UNITED STATES  
                      SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549
                                 FORM 10-K
	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
    ACT OF 1934 

                For the fiscal year ended December 31, 1996

                          Commission File No. 1-9844
                        SHELTER COMPONENTS CORPORATION    
            (Exact name of Registrant as specified in its charter)

          Indiana                                    22-2825183
(State of Incorporation)               (IRS Employer Identification No.)

 2831 Dexter Drive, P.O. Box 4026, Elkhart, Indiana        46514    
 (Address of principal executive offices)                 (Zip Code)

                                 (219) 262-1514
                 (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 Par Value                 American Stock Exchange
(Title of each class)                      (Name of Each Exchange on
                                            Which Registered)

Securities registered pursuant to Section 12(g) of the Act:    None

Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
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 the Registrant's knowledge, in the definitive Proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment hereto. X
                 ---
The aggregate market value of the Common Shares held by non-affiliates of the 
Registrant, based on the closing price on February 28, 1997 as reported by The 
American Stock Exchange, was approximately $78,508,000. For purposes of the 
foregoing calculation only, all directors and executive officers of the 
Registrant have been deemed affiliates.

As of February 28, 1997, there were approximately 7,680,000 Common Shares 
outstanding.

                     Documents Incorporated by Reference

                                          Parts of Form 10-K into which
Document                                   the Document is Incorporated

Portions of the Annual Report to Shareholders
for the Year Ended December 31, 1996	                  Part II

Portions of the Proxy Statement with Respect to the
1997 Annual Meeting of Shareholders of the Registrant  Part III


                                 PAGE 1
<PAGE>


                                  PART I

Item 1 - Business

(i)  General
Shelter Components Corporation ("Registrant") is primarily a supplier of 
numerous products to the Manufactured Housing, Modular Housing and Recreational
Vehicle industries including laminated wallboard products and thermoformed 
plastic bathroom products which are manufactured by wholly-owned subsidiaries. 
 To a lesser extent, the Registrant distributes products to other industries 
within the Registrant's geographic territories.

On January 31, 1992, the Registrant, through its wholly-owned subsidiary, 
Danube Carpet Mills, Inc. ("Danube"), acquired the business operations and net 
assets of E'Con Mills, Inc. ("E'Con"), a Chattanooga, Tennessee-based 
manufacturer of carpeting primarily for use by the Manufactured Housing 
industry.  The operations of E'Con were subsequently integrated with Danube 
operations.

On October 7, 1993, the Registrant, through a newly-formed wholly-owned 
subsidiary, Design Components, Inc. acquired the business operations and net 
assets of Design Time, Inc. ("Design Time"), an Elkhart, Indiana based 
manufacturer of laminated wallboard products for use by the Manufactured 
Housing and Recreational Vehicle industries.  

On May 2, 1994 the Registrant, through its wholly-owned subsidiary, Shelter 
Components of Indiana, Inc. acquired the business operations and operating 
assets of TATCO, Inc. ("TATCO") located in Lancaster, Pennsylvania.  TATCO was 
a wholesale distributor of building and component products to the Manufactured 
Housing and Modular Housing industries.

Effective January 1, 1995, the Registrant, through its newly-formed wholly-
owned subsidiary, Nubabsco, Inc. ("Nubabsco"), acquired the business operations 
and operating assets of BABSCO, Inc. ("BABSCO"), located in Elkhart, Indiana 
and having additional operations in Plymouth and Warsaw, Indiana and Mt. Joy, 
Pennsylvania.  The Registrant subsequently changed the name of Nubabsco to 
BABSCO, Inc.  BABSCO was a wholesale distributor of a full line of electrical 
products to the Recreational Vehicle, Manufactured Housing and Modular Housing 
industries, and to electrical contractors in the Northern Indiana and Southern 
Michigan region.

On January 1, 1996, the Registrant consolidated the operations of its three 
wholly-owned distribution subsidiaries, BABSCO, Inc., Thunander Corporation, 
and Shelter Components of Indiana, Inc. into a newly-formed limited partnership 
named Shelter Distribution, LP.  The partnership is owned by the Registrant's 
wholly-owned subsidiaries, Shelter Components of Indiana, Inc.  (99% limited 
partner) and newly formed BPR Holdings, Inc. (1% general partner).

Also on January 1, 1996, the Registrant merged its wholly-owned bath products 
manufacturing subsidiaries, Better Bath Components, Inc. and Duo-Form of 
Michigan, Inc. ("Duo-Form") under the Duo-Form name, with Better Bath 
Components continuing to operate as a division of Duo-Form.

On December 31, 1996, the Registrant sold the business operations and certain 
assets and transferred certain liabilities of Danube Carpet Mills, Inc., its 
wholly-owned carpet manufacturing subsidiary.  Included in the sale agreement 
was an agreement not to compete with the buyer for a period of five years in 
the carpet and yarn business and for a period of two years in the vinyl floor 
covering business.  

The Registrant's operations are conducted from its headquarters and 
distribution centers in Elkhart, Indiana and from 21 additional locations in 
other areas of the United States.  Through these locations, the Registrant is 
able to service its customers who, in accordance with industry practice, 
generally do not inventory significant quantities of items supplied by the 
Registrant and, accordingly, require frequent deliveries.

                                  PAGE 2
<PAGE>


(ii.)  Distributed Products
The principal products manufactured by others and distributed by the 
Registrant's wholesale distribution subsidiary, Shelter Distribution, LP, can 
be divided into four major groups: building products, hardware and fasteners, 
plumbing, and electrical components.  The principal products manufactured by 
others and distributed by the building products division include wood moulding, 
exterior wood and vinyl siding, visqueen, gypsum board, parquet wood flooring, 
and windows.

The principal products manufactured by others and distributed by the hardware 
and fastener division are a wide variety of fasteners, hardware and power tools 
used in the production of both Manufactured Homes and Recreational Vehicles. 
The hardware division distributes approximately 30,000 items.  Fasteners 
include screws, bolts and nuts of various sizes and dimensions.  Hardware 
components include lock sets, cabinet door pulls, hinges, door slides and 
drapery hardware.  The power tools and mill supplies are comprised principally 
of stationary power tools, table saws, hoists and related equipment used in the 
manufacturing cycle, including complete plant set-ups.  Additional items 
include plastic film, tape, glue, caulking, chemicals and abrasives.

The principal products manufactured by others and distributed by the 
Registrant's electrical division are wire, wiring devices, power generators, 
circuit breakers, panels, air conditioners, mill supplies and machinery.

The principal products manufactured by others and distributed by the 
Registrant's plumbing division are drain waste vent systems, potable water 
systems and fixtures.

In view of the variety of products distributed by the Registrant, its customers 
are able to maintain low inventories by placing frequent orders to meet their 
requirements for such items.

(iii.)  Manufactured Products
The principal products manufactured by the Registrant's subsidiaries are 
laminated wallboard products and thermoformed bathroom products.  

Laminated Wallboard - Design Components, Inc. ("Design") a subsidiary of the 
Registrant, manufactures laminated wallboard products primarily for the 
Manufactured Housing and Recreational Vehicle industries and, to a lesser 
extent, manufactures laminated wall shelving systems for the retail home 
improvement industry.  Decorative paper or vinyl wall coverings are laminated 
onto 4'x 8' sheets of gypsum or lauan and are shipped directly to the customers 
from one of Design's five manufacturing facilities located in Indiana, Georgia, 
Tennessee, and Texas (2 plants).

Thermoforming - Duo-Form of Michigan, Inc. ("Duo-Form") a subsidiary of the 
Registrant, manufactures bathtubs, shower enclosures and tub wall surrounds 
using the thermoforming process.  Thermoforming is the heating of plastic sheet 
to a softening temperature and forcing the hot flexible material over a mold by
the use of mechanical and vacuum pressure.  Allowed to cool, the plastic 
retains the exact shape and detail of the mold.  Better Bath , a division of 
Duo-Form, manufactures primarily for the Manufactured Housing industry while 
Duo-Form manufactures primarily for the Recreational Vehicle industry.

(iv.)  Purchasing
The Registrant's purchases of products for distribution are from domestic and 
foreign sources.  In 1996, five unaffiliated suppliers accounted for 
approximately 35% of consolidated purchases.  The relationships with those 
suppliers have been good and the Registrant does not have any reason to 
anticipate that they will not continue.

The raw material used by the Registrant for its manufactured products are 

                             PAGE 3
<PAGE>

generally available from a number of sources and the loss of any one source 
would not have a material adverse effect on the Registrant.

The Registrant's purchases, primarily of fasteners, hardware, and plywood 
include products manufactured in foreign countries, principally Korea, 
Indonesia, Malaysia, China, and Taiwan.  The Registrant also purchases products 
from United States based distributors and/or affiliates of the foreign 
manufacturers.  Shipments of foreign manufactured products may be delayed as a 
result of shipping difficulties, dock strikes, export and import restrictions, 
and other factors beyond the control of the Registrant.  The Registrant 
generally makes purchases by purchase orders rather than long-term contracts.  
Orders for U.S. manufactured products usually require one to two months lead 
time while foreign products require up to four months.

(v.)  Industry Segment
The Registrant is engaged in only one industry segment: the manufacture and 
wholesale distribution of numerous products, for use principally by the 
Manufactured Housing and Recreational Vehicle industries and to other 
manufacturing companies.

According to the National Conference of States on Building Codes and Standards, 
there were approximately 363,000, 340,000, and 304,000 manufactured homes built 
in the United States in 1996, 1995 and 1994, respectively.  Most Manufactured 
Housing and Recreational Vehicle manufacturers do not maintain significant 
inventories of parts and supplies as compared with their production 
requirements.  Suppliers, including the Registrant, must therefore bear the 
risk of making accurate advance estimates of customer orders and maintaining 
adequate levels of inventories to meet the needs of their customers.  The 
Manufactured Housing and Recreational Vehicle supply and distribution industry 
is generally fragmented, characterized by small and medium size enterprises 
located throughout the country.

(vi.)  Sales and Principal Customers
The Registrant's sales are conducted principally through its staff of 196 
full-time salespeople.  Sales are made by personal contact, principally by 
visiting customer locations and by telephone contact.  As of December 31, 1996, 
the Registrant had two customers (Champion Enterprises, Inc. and Fleetwood 
Enterprises, Inc.), which accounted for approximately 13% and 11%, 
respectively, of the Registrant's 1996 consolidated net sales.

The nature of the Registrant's business and the industries requires that the 
Registrant be able to deliver orders promptly from its inventory and 
consequently the Registrant does not generally have a significant backlog of 
orders.

(vii.)  Facilities
Because of the substantial expense in shipping Manufactured Homes, 
manufacturers maintain production facilities in or close to the principal 
market for these products.  The Registrant maintains nine manufacturing and 
related facilities and twenty-one distribution centers.  Each distribution 
center and manufacturing facility is located in a major Manufactured Housing 
and/or Recreational Vehicle market and, consequently, the Registrant's delivery 
time to its customers is minimized.  The Registrant generally purchases its 
principal products in truckload quantities and maintains substantial 
inventories of these products in each of their distribution centers.  Many of 
the products are sold directly from the distribution centers and delivered by 
the Registrant's trucks, vans or by common carriers, with the balance shipped 
directly from the product manufacturer's facilities to the customer.  Although 
the Registrant has had long-standing business relationships with many of its 
customers, there are generally no exclusive or long-term contracts with them.

(viii.)  Competition
The ability of the Registrant to compete as a supplier to the Manufactured 
Housing and Recreational Vehicle industries is largely dependent on maintaining 
an inventory of a wide variety of products, offering competitive prices and 

                               PAGE 4
<PAGE>

being able to manufacture and deliver on short notice.  Although numerous 
manufacturers and distributors are engaged in this industry, the Registrant 
believes it is one of the nation's largest wholesale distributors of products 
used in the Manufactured Housing and Recreational Vehicle industries, carrying 
what it believes to be a wider array of products than any of its competitors.

(ix.)  Employees
As of December 31, 1996, the Registrant had 1,127 full-time employees, of whom 
196 were engaged in sales, 681 in warehouse, manufacturing and distribution 
services, and 250 in administration.  The Registrant has experienced no work 
stoppage arising from labor disputes and considers employee relations to be 
good.  None of the employees are covered by collective bargaining agreements, 
except that effective February 1, 1997 certain employees at the Registrant's 
plastic operation in Texas are covered by a two-year collective bargaining 
agreement.

(x.)  Seasonality
Sales in the Manufactured Housing and Recreational Vehicle industries are 
usually seasonal in nature, with most units normally being sold in the period 
from March through October.  Historically, the Registrant's sales generally 
tend to be greater during the second and third quarter of each calendar year  
and lower during the first and last quarter of the calendar year.  Operations 
during the fourth quarters of 1995 and 1996 were adversely affected by winter 
storms that restricted the movement of finished manufactured homes and RVs by 
the Registrant's customers to their retail dealerships.  These conditions were 
not experienced during the fourth quarter of 1994.

                             PAGE 5
<PAGE>

Item 2 - Properties
Set forth below is a brief summary of the properties which were owned or leased 
by the Registrant as of December 31, 1996:

LOCATION             	SQUARE FOOTAGE          USE	           OWNED OR LEASED
Elkhart, IN                 5,000         Corporate Offices        Owned

DISTRIBUTION
Elkhart, IN (Bldg Products)94,000         Distribution             Owned
Elkhart, IN (Hardware)     15,000         Distribution             Leased (a)
Elkhart, IN (Hardware)     65,000         Distribution             Owned
Elkhart, IN (Electrical)   70,000         Distribution             Owned
Elkhart, IN (Electrical)   22,000         Distribution             Owned 
Elkhart, IN (Electrical)    8,000         Distribution             Leased
Plymouth, IN                5,000         Distribution             Leased 
Warsaw, IN                 20,000         Distribution             Leased (a)
Bear Creek, AL             85,000         Distribution             Owned
Phoenix, AZ                59,000         Distribution             Leased
Riverside, CA              35,000         Distribution             Leased
Concord, NC                65,000         Distribution             Owned
Newton, KS                 80,000         Distribution             Owned
Valdosta, GA               76,000         Distribution             Leased
Lakeland, FL               36,000         Distribution             Leased
Milwaukie, OR              62,000         Distribution             Leased
Morristown, TN             42,000         Distribution             Leased
Ft. Worth, TX              91,000         Distribution             Leased
Lancaster, PA              43,000         Distribution             Leased
Redwood Falls, MN          24,000         Distribution             Owned
Leola, PA                  13,000         Distribution             Owned

MANUFACTURING
Waxahachie, TX            100,000         Thermoforming            Owned
Edwardsburg, MI            70,000         Thermoforming            Owned
Edwardsburg, MI             7,000         Warehouse- Thermoforming Leased
Elkhart, IN                74,000         Laminating               Owned
Elkhart, IN                20,000         Warehouse-Laminating     Owned
Tifton, GA                 22,000         Laminating               Owned
Madisonville, TN           38,000         Laminating               Leased
Mansfield, TX              25,000         Laminating               Owned
Temple, TX                 44,000         Laminating               Leased

(a)  These properties are leased from entities that are primarily owned by 
certain officers and directors of the Registrant.  The rentals are believed to 
be as low or lower than could be obtained from an independent third party.  

The following owned properties were being held for sale as of December 31, 
1996:

LOCATION                SQUARE FOOTAGE     USE            
Ft. Oglethorpe, GA         78,000         Vacant (b)
Ft. Oglethorpe, GA         20,000         Vacant (b)
Ft. Oglethorpe, GA         35,000         Vacant (b)
Chattanooga, TN            74,000         Vacant (b)
Lafayette, GA              73,000         Rental Property (b)
Elkhart, IN                40,000         Vacant
Ft. Worth, TX              42,000         Vacant
Moultrie, GA               10,000         Vacant

(b)  Properties held for sale to buyer in connection with the December 31, 1996 
sale of carpet manufacturing operations.  The Ft. Oglethorpe, GA properties 
were sold in February 1997. 

Management believes that the present facilities and the equipment therein are 
in good repair and are adequate to meet current requirements.

                               PAGE 6
<PAGE>

Item 3 - Legal Proceedings

The Registrant is not involved in any material litigation.

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

No matters were submitted during the quarter ended December 31, 1996 to a vote 
of security holders.

PART II

Item 5 - Market for Registrant's Common Equity and Related Shareholder Matters

The information included under the caption "Securities Information" in Exhibit 
13 of this Form 10-K report is incorporated herein by reference in response to 
this item.

Item 6 - Selected Financial Data

The information included under the caption "Selected Financial Data" in Exhibit 
13 of this Form 10-K report is incorporated herein by reference in response to 
this item.

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

The information included under the caption ""Management's Discussion and 
Analysis of Financial Condition and Results of Operations" in Exhibit 13 of 
this Form 10-K report is incorporated herein by reference in response to this 
item.

Item 8 - Financial Statements and Supplementary Data

The information included in Exhibit 13 of this Form 10-K report is incorporated 
herein by reference in response to this item.

Item 9 - Changes In and Disagreements with Accountants on Accounting and 
Financial Disclosure

The Corporation changed independent accountants effective October 16, 1995.  
Information related to the change was filed with the SEC on October 23, 1995 on 
Form 8-K.  There were no disagreements with accountants on accounting and 
financial disclosure.

PART III


Item 10 - Directors and Executive Officers of the Registrant

(a)  Directors - The information included under the caption "Election of 
Directors" in the Registrant's definitive Proxy Statement filed pursuant to 
Regulation 14A in connection with its 1997 Annual Meeting of Shareholders (the 
"Proxy Statement") is incorporated herein by reference in response to this 
item.
                             PAGE 7
<PAGE>


(b.) Executive Officers - 

Name of Officer and   Age as of    Date First Elected   Principal Occupation
Positions/Offices    February 28,    to Executive       and Employment During
Presently Held           1997           Office            Past Five Years   
   
Larry D. Renbarger        58             1987          Chief Executive 
  Chief Executive                                      Officer of the
  Officer and Director                                 Registrant since
                                                       May 1992 and
                                                       President from May 
                                                       1992 to December 
                                                       1996.

Gerald R. Stults          48             1995          President and owner 
  President and                                        of BABSCO, Inc. from
  Chief Operating Officer                              January 1981 until
  and Director                                         January 1995 when the 
                                                       Registrant acquired
                                                       BABSCO, Inc. from 
                                                       him. Executive Vice
                                                       President and COO 
                                                       from August 1995 to 
                                                       December 1996.
                                                       Appointed President
                                                       in December 1996.

Mark C. Neilson           38             1987          Chief Financial 
  Chief Financial Officer,                             Officer, Vice President
  Vice President, Secretary,                           Secretary and 
  Treasurer and Director                               Treasurer of the
                                                       Registrant.

James E. DeCraene         52             1993          Prior to joining the
  Vice President of                                    Registrant in 1993, 
  Planning and                                         Mr. DeCraene was Vice 
  Development                                          President and General 
                                                       Manager of Harmon Glass
                                                       Corporation from 1982
                                                       through 1992.

Steven A. Salzer          35             1996          Prior to joining the
  Vice President,                                      Registrant, Mr. Salzer 
  General Counsel and                                  was Branch General 
  Assistant Secretary                                  Manager of Alumax
                                                       Building Products, Inc.
                                                       from 1994 to 1996
                                                       and a Staff Attorney 
                                                       of Alumax, Inc. from 
                                                       1992 until 1994.

Item 11 - Executive Compensation
The information included under the captions "Meetings and Committees of the 
Board of Directors", "Director Compensation", "Executive Compensation", 
"Compensation Committee Report on Executive Compensation", and "Employees' 
Savings and Investment Plan" in the Proxy Statement is incorporated herein by 
reference in response to this item.

Item 12 - Security Ownership of Certain Beneficial Owners and Management
The information contained under the captions "Principal Shareholders and 
Management Ownership" in the Proxy Statement is incorporated herein by 
reference in response to this item.

Item 13 - Certain Relationships and Related Transactions
The information contained under the caption "Transactions With Management and 
Directors" in the Proxy Statement is incorporated herein by reference in 
response to this item.

                              PAGE 8
<PAGE>

PART IV


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

(a)  Documents Filed as Part of This Report
				
1.	Financial Statements:			
The information included under the captions "Consolidated Balance 
Sheets", "Consolidated Statements of Income", "Consolidated Statements 
of Shareholders' Equity", "Consolidated Statements of Cash Flows", 
"Notes to Consolidated Financial Statements", and "Report of 
Independent Accountants" in Exhibit 13 of this Form 10-K is 
incorporated herein by reference in response to this item.  The 
"Report of Independent Accountants" for 1994 appears on page 13 of 
this Form 10-K report.
			

	2.	Financial Statement Schedule:	                          	Page

  		Report of Independent Accountants on		 
		 	Financial Statement Schedule - 1996 and 1995               12

  		Report of Independent Accountants on		 
		 	Financial Statement Schedule - 1994                      	 13

  		Schedule II - Valuation and Qualifying Accounts	           14

  		Schedules other than listed above are omitted because they are not 
    required or the information is included in the Notes to Consolidated 
    Financial Statements.

	3.	Exhibits

		  Index to Exhibits                                          15

(b)  Reports on Form 8-K

Form 8-K was filed on January 15, 1997 announcing the sale of the 
operations and certain assets of Danube Carpet Mills, Inc., a wholly-
owned subsidiary of the Registrant.

                               PAGE 9
<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.

                                     SHELTER COMPONENTS CORPORATION
                                              (Registrant)

Dated:    March 28, 1997              /S/ Larry D. Renbarger                  
                                      Larry D. Renbarger, Chief
                                      Executive Officer and Director

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


Dated:    March 28, 1997          By: /S/ Larry D. Renbarger                  
                                      Larry D. Renbarger
                                      Chief Executive Officer and
                                      Director

Dated:    March 28, 1997          By: /S/ Gerald R.Stults                  
                                      Gerald R. Stults
                                      President, Chief Operating
                                      Officer and Director

Dated:    March 28, 1997          By: /S/ Mark C. Neilson                     
                                      Mark C. Neilson
                                      Chief Financial Officer, Vice President,
                                      Treasurer, Secretary and Director
                                      (Principal Financial and Accounting
                                      Officer)

Dated:    March 28, 1997          By: /S/ William N. Harper                   
                                      William N. Harper
                                      Chairman of the Board 

Dated:    March 28, 1997          By: /S/ Ronald D. Minzey                    
                                      Ronald D. Minzey
                                      Director

Dated:    March 28, 1997          By: /S/ William B. Riblet                   
                                      William B. Riblet
                                      Director

                             PAGE 10
<PAGE>

SHELTER COMPONENTS CORPORATION
INDEX TO FINANCIAL STATEMENTS

The financial statements and supplementary data of Shelter Components 
Corporation and its consolidated subsidiaries, together with the report thereon 
of Price Waterhouse LLP dated February 18, 1997, appearing on pages 28 through 
51 of this Form 10-K report are incorporated by reference in this Form 10-K 
Annual Report.  The report of predecessor independent accountants for the year 
ended December 31, 1994 appears on page 13 of this Form 10-K Annual Report.  
The following additional financial data should be read in conjunction with such 
financial statements.  Schedules not included with this additional financial 
data have been omitted because they are not applicable or the required 
information is shown in the financial statements or notes thereto.


Additional Information:			                                             Page

Report of Independent Accountants on 
  Financial Statement Schedule - 1996 and 1995                          12

Report of Independent Accountants on 
  Financial Statement Schedule - 1994                                   13

Schedule II                                                             14

Index to Exhibits                                                       15

Consolidated Financial Statements and Notes
  to Consolidated Financial Statements	                                36-48

                               PAGE 11
<PAGE>

Report of Independent Accountants on
Financial Statement Schedule




To the Shareholders and Board of Directors
of Shelter Components Corporation:

Our audits of the consolidated financial statements referred to in our 
report dated February  18, 1997 appearing in the 1996 Annual Report to 
Shareholders of Shelter Components Corporation (which report and 
consolidated financial statements are incorporated by reference in this 
Annual Report on Form 10-K) also included an audit of the Financial 
Statement Schedule listed in Item 14(a) of this Form 10-K as of December 
31, 1996 and 1995 and for each of the two years in the period ended 
December 31, 1996.  In our opinion, this Financial Statement Schedule 
presents fairly, in all material respects, the information set forth 
therein as of December 31, 1996 and 1995 and for each of the two years in 
the period ended December 31, 1996 when read in conjunction with the 
related consolidated financial statements.

The financial statements and the financial statement schedule of Shelter 
Components Corporation for the year ended December 31, 1994 were audited 
by other independent accountants, whose report dated February 7, 1995, 
except as to the information expressed in Note 4 for which the date was 
March 27, 1995, expressed an unqualified opinion on  those statements.


 /s/ Price Waterhouse LLP

South Bend, Indiana
February 18, 1997

                               PAGE 12
<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS



To the Shareholders and Board of Directors of
Shelter Components Corporation: 

We have audited the consolidated statements of income, shareholders' equity and 
cash flows and the financial statement schedule of Shelter Components 
Corporation and subsidiaries for the year ended December 31, 1994.  These 
financial statements and financial statement schedule are the responsibility of 
the Corporation's management.  Our responsibility is to express an opinion on 
these financial statements and financial statement schedule based on our audit.

We conducted our audit 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 audit provides a reasonable basis 
for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated results of operations and cash flows of 
Shelter Components Corporation and subsidiaries for the year ended December 31, 
1994, in conformity with generally accepted accounting principles.  In 
addition, in our opinion, the financial statement schedule referred to above, 
when considered in relation to the basic 1994 financial statement taken as a 
whole, presents fairly, in all material respects, the information required to 
be included therein.

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



South Bend, Indiana 
February 7, 1995

                               PAGE 13
<PAGE>



                        SHELTER COMPONENTS CORPORATION
                               AND SUBSIDIARIES

                                  SCHEDULE II

                        VALUATION AND QUALIFYING ACCOUNTS 
                  Years Ended December 31, 1996, 1995 and 1994


Column A          Column B         Column C          Column D       Column E
                 Balance at   Charged to  Charged to                Balance
                 Beginning    Costs and     Other    Deductions     at End
Description       of Year     Expenses    Accounts      (a)         of Year
-----------
Allowance for doubt-
ful receivables de-
ducted from accounts
receivable, trade, 
in the consolidated
balance sheet:
     1996      $500,000       $326,000      $ -0-    $326,000    $500,000

     1995       500,000        181,000        -0-     181,000     500,000
     
     1994       567,000        (21,000)       -0-      46,000     500,000




(a)  Losses, net of recoveries.

                                PAGE 14
<PAGE>


                         SHELTER COMPONENTS CORPORATION
                                   FORM 10-K
                                December 31, 1996
                                Index to Exhibits
Number Assigned                                             Sequential Number-
in Regulation                                                ing System Page
S-K,Item 601       Description of Exhibit                   Number of Exhibit	
(3)      	3.1+      	Certificate of Incorporation, as amended	
         	3.2+      	By-Laws, as amended
(4)	                	No exhibit
(9)	                	No exhibit
(10)	    10.8       Key 	Employee Stock Incentive Plan, as amended   16-23
        	10.20*     	Asset Purchase Agreement for purchase of
                     E'Con Mills, Inc. Agreement dated January
                     22, 1992, including Exhibit S-2, Non-
                     Compete Agreement with Anthony Bell
        10.23++    	Note Agreement, dated March 4, 1993 between
                     the Registrant and Massachusetts Mutual Life
                     Insurance Corporation
        10.24**    	Asset Purchase and Sale Agreement for pur-
                     chase of Design Time, Inc. dated October 7,
                     1993, including Exhibits 5.1 (Non-Compete
                     Agreement) and 5.3 (Consulting Agreement)
        10.27+++   	Asset Purchase and Sale Agreement for pur-
                     chase of BABSCO, Inc. dated January 27, 1995
        10.28***	   Amended Note Agreement dated February 21, 1995
                     between the Registrant and Massachusetts Mutual
                     Life Insurance Corporation (amends 10.23)				
        10.29***   	Note Agreement dated February 21, 1995 between
                     the Registrant and Massachusetts Mutual Life		
                     Insurance Corporation	
        10.30***   	Revolving Credit Agreement dated March 27, 1995 
                     between the Registrant and Society National
                     Bank, Indiana			
        10.31++++  Asset Purchase Agreement for sale of Danube 
                     Carpet Mills, Inc. dated December 31, 1996
        10.32      Non-Qualified Stock Option Plan                    24-27
(11)		               No exhibit	  	
(12)		               No exhibit
(13)		               Portion of the Registrant's 1996 Annual Report   28-51
                     to Shareholders	
(16)		               No exhibit
(18)		               No exhibit
(19)		               No exhibit
(21)		               Subsidiaries of the Registrant                    52
(22)		               No exhibit
(23)		               No exhibit
(24)		               No exhibit
(27)		               Financial Data Schedule	                          53
(28)		               No exhibit

+	   Filed as an exhibit to Registration Statement File No. 2-80714-C and 		
     hereby incorporated by reference thereto.
*	   Filed as an Exhibit to the Corporation's report on Form 8-K dated
     February 15, 1992, and hereby incorporated by reference thereto.
++	  Filed as an exhibit to the Corporation's report on Form 10-K dated
    	March 26, 1993 and hereby incorporated by reference thereto.
**	  Filed as an exhibit to the Corporation's report on Form 8-K dated
    	October 15, 1993 and hereby incorporated by reference thereto.
+++	 Filed as an exhibit to the Corporation's report on Form 8-K dated
    	January 30, 1995 and hereby incorporated by reference thereto.
***	 Filed as an exhibit to the Corporation's report on Form 10-K dated March 	
    	28, 1995 and hereby incorporated by reference thereto.
++++ Filed as an exhibit to the Corporation's report on Form 8-K dated January 
     15, 1997 and hereby incorporated by reference thereto.

                             PAGE 15
<PAGE>

                                                             Exhibit 10.8

                     KEY EMPLOYEES STOCK INCENTIVE PLAN


     1. Purpose of Plan.  This Key Employees Stock Incentive Plan (the "Plan") 
is intended to provide employment incentives that will enable Shelter 
Components Corporation (the "Company") to retain in the employ of the Company 
and its subsidiaries persons of training, experience, and ability, to attract 
new employees whose services are considered unusually valuable, to encourage 
the sense of proprietorship of such persons, and to stimulate the active 
interest of such persons in the development and financial success of the 
company.  Options granted under the Plan may contain such terms as will 
qualify the options as incentive stock options ("ISO") within the meaning of 
Section 422A(b) of the Internal Revenue Code of 1954, as amended (the "Code").

     2. Administration of Plan.  The Board of Directors (the "Board") or a 
Stock Incentive Committee (the "Committee") appointed and maintained by the 
Board shall have the power to administer the Plan.  The Committee shall 
consist of at least three (3) members who shall serve at the pleasure of the 
Board, and any member of such Committee shall be eligible to receive stock 
options ("Options") and stock appreciation rights ("SARs") under the Plan 
while serving on the Committee, unless otherwise specified herein.  The Board 
or the Committee shall have full power and authority:  (i)  to designate 
participants; (ii) to designate options or any portion thereof as ISOs; (iii) 
to determine the terms and provisions of respective option agreements (which 
need not be identical) including, but not limited to, provisions concerning 
the time or times when and the extent to which the Options and SARs may be 
exercised and the nature and duration of restrictions as to transferability or 
constituting substantial risk of forfeiture; (iv) to amend or modify any 
option, with the consent of the holder thereof; (v) to accelerate the right of 
an optionee to exercise in whole or in part any previously granted ISO 
including any options modified to qualify as ISOs; and (vi) to interpret the 
provisions and supervise the administration of the Plan.  
     The Board or the Committee shall have the authority, subject to 
shareholder approval of the Plan, to grant in its discretion to the holder of 
an outstanding Option in exchange for the surrender and cancellation of such 
Option, a new Option having a purchase price lower than provided in the Option 
so surrendered and cancelled and containing such other terms and conditions as 
the Board or the Committee may prescribe in accordance with the provisions of 
the Plan.
     All decisions and selections made by the Board or the Committee pursuant 
to the provisions of the Plan shall be made by a majority of its members 
except that any decision with respect to the grant of an Option or SAR to a 

                                PAGE 16
<PAGE>

member of the Board or the Committee shall be made by a majority of those 
Board members or Committee members who are not employees of the Company or 
otherwise eligible to receive Options or SARs.  Any decision reduced to 
writing and signed by a majority of the members who are authorized to make 
such a decision shall be fully effective as if it had been made by a majority 
at a meeting duly held.
     Each member of the Board or the Committee shall be indemnified and held 
harmless by the Company against any cost or expense (including counsel fees) 
reasonably incurred by him or liability (including any sum paid in settlement 
of a claim with the approval of the Company) arising out of any act or 
omission to act in connection with the Plan unless arising out of such 
member's own fraud or bad faith, to the extent permitted by applicable law.  
Such indemnification shall be in addition to any rights or indemnification the 
members may have as directors or otherwise under the by-laws of the Company, 
any agreement, vote of stockholders or disinterested directors or otherwise.

     3. Designation of Participants.  The person eligible for participation in 
the plan as recipients of Options and SARs shall include only key employees of 
the Company or of any subsidiary of the Company.  Directors of the Company 
shall not be eligible to participate in the Plan as directors, but Directors 
otherwise qualified shall be eligible to participate.  An employee who has 
been granted an Option or SAR hereunder may be granted additional Options or 
SARs, if the Committee shall so determine.

     4. Stock Subject to the Plan.  Subject to adjustment as provided in 
Paragraph 6 hereof and subject to ratification by the stockholders, the total 
shares of Common Stock, $.01 par value ("Stock") of the Company subject to 
this Plan shall be increased to a total of 937,500.  The shares subject to the 
Plan shall consist of unissued shares, and such amount of shares shall be, and 
hereby is, reserved for sale for such purpose.  Any of such shares which may 
remain unsold and which are not subject to outstanding options at the 
termination of the Plan shall cease to be reserved for the purpose of the 
Plan, but until termination of the Plan the Company shall, at all times, 
reserve a sufficient number of shares to meet the requirements of the Plan.  
Should any Option for any reason other than the exercise of SARs expire or be 
canceled prior to its exercise to relinquishment in full, the sales 
theretofore subject to such Option may again be made subject to an Option 
under the Plan.

     5. Option Price.  (a)  The purchase price of each share subject to Option 
or any portion thereof which has been designated by the Board or the Committee 
as an ISO shall not be less than 100% (or 110%, if at the time of the grant 
the optionee owns more than 10% of the total combined voting power of all 
classes of stock of the Company, a parent corporation of the Company or a 

                                  PAGE 17
<PAGE>

subsidiary of the Company) of the fair market value of such share on the date 
the option is granted.  The purchase price of each share subject to an Option 
or any portion thereof which is not designated as an ISO shall be not less 
than 75% of the fair market value of such share on the date the option is 
granted provided, however, that in no event shall the option price be less 
than the par value of the Stock.  SARS granted with respect to shares of Stock 
covered by an outstanding option shall be granted on the basis of the option 
price for such shares fixed by the initial grant of such Option.
     (b) The fair market value of a share on a particular date shall be the 
mean between the highest and lowest quoted selling prices on such date (the 
valuation date) on the securities market where the Common Stock of the Company 
is traded.  If there were no sales on the valuation date, but there were sales 
within a reasonable period both before or after that date, the fair market 
value shall be determined by taking a weighted average of the mean between the 
highest and lowest sales on the nearest date before and the nearest date after 
the valuation date.  This average must be weighted inversely by the respective 
numbers of trading days between the selling dates and the valuation date.
     (c) The option price shall be payable upon the exercise of the Option in 
cash, by check, shares of the Company's Stock (valued at their fair market 
value) or other form satisfactory to the Board or the Committee.
     (d) The proceeds of the sale of the Stock subject to Options are to be 
added to the general funds of the Company and used for its corporate purposes.

     6. Adjustments.  (a) If the Company is reorganized, separated from or 
merged or consolidated with another corporation while unexercised Options 
remain outstanding under the Plan, there shall be substituted for the shares 
subject to the unexercised portions of such outstanding Options an appropriate 
number of shares of each class of stock or other securities of the separated 
or reorganized, or merged or consolidated corporation which were distributed 
to the shareholders of the Company in respect of such shares; provided, 
however, that all such Options may be exercised in full by the employee as of 
the effective date of any such separation, reorganization, merger, or 
consolidation of the Company without regard to the installment exercise 
provisions of paragraph 7(a), by the employee giving notice in writing to the 
Company of his intention to so exercise.
     (b) If the Company is liquidated or dissolved while unexercised Options 
or SARs remain outstanding under the Plan, then all such outstanding Options 
or SARs may be exercised in full by the employee as of the effective date of 
any such liquidation or dissolution of the Company without regard to the 
installment exercise provisions of paragraph 7(a), by the employee giving 
notice in writing to the Company of his intention to so exercise.
     (c) If the outstanding shares of Stock shall at any time be changed or 

                                 PAGE 18
<PAGE>


exchanged by declaration of a stock dividend, stock split, combination or 
exchange of shares, recapitalization, extraordinary dividend payable in stock 
of a corporation other than the Company or in cash or any other like event by 
or of the Company, and as often as the same shall occur, then the number, 
class and kind of shares subject to this Plan or subject to any Options or 
SARs theretofore granted, and the option prices, shall be appropriately and 
equitably adjusted so as to maintain the proportionate number of shares 
without changing the aggregate option price; provided, however, no adjustment 
shall be made by reason of the distribution of subscription rights on 
outstanding stock.

     7. Term and Exercise of Option and Stock Appreciation Rights.  (a) Each 
Option and SAR granted under this Plan shall be exercisable on the dates and 
for the numbers of shares as shall be provided in the option certificate 
evidencing the Option granted by the Board or the Committee and the term 
thereof.  However, no Option or SAR shall be exercisable after the expiration 
of five (5) years from the date of grant.
     (b) Each Option or portion thereof granted under the Plan and designated 
as an ISO shall provide that it may not be exercised while any ISO previously 
granted to the participant is outstanding.  An Option will be considered 
outstanding for this purpose until it is exercised or lapses by its terms, 
even if it has previously been surrendered by the participant.  For the 
purposes of this subparagraph 7(b), an Option shall be deemed exercised to the 
extent a related SAR is exercised as provided in paragraph 9(c) hereof.
     (c) Options and SARs may be exercised solely by the employee during his 
lifetime or after his death by the person or persons entitled thereto under 
his will or the laws of descent and distribution.
     (d) Options and SARs may not be exercised after the termination of 
employment of the employee unless (i) termination of employment is without 
cause in which event any Options and SARs still in force and unexpired may be 
exercised within a period of ninety (90) days from the date of such 
termination, but only with respect to the number of shares purchasable at the 
time of such termination, (ii) termination of employment is the result of the 
death or disability of the employee in which event any Options and SARs still 
in force and unexpired may be exercised within a period of six (6) months from 
the date of each, but only with respect to the number of shares purchasable at 
the time of such termination, or (iii) termination of employment is the 
results of retirement under any deferred compensation agreement or retirement 
plan of the Company or of any subsidiary of the Company or after age 60.  
While Options and SARs granted hereunder are still in force and unexpired, the 
Board or Committee shall have the discretion to permit any unmatured 
installments of the Options and SARs to be accelerated to a date on or prior 

                             PAGE 19
<PAGE>


to the date three (3) months after the date of retirement, and the Options and 
SARs shall thereupon be exercisable in full without regard to the installment 
exercise provisions of subparagraph 7(a).
     (e) The holders of Options shall not be or have any of the rights or 
privileges of a shareholder of the Company in respect of any shares 
purchasable upon the exercise of any part of an Option unless and until 
certificates representing such shares shall have been issued by the Company to 
such holders.
     (f) The form of Option authorized by the Plan may contain such other 
provisions as the Board or the Committee may, from time to time, deem 
advisable.  Without limiting the foregoing, the Board or the Committee may, 
with the consent of the employee, from time to time cancel all or any portion 
of any Option then subject to exercise, and the Company's obligation in 
respect of such Option may be discharged by (i) payment to the employee of an 
amount in cash equal to the excess, if any, of the fair market value, as 
defined in subparagraph 5(b), of the shares at the date of such cancellation 
subject to the portion of the Option so cancelled over the aggregate purchase 
price of such shares, (ii) the issuance or transfer to the employee of shares 
of Stock with a fair market value, as defined in subparagraph 5(b), at the 
date of such transfer equal to any such excess, or (iii) a combination of cash 
and shares with a combined value equal to any such excess, all as determined 
by the Board or the Committee in its sole discretion.
     (g) Options shall be exercised by the optionee giving written notice to, 
which exercise shall be effective upon receipt of such notice by (subject, in 
the case of the exercise of SARs, to the provisions of paragraph 9 hereof and 
the terms of the respective SAR agreement), the Secretary of the Company at 
its general offices.  The notice shall specify the number of shares with 
respect to which the Option is being exercised.  If a registration statement 
under the Securities Act of 1933, as amended, containing a prospectus as a 
part thereof, which prospectus is to comply with said Act, is not then in 
effect with respect to the shares issuable upon such exercise, it shall be a 
condition precedent to the exercise of any Option entitling the holder thereof 
to receive shares of Stock that (i) the person exercising the Option provide 
the Company with a written undertaking, satisfactory in form and substance to 
the Board or the Committee, that he is acquiring the shares for his own 
account for investment and not with a view to the distribution thereof and 
(ii) such exercise be permissible under applicable law.

     8. Maximum ISOs.  The aggregate fair market value of Common Stock with 
respect to which ISOs (within the meaning of Section 422 of the Code) are 
exercisable for the first time by an Optionee during any calendar year under 
the Plan or any other plan of the Corporation or its Affiliates shall not 

                               PAGE 20
<PAGE>


exceed $100,000.  For this purpose, the fair market value of such shares shall 
be determined as of the date the option is granted and shall be computed in 
such manner as shall be determined by the Committee, consistent with the 
requirements of Section 422 of the Code.

     9. Stock Appreciation Rights.  (a) At the discretion of the Board or the 
Committee, any Option granted under this Plan may, at the time of such grant 
or at any time thereafter, include an SAR.  The Board or the Committee may 
impose conditions upon the grant or exercise of the SAR which conditions may 
include a condition that the SAR may only be exercised in accordance with 
rules and regulations adopted by the Board or the Committee from time to time 
and a condition that the Optionee satisfy certain performance goals before the 
SAR may be exercised.  Such rules and regulations may govern the right to 
exercise the SAR granted prior to the adoption or amendment of such rules and 
regulations as well as SARs granted thereafter.
     (b) A "stock appreciation right" is the right of an Optionee, without 
payment to the Company (except for applicable withholding taxes), to receive 
cash or shares of Common Stock with a value equal to the amount by which the 
fair market value per share on the date on which an SAR is exercised exceeds 
the option price per share as provided in the related underlying Option.  An 
SAR shall pertain to, and be granted only in conjunction with, a related 
underlying Option granted under this Plan and shall be exercisable and 
exercised only to the extent that the related Option is exercisable.  The 
number of shares of Stock subject to the SAR shall be all or part of the 
shares subject to the related Option, as determined by the Board or the 
Committee. The SAR shall either become all or partially non-exercisable  and 
shall be all or partially forfeited if the exercisable portion, or any part 
thereof, of the related Option is exercised and vice versa.
     (c) Subject to any restrictions or conditions imposed by the Board or the 
Committee, an SAR may be exercised by the employee as to a number of shares of 
Stock under its related Option only upon the surrender of the right to 
exercise a like number of shares of Stock available for exercise of the 
related Option at the time of surrender.  Upon the exercise of an SAR and the 
surrender of the exercisable portion of the related Option, the employee shall 
be awarded cash, share of Stock or a combination of shares and cash at the 
discretion of the Board or the Committee.  The award shall have a total value 
equal to the product obtained by multiplying (1) the excess of the fair market 
value per share on the date on which the SAR is exercised over the option 
price per share by (2) the number of shares subject to the exercisable portion 
of the related Option so surrendered.  Provided further, each of the following 
requirements shall be met: (1) The SAR must expire no later than the 
expiration of the underlying ISO; (2) The SAR may be for no more than the 

                              PAGE 21
<PAGE>

lesser of (i) 100% of the difference between the exercise price of the 
underlying option and the market price of the Common Stock subject to the 
underlying option at the time the SAR is exercised; or (ii) 200% of the 
exercise price of the underlying option; (3) The SAR is transferable only when 
the underlying ISO is transferable and subject to the same conditions; (4) The 
SAR may only be exercised when the underlying ISO may be exercised; and (5) 
The SAR may only be exercised when the market price of the stock exceeds the 
exercise price of the ISO.
     (d) The portion of the SAR which may be awarded in cash shall be 
determined by the Board or the Committee from time to time.  The number of 
shares awardable to an employee with respect to the non-cash portion of an SAR 
shall be determined by dividing such non-cash portion by the fair market value 
per share, as defined in subparagraph 5(b), on the exercise date.  No 
fractional shares shall be issued.
     (e) For the purposes of this subparagraph, if there is no sale on the 
date the SAR is exercised, then the fair market value shall be determined on 
the next preceding day on which there is a sale.
     (f) The Board or the Committee may, in its sole discretion, disapprove 
the exercise of an SAR or the form of payment elected by any holder of an SAR. 
 In the event the Board or the Committee so disapproves, in whole or in part, 
an election by a holder to exercise an SAR or the form of payment thereof, 
such disapproval shall not affect a holder's right to exercise his option 
currently or his SAR at a later date to the extent either is otherwise 
exercisable, or to elect a form of payment at a later date, provided that such 
later exercise and election shall be similarly subject to the Board's or the 
Committee's right of disapproval.  In addition, such disapproval shall not 
affect a holder's right to exercise any other rights or options granted to a 
holder under the Plan.

     10. Purchase for Investment.  Unless the Options and shares covered by 
the Plan have been registered under the Securities Act of 1933, as amended, or 
the Company has determined that such registration is unnecessary, each person 
exercising an Option under the Plan may be required by the Company to give a 
representation in writing that he is acquiring such shares for his own account 
for investment and not with a view to, or for sale in connection with, the 
distribution of any part thereof.

     11. Effective Date of Plan.  The Plan, upon approval by the Company's 
Shareholders, shall be effective as of February 28, 1988.

     12. Amendments or Termination.  The Board may amend, alter, or 
discontinue the Plan, except that no amendment or alteration shall be made 
that would impair the rights of any participant under any Option theretofore 
granted, without his consent and accept that no amendment or alteration shall 

                               PAGE 22
<PAGE>

be made which without the approval of the shareholder, would:
     (a) Increase the total number of shares reserved for the purposes of the 
Plan, except as is provided in paragraph 6, or decrease the option price 
provided in paragraph 5, or change the class of employees eligible to 
participate in the Plan as provided in paragraph 3; or
     (b) Extend the option period provided for in paragraph 7.

     13. Government Regulations.  The plan, and the granting and exercise of 
Options and SARs thereunder, and the obligation of the Company to sell and 
deliver shares or cash under such Options and SARs, shall be subject to all 
applicable laws, rules, and regulations, including the registration of the 
shares pursuant to the Securities Act of 1933, and to such approvals by any 
governmental agencies or national securities exchanges as may be required.

     14. Governing Law.  This Plan shall be deemed made in the State of 
Indiana and shall be governed by and construed and enforced in accordance with 
the laws of such State applicable to contracts made and to be performed in 
such State without giving effect to the principles of conflict of laws.

                                PAGE 23
<PAGE>


                                                            Exhibit 10.32

                     SHELTER COMPONENTS CORPORATION
                  1995 NON-QUALIFIED STOCK OPTION PLAN



	1.	Purpose.  The purpose of the Shelter Components Corporation 1995 
Non-Qualified Stock Option Plan (the "Plan") is to provide to Directors of 
Shelter Components Corporation, who are not employees of Shelter Components 
Corporation (the "Corporation").

	2.	Administration of the Plan.  The Plan shall be administered, 
construed and interpreted by a Committee (the "Committee").  The Committee 
shall consist of the Corporation's Board of Directors or a Committee of not 
less than two (2) disinterested persons appointed by the Board of Directors.

		(a)	General Provision.  The decision of a majority of the members 
of the Committee shall constitute the decision of the Committee, and the 
Committee may act either at a meeting at which a majority of the members 
of the Committee are present or by a written consent signed by all 
members of the Committee.  The Committee shall have the sole, final and 
conclusive authority to determine, consistent with and subject to the 
provisions of the Plan:

 			(i)	the individuals (the "Optionees") to whom options or 
        successive options shall be granted under the Plan;

			(ii)	the time when options shall be granted under the Plan;

		(iii)	the number of shares of Common Stock of the Corporation 
        to be covered under each option;

			(iv)	the option price to be paid upon the exercise of each 
        option;

 			(v)	the period within which each option may be exercised;

			(vi)	the extent to which stock appreciation rights shall be 
        awarded in conjunction with an option; and,

		(vii)	the terms and conditions of the respective Stock Option 
        Agreements by which options granted shall be evidenced.

The Committee shall also have authority to prescribe, amend and rescind rules 
and regulations relating to the Plan, and to make all other determinations 
necessary or advisable in the administration of the Plan.

		(b)	Notwithstanding the foregoing; to facilitate the 
administration of the plan, it shall be automatic, unless rescinded by 
the committee, that each non-employee Director of the Company shall be 
granted 2,000 options, under the terms of the plan, at the first meeting 
of this Board of Directors in each calendar year beginning in 1996.

		(c)	Until this Plan is submitted to the shareholders, the Plan 
will continue to be subject to the rules of Section 16 of the 1934 Act.

                               PAGE 24
<PAGE>


	3.	Eligibility.  Options may be granted only to Directors of the 
Corporation who are not employees of the Corporation.  Subject to the 
provisions of Section 4, an individual who has been granted an option under the 
Plan, if he is otherwise eligible, may be granted an additional option or 
options if the Committee shall so determine.

	4.	Stock Subject to the Plan.  There shall be reserved for issuance 
upon the exercise of options granted under the Plan Two Hundred Thousand 
(200,000) shares of Common Stock, $.01 par value per share, of the Corporation, 
which may be authorized but unissued shares of the Corporation.  Subject to 
Section 7, the shares for which options may be granted under the Plan shall not 
exceed that number.  If any option shall expire or terminate for any reason 
without having been exercised in full, the unpurchased shares subject to it 
shall (unless the Plan shall have terminated) become available for other 
options under the Plan.

	5.	Terms of Option.  Each option granted under the Plan shall be 
evidenced by a Stock Option Agreement between the Corporation and the Optionee 
and shall be subject to the following terms and conditions and to such other 
terms and conditions not inconsistent with that Stock Option Agreement as the 
Committee may deem appropriate in each case:

		(a)	Option Price.  The price to be paid for shares of stock upon 
the exercise of such option shall be the fair market value at the date of 
grant.  Fair Market Value will be the price of the Corporation's shares 
at the close of trading on the American Stock Exchange on the date of 
grant.  If the American Stock Exchange is closed on the date of grant, 
the closing price on the next day's closing shall be the Fair Market 
Value.

		(b)	Period For Exercise of Option.  An option shall be 
exercisable at any time for five (5) years from the date of grant.  
Options shall be subject to earlier  termination as provided in this 
Plan.

		(c)	Exercise of Options.  The option price of each share of stock 
purchased upon exercise of an option shall be paid in full (i) in cash at 
the time of such exercise, (ii) if the Optionee may do so in conformity 
with Regulation T (12 C.F.R. Section 220.3(e)(4)) and without violating 
Section 16(b) or (c) of the 1934 Act and subject to approval by the 
Committee, pursuant to a broker's cashless exercise procedure, by 
delivering a properly executed exercise notice together with irrevocable 
instructions to a broker to deliver promptly to the Corporation the total 
option price in cash and, if desired, the amount of any taxes to be 
withheld from the Optionee's compensation as a result of any withholding 
tax obligation of the Corporation or any of its Affiliates, as specified 
in such notice, or (iii) subject to the approval of the Committee, by 
tendering to the Corporation whole shares of the Corporation's Common 
Stock owned by him or any combination of whole shares of the 
Corporation's Common Stock owned by him and cash, having a fair market 
value equal to the cash exercise price of the shares with respect to 
which the option is being exercised.  For this purpose, any shares so 
tendered by an Optionee shall be deemed to have a fair market value as 
determined by the Committee.  The Committee shall have the authority to 
grant options exercisable in full at any time during their term, or 
exercisable in such installments at such times during their term as the 
Committee may determine.  Installments not purchased in earlier periods 
shall be cumulated and be available for purchase in later periods.  
Subject to the other provisions of this Plan, an option may be exercised 
at any time or from time to time during the term of the option as to any 
or all whole or fractional shares which have become subject to purchase 
pursuant to the terms of the option or the Plan.  An option may be 
exercised only by written notice to the Corporation, mailed to the 
attention of its Secretary, signed by the Optionee (or such other person 
or persons as shall demonstrate to the Corporation his or their right to 
exercise the option), specifying the number of shares in respect of which 
it is being exercised, and accompanied by payment of the option price for 
such shares.

		(d)	Certificates.  The certificate or certificates for the shares 
as to which the option is exercised shall be registered in the name of 

                          PAGE 25
<PAGE>


the person or persons so exercising the option and shall be delivered to 
or upon the order of such person or persons, as soon as practicable after 
such written notice is received by the Corporation.  An Optionee shall 
not have any rights of a shareholder in respect to the shares of stock 
subject to an option until such shares are purchased upon exercise of 
such option.

		(e)	Termination of Option.  If an Optionee ceases to be a 
Director of the Corporation for any reason, any option granted to him 
shall simultaneously terminate, except that the Director shall have 
ninety (90) days to exercise all options after the date the Director 
terminated.

		(f)	Estate Right of Option.  If a Director dies with options 
outstanding, said options will terminate one hundred twenty (120) days 
after his death.  The deceased Director's estate will have the right to 
exercise such options during this  one hundred twenty (120) day period.

		(g)	Nontransferability of Option.  An Option may not be 
transferred by the Optionee otherwise than by will or the laws of descent 
and distribution, and during the lifetime of the Optionee shall be 
exercisable only by him or his guardian or legal representative.

		(h)	Investment Representations.  Unless the shares subject to an 
Option are registered under applicable Federal and State securities laws, 
each Optionee, by accepting an Option, shall be deemed to agree for 
himself and his legal representatives that any Option granted to him and 
any and all shares of Common Stock purchased upon the exercise of the 
Option shall be acquired for investment and not with a view to, or for 
the sale in connection with, any distribution, and each notice of the 
exercise of any portion of an Option shall be accompanied by a 
representation in writing, signed by the Optionee or his legal 
representatives, as the case may be, that the shares of Common Stock are 
being acquired in good faith for investment and not with a view to, or 
for sale in connection with, any distribution (except in case of the 
Optionee's legal representatives for distribution, but not for sale, to 
his legal heirs, legatees and other testamentary beneficiaries).  Any 
shares issued pursuant to an exercise of an option may bear a legend 
evidencing such representations and restrictions.

		(i)	No Right to Continued Service.  Nothing in this Plan or in 
any agreement entered into pursuant to it shall confer on any person any 
right to continue in the employ of the Corporation or its Affiliates or 
affect any rights of the Corporation, an Affiliate, or the shareholders 
of the Corporation may have to terminate his service at any time.

6.	Adjustments.

	(a)	If the Corporation is reorganized, separated from, or merged, or 
consolidated with another corporation while unexercised Options remain 
outstanding under the Plan, there shall be substituted for the shares subject 
to the unexercised portions of such outstanding Options, an appropriate number 
of shares of each class of stock or other securities of the separated or 
reorganized, or merged or consolidated corporation which were distributed to 
the shareholders of the Corporation in respect to such separated or 
reorganized, or merged, or consolidated corporation which were distributed to 
the shareholders of the Corporation in respect of such shares; provided, 
however, that all such Options may be exercised in full by the Optionee as of 
the effective date of any such separation, reorganization, merger, or 
consolidation of the Corporation by the Optionee giving notice, in writing, to 
the Corporation of the Optionee's intention to so exercise.

	(b)	If the Corporation is liquidated or dissolved while unexercised 
Options or SARs remain outstanding under the Plan, then all such outstanding 
Options or SARs may be exercised in full by the Optionee as of the effective 
date of any such liquidation or dissolution of the Corporation by the Optionee 
giving notice, in writing, to the Corporation of the Optionee's intention to so 
exercise.

	(c)	If the outstanding shares of stock shall at any time be 

                            PAGE 26
<PAGE>


changed or exchanged by declaration of a stock dividend, stock split, 
combination or exchange of shares, recapitalization, extraordinary dividend 
payable in stock of a corporation other than the Corporation or in cash or any 
other like event or of the corporation, and as often as the same shall occur, 
then the number, class, and kind of shares subject to this Plan or subject to 
any Options or SARs theretofore granted, and the option prices, shall be 
appropriately and equitably adjusted as to maintain the proportionate number of 
shares without changing the aggregate option price; provided, however, no 
adjustment shall be made by reason of the distribution of subscription rights 
on the outstanding stock.

	7.	Stock Appreciation Rights.  The Committee may award a Stock 
Appreciation Right in conjunction with an Option.  Under a Stock Appreciation 
Right, the Optionee may surrender all or a part of a Stock Option and receive, 
in exchange, payment of no more than 100% of the excess of the market price of 
the Corporation's Common Stock subject to the Option over the exercise price of
the Option.  The award of a Stock Appreciation Right shall be evidenced by an 
agreement between the Corporation and the Optionee, the provisions of which 
shall be determined by the Committee.

	Payment may be made in cash, in shares or Corporation's Common Stock, or 
in a combination of cash and shares of Common Stock.  Notwithstanding any other
provision in the Plan to the contrary, the Committee shall have the sole 
discretion either (i) to determine the form in which payment for the Stock 
Appreciation Right will be made (i.e., cash, shares of the Corporation's Common
Stock or a combination), or (ii) to consent to or disapprove the election of 
the Optionee to receive cash in full or partial settlement of the Stock 
Appreciation Right.  Such consent or disapproval must be given within seven (7) 
calendar days after the date on which the Optionee initially elects the form of
payment.  Upon exercise of a Stock Appreciation Right respecting a given number
of shares subject to the option, the right to exercise the related stock option
respecting such shares shall automatically terminate.

	To the extent that stock appreciation rights shall be exercised, the 
Option with respect to which the stock appreciation rights have been granted 
shall be deemed to have terminated for a reason other than the exercise of them
for the purpose of the limitation on the aggregate number of shares reserved 
under Section 4 of this Plan.
	
	8.	Amendment.  The Board of Directors of the Corporation may amend the 
Plan from time to time. 	

No amendment of the Plan, however, may, without the consent of the Optionees,
make any changes in any outstanding options previously granted under the 
Plan which would adversely affect the rights of such Optionees.  

	9.	Termination.  The Board of Directors of the Corporation may 
terminate the Plan at any time and no option shall be granted thereafter.  Such 
termination, however, shall not affect the validity of any option previously 
granted under the Plan.

	10.	Successors.  This Plan shall be binding upon the successors and 
assigns of the Corporation.

	11.	Governing Law.  The terms of any options granted under this Plan 
and the rights and obligations under this Plan of the Corporation, the Optionee 
and their successors in interest shall, except to the extent governed by 
Federal law, be governed by Indiana law.

	12.	Government and Other Regulations.  The obligations of the 
Corporation to issue or transfer and deliver shares under options granted under 
the Plan shall be subject to compliance with all applicable laws, governmental 
rules and regulations, and administrative action.

	13.	Effective Date.  The Plan shall become effective when it shall have 
been approved by the Corporation's Board of Directors.  

                              PAGE 27
<PAGE>

                                                        Exhibit 13

SELECTED FINANCIAL DATA
OPERATING RESULTS DATA                 Years ended December 31
(in thousands, except per share data)
                                1996       1995      1994      1993      1992 

Net sales                    $521,022   $462,323  $333,104  $236,958  $193,627

Net income                     11,698(1)  10,038     8,697     6,562     4,220

Net income per share: 
  
  Primary                        1.51(1)    1.31      1.19       .90       .62
  
  Fully diluted                  1.51(1)    1.31      1.19       .90       .58

Cash dividends per share          .05        .05       .05       .03       .01
  
Weighted average shares: 
  
   Primary                      7,738      7,680     7,300     7,240     6,859

   Fully diluted                7,751      7,698     7,303     7,269     7,223

Operating results data include the results of acquired businesses from the 
dates of acquisition (BABSCO, Inc. - January 1, 1995; TATCO, Inc. - May 2, 
1994;  Design Components, Inc. - October 7, 1993; and  E'Con Mills, Inc. - 
January 31, 1992).

(1)  1996 net income includes a $3.2 million gain ($.41 per share) on the sale 
of the Corporation's carpet manufacturing and yarn processing operations.

All share and per share data have been adjusted for stock splits.
   
[Graphic - In the margin of the presentation of `SELECTED FINANCIAL 
DATA" in the annual report to shareholders are three charts.

1.  The top chart presents the Corporation's "Net Sales" trend for 
five years.  The X axis shows the years 1992 through 1996.  The Y 
axis represents net sales dollars, in millions.
 
2.  The middle chart presents the Corporation's "Net Income" trend for 
five years.  The X axis shows the years 1992 through 1996.  The Y 
axis represents net income, in millions.
 
3.  The bottom chart presents the Corporation's "Earnings per Share" 
trend for five years.  The X axis shows the years 1992 through 
1996. The Y axis represents fully-diluted earnings per share.]

BALANCE SHEET DATA                      As of  December 31                   
(in thousands)
                               1996       1995      1994      1993      1992  

Working capital            $ 50,084    $ 41,729  $ 40,776  $ 22,998  $ 21,148 

Total assets                120,910     107,414    87,332    61,917    47,647 


Long-term debt, net of
 current maturities          16,639      19,596    21,824    11,766     9,695 

Shareholders' equity         62,780      51,168    38,116    29,729    23,336 

                                PAGE 28
<PAGE>


QUARTERLY RESULTS

Presented below is certain selected quarterly financial information for the   
years ended December 31, 1996 and 1995:  (in thousands, except per share data)

                First        Second         Third        Fourth           1996
1996           Quarter       Quarter       Quarter       Quarter          Total 

Net sales     $119,796      $137,958      $139,311       $123,957      $521,022

Gross profit    17,516        19,681        20,319         15,805        73,321

Net income       2,268         2,888         3,235          3,307        11,698

Net income per 
 common share:     .29           .37           .42            .42          1.51


                First        Second         Third         Fourth          1995
1995           Quarter       Quarter       Quarter        Quarter         Total 

Net sales     $108,898      $116,406      $119,349       $117,670      $462,323

Gross profit    16,471        16,857        17,638         17,582        68,548

Net income       2,423         2,629         2,905          2,081        10,038

Net income per 
 common share:     .32           .34           .38            .27          1.31

The sum of quarterly earnings per share for the four quarters may not equal 
annual earnings per share due to changes in the average common and common 
equivalent shares.

The fourth quarter of 1996 includes a net gain of $3.2 million ($.41 per share) 
as a result of the December 31, 1996 sale of the Corporation's carpet 
manufacturing and yarn processing operations.  The gross margin and net income 
for the fourth quarter of 1996 were reduced by $1.5 million and $.9 million 
($.12 per share) respectively, for inventory adjustments primarily related to 
the carpet operations.


[Graphic - In the margin of the presentation of "QUARTERLY RESULTS" 
in the annual report to shareholders are two charts. 

1.  The top chart presents the Corporation's "Earnings per Share by 
Quarter" for 1995 and 1996.  The X axis shows the captions for 
"1st", "2nd", "3rd", and "4th" quarters.  The Y axis represents 
earnings per share.
2.  The bottom chart presents the Corporation's  "Net Sales by Quarter" 
for 1995 and 1996.  The X axis shows the captions for "1st", "2nd", 
"3rd", and "4th" quarters.  The Y axis represents net sales 
dollars, in millions.

                               PAGE 29
<PAGE>

Management's Discussion and Analysis of
Financial Condition and Results of Operations 

SIGNIFICANT FACTORS
The following discussion includes the financial condition, results of 
operations, and liquidity for the Corporation and its subsidiaries as of 
December 31, 1996 and 1995 and for the three years ended December 31, 1996.  
The 1995 and 1996 results include the acquired electrical distribution 
operations of BABSCO, Inc. ("BABSCO"), acquired on January 1, 1995.  Proforma 
information regarding the 1994 results of this acquisition is reflected in Note 
9 of the Notes to Consolidated Financial Statements.

The results for the three years ended December 31, 1996 also include the 
operations of Danube Carpet Mills, Inc. the Corporation's wholly-owned carpet 
manufacturing and yarn processing subsidiary, the operations and certain assets 
of which were sold on December 31, 1996.  Historical financial information 
regarding Danube's results of operations is reflected in Note 10 of the Notes 
to Consolidated Financial Statements.

RESULTS OF OPERATIONS
The following table sets forth the consolidated statements of income for the 
years ended December 31, 1996, 1995 and 1994 expressed as a percentage of net 
sales:
                                           Years Ended December 31,
                                          1996       1995       1994 
                                          ----       ----       ----
Net sales                                100.0%     100.0%     100.0%
Cost of sales                             85.9       85.2       84.6
                                         -----      -----      -----
  Gross profit                            14.1       14.8       15.4
Commission income                           .5         .7         .9
                                         -----      -----      -----
                                          14.6       15.5       16.3
Selling, general, and 
  administrative expenses                 11.6       11.4       11.7
                                        ------      -----      -----
      Operating income                     3.0        4.1        4.6
Gain on sale of carpet business            1.1          -          -
Interest expense, net                      (.3)       (.5)       (.3)
                                        ------      -----      -----
      Income before income taxes           3.8        3.6        4.3
Income taxes                               1.6        1.4        1.7
      Net income                           2.2%       2.2%       2.6%

The following table sets forth the proforma consolidated statements of income 
for the years ended December 31, 1996, 1995 and 1994 excluding the results of 
operations of the carpet and yarn business (which was sold on December 31, 
1996) expressed as a percentage of net sales: 
                                           Years Ended December 31,
                                          1996       1995       1994 
Net sales                                100.0%     100.0%     100.0%
Cost of sales                             86.1       86.0       85.5
  Gross profit                            13.9       14.0       14.5
Commission income                           .5         .8        1.1
                                          14.4       14.8       15.6
Selling, general, and              
  administrative expenses                 11.1       11.2       11.7
      Operating income                     3.3        3.6        3.9
Interest expense, net                      (.4)       (.5)       (.4)
      Income before income taxes           2.9        3.1        3.5
Income taxes                               1.1        1.2        1.4
      Net income                           1.8%       1.9%       2.1

                            PAGE 30
<PAGE>


1996 COMPARED TO 1995
Net sales increased by $59 million (13%) in 1996 as compared to 1995.  The 
Corporation's primary market is the Manufactured Housing Industry ("MHI"), 
representing approximately 75% of consolidated net sales in 1996.  The MHI 
recorded a 7% increase in homes produced in 1996 (363,000 homes) compared to 
1995 (340,000 homes).  With the exception of carpeting, the Corporation 
improved its market share in all major product categories during 1996 to 
account for the total sales increase in excess of MHI demand.  During the year, 
the Corporation was particularly successful at improving its market share in 
electrical products, stemming from the January 1, 1995 acquisition of BABSCO.  
The Corporation's sales also benefited from new regional distribution 
operations added in 1995 in Arizona, Minnesota, and Pennsylvania, where the 
Corporation has established its presence. Management estimates that less than 
2% of the sales increase during 1996 compared with 1995 was due to selling 
price increases. While it is widely expected that MHI production will grow at a 
slower annual rate in 1997, management anticipates that it will continue to 
gradually increase its market share.

Gross profit margins were 14.1% and 14.8% of net sales for 1996 and 1995, 
respectively.  Of the .7% decrease in gross profit margins as a percentage of 
net sales, .6% relates to the Corporation's carpet manufacturing operations and
 .1% is attributed to the remaining operations.  During 1996, the finishing 
operation of the carpet mill reached production levels in excess of "efficient 
capacity" and required a percentage of the finishing to be outsourced at a cost 
considerably higher than the internal cost of this process.  It was discovered 
that the inventory costing system did not adequately recognize these higher 
costs and a negative year-end adjustment was necessary, adversely impacting the 
Corporation's consolidated results for the fourth quarter of 1996.

In addition to the decreased margins from the carpet manufacturing operations, 
the Corporation experienced a reduction in gross profit margins at its Design 
Components laminating operations.  This reduction was due to strong competition 
in the marketplace combined with increases in the cost of gypsum during 1996.  
The Corporation's distribution operations experienced a modest decline in gross 
margins primarily due to an increase in lower margin "direct ship" business 
(for truckload quantities) as a percentage of all distributed product sales.

In 1997, management's efforts to improve gross profit margins will focus on: 
importing more distribution products at lower costs, reducing manufacturing 
labor and overhead, seeking new product lines that exceed current gross profit 
margin levels and making acquisitions that will enable the Corporation to 
manufacture more products.  Management believes that these efforts will 
increase gross profit margins above 1996 levels, exclusive of the sold carpet 
operations.

Commission income is earned by the Corporation's distribution operations from 
selling, warehousing and delivery services to certain product manufacturers.  
Commission income decreased from $3.0 million in 1995 to $2.5 million in 1996 
primarily due to a decrease in the commission rate received for warehousing and 
delivery of wood molding products and a change to a buy-sell arrangement on 
certain plumbing products.

Selling, general, and administrative  ("S,G & A") expenses were 11.6% and 11.4% 
of net sales for 1996 and 1995, respectively.  Management has begun to 
implement strategies to reduce its S,G & A expenses as a percentage of net 
sales including efforts to eliminate duplicate costs as well as reviewing 
staffing levels and incentive systems.  Management anticipates that its future 
annual S,G & A expenses will decrease as a percentage of net sales as a result 
of these and other efforts to reduce operating costs.

Interest expense decreased by 26% from $2.5 million in 1995 to $1.8 million in 
1996, due to strong cash flows during 1996 which resulted in a reduction in 
average borrowings outstanding on the Corporation's $25 million bank revolving 
line of credit during the year.  The Corporation increased its average accounts 
payable balance with certain vendors by negotiating more favorable payment 
terms, thus reducing the need for bank borrowings.  In addition, the 
Corporation negotiated lower market-based rates on its bank revolver.  It is 
expected that interest expense will continue to decline over the near term, 
(exclusive of any future business acquisitions) as the Corporation continues to 

                              PAGE 31
<PAGE>

use excess cash flows generated to reduce its outstanding debt.  The 
Corporation also anticipates realizing material amounts of interest income 
until the proceeds from the sale of its carpet manufacturing operations are 
redeployed.

Federal and state income taxes as a percentage of income before income taxes, 
were 41% for 1996 compared to 39% for 1995.  The increase in the effective rate 
in 1996 is due to the write-off of $800,000 of non-deductible goodwill in 
connection with the sale of the carpet and yarn operations.  The Corporation 
anticipates that its effective tax rate in 1997 will be approximately 39%.

Net income was 2.2% of net sales for 1996 and 1995.  The 1996 results include a 
$3.2 million (after-tax) gain on the sale of the carpet manufacturing and yarn 
processing operations.  Net income for 1996, exclusive of this gain, was 1.6% 
of net sales.  The reduction in this percentage, exclusive of the gain on the 
sale of the carpet operations, is primarily due to poor performance experienced 
in the Corporation's carpet manufacturing operations in 1996, and other factors 
as discussed above.  Net income as a percentage of net sales, exclusive of both 
the carpet and yarn operations and the gain on the sale thereof, was 1.8% and 
1.9% for 1996 and 1995, respectively.  Management anticipates and expects to 
improve its net income as a percentage of net sales in future periods due to 
the strategies discussed above aimed at improving the Corporation's 
performance.


1995 COMPARED TO 1994
Net sales increased by $129 million (39%) in 1995 from 1994.  The 39% increase 
consisted of 18% attributable to the acquired electrical distribution 
operations of BABSCO and 21% by the other operating units of the Corporation.  
The 21% increase in comparable sales compared favorably with the 12% increase 
in homes produced in 1995 compared to 1994 by the Corporation's largest market, 
Manufactured Housing, which reported 340,000 homes produced in 1995 compared to 
304,000 homes produced in 1994.  Sales to the Manufactured Housing industry 
represented approximately 75% of the Corporation's net sales in 1995.  The 
Corporation improved its market share in 1995, particularly in decorative 
wallboard (produced by Design Components) and in the Corporation's building 
products distribution operations, as sales in new territories continued to 
grow.

Management estimates that less than 3% of the sales increase during 1995 
compared with 1994, was due to selling price increases.   

Gross profit margins were 14.8% and 15.4% of net sales for 1995 and 1994, 
respectively.  The reduction of gross profit margins in 1995 reflects the 
increased sales of lower margin laminated decorative wallboard and other 
building products at a faster growth rate than certain of the Corporation's 
other products.  Also, the increased demand for truckload quantities of 
product on a "direct ship" basis had a slightly adverse impact on overall 
gross margins.  

Commission income decreased from $3.1 million in 1994 to $3.0 million in 1995 
primarily due to a decrease in the commission rate on certain products 
distributed by the Corporation for unaffiliated manufacturers.

Selling, general and administrative expenses decreased from 11.7% of net sales 
in 1994 to 11.4% in 1995.  The reduction in this percentage reflected the 
Corporation's capacity to increase sales without a proportionate increase in 
fixed costs.  

Interest expense increased from $1.0 million in 1994 to $2.5 million in 1995 
due to the debt incurred and assumed in connection with the January 1995 
acquisition of the operations and net assets of BABSCO.  The increase also 
reflected higher prevailing short-term borrowing rates on working capital debt 
outstanding during 1995 as compared to short-term borrowing rates in 1994.

Federal and state income taxes as a percentage of income before income taxes 
were 39% for 1995 and 1994.  

Net income as a percentage of net sales was 2.2% and 2.6% for 1995 and 1994, 
respectively.  The primary cause of the decline in this percentage was the 

                                PAGE 32
<PAGE>


acquisition of BABSCO in 1995.  BABSCO accounted for 13% of 1995 net sales and 
less than 2% of net income.  The addition of these operations had a .3% adverse 
effect on 1995 net income as a percentage of net sales.  The remaining decline 
of .1% was a result of the decline in gross margins as a percentage of net 
sales, as discussed above.

LIQUIDITY AND CAPITAL RESOURCES
The Corporation's cash flows from operating activities during 1996 were $15 
million due to net income of $11.7 million (inclusive of the $3.2 million net 
gain on the sale of the carpet and yarn business) plus depreciation and 
amortization of $3.4 million.  The Corporation decreased its accounts 
receivable by $2.8 million due to lower net sales during the second half of 
December 1996 as compared with the same period in December 1995 due to 
inclement weather and holiday plant closings by certain customers.  Accounts 
payable was increased by $2.7 million due to more favorable payment terms 
negotiated with certain vendors.  The increase in other current liabilities 
includes $3.3 million of income taxes currently due on the gain on the sale of 
the carpet and yarn operations.

Cash provided by investing activities during 1996 totalled $8 million, 
consisting of $16.4 million in proceeds from the sale of the carpet business 
(net of expenses paid in 1996 in connection with the divestiture) less capital 
expenditures of $8.4 million in 1996.  Capital expenditures in 1996 included 
$4.2 million for certain real estate previously leased by the Corporation and 
$4.2 million for other property, plant and equipment investments.  Capital 
expenditures in 1997 are anticipated to be approximately $4 to 7 million, 
compared to expected 1997 depreciation and amortization of approximately $3 
million.

Cash flows used in financing activities during 1996 totalled $1.9 million as 
the Corporation reduced its long-term debt by $3.0 million, but increased its 
short-term debt by $1.3 million.

Management believes the Corporation is in good financial condition as of 
December 31, 1996, and anticipates the Corporation's operating cash flows in 
1997 will be adequate to fund its seasonal working capital needs and capital 
expenditures.  As of December 31, 1996, the Corporation had cash and cash 
equivalents of $21.1 million (primarily due to funds received in the December 
31, 1996 sale of its carpet operations), $6 million of which was subsequently 
used to retire short-term debt outstanding under the Corporation's $25 million 
bank revolving line of credit agreement.  The remaining funds are invested in 
short-term instruments while management evaluates various opportunities to 
reinvest funds received from the divestiture of its carpet manufacturing 
operations.

                                  PAGE 33
<PAGE>


SEASONALITY
The Corporation's primary markets, the Manufactured Housing and Recreational 
Vehicle industries, typically shut down for a week in early July and for 1-2 
weeks over the Christmas holidays.  Operations during the fourth quarter of 
1995 and 1996 were adversely affected by winter storms that restricted the 
shipment of finished manufactured homes and RV's by the Corporation's customers 
to their retail dealerships.  These conditions were not experienced during the 
fourth quarter of 1994.

INFLATION
Generally, the impact of inflation and changing prices had a minimal impact on 
1996 operating results as increases in selling prices closely followed 
increases in material costs.  During 1995, however, the Corporation temporarily 
absorbed certain product cost increases because of competitive market 
conditions.  These increases combined with competitive market conditions for 
certain distributed products adversely impacted the Corporation's overall gross 
profit margins during 1995.

During 1994, the Corporation temporarily absorbed certain manufacturing 
material cost increases because of competitive market conditions.  Significant 
raw material increases, combined with competitive market conditions for 
laminated gypsum wallboard products, adversely impacted the gross profit 
margins of Design Components during 1994.

OUTLOOK FOR 1997
The Corporation's strategies to increase its net income and operating margins 
in 1997 and beyond will focus on maximizing the benefit from its selling, 
general and administrative expenses by better aligning its sales and marketing 
efforts with a consolidating customer base.  Management also plans to direct 
existing resources toward improving its manufacturing systems and processes, 
adding new product lines to feed the Corporation's national distribution 
network, and aggressively seeking strategic business acquisitions that will 
complement existing lines and allow the Corporation to improve its market share 
and net profit margins.  

DISCUSSION OF FORWARD-LOOKING INFORMATION
From time to time, the Corporation may make oral or written forward-looking 
statements regarding its anticipated sales, costs, expenses, earnings and 
matters affecting its financial condition and results of operations.  Such 
forward-looking statements are subject to a number of material factors which 
could cause the statements or projections contained in them to be materially 
inaccurate.  Such factors include, without limitation, the following:

Economic Conditions.  The Manufactured Housing and Recreational 
Vehicle industries have historically been cyclical and are affected 
by the general trends of the economy and consumer preferences and 
consumer confidence.  The level of disposable consumer income affects 
the Corporation's sales, particularly with regards to the Recreational 
Vehicle industry, because Recreational Vehicles are generally 
considered discretionary expenditures by consumers.  Other macro 
economic factors affecting the demand for the Corporation's products 
include the vacancy rates for rental housing, general employment 
levels, the level of interest rates and the availability of consumer 
financing.  Because the majority of consumers finance their purchase 
of a Manufactured Home or Recreational Vehicle, the availability of 
financing and level of interest rates can affect a consumer's 
purchasing decision.  A decline in general economic conditions or 
consumer confidence can be expected to affect the Corporation's sales 
adversely.

Competition.  The U.S. Manufactured Housing and Recreational Vehicle 
industries are very competitive with several principal nationwide 
manufacturers and suppliers and numerous local and regional 
competitors.  There is no assurance the Corporation will be able to 
maintain its current competitive position in the market or that it 
will be able to expand its sales.

Potential Product Liability.  Like other manufacturers and suppliers, 

                           PAGE 34
<PAGE>

the Corporation may be subject to claims that its products or 
products sold by it caused or contributed to damage or injury or may 
be required to recall products deemed unsafe.  Any such claims in 
excess of the Corporation's insurance coverage or material product 
recall expenses could adversely affect the Corporation's financial 
condition and results of operations.

Acquisitions.  The Corporation expects to be engaged in negotiations 
from time to time regarding prospective acquisitions of other 
businesses.  Such acquisitions could be material to the Corporation 
and, if consummated, could have a material effect on the 
Corporation's financial condition or results of operations.  There is 
no assurance as to when or whether the Corporation will be able to 
effect acquisitions, whether it will be able to generate the 
necessary funding to effect such acquisitions, or as to the terms on 
which such acquisitions may be effected.

                           PAGE 35
<PAGE>


CONSOLIDATED BALANCE SHEETS
SHELTER COMPONENTS CORPORATION AND SUBSIDIARIES
as of December 31, 1996 and 1995
(in thousands, except share and per share data)

ASSETS                                                   1996            1995
Current assets
  Cash and cash equivalents                           $ 21,096        $     24
  Trade receivables, less allowance for 
    doubtful receivables, 1996 and 1995 - $500          22,827          25,452
  Inventories                                           41,475          50,049
  Deferred income taxes                                  2,128           1,412
  Prepaid expenses and other                               595             457
  Real estate held for sale                              2,576               -
        Total current assets                            90,697          77,394

Property, plant and equipment, net                      19,381          17,587

Cost in excess of net assets acquired, net of 
  accumulated amortization, 1996 - $1,482 and
  1995 - $1,125                                         10,312          11,554

Other assets                                               520             879
        Total assets                                  $120,910        $107,414

LIABILITIES AND SHAREHOLDERS' EQUITY                     1996            1995
Current liabilities
  Short-term debt                                     $  6,000        $  4,723
  Current maturities of long-term debt                   1,904           2,009
  Accounts payable, trade                               23,067          23,159
  Income taxes payable                                   2,381              43
  Accrued liabilities:                                                    
    Salaries and wages                                   2,142           2,015
    Accrued expenses related to sale of business         1,703               -
    Other                                                3,416           3,716
        Total current liabilities                       40,613          35,665

Long-term debt                                          16,639          19,596

Deferred income taxes                                      745             944

Other deferred liabilities                                 133              41

Commitments (Note 8)                                             

Shareholders' equity
  Preferred stock, $.01 par value;
    authorized and unissued 1,000,000 shares                             
  Common stock, $.01 par value; authorized 
    10,000,000 shares, issued 
    1996 - 7,680,623 shares
    and 1995 - 6,098,969 shares                             76              61
  Additional paid-in capital                            11,914          11,613
  Retained earnings                                     50,827          39,545
                                                        62,817          51,219
    Less, Treasury stock, at cost, 1996-
     24,482 shares and 1995 - 26,767 shares                 37              51
       Total shareholders' equity                       62,780          51,168
       Total liabilities and shareholders' equity     $120,910        $107,414

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

                                PAGE 36
<PAGE>


CONSOLIDATED STATEMENTS OF INCOME
SHELTER COMPONENTS CORPORATION AND SUBSIDIARIES
For the years ended December 31, 1996, 1995 and 1994 
(in thousands, except per share data)

                                       1996             1995            1994

Net sales                           $521,022         $462,323         $333,104

Cost of sales                        447,701          393,775          281,808
       Gross profit                   73,321           68,548           51,296

Commission income                      2,459            3,005            3,111
                                      75,780           71,553           54,407
Selling, general and
  administrative expenses             60,194           52,709           39,136
       Operating income               15,586           18,844           15,271

Gain on sale of carpet business       (5,919)               -                -
Interest income                         (177)            (142)             (38)
Interest expense                       1,831            2,472            1,035
       Income before income taxes     19,851           16,514           14,274
Income taxes                           8,153            6,476            5,577

       Net income                   $ 11,698         $ 10,038         $  8,697

Net income per share                $   1.51         $   1.31         $   1.19
  
Weighted average common and
  common equivalent shares
  outstanding                          7,738            7,680            7,300

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

                                    PAGE 37
<PAGE>


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
SHELTER COMPONENTS CORPORATION AND SUBSIDIARIES
For the years ended December 31, 1996, 1995 and 1994
(in thousands, except per share data)
                                   Additional
                         Common      Paid-In     Retained    Treasury
                          Stock      Capital     Earnings      Stock   Total 
Balance at
  January 1, 1994        $   58      $ 8,395      $21,522    $  (246) $29,729
  Exercise of stock options   -            4            -         38       42
  Cash dividends       
    ($.05 per share)          -            -         (346)         -     (346)
  Cash paid in lieu of
    fractional shares         -            -           (6)         -       (6)
  Net income                  -            -        8,697          -    8,697
Balance at
  December 31, 1994          58        8,399       29,867       (208)  38,116

  Exercise of stock options   -          171            -        157      328
  Cash dividends
    ($.05 per share)          -            -         (360)         -     (360)
  Issuance of common shares in
    connection with a business
    acquisition (Note 9)      3        2,923            -          -    2,926
  Tax benefit from early sale
    of stock acquired 
    with options              -          120            -          -      120
  Net income                  -            -       10,038          -   10,038
Balance at
  December 31, 1995          61       11,613       39,545        (51)  51,168

  Exercise of stock options   -          246            -         14      260
  Cash dividends              -            -         (413)         -     (413)
    ($.05 per share)
  Cash paid in lieu
    of fractional shares      -            -           (3)         -       (3)
  Five-for-four 
    stock split              15          (15)           -          -        -
  Tax benefit from early 
    sale of stock acquired
    with options              -           70            -          -       70
  Net income                  -            -       11,698          -   11,698
Balance at
  December 31, 1996      $   76      $11,914      $50,827    $   (37) $62,780

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

                              PAGE 38
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
SHELTER COMPONENTS CORPORATION AND SUBSIDIARIES
For the years ended December 31, 1996, 1995 and 1994 (in thousands)
                                                  1996        1995      1994
Cash flows from operating activities:
  Net income                                   $11,698     $10,038    $8,697
  Adjustments to reconcile net income to net 
    cash provided by (used in) operating activities:
  Depreciation                                   2,337       1,930     1,508
  Amortization                                   1,013         967       524
  Loss (gain) on sales of property,
    plant and equipment                             29          11       (53)
  Deferred income taxes                           (915)        (38)     (130)
  Gain on sale of carpet business               (5,919)          -         -
Changes in certain assets and liabilities,
   excluding effects from acquisitions and dispositions:
   Trade receivables                             2,760      (1,346)   (6,327)
   Inventories                                    (738)      1,481   (17,484)
   Prepaid expenses and other                     (138)       (154)      167
   Accounts payable, trade                       2,687      (1,159)    6,479
   Other current liabilities                     2,174         172      (183)
            Net cash provided by (used in)
              operating activities              14,988      11,902    (6,802)

Cash flows from investing activities:
  Proceeds from sales of property, plant
    and equipment                                   61          51       120
  Acquisitions of property, plant
    and equipment                               (8,368)     (2,790)   (2,136)
  Acquisitions of businesses, net of
    cash acquired                                 (145)       (732)     (732)
  Proceeds from sale of carpet operations,
    net of $1,921 costs and expenses paid       16,367           -         -
  Other, net                                       110         180       132
            Net cash provided by (used in)
              investing activities               8,025      (3,291)   (2,616)

Cash flows from financing activities:
  Proceeds from issuance of debt                83,837     171,697   100,382
  Repayment of debt                            (85,622)   (180,271) (90,652)
  Proceeds from exercise of stock options          260         328       42
  Cash dividends paid                             (413)       (360)    (346)
  Other, net                                        (3)          -       (6)
            Net cash (used in) provided by
              financing activities              (1,941)     (8,606)   9,420

            Increase in cash                    21,072           5        2
Cash, beginning of year                             24          19       17
Cash, end of year                              $21,096     $    24   $   19

Supplemental disclosures of cash flow
  information
    Cash paid during the year for:
      Interest                                 $ 1,894     $ 2,516   $  979
      Income taxes                               6,660       6,894    5,940

Non-cash investing and financing activities
  Reclassification of short-term
    borrowings to reflect debt refinancing           -           -    8,000
  Obligations assumed in business acquisitions       -       9,438      897
  Short-term debt issued in business acquisition     -       1,500        -
  Long-term debt issued in business acquisition      -       5,522        -
  Common stock issued in business acquisition        -       2,926        -

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

                              PAGE 39
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                          
Note 1:   NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business - Shelter Components Corporation and subsidiaries 
(individually and collectively referred to as the "Corporation") manufacture 
and distribute products and materials primarily for use by the Manufactured 
Housing, Modular Housing and Recreational Vehicle industries.
            
Significant Accounting Policies:
Principles of Consolidation - The consolidated financial statements include the 
accounts of the Corporation and its wholly-owned subsidiaries.  All 
intercompany balances and transactions have been eliminated.
      
Inventories - Inventories are stated at the lower of cost or market, with cost 
determined by the first-in, first-out method.
            
Property, Plant and Equipment - Property, plant and equipment are carried at 
cost less accumulated depreciation.  Depreciation is computed primarily by the 
straight-line method over the estimated useful lives of the assets.  Upon sale 
or retirement of property, plant and equipment, the asset cost and related 
accumulated depreciation are removed from the accounts and any resulting gain 
or loss is included in income.
            
Intangibles - Non-compete agreements are amortized on a straight-line basis 
over the terms of the related agreements (3 to 5 years).  The excess of 
acquisition cost of acquired businesses over the fair value of net assets 
acquired ("goodwill") is amortized, using the straight-line method, over 
periods ranging from 10 to 40 years.  The Corporation periodically reviews the 
carrying value of goodwill to assess that recoverability and impairments are 
recognized in operating results when a permanent diminution in value has 
occurred.
            
Income Taxes - Deferred income taxes are determined using the liability method 
in accordance with Statement of Financial Accounting Standards (SFAS) No. 109 
"Accounting for Income Taxes".

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

Fair Value of Financial Instruments - The fair value of all financial 
instruments where the face value differs from the fair value are estimated 
based upon quoted amounts or the use of current rates available for similar 
financial instruments.  If fair value accounting had been used at December 31, 
1996 and 1995, instead of the historic basis of accounting used in the 
financial statements, long-term debt would exceed the reported level by 
approximately $1.5 million in each year.

Product Warranty Expense - Provisions are made currently for the estimated 
future costs that will be incurred under product warranties presently in force.

                               PAGE 40
<PAGE>

Revenue Recognition and Concentration of Credit Risk - Revenue from product 
sales is recognized at the time of shipment and commissions are recognized as 
earned on an accrual basis.  Although the Corporation has a concentration of 
credit risk in the Manufactured Housing and Recreational Vehicle industries, 
there is no geographical concentration of credit risk.  Sales to one customer 
were approximately 11%, 12% and 10% of the Corporation's consolidated net sales
in 1996, 1995 and 1994, respectively.  Two of the Corporation's customers 
merged during 1996 resulting in combined sales approximating 13% of the 1996 
consolidated net sales.  The Corporation performs an ongoing credit evaluation 
of its customers' financial condition, and credit is extended to customers on 
an unsecured basis.  Future credit losses are provided for currently through 
the allowance for doubtful receivables.  Actual credit losses are charged to 
the allowance when incurred.  The amounts provided for such losses are 
determined based on the Corporation's historical loss experience considering 
current economic conditions.

Earnings Per Common Share - Primary and fully diluted earnings per common share 
computations are based on the weighted average number of shares of common stock 
and the dilutive effect of common stock equivalents (see Note 6) outstanding 
during each year, adjusted for all stock splits declared during the periods 
presented.


Note 2:    INVENTORIES
Inventories consist of the following components:
(in thousands)
                                          1996            1995 
                                                              
Raw materials                           $ 5,466        $ 8,272
Work-in-process                             382          4,986
Finished goods                              814          6,866
Goods held for resale                    34,813         29,925
  Total                                 $41,475        $50,049


Note 3:   PROPERTY, PLANT AND EQUIPMENT
The cost and accumulated depreciation are summarized as follows:
(in thousands)
                                          1996            1995
                                                     
Land                                    $ 1,984         $ 1,435
Buildings                                12,915          10,569
Leasehold improvements                      278           1,217
Machinery and equipment                   6,276           9,739
Office equipment                          2,584           2,569
Transportation equipment                  2,206           2,184
                                         26,243          27,713
Less, Accumulated depreciation            6,862          10,126
  Property, plant and equipment, net    $19,381         $17,587
            
                                PAGE 41
<PAGE>



Note 4:  DEBT
The Corporation has a $25 million, unsecured, revolving bank line of credit 
(the "Revolver").  The Revolver requires monthly interest payments based on 
market interest rates (6.47% at December 31, 1996) and an annual commitment fee 
of 1/8% based on the unused portion of the Revolver.  Outstanding borrowings 
under the Revolver at December 31, 1996 were $6 million which were repaid in 
January 1997.  There were no outstanding borrowings under the revolving line of 
credit at December 31, 1995.

Long-term debt consists of the following:
(in thousands)
                                          1996            1995   
9.24% senior notes                      $15,000         $15,000
6.4% senior notes                         1,500           3,000
Term loan, payable in monthly
  installments including interest
  at 6.75% with a final maturity 
  of February 1999, collateralized 
  by a real estate mortgage               1,279           1,420
Unsecured note, payable in quarterly 
  installments of $50 including
  interest imputed at 9.24% with 
  a final maturity of January 2000          556             697
Other                                       208           1,488
  Total long-term debt                   18,543          21,605
Less, Current maturities                  1,904           2,009
  Long-term debt, net of current
    maturities                          $16,639         $19,596


In February 1995, the Corporation issued $15 million, 9.24%, unsecured senior 
notes under a note agreement where interest is payable quarterly and principal 
is payable in eight annual installments of $1,875,000 commencing March 1998.

The unsecured $1.5 million, 6.4% senior note outstanding at December 31, 1996 
was paid in full on February 15, 1997.

Aggregate annual maturities of long-term debt for each of the next five years 
ending December 31 are as follows:  1997 - $1,904,000; 1998 - $2,285,000; 1999 
- $3,055,000; 2000 - $1,924,000 and 2001 - $1,875,000.
      
The revolver and senior note agreements contain, among other provisions, 
certain covenants including:  maintenance of minimum net worth and certain 
financial ratios; limitations on indebtedness, liens and leases; and 
limitations on the payment of cash dividends.  Under the senior note agreements 
and revolver, retained earnings of $39.2 million at December 31, 1996 is 
restricted, as to cash dividends and purchases or redemptions of shares of 
common stock.
                            
Note 5:   RETIREMENT PLAN
The Corporation has a defined contribution plan which covers substantially all 
full-time employees of the Corporation and is qualified under Section 401(k) of 
the Internal Revenue Code.  Under the plan, employees may voluntarily 
contribute a percentage of their compensation and the plan allows the 
Corporation to make discretionary matching contributions. Retirement plan 
expense, including administrative expenses, aggregated $271,000; $259,000 and 
$198,000 for the years ended December 31, 1996, 1995 and 1994, respectively.

Note 6:  SHAREHOLDERS' EQUITY
The Corporation is authorized to issue 1,000,000 shares of special (preferred) 
shares (par value $.01), of which none have been issued.  The special shares 
have no voting rights or powers, except the Corporation's Board of Directors is 
vested with authority to determine and state the designations and relative 

                               PAGE 42
<PAGE>

preferences, limitations, voting rights, if any, and other rights of the 
special shares.
      
On May 30, 1996, the Board of Directors declared a five-for-four stock split of 
the Corporation's common stock, paid on July 8, 1996 to shareholders of record 
on June 24, 1996.  On February 8, 1994, the Board of Directors declared a 
three-for-two stock split of the Corporation's common stock, paid on March 8, 
1994 to shareholders of record on February 22, 1994.  All historical share and 
per share data has been restated for all periods presented herein to reflect 
these stock splits.

During 1996, the Board of Directors approved the Shelter Components Employee 
Stock Purchase Plan which allows all full-time employees of the Corporation to 
purchase shares of the Corporation's common stock through payroll deduction at 
market prices.  As of December 31, 1996, 4,422 shares of common stock had 
been purchased by employees participating in the plan.  The Corporation pays 
the expenses of administering the plan.

The Corporation has a stock incentive plan authorizing the grant of incentive 
stock options and non-qualified stock options to purchase up to 937,500 shares 
of the Corporation's common stock.  Under the plan, the incentive stock option 
price may not be less than the fair market value of the Corporation's common 
stock at the date of grant.  Generally, the options become exercisable over 
staggered periods and expire five years from the date of grant.

The transactions for shares under options for each of the three years in the 
period ended December 31, 1996 were as follows:

                                       Shares
                                        Under          Per Share
                                       Option        Option Price 
Outstanding, January 1, 1994           322,144       $1.54 - $6.94
      Exercised                        (24,884)       1.54 -  2.02
Outstanding, December 31, 1994         297,260        1.54 -  6.94
      Exercised                       (104,235)       1.54 -  6.94
      Granted                          241,250            9.20
Outstanding, December 31, 1995         434,275        1.54 -  9.20
      Exercised                        (65,823)       1.54 -  9.20
      Cancelled                        (19,687)       6.94 -  9.20
Outstanding, December 31, 1996         348,765        6.94 -  9.20

Exercisable, December 31, 1996         136,401       $6.94 - $9.20

As of December 31, 1996, 331,095 shares were reserved for the granting of 
future stock options under this plan, compared with 106,330 shares at December 
31, 1995.

In 1996, the Board of Directors implemented a non-qualified stock option plan 
for the purpose of granting stock options to the Corporation's non-employee 
directors.   The plan provides for annual grants of 2,500 options to each non-
employee director at the fair market value of the Corporation's common stock at 
the date of the grant.  The options are immediately exercisable upon grant.  In 
May 1996, a total of 20,000 options were granted to the non-employee directors 
of the Corporation at an exercise price of $10.90 per share, all of which were 
outstanding and exercisable at December 31, 1996.  As of December 31, 1996, 
180,000 shares were reserved for the granting of future stock options to non-
employee directors under this plan.

The Corporation has adopted the disclosure-only provisions of Statement of 
Financial Accounting Standards No. 123, "Accounting for Stock-Based 
Compensation" (SFAS No. 123).  The Corporation applies Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for its plan.
Accordingly, no compensation cost has been recognized for its fixed stock
option plan.  Had compensation cost for the 1995 grant been determined based
on the fair value method as defined in SFAS No. 123, the Corporation's net

                             PAGE 43
<PAGE>


income and income per share would have been reduced to the proforma amounts
indicated below.          
                        --------1996----------        --------1995----------
                        Reported       Proforma        Reported      Proforma
Net income               $11,698        $11,548         $10,038        $9,888
Net income per share        1.51           1.49            1.31          1.29

The fair value of the option grant is estimated on the date of grant with the 
following assumptions:  expected volatility 32%; risk-free interest rate of 
6.04%; and expected life of 3 years.

Note 7:  INCOME TAXES
Income taxes consist of the following:
(in thousands)      
                                               1996         1995          1994 
Federal:
  Current                                    $7,724       $5,414        $4,728
  Deferred                                     (784)         (33)         (110)
                                              6,940        5,381         4,618
State:
  Current                                     1,344        1,100           979
  Deferred                                     (131)          (5)          (20)
                                              1,213        1,095           959

  Total                                      $8,153       $6,476        $5,577

                                 PAGE 44
<PAGE>


The components of the net deferred tax asset and the net deferred tax liability 
as of December 31, 1996 and 1995 were as follows:
(in thousands)
                                              1996         1995 
Current deferred tax asset:
  Allowance for doubtful receivables         $  196       $  196
  Inventories                                   895          601
  Accrued liabilities and other               1,037          615
    Deferred tax asset                       $2,128       $1,412

                                               1996         1995 
Non-current deferred tax asset (liability):
  Depreciation                               $ (643)      $ (743)
  Acquired companies                           (210)        (214)
  Other                                         108           13 
    Deferred tax liability                   $ (745)      $ (944)

The following is a reconciliation of income taxes computed at the statutory 
federal income tax rate to the reported provision:
(in thousands)
                                               1996         1995          1994
Computed income taxes at
  federal statutory rate                     $6,948       $5,782        $4,996
State income taxes, net
  of federal benefit                            789          711           630
Writedown of non-deductible goodwill            280            -             -
Other                                           136          (17)          (49)
      Total                                  $8,153       $6,476        $5,577

Note 8:  COMMITMENTS, CONTINGENCIES AND RELATED PARTIES
Lease Commitments
The Corporation leases certain facilities under noncancellable agreements which 
expire at various dates through September 2000.  The lease agreements require 
the Corporation to pay property taxes, utilities, insurance, and repairs and 
maintenance on the properties.  In addition, certain of the building leases are 
with entities which are principally owned by certain directors and officers of 
the Corporation.  During 1996, the Corporation exercised its option to purchase 
certain real estate totalling $3.6 million from ELJO Investments, a partnership 
principally owned by certain directors and officers of the Corporation.  The 
aggregate purchase price was below the fair market value of the properties at 
the date of purchase.  During 1996, the Corporation also purchased a facility 
from Stults Realty, Inc. which is owned by Mr. Stults, the Corporation's 
President pursuant to a provision in the January 1995 agreement to purchase the 
assets of BABSCO, Inc.  The purchase price was approximately $600,000, which 
reflected  the fair market value of the property.

The Corporation also leases certain transportation, manufacturing, distribution 
and office equipment under lease agreements with expiring terms through May 
2004.  The transportation leases require weekly rentals plus additional amounts 
based upon actual mileage.

The above described leases are accounted for as operating leases.  Total rental 
expense in the consolidated statements of income for the years ended December 
31, 1996, 1995 and 1994 aggregated $3,759,000, $3,474,000 and $2,901,000 
respectively, including payments to related parties of $266,000 in 1996, 
$711,000 in 1995, and $531,000 in 1994.
Future minimum annual lease payments under these operating leases, excluding 
mileage payments that may be required under transportation vehicle leases, are 
as follows:
          
          Year                   (in thousands)
          1997                      $2,053
          1998                       1,724
          1999                       1,254
          2000                         711
          2001                         219
          Thereafter                   168
                                    $6,129
                                
                                 PAGE 45
<PAGE>
Self Insurance
The Corporation is self-insured for certain employee health benefits ($100,000 
per individual with an annual aggregate of approximately $1.4 million) and 
workers' compensation ($500,000 per occurrence with an annual aggregate of 
approximately $1.1 million).  The Corporation accrues for the estimated losses 
occurring from both asserted and unasserted claims.  The estimate of the 
liability for unasserted claims arising from incurred but not reported claims 
is based on an analysis of historical claims data.

Other Related Party Transactions
The Corporation made purchases from an electrical wire products supplier in 
which the Corporation's President has a 16% ownership interest.  Total 
purchases for 1996 and 1995 were approximately $3 million per year.  The 
Corporation believes the purchases were at a price and terms which approximate 
general market prices and terms for similar products.

Other 
Certain claims are pending against the Corporation with respect to matters 
arising out of the ordinary conduct of the business.  In the opinion of 
management, based upon presently available information, either adequate 
provision for anticipated costs has been made by insurance, accruals or 
otherwise, or the ultimate anticipated costs resulting will not materially 
affect the Corporation's consolidated financial position or results of 
operations.

During 1996, the Corporation committed to the expansion of its corporate 
offices.  At December 31, 1996, the outstanding contractual obligation amounted 
to $1.1 million.

Note 9:  BUSINESS ACQUISITIONS
The following acquisitions have been accounted for using the purchase method of 
accounting, with the operating results of the acquired businesses being 
included in the Corporation's consolidated financial statements from the date 
of acquisition.               

In January 1995, the Corporation acquired the business operations and operating 
assets of BABSCO, Inc. ("BABSCO"), located in Elkhart, Indiana, and having 
additional operations in Plymouth and Warsaw, Indiana and Mt. Joy, 
Pennsylvania.  BABSCO is a wholesale distributor of a full line of electrical 
products to the Recreational Vehicle, Manufactured Housing and Modular Housing 
industries, and to electrical contractors in the Northern Indiana and Southern 
Michigan region.  The total purchase price was $18.2 million, consisting of 
three promissory notes totalling $7.0 million, 336,323 restricted shares of 
common stock with a market value of $2.9 million, and $8.3 million of assumed 
liabilities as of the closing date.  The promissory notes included a $1.5 
million demand note, an $800,000 note payable in quarterly installments over 
five years and a $4.7 million note paid in January 1996.  The $7.5 million 
excess of the purchase price over the fair value of acquired assets 
("goodwill") is being amortized over a 20-year period.

The following represents unaudited proforma financial information as if the 
acquisition of BABSCO had occurred at the beginning of 1994 (in thousands, 
except per share amounts):
                                                 1994       
      Net sales                               $380,022      
      Net income                                 9,400      
      Net income per common share                 1.23      

On May 2, 1994 the Corporation acquired the business operations and operating 
assets of TATCO, Inc. ("TATCO") located in Lancaster, Pennsylvania.  TATCO is a 
wholesale distributor of building and component products to the Manufactured 
and Modular Housing industries. The purchase price, including liabilities 
assumed and amounts due under non-compete, employment, and earnout agreements 

                               PAGE 46
<PAGE>


totalled $2.1 million.  The $700,000 excess of the purchase price over the fair 
value of acquired assets ("goodwill") is being amortized over a ten-year 
period.  Proforma financial information had TATCO been acquired as of the 
beginning of 1994 has not been presented as it is not materially different from 
historical results of the Corporation.

Note 10:  DISPOSAL OF CARPET BUSINESS
On December 31, 1996, the Corporation sold the carpet manufacturing and yarn 
processing operations and certain assets and transferred certain liabilities of 
its wholly-owned subsidiary, Danube Carpet Mills, Inc., for $18.3 million in 
cash.  The transaction resulted in a pre-tax gain of $5.9 million which amounts 
to a net gain of $.41 per share after income taxes.  The gain is net of $4.5 
million of expenses incurred in connection with the sale of the business, 
including an $800,000 non-deductible charge for goodwill related to the carpet 
and yarn operations.  Condensed income statement information and a listing of 
the assets and liabilities retained at December 31, 1996 relating to these 
operations after eliminating intercompany transactions and allocations are as 
follows:
                                                 Year ended December 31,
                                               1996        1995        1994
Sales                                        $74,851     $68,210     $64,573
Cost of sales                                 63,403      55,385      52,228
   Gross profit                               11,448      12,825      12,345
Selling, general and
  administrative expenses                     10,547       8,709       7,658
Interest expense                                   4           3          15
Gain on sale of business                      (5,919)          -           -
Income before income taxes                   $ 6,816     $ 4,113     $ 4,672

                                         December 31, 1996
Accounts receivable                          $ 3,594
Receivable due from buyer                        135
Real estate held for sale to buyer             1,648
Accounts payable and accrued expenses         (2,444)
Income taxes payable                          (2,963)
   Net liabilities retained in excess
    of assets                                $   (30)

                                PAGE 47
<PAGE>



REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Shareholders of
Shelter Components Corporation:

In our opinion, the accompanying consolidated balance sheets and the related 
consolidated statements of income, of shareholders' equity and of cash flows 
present fairly, in all material respects, the financial position of Shelter 
Components Corporation and its subsidiaries at December 31, 1996 and 1995, and 
the results of their operations and their cash flows for the years then ended 
in conformity with generally accepted accounting principles.  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 of these statements in accordance with 
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates 
made by management, and evaluating the overall financial statement 
presentation.  We believe that our audits provide a reasonable basis for the 
opinion expressed above. 

The financial statements of Shelter Components Corporation for the year ended 
December 31, 1994 were audited by other independent accountants, whose report 
dated February 7, 1995, except as to the information presented in Note 4 for 
which the date was March 27, 1995, expressed an unqualified opinion on those 
statements.


 /s/Price Waterhouse LLP 

South Bend, Indiana
February 18, 1997

                                     PAGE 48
<PAGE>

CORPORATE INFORMATION

SECURITIES INFORMATION

The Corporation's Common Stock is traded on the American Stock Exchange as 
Shelter Components Corporation under the symbol "SST".  The following table 
sets forth, for the last two fiscal years, quarterly high and low bid prices 
for the Common Stock on the American Stock Exchange.  All share prices have 
been adjusted to reflect the July 1996 five-for-four stock split.

1996                                    High                   Low   

First Quarter                         $13-1/8                 $9-3/4

Second Quarter                         13-5/8                  9-7/8

Third Quarter                          14-1/4                 10-7/8

Fourth Quarter                         14-1/2                 11-1/2


1995                                    High                    Low   

First Quarter                         $11-5/8                 $ 8-3/4

Second Quarter                         11                       8-1/4

Third Quarter                          11-7/8                   9 

Fourth Quarter                         13-3/4                  11-1/4


As of February 28, 1997 there were 425 holders of record of the Corporation's 
common stock.



Dividends
1996 and 1995 dividends per share were as follows:


Dividends Declared In:                       1996       1995

June                                        $.024       $.024
December                                     .030        .024
Total                                       $.054       $.048

Pursuant to the terms of certain debt agreements (see Note 4 of the Notes to 
Consolidated Financial Statements), the Corporation is prohibited from paying 
cash dividends in excess of $750,000 plus 50% of consolidated net income after 
December 31, 1994.  Future cash dividends will be contingent upon working 
capital needs and the financial position of the Corporation.
 
                               PAGE 49
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Form 10-K and Shareholder Inquiries
To request a free copy of Shelter Components Corporation's Form 10-K as filed 
with the Securities and Exchange Commission, contact:

  Investor Relations
  2831 Dexter Drive
  P.O. Box 4026
  Elkhart, Indiana 46514
  (800) 571-6929
  (219) 262-2213 (fax)


  Corporate Offices
  2831 Dexter Drive
  Elkhart, Indiana  46514  


  Transfer Agent
  KeyCorp Shareholder Services, Inc.
  127 Public Square, 15th Floor
  Cleveland, Ohio 44114-1306


  Independent Accountants
  Price Waterhouse LLP
  South Bend, Indiana


  Legal Counsel
  Barnes & Thornburg
  Elkhart, Indiana


                            PAGE 50
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Board of Directors                   Executive Officers

Outside Directors:                    Corporate Officers:

William J. Barrett (3)                Larry D. Renbarger
Senior Vice President                 Chief Executive Officer
Janney Montgomery Scott Inc.
(Investment Bankers)                  Gerald R. Stults
                                      President 
Arthur M. Borden                      & Chief Operating Officer
Partner, Rosenman & Colin             
(Attorneys)                           Mark C. Neilson 
                                      Chief Financial Officer
Herbert M. Gardner (2)                & Secretary-Treasurer
Senior Vice President                 
Janney Montgomery Scott Inc.          James E. DeCraene
(Investment Bankers)                  Vice President, Planning & Development
                                      
William N. Harper (1)(2)              Steven A. Salzer
Private Investor                      Vice President & General Counsel
                                      
Ronald D. Minzey (2)                  
Private Investor                      Operating Officers:      
                                      Dale A. Ledbetter
Cornelius J. Murphy (3)               President, Shelter Distribution
Private Investor                      
Co-Founder                            Richard E. Clark
                                      President, Shelter Plastics Group
William B. Riblet                     
Vice President                        Richard J. Ostroski
Lippert Components, Inc.              President, Design Components, Inc
                                      
                                      
Employed Directors:                    

Larry D. Renbarger 
Gerald R. Stults
Mark C. Neilson


(1)  Chairman of the Board
(2)  Audit Committee
(3)  Compensation Committee


                                PAGE 51
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                                                                Exhibit 21



SHELTER COMPONENTS CORPORATION
SUBSIDIARIES OF THE REGISTRANT
December 31, 1996




                                                           Percentage of Voting
                                         Incorporated      Securities Owned
         Name                            Under Laws of     by Immediate Parent
BPR Holdings, Inc.                            Indiana             100% (1)

Shelter Components of Indiana, Inc.           Indiana             100% (1)

    Shelter Distribution, LP                                           (2)

Design Components, Inc.                       Indiana             100% (1)

Duo-Form of Michigan, Inc.                    Michigan            100% (1)

Danube Carpet Mills, Inc.                     Tennessee           100% (1) (3)


(1)  Wholly-owned subsidiary of Shelter Components Corporation
(2)  Limited partnership owned by BPR Holdings, Inc. (1%)and Shelter Components 
       of Indiana, Inc. (99%)
(3)  Business operations and substantially all net assets of Danube Carpet 
       Mills, Inc. were sold on December 31, 1996.

                                PAGE 52
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