<PAGE>   1


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the fiscal year ended January 31, 1997.

[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

         For the transition period from ______________ to ____________________.

Commission file number 0-21862

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

                 Delaware                                        94-2385342
     -------------------------------                         ------------------
     (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                          Identification No.)


443 North Varney Street, Burbank, California                         91502 
--------------------------------------------                     ------------
 (Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code: (818) 848-5555

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

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value    
                          -----------------------------
                                (Title of class)

         Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes   X    No_______

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

         The aggregate market value of the voting stock held by non-affiliates
of the registrant as of April 22, 1997, computed by reference to the closing
sales price as reported on The Nasdaq National Market on such date, was
$12,256,720.  In determining such market value, shares of Common Stock
beneficially owned by each executive officer and director have been excluded.

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.


          Class                  Number of Shares Outstanding on April 22, 1997
          -----                  ----------------------------------------------
Common Stock, $.001 par value                          6,254,378

                      DOCUMENTS INCORPORATED BY REFERENCE

         Pursuant to General Instruction G(3) to this form, the information
required by Part III (Items 10, 11, 12 and 13) hereof is incorporated by
reference from the registrant's definitive Proxy Statement for its Annual
Meeting of Stockholders scheduled to be held on July 1, 1997.
<PAGE>   2
                                     PART I

ITEM 1.  BUSINESS

GENERAL

         The Company is the largest manufacturer and distributor of karat gold
jewelry in the United States.  The Company offers its customers a large
selection of jewelry styles, consistent product quality and prompt delivery of
product orders and provides a wide range of specialized services.  The
Company's customers include mass merchandisers, discount stores, home shopping
networks, catalog showrooms, warehouse clubs and jewelry wholesalers and
distributors.  In fiscal 1997, sales were made to approximately 900 customers,
with sales to the Company's ten largest customers accounting for approximately
51% of net sales.

         The Company's principal product line is an extensive selection of 14
karat gold chains that are offered in a variety of popular styles, gauges and
lengths.  The Company also offers its customers a wide assortment of 14 karat
gold charms, earrings, rings and bracelets and a line of 10 karat gold jewelry
that includes both chain and non-chain products.  While the Company intends to
continue to aggressively market its karat gold chain product lines, the Company
also intends to continue its strategy of attempting to increase its sales of
non-chain karat gold products by regularly introducing new styles and building
upon relationships with existing customers.  The Company also has a line of
sterling silver jewelry and, since May 1994, has engaged in the design,
manufacture and distribution of karat gold jewelry accented with diamonds and
colored gemstones.

         The Company operates a manufacturing plant at its Burbank facility
where it manufactures a substantial portion of its products from semi-finished
materials and from gold bullion and other raw materials.  The Company also
recently established three manufacturing plants, which are primarily used for
the manufacture of rope chain, in facilities located in South America and the
Caribbean.  The Company believes that its manufacturing capabilities better
enable it to respond to customer requests for customized products, provide
greater flexibility and complement its outside sources of supply.  The
Company's manufacturing expertise also enables it to better support and monitor
the operations of its outside suppliers.

         The Company has recently announced that it was entering the premium
cigar business and the perfume business.  For additional information regarding
these new product lines, see "Recent Developments" below.

PRODUCTS

         The Company seeks to provide its customers with a full line of high
quality karat gold jewelry products that incorporate traditional styles and
designs.  While the Company regularly updates its product lines and offers new
products, it seeks to avoid designs incorporating fashion trends which are
expected to have short life cycles.  The Company currently offers over 1,300
styles of gold chains, charms, earrings, bracelets and rings and over 1,000
styles of sterling silver chains, charms, earrings, bracelets and rings.  The
Company's products are moderately priced, with the majority of its gold
products retailing at prices between $30 and $200 and a majority of its
sterling silver products retailing at prices between $10 and $30.  The
Company's products are intended to appeal to consumers who are value-conscious
as well as fashion-conscious.
<PAGE>   3
         The Company's principal product line is an extensive selection of 14
karat gold rope and flat chains.  Rope chains, as their name implies, have a
woven, rope-like appearance and typically are handmade.  Flat chains are made
by specialized machinery which hammers the chain into various patterns.  The
Company's other jewelry products include 14 karat gold charms, earrings,
bracelets and rings, 14 karat gold jewelry set or accented with diamonds and
colored gemstones, a line of 10 karat gold jewelry which includes both chain
and non-chain products, sterling silver jewelry and a line of 14 karat gold
interwoven with sterling silver or with sterling silver accents.  A major
portion of the Company's jewelry is finished using the diamond-cut process, a
technique which etches the surface of the jewelry to create a brilliant,
faceted appearance.  The Company believes it was one of the first manufacturers
to utilize the diamond-cut process in the production of rope chains.

         The following table shows sales by product category as a percentage of
total net sales of karat gold and sterling silver products for fiscal 1995,
1996 and 1997.

<TABLE>
<CAPTION>
                                                 JANUARY 27,       FEBRUARY 2,       JANUARY 31,
                                                    1995              1996              1997     
                                                 -----------       -----------       -----------
 <S>                                              <C>                <C>              <C>    
 14 karat gold chains  . . . . . . . . . . . . .    63.9%             56.6%             52.7%

 14 karat gold non-chain products  . . . . . . .    21.2              17.1              21.5

 10 karat gold jewelry(1)  . . . . . . . . . . .    13.6              21.3              20.4
 Sterling silver jewelry . . . . . . . . . . . .     1.3               5.0               5.4 
                                                    ----              ----              ----
                                                     100%              100%              100%
                                                    ====               ====              ====
                          
--------------------------
</TABLE>
(1)      Includes both chain and non-chain products.

         The Company maintains a staff of designers at its Burbank facility who
work closely with the Company's senior officers and marketing personnel to
develop new products meeting the needs of the Company's customers.  The
Company's marketing and merchandising staff also work in partnership with major
customers to develop products that are sold exclusively by those customers.

         The Company's product line includes approximately 200 products that
are a permanent part of its product line.  These products are traditionally
designed karat gold chains and other jewelry products for which there has been
consistent demand.  The Company continually strives to update the balance of
its product line with innovative, new styles.  New styles primarily are
introduced three times each year, in connection with major trade shows, and
replace older styles whose performance has declined.  The Company closely
monitors sales of its new styles and promptly discontinues any styles which
fail to achieve desired sales levels.

         The Company seeks to obtain proprietary protection for its products
whenever possible.  The Company's Silk Rope(R) (a line of rope chain that is
manufactured from an increased number of thinner links as compared to a
standard rope chain of comparable gauge and appearance) is manufactured using
processes covered by a utility patent owned by the Company which expires in
2004.  The Company's SupremeValue Rope(TM) (a line of simulated diamond-cut
rope chains that is manufactured using hollow rather than solid gold links) is
manufactured using processes covered by utility patents which were purchased by
the Company from an unaffiliated party in April 1994 and expire in 2009.  The
patents previously were utilized by the Company pursuant to the terms of a
license agreement with the prior owner.  The Company also offers a line of
diamond cut rope chain and a line of 14 karat gold diamond cut "tennis"
bracelets, and matching gold earrings, necklaces and
                                
                                
                                -2-

<PAGE>   4
rings, which are marketed by the Company pursuant to the terms of license
agreements with unaffiliated parties.  Together with QVC Network, the Company
markets a specially selected and packaged line of karat gold jewelry under the
name Beverly Hills Gold(TM).  The Company believes there is strong recognition
of the Beverly Hills Gold(TM) trademark with viewers of the QVC Network and
that this recognition has enhanced sales of these products.  During fiscal
1997, the Company introduced its Precious Precious(TM) line of jewelry, which
features 14 karat gold earrings, necklaces and rings interwoven with sterling
silver or with sterling silver accents.  The Company also generally applies for
copyrights covering the design of its charms and other selected products.
During fiscal 1997, sales of products manufactured or marketed pursuant to the
Silk Rope(R) and SupremeValue Rope(TM) patents, license agreements, copyrights
or the Beverly Hills Gold(TM) and Precious Precious(TM) trademarks accounted
for approximately 27.6% of the Company's net sales.  See "Patents and
Trademarks".

SALES AND MARKETING

         The Company's jewelry sales and marketing operations are divided into
retail and wholesale divisions, with the retail division accounting for
approximately three-quarters of the Company's net sales.  The marketing efforts
of the Company's retail division are directed towards large retailers, such as
mass merchandisers and discount stores, catalog showrooms, national and
regional jewelry chains, home shopping networks, warehouse clubs and department
stores.  The wholesale division markets to jewelry wholesalers and
distributors.  The Company's marketing efforts emphasize maintaining and
building upon the Company's relationships with existing customers.

         The Company believes that providing exceptional customer service is a
key element of its marketing program.  The Company maintains an extensive
inventory of finished goods which, coupled with its manufacturing capabilities,
enables it to rapidly fill customer orders.  The Company's marketing efforts
emphasize its ability to fill orders in a prompt and reliable fashion.

         In addition to prompt and reliable order fulfillment, the Company
offers a wide variety of customer support services designed to meet the
individual needs of its customers.  For many of the Company's retail customers,
the Company prepackages, price-tags and bar codes individual pieces of jewelry,
and then ships an assortment of many prepackaged items to individual retail
locations.  Other services provided to retail customers include advertising and
merchandising support, point of sale displays and training for sales employees.
The Company also is able to provide to its customers computer generated reports
analyzing the customers' sales and information regarding market trends.

         In order to fill customer orders more quickly and efficiently, the
Company has implemented an EDI program with certain retail customers.  Under
this program, the Company electronically receives purchase orders from
participating customers and electronically transmits to the customer order
acknowledgements, invoices and advance shipping notices.  Certain large
retailers require their vendors to utilize EDI programs.  During fiscal 1997,
approximately 56% of the Company's net sales were made pursuant to orders
received through the EDI program.

         The wholesale division markets to wholesalers and distributors who in
turn sell to small retailers.  The marketing efforts of the jewelry wholesale
division emphasize the Company's ability to provide prompt delivery of product
orders and consistent product quality at competitive prices.  The Company
generally does not provide to its wholesale customers the specialized services
which it provides to retail customers.


                                      -3-
<PAGE>   5
         Sales of new products often are first made by the wholesale division.
The jewelry wholesalers and distributors who purchase the products from the
Company typically will promote the new products to their retail customers.  The
promotional efforts of the jewelry wholesale division's customers provide a
cost-effective method for determining whether new products will be accepted in
the marketplace and, in the case of successful products, help generate interest
in the new products throughout the retail sector, including with customers of
the Company's retail division.  Customers of the jewelry wholesale division
also serve as an outlet for discontinued products that are no longer offered to
retail customers.

         Marketing of the Company's products is conducted primarily from the
Company's Burbank offices through its direct sales force, which includes both
sales personnel and customer service representatives.  In addition, the Company
maintains a showroom in New York City and a sales office in the Jewelry Mart
area of Los Angeles which serves small wholesale customers, and the Company
utilizes the services of independent sales representatives who market to retail
customers and are compensated on a commission basis.  The Company's products
are promoted through the use of product catalogs and brochures, advertisements
in trade publications, trade show exhibitions and promotional events with
retailers.  The Company does not advertise its products directly to consumers.

         Prices charged to individual customers vary based on the services
required by the customer and the customer's sales volume.  Prices on sales to
wholesale customers are based on the price of gold at the time of sale.  Sales
to retail customers generally are made under a program which allows the
customer to place a blanket order for a specified amount of gold jewelry to be
delivered within 90 days from the order date at a gold price which is fixed at
the time the order is placed.  This program enables the customer to fix the
cost of the products that it will order during a certain period of time,
thereby offering protection for the customer against increases in the price of
gold.  The Company protects itself from fluctuations in the price of gold
between the order date and the date of sale by maintaining forward contracts
for the purchase of gold in amounts and for periods of time that approximately
correspond to the Company's obligations under such orders.  If the market price
of gold increases between the order date and the date of sale, the Company is
able to offset the increase in the cost of the gold included in the products
shipped to the customer by the gain resulting from the liquidation of its
position under the related forward contracts.  To the extent the Company does
not maintain appropriate forward contracts, the Company will be exposed to the
costs associated with a subsequent increase in the price of gold.

         The Company accepts returns of products with defects in materials or
workmanship.  The Company also accepts returns of certain items, primarily from
large retailers, in order to maintain customer goodwill and as part of
promotional programs.  Returns of products which are not defective generally
are made as part of stock balancing transactions in which the returned products
are replaced with products better suited to the customer's needs.  In addition,
the Company makes a limited amount of sales on a consignment basis
(transactions in which products are delivered to customers for more than 30
days under terms which permit the customer to defer paying for the products
until they are sold to its customers).  The Company has not experienced any
difficulty in reselling returned merchandise to other customers.  For further
information regarding the Company's returns, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- General".

         While the Company sold its products to approximately 900 customers in
fiscal 1997, sales to the Company's ten largest customers accounted for
approximately 51% of net sales and sales to the



                                      -4-
<PAGE>   6
Company's 50 largest customers accounted for approximately 82% of net sales.
During fiscal 1997, sales to Wal-Mart accounted for approximately 17.7% of net
sales.  No other customer accounted for more than 10% of net sales.  The
Company has no long-term contractual relationships with any of its customers.

MANUFACTURING AND PURCHASING

         The Company's products are acquired through three sources: products
manufactured by the Company from gold bullion and other raw materials; products
completed by the Company from materials ("semi-finished materials") partially
fabricated by outside manufacturers; and products purchased as finished goods.
During fiscal 1997, the Company manufactured approximately 73% of its products
from semi-finished materials and from gold bullion and other raw materials and
purchased approximately 27% of its products as finished goods.  The principal
products manufactured by the Company from raw materials are cast jewelry, such
as charms, rings, earrings and bracelets, and certain styles of rope chain.
Semi-finished materials primarily consist of spools of rope chain in which the
individual links have been woven and soldered by hand by outside manufacturers
and at offshore manufacturing facilities operated by the Company.

         Jewelry manufacturing operations performed by the Company at its
Burbank facility include: combining pure gold with other metals to produce
karat gold; manufacturing cast jewelry; fabricating links utilized in the
manufacture of the Company's rope chains; manufacturing certain styles of rope
chain through the use of specialized machinery; and finishing operations such
as cutting chains to the desired length, attaching clasps, cleaning, polishing
and diamond cutting.  The Company believes that its manufacturing capabilities
better enable it to respond to requests for customized products, provide
greater flexibility and complement its outside sources of supply.  The Company
also believes that the expertise derived from its manufacturing operations
better enables it to support and monitor the activities of its outside
manufacturers.

         As part of its manufacturing operations, the Company also completes
the fabrication of semi-finished jewelry items, principally handmade rope
chain.  While the Company uses machinery to manufacture certain styles of rope
chain, the individual links in most of the Company's rope chain styles are
woven by hand to form gold chains.  Because this process is highly labor
intensive, the Company typically utilizes the services of manufacturers located
in countries with lower labor costs to perform the required weaving and
soldering, both with links fabricated by the Company and with links fabricated
by the outside manufacturers from gold supplied, in most instances, by the
Company.  The principal manufacturers currently utilized by the Company are
located in South America.  After the hand soldering operations have been
completed, the chains are returned to the Company for finishing.  Finishing
operations performed by the Company include diamond cutting, cutting the chain
to the desired length, soldering a clasp to the chain and tumbling, polishing
and cleaning the finished products.

         The Company maintains a close working relationship with, and provides
ongoing technical support to, the outside manufacturers who participate in the
production of its rope chains.  For further information regarding the Company's
use of outside manufacturers, including certain risks associated therewith, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- General".





                                      -5-
<PAGE>   7
         In order to reduce the Company's reliance on outside manufacturers for
the manufacture of rope chain products, the Company has established three
facilities for the manufacture of rope chain which are operated by the Company
out of facilities located in South America and the Caribbean.  In fiscal 1997,
production from these facilities accounted for approximately 41% of the rope
chain products sold by the Company.  While the Company anticipates that its
offshore manufacturing facilities will reduce its use of outside manufacturers
for the production of rope chain products, the Company does not intend to
consolidate the production of rope chain products at Company-operated
facilities and anticipates that it will continue to rely on the services of
independent outside manufacturers for the production of a substantial portion
of its rope chain products.  The Company did not incur material capital
expenditures in connection with the establishment of its offshore manufacturing
facilities.

         In addition to products manufactured from gold bullion and
semi-finished materials, the Company purchases finished products from suppliers
located principally in Europe and the United States.  The principal items
purchased by the Company are machine-made flat chains; other items purchased as
finished goods include rings, bracelets, earrings and charms.  Jewelry
purchased by the Company frequently is manufactured under an arrangement
whereby the Company supplies all necessary gold bullion and pays a
manufacturing charge and applicable duties at the time of delivery.

         During fiscal 1997, the Company purchased gold products from over 190
suppliers.  The largest supplier accounted for approximately 10% of the
Company's total purchases, and the ten largest suppliers accounted for
approximately 50%.  Although a substantial portion of the Company's purchases
are concentrated with a relatively small number of suppliers, the Company does
not believe the loss of any supplier would have a material adverse effect on
its business.  Alternative sources of supply for the finished goods purchased
by the Company are readily available.  During recent years, the Company has
increased its outside manufacturing sources and believes it could shift
production to other manufacturers currently providing services to it and that
other sources of supply would be available if the Company were to lose the
services of any of these outside manufacturers.  The Company also believes that
the establishment of its own offshore manufacturing facilities for the
production of rope chain products has served to lessen its reliance on the
services provided by independent outside manufacturers.  The Company has no
long-term contractual relationships with any of its suppliers.

GOLD CONSIGNMENT ARRANGEMENTS

         The Company's primary source of gold used in the manufacturing process
(including gold supplied by the Company to its outside manufacturers) is gold
acquired through consignment arrangements with various banks and bullion
dealers.  The cost to the Company of the consignment program is substantially
less than the costs that would be incurred if the Company were to finance the
purchase of all of its gold requirements at the commencement of the production
process with borrowings under its revolving credit facility or other credit
arrangements.  The consignment program allows the Company to maintain high
inventory levels at a relatively low cost, thereby enabling it to respond more
promptly to customer demand.

         The Company currently has in place agreements with six institutions
that provide gold to the Company on a consignment basis.  Title to consigned
gold, including consigned gold incorporated into finished products, remains
with the consigning institution until the Company purchases the gold.





                                      -6-
<PAGE>   8
This substantially insulates the Company from the risk of gold price
fluctuation; however, during the period of consignment, the entire risk of loss
or damage to the gold is borne by the Company.

         Under the consignment arrangements, the Company may defer the purchase
of gold used in the manufacturing process and held in inventory until the time
of sale of finished products to customers.  Financing costs under the
consignment arrangements currently are approximately 3% per annum of the market
value of the gold held under consignment, computed daily.  At the time of sale,
the Company purchases the gold included in the finished products at current
market prices.  Alternatively, the Company may "replace" the consigned gold
with gold purchased from another institution.  The Company generally eliminates
the risk of market fluctuations in the price of the consigned gold by either
using the price it pays for the gold to determine the prices it charges to its
customers for finished products incorporating the consigned gold or by
maintaining appropriate forward contracts for the purchase of gold which
protect the Company against fluctuations in the price of gold between the order
date and the date of sale.  See "Sales and Marketing".

         In addition to gold acquired through the consignment arrangements, the
Company purchases gold from financial institutions in the form of gold bullion
and from its manufacturers and vendors in the form of semi-finished materials
and finished goods.  During fiscal 1997, the Company satisfied approximately
75% of its gold requirements through purchases under the consignment program
and purchased the remaining 25% of its gold requirements from manufacturers and
vendors.  The value of the gold purchased by the Company and held in inventory,
as well as the value of the gold included in returned merchandise and other
gold owned by the Company, is subject to fluctuation based on changes in the
market value of gold.  The Company does not engage in hedging transactions to
protect against fluctuations in the market value of the gold owned by it.  For
information regarding the effects of fluctuations in the market value of gold
on the Company's gross profit margins and the divestiture by the Company in
fiscal 1995 of a substantial portion of the gold owned by it, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
General".

         The Company's consignment agreements include provisions which
generally limit both the fair market value and amount (by weight) of gold which
the Company may hold under consignment.  Based on the value of gold on April 8,
1997, the Company currently is able to hold an aggregate of approximately
240,000 ounces of gold under consignment; the actual amount of gold held by the
Company under consignment on that date was approximately 127,000 ounces.  The
amount of gold which the Company is able to acquire under consignment is
subject to fluctuations based on changes in the market value of gold.  The
consignment agreements contain covenants restricting the amount of consigned
gold the Company may reconsign or otherwise have outside of its possession.

         The Company's consignment arrangements generally are terminable upon
30 days notice to the Company.  Gold consignment arrangements are common in the
jewelry industry, and the Company historically has not experienced any
difficulties in obtaining sufficient quantities of consigned gold to meet its
operating needs.  If one or more institutions were to terminate the consignment
arrangements, the Company does not believe it would experience any interruption
in its gold supply that would materially adversely affect its business, as it
believes that a number of other institutions would be willing to enter into
similar arrangements.  In addition, if the Company's requirements for consigned
gold were to increase, the Company believes that appropriate modifications
could be made to its existing arrangements or consignment arrangements could be
entered into with additional institutions, so that the amount of gold available
to the Company on





                                      -7-
<PAGE>   9
consignment would be increased to meet its operating needs.  However, there can
be no assurance that fluctuations in the credit or precious metals markets
would not result in an interruption of the Company's gold supply or the
contractual arrangements necessary to allow the Company to continue the use of
consigned gold.

         For further information regarding the consignment agreements, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".

BACKLOG

         Substantially all of the Company's wholesale customers' orders are for
immediate shipment and typically are shipped within two to four days of
receipt.  Orders from retailers typically have shipment dates which may range
from 24 hours to 90 days.  The approximate aggregate dollar value of the
Company's backlog at April 5, 1996 and April 9, 1997 was $7.8 million and $5.5
million, respectively.  The Company expects that substantially all of the
current backlog will be shipped during the next 90 days.  Annual comparisons of
backlog as of any given date are not necessarily indicative of sales trends,
and the Company does not believe that backlog is indicative of the Company's
future results of operations.

COMPETITION

         The jewelry industry in the United States is highly fragmented and
characterized by a large number of small to medium-sized manufacturers,
wholesalers and distributors.  The Company's business is highly competitive,
and the Company's competitors include domestic and foreign jewelry
manufacturers, wholesalers and importers who may operate on a national,
regional or local scale.  Based upon its knowledge of the domestic jewelry
industry and a review of available information, the Company believes that it is
the largest manufacturer and distributor of karat gold jewelry in the United
States and that its resources generally are equal to or greater than the
resources of most of its competitors.  However, some companies in the jewelry
industry may be larger and have greater financial and other resources than the
Company.

         The Company believes that competition is based primarily on product
availability, timeliness of shipment, customer service, product quality, design
and price.  The diverse distribution channels in which the Company markets its
products frequently involve different competitive factors.  The ability to
provide specialized services is a particularly important competitive factor in
sales to certain large retailers such as mass merchandisers, discount stores
and warehouse clubs.  Product availability and the ability to offer consistent
product quality at competitive prices tend to be the key competitive factors in
sales to catalog showrooms and wholesale customers.  Some of the Company's
competitors may specialize in sales to particular distribution channels and may
have relationships with customers in those distribution channels that make
competition by the Company more difficult.  The Company believes that recent
consolidations at the retail level in the jewelry industry have increased the
level of competition in the markets in which the Company competes.

INSURANCE

         The Company maintains primary all-risk insurance to cover thefts and
damage to inventory and insurance on all goods in transit.  Additional
insurance coverage is provided by some of the





                                      -8-
<PAGE>   10
Company's suppliers.  The Company also maintains limited fidelity insurance
(insurance providing coverage against theft or embezzlement by employees of the
Company or its suppliers).

PATENTS AND TRADEMARKS

         The Company manufactures two lines of diamond cut rope chain using
processes covered by utility patents and manufactures a line of diamond cut
rope chain and a line of 14 karat gold diamond cut "tennis" bracelets under the
terms of license agreements with unaffiliated parties.  The Company also
maintains certain trademarks and generally applies for copyrights covering the
design of its charms and other selected products.  The level of protection
available to the Company for proprietary products and designs varies depending
on a number of factors, including the degree of originality and the
distinctiveness of the products or designs.  No assurance can be given that the
Company's patents, copyrights and other proprietary rights will preclude
competitors from developing substantially equivalent products.  See "Products".

EMPLOYEES

         At March 31, 1997, the Company employed 306 persons in the United
States, of whom 175 were engaged in manufacturing and distribution operations,
90 were engaged in marketing, customer service and merchandising and 41 were
engaged in management and administration.  At that date, the Company also
employed 545 persons at its manufacturing facilities in South America and the
Caribbean.  None of the Company's employees is covered by a collective
bargaining agreement, and the Company considers its relations with its
employees to be good.

ENVIRONMENTAL MATTERS

         The Company's jewelry manufacturing operations routinely involve the
use of small quantities of materials that are classified as hazardous.  The
Company believes that its use of such materials is in compliance in all
material respects with applicable federal, state and local laws and regulations
concerning the environment, health and safety, and the costs incurred in
complying with such laws and regulations have not been material to the
Company's results of operations.

         The Company's Burbank facility is located in an area of the San
Fernando Valley which is either included in or adjacent to an extensive area of
groundwater contamination known as the San Fernando Valley Superfund Site (the
"Site").  In 1986, the United States Environmental Protection Agency (the
"EPA") included portions of the Site on the National Priorities List as
"Superfund Sites" pursuant to the provisions of the Comprehensive Environmental
Response, Compensation, and Liability Act, as amended ("CERCLA").  The Company
is not a party to any litigation involving the Site, has not been identified by
the EPA as a potentially responsible party under CERCLA and does not believe
that it has contributed to the existing groundwater contamination at the Site.
However, given the location of the Company's manufacturing facility and the
fact that the Company's operations involve the use of small quantities of
hazardous materials, no assurances can be given that the Company will not be
named as a party to litigation, or as a potentially responsible party, with
respect to the Site.





                                      -9-
<PAGE>   11
RECENT DEVELOPMENTS

  Premium Cigar Business

         On February 27, 1997, the Company announced that it was entering the
premium cigar business.  The Company intends to manufacture a range of premium
cigars for sale to wholesale distributors, tobacconists and upscale retail
stores and for sale at one or more retail cigar stores to be operated by the
Company.  To date, the Company has leased manufacturing facilities in the
Dominican Republic and in Indonesia, begun hiring selected key employees and
purchased an initial inventory of high quality Indonesian wrapper tobacco.  The
Company also has leased space for a flagship cigar shop in Beverly Hills,
California.  The Company anticipates commencing commercial production of
premium cigars at its Dominican Republic facility by October 1997 and opening
its Beverly Hills cigar shop in the third quarter of 1997.

         The Company is seeking to capitalize on the recent growth of the
premium cigar market and the Company's many years of experience in
manufacturing and supervising the manufacture of karat gold jewelry in
developing countries.  The Company's strategies for capitalizing on these
opportunities include the following:

         Quality Product Lines.  The Company intends to introduce at least two
product lines of premium cigars, including a line of super-premium cigars that
are expected to sell at retail prices of $10.00 and up per cigar and a line of
premium cigars expected to retail at a price range of from $3.00 to $10.00 per
cigar.  The Company intends to manufacture its cigars by hand using long-filler
and all natural tobacco leaf wrappers and binders of the best grades.

         Establish Manufacturing Facilities.  The Company has leased a
manufacturing facility in the Dominican Republic which is expected to commence
commercial production by October 1997.  The Company also has leased a 26,000
square foot manufacturing facility in Indonesia that will be used to process
and reclassify tobacco leaf and manufacture premium cigars.  The Company
expects to commence commercial production of premium cigars at the Indonesian
facility during the fourth quarter of the current fiscal year and may operate
the facility with a local partner.  These facilities will allow the Company to
take advantage of local tobacco supplies and the Company's experience in
operating jewelry manufacturing facilities in those countries. The Company also
has purchased approximately 57 acres of land in Esteli, Nicaragua, where it
intends to grow some of its own tobacco.

         Beverly Hills Retail Store.  In order to promote the Company's line of
super-premium cigars, the Company intends to operate a flagship cigar shop in
Beverly Hills, California.  The Company has leased a 1,300 square foot shop on
Rodeo Drive, which the Company expects to open during the third quarter of
1997.  The shop will offer both the Company's super-premium cigars and premium
cigars manufactured by other companies and also will include a mezzanine level
cigar lounge and private humidors.

         The Company historically has operated as a manufacturer and
distributor of karat gold jewelry and has not engaged in the manufacture or
distribution of cigars or other tobacco products.  There can be no assurance
that the Company will be able to successfully introduce its premium cigar line,
successfully open and operate any retail cigar shops or otherwise successfully
compete in the premium cigar market.





                                      -10-
<PAGE>   12
         The foregoing discussion contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.  The Company
cautions investors that there are certain important factors that could cause
future events and results to differ materially from those anticipated by
management in the forward-looking statements included herein, as well as risks
and uncertainties generally applicable to the cigar business.  Among these
important factors, risks and uncertainties are (a) risks associated with the
commencement of a new business operation and the introduction of a new product
line, including risk of lack of market acceptance for the Company's premium
cigars and risks associated with the manufacture and distribution of product
lines unrelated to the Company's existing business, (b) delays that may be
encountered in opening the Company's manufacturing facilities and retail store,
(c) the Company's ability to attract, hire and retain master-cigar makers and
other skilled craftsmen and laborers, (d) the Company's ability to obtain, on
an ongoing basis, sufficient supplies of properly aged tobacco for its proposed
operations, (e) whether the recent upward trend in unit sales of premium cigars
will continue, (f) extensive and increasing federal, state and local regulation
of tobacco products, (g) tobacco industry litigation, (h) the competitive
environment in the premium cigar market, (i) effects of any increases in excise
taxes that may occur in the future, and (j) social, political and economic
risks associated with foreign operations and international trade.  For further
information regarding these and other factors, risks and uncertainties
affecting the Company's entry into the premium cigar business, reference is
made to the Company's Current Report on Form 8-K dated February 27, 1997, which
is incorporated herein by reference.

  Perfumes

         The Company has entered into an exclusive license arrangement with a
French manufacturer of perfumes and distinctively shaped perfume bottles
pursuant to which the Company has acquired the exclusive license to
manufacture, market and sell in the United States the bottles and fragrances
developed by the licensor.  The Company currently anticipates commencing
initial marketing of perfumes under this license in the third quarter of 1997.

         The Company is seeking to capitalize on its relationships with mass
merchandisers and home shopping networks in order to introduce its line of
perfumes and colognes.  The Company intends to initially market through mass
merchandisers, at a retail price of under $20, a women's perfume featuring an
evening gown shaped glass bottle and a vanilla scented fragrance, to be
followed by a men's cologne in glass bottles shaped as sports figures, such as
a soccer player or a football player.  The Company also intends to market
through QVC Network a women's perfume under the Beverly Hills Gold(TM) name,
featuring a heart shaped glass bottle and a heart shaped gold cap, with a small
amount of gold leaf inside the bottle.  The Company expects the Beverly Hills
Gold(TM) perfume to retail for around $40.

         The Company currently intends to have the bottles and caps produced in
Europe, with the perfume and cologne produced and filled by a contract
manufacturer in the United States.  Shipments of the perfume products will be
made from the Company's Burbank, California facilities.

         The Company historically has operated as a manufacturer and
distributor of karat gold jewelry and has not engaged in the manufacture or
distribution of perfumes or colognes.  There can be no assurance that the
Company will be able to successfully introduce its line of perfumes and
colognes or otherwise successfully compete in the perfume and cologne market.





                                      -11-
<PAGE>   13
ITEM 2.  PROPERTIES

         The Company maintains manufacturing and administrative facilities in a
52,000 square foot building of modern construction owned by the Company and
located on North Varney Street in Burbank, California.  The Company currently
utilizes approximately 20,000 square feet as manufacturing space, approximately
25,000 square feet as distribution, warehouse and storage space (including
vaults) and approximately 7,000 square feet as administrative offices.  The
facility is encumbered by deeds of trust securing the repayment of indebtedness
in the aggregate amount of $1.9 million at January 31, 1997, which was incurred
in connection with the acquisition and expansion of the facility.

         In March 1995, the Company purchased a building of approximately
10,500 square feet, which it expanded to 15,000 square feet, in Burbank,
California, which is located in the vicinity of its current manufacturing
facility.  The Company currently utilizes approximately 8,000 square feet as
sales offices and approximately 7,000 square feet as administrative facilities.
The facility is encumbered by deeds of trust securing the repayment of
indebtedness in the aggregate amount of $900,000 at January 31, 1997, which was
incurred in connection with the acquisition and expansion of the facility.

         The Company also owns two buildings adjacent to its manufacturing
facility, with an aggregate of 3,000 square feet, which are used for storage
space.  The Company leases a sales office and showroom in New York City
pursuant to a lease which expires in April 1999.  The Company also leases a
sales office in the Jewelry Mart area of Los Angeles pursuant to a lease which
expires in August 1997 and a purchasing office in the Jewelry Mart area of Los
Angeles pursuant to a lease which expires February 1998.  The Company also owns
a manufacturing facility in Bolivia, leases another manufacturing facility in
Peru pursuant to a lease which expires in July 1998 and leases a third
manufacturing facility in the Dominican Republic pursuant to a lease which
expires in June 1997.

         In connection with its premium cigar business, the Company has
purchased approximately 57 acres of land in Esteli, Nicaragua, for growing
tobacco, and leased a 9,600 square foot manufacturing facility in the Dominican
Republic, pursuant to a lease which expires in January 2000, and a 26,000 square
foot manufacturing facility in Indonesia, pursuant to a lease which expires in
April 1999.  The Company also has leased a 1,300 square foot retail cigar shop
in Beverly Hills, California, pursuant to a lease which expires in May 2002.

         The Company believes that its facilities are adequate for the
Company's current operating levels and presently foreseeable growth.

ITEM 3.  LEGAL PROCEEDINGS

         From time to time the Company is involved in litigation incidental to
the conduct of its business.  The Company currently is not involved in any
litigation which, individually or in the aggregate, is material to its business
or financial condition.

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

         No matters were submitted to a vote of the Company's security holders
during the fourth quarter of the fiscal year covered by this report.





                                      -12-
<PAGE>   14
SUPPLEMENTAL ITEM: EXECUTIVE OFFICERS

         The executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME                      AGE                           POSITION
----                      ---                           --------
<S>                       <C>        <C>
Guy Benhamou              45         Chairman of the Board, President and Chief
                                     Executive Officer
Shiu Shao                 45         Chief Financial Officer and Director
Sophia Chalermsopone      44         Vice President - Sales
Claudia Hollingsworth     37         Vice President - Sales
David Wu                  48         Vice President - Manufacturing
Betty Sou                 40         Controller and Secretary
Colm Plunkett             35         Treasurer
</TABLE>

        GUY BENHAMOU is a co-founder of the Company and has been its President,
Chief Executive Officer and a member of its Board of Directors since its 
inception in January 1977.  Mr. Benhamou was appointed Chairman of the Board in
May 1993.

        SHIU SHAO has been employed by the Company since April 1981.  Mr. Shao
served as Controller of the Company from 1981 to 1984 and Vice President - 
Finance from 1984 until September 1991, when he was appointed Chief Financial 
Officer.  Mr. Shao also has served as a director of the Company since May 1993.

        SOPHIA CHALERMSOPONE has been employed by the Company since 1978 and 
served in the capacity of Sales Manager from 1981 to 1984.  Ms.  Chalermsopone
has served as Vice President - Sales since 1984 and is responsible for marketing
to wholesale accounts.

        CLAUDIA HOLLINGSWORTH has been employed by the Company since May 1988.  
Ms. Hollingsworth served as Merchandise Manager until October 1989, when she was
appointed Vice President - Merchandising.  In September 1995, Ms. Hollingsworth
was appointed Vice President - Sales.

        DAVID WU has been employed by the Company since 1987 and served as 
Production Manager from 1987 to May 1993, when he was appointed Vice President -
Manufacturing.

         BETTY SOU has been employed by the Company since January 1984.  Ms. Sou
served as Accounting Manager from 1984 until January 1987, when she was
appointed Controller.  Ms. Sou also has served as the Secretary of the Company
since July 1991.

        COLM PLUNKETT has been employed by the Company since December 1989.  
Mr. Plunkett served as Assistant Treasurer from December 1989 to March 1994, 
when he was appointed Treasurer.

        Executive officers are elected by and serve at the discretion of the 
Board of Directors.  No family relationships exist between any of the officers
or directors of the Company.





                                      -13-
<PAGE>   15
                                    PART II

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

        The Company's Common Stock has traded over-the-counter in the National 
Market tier of The Nasdaq Stock Market under the trading symbol "OROA" since 
the Company's initial public offering on September 23, 1993.

        The following table sets forth the range of the high and low sales 
prices for the fiscal periods indicated, as reported on the Nasdaq National
Market.  On April 22, 1997, there were 31 holders of record of the Common Stock.
<TABLE>
<CAPTION>
                                                                                   HIGH            LOW
                                                                                   ----            ---
 <S>                                                                               <C>             <C>
 YEAR ENDED FEBRUARY 2, 1996
   First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         $6.75           $4.50
   Second quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . .          5.50            3.50
   Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4.75            3.88
   Fourth quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4.88            4.00
 YEAR ENDED JANUARY 31, 1997
   First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         $4.88           $4.25
   Second quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6.50            4.75
   Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6.50            5.00
   Fourth quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . .          6.50            4.63
</TABLE>

         The Company has not paid dividends on the Common Stock since its
initial public offering in September 1993 and does not intend to pay dividends
in the foreseeable future.  The Board of Directors currently intends to retain
earnings for use in the Company's business.  In addition, the Company's
revolving credit facility and gold consignment agreements contain covenants
which prohibit the payment of dividends on the Common Stock.

ITEM 6.  SELECTED FINANCIAL DATA

         The following table sets forth selected financial data and other
selected data of the Company.  The selected historical financial data in the
table for the five years in the period ended January 31, 1997 are derived from
the consolidated financial statements of the Company, which have been audited
by Price Waterhouse LLP, independent accountants.  The pro forma income
statement data for the periods set forth below are unaudited.  The data should
be read together with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements
and related notes and other financial information included elsewhere herein.





                                      -14-
<PAGE>   16
                                OROAMERICA, INC.
                             SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
For the fiscal years ended                              January 29,     January 28,    January 27,   February 2,    January 31,
(Dollars in thousands, except per share and other data)        1993            1994           1995          1996           1997
-------------------------------------------------------------------------------------------------------------------------------
Historical Income Statement Data:
<S>                                                       <C>             <C>            <C>          <C>         <C>      
Net sales                                                  $176,101        $203,361       $219,415     $213,417     $ 177,065
Cost of goods sold (1)                                      143,813         163,219        183,188      178,865       144,398
------------------------------------------------------------------------------------------------------------------------------
Gross profit                                                 32,288          40,142         36,227       34,552        32,667
Selling, general and administrative expense                  20,030          20,357         25,862       30,229        25,907
------------------------------------------------------------------------------------------------------------------------------
Operating income                                             12,258          19,785         10,365        4,323         6,760
Interest expense                                              5,565           5,021          3,170        3,423         2,885
------------------------------------------------------------------------------------------------------------------------------
Income before income
      taxes and extraordinary item                            6,693          14,764          7,195          900         3,875
Provision for income taxes (2)                                1,251           6,003          3,030          554         1,685
------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary item                              5,442           8,761          4,165          346         2,190
Loss on early extinguishment of debt
      less applicable income taxes of $343                        -            (564)             -            -             -
------------------------------------------------------------------------------------------------------------------------------
Net income                                                 $  5,442        $  8,197       $  4,165     $    346     $   2,190
------------------------------------------------------------------------------------------------------------------------------
Pro Forma Data (3):
      Income before pro forma provision for
          income taxes and extraordinary item              $  6,693
      Pro forma provision for income taxes                    2,677
--------------------------------------------------------------------
      Pro forma net income after pro forma
          provision for income taxes                       $  4,016
Net income per share
      (Pro Forma Net Income):
          Income before extraordinary item                    $0.96           $1.78          $0.67       $ 0.06      $ 0.35
          Extraordinary item                                      -           (0.12)             -            -           -
----------------------------------------------------------------------------------------------------------------------------
Net income per share                                          $0.96           $1.66          $0.67       $ 0.06      $ 0.35
----------------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding (4)                   4,193,859       4,931,213      6,257,023    6,248,378   6,256,075
----------------------------------------------------------------------------------------------------------------------------
Other Data:
Amount of gold sold by weight (in ounces of fine gold)      335,748         376,010        379,223      337,855     306,763

Average daily gold price per ounce (5)                     $    342        $    364       $    384     $    386     $   384
----------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data:
Working Capital                                            $ 34,020        $ 39,204       $ 37,572     $ 39,022     $40,663
Total Assets                                                 66,082          81,686         76,371       73,544      75,261
Long-term debt, including current portion                    29,309           4,797          2,806        4,537       3,199
Total stockholders' equity                                   22,693          52,196         56,574       57,301      59,510
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) In fiscal 1993, the Company determined that certain advances to two
manufacturers were not recoverable, resulting in a charge of $2.6 million to
cost of goods sold in fiscal 1993.

(2) In fiscal 1993 through August 31, 1992, the Company operated as an S
Corporation for income tax purposes and was subject to no federal income taxes
and state income taxes at a reduced rate. On September 1, 1992, the Company's
status as an S Corporation terminated. As a result, effective from September 1,
1992, the tax rate increased from 0% to 34% for federal purposes and from 2.5%
to 9.3% for state purposes. During the period the Company was an S Corporation,
the Company declared dividends on its Common Stock in the estimated amount of
the federal and state income taxes incurred by its stockholders as a result of
the earnings of the Company.

(3) Pro Forma Data for the fiscal year ended 1993 reflects income taxes,
computed at a marginal effective tax rate of 40%, that would have been reported
had the Company been subject to federal and state income taxes at C Corporation
rates during this period. See (2) above.

(4) Per share amounts are based on the number of weighted average shares
outstanding during each period, including dilutive shares issuable upon the
exercise of stock options granted, calculated using the treasury stock method.

(5) Based on the Second London Gold Fixing.

                                      -15-

<PAGE>   17
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The following discussion and analysis should be read together with the
consolidated financial statements and notes thereto included elsewhere herein.

GENERAL

  Gross Sales; Returns

         The Company reduces gross sales by the amount of returns and discounts
to determine net sales.  Each month the Company estimates a reserve for returns
based on historical experience and the amount of gross sales.  The total of
actual returns and the provision for the returns reserve amounted to 12.2% of
gross sales in fiscal 1995, 14.5% of gross sales in fiscal 1996 and 14.3% of
gross sales in fiscal 1997.  The Company has implemented quality control
procedures to reduce returns of defective merchandise.  Discounts to customers
have not had a material effect on the Company's results of operations.  For
further information regarding the reserve for returns, see Note 1 of Notes to
Consolidated Financial Statements.

         Prices for the Company's jewelry products generally are determined by
reference to the current market price of gold.  Consequently, the Company's
sales could be affected by significant increases, decreases or volatility in
the price of gold.

  Inventories

         The Company accounts for its inventories at the lower of cost or
market, using the last in, first out (LIFO) method to determine cost, less the
allowance for uncollectible vendor advances.  As a result, the Company's gross
profit margin can be affected by changes in LIFO reserves and the allowance for
vendor advances, as well as by changes in the amount of gold owned at each
period end and fluctuations in the price of gold.

         The Company's inventories historically included a significant amount
of gold owned by the Company, typically in the form of finished goods and
work-in process.  In the first quarter of fiscal 1995, the Company decided to
significantly reduce the amount of gold owned by it.  The Company implemented
this decision by selling a substantial portion of its owned gold, reducing the
amount of gold owned by the Company from 56,400 ounces at January 28, 1994 to
4,900 ounces at January 27, 1995, approximately 1,600 ounces at February 2,
1996 and approximately 6,500 ounces at January 31, 1997.  The net proceeds from
the sale of the gold were applied to reduce amounts outstanding under the
Company's line of credit.  The Company anticipates that it generally will
maintain its level of owned gold at a substantially reduced level, with a
corresponding reduction in bank borrowings and a corresponding increase in the
amount of gold held under consignment.

         Consigned gold is not included in inventory, and there is no related
liability recorded at year end.  Financing costs under the consignment
arrangements currently are approximately 3% per annum of the market value of
the gold held under consignment, computed daily.  If the market value of gold
increases and assuming consignment levels remain constant, the financing costs
incurred by the Company under the consignment arrangements will increase in
proportion to the increase in the





                                      -16-
<PAGE>   18
market value of gold.  At February 2, 1996 and January 31, 1997, the Company
held 181,800 ounces and 147,500 ounces, respectively, under the consignment
arrangements.

         For further information regarding the accounting policies applicable
to the Company's inventories, see Note 2 of Notes to Consolidated Financial
Statements.

  Outside Manufacturers

         In fiscal 1997, the Company purchased approximately 27% of its
products as finished goods and completed the manufacture of approximately 73%
of its products from semi-finished materials partially fabricated by outside
manufacturers.  Of the total amount of products purchased from outside
manufacturers in fiscal 1997, approximately 65% were purchased from foreign
manufacturers and approximately 35% were purchased from domestic manufacturers.
The Company's use of domestic and foreign outside manufacturers minimizes the
capital invested in property, plant and equipment and the overhead associated
with a Company-employed manufacturing labor force.  The use of foreign
manufacturers also allows the Company to take advantage of the lower labor
costs prevailing in developing countries.  Risks generally inherent in the use
of outside manufacturers include security at the manufacturer's facility,
transport of materials to and from the manufacturer, theft by the manufacturer
or its employees and bankruptcy or other financial problems of the
manufacturer.  The Company's arrangements with its foreign manufacturers are
subject to the additional risks of doing business abroad, including risks
associated with economic or political instability in the countries in which
such manufacturers are located, labor strikes, risks associated with potential
import restrictions and risks associated with United States and foreign
governmental policies, regulations and restrictions affecting the purchase,
import and export of gold.

         Both finished and semi-finished materials frequently are manufactured
under an arrangement whereby the Company supplies all necessary gold (or, in
some instances, funds to purchase the required gold) to an outside manufacturer
and pays a manufacturing charge and applicable duties at the time of delivery.
These arrangements, which the Company believes are common in the jewelry
industry, reduce the costs charged to the Company by its outside manufacturers
and allow the Company to utilize the services of qualified manufacturers who
might be unable to finance the acquisition of the gold required in the
production process.  The Company typically advances gold to its manufacturers
sufficient to cover manufacturing requirements for a two-to-three week cycle,
and as completed products are shipped to the Company, additional gold is
advanced to the manufacturer.

         The Company utilizes certain controls and procedures to minimize the
credit risks associated with advancing funds or gold to its outside
manufacturers.  The Company believes its procedures will reduce, but will not
eliminate, its exposure to credit losses.  The procedures employed by the
Company include monitoring the performance and financial condition of outside
manufacturers, monitoring of each manufacturer's "credit limit", inspection
visits made to the production facilities of outside manufacturers and
management's review of credit evaluation documentation.  The Company attempts
to diversify its sources of supply and broadly allocate production over its
base of manufacturers in order to reduce the amount of orders it places with
any single manufacturer.  As of March 31, 1997, $9.3 million of gold owned by
or consigned to the Company was in the possession of outside manufacturers.  On
that date, the largest amount held by a single manufacturer was $1.7 million.
At March 31, 1997, the Company's reserve for uncollectible vendor advances was
$630,000.





                                      -17-
<PAGE>   19
         The Company believes its use of outside manufacturers provides it with
a cost-effective source for products.  The Company believes that advancing gold
to its outside manufacturers has resulted in significant cost savings and that
any credit risks associated with this practice can be maintained at an
acceptable level by careful management of the Company's relationships with its
outside manufacturers, the continued diversification of the Company's sources
of supply and the maintenance of adequate reserves.  However, no assurances can
be given that possible future financial problems or other factors affecting its
outside manufacturers will not have a material adverse effect on the Company's
financial condition or results of operations.

  The Buyout

         In October 1987, the Company purchased all of the equity interests in
the Company and certain affiliated companies owned by a former stockholder, and
$5.8 million of goodwill was capitalized in connection with such buyout.  The
Company will continue to amortize goodwill, which is non-deductible for income
tax purposes, in the amount of $231,000 per year, and the unamortized balance
of goodwill at January 31, 1997 was approximately $3.6 million.

  Seasonality

         The Company's business, and the jewelry business in general, are
highly seasonal.  The third and fourth quarters of the Company's fiscal year,
which include the Christmas shopping season, historically have accounted for
approximately 60% of the Company's annual net sales and a somewhat higher
percentage of the Company's income before taxes.  While the fourth quarter
generally produces the strongest results, the relative strengths of the third
and fourth quarters are subject to variation from year to year based on a
number of factors, including the purchasing patterns of the Company's
customers.  The seasonality of the Company's business places a significant
demand on working capital resources to provide for a buildup of inventory in
the third quarter (which is primarily satisfied by an increase in the amount of
gold held under consignment) and in turn has led to a seasonal buildup in
customer receivables in the fourth quarter and the first quarter of the
succeeding fiscal year that must be funded by increased borrowings.

RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, the
percentage of net sales represented by certain items included in the
Consolidated Statements of Income.
<TABLE>
<CAPTION>
                                                                    AS A PERCENTAGE OF NET SALES

                                                                             YEAR ENDED                      
                                                         --------------------------------------------------

                                                         JANUARY 27,         FEBRUARY 2,        JANUARY 31,
                                                             1995               1996               1997    
                                                         ------------       ------------        -----------
 <S>                                                         <C>                <C>                <C>
 Net sales . . . . . . . . . . . . . . . . . . . .           100.0%             100.0%               100%

 Cost of goods sold  . . . . . . . . . . . . . . .            83.5               83.8               81.6
                                                            ------             ------             ------

 Gross profit  . . . . . . . . . . . . . . . . . .            16.5               16.2               18.4
 Selling, general and administrative expenses  . .            11.8               14.2               14.6
                                                            ------             ------             ------

 Operating income  . . . . . . . . . . . . . . . .             4.7                2.0                3.8
 Interest expense  . . . . . . . . . . . . . . . .             1.4                1.6                1.6
                                                            ------             ------             ------

 Income before income taxes  . . . . . . . . . . .             3.3%               0.4%               2.2%
                                                            ======             ======             ====== 
</TABLE>



                                      -18-
<PAGE>   20

  Fiscal 1997 compared to fiscal 1996

         Net sales for fiscal 1997 decreased by $36.4 million, or 17.0%, from
fiscal 1996, primarily due to a 9% decrease in the amount of gold jewelry (by
weight) sold by the Company.  The Company attributes this decrease to inventory
reductions by certain retail customers and to the bankruptcy filing of one of
the Company's major customers, Best Products.

         Gross profit for fiscal 1997 decreased by $1.9 million, or 5.5%, from
fiscal 1996.  As a percentage of net sales, gross profit increased to 18.4% in
fiscal 1997, from 16.2% in fiscal 1996.  Excluding the effects of gold price
fluctuations and LIFO and vendor reserve adjustments on cost of good sold, the
gross profit margins for fiscal 1997 and fiscal 1996 would have been 18.1% and
16.4%, respectively.  The increase in gross profit margin in fiscal 1997 is
primarily due to changes in the Company's product mix.  The gold price used to
value inventory at year end for fiscal 1997, 1996 and 1995 was $345.50, $414.50
and $378.40 per ounce, respectively.

         Selling, general and administrative expenses for fiscal 1997 decreased
by $4.3 million, or 14.3%, from the prior year.  As a percentage of net sales,
these expenses increased to 14.6% in fiscal 1997, from 14.2% in fiscal 1996.
The decrease in the dollar amount of selling, general and administrative
expenses is primarily attributable to (i) a $1.0 million decrease in personnel
costs due to a reduction in the head count, (ii) a $1.4 million decrease in the
provision for bad debts due to a greater write-off of accounts receivable in
fiscal 1996 as compared to fiscal 1997, (iii) a $2.2 million decrease in
selling expenses due to a reduction in cooperative advertising with certain
customers and (iv) a $600,000 increase in other income as a result of the
investment of excess cash.  Offsetting these amounts was a $1.3 million
increase in professional, consulting and outside services fees.  Consulting and
outside services fees increased due to a higher utilization by the Company of
computer consultants and temporary personnel, while professional fees reflected
legal fees related to various litigation in which the Company was involved and
to the Company's merger discussions with another jewelry manufacturer.  Such
merger discussions were terminated in the fourth quarter of fiscal 1997.

         Interest expense decreased by $538,000, or 15.7%, from fiscal 1996.
This decrease results primarily from reduced borrowings under the Company's
line of credit and gold consignment agreements.  See "Liquidity and Capital
Resources".

         The provision for income taxes in fiscal 1997 increased by $1.1
million as compared to fiscal 1996 due to the increase in taxable income
between years.  See Note 9 - Income Taxes.

  Fiscal 1996 compared to fiscal 1995

         Net sales for fiscal 1996 decreased by $6.0 million, or 2.7%, from
fiscal 1995, primarily due to an 11% decrease in the amount of gold jewelry (by
weight) sold by the Company, which was offset by an increase in the average
unit price attributable to the gold product mix and by an increase in sales of
silver products of approximately $4.6 million.

         Gross profit for fiscal 1996 decreased by $1.7 million, or 4.6%, from
fiscal 1995.  As a percentage of net sales, gross profit decreased to 16.2% in
fiscal 1996 from 16.5% in fiscal 1995.  In fiscal 1995, there was a $2.0
million increase in cost of goods sold which was attributable to a LIFO reserve
adjustment of $1.8 million and a loss of approximately $200,000 from sales of
equity gold in the first quarter of fiscal 1995.  This compares to an increase
in fiscal 1996 of $511,000 in cost of





                                      -19-
<PAGE>   21
goods sold from a LIFO reserve adjustment of $570,000, which was partially
offset by an increase of $59,000 in the carrying value of inventory from gold
price fluctuations.  Absent these factors, the gross profit margins in fiscal
1996 and 1995 would have been 16.4% and 17.4%, respectively.  The decrease in
gross profit margin as compared to the prior year is due to price competition,
changes in product mix and a higher return rate.  The gold prices used to value
inventory at year end for fiscal 1996, 1995 and 1994 were $414.50, $378.40, and
$378.25 per ounce, respectively.

         Selling, general and administrative expenses for fiscal 1996 increased
by $4.4 million, or 16.9%, from the prior year.  As a percentage of net sales,
these expenses increased to 14.2% in fiscal 1996 from 11.8% in fiscal 1995.
The increase in the dollar amount of selling, general and administrative
expenses is primarily attributable to an increased bad debt provision of $1.6
million, increased consulting, professional and outside services of $1.5
million, increased advertising allowance expense of $1.0 million and increased
sales supplies of $400,000.  The provision for bad debts has increased
primarily due to the write-off of certain accounts receivable.  Consulting,
professional and outside services have increased primarily due to increased
legal fees resulting from defending the Company against various lawsuits and
from a higher utilization of temporary personnel in the Company's operations
for the busy season.  Selling and product expenses have increased due to
expanded cooperative advertising with several customers.

         Interest expense increased by $253,000, or 8.0%, from fiscal 1995.
This increase results primarily from an increase in consignment fees as a
result of an increase in consignment gold held during fiscal 1996 as compared
to fiscal 1995.  This increase in consignment fees was partially offset by a
decline in interest expense from reduced borrowings on the Company's line of
credit.  See "Liquidity and Capital Resources".

         The provision for income taxes in fiscal 1996 decreased by $2.5
million from fiscal 1995 due to the decline in taxable income between years.
See Note 9 - Income Taxes.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has satisfied its working capital requirements through
internally generated funds, a gold consignment program and borrowings under its
revolving credit facility.

         A substantial portion of the Company's gold supply needs are satisfied
through gold consignment arrangements with six financial institutions.  During
fiscal 1997, the Company satisfied approximately 75% of its gold requirements
through purchases under the consignment program and purchased the remaining 25%
of its gold requirements from financial institutions, manufacturers and
vendors.  Under the consignment arrangements, the Company may defer the
purchase of gold used in the manufacturing process and held in inventory until
the time of sale of finished goods to customers.  Financing costs under the
consignment arrangements currently are approximately 3% per annum of the market
value of the gold held under consignment, computed daily.  The maximum amount
of gold that the Company may hold on consignment was 255,000 ounces at January
31, 1997 and is subject to fluctuation based on changes in the market value of
gold.  The gold consignment agreements contain covenants regarding the amount
of consigned gold the Company may reconsign or otherwise have outside its
possession at any one time.  At January 31, 1997, the Company held
approximately 147,500 ounces of gold under consignment.  During fiscal 1997,
1996 and 1995, the largest amount of gold held under consignment was 220,400
ounces, 258,600 ounces and 192,600 ounces, respectively, and the average amount
of gold held under consignment was 168,000 ounces,





                                      -20-
<PAGE>   22
214,400 ounces and 174,500 ounces, respectively.  Use of the consignment
arrangements tends to be highest during the third quarter.

         The Company has a revolving credit facility with Bank of America
NT&SA, which facility provides for borrowings which vary seasonally from $20.0
million to $35.0 million and is limited to the lesser of the credit line, as
seasonally adjusted, or 80% of eligible accounts receivable minus a reserve
amount as provided for under the credit facility.  No amounts were outstanding
under the revolving credit facility at January 31, 1997 or February 2, 1996,
while $4.7 million was outstanding at January 27, 1995.  During fiscal 1997,
1996 and 1995, the Company's highest outstanding balances under its revolving
credit facilities were $1.4 million, $21.7 million and $25.6 million,
respectively, and the average amounts outstanding were $100,000, $3.1 million
and $7.9 million, respectively.  Borrowings under the revolving credit facility
tend to be highest in the fourth quarter.  For further information regarding
the consignment agreements and the revolving credit facility, see "Business --
Gold Consignment Arrangements" and Notes 2 and 6 of Notes to Consolidated
Financial Statements.

         Cash and cash equivalents increased $10.1 million, from $12.3 million
in fiscal 1996 to $22.4 million in fiscal 1997.  This increase results from
$12.2 million of cash generated from operations, which was partially offset by
$900,000 of capital expenditures and $1.3 million in debt repayment.

         Net accounts receivable decreased $5.8 million, from $23.6 million at
February 2, 1996 to $17.8 million at January 31, 1997.  This decrease results
primarily from the decrease in the amount of sales in the fourth quarter of
fiscal 1997 as compared to the same period in fiscal 1996, and an increase in
collections on accounts receivable in the fourth quarter of fiscal 1997 as
compared to the fourth quarter of fiscal 1996.

         Inventories decreased to $9.4 million in fiscal 1997 from $11.0
million in fiscal 1996.  The decrease in inventory levels is primarily
attributable to a $3.8 million decrease in the manufacturing cost component of
inventory, which was partially offset by a $1.4 million increase in the amount
of gold owned by the Company and a $800,000 reduction in LIFO and vendor
reserves.

         The Company incurred capital expenditures of approximately $900,000 in
fiscal 1997, principally related to improvements of its manufacturing and
distribution facilities and for the purchase of manufacturing and computer
equipment for its jewelry business.  The Company expects to incur capital
expenditures related to its jewelry business of approximately $1.5 million in
fiscal 1998, principally for the improvement of manufacturing facilities and the
purchase of manufacturing and computer equipment.  The Company also currently
estimates that its working capital and capital expenditure requirements for
fiscal 1998 for the proposed cigar operations will be approximately $4.2
million, including amounts required for initial tobacco purchases.  The Company
is unable to estimate the amount of any funding requirements that may be
required for the cigar operations beyond the current fiscal year.  The Company
believes that funds generated from operations, the gold consignment program and
the borrowing capacity under its revolving credit facility will be sufficient to
finance its working capital and capital expenditure requirements for the next 12
months.





                                      -21-
<PAGE>   23
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

         The following consolidated financial statements are included as a
separate section following the signature page to this Form 10-K and are
incorporated herein by reference:

<TABLE>
<CAPTION>
                                                                                                               PAGE   
                                                                                                            ----------
         <S>                                                                                                     <C>
         Report of Independent Accountants  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-1
         Consolidated Financial Statements:                                                              
                 Consolidated Balance Sheets as of January 31, 1997 and                                  
                 February 2, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2
                 Consolidated Statements of Income for the years ended January 31, 1997,                 
                 February 2, 1996 and January 27, 1995  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-3
                 Consolidated Statements of Changes in Stockholders' Equity for the years                
                 ended January 31, 1997, February 2, 1996 and January 27, 1995  . . . . . . . . . . . . . . . .  F-4
                 Consolidated Statements of Cash Flows for the years ended January 31,                   
                 1997, February 2, 1996 and January 27, 1995  . . . . . . . . . . . . . . . . . . . . . . . . .  F-5
                 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6
</TABLE> 

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

         Not applicable.

                                    PART III

ITEM 10.         DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required by this item is set forth, in part, in the
Supplemental Item, "Executive Officers" in Part I of this report.  The balance
of the information required by this item is incorporated by reference from the
Company's definitive proxy statement for its Annual Meeting of Stockholders
scheduled to be held on July 1, 1997.

ITEM 11.         EXECUTIVE COMPENSATION

         The information required by this item is incorporated by reference
from the Company's definitive proxy statement for its Annual Meeting of
Stockholders scheduled for July 1, 1997.

ITEM 12.         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this item is incorporated by reference
from the Company's definitive proxy statement for its Annual Meeting of
Stockholders scheduled for July 1, 1997.

ITEM 13.         CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this item is incorporated by reference
from the Company's definitive proxy statement for its Annual Meeting of
Stockholders scheduled for July 1, 1997.





                                      -22-
<PAGE>   24
                                    PART IV

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

(a)1.    FINANCIAL STATEMENTS:

         The following consolidated financial statements are filed as part of
this report:

<TABLE>
<CAPTION>
                                                                                                               PAGE   
                                                                                                             ---------
         <S>                                                                                                     <C>
         Report of Independent Accountants  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-1
         Consolidated Financial Statements:                                                              
                 Consolidated Balance Sheets as of January 31, 1997 and                                  
                 February 2, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2
                 Consolidated Statements of Income for the years ended January 31, 1997,                 
                 February 2, 1996 and January 27, 1995  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-3
                 Consolidated Statements of Changes in Stockholders' Equity for the years                
                 ended January 31, 1997, February 2, 1996 and January 27, 1995  . . . . . . . . . . . . . . . .  F-4
                 Consolidated Statements of Cash Flows for the years ended January 31, 1997,             
                 February 2, 1996 and January 27, 1995  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-5
                 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .  F-6
</TABLE> 

(a)2.    FINANCIAL STATEMENT SCHEDULES

         The following financial statement schedule is filed as part of this
report:

<TABLE>
<CAPTION>
                                                                                                            PAGE  
                                                                                                         ---------
         <S>                                                                                                 <C>
         Schedule II - Valuation and Qualifying Accounts  . . . . . . . . . . . . . . . . . . . . . . . . .  S-1
</TABLE>

         Schedules other than the schedule listed above are omitted for the
reason that they are not required or are not applicable, or the required
information is shown in the consolidated financial statements or notes thereto.

(b)      REPORTS ON FORM 8-K

         On November 18, 1996, the registrant filed a Report on Form 8-K
disclosing, under Item 5, that discussions regarding a potential merger with
Michael Anthony, Inc., a jewelry manufacturer, were terminated.

(c)      EXHIBITS

         The following exhibits are filed as part of this report:

<TABLE>        
         <S>      <C>
         3.1      Certificate of Incorporation of the registrant, together with
                  amendments filed June 15, 1993 and September 23, 1993.(l)
         3.2      Certificate of Amendment to Certificate of Incorporation dated
                  July 3, 1995.(6) 
         3.3      Bylaws of the registrant.(1)
         10.1     Form of Consignment Agreement between the registrant and each
                  of the consigning institutions.(2)
</TABLE>       





                                      -23-
<PAGE>   25
<TABLE>
         <S>        <C>
         10.2       Form of Loan Agreement between the registrant and each of
                    Fleet Precious Metals Inc. and ABN AMRO Bank N.V.(2)
         10.3       Sixth Amended and Restated Credit Agreement, dated July 22,
                    1994, between the registrant and Bank of America National
                    Trust and Savings Association.(3)
         10.4       Amendment No. Six to Sixth Amended and Restated Credit
                    Agreement, dated November 1, 1996, between the registrant
                    and Bank of America National Trust and Savings
                    Association.(8)
         10.5       First Amendment and Agreement, dated July 22, 1994, among
                    the consigning institutions and the lenders named therein
                    and the registrant.(3)
         10.6       Second Amendment and Agreement, dated December 2, 1994,
                    among the consigning institutions and the lenders named
                    therein and the registrant.(5)
         10.7       Third Amendment and Agreement, dated May 30, 1995, among the
                    consigning institutions and the lenders named therein and
                    the registrant.(6)
         10.8       Fourth Amendment and Agreement, dated July 28, 1995, among
                    the consigning institutions and the lenders named therein
                    and the registrant.(7)
         10.9       Second Amended and Restated Intercreditor Agreement, dated
                    July 22, 1994, among the lenders named therein and the
                    registrant.(3)
         10.10      Amended and Restated Security Agreement, dated February 25,
                    1994, among the lenders named therein and the registrant.(2)
         10.11      Trademark Collateral Assignment, dated February 25, 1994,
                    among the lenders named therein and the registrant.(2)
         10.12      First Amendment to Trademark Collateral Assignment, dated
                    July 22, 1994, among the lenders named therein and the
                    registrant.(3)
         10.13      Trademark Collateral Assignment, dated July 22, 1994, among
                    the lenders named therein and the registrant.(3)
         10.14      Patent Collateral Assignment, dated February 25, 1994, among
                    the lenders named therein and the registrant.(2)
         10.15      First Amendment to Patent Collateral Assignment, dated July
                    22, 1994, among the lenders named therein and the
                    registrant.(3)
         10.16      Patent Collateral Assignment, dated April 3, 1989, among the
                    lenders named therein and the registrant, together with
                    amendments dated August 11, 1989, December 4, 1989 and May
                    1, 1992.(1)
         10.17      Fourth Amendment to Patent Collateral Assignment.(2)
         10.18      Fifth Amendment to Patent Collateral Assignment, dated July
                    22, 1994.(3)
         10.19      Sixth Amendment to Patent Collateral Assignment, dated May
                    30, 1995, among the lenders named therein and the
                    registrant.(6)
         10.20      Patent Collateral Assignment, dated July 22, 1994, among the
                    lenders named therein and the registrant.(3)
         10.21      First Amendment to Trademark Collateral Assignment, dated
                    May 30, 1995, among the lenders named therein and the
                    registrant.(6)
         10.22      Second Amendment to Trademark Collateral Assignment, dated
                    May 30, 1995, among the lenders named therein and the
                    registrant.(6)
         10.23      First Amendment to Patent Collateral Assignment, dated May
                    30, 1995, among the lenders named therein and the
                    registrant.(6)
         10.24      Second Amendment to Patent Collateral Assignment, dated May
                    30, 1995, among the lenders named therein and the
                    registrant.(6)
         10.25      Business Loan Agreement, dated September 10, 1993, between
                    the registrant and Cathay Bank. (1)
</TABLE>





                                      -24-
<PAGE>   26
<TABLE>
         <S>        <C>
         10.26      Business Loan Agreement, dated February 10, 1993, between
                    the registrant and Cathay Bank. (1)
         10.27      Mortgage Loan, dated March 9, 1995, between the registrant
                    and Cathay Bank.(6)
         10.28      Mortgage Loan, dated March 9, 1995, between the registrant
                    and Cathay Bank.(6)
         10.29      Mortgage Loan, dated November 1995, between the registrant
                    and Cathay Bank.(9)
         10.30      Note Secured by Deed of Trust, dated July 31, 1989, by the
                    registrant in favor of Chester Scott and Elizabeth D. Scott.
                    (1)
         10.31      All-Inclusive Purchase Money Promissory Note Secured by Long
                    Form All-Inclusive Purchase Money Deed of Trust, dated April
                    13, 1981, by the registrant in favor of Carl Mattera,
                    together with amendments dated May 1, 1991 and August 9,
                    1991.(1)
         10.32      Employment Agreement, dated June 10, 1993, between the
                    registrant and Guy Benhamou.* (1)
         10.33      Tax Indemnification Agreement, dated June 10, 1993, between
                    the registrant and Guy Benhamou.* (1)
         10.34      Amended and Restated OroAmerica, Inc. 1988 Incentive Stock
                    Option Plan.* (1)
         10.35      OroAmerica, Inc. Salary Deferral and Profit Sharing Plan, as
                    amended.* (1)
         10.36      Form of awards under the OroAmerica, Inc. Executive/Key
                    Employee Bonus Plan.* (1)
         10.37      Form of Indemnification Agreement between the registrant and
                    its directors and executive officers.* (1)
         10.38      Summary of dependent medical insurance coverage for
                    executive officers.* (1)
         10.39      OroAmerica, Inc. Directors' Stock Option Plan.* (4)
         10.40      OroAmerica, Inc. 1994 Chief Executive Officer Bonus
                    Plan.*(5)
         10.41      Letter Agreement, dated August 8, 1996, between the
                    registrant and Shiu Shao.*
         10.42      Letter Agreement, dated August 8, 1996, between the
                    registrant and Sophia Chalermsopone.*
         10.43      Letter Agreement, dated August 8, 1996, between the
                    registrant and Claudia Hollingsworth.*
         10.44      Letter Agreement, dated August 8, 1996, between the
                    registrant and David Wu.*
         10.45      Letter Agreement, dated September 11, 1996, between the
                    registrant and Betty Sou.*
         10.46      Exclusive License Agreement, dated December 15, 1996,
                    between Fragrance Business Company Limited and the
                    registrant.
         21.1       Subsidiaries of the registrant.(9)
         23.1       Consent of Price Waterhouse LLP.
         27.1       Financial Data Schedule.
</TABLE>
____________________________________
*        Management contract, compensatory plan or arrangement.
(1)      Previously filed in the Exhibits to the registrant's Registration
         Statement on Form S-1 (File No. 33-63422) and incorporated by
         reference herein.
(2)      Previously filed in the Exhibits to the registrant's Annual Report on
         Form 10-K for the fiscal year ended January 28, 1994 and
         incorporated by reference herein.
(3)      Previously filed in the Exhibits to the registrant's Quarterly Report
         on Form 10-Q for the quarterly period ended July 29, 1994 and
         incorporated by reference herein.
(4)      Previously filed in the Exhibits to the registrant's Registration
         Statement on Form S-8 (File No. 33-84028) and incorporated by
         reference herein.





                                      -25-
<PAGE>   27
(5)      Previously filed in the Exhibits to the registrant's Annual Report on
         Form 10-K for the fiscal year ended January 27, 1995 and
         incorporated by reference herein.
(6)      Previously filed in the Exhibits to the registrant's Quarterly Report
         on Form 10-Q for the quarterly period ended July 28, 1995 and
         incorporated by reference herein.
(7)      Previously filed in the Exhibits to the registrant's Quarterly Report
         on Form 10-Q for the quarterly period ended October 27, 1995 and
         incorporated by reference herein.
(8)      Previously filed in the Exhibits to the registrant's Quarterly Report
         on Form 10-Q for the quarterly period ended November 1, 1996 and
         incorporated by reference herein.
(9)      Previously filed in the Exhibits to the registrant's Annual Report on
         Form 10-K for the fiscal year ended February 2, 1996 and incorporated 
         by reference herein.





                                      -26-
<PAGE>   28
                                   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.

                                     OROAMERICA, INC.


Date:  April 29, 1997                By: /s/ Guy Benhamou
                                         ---------------------------------------
                                         Guy Benhamou, Chairman of the Board,
                                         President and Chief Executive Officer

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


Date:  April 29, 1997             /s/ Guy Benhamou
                                  ----------------------------------------------
                                  Guy Benhamou, Chairman of the Board, President
                                  and Chief Executive Officer



Date:  April 29, 1997             /s/ Shiu Shao
                                  ----------------------------------------------
                                  Shiu Shao, Chief Financial Officer and 
                                  Director


Date:  April 29, 1997             /s/ Betty Sou
                                  ----------------------------------------------
                                  Betty Sou, Controller (Principal
                                  Accounting Officer)



Date:  April 29, 1997             /s/ Bertram K. Massing
                                  ----------------------------------------------
                                  Bertram K. Massing, Director



Date:  April 29, 1997             /s/ Ronald A. Katz,
                                  ----------------------------------------------
                                  Ronald A. Katz, Director



Date:  April 29, 1997             /s/ David Rousso
                                  ----------------------------------------------
                                  David Rousso, Director





                                      -27-
<PAGE>   29
                                      
                        REPORT OF INDEPENDENT ACCOUNTANTS



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

In our opinion, the consolidated financial statements listed in the index
appearing under item 14(a)(1) and (2) on page 23 present fairly, in all material
respects, the financial position of OroAmerica, Inc. and its subsidiaries at
January 31, 1997 and February 2, 1996, and the results of their operations
and their cash flows for each of the three fiscal years in the period ended
January 31, 1997, 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.




Price Waterhouse LLP
Los Angeles, California
April 21, 1997

                                      F-1
<PAGE>   30



                                OROAMERICA, INC.

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                February 2,    January 31,
(Dollars in thousands except per share amounts)                                        1996           1997
-----------------------------------------------                                 -----------    -----------
ASSETS
Current assets:
<S>                                                                                <C>             <C>    
    Cash and cash equivalents                                                      $12,310         $22,381
    Accounts receivable less allowance for returns                                                 
         and doubtful accounts of $9,948 and $10,222                                23,567          17,837
    Other accounts and notes receivable                                                747             521
    Inventories (Note 2)                                                            11,007           9,411
    Deferred income taxes (Note 9)                                                   2,384           2,712
    Prepaid income taxes (Note 9)                                                      142               -
    Prepaid items and other current assets                                             925             582
                                                                                   -------         -------
         Total current assets                                                       51,082          53,444
                                                                                                   
Property and equipment, net (Notes 4, 7 and 12)                                     10,937          10,219
Excess of purchase price over net assets acquired, net (Note 1)                      4,689           4,395
Patents, net (Note 1)                                                                6,155           5,666
Investments in and advances to affiliates (Note 10)                                    642             642
Non-current account receivable (Note 5)                                                  -             768
Other assets                                                                            39             127
                                                                                   -------         -------
                                                                                   $73,544         $75,261
                                                                                   =======         =======
LIABILITIES AND STOCKHOLDERS' EQUITY                                                               
Current liabilities:                                                                               
    Current portion of long-term debt (Notes 7 and 12)                             $   737         $   514
    Notes payable (Note 6)                                                               -               -
    Accounts payable                                                                 5,874           6,094
    Income taxes payable (Note 9)                                                        -             443
    Accrued expenses (Note 8)                                                        5,449           5,730
                                                                                   -------         -------
         Total current liabilities                                                  12,060          12,781
                                                                                                   
Deferred income taxes payable (Note 9)                                                 383             285
Long-term debt, less current portion (Notes 7 and 12)                                3,800           2,685
                                                                                   -------         -------
         Total liabilities                                                          16,243          15,751
                                                                                   -------         -------

Commitments and contingencies (Notes 2 and 12)  
                          
Stockholders' equity:                                                                              
    Preferred stock, 500,000 shares authorized, $.001 par value; none issued and                   
    outstanding (Note 14) 
    Common stock, 10,000,000 shares authorized, $.001 par value; 6,248,378, and 
    6,252,378 shares issued and outstanding at February 2, 1996 and January 31, 
    1997, respectively (Note 14)                                                         6               6
    Paid-in capital                                                                 42,951          42,970
    Retained earnings                                                               14,344          16,534
                                                                                   -------         -------
           Total stockholders' equity                                               57,301          59,510
                                                                                   -------         -------
                                                                                   $73,544         $75,261
                                                                                   =======         =======
</TABLE>
                                                                              
     See accompanying notes to consolidated financial statements.
                                                                               
                                      F-2
<PAGE>   31



                                OROAMERICA, INC.

                        CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
For the fiscal years ended                                  January 27,   February 2,    January 31,
(Dollars in thousands, except per share amounts)                  1995           1996           1997
-----------------------------------------------------------------------------------------------------
<S>                                                         <C>           <C>            <C>        
Net sales                                                   $   219,415   $   213,417    $   177,065
Cost of goods sold, exclusive of                            
  depreciation                                                  183,188       178,865        144,398
                                                            -----------   -----------    -----------
        Gross profit                                             36,227        34,552         32,667
                                                            -----------   -----------    -----------
Selling, general and administrative                         
  expenses                                                       23,259        25,857         23,577
Bad debt expense                                                    327         1,898            517
Depreciation and amortization expense                             2,128         2,520          2,453
Interest expense                                                  3,170         3,423          2,885
Other (income) expense                                              148           (46)          (640)
                                                            -----------   -----------    -----------
        Total operating expenses                                 29,032        33,652         28,792
                                                            -----------   -----------    -----------
Income before income taxes                                        7,195           900          3,875
Provision for income taxes (Note 9)                               3,030           554          1,685
                                                            -----------   -----------    -----------
Net income                                                  $     4,165   $       346    $     2,190
                                                            ===========   ===========    ===========
                                                            
Net income  per share                                       $       .67   $       .06    $       .35
                                                            ===========   ===========    ===========
                                                            
Weighted average shares outstanding                           6,257,023     6,248,378      6,256,075
                                                            ===========   ===========    ===========
</TABLE>
                                                            
                                                  
See accompanying notes to consolidated financial statements.



                                      F-3
<PAGE>   32



                                OROAMERICA, INC.

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
For the fiscal years ended
January 27, 1995, February 2, 1996 and January 31, 1997

                                             Common Stock                           Unrealized                  
                                          -----------------    Paid-in   Retained     Loss on
(Dollars in thousands)                    Number      Amount   Capital   Earnings   Securities     Total
---------------------------------------------------------------------------------------------------------
<S>                                       <C>         <C>      <C>       <C>        <C>           <C>
Balance at January 28, 1994               6,201,560    $6      $42,357   $ 9,833     $   -        $52,196
Issuance of stock related to
      acquisition (Note 1)                   46,818                594                                594
Change in unrealized losses (Note 3)                                                  (381)          (381)
Net income                                                                 4,165                    4,165
---------------------------------------------------------------------------------------------------------
Balance at January 27, 1995               6,248,378     6       42,951    13,998      (381)        56,574
Change in unrealized losses (Note 3)                                                   381            381
Net income                                                                   346                      346
---------------------------------------------------------------------------------------------------------
Balance at February 2, 1996               6,248,378     6       42,951    14,344         -         57,301
Stock options exercised                       4,000                 19                                 19
Net income                                                                 2,190                    2,190
---------------------------------------------------------------------------------------------------------
Balance at January 31, 1997               6,252,378    $6      $42,970   $16,534     $   -        $59,510
---------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>   33



                                OROAMERICA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

For the fiscal years ended                                                        January 27,     February 2,     January 31,
Dollars in thousands, increase (decrease) in cash                                        1995            1996            1997
-------------------------------------------------                                 -----------     -----------     -----------
 Cash flows from operating activities:
<S>                                                                               <C>             <C>             <C>      
Net income                                                                        $   4,165       $     346       $   2,190
Adjustments to reconcile net income to net cash                                                                   
   provided by operating activities:                                                                              
      Depreciation and amortization                                                   2,128           2,520           2,453
      Provision for losses on accounts receivable                                       327           1,898             517
      Provision for estimated returns                                                   200           2,700             140
      Provision for  uncollectible vendor advances                                        -               -            (228)
      Gain on sale of property                                                            -               -             (20)
      Gain on sale of marketable securities                                               -             (34)              -
Changes in assets and liabilities, net of effects 
   from acquisition of business:                                   
      Accounts receivable                                                            (8,895)          6,818           5,073
      Other accounts and notes receivable                                              (201)           (130)            226
      Inventories                                                                    20,793           3,358           1,824
      Non-current account receivable                                                    605               -            (768)
      Deferred income taxes                                                            (348)           (934)           (426)
      Prepaid income taxes and income taxes payable                                  (1,108)            230             585
      Prepaid items and other assets, net                                               581              13             156
      Accounts payable, accrued expenses and                                                                      
        deferred liabilities                                                         (1,415)            (93)            501
                                                                                  ---------       ---------       ---------
           Net cash provided by operating activities                                 16,832          16,692          12,223
                                                                                  ---------       ---------       ---------
                                                                                                                  
Cash flows from investing activities:                                                                             
      Capital expenditures                                                           (1,636)         (3,067)           (865)
      Purchase of a patent                                                           (6,075)              -               -
      Acquisition of a business, net of cash acquired                                  (504)              -               -
      Proceeds from sale of marketable securities                                         -           1,565               -
      Proceeds from sale of property                                                      -               -              32
                                                                                  ---------       ---------       ---------
           Net cash used in investing activities                                     (8,215)         (1,502)           (833)
                                                                                  ---------       ---------       ---------
                                                                                                                  
Cash flows from financing activities:                                                                             
      Gross borrowings under line-of-credit agreement                               697,877         652,900           3,950
      Repayment of borrowings under line-of-credit                                 (703,977)       (657,600)         (3,950)
      Borrowings under long-term debt agreements                                          -           1,910               -
      Principal repayments of long-term debt                                         (1,991)           (766)         (1,338)
      Issuance of common stock                                                            -               -              19
                                                                                  ---------       ---------       ---------
           Net cash used in financing activities                                     (8,091)         (3,556)         (1,319)
                                                                                  ---------       ---------       ---------
                                                                                                                  
Increase in cash and cash equivalents                                                   526          11,634          10,071
      Cash and cash equivalents at beginning of period                                  150             676          12,310
                                                                                  ---------       ---------       ---------
      Cash and cash equivalents at end of period                                  $     676       $  12,310       $  22,381
                                                                                  =========       =========       =========
                                                                                                                  
Supplemental disclosure of cash flow information:                                                                 
      Interest paid                                                               $   3,570       $   3,408       $   3,046
      Income taxes paid                                                               5,304           1,599           1,522
                                                                                                                  
Supplemental disclosure of non-cash investing and financing activity:                                             
      Capital lease obligation entered into                                       $       -       $     587       $       -
                                                                                                                  
See accompanying notes to consolidated financial statements.                                          
</TABLE>


                                      F-5
<PAGE>   34


                                OROAMERICA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Line of business

OroAmerica, Inc. (the Company) is a Delaware corporation primarily engaged in
importing, manufacturing and distributing gold jewelry products to large
retailers such as mass merchandisers and discount stores, catalog showrooms,
national and regional jewelry chains, home shopping networks, warehouse clubs
and department stores and to jewelry wholesalers and distributors.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
all majority-owned subsidiaries. Investments in 20% to 50% owned affiliated
companies are accounted for on the equity method where the Company exercises
significant influence over operating and financial affairs. Otherwise,
investments are included at cost. Significant intercompany transactions are
eliminated in consolidation.

Accounting Estimates

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

Fiscal Years

The Company reports results of operations for a fiscal year consisting of a 
52- or 53- week period ending the Friday closest to January 31. The fiscal years
ended January 27, 1995 and January 31, 1997 consist of fifty-two weeks. The
fiscal year ended February 2, 1996 consists of fifty-three weeks.

Statement of Cash Flows

For the purposes of reporting cash flows, cash and cash equivalents include
amounts held at financial institutions or highly liquid investments with
original maturities of ninety days or less when purchased. The fair value of
cash and cash equivalents approximates their carrying amount.

Concentrations of Credit Risk

The Company's financial instruments subject to credit risk consist primarily of
cash equivalents and accounts receivable. The Company places its cash
equivalents in high quality securities with a major bank and financial
institution. With respect to accounts receivable, the Company extends credit
based on an evaluation of a customer's financial condition, generally without
requiring collateral. Exposure to losses on receivables is principally dependent
on each customer's financial condition. The Company monitors its exposure for
credit losses and maintains allowances for anticipated losses. The Company's ten
largest customers accounted for approximately 48% of net sales in 1995, 55% of
net 

                                      F-6
<PAGE>   35

sales in 1996 and 51% of net sales in 1997. One customer, Walmart, accounted
for 12.4%, 20.5% and 17.7% of the Company's net sales for the years ended
January 27, 1995, February 2, 1996, and January 31, 1997, respectively. No other
individual customer accounts for more than 10 percent of sales. At February 2,
1996 and January 31, 1997, gross accounts receivable included balances totaling
$19.7 million and $12.8 million, respectively, from the Company's ten largest
customers.

Marketable Securities Available for Sale

The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities", (SFAS No.
115) for marketable securities acquired in July 1994. SFAS No. 115 requires that
investments in debt and equity securities which are available for sale be
recorded at fair value in the financial statements and that unrealized holding
gains and losses be reported as a net amount in a separate component of
stockholders' equity until realized.

Allowance for Sales Returns and Doubtful Accounts

The Company reduces gross sales by the amount of discounts and returns to
determine net sales. Each month the Company estimates a reserve for returns
based on historical experience and the amount of gross sales. The reserve is
adjusted periodically to reflect the Company's actual return experience. The
Company provides allowances for doubtful accounts receivable when it determines
that such amounts are uncollectible. Actual bad debt and sales return experience
has been in line with management's expectations. The allowances are as follows
at the following dates:

<TABLE>
<CAPTION>
                                     February 2,                 January 31,
                                            1996                        1997
                               -----------------              --------------
   <S>                                <C>                         <C>       
    Doubtful accounts . . . . . . . . $1,448,000                  $1,582,000
    Sales returns. . . . . . . . . .  $8,500,000                  $8,640,000
</TABLE>

Cost of Goods Sold and Inventories

The principal component of inventories and cost of goods sold is the cost of the
bullion and other raw materials used in the production of the Company's jewelry.
Other components of inventories and cost of goods sold include direct costs
incurred by the Company in its manufacturing operations, fees paid to outside
manufacturers, procurement costs such as customs duties, handling charges and
freight and provisions for uncollectible vendor advances.

The Company accounts for its inventories at the lower of cost or market, using
the last in, first out (LIFO) method to determine cost. Year end gold inventory
cost used in determining incremental LIFO layers is based on the year end gold
market price at the Second London Gold Fixing. The LIFO cost may increase or
decrease from year to year as a result of changes in quantities and unit prices
in ending inventory. Consigned gold is not included in inventory, and there is
no related liability recorded at year end.

"Market" consists of the market value of gold in inventory, determined as of the
last day of the reporting period, plus allocated manufacturing costs (labor and
overhead). When market value is lower than LIFO cost and market value declines
from period to period, the carrying value of inventory is reduced, resulting in
an increase in cost of goods sold.


                                      F-7
<PAGE>   36


Forward Purchase Contracts

The Company enters into forward contracts for the purchase of gold to hedge
outstanding customer orders for future delivery in order to mitigate the risk of
price fluctuations. The Company does not enter into forward contracts for
trading purposes. The effects of hedging transactions are recognized when
contracts are settled. The aggregate amounts of forward contracts were $7.8
million and $1.8 million at February 2, 1996 and January 31, 1997, respectively.
The forward contract outstanding at January 31, 1997, expired in February 1997.
The carrying value of the forward purchase contract approximates its fair value
because of the relatively short maturity of this contract.

Property and Equipment

Property and equipment are stated at cost or, in the case of leased assets under
capital leases, at the present value of future minimum lease payments.
Expenditures for major renewals and improvements which substantially increase
the useful lives of assets are capitalized. Repair and maintenance costs are
expensed as incurred. Depreciation of buildings and equipment is provided over
the estimated useful lives of the assets using straight-line and accelerated
methods. Amortization of leasehold improvements is provided using the
straight-line method over the life of the lease or asset, whichever is shorter.
The useful lives range from three to twenty years.

Excess of Purchase Price over the Fair Value of Net Assets Acquired

The excess of the purchase price over the fair value of the net assets acquired
in the amount of $5,793,000, which arose in connection with the acquisition of a
former stockholder's interests in the Company and its affiliates in 1987, is
amortized over twenty-five years. In May 1994, the Company purchased the capital
stock of Jerry Madison Enterprises, a jewelry company which specializes in the
production and distribution of diamond-accented and gemstone jewelry
merchandise. This transaction was accounted for under the purchase method. The
purchase price was paid by a combination of cash and the issuance of the
Company's stock, totaling $1,098,000. The excess of the purchase price over the
fair value of the net assets acquired in the amount of $1,098,000, is amortized
over fifteen years. During fiscal 1996, goodwill related to the Jerry Madison
acquisition was reduced by approximately $125,000 due to the elimination of
certain net liability accounts established at acquisition which no longer
represented a future obligation. The consolidated results of operations on a pro
forma basis as if Jerry Madison Enterprises had been acquired as of the
beginning of the Company's fiscal year 1995 have not been presented as the
effects are immaterial.

Amortization expense for fiscal 1995, 1996 and 1997 was $301,000,  $304,000, and
$294,000, respectively. Accumulated amortization at February 2, 1996 and January
31, 1997 was $2,077,000 and $2,371,000, respectively.

Patents and License

At January 28, 1994, the Company had a patent and license to use a patent for
jewelry products. In April 1994, the Company purchased a patent for "Supreme
Value Rope" for $6 million and terminated the related license. The Company
amortizes its patents over their economic useful lives, estimated between
fifteen and seventeen years. Amortization expense for fiscal 1995, 1996 and 1997
was approximately $354,000, $490,000, and $489,000, respectively. Accumulated
amortization at February 2, 1996 and January 31, 1997, was $1,362,000 and
$1,851,000, respectively.



                                      F-8
<PAGE>   37

Income Taxes

The provision for income taxes includes amounts related to current taxable
income and deferred income taxes. A deferred income tax asset or liability is
determined by applying currently enacted tax laws and rates to the expected
reversals of cumulative temporary differences between the carrying value of
assets and liabilities for financial statement and income tax purposes.
Additionally, a valuation allowance is established to reduce a deferred tax
asset if it is more likely than not that all, or some portion, of such deferred
tax asset will not be realized. The deferred income tax provision is measured by
the change in the net deferred income tax asset or liability during the year.

Impairment of Long-Lived Assets

In fiscal 1996, the Company adopted Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." This statement requires that long-lived assets and
certain identifiable intangibles to be held and used or disposed of by an entity
be reviewed for impairment whenever events or changes in circumstances indicate
that the carrying value of an asset may not be recoverable. An impairment loss
is recognized when the estimate of undiscounted future cash flows expected to be
generated by the asset is less than its carrying amount. An impairment loss is
measured as the amount by which the carrying amount of the asset exceeds its
fair value. Since adoption, no impairment losses have been recognized.

Stock Compensation

The Company accounts for employee stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, "Accounting For Stock Issued To
Employees." In February 1996, the Company adopted the disclosure requirements of
Statement of Financial Accounting Standards No. 123 ("SFAS No. 123"), 
"Accounting For Stock-Based Compensation" (see Note 13).

Net Income Per Share

Net income per share is computed by dividing net income for all periods
presented by the weighted average number of shares outstanding during each
period, including dilutive shares issuable upon the exercise of stock options
granted, calculated using the treasury stock method.

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128 ("SFAS No. 128"), "Earnings per Share" in February
1997 which is effective for fiscal years beginning after December 15, 1997. SFAS
No. 128 establishes accounting standards for computation, presentation, and
disclosure requirements for earnings per share for entities with publicly-held
common stock or potential common stock. The objective of SFAS No. 128 is to 
simplify the computation of earnings per share and to make the U.S. standard for
computing earnings per share more compatible with the earnings per share
standards of other countries and with that of the International Accounting
Standards Committee. The Company shall adopt the provisions of SFAS No. 128 in
fiscal 1998 and expects no material impact on its financial statements.


                                      F-9
<PAGE>   38


NOTE 2 - INVENTORIES:

Inventories consist of the following (in thousands except per ounce data):

<TABLE>
<CAPTION>
                                     February 2,        January 31,
                                            1996               1997
                                    ------------        -----------
<S>                                   <C>                  <C>               
Gold and other raw materials          $  1,475             $  2,880
Manufacturing costs and other           12,804                9,041
                                      --------             --------
                                        14,279               11,921
LIFO cost less than FIFO cost           (2,414)              (1,880)
Allowance for vendor advances             (858)                (630)
                                      --------             --------
Inventories                           $ 11,007             $  9,411
                                      ========             ========
                                                           
Gold price per ounce:                 $ 414.50             $ 345.50
                                      ========             ========
</TABLE>                                                


The Company has several consignment agreements with gold consignors, providing
for a maximum aggregate consignment of 255,000 fine troy ounces. In accordance
with the consignment agreements, title remains with the gold consignors until
purchased by the Company.

At February 2, 1996 and January 31, 1997, the Company held 181,800 and 147,500
fine troy ounces of gold under consignment agreements, respectively. Consigned
gold is not included in inventory and there is no related liability recorded at
year end. The purchase price per ounce is based on the daily Second London Gold
Fixing. Manufacturing costs included in inventory represent costs incurred to
process consigned and Company owned gold into finished jewelry products.

The gold consignors and the Company's revolving credit lender (Note 6) have a
security interest in substantially all the assets of the Company. The Company
pays to the gold consignors a consignment fee based on the dollar equivalent of
ounces outstanding, computed based on the Second London Gold Fixing, as defined
in the agreements. Each consignment agreement is terminable on a 30 days notice
by the Company or the consignor.

The gold consignment agreements require the Company to comply with certain
covenants with respect to its working capital, current ratio and tangible net
worth and to maintain the aggregate of its accounts receivable and inventory of
gold at specified minimums. Additional provisions of the agreements (a) prohibit
the payment of dividends, (b) limit capital expenditures, (c) limit the amount
of debt the Company may incur, (d) prohibit the Company from engaging in mergers
and acquisitions, (e) require the Company to maintain and assign as additional
collateral key man life insurance on its chief executive officer in the amount
of $10.0 million, (f) prohibit termination of the chief executive officer's
employment for any reason other than death or disability and prohibit any
material amendment to his employment contract and (g) require notice if the
Company's principal stockholder (who is also its chief executive officer) ceases
to own at least 40% of the Company's outstanding common stock. At January 31,
1997, the Company was in compliance with all of the requirements of its
consignment agreements.

During fiscal 1995, the Company sold a substantial portion of its equity gold,
resulting in a reduction in the amount of gold owned by the Company from 56,400
ounces at January 28, 1994 to 4,900 ounces at January 27, 1995. This reduction
resulted in a liquidation of LIFO inventory quantities carried at higher costs
prevailing in prior years as compared with the cost of fiscal 1995 purchases,
the effect of which increased cost of goods sold by approximately $1.8 million


                                      F-10
<PAGE>   39

and decreased net income by $1.1 million or $.17 per share. In fiscal 1997 the
Company reduced inventory levels, resulting in a liquidation of manufacturing
cost LIFO inventory, carried at lower costs prevailing in prior years, the
effect of which reduced costs of goods sold by approximately $535,000 and
increased net income by approximately $305,000 or $.05 per share. The Company
anticipates that it will maintain its level of owned gold at a substantially
reduced level.


NOTE 3 - MARKETABLE SECURITIES:

At January 27, 1995, the Company's investment common stock was classified as
available-for-sale securities and reported at its fair value of $1,150,000
compared to an original carrying value of $1,531,000. The unrealized loss of
$381,000, net of tax, was reported as a separate component of stockholders'
equity. In July 1995, the Company's investment in common stock was sold for
approximately $1,565,000 and the related unrealized loss was eliminated.


NOTE 4 - PROPERTY AND EQUIPMENT:

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

<TABLE>
<CAPTION>
                                                    February 2,              January 31,
                                                           1996                     1997
                                                   ------------              ----------- 
<S>                                                <C>                       <C>        
Land                                               $      3,364              $     3,364
Buildings, leaseholds and improvements                    6,759                    7,318
Construction in progress                                     76                       88
Automobiles                                                 301                      221
Office furniture and equipment                            6,127                    6,314
Manufacturing equipment                                   3,378                    3,446
                                                   ------------              -----------
                                                         20,005                   20,751
Less:  Accumulated depreciation                          (9,068)                 (10,532)
                                                   ------------              -----------
                                                   $     10,937              $    10,219
                                                   ============              ===========
</TABLE>


NOTE 5 - NON-CURRENT ACCOUNT RECEIVABLE:

On September 24, 1996, Best Products Co., Inc. ("Best"), a customer owing
$1,153,000, filed for protection from creditors under Chapter 11 of the United
States Bankruptcy Code. On March 4, 1997, Best filed with the United States
Bankruptcy Court ("the Bankruptcy Court") a proposed plan of liquidation (the
"Plan") and a disclosure statement relating to the Plan (the "Disclosure
Statement"), which was approved by the Bankruptcy Court the day it was filed.
The Plan provides for the liquidation and conversion of all of Best's remaining
assets to cash and the distribution of the net proceeds realized from the
liquidation to creditors in accordance with the priorities of the bankruptcy
code. Under the Plan, Best estimates that unsecured creditors will recover
approximately 68% of their claims. However, actual distributions under the Plan
may vary depending on various matters, including the resolution of certain
claims as set forth in the Disclosure Statement. On April 18, 1997, unsecured
creditors voted to accept or reject the plan submitted by Best. The outcome of
this vote has not yet been determined.

The Company has discounted the face value of its receivable to what it
anticipates it will recover from liquidation of Best's assets. Because the
Company is unable to predict repayment prior to January 1998, the Company has
classified the Best receivable as long-term at January 31, 1997.


                                      F-11
<PAGE>   40


NOTE 6 - BORROWINGS UNDER REVOLVING CREDIT AGREEMENT:

The Company has a revolving credit facility with Bank of America, NT & SA which
varies seasonally from $20.0 million to $35.0 million and may not exceed the
lesser of the credit line, as seasonally adjusted, or 80% of eligible accounts
receivable minus a reserve amount, as provided for under the credit facility.
Advances under the credit facility bear interest at the lender's prime rate
minus 0.25%, or, at the Company's option, at short-term fixed rates or rates
determined by reference to offshore interbank market rates plus 1.75%. The
revolving credit facility also provides for the issuance of banker's
acceptances, and for the issuance of letters of credit in an aggregate amount
not to exceed $2.5 million at any one time. Banker's acceptances bear an
interest rate based on the bank's prevailing discount rate at the time of
issuance plus 1.75%. No banker's acceptances were outstanding as of 
February 2, 1996 and January 31, 1997. No short-term advances were outstanding
at February 2, 1996 and January 31, 1997. Stand-by letters of credit outstanding
at February 2, 1996 and January 31, 1997, totaled $700,000 and $1,583,000,
respectively. The revolving credit facility also provides for a separate $1
million reducing-revolving line of credit, whereby the amount of credit
available decreases $200,000 annually every June 30th until June 30, 1999, when
the then outstanding principal balance becomes payable in full. At January 31,
1997, no amounts were outstanding under the reducing-revolving line of credit.
At February 2, 1996, advances under the reducing-revolving credit facility were
$800,000, bearing interest at the Bank's prime rate plus .75%. The $800,000 of
advances under the reducing-revolving credit facility have been classified as
long-term at February 2, 1996 (See Note 7). The revolving credit agreement
expires August 1, 1998. Amounts outstanding under the Bank of America credit
agreement are secured by substantially all of the Company's assets; the
Company's gold consignors also have security interests in these assets, and all
of the consignors and Bank of America are parties to a collateral sharing
agreement. The revolving credit agreement contains substantially the same
covenants and other requirements as are contained in the Company's gold
consignment agreements (Note 2). At January 31, 1997, the Company was in
compliance with all of the requirements of the revolving credit agreement.


                                      F-12
<PAGE>   41


NOTE 7 LONG-TERM DEBT:
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
                                                        
                                                                                         February 2,              January 31,
                                                                                                1996                     1997
                                                                                         -----------              -----------
<S>                                                                                    <C>                       <C>        
Note with interest at the bank's prime rate (8.5 percent at January 31, 1997)
  plus 2 percent, secured by commercial property, payable in monthly
  installments of $10,000 plus interest, unpaid
  balance due September 1998                                                           $     1,880               $     1,760

Note with interest at the bank's prime rate (8.5 percent at January 31, 1997)
  plus 1.50 percent, secured by real property, payable in monthly principal and
  interest installments of $13,928,  unpaid balance due February 1998                          315                       173

Note with interest at the bank's reference rate (8.5 percent at January 31, 1997)
  plus 1.5 percent, secured by commercial property, payable in monthly principal
  and interest installments of $4,622, unpaid balance due September 1998                       497                       492

Note with interest at the bank's reference rate (8.5 percent at January 31,
  1997) plus 1.5 percent, secured by commercial property, payable in monthly
  principal and interest installments of $9,782, unpaid balance
  due March 1997                                                                               153                        46

Note with interest at the bank's reference rate (8.5 percent at January 31,
  1997) plus 1.5 percent, secured by commercial property, payable in monthly
  principal and interest installments of $6,772, unpaid balance due
  September 1998                                                                               393                       349

Reducing-revolving line of credit bearing interest at the bank's prime rate
  (8.25 percent at January 31, 1997) plus .75 percent (Note 6)                                 800                         -

Capital lease obligation due in February 1999, interest rate at 12.83 percent,
  payable in monthly principal and interest installments
  of $14,674                                                                                   499                       379
                                                                                     -------------             -------------
Total long-term debt                                                                         4,537                     3,199
Less: Current portion                                                                         (737)                     (514)
                                                                                     -------------             -------------
                                                                                     $       3,800             $       2,685
                                                                                     =============             =============
</TABLE>                                                                       

                                      F-13

<PAGE>   42

The interest rates on the Company's revolving credit agreement and long-term
debt agreements are tied to market rates. Accordingly, the carrying values of
the Company's short-term and long-term debt agreements approximate their fair
values.

Long-term debt at January 31, 1997 matures as follows (in thousands):

<TABLE>
<CAPTION>
                     Fiscal                                           Principal
                      Year                                             Payment
                      ----                                             -------
                     <S>                                                <C> 
                     1998 . . . . . . . . . . . . . . . . . . . . . . .    $514
                     1999 . . . . . . . . . . . . . . . . . . . . . . .   2,594
                     2000 . . . . . . . . . . . . . . . . . . . . . . .      91
                                                                        --------
                                                                        $ 3,199
                                                                        ========
</TABLE>

NOTE 8 - ACCRUED EXPENSES:
<TABLE>
<CAPTION>
Accrued expenses consist of the following (in thousands):

                                                                                  February 2,                     January 31,
                                                                                         1996                            1997
                                                                        ---------------------            -------------------
<S>                                                                     <C>                              <C>                
Advertising and customer promotions                                     $               2,294            $             2,384
Interest                                                                                  242                             81
Payroll and fringe benefits                                                               924                            912
Sales taxes                                                                               105                            105
Deferred liabilities                                                                       99                            408
Professional fees                                                                         907                            749
Other miscellaneous liabilities                                                           878                          1,091
                                                                        ---------------------            -------------------
Total                                                                   $               5,449            $             5,730
                                                                        =====================            ===================
</TABLE>




NOTE 9 - INCOME TAXES:

The provision for income taxes for the fiscal years 1995, 1996 and 1997 are 
summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                     1995       1996       1997
                                  -------    -------    -------
                                                         
Current:
<S>                               <C>        <C>        <C>    
           Federal                $ 2,575    $ 1,010    $ 1,836
           State                      803        478        275
                                  -------    -------    -------
                                    3,378      1,488      2,111
                                  -------    -------    -------

Deferred:
           Federal                   (253)      (221)      (325)
           State                      (95)      (713)      (101)
                                  -------    -------    -------
                                     (348)      (934)      (426)
                                  -------    -------    -------
           Income tax provision   $ 3,030    $   554    $ 1,685
                                  =======    =======    =======
</TABLE>

Deferred tax assets by jurisdiction are as follows:
<TABLE>
<CAPTION>
                                               February 2,       January 31,
                                                     1996              1997
                                               ----------        ----------
<S>                                            <C>               <C>       
Deferred taxes - Federal                       $    1,575        $    1,900
Deferred taxes - State                                426               527
                                               ----------        ----------
                                               $    2,001        $    2,427
                                               ==========        ==========
</TABLE>
                                      F-14
<PAGE>   43

Deferred tax assets (liabilities) are comprised of the following:
<TABLE>
<CAPTION>
                                             February 2,          January 31,
                                                    1996                 1997
                                             -----------          -----------
Deferred tax liabilities
      <S>                                      <C>                 <C>     
      Inventory                                $(2,327)            $(2,051)
      Fixed and intangible assets                 (769)               (604)
      Prepaid box supplies                        (191)               (114)
                                               -------             -------
      Total deferred tax liabilities            (3,287)             (2,769)
                                               -------             -------
Deferred tax assets                                                
      Reserve for returns                        3,412               3,468
      Bad debt reserve                             936                 890
      Compensation accruals                        198                 196
      Net operating loss carryforwards             410                 352
      Other                                        332                 290
                                               -------             -------
      Total deferred tax assets                  5,288               5,196
                                               -------             -------
Net deferred tax assets                        $ 2,001             $ 2,427
                                               =======             =======
</TABLE>

                                                                
As a result of its purchase of Jerry Madison Enterprises, the Company acquired
net operating loss carryforwards ("NOLs") of approximately $1.4 million which
expire through 2009. These NOLs are subject to the limitations under Internal
Revenue Code Section 382, which may limit the usage of the NOLs in any given
year.

The following is a reconciliation for the U.S. federal statutory rate and the 
effective tax rate:
<TABLE>
<CAPTION>
                                                    Fiscal Year Ended
                                       ---------------------------------------------
                                       January 27,      February 2,       January 31,
                                             1995             1996              1997
                                        ---------       ----------       ----------
                                                        
<S>                                        <C>              <C>              <C>  
Federal statutory rate                     34.0%            34.0%            34.0%
State and local income taxes,                                                
   net of federal tax benefits              6.5             18.8              3.0
Goodwill amortization                       1.4             11.5              2.6
Effect of foreign operations               (1.3)            (8.8)            (5.0)
Other, net                                  1.5              6.1              8.9
                                           ----             ----             ----
Effective income tax rate                  42.1%            61.6%            43.5%
                                           ====             ====             ====
</TABLE>
                                                                         
Pretax income includes approximately $573,000 of income from foreign
subsidiaries.

NOTE 10 - RELATED PARTY TRANSACTIONS:

The Company accounts for its investments in less than majority-owned entities
using the equity method. The results of operations and the financial positions
of the affiliates are immaterial to the Company. The Company owns a 45 percent
interest in Sicor, an Italian corporation which manufactures gold chain, jewelry
and similar items. The Company purchases finished product from Sicor at prices
which management believes represent Sicor's cost. Purchases from Sicor during
fiscal years 1995, 1996 and 1997 were approximately $581,000, $196,000 and
$234,000, respectively.

During fiscal 1993, the Company made an initial capital contribution of $6,000
to a new partnership (OroIndo) whose purpose is to develop rope chain
manufacturing. The Company owns a 50 percent interest in OroIndo and accounts
for this entity using the equity method. The purchases from OroIndo during
fiscal year 1995, 1996 and 1997 were approximately $868,000, $1,106,000 and
$966,000, respectively.


                                      F-15
<PAGE>   44

In June 1993, the Company entered into a Tax Indemnification Agreement with the
principal stockholder who owned capital stock when the Company was an S
Corporation. The Tax Indemnification Agreement provides for, among other things,
the indemnification of the principal stockholder for any losses or liabilities
(including interest, penalties and professional fees) with respect to any
additional taxes resulting from the Company's operations during the period in
which it was an S Corporation. On September 1, 1992, the Company's status as an
S Corporation for income tax purposes was terminated.

NOTE 11 - SALARY DEFERRAL AND PROFIT SHARING PLAN:

The Company has a Salary Deferral and Profit Sharing Plan covering substantially
all eligible employees. Under the plan, employees may elect to defer a
percentage of their salary. The Company may, at its discretion, make
contributions to the plan. The Company contributed approximately $63,000,
$50,000, and $80,000 to the plan during the fiscal years ended January 27, 1995,
February 2, 1996 and January 31, 1997, respectively.

NOTE 12 - COMMITMENTS AND CONTINGENCIES:

The Company leases office space and manufacturing facilities. These leases are
classified as operating leases and have original, noncancellable terms of one to
five years. The three year office space lease agreement provides for minimum
annual rentals, subject to annual escalations generally based on the Consumer
Price Index plus executory costs. Rent expense for fiscal years 1995, 1996 and
1997 was approximately $160,000, $282,000, and $277,000, respectively.

The Company leases computer equipment under agreements classified as capital
leases. One such agreement expired in fiscal 1995. Another such agreement
started in fiscal 1996.

Future minimum annual commitments under the capital lease and operating leases
with initial or remaining terms of one year or more consist of the following at
January 31, 1997 (in thousands):

<TABLE>
<CAPTION>
                                                    Capital          Operating
Fiscal Year                                          Leases             Leases
-----------                                     -----------     --------------
<S>                                             <C>     <C>     <C>        <C>
1998                                            $       176     $          123
1999                                                    176                 74
2000                                                     93                 22
                                                -----------     --------------
Total minimum lease payments                            445     $          219
                                                                ==============
Less: Amount representing interest                      (66)
                                                -----------
Present value of minimum lease payments         $       379
                                                ===========
</TABLE>

Property and equipment accounts include the following amounts for computer
equipment that have been recorded under capital leases (in thousands):

<TABLE>
<CAPTION>
                                              February 2,               January 31,
                                                     1996                      1997
                                       ------------------        ------------------
<S>                                    <C>                       <C>               
Office furniture and equipment         $              631        $              631
Less: Accumulated depreciation                       (185)                     (329)
                                       ------------------        ------------------
                                       $              446        $              302
                                        =================         =================
</TABLE>

In the normal course of business, the Company is a defendant in various
lawsuits. The Company's management believes that there will be no material
adverse impact on the 

                                      F-16
<PAGE>   45

financial condition or results of operations of the
Company as a result of the ultimate resolution of these matters.

NOTE 13 - STOCK OPTION PLANS:

The Company has an Incentive Stock Option Plan under which options to purchase
shares of the Company's common stock may be granted to key employees of the
Company. In fiscal 1995 stockholders approved an increase in the total number of
shares issuable under the Incentive Stock Option Plan from 300,000 shares to
500,000 shares. Additionally, stockholders approved a Director Stock Option Plan
under which the Company may grant options to purchase shares of the Company's
stock to each non-employee director of the Company. The total number of shares
issuable under the Director Stock Option Plan is 100,000 shares. All options
under both plans expire 10 years from the date of grant. Options granted in
fiscal years 1995, 1996 and 1997 include 30,000, 10,000 and 5,000 of options
granted to directors, respectively. Options granted under both plans become
exercisable in cumulative annual increments of 20 percent, commencing on the
date of grant, except for one director. For one director, options granted in
fiscal 1995 under the Director Stock agreement were 100 percent exercisable on
the date of grant. Both Plans are administered by a Compensation Committee
appointed by and holding office at the pleasure of the Board of Directors. Stock
option activity is shown below:


<TABLE>
<CAPTION>
                                                                 Weighted-
                                                   Options         Average
                                               Outstanding        Exercise
                                                    Number           Price
                                               -----------        --------
<S>                                                <C>             <C>  
Outstanding at January 28, 1994                    211,250           $8.89
  Granted                                          105,000          $13.00
  Exercised                                              -               -
  Cancelled                                              -               -
                                               -----------
Outstanding at January 27, 1995                    316,250          $10.25
  Granted                                           10,000           $4.13
  Exercised                                              -               -
  Cancelled                                        (10,000)         $14.25
                                               -----------
Outstanding at February 2, 1996                    316,250           $9.93
  Granted                                          107,500           $4.69
  Exercised                                         (4,000)          $4.69
  Cancelled                                        (20,250)          $5.23
                                               -----------
Outstanding at January 31, 1997                    399,500           $8.81
                                               ===========

Options exercisable at January 27, 1995            174,250           $8.35
                                               ===========

Options exercisable at February 2, 1996            213,250           $9.01
                                               ===========

Options exercisable at January 31, 1997            251,500           $9.51
                                               ===========
</TABLE>


The following table summarizes information about employee and director stock
options outstanding at January 31, 1997:

<TABLE>
<CAPTION>

                                Options Outstanding                             Options Exercisable
                    -------------------------------------------------      --------------------------------
                                         Weighted-
                                           Average         Weighted-                             Weighted-
  Range of                               Remaining           Average                               Average
  Exercise                Number       Contractual          Exercise              Number          Exercise
    Prices           Outstanding              Life             Price         Exercisable             Price
  ---------          ------------      ------------        ----------       -------------        ----------
  <S>                <C>               <C>                 <C>               <C>                 <C>
   $4.13 to  $5.23     194,500               5.9             $4.88             102,500             $5.09
  $12.25 to $14.25     205,000               6.9            $12.54             149,000            $12.54
                       -------                                                 -------
                       399,500               6.4             $8.81             251,500             $9.51
                       =======                                                 =======
</TABLE>




                                      F-17
<PAGE>   46

Pro-forma information regarding the net income and earnings per share is
required By SFAS No. 123, and has been determined as if the Company had
accounted for the employee and non-employee director stock options granted only
in fiscal years 1996 and 1997, under the fair value method of that Statement.
The impact on fiscal years 1996 and 1997 of options granted prior to fiscal 1996
has been excluded from this presentation. The weighted-average estimated grant
fair values, as defined by SFAS No. 123, for options granted during fiscal 
1996 and fiscal 1997, were $2.24 and $2.51, respectively. All options were 
granted at exercise prices equal to market prices during fiscal years 1996 
and 1997.

The fair value for options granted in fiscal 1996 and 1997 was estimated as of
the date of grant using a Black-Scholes option pricing model with the following
weighted average assumptions for the two fiscal years ended January 31, 1997.

<TABLE>
<CAPTION>

                                                                    1996                           1997
                                                    --------------------           --------------------
<S>                                                 <C>                            <C>
Risk-free interest rate                                            5.83%                          6.31% 
Dividend yield                                                      0.0%                           0.0%
Volatility                                                        48.61%                         48.16%
Weighted-average option life                                     6 Years                        6 Years
</TABLE>

Compensation cost for stock options is measured as the excess, if any, of the
quoted market price of the Company's stock at the date of the grant over the
amount an employee or director must pay to acquire the stock. Had compensation
cost for these plans been determined using fair value, rather than the quoted
market price, the Company's net income and net income per share would have been
reduced to the following pro forma amounts (in thousands, except per share
data): 

<TABLE>
<CAPTION>
                                                                    1996                           1997
-------------------------------------------------------------------------------------------------------
<S>                                                               <C>                         <C>  
Net income:
  As reported                                                       $346                         $2,190
  Pro forma                                                          345                          2,158

Net income per share:
  As reported                                                       $.06                         $  .35
  Pro forma                                                          .06                            .34
-------------------------------------------------------------------------------------------------------
</TABLE>


NOTE 14 - CAPITAL STOCK:

Each holder of Common Stock is entitled to one vote for each share held of
record on each matter submitted to a vote of stockholders. Stockholders are not
entitled to cumulate votes in the election of directors and, therefore, holders
of a majority of the outstanding shares of Common Stock can elect all of the
directors. Subject to any preferences which may be granted to the holders of
Preferred Stock, each holder of Common Stock is entitled to receive ratably such
dividends as may be declared by the Board of Directors.

The Board of Directors, without further action by the holders of Common Stock,
may issue shares of Preferred Stock in one or more series and may fix or alter
the rights, preferences, privileges and restrictions of any unissued series of
Preferred Stock, including the voting rights, redemption provisions (including
sinking fund provisions), dividend rights, dividend rates, liquidation
preferences and conversion rights. No shares of Preferred Stock are outstanding.



                                      F-18
<PAGE>   47


NOTE 15 - QUARTERLY FINANCIAL DATA (UNAUDITED):
(Amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                     1997 Quarters
                                   -------------------------------------------------------
Quarter Ended                           1st            2nd           3rd         4th
------------------------------------------------------------------------------------------
<S>                                 <C>          <C>           <C>          <C>       
Net Sales                           $   44,915   $   29,747    $   55,649   $   46,754
Gross Margin                             8,246        5,056        10,749        8,616
Net Income (Loss)                          287         (645)        1,622          926
Per Share Data                   
           Net Income (Loss)               .05         (.10)          .26          .14
           Market Price - High            4.88         6.50          6.50         6.50
           Market Price - Low             4.25         4.75          5.00         4.63
</TABLE>

<TABLE>
<CAPTION>

                                                      1996 Quarters
                                    --------------------------------------------------
Quarter Ended                            1st           2nd           3rd           4th
---------------------------------------------------------------------------------------
<S>                                 <C>          <C>           <C>          <C>       
Net Sales                           $   42,337   $   33,043    $   72,799   $   65,238
Gross Margin                             7,181        4,817        11,842       10,712
Net Income (Loss)                           67       (1,108)        1,369           18
Per Share Data
           Net Income (Loss)               .01         (.18)          .22          .00
           Market Price - High            6.75         5.50          4.75         4.88
           Market Price - Low             4.50         3.50          3.88         4.00
</TABLE>

The Company's Common Stock is traded over-the-counter in the NASDAQ National
Market System ("NMS")under the trading symbol "OROA" since the Company's initial
public offering on September 23, 1993. On April 22, 1997, there were 31 holders
of record of the Common Stock.

The Company has not paid dividends on the Common Stock since its initial public
offering in September 1993 and does not intend to pay dividends in the
foreseeable future. The Board of Directors currently intends to retain earnings
for use in the Company's business. In addition, the Company's revolving credit
facilities and gold consignment agreements contain convenants which prohibit the
payment of dividends on the Common Stock.



                                      F-19
<PAGE>   48
                                OroAmerica, Inc.
                 Schedule II - Valuation and Qualifying Accounts
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                 Additions
                                         --------------------------------------------------------
                                                            Charged
                                         Balance            to costs          Charged                                Balance
                                         at beginning       and ex-           to other                               at end
                    Description          of period          penses            accounts           Deductions          of period
---------------------------------------- ---------------    ---------------   ---------------    -------------       ------------



For the year ended January 27, 1995:
<S>                                              <C>                  <C>               <C>  <C>       <C>    <C>         <C>
   Allowance for doubtful accounts               $1,500               $327              $173 (1)       ($900) (2)         $1,100
   Reserve for estimated returns                  5,600                  0                 0              200 (3)          5,800
   Allowance for uncollectible 
     vendor advances                                750                  0                 0                0                750
                                         ---------------    ---------------   ---------------    -------------        -----------

                       Total                     $7,850               $327              $173           ($700)             $7,650
                                         ===============    ===============   ===============    =============        ===========



For the year ended February 2, 1996:
   Allowance for doubtful accounts               $1,100             $1,898            ($497) (4)     ($1,053) (2)         $1,448
   Reserve for estimated returns                  5,800                  0                 0            2,700 (3)          8,500
   Allowance for uncollectible 
     vendor advances                                750                  0               108 (5)            0                858
                                         ---------------    ---------------   ---------------    -------------         ----------

                       Total                     $7,650             $1,898            ($389)           $1,647            $10,806
                                         ===============    ===============   ===============    =============         ==========

For the year ended January 31, 1997:
   Allowance for doubtful accounts               $1,448               $517               $31 (1)       ($414) (2)         $1,582
   Reserve for estimated returns                  8,500                  0                 0              140 (3)          8,640
   Allowance for uncollectible 
     vendor advances                                858                  0                 0            (228) (6)            630
                                         ---------------    ---------------   ---------------    -------------         ----------

                       Total                    $10,806               $517               $31           ($502)            $10,852
                                         ===============    ===============   ===============    =============         ==========
</TABLE>


(1)   Collection of trade accounts receivable previously written off.

(2)   Due to debtors' inability to pay, price disputes, shortages and other
      allowances.

(3)   The Company reduces gross sales by the amount of returns processed. Each
      month the Company estimates a reserve for returns based on historical
      experience and the amount of gross sales. The reserve is adjusted
      periodically to reflect the Company's actual return
      experience.

(4)   Includes $210,000 of payments determined to be "preferential" by a
      bankruptcy court, $380,000 of memo and sample accounts written-off from
      inventory, and a $69,000 adjustment to goodwill originating from the Jerry
      Madison acquisition. These items were offset by $162,000 of collections of
      trade accounts receivable previously written off.

(5)   Cash received on vendor advances previously written-off.

(6)   Reduction in vendor reserve credited to cost of sales.




                                       S-1

<PAGE>   49
<TABLE>
<CAPTION>

EXHIBIT 
NUMBER                DESCRIPTION
------                -----------
<S>              <C>
10.41            Letter Agreement, dated August 8, 1996, between the registrant
                 and Shiu Shao.
10.42            Letter Agreement, dated August 8, 1996, between the registrant
                 and Sophia Chalermsopone.
10.43            Letter Agreement, dated August 8, 1996, between the registrant
                 and Claudia Hollingsworth.
10.44            Letter Agreement, dated August 8, 1996, between the registrant
                 and David Wu.
10.45            Letter Agreement, dated September 11, 1996, between the
                 registrant and Betty Sou.
10.46            Exclusive License Agreement, dated December 15, 1996, between
                 Fragrance Business Company Limited and the registrant.
23.1             Consent of Price Waterhouse LLP
27.1             Financial Data Schedule
</TABLE>