price volatility of the underlying stock. Because changes in 
these subjective input assumptions can materially affect the fair value 
estimate, in management's opinion, the existing models do not provide a 
reliable single measure of the fair value of its stock options.  

  Pro forma net income and earnings per share are the same as reported amounts 
prior to 1996, as no stock options were granted until the initial public 
offering on March 18, 1996. Because options generally vest over three years and 
new option grants are generally made each year, the pro forma amounts shown 
above may not be representative of the pro forma effect on reported net income 
in future years.  

Warrants 

  At December 31, 1997, warrants to purchase up to 220,000 shares of Common 
Stock were outstanding. These warrants were issued to underwriters in 
connection with the Company's initial public offering, and are exercisable for 
a period of four years commencing March 18, 1997 at an exercise price of $6.50 
per share.  

9. INCOME TAXES 

  Through March 18, 1996, the date of the Reorganization and the Company's 
initial public offering, Ocal Alabama and Ocal Data had elected to be taxed as 
S corporations under the provisions of the Internal Revenue Code. Pursuant to 
such elections, stockholders of these companies included their proportionate 
share of the taxable income of these companies in their personal tax returns.  
Accordingly, no provision for federal income taxes was required or provided for 
the operations of Ocal Alabama and Ocal Data through March 18, 1996. The State 
of California adopted the provisions of the S corporation election but charged 
a franchise tax at the corporate level. As of March 18, 1996, as a result of 
the Reorganization, the Company and all of its subsidiaries became C 
corporations subject to state and federal income taxes at statutory rates. Such 
income taxes are provided on the results of operations in the accompanying 
consolidated statements of income for the year ended December 31, 1997 and the 
period from March 18, 1996 through December 31, 1996.  

  The components of the provision for income taxes are as follows (amounts in 
thousands): 

<TABLE>
<CAPTION>
                                  Years ended December 31,
                               _____________________________
                                 1997       1996       1995
                               _______    _______    _______
<S>                            <C>        <C>        <C>
Current:              
  Federal                      $   581    $   960    $    --
  State                            155        305         22
                               _______    _______    _______
                                   736      1,265         22
Deferred:
  Federal                          113        (90)        -- 
  State                             18          5         -- 
                               _______    _______    _______
                                   131        (85)        --
                               _______    _______    _______
Total                          $   867    $ 1,180    $    22
                               =======    =======    =======

</TABLE>

  The reconciliation of income tax computed at the U.S. federal statutory tax 
rate to the Company's effective income tax rate is as follows (amounts in 
thousands): 

                                            Years ended December 31,
                                          _____________________________
                                            1997       1996       1995
                                          _______    _______    _______
[S]                                       [C]        [C]        [C]
Expected tax at U.S. federal
  statutory rate                            34.0%      34.0%      34.0%
State and local income taxes,
  net of U.S. federal benefit                4.7        5.8        2.0 
Tax exempt interest income                  (2.3)      (0.3)        -- 
Exclusion of statutory taxes on
  income prior to Reorganization              --       (6.7)     (34.0) 
Other                                        0.1        0.6         -- 
                                          _______    _______    _______
Total                                       36.5%      33.4%       2.0%
                                          =======    =======    =======

  Deferred income taxes reflect the net tax effects of temporary differences 
between the reported amounts of certain assets and liabilities in the Company's 
financial statements and the amounts used for income tax purposes. Significant 
components of the Company's deferred tax assets and liabilities are as follows: 

<TABLE>
<CAPTION>
                                                  December 31,
                                                  ____________     
                                                1997        1996
                                              ________    ________
<S>                                           <C>         <C>
Deferred tax assets:
Receivables valuation                         $   138     $   126
Inventory valuation                                --          51
State franchise taxes                              75         105
Accrued commissions payable                        35          --
Other                                              27          11
                                              ________    ________
  Total deferred tax assets                   $   275     $   293
                                              ========    ========
Deferred tax liability - depreciation         $   287     $   218
                                              ========    ========

</TABLE>

10.  STOCKHOLDERS' COMPENSATION 

  Stockholders' compensation in 1995 includes amounts distributed to former 
stockholders of Ocal Alabama to facilitate the payment of their personal income 
taxes which include the taxable income of Ocal Alabama for those years as a 
result of its election of S corporation status.  

11.  LEASE COMMITMENTS 

  The Company leases its manufacturing facilities under an agreement expiring 
on December 31, 2001. The lease for the manufacturing facilities contains 
certain rent escalation clauses based upon changes in the Consumer Price Index 
and provides the Company with an option to extend the lease through December 
31, 2002. The Company's majority stockholder has personally guaranteed the 
lease obligation for the manufacturing facilities. The Company's corporate 
office is leased from a partnership in which the Company's majority stockholder 
is the general partner (see Note 7), and the expiration date of that lease is 
December 31, 1998. The Company also leases autos under various agreements 
expiring in 2000. Future minimum lease payments under noncancelable operating 
leases as of December 31, 1997 are as follows (amounts in thousands): 

<TABLE>
<CAPTION>
     Years ended December 31,
     ________________________
               <S>                            <C>
               1998                           $    235
               1999                                178
               2000                                168
               2001                                148
               Thereafter                           --
                                              ________
               Total                          $    729
                                              ========
</TABLE>

  Rent expense was as follows (amounts in thousands): 

<TABLE>
<CAPTION>
     Years ended December 31,
     ________________________
               <S>                            <C>
               1997                           $    199
               1996                                196
               1995                                167
</TABLE>


  Included in rent expense are amounts paid to a partnership for rental of the 
Company's corporate office in the amounts indicated in Note 7.  

12.  CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS 

  Financial instruments that potentially subject the Company to concentrations 
of credit risk consist primarily of cash equivalents and trade receivables. The 
Company places its cash equivalents with high credit quality institutions.  

  The primary users of the Company's products are electrical contractors and 
large industrial companies that obtain such products through a group of 
approximately 700 distributors and resellers who purchase the products directly 
from the Company. Credit is extended to these distributors and resellers based 
upon an evaluation of the customer's financial condition, and collateral is 
generally not required. Management does not believe significant credit risk 
exists at December 31, 1997.  

  The Company's four largest customers are multiple location distributors.  
These customers are comprised of chains of individual distributors who make 
independent purchasing decisions. In 1997, sales to one customer represented 
10.2% of the Company's net sales. During 1996, sales to any individual customer 
did not exceed 10% of the Company's net sales. During 1995, there were two 
individual customers that represented 15.3% and 11.4%, respectively, of the 
Company's net sales. Management believes that the loss of any of these 
distributors would not have a material adverse effect on the Company.  

13.  COMMITMENTS AND CONTINGENCIES 

  The Company is a party to various lawsuits arising in the ordinary course of 
business. The Company does not believe that the outcome of any of these 
lawsuits will have a material adverse effect on the Company's business or 
financial condition.  

14.  QUARTERLY FINANCIAL DATA (UNAUDITED) 

  Summarized quarterly financial data for 1997 and 1996 follow (in thousands of 
dollars except for per share amounts): 

<TABLE>
<CAPTION>

                                          First     Second      Third     Fourth        
                                         Quarter    Quarter    Quarter    Quarter      Year
1997                                     _______    _______    _______    _______      ____  
____
<S>                                      <C>        <C>        <C>        <C>        <C>
Net sales                                $ 5,527    $ 6,350    $ 6,457    $ 5,945    $ 24,279
Gross profit                               1,574      1,760      1,792      1,525       6,651
Net income                                   286        402        487        333       1,508
Basic and diluted earnings per share         .05        .07        .08        .06         .26

<CAPTION>
1996
____
<S>                                      <C>        <C>        <C>        <C>        <C>
Net sales                                $ 5,721    $ 6,011    $ 7,193    $ 6,075    $ 25,000
Gross profit                               1,821      1,891      2,172      1,975       7,859
Net income                                   639        540        612        565       2,356
Pro forma net income                         499        540        612        465       2,116
Basic and diluted earnings per share         .18        .09        .11        .10         .45
Pro forma earnings per share                 .14        .09        .11        .08         .41

</TABLE>


  The pro forma financial information is prepared on a basis consistent with 
pro forma information appearing in the Registration Statement and Prospectus 
related to the Company's initial public offering. The pro forma financial 
information includes an adjustment to provide related income taxes as if all of 
the Company's income prior to the IPO had been taxed at C corporation rates 
based upon income before income taxes. The above earnings per share amounts 
have been recalculated to comply with Statement of Financial Accounting 
Standards No. 128, "Earnings per Share," which did not change amounts 
previously reported.  

<PAGE> 

ITEM 9.  CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.  

  Not applicable.  

<PAGE> 

                                    PART III 


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 

ITEM 11.  EXECUTIVE COMPENSATION 

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

  The information called for by Items 10, 11, 12, and 13 is incorporated by 
reference to the Company's definitive proxy statement for the Company's 1998 
Annual Meeting of Stockholders to be filed pursuant to Regulation 14A.  

<PAGE> 

                                    PART IV 


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

                                                                        PAGE 
  (a)  The following documents are filed as part of this report:        ____ 

    (1)  FINANCIAL STATEMENTS:
         Report of Independent Auditors..................................14
         Consolidated Statements of Income for the three years ended
         December 31, 1997...............................................15
         Consolidated Balance Sheets as of December 31, 1997 and 1996....16
         Consolidated Statements of Cash Flows for the three years
         ended December 31, 1997.........................................17
         Consolidated Statements of Stockholders' Equity for the
         three years ended December 31, 1997.............................18
         Notes to Consolidated Financial Statements......................19 

    (2)  FINANCIAL STATEMENT SCHEDULES:
         All other schedules for which provision is made in the applicable 
         rules and regulations of the Securities and Exchange Commission 
         ("SEC") have been omitted as the schedules are not required under the 
         related instructions, are not applicable, or the information required 
         thereby is set forth in the consolidated financials statements or 
         notes thereto.  

    (3)  EXHIBITS

         3.1   Amended and Restated Certificate of Incorporation of the 
               Company, as amended to date.(2) 

         3.2   Bylaws of the Company.(1) 

         4.1   Specimen Common Stock Certificate.(4) 

         4.2   Revised form of Representatives Warrants.(3) 

         10.1  Forms of Stock Option Agreements.(1) 

         10.2  Form of Indemnity Agreement between the Company and each of its 
               officers and directors.(1) 

         10.3  1995 Stock Option Plan, As Amended.(5) 

         10.7  Loan and Security Agreement dated July 28, 1992, among OCAL, 
               Incorporated, Occidental Coating Company ("Occidental"), and 
               SouthTrust Bank of Alabama ("SouthTrust"), and related Guaranty 
               Agreements with each of Ilan Bender and Mrs. Bender dated July 
               28, 1992, and Demand Promissory Note dated July 28, 1992 signed 
               by OCAL, Incorporated and Occidental.(1) 

         10.8  Letter Agreement dated October 20, 1993 between OCAL, 
               Incorporated, Occidental and SouthTrust re: waiver of loan 
               covenant.(1) 

         10.9  Amendment to Loan and Security Agreement with SouthTrust dated 
               July 1, 1994 to increase loan value of inventory.(1) 

         10.10 Amendment to Loan and Security Agreement dated June 27, 1995, 
               among OCAL, Incorporated, Occidental, and SouthTrust increasing 
               line of credit to $6.5 million, and related Guarantor's Consent; 
               Letter Agreement dated June 27, 1995 releasing subordinated 
               debts owed by Occidental and OCAL and relating to $2 million 
               certificate of deposit.(1) 

         10.11 Consent of SouthTrust to payment of dividends and other matters, 
               dated August 17, 1995.(1) 

         10.12 Lease dated June 22, 1988 between ADDSCO Industries, Inc. 
               ("ADDSCO") and OCAL, Incorporated relating to lease of 
               manufacturing facility in Mobile, Alabama, and related Personal 
               Guaranty dated June 22, 1988 of Ilan Bender, Amendment No. 1 to 
               Lease dated June 1, 1989 relating to the lease of additional 
               land, and Letter dated December 19, 1991 from ADDSCO extending 
               term of lease.(1) 

         10.13 Amended Lease dated August 28, 1995 between Ocal, Inc. and 14647 
               Lull Co. relating to California property.(3) 

         10.15 Forms of S Corporation Tax Allocation and Indemnification 
               Agreement between the Company and the prior stockholders of 
               OCAL, Incorporated and Ocal Data Company. (4) 

         10.16 Amendment to Loan and Security Agreement and Note Modification 
               dated June 30, 1997 among Ocal, Inc., Occidental, OCAL, 
               Incorporated, Ocal Data Company ("Ocal Data"), Ocal Transport 
               Co. ("Ocal Transport") and SouthTrust Bank, National Association 
               ("SouthTrust") adding Ocal, Inc., Ocal Data, and Ocal Transport 
               as named borrowers and to add a LIBOR interest pricing 
               option.(6) 

         10.17 Amendment to Loan and Security Agreement and Note Modification 
               dated December 31, 1997 among Ocal, Inc., Occidental, OCAL, 
               Incorporated, Ocal Data, Ocal Transport and SouthTrust 
               increasing the loan value of inventory to $3,250,000 and 
               converting the loan from a demand facility to a committed 
               facility expiring on July 31, 2000.(7)  

         21.   Subsidiaries.(3) 

         23.   Consent of Ernst & Young LLP, Independent Auditors.(7)

         27.   Financial Data Schedule.(7)
_____________ 

    (1) Incorporated by reference to the exhibit with the same number in the 
        Company's Registration Statement on Form S-1 (Registration No.
        33-96336), filed with the SEC on August 29, 1995.  

    (2) Incorporated by reference to Exhibit 3.3 in Amendment No. 2 to the 
        Company's Registration Statement on Form S-1 (Registration No.
        33-96336), filed with the SEC on December 26, 1995.  

    (3) Incorporated by reference to the exhibit with the same number in 
        Amendment No. 3 to the Company's Registration Statement on Form S-1 
        (Registration No. 33-96336), filed with the SEC on January 23, 1996.  

    (4) Incorporated by reference to the exhibit with the same number in 
        Amendment No. 4 to the Company's Registration Statement on Form S-1 
        (Registration No. 33-96336), filed with the SEC on March 8, 1996.  

    (5) Incorporated by reference to Exhibit 10.2 of the Company's Quarterly 
        Report on Form 10-Q for the quarter ended September 30, 1997 (File No. 
        0-27748), filed with the SEC on November 14, 1997.  

    (6) Incorporated by reference to Exhibit 10.1 of the Company's Quarterly 
        Report on Form 10-Q for the quarter ended September 30, 1997 (File No. 
        0-27748), filed with the SEC on November 14, 1997.  

    (7) Filed herewith.

  (b)  REPORTS ON FORM 8-K:

         During the fourth quarter ended December 31, 1997, the Company did not 
       file any reports on Form 8-K.  

<PAGE>

                                   SIGNATURES


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


                                             OCAL, INC.

                                       By:  /s/ Lida R. Frankel
                                            ___________________
                                            Lida R. Frankel
                                            Chief Financial Officer

                                     Date:  March 24, 1998


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


         Signature                       Title                     Date
      _______________                  _________                __________

                                 Director and Principal
      /s/ Ilan Bender              Executive Officer          March 24, 1998
  _______________________
       (Ilan Bender)

     /s/ Ronald Costa                  Director               March 24, 1998
  _______________________
       (Ronald Costa)

   /s/ Carlos R. Espinosa              Director               March 24, 1998
  _______________________
    (Carlos R. Espinosa)

   /s/ Carlos V. Espinosa              Director               March 24, 1998
  _______________________
    (Carlos V. Espinosa)

   /s/ William T. Gross                Director               March 24, 1998
  _______________________
     (William T. Gross)

   /s/ Michael R. Peevey               Director               March 24, 1998
  _______________________
    (Michael R. Peevey)

   /s/ Lida R. Frankel         Chief Financial Officer        March 24, 1998
  _______________________     (Principal Financial and
    (Lida R. Frankel)            Accounting Officer)