<PAGE>

                                  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 December 27, 1997
                                       or
                  [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                        For the transition period from to

                         Commission File Number 0-23204

                                VISTA 2000, INC.
             (Exact name of Registrant as specified in its charter)

<TABLE>
  <S>                                            <C>
            DELAWARE                                58-1972066
   --------------------------------              -----------------------
   (State or other jurisdiction of                (I.R.S. Employer
   incorporation or organization)                 Identification No.)

   221 West First Street, Kewanee, Illinois            61443
   ----------------------------------------           --------
   (Address of principal executive offices)          (Zip Code)
Registrant's telephone number, including area code: (309) 856-8068

</TABLE>

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                           Common Stock $.01 Par Value
                                Series A Warrants

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 [ ]  No [X]

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

The aggregate market value of the voting stock held by nonaffiliates computed 
by reference to the price at which the stock was sold was $1,993,673 as of 
May 13, 1998. This represents 31,898,764 shares at $.0625 per share. Since 
the Company's common stock is not traded on any recognized stock exchange, 
the price per share is based on unofficial trading history.

There were 47,466,432 shares of the Registrant's common stock and 2,300,000 
Series A Warrants and 611,127 other warrants outstanding as of May 13, 1998.


<PAGE>


                                     PART I

Item 1.  Business

         Vista 2000, Inc., the registrant, together with its subsidiaries, is 
referred to herein as the "Company". The Company's executive offices are 
located at 221 West First Street, Kewanee, Illinois 61443, and its telephone 
number is (309) 856-8068.

         All statements, other than statements of historical fact, included 
in this Annual Report, including, without limitation, the statements under 
"Current Developments", "General Business" and "Management's Discussion and 
Analysis of Financial Condition and Results of Operations" are, or may be 
deemed to be, forward-looking statements within the meaning of Section 21E of 
the Securities Exchange Act of 1934. Important factors that could cause 
actual results to differ materially from those discussed in such 
forward-looking statements ("Cautionary Statements") include: the general 
strength or weakness of the consumer products industry, and the pricing 
policies of competitors. All subsequent written and oral forward-looking 
statements attributable to the Company or persons acting on behalf of the 
Company are expressly qualified in their entirety by such Cautionary 
Statements.

General

         The Company, successor by merger to Firearm Safety Products, Inc. 
("Firearm"), was organized to design, develop, manufacture and market 
consumer products. Firearm was organized on December 19, 1991 as 
Triggerguard, Inc., a Georgia corporation. Effective August 10, 1992, 
Triggerguard's name was changed to Firearm Safety Products, Inc. Pursuant to 
a Plan and Agreement of Merger entered into October 20, 1993, Firearm was 
merged into the Company, a newly formed Delaware corporation. In conjunction 
with the plan of merger, Family Safety Products, Inc. ("FSPI"), a Georgia 
corporation, was formed as a wholly-owned subsidiary of the Company, and the 
assets and operations of Firearm were transferred to FSPI. FSPI manufactured 
and marketed a broad range of personal safety and home security devices, 
alarms and security systems. On October 24, 1994, the Company completed an 
initial public offering of its common stock and warrants.

         In 1995 the Company elected to change its fiscal year from September 
30 to December 30. The Company engaged Grant Thornton LLP ("Grant Thornton") 
to audit its financial statements for the period ending December 30, 1995. In 
March, 1996, Grant Thornton advised the Company that contrary to prior 
projections and previously filed financial reports, the Company had incurred 
a substantial loss for the year-end and for prior quarters for fiscal year 
1995. In March 1996, the Audit Committee of the Board of Directors 
(consisting of the Company's two outside (i.e. non-employee) directors) 
initiated an investigation of the integrity of the Company's financial 
reporting procedures as well as the integrity of management.

         Richard P. Smyth ("Smyth") Chairman of the Board of Directors and 
Chief Executive Officer, was placed on leave of absence pending the Audit 
Committee's review. On April 16, 1996, 

                                     Page 2
<PAGE>


the Company announced Smyth's resignation as Chairman of the Board of 
Directors and Chief Executive Officer of the Company and the Company filed a 
lawsuit against Mr. Smyth, alleging, among other things, breach of fiduciary 
duty. This litigation is currently pending.

         As a result of the Audit Committee's investigation, the Company 
reported a restatement of its results for the fiscal year ended September 30, 
1994. The Company had previously reported a loss for the period of $329,000. 
The restated loss for this period was $2.1 million. Further, the Company 
reported a loss for the three (3) month stub period ended December 31, 1994 
of approximately $1 million. The Company had reported a loss from its 
consolidated operations for the fiscal year ended December 30, 1995 of $12.9 
million or $2.04 per share based on approximately 6.3 million weighted 
average shares outstanding during the period. This loss has been restated to 
$14.7 million or $2.33 per share as presented in the Company's Form 10-K for 
the year ended December 30, 1995.

         Beginning in mid-April 1996, 17 class action lawsuits were filed 
against the Company and certain other entities and individuals relating to 
activities of the Company while under control of previous management and the 
previous Board of Directors. All of the lawsuits were eventually 
consolidated. The lawsuits were filed in the United States District Court for 
the Northern District of Georgia, and on March 14, 1997, the litigation was 
settled by a Final Judgment and Order of Dismissal by the Court. Further, the 
Securities and Exchange Commission ("SEC") commenced an investigation of the 
Company and its former officers and directors in 1997.

         On April 26, 1996, the Company received a letter from the NASDAQ 
Stock Market, Inc. ("NASDAQ") notifying the Company that its securities were 
scheduled to be delisted from NASDAQ effective May 10, 1996. The Company 
requested a formal hearing on the matter which was held on May 22, 1996. On 
May 30, 1996, the Company was advised by NASDAQ that the Company's securities 
were delisted effective May 31, 1996. The Company will not be eligible to 
trade its securities on either the Electronic Bulletin Board Market or the 
"pink sheets" market until (i) an application is made on behalf of the 
Company by a NASD member firm as a market maker for the Company's securities 
and (ii) the application is accepted by NASDAQ.

         On June 7, 1996, the Company entered into an agreement with a 
shareholder, Ginarra Holdings, Inc. ("Ginarra") to add six (6) additional 
outside directors to the Board of Directors which, at that time, consisted of 
three (3) members. Pursuant to the terms of the agreement, the directors 
amended the Company's bylaws to increase the size of the Board of Directors 
from five (5) to nine (9) and voted to add six (6) Ginarra nominees as 
directors of the Company. The nominees assumed office immediately following 
the issuance of a Form 8-K filed with the SEC on June 6, 1996 for the year 
ended December 30, 1995 in lieu of a Form 10-K (the "June 1996 Form 8-K"). 
Since that time, the three original directors and one of the newly-elected 
directors have resigned and one new director has been added.

         As previously disclosed in the June 1996 Form 8-K, Grant Thornton 
had disclaimed an opinion on the Company's consolidated financial statements 
for the year ended December 30, 1995 

                                     Page 3
<PAGE>


because evidence supporting the results of operations of the Company's 
subsidiaries, FSPI, Promotional Marketing, Inc. ("PMI") and Intelock 
Technologies, Inc. ("Intelock") was not available. However, Grant Thornton 
advised that it could express, and the Company did receive, an unqualified 
opinion on the financial statements of the Company's subsidiary, American 
Consumer Products, Inc. ("ACPI"), presented on an historical basis for twelve 
(12) months ended December 30, 1995. Without an opinion on the Company's 
consolidated financial statements, the Company was not able to comply with 
the applicable rules and regulations of the SEC regarding reports and NASDAQ 
regarding the listing of the Company's securities. This resulted in, among 
other things, the delisting of the Company's securities from the NASDAQ 
National Market described above.

         Following the issuance of the June 1996 Form 8-K, Grant Thornton was 
able to perform additional audit procedures with respect to the fiscal year 
ended December 30, 1995. After performing these procedures, Management 
identified certain corrections that have been made to the financial 
statements for the year-ended December 30, 1995. As a result of these 
corrections, on March 12, 1997, Grant Thornton re-issued its Auditors' Report 
on the Company's 1995 consolidated financial statements. This re-issued 
Report of Independent Certified Public Accounts, which now contains an 
unqualified opinion of Grant Thornton, was filed on May 1, 1997 with the 
Company's Form 10-K for the year ended December 30, 1995.

         The Company's Form 10-K for the year ending December 28, 1996 was 
filed on August 25, 1997 and included an unqualified opinion of Grant 
Thornton, the Company's independent certified public accountants. All 
required quarterly SEC filings for the fiscal year ended December 27, 1997 
have been made.

Acquisitions and Dispositions

         On April 18, 1997, the Company sold all of its 94% interest in 
Intelock's common stock to a company managed by a minority (4.2%) shareholder 
of Intelock, who was an officer and director of Intelock prior to the 
purchase of Intelock by the Company in 1995. Proceeds from the sale were 
$5,000 in cash and a $95,000 promissory note, which matures on April 11, 
1998. This sale resulted in a 1997 gain of approximately $128,000 since the 
net operating assets of Intelock had been previously written off during the 
third quarter of the 1996 fiscal year when Intelock ceased operations.

         On June 19, 1997, the Company sold all of the stock of Alabaster to 
W. R. Hill & Co., Inc., for $2.0 million. Payment consisted of $500,000 cash 
and a $1.5 million note receivable, secured by a first mortgage on the land 
and buildings which comprise Alabaster's manufacturing, sales and 
administrative operations. During the quarter ended June 28, 1997, the 
Company recorded a loss of approximately ($1.8 million) on the sale. During 
the year ended December 28, 1996, the Company had recorded losses of 
approximately ($3.6 million), as a result of operating losses and asset write 
downs at Alabaster. Alabaster represented approximately $2.8 million of the 
Company's consolidated sales for the year ended December 27, 1997.

                                     Page 4
<PAGE>


         On August 25, 1997, the Company completed the sale of certain assets 
of ACPI to Axxess Technologies, Inc. (the "Purchaser"). These assets 
comprised primarily ACPI's key, key manufacturing, letters, numbers and signs 
manufacturing, real estate and related businesses. The Company retained Boss 
Manufacturing Company, Boss Balloon, Inc., Boss Real Estate, Inc. and the 
ACPI Warren Pet Division. The business assets being sold accounted for 
approximately $57.0 million of the Company's consolidated sales for the year 
ended December 28, 1996. The Company recognized a loss of approximately ($1.8 
million) on the sale, after accounting for legal expenses and other 
transaction expenses.

         Consideration for the sale consisted of cash of approximately $24.8 
million and the assumption of approximately $3.3 million of liabilities by 
the Purchaser. Except for approximately $3.0 million of cash, which was 
retained by the Company to pay, among other things, closing costs and other 
expenses associated with the transaction, the balance of the cash proceeds 
were used to retire debt, including a payment of approximately $18.6 million 
against ACPI's revolving line of credit. Immediately after this payment the 
ACPI revolving line of credit had an outstanding balance of approximately 
$3.4 million. As a result of this sale of ACPI's assets, including inventory 
and accounts receivable, which comprised a significant portion of the 
revolving line of credit borrowing base, ACPI's borrowing limit was reduced 
from $30.0 million to $10.0 million.

Operations

         With the asset and business sales which have occurred during the 
years ended December 27, 1997 and December 28, 1996, the concentration of the 
Company's operations have shifted to work gloves and protective wear. Boss 
Manufacturing Company ("Boss"), a wholly-owned subsidiary of the Company's 
ACPI subsidiary, manufactures and distributes the Company's work glove and 
protective wear products. The headquarters of Boss is in Kewanee, Illinois, 
with manufacturing and distribution facilities in the United States, Canada 
and Mexico.

Marketing

         The Company markets its product lines directly through its own sales 
force to major retail stores and through distributors and manufacturer 
representatives. Retail products are primarily purchased from the Company by 
businesses located in the United States, including mass merchandising stores, 
supermarkets, hardware stores, drug and variety stores, and other retail 
outlets and by wholesalers who resell to such retailers. The Company's 
products are also marketed outside the United States in Canada.

Raw Material

         The Company expects to have multiple sources of supply for 
substantially all of its material requirements. The raw materials and various 
purchased components required for its products have generally been available 
in sufficient quantities.

                                     Page 5
<PAGE>


Competition

         In the work glove and protective clothing market the Company 
competes with a few well-established domestic and foreign manufacturers as 
well as a number of smaller manufacturers. Many of the Company's products 
also compete against a number of substitute products. The fragmented nature 
of the competitive market does not permit the Company to form a reliable 
opinion as to its precise competitive position within these markets, however, 
the Company believes it has a significant share in many of the markets for 
some of its products.

Regulation

         The Company is subject to federal, state and local regulations 
concerning the environment, occupational safety and health, and consumer 
products safety. The Company has not experienced significant difficulty in 
complying with such regulations and compliance has not had a material adverse 
effect on the Company's business.

Employees

         The Company has approximately 413 full-time associates including 57 
salaried personnel. Approximately 25 hourly associates are represented by 
labor organizations under collective bargaining agreements at the Company's 
Boss Manufacturing facilities.

Executive Officers of the Registrant

         The following is a list of the names and ages of all the executive 
officers of the registrant and principal subsidiaries as of December 27, 1997 
indicating all positions and offices with the registrant held by each such 
person, and each such persons' principal occupations or employment during the 
past five years.

                                     Page 6
<PAGE>


                                 THE REGISTRANT

<TABLE>
<CAPTION>

            Name                   Age                           Positions and Offices Held and
                                             Principal Occupations or Employment during past 5 years
---------------------------------------------------------------------------------------------------------------------
<S>                                 <C>      <C>
G. Louis Graziadio III              48       Chairman  of the Board and Chief  Executive  Officer  since June 1996.
                                             He is also the Chairman and CEO of Ginarra  Holdings,  Inc., a holding
                                             company with investments through various corporations,  and a director
                                             of  Imperial  Credit  Industries,  Inc.,  Imperial  Bancorp,  Imperial
                                             Trust, Imperial Financial Group and Lynx Golf, Inc.

Shyam H. Gidumal                    38       President  since  November,  1997.  From 1989 through 1992 Mr. Gidumal
                                             was a partner  with the  Boston  Consulting  Group.  Mr.  Gidumal  has
                                             served as  President  of  Strategic  Turnarounds  Investment  Corp.  &
                                             Affiliates  since 1992,  and Managing  Director of Crown Capital Group
                                             since 1997.

                                  SUBSIDIARIES

Ken Fristad                         57       President, ACPI Subsidiary (1) and Boss Manufacturing Company

</TABLE>

----------------------
(1)      Mr. Ken Fristad, the President of ACPI's subsidiary, Boss Manufacturing
         Company, was named President of ACPI effective May 7, 1997.

Item 2.  Properties

         The following table shows the location, general character, square 
footage, annual rent and lease expiration date of the principal operating 
facilities owned or leased by the Company as of December 27, 1997. The 
executive offices are located in Kewanee, Illinois, which is an owned 
facility occupying approximately 50,400 square feet. The Company considers 
its properties to be in generally good condition and well-maintained, and are 
generally suitable and adequate to carry on the Company's business.

                                     Page 7
<PAGE>


<TABLE>
<CAPTION>



 Location               City          General Character            Square        Annual     Lease Expiration
                                                                    Feet          Rent
----------------------------------------------------------------------------------------------------------------
<S>                 <C>                <C>                         <C>             <C>       <C>
Alabama               Greenville       Manufacturing                86,000             0       owned
Alabama               Monroeville      Manufacturing                 5,000         3,600   month-to-month
Arizona               Phoenix          Manufacturing                68,600       179,172      05/14/98
Br. Columbia,         Vancouver        Distribution                  6,000        14,400   month-to-month
  Canada
Florida               Hollywood        Manufacturing                15,000        90,000      12/31/98
Georgia               Atlanta          Administrative Office           400         6,000   month-to-month
Illinois              Kewanee          Manufacturing and            50,400             0       owned
                                       Administrative Office
Illinois              Springfield      Manufacturing                80,000             0       owned
Mexico                Juarez           Manufacturing                35,400             0       owned
Ontario, Canada       Concord          Manufacturing                18,400        62,560   month-to-month
Texas                 El Paso          Manufacturing                 1,770        11,664   month-to-month
Washington            Kent             Warehouse                    25,000        90,000   month-to-month

</TABLE>

Item 3.   Legal Proceedings.

         The Corporation is involved in various lawsuits in the ordinary 
course of business. These lawsuits primarily involve claims for damages 
arising out of commercial disputes.

         The SEC notified the Company in April 1996 that it had commenced an 
informal investigation of the Company. The status of the investigation was 
changed to a formal private investigation in January, 1997. The Company has 
responded to the SEC's request for information and will continue to cooperate 
with the SEC in this matter. Independently, the Company through its Audit 
Committee has conducted an internal investigation of the facts and 
circumstances surrounding the investigation.

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

         There were no matters submitted to a vote of security holders during 
the year ended December 27, 1997, as neither an annual meeting was held nor a 
proxy statement issued during 1997.

                                     Page 8
<PAGE>


                                     PART II


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

         The Company's common stock (symbol: VISTE) was traded on NASDAQ 
until May 31, 1996, when the Company's stock was delisted. Since that time, 
the Company's stock has not been listed on any official stock exchange. The 
following table sets forth the range of high and low bid prices for the 
Company's Common Stock as quoted by NASDAQ. These quotations represent prices 
between dealers in securities, do not include retail mark-ups, mark-downs or 
commissions and do not necessarily represent actual transactions.

<TABLE>
<CAPTION>

   Quarter        Fiscal Year Ended        Fiscal Year Ended        Fiscal Year Ended       October 25, 1994 thru
                 December 27, 1997(1)    December 28, 1996(1)       December 30, 1995         December 31, 1994

                   High Bid Low Bid        High Bid Low Bid          High Bid Low Bid          High Bid Low Bid
---------------------------------------------------------------------------------------------------------------------
<S>                 <C>                    <C>      <C>             <C>        <C>             <C>      <C>
    First                N/A               14-7/8    8-1/2            2-5/8    1-1/2                 N/A
  Second(2)              N/A               10-1/8    1-7/16           6-9/32   1-15/16               N/A
    Third                N/A                      N/A                 7-3/8    5-3/16                N/A
    Fourth               N/A                      N/A                10-1/2    4-5/8           3-15/16    2-1/2

</TABLE>

-----------------------
(1) There were in excess of 1000 record holders of the Company's common stock 
on these dates. Holders of Common Stock are entitled to dividends when, as, 
and if declared by the Board of Directors out of funds legally available 
therefore. The Company has not paid any cash dividends on its Common Stock 
and, for the immediate future, intends to retain earnings, if any, to finance 
the development and expansion of its business.

(2) Represents market prices second quarter through May 31, 1996, the date 
the stock was delisted.

Item 6.  Selected Financial Data.

         The selected consolidated financial data of the Company shown below 
for the five year and three month period ended December 27, 1997 are derived 
from the consolidated financial statements of the Company. The information 
set forth below is qualified in its entirety by the more detailed financial 
statements and notes thereto included elsewhere herein together with the 
reports issued by the independent certified public accounts. The following 
table should be read in conjunction with Management's Discussion and Analysis 
of Results of Operations and Financial Condition and the Company's audited 
Consolidated Financial Statements and Notes thereto appearing elsewhere 
herein.

                                     Page 9
<PAGE>


<TABLE>
<CAPTION>

                                                    Year ended 12/27/97    Year ended 12/28/96   Year ended 12/30/95
                                                    -------------------    -------------------   -------------------
Consolidated Balance Sheet Data (as of period         (Amounts in thousands, except shares and per share data)
end)                                               ------------------------------------------------------------------
<S>                                                           <C>                  <C>                   <C>
Working capital                                               $  17,438            $   30,587            $   30,393
Total assets                                                     28,562                61,771                65,311
Long-term debt, including current                                 4,020                24,302                23,636
Stockholders' equity                                             19,123                24,161                21,125
Consolidated Statement of Operations Data
Net sales                                                      $ 78,400             $ 110,955            $   32,422
Cost of sales                                                    57,909                82,563                28,244
   Gross profit                                                  20,491                28,392                 4,178
Operating expenses                                               21,190                34,235                17,318
(Loss) from Asset Sales/Writedowns                              (3,792)              (10,787)                 -----
(Loss) from disposed business                                     -----                 -----               (1,147)
   Operating (loss)                                             (4,491)              (16,630)              (14,287)
Interest (expense)                                              (1,799)               (2,174)                 (649)
Other income (expense)                                               11                 (351)                   273
Net (loss) before Income Taxes                                  (6,279)              (19,155)              (14,663)
Income Tax (Expense)                                              (256)                 (246)                 -----
   (Net loss)                                                   (6,535)            $ (19,401)            $ (14,663)
                                                          -------------          ------------          ------------
                                                          -------------          ------------          ------------
 (Loss) per share                                         $      (0.21)          $     (1.20)          $     (2.33)
                                                          -------------          ------------          ------------
                                                          -------------          ------------          ------------
Weighted average shares outstanding                          31,862,273            16,133,508             6,294,361

</TABLE>


                                    Page 10
<PAGE>


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

OVERVIEW

         The Company reported a net loss of $6.5 million or $.21 loss per 
share for the year ended December 27, 1997 compared to a net loss of $19.4 
million or $1.20 loss per share for the year ended December 28, 1996 and a 
net loss of $14.7 million or $2.33 loss per share for the year ended December 
30, 1995.

         The 1997 loss is primarily attributable to losses on the sale of 
Alabaster and the ACPI key and letters, numbers and signs businesses, and to 
a lesser degree, operating losses resulting from the restructuring of the 
Company following the sale of the ACPI businesses. The 1997 loss also 
reflected additional legal and other costs associated with the settlement of 
the claims of preferred and common shareholders of the Company.

         The 1996 loss is primarily attributable to operating losses and 
substantial losses on the sale of the assets of FSPI, a write-down of the 
assets of Alabaster and Intelock, and accrued costs resulting from settlement 
of the Class Action shareholder lawsuit. In addition, high general overhead 
costs were incurred in the operation of the Company's corporate offices.

         The loss for the year ended December 30, 1995 was primarily 
attributable to acquisition and reorganization costs, inventory liquidations 
below normal selling prices, production start-up costs, related material and 
manufacturing costs, and high general overhead costs.

RESTATEMENT OF FINANCIAL STATEMENTS OF PRIOR PERIODS

Financial Statements for the Year ended September 30, 1994

         The audited financial statements previously issued for the year 
ended September 30, 1994 have been restated to reflect two prior period 
accounting adjustments. First, previously recognized revenue from the sale of 
an exclusive license agreement for one of the Company's products, 
consideration for which was substantially in the form of a $1.2 million note 
receivable, has been reversed as a result of a 1996 investigation initiated 
by the Audit Committee of the Board of Directors. Second, $635,000 of 
previously reported sales have been reversed also as a result of the Audit 
Committee investigation referred to above. The effects of these two prior 
period adjustments on operations results in a reduction of revenue, an 
increase in net loss and an increase in accumulated deficit all in the amount 
of $1.8 million.

                                    Page 11
<PAGE>


Quarterly Reports filed on Forms 10-Q

         The unaudited interim financial statements filed on Forms 10-Q for 
the quarters ended December 31, 1994, March 31, 1995, June 30, 1995 and 
September 30, 1995 have been amended. These amendments were necessary to 
properly reflect certain year-end 1995 adjustments, correct accounting errors 
determined as a result of the audit of the December 30, 1995 financial 
statements, and record the prior period accounting adjustments referred to 
above related to the September 30, 1994 financial statements. The individual 
quarterly effects of the adjustments for the respective comparative quarters 
have been reported in the Company's Forms 10-Q for the quarters ending March 
30, 1996, June 29, 1996 and September 28, 1996, which were filed on May 1, 
1997. Descriptions of the nature of these adjustments are as follows:

-    The effective date of the acquisition of PMI by Vista was not October 31,
     1994 as previously reported but instead, May 1, 1995, immediately prior to
     the closing date of the acquisition in May of 1995.

-    The effective date of the acquisition of Alabaster by Vista was not May 1,
     1995 as previously reported but instead, the closing date of the
     acquisition was on July 31, 1995.

-    The effective date of the acquisition of ACPI by Vista was not August 31,
     1995 as previously reported but instead, September 30, 1995, subsequent to
     the initiation of the tender offer through which Vista achieved majority
     ownership and control of ACPI.

-    Inventory costing adjustments necessary to properly state year-end FSPI
     inventories, in large part, related to the previously reported quarterly
     results. During prior quarters cost of goods sold for FSPI was artificially
     computed to be approximately 52% of net sales. Upon examination of the
     actual costs of products sold by FSPI it was determined that costs as a
     percentage of net sales was much higher than the 52% factor used in
     computing the quarterly gross profit amounts.

-    Accruals for various stock-based compensation costs were not recorded in
     the quarterly results.

RESULTS OF OPERATIONS

Consolidated for fiscal years ending December 27, 1997 and December 28, 1996.

         Net sales were $78.4 million for the year ended December 27, 1997 
compared to $111.0 million for the year ended December 28, 1996. The decrease 
is primarily the result of the sale of ACPI's key and letters, numbers and 
signs business in August, 1997, the sale of the Company's Alabaster 
subsidiary in June, 1997, and the sale of the assets of the Company's FSPI 
subsidiary in August, 1996.

                                    Page 12
<PAGE>


         Gross profit was $20.5 million for the year ended December 27, 1997 
compared to $28.4 million for the year ended December 28, 1996. The decrease 
is primarily the result of the sale of ACPI's key and letters, numbers and 
signs business in August, 1997, the sale of the Company's Alabaster 
subsidiary in June, 1997, and the sale of the assets of the Company's FSPI 
subsidiary in August, 1996. Gross profit was 26.1% of net sales for the year 
ended December 27, 1997 compared to 25.6% of net sales for the year ended 
December 28, 1996.

         Operating expenses were $21.2 million for the year ended December 
27, 1997 compared to $34.2 million for the year ended December 28, 1996. In 
addition to operating expense reductions resulting from the sale of certain 
ACPI assets, the Alabaster subsidiary, and the sale of FSPI assets, the 
Company reduced its general overhead. Operating expenses were 27.0% of net 
sales for the year ended December 27, 1997 compared to 30.8% of net sales for 
the year ended December 28, 1996.          

         Net loss for the year ended December 27, 1997 was $6.5 million 
compared to $19.4 million for the year ended December 28, 1996. The 1997 loss 
includes a loss of $3.8 million on the sale of businesses and operating 
assets while the 1996 loss included a loss of $10.8 million from the sale and 
write-down of operating assets.

Consolidated for fiscal years ended December 28, 1996 and December 30, 1995.

         Net sales were $111.0 million for the year ended December 28, 1996 
compared to $32.4 million for the year ended December 30, 1995. The increase 
is primarily a result of the inclusion of a full year's operating results of 
ACPI and Alabaster, both of which were acquired during 1995.

         Gross profit was $28.4 million for the year ended December 28, 1996 
compared to $4.2 million for the year ended December 30, 1995. The increase 
was primarily a result of the acquisitions of ACPI and Alabaster during 1995. 
Gross profit was 25.6% of net sales for the year ended December 20, 1996 
compared to 12.9% of net sales for the year ended December 30, 1995. Gross 
profit in 1996 improved as a result of having a full year's results for ACPI 
versus three months in 1995, substantially mitigating gross profit losses at 
FSPI.

         Operating expenses were $34.2 million for the year ended December 
28, 1996 compared to $17.3 million for the year ended December 30, 1995. The 
increase was primarily a result of the acquisitions of ACPI and Alabaster, 
and growth of parent company operations at Vista. Operating expenses were 
30.8% of net sales for the year ended December 28, 1996 compared to 53.4% of 
net sales for the year ended December 30, 1995.

         Net loss for the year ended December 28, 1996 was $19.4 million 
compared to $14.7 million for the year ended December 30, 1995.

                                    Page 13
<PAGE>


Separate Company Analysis

         The following is an analysis of results of operations on a separate 
company basis using financial data included in the consolidated financial 
statements.

Vista and FSPI (combined) for fiscal years ended December 27, 1997 and 
December 28, 1996

         There were no sales for the year ended December 27, 1997 compared to 
$2.9 million for the year ended December 28, 1996. Due to the sale of all 
FSPI assets in August, 1996 and Vista having no operations, these units had 
no sales during the year ended December 27, 1997.

         Gross profit (loss) was $0.00 for the year ended December 27, 1997 
and $(764,000) or (26.2%) for the year ended December 28, 1996. The 1996 
losses were due to a number of factors, the most significant of which were:

-    Excessive production costs related to gas detection products primarily
     caused by product rework, excessive direct labor costs, high indirect labor
     and engineering costs and high manufacturing overhead costs.

-    Shrinkage caused by loss of control over quantities of physical
     inventories, primarily manufactured goods.

         Operating expenses were $2.2 million for the year ended December 27, 
1997 compared to $9.2 million for the year ended December 28, 1996. Operating 
expenses in 1997 decreased primarily due to the absence of FSPI expenses and 
further reductions in the overhead costs associated with Vista.

         Net loss was $3.7 million and $19.0 million for the years ended 
December 27, 1997 and December 28, 1996, respectively. The net loss for 1997 
includes $1.7 million on the sale and disposal of assets and businesses. The 
net loss for 1996 included a $8.8 million loss on the sale of substantially 
all of the operating assets of FSPI.

Vista and FSPI (combined) for the years ended December 28, 1996 and December 
30, 1995

         Sales were $2.9 million for the year ended December 28, 1996, 
compared to $2.0 million for the year ended December 30, 1995. The increase 
in sales in 1996 was due to 1996 consisting of eight months of sales of gas 
detection devices while 1995 represented only three months of these sales.

         Gross profit (loss) was $(764,000) or (26.2%) for the year ended 
December 28, 1996 compared to $(3.15) million or (157.5%) for the year ended 
December 30, 1995. The 1996 loss was due to a number of factors, the most 
significant of which were:

                                    Page 14
<PAGE>


-        Excessive production costs related to gas detection products primarily
         caused by product rework, excessive direct labor costs, high indirect 
         labor and engineering costs and high manufacturing overhead costs.

-        Shrinkage caused by loss of control over costs and quantities of 
         physical inventories, primarily manufactured goods.

         The loss for the year ended December 30, 1995 was due to low volume, 
high overhead costs and research and development expenditures for gas 
detection devices.

         Operating expenses were $9.2 million for the year ended December 28, 
1996 compared to $9.7 million for the year ended December 30, 1995. Operating 
expenses during 1996 decreased primarily as a result of reduction in staffing 
at the Company's corporate office. Operating expenses during 1995 were higher 
due to increased marketing and promotional costs, increased research and 
development costs, costs associated with start-up of full production 
operations for gas detection devices at FSPI, growth of parent company 
operations including executive and management staff at the parent company, 
equity based compensation awards at the parent company, and other less 
individually significant items. Operating expenses were 324% of net sales for 
the year ended December 28, 1996 compared to 485% of net sales for the year 
ended December 30, 1995.

         The net loss was $19.0 million and $13.7 million for the year ended 
December 28, 1996 and the year ended December 30, 1995, respectively. The net 
loss for 1996 includes a $8.8 million loss on the sale of substantially all 
of the operating assets of FSPI.

Intelock for the fiscal years ended December 27, 1997 and December 28, 1996

         Sales were $0 for the year ended December 27, 1997 compared to 
$262,000 for the year ended December 28, 1996. Sales in 1996 were reduced as 
the Intelock operations wound down and eventually ceased operating in the 
third quarter of 1996.

         Gross profit (loss) was $0 for the year ended December 27, 1997 
compared to $(32,000) or (12.2%) of sales for the year ended December 28, 
1996. The loss in 1996 was primarily due to low volume levels, product 
returns, excessive customer credits and allowances related to product quality 
issues and inventory obsolescence reserves.

         Operating expenses were $20,000 for the year ended December 27, 1997 
compared to $207,000 for the year ended December 28, 1996. Decreased 
operating expenses were primarily due to the winding down of Intelock 
operations during 1996.

         The net loss was $20,000 for the year ended December 27, 1997 
compared to $896,000 for the year ending December 28, 1996. The 1996 loss 
included a loss of $659,000 on writing down Intelock's assets to net 
realizable value.

                                    Page 15
<PAGE>


Intelock for fiscal years ended December 28, 1996 and December 30, 1995

         Sales were $262,000 for the year ended December 28, 1996 compared to 
$480,000 for the period from June 30, 1995 (acquisition date) to December 30, 
1995. Sales in 1996 were reduced as the Intelock operations wound down and 
eventually ceased operating in the third quarter of 1996. Sales volumes in 
1995 were lower than anticipated due to product quality and reliability 
problems resulting in significant returns and customer credits.

         Gross profit (loss) was $(32,000) or (12.2%) of sales for the year 
ended December 28, 1996 compared to ($6,000) or (1.2%) for the period from 
June 30, 1995 (acquisition date) to December 30, 1995. The loss was primarily 
due to low volume levels, product returns, excessive customer credits and 
allowances related to product quality issues and inventory obsolescence 
reserves.

         Operating expenses were $207,000 for the year ended December 28, 
1996 compared to $537,000 for the period from June 30, 1995 (acquisition 
date) to December 30, 1995. Decreased operating expenses were primarily due 
to the winding down of Intelock operations.

         The net loss was $896,000 for the year ending December 28, 1996 
compared to $543,000 for the period from June 30, 1995 (acquisition date) to 
December 30, 1995. The 1996 loss includes a loss of $659,000 on writing down 
assets to net realizable value.

Alabaster for fiscal years ended December 27, 1997 and December 28, 1996

         Sales were $2.8 million for the year ended December 27, 1997 
compared to $8.9 million for the year ended December 28, 1996. Sales during 
1997 are only through June 18, 1997, the date of the sale of Alabaster.

         The gross profit was $245,000 or 8.6% of net sales for the year 
ended December 27, 1997 compared to $723,000 or 8.1% of net sales for the 
year ended December 28, 1996.

         Operating expenses were $862,000 for the year ended December 27, 
1997 compared to $2.3 million for the year ended December 28, 1996. Operating 
expenses were 30.4% of net sales for the year ended December 27, 1997 
compared to 25.6% of net sales for the year ended December 28, 1996. The 
reduction of operating expenses in 1997 were primarily a result of the sale 
of Alabaster in June, 1997.

         The net loss was $751,000 for the year ended December 27, 1997 
compared to $3.6 million for the year ended December 28, 1996. The 1996 loss 
included a loss of $1.8 million on the write down of assets to net realizable 
value.

                                    Page 16
<PAGE>


Alabaster for fiscal years ended December 28, 1996 and December 30, 1995

         Sales were $8.9 million for the year ended December 28, 1996 
compared to $3.9 million for the period from July 31, 1995 (acquisition date) 
to December 30, 1995.

         The gross profit was $723,000 or 8.1% of net sales for the year 
ended December 28, 1996 compared to $142,000 or 3.6% for the period from July 
31, 1995 (acquisition date) to December 30, 1995. The gross profit in 1995 
was negatively impacted by liquidations of excess and slow moving inventory 
which were not in accordance with management's sales and distribution 
strategies. Additionally, inventory costs in 1995 were high due to low 
manufacturing capacity utilization during the period. 1995 gross profit was 
also impaired due to valuation reserves necessary to absorb losses sustained 
from additional liquidations of 1995 year-end inventories during the first 
quarter of 1996.

         Operating expenses were $2.3 million for the year ended December 28, 
1996 compared to $1.2 million for the period from July 31, 1995 (acquisition 
date) to December 30, 1995. Operating expenses were 25.6% of net sales for 
the year ended December 28, 1996 compared to 30.8% of net sales for the 
period from July 31, 1995 (acquisition date) to December 30, 1995. The 
operating expense decrease was achieved primarily through reductions in 
administrative staffing.

         The net loss was $3.6 million for the year ended December 28, 1996 
compared to $1.1 million for the period from July 31, 1995 (acquisition date) 
to December 30, 1995. The 1996 loss included a loss of $1.8 million on the 
write down of assets to net realizable value.

ACPI for fiscal years ended December 27, 1997 and December 28, 1996

         Sales for the year ended December 27, 1997 were $75.6 million 
compared to $100 million for the year ended December 28, 1996. The decline in 
sales from 1996 to 1997 was due primarily to the sale of ACPI's key and 
letter, numbers and signs business in August, 1997.

         The gross profit for the year ended December 27, 1997 was $20.2 
million or 26.7% of sales compared to $28.5 million or 28.4% of sales for the 
year ended December 28, 1996. The gross profit for 1997 was reduced by the 
sale of the key and letters, numbers and signs business, which carried higher 
gross profit margins than the remaining operations.

         Operating expenses were $18.0 million for the year ended December 
27, 1997 compared to $22.7 million for the year ended December 28, 1996. 
Operating expenses were 23.7% and 22.6% of net sales for the years ended 
December 27, 1997 and December 28, 1996, respectively. The reduction in 
operating expenses from 1996 to 1997 was primarily the result of the sale of 
certain ACPI operating assets in August, 1997.

         The net profit was $1.5 million for the year ended December 27, 1997 
compared to $4.2 million for the year ended December 28, 1996. The profit for 
the year ended December 27, 1997 was reduced by a loss of $2.4 million on the 
sale of the key and letters, numbers and sign businesses 

                                    Page 17
<PAGE>


and interest expense of $1.7 million . The profit for the year ended December 
28, 1996 included a gain of $472,000 on the sale of businesses and a $2.1 
million interest expense.

ACPI for fiscal years ended December 28, 1996 and December 30, 1995

         Sales for the year ended December 28, 1996 were $100 million 
compared to $105 million for the year ended December 30, 1995 (including 
amounts which are not included in the consolidated financial statements of 
Vista 2000, Inc.) Sales were $26.0 million for the period from September 30, 
1995 (acquisition date) to December 30, 1995. The decline in sales was 
primarily attributable to a reduction in sales of the KA-BAR product line and 
the loss of one half of Wal-Mart's key business. The loss of the Wal-Mart key 
business was due to the introduction by an ACPI competitor of improved key 
identification and cutting technology.

         The gross profit for the year ended December 28, 1996 was $28.5 
million or 28.4% compared to $26.9 million or 25.6% for the year ended 
December 30, 1995 (including amounts which are not included in the 
consolidated financial statements of Vista 2000, Inc.) The gross profit was 
$7.2 million or 27.6% for the period from September 30, 1995 (acquisition 
date) to December 30, 1995.

         Operating expenses were $22.7 million for the year ended December 
28, 1996 compared to $25 million for the year ended December 30, 1995 
(including amounts which were not included in the consolidated financial 
statements for Vista 2000, Inc.) Operating expenses were $6.0 million for the 
period from September 30, 1995 (acquisitions date) to December 30, 1995. 
Operating expenses were 22.6% and 23.8% of net sales for the years ended 
December 28, 1996 and December 30, 1995 respectively. Operating expenses for 
the period September 30, 1995 to December 30, 1995 were 23.1% of net sales. 
Operating expenses for the year ended December 28, 1996 were favorably 
affected by certain purchase accounting adjustments, primarily those related 
to valuation of long-term assets, which result in significant decrease in 
annual depreciation on existing assets. Operating results were also favorably 
affected by reductions in operating cost from fewer employees in 1996, saving 
$750,000.

         Pretax income (loss) was $4.2 million for the year ended December 
28, 1996 and ($774,000) for the year ended December 30, 1995 (including 
amounts which were not included in the consolidated financial statements of 
Vista 2000, Inc.). Pre-tax income for the period from September 30, 1995 
(acquisition date) to December 30, 1995 was $620,000.

                                    Page 18
<PAGE>


FINANCIAL CONDITION

Consolidated for the year ended December 27, 1997

         Consolidated working capital at December 27, 1997 was $17.4 million 
exclusive of the $3.1 million ACPI revolver debt which matures in May, 2000. 
Due to the sale of assets which secured the ACPI credit facility, the line of 
credit limit was reduced from $30 million to $10 million in August, 1997. As 
of December 27, 1997, $3.1 million was drawn under the line of credit.

         Regarding the use of the Company's income tax loss carryforward, 
during 1995 and 1996 the Company experienced a change in control, as defined 
under Section 382 of the Internal Revenue Service Code. Additionally, another 
change in control occurred during 1997 upon issuance of the common stock in 
settlement of the class action lawsuit. As a result, the utilization of a 
significant portion of the tax loss carryforwards will be limited on an 
annual basis and may expire unused.

Consolidated for the year ended December 28, 1996

         Consolidated working capital at December 28, 1996 was $30.6 million 
exclusive of the $20.4 million ACPI revolver debt. The ACPI credit facility 
was replaced in May 1997. The new loan agreement expires in May, 2000.

         During 1996, Vista raised approximately $21.2 million, net of 
issuance costs, through convertible preferred stock offerings and common 
stock offerings issued pursuant to the exemption from registration of 
Regulation S under the Act. The proceeds of these offerings were used to fund 
operating losses and working capital requirements.

Separate Company Analysis

ACPI for the year ended December 27, 1997

         $16.0 million of consolidated working capital is from ACPI. As of 
December 27, 1997, ACPI had $6.9 million available under its $10.0 million 
revolving line of credit, of which $2.0 million was restricted to secure 
letters of credit issued in conjunction with the sale of the ACPI key and 
letters, numbers and signs businesses.

         The line of credit bears interest at the Fleet National Bank Prime 
Rate plus .5% or LIBOR plus 2.5% and is collateralized by accounts 
receivable, inventory, equipment and real estate. The interest rate at 
December 27, 1997 was 9.0%. Borrowings under the line of credit are based on 
a formula which includes eligible accounts receivable and inventories. The 
revolving credit facility provides for intercompany advances to Vista/ACPI 
affiliates based upon a percentage of excess cash flow as defined in the 
credit agreement.

                                    Page 19
<PAGE>


ACPI for the year ended December 28, 1998

         $30.0 million of consolidated working capital is from ACPI. As of 
December 28, 1996, ACPI had $8.5 million available under its $28.9 million 
revolving line of credit. Borrowings under the line of credit are based on a 
formula which includes eligible accounts receivable and inventories. The line 
of credit bears interest at the base rate plus 3/8% (8.625% at December 28, 
1996) and is collateralized by accounts receivable, inventories and equipment 
and is guaranteed by each of ACPI's subsidiaries. The ACPI revolving credit 
facility does not provide for intercompany advances to non-ACPI Vista 
affiliates other than for payment of dividends and trading transactions 
occurring through the normal course of business.

         The existing line of credit was replaced on May 7, 1997 with a new 
line of credit in the total amount of $30 million. The line bears interest at 
the Fleet National Bank prime rate plus .5% or LIBOR plus 2.5% and is 
collateralized by accounts receivable, inventory, equipment and real estate. 
Borrowings under the line of credit are based on a formula which includes 
eligible accounts receivable and inventories. The revolving credit facility 
provides for intercompany advances to non-ACPI Vista affiliates based upon a 
percentage of excess cash flow as defined in the credit agreement.

Vista for the year ended December 27, 1997

         Working capital at Vista at December 27, 1997 was $1.4 million. 
Staffing costs and most overhead costs have been reduced or eliminated, 
thereby minimizing working capital requirements. If required, working capital 
could be obtained through dividends from Vista's ACPI subsidiary.

Parent Company, FSPI and Intelock ("Vista Group") for the year ended 
December 28, 1996

         Working capital at the Vista Group at December 28, 1996 was 
$100,000. Due to the sale of FSPI assets and the closing and sale of 
Intelock, their cash requirements are minimal. The staffing costs and 
overhead of the parent company have been substantially reduced. Working 
capital for the Vista Group is derived primarily through dividends and cost 
reimbursements from ACPI for expenses advanced or paid on behalf of ACPI.

Alabaster for the year ending December 27, 1997

         Due to the sale of Alabaster in June, 1997, the Company's working 
capital at December 27, 1997 did not include any assets or liabilities of 
Alabaster.

Alabaster for the year ending December 28, 1996

         Working capital at Alabaster at December 28, 1996 was $500,000. In 
September 1996, Alabaster entered into a revolving credit and demand loan 
agreement. The amount of the credit was $2.5 million. As of December 28, 
1996, availability under the credit agreement was $1.25 million of which 
$908,000 had been borrowed. Interest was at the greater of 9% or prime plus 
3-1/4%. The

                                    Page 20
<PAGE>


agreement was secured by substantially all of the assets of Alabaster and was 
guaranteed by Vista. The agreement expired June, 1997 when Alabaster was sold.

Year 2000

The Company's primary software applications are not currently year 2000 
compliant. To resolve this issue, the Company is in the process of selecting 
new software which is planned for implementation during the second half of 
1998 and first half of 1999. Total implementation costs are expected to be in 
the $250,000 to $500,000 range including software, hardware and training.

In addition to addressing the Year 2000 problem, this new software will 
benefit the Company by providing improved system integration as well as 
significant enhancements to the current software applications. The Company 
believes the schedule for implementation should allow completion prior to the 
development of any potential Year 2000 dating anomalies.

Outlook for 1998

Since the date of the election of the incumbent Board of Directors, the 
Company has been involved in a major restructuring, which has included the 
sale of its interest in FSPI, Intelock, Alabaster and a significant portion 
of the assets of ACPI. The sale of these assets, while resulting in a loss, 
enabled the Company to substantially reduce its outstanding debt and improve 
its prospects for future profitability.

Consolidated revenues are expected to decline sharply from the prior year 
because of the operations sold in 1997. The Company's revenues and earnings 
will principally reflect its concentration in the glove, boot and rainwear 
business. These businesses are seasonal and dependent upon weather patterns 
and other factors beyond the Company's control.

During 1998, the Company will continue to pursue initiatives to streamline 
and focus the business. These initiatives include improvements in 
distribution and logistics, and consolidation of corporate headquarters with 
the primary operating subsidiaries.

For 1998 and future periods, the Company intends to focus on improved 
earnings. To do so, management will evaluate a number of alternatives 
including expanded sales and marketing programs, product line expansion, 
licensing opportunities, and potential acquisition and disposition 
opportunities. There can be no assurance as to the success of such 
alternatives, if implemented, due to, among other factors, capital 
constraints faced by the Company to maintain adequate liquidity and the 
market reaction from competitors in the industry who are, in certain cases, 
larger than the Company with greater capital resources.

                                    Page 21
<PAGE>


SIGNIFICANT SUBSEQUENT EVENTS

         On February 25, 1998, W.R. Hill and Company, Inc. sold its interest 
in Alabaster to A.I. Holdings, Inc. ("AI"), a company comprised of a 
management group from Alabaster. The Company gave its consent for AI to 
assume the first mortgage (see Acquisitions and Dispositions in this Form 
10-K) on Alabaster's land and buildings. On April 1, 1998, the Company was 
advised that Alabaster had filed for bankruptcy protection under Chapter 11 
of the Federal Bankruptcy Statutes. As a result of these events, the Company 
has taken a reserve against the face value of the note which Management 
believes will be sufficient to cover any losses on the collection of the note.

         On April 9, 1998, the Company was notified by Axxess of a claim 
against the Company related to the purchase by Axxess of the key and letter, 
numbers and signs businesses of the Company's ACPI subsidiary. The Company 
believes that it will ultimately prevail and has instituted claims of its 
own. However, the results of arbitration and litigation are unpredictable and 
should Axxess prevail, its claim would have a material adverse impact on the 
Company.

         In April, 1998, the Company hired Mr. Bruce Lancaster to serve as 
its Chief Financial Officer, replacing Mr. Larry Cobb, who had served in this 
capacity since April, 1996. Prior to joining the Company, Mr. Lancaster 
served as Vice President of Finance and Administration for Acme Boot Company, 
Inc. from December 1995 to April 1998, and previously as Vice-President of 
Finance and Controller for Kinark Corporation from 1989 to 1995. Mr. 
Lancaster's previous experience includes two years with the Texas Society of 
CPA's, four years with Perry Equipment Corporation and four years with United 
States Steel Corporation. Mr. Lancaster received BA and MBA degrees from 
Texas A&M University and is a CPA, licensed in the State of Texas.

         In accordance with the terms of the June 30, 1997 agreement covering 
the sale of ACPI assets to Axxess Technologies, Inc., the Company has changed 
the names of its wholly-owned subsidiaries as follows:

       Boss Manufacturing Holdings, Inc., f/k/a American Consumer Products, Inc.
       Boss Manufacturing Marketing, Inc., f/k/a Product Merchandisers, Inc.
       Boss Manufacturing Real Estate II, Inc., f/k/a ACPI Real Estate, Inc.

Item 8.  Financial Statements and Supplemental Data.

         The following consolidated financial statements of the Company and 
its Accountants' Opinion are set forth in Part IV, Item 14, of this Report:

                           (i)   Consolidated Statements of Operations, Cash 
                  Flows and Shareholders' Equity for the year ended December 27,
                  1997 the year ended December 28, 1996 and the year ended 
                  December 30, 1995.

                           (ii)  Consolidated Balance Sheet - December 27, 
                  1997 and December 28, 1996.


                                    Page 22
<PAGE>


                           (iii) Notes to the Consolidated Financial Statements;
                  and Unqualified Opinion of Independent Accountants dated
                  February 19, 1998.

Item 9.   Changes in And Disagreements With Auditors on Accounting And Financial
          Disclosures.

         Not applicable.


                                    Page 23
<PAGE>


                                    PART III

Item 10.   Directors and Executive Officers of the Registrant.

         The information as to directors of the registrant is set forth 
below. The information as to the executive officers of the registrant is 
included in Part I hereof under the caption "Executive Officers of the 
Registrant." Directors are elected by the stockholders at each annual meeting 
and serve until the next annual meeting of stockholders, or until their 
successors are duly elected and qualified. At the present time, the Company's 
Board of Directors consists of six directors. The following table sets forth 
certain information concerning the members of the Board of Directors of the 
Company at December 27, 1997:

<TABLE>
<CAPTION>

            Name               Age                 Position
------------------------------------------------------------------------------------------------------------------
<S>                           <C>    <C>
G. Louis Graziadio, III(1)     48    Chief Executive Officer and Chairman of the Board since
                                     June 1996. He is also the Chairman and CEO of Ginarra Holdings, Inc., 
                                     a holding company with investments through various
                                     corporations, and a director of Imperial Credit Industries, Inc., 
                                     Imperial Bancorp, Imperial Trust, Imperial Financial Group
                                     and Lynx Golf, Inc.

Perry A. Lerner                55    Director since June 1996. Mr. Lerner is a Managing Director of Crown Capital
                                     Group, Inc., a New York-based investment company. A graduate of Harvard Law
                                     School and Claremont McKenna College, Mr. Lerner was a partner of the law
                                     firm O'Melveny & Meyers from 1984-1996 and is a member of the State Bar of
                                     New York, State Bar of California and American Bar Association. Mr. Lerner
                                     also serves on the Board of Directors of Imperial Credit Industries, Inc. and
                                     Imperial Financial Group.

Lee E. Mikles(1)               42    Director since June 1996. Mr. Mikles is Chairman of Mikles/Miller Management,
                                     Inc. Prior to the formation of that company, he headed Mikles/Miller Group,
                                     an affiliate of Shearson Lehman Brothers after serving as First Vice
                                     President of the Corporate Finance Department at Bateman Eichler, Hill
                                     Richards Inc. and as First Vice President with Drexel Burnham Lambert, Inc.
                                     from 1981 through 1989. Mr. Mikles also serves on the Board of Directors of
                                     Imperial Bancorp, Imperial Bank, Imperial Ventures, Coastcast Corporation
                                     and Imperial Financial Group.

Paul A. Novelly                54    Director since June 1996. Mr. Novelly controls Apex Oil Company in St.
                                     Louis, MO with a refinery in Long Beach, CA; International Dunraine, Ltd., a
                                     publicly-held company; and AIC, Limited, which, headquartered in Bermuda,
                                     trades petroleum products internationally through its office in Monaco. Mr.
                                     Novelly is a substantial shareholder and director of Intrawest Corp. He also
                                     serves on the Board of Directors of Apex Oil Company, Inc. International
                                     Dunraine, Ltd., Coastcast Corporation, Imperial Bank and Imperial Financial
                                     Group.

</TABLE>


                                    Page 24
<PAGE>


<TABLE>


<S>                            <C>   <C>
Richard D. Squires             40    Director since June 1996. Mr. Squires serves as President of RS Holdings,
                                     Inc., a Dallas, Texas based real estate and high-yield investment company,
                                     and as President of R3 Realty Corporation, formerly Pace Membership
                                     Warehouse, Inc., a former subsidiary of K-Mart Corporation. Mr. Squires has
                                     previously served as Chief Financial Officer of Ft. Worth Holdings, Inc. and
                                     Vice President of Finance at American Hotels Corporation and Second Vice
                                     President of Finance at Punta Gorda Isles, Inc. Mr. Squires has a B.S. in
                                     Accounting from Pennsylvania State University, and a Masters of Business
                                     Administration from Harvard University.

Shyam H. Gidumal               38    President and Director since November, 1997. Mr. Gidumal serves as President
                                     of Strategic Turnarounds Investment Corp. & Affiliates, a New York based
                                     consulting firm, and Managing Director of Crown Capital Group, a New York
                                     based investment firm. From 1989 through 1992, Mr. Gidumal was a partner in
                                     the Boston Consulting Group. Mr. Gidumal is a graduate of Columbia University
                                     and Harvard Business School.

</TABLE>

----------------------
(1)      Mr. Graziadio and Mr. Mikles are first cousins; otherwise, there are no
         family relationships existing between the officers and directors of the
         Company.

Item 11.  Executive Compensation.

Compensation Tables

         The compensation paid in fiscal 1997 to the Company's Chief Executive
Officer and to each of the other executive officers and of the subsidiaries
whose total compensation exceeded $100,000 are as follows:


<TABLE>
<CAPTION>

                                            1997 SUMMARY COMPENSATION TABLE
                                                   THE REGISTRANT
----------------------------------------------------------------------------------------------------------------------------------
                                           Annual                                   Long-Term Compensation 
                                        Compensation                          ---------------------------------
                                       ----------------      Other Annual           Awards           Payouts          All Other  
       Name and            Year        Salary     Bonus      Compensation     ---------------------------------     Compensation 
   Principal Position                   ($)        ($)           ($)          Restricted   Options       LTIP            ($)     
                                                                                Stock        SARs       Payout      
                                                                                Awards      (#)(3)        ($)       
----------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>          <C>        <C>         <C>             <C>         <C>           <C>          <C>
G. Louis Graziadio,       1997           -0-      ---          ---                         2,400,000                    465,000
III(1)  CEO and                                              
Chairman of the Board     1996           -0-      -0-          -0-                                                      138,000
                                                             

Shyam H. Gidumal,         1997                                                             2,400,000                  1,035,000
President(2)

</TABLE>


                                    Page 25
<PAGE>


                                THE SUBSIDIARIES

<TABLE>
<CAPTION>


                                            1997 SUMMARY COMPENSATION TABLE
                                                   THE REGISTRANT
----------------------------------------------------------------------------------------------------------------------------------
                                           Annual                                   Long-Term Compensation 
                                        Compensation                          ---------------------------------
                                       ----------------      Other Annual           Awards           Payouts          All Other  
       Name and            Year        Salary     Bonus      Compensation     ---------------------------------     Compensation 
   Principal Position                   ($)        ($)           ($)          Restricted   Options       LTIP            ($)     
                                                                                Stock        SARs       Payout      
                                                                                Awards      (#)(3)        ($)       
----------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>          <C>        <C>         <C>             <C>         <C>           <C>          <C>
Ken Fristad, President
of ACPI Subsidiary        1997         95,865     48,000

</TABLE>

---------------------------
    (1)   On June 6, 1996, Mr. Graziadio was elected Chief Executive Officer by
          the Board of Directors. Compensation for his services is as
          periodically determined by the Board's Compensation Committee, based
          on the type and extent of services Mr. Graziadio provided.

    (2)   Compensation shown for Mr. Gidumal was paid to companies in which Mr.
          Gidumal is a principal for activities prior to Mr. Gidumal being
          elected as an officer and director. (See Item 13. Certain
          Relationships and Related Transactions.) 
          Mr. Gidumal was elected President of the Company effective November 1,
          1997.

    (3)   All figures in this column reflect options to purchase shares of 
          Common Stock.


         There were 4,800,000 options granted to the Executive Officers of the
Company and its subsidiaries during the fiscal year ending December 27, 1997.
The Company has no stock appreciation rights ("SARs") outstanding.

         The following sets forth the value of options exercised during the year
and unexercised options held by the named executive officers on December 27,
1997:


                                    Page 26
<PAGE>


            Aggregated Options/SAR Exercises in the last Fiscal Year
                      and Fiscal Year-End Option/SAR Values

<TABLE>
<CAPTION>

            Name                  Shares            (1)             (2) Number of                   (1)
                                Acquired on        Value        Securities Underlying      Value of Unexercised
                               Exercise (#)     Realized ($)         Unexercised         In-the-Money Options/SARs
                                                               Options/SARs at Fiscal      at Fiscal Year-End($)
                                                                    Year End (#)
                                                               ----------------------    ---------------------------
                                                                    Exercisable/                Exercisable/
                                                                    Unexercisable               Unexercisable
                               -------------   ------------    ----------------------    ---------------------------
<S>                              <C>               <C>              <C>                        <C>
G. Louis Graziadio III           1,200,000         39,000           0 / 1,200,000               0 / 39,000
Shyam H. Gidumal                 1,200,000         39,000           0 / 1,200,000               0 / 39,000

</TABLE>

------------------------
(1)      Assumes a market price of $.0625 per share based on unofficial trading
         history less the option exercise price of $.03 per share.

(2)      All figures in this column reflect options to purchase shares of Common
         Stock.


                                    Page 27
<PAGE>


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth, as of May 13, 1998, certain information
regarding the bene-ficial ownership of Common Stock by (i) each person known by
the Company to be beneficial owner of more than five percent of the outstanding
shares of Common Stock, (ii) each director; (iii) each Named Executive Officer;
and (iv) all directors and executive officers as a group. This table includes
787,500 currently exercisable options granted to directors of the Company on
December 31, 1996.

<TABLE>
<CAPTION>

                  Name and Address of Beneficial Owner (1)             Common Stock Beneficially Owned
                  ----------------------------------------             ---------------------------------
                                                                       No. of Shares         % of Class
                                                                       -------------         -----------
          <S>                                                           <C>                   <C>
           Mr. G. Louis  Graziadio, III (4)                              5,039,328             10.4 %
           2325 Palos Verdes Drive West,  Suite 211
           Palos Verdes Estates, CA  90274

           Mr. Perry A. Lerner                                            525,000              1.1 %
           660 Madison Ave., New York, NY  10022

           Mr. Lee E. Mikles (3)                                         1,982,085             4.1 %
           Mikles/Miller Management, Inc.
           100 Wilshire Blvd., Santa Monica, CA 90401

           Mr. Paul A. Novelly (2)                                       2,182,085             4.5 %
           8182 Maryland Ave., St. Louis, MO 63105

           Mr. Richard D. Squires                                        1,982,085              4.1%
           4229 Cochran Chapel, Dallas, TX 75209

           Mr. Shyam H. Gidumal                                          3,857,085              8.0%
           660 Madison Ave., New York, NY  10022

           All Directors and Executive Officers as a Group              15,567,668             32.2%
           (6 Persons)

</TABLE>


 (1)     Unless otherwise noted, the Company believes that all persons named in
         the table have sole voting and investment power with respect to all
         shares of common stock beneficially owned by them. Under the rules of
         the Securities and Exchange Commission, a person is deemed to be a
         "beneficial" owner of securities if he or she has or shares the power
         to vote or direct the voting of such securities or the power to direct
         the disposition of such securities. A person is deemed to be the
         beneficial owner of any securities of which that person has the right
         to acquire beneficial ownership within 60 days. More than one person
         may be deemed to be a beneficial owner of the same securities.

 (2)     Includes presently exercisable options to acquire 262,500 shares of 
         Common Stock.


                                    Page 28
<PAGE>


 (3)     Includes presently exercisable options to acquire 525,000 shares of 
         stock.

 (4)     Mr. Graziadio disclaims the beneficial ownership of approximately
         1,582,686 of these shares which are owned by Ginarra Holdings, Inc. and
         an additional 511,378 shares which are owned by the Graziadio Family
         Trust.

Item 13.  Certain Relationships and Related Transactions.

         In July 1996, the Board of Directors contracted with a turnaround 
management company, S. Gidumal & Company, Inc., and its affiliate, Strategic 
Turnarounds & Investment Corp. (collectively "STIC"), to assist with the 
restructuring of the Company, including operations, financing, litigation, 
strategic planning and divestitures. Mr. Shyam Gidumal is a principal with 
STIC and in September 1996 became a member of the Board of Directors of ACPI 
and other subsidiaries of ACPI. In November, 1997, Mr. Gidumal became a 
member of the Board of Directors of Vista and was elected President of the 
Company. STIC was involved in the resolution of the Class Action Litigation, 
sale of the assets of FSPI, financings involving ACPI and Alabaster, and the 
sale of the key and numbers, letters and signs business of ACPI. STIC was 
paid approximately$1,035,000 and $308,000, respectively for its services in 
1997 and 1996. In addition, in December 1996, Mr. Gidumal was granted options 
to acquire 2,400,000 shares of common stock of the Company at an exercise 
price of $.03 per share. Of the options granted, 1,200,000 were immediately 
exercisable, with the balance exercisable on December 31, 1997. As of May 13, 
1998, Mr. Gidumal had exercised his options and acquired 2,400,000 shares of 
the Company's common stock.

         The Company has received a claim for payment of legal fees from 
former members of the Company's Board of Directors, pursuant to inquiries 
made by the SEC. The Company may be obligated to pay certain of these legal 
fees but does not believe these fees will materially impair the Company's 
overall performance.

         During May 1997, four of the Company's directors, together with Mr. 
Gidumal and an unaffiliated third party, (the "Individual Purchasers") 
purchased approximately 57% of the Company's outstanding Convertible 
Preferred Stock directly from the security holders to settle potential and 
substantial legal and fraud claims against the Company related to activities 
which occurred prior to the date the Company's current management and Board 
of Directors assumed control of the Company. During July 1997, the Individual 
Purchasers purchased an additional 1,250 preferred shares, or approximately 
30% of the Company's outstanding Convertible Preferred Stock directly from 
the security holder. As a result of these purchases, subsequent conversions 
and additional common shares issued for release of claims, each of the 
Individual Purchasers acquired 1,457,085 shares of the Company's common stock 
or an aggregate of 8,742,510 shares for all of the Individual Purchasers.

                                    Page 29
<PAGE>


                                     PART IV

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

         (a)        List of financial statements, financial statement schedules 
                    and exhibits:

                    (i)     List of financial statements.

                    The following consolidated financial statements of Vista 
2000, Inc. and Report of Independent Accountants are attached to this report 
as follows:

                    Consolidated Statements of Operations, Cash Flows and
                    Shareholders' Equity - year ended December 27, 1997, the
                    year ended December 28, 1996 and the year ended December 30,
                    1995;

                    Consolidated Balance Sheet - December 27, 1997 and 
                    December 28, 1996;

                    Notes to the Consolidated Financial Statements; and

                    Report of Independent Accountants dated February 19, 1998.

                    (ii)    list of financial statement schedules

                    The following financial statement schedules of Vista 
2000, Inc. for the years ended December 27, 1997, December 28, 1996, and 
December 30, 1995 are included pursuant to Item 8:

<TABLE>

                    <S>                                                                               <C>
                    Report of Independent Certified Public Accountants on Schedules . . . . . . . . . .  S-1

                    Schedule II:  Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . .  S-2

</TABLE>

                    Schedules not listed above have been omitted because they
are not applicable or are not required for the information required to set forth
therein is included in the Financial Statements or notes thereto.

                    The following consolidated financial statements schedules of
Vista 2000, Inc. are included in this report:

                    Unqualified Opinion of Independent Accountants and Financial
                    Statements Schedule


                                    Page 30
<PAGE>


         (b)        Reports on Form 8-K:

                    A report on Form 8-K containing information on the June 19,
                    1997 sale of the Company's Alabaster subsidiary was filed
                    September 19, 1997.

                    A report on Form 8-K containing information on the August
                    25, 1997 sale of the key and numbers, letters and signs
                    assets of the Company's ACPI subsidiary was filed on
                    September 25, 1997.

         (c)        Exhibits:

                    The exhibits required by Item 601 of Regulation SKB are 
                    filed herewith.  (See Index of Exhibits.)

         (d)        Financial Statement Schedules:

                    The Financial Statement Schedules required by Regulation SX
                    are filed herewith.



                                    Page 31
<PAGE>


                                   SIGNATURES

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

(Registrant)                         Vista 2000, Inc.

By (Signature and Title)              /s/  G. Louis Graziadio, III
                        ------------------------------------------------------
                           G. Louis Graziadio, III, Chief Executive Officer
Date: June 17, 1998

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

By (Signature and Title)            /s/ G. Louis Graziadio, III
                        ------------------------------------------------------
                             G. Louis Graziadio, III, Chairman of the Board
Date: June 17, 1998


By (Signature and Title )               /s/ Shyam H. Gidumal
                        ------------------------------------------------------
                                 Shyam H. Gidumal, President and Director
Date: June 17, 1998

By (Signature and Title)                   /s/  Perry A. Lerner
                        ------------------------------------------------------
                                         Perry A. Lerner, Director
Date: June 17, 1998

By (Signature and Title)                   /s/ Lee E. Mikles
                        ------------------------------------------------------
                                        Lee E. Mikles, Director
Date: June 17, 1998

By (Signature and Title)                  /s/ Paul A. Novelly
                        ------------------------------------------------------
                                       Paul A. Novelly, Director
Date: June 17, 1998

By (Signature and Title)                  /s/ Richard D. Squires
                        ------------------------------------------------------
                                       Richard D. Squires, Director
Date: June 17, 1998

                                    Page 32

<PAGE>


[LETTERHEAD]                                                         [LOGO]


                       FINANCIAL STATEMENTS AND REPORT OF
                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                        VISTA 2000, INC. AND SUBSIDIARIES
                     December 27, 1997 and December 28, 1996








[ADDRESS]


<PAGE>


[LETTERHEAD]                                                         [LOGO]

               Report of Independent Certified Public Accountants




Board of Directors
Vista 2000, Inc.

We have audited the accompanying consolidated balance sheets of Vista 2000, 
Inc. and subsidiaries as of December 27, 1997 and December 28, 1996, and the 
related consolidated statements of operations, stockholders' equity, and cash 
flows for each of the three years in the period ended December 27, 1997. 
These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial 
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Vista 2000, 
Inc. and subsidiaries as of December 27, 1997 and December 28, 1996, and the 
consolidated results of their operations and their consolidated cash flows 
for each of the three years in the period ended December 27, 1997 in 
conformity with generally accepted accounting principles.


/s/ GRANT THORNTON LLP


Atlanta, Georgia
February 19, 1998


                                       2


[ADDRESS]


<PAGE>


                        Vista 2000, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS
               (Dollar amounts in thousands except per share data)



                                     ASSETS

<TABLE>
<CAPTION>

                                                                       December 27,         December 28,
                                                                          1997                 1996
                                                                       ------------         ------------
<S>                                                                   <C>                    <C>          
CURRENT ASSETS
   Cash and cash equivalents                                            $      2,122         $     1,165
   Accounts receivable, net of allowance for
     doubtful accounts and returns of $507
     and $1,405, respectively                                                  7,729              16,187
   Inventories                                                                12,493              25,157
   Prepaid expenses                                                              374               1,564
   Other current assets                                                          276                 205
                                                                        ------------        ------------
       Total current assets                                                   22,994              44,278
PROPERTY AND EQUIPMENT, NET                                                    4,270              15,927


OTHER ASSETS
   Note receivable, less allowance of $450                                     1,042                   -
   Other                                                                         256               1,566
                                                                        ------------        ------------
                                                                               1,298               1,566
                                                                        ------------        ------------




                                                                      $       28,562       $      61,771
                                                                      --------------       -------------
                                                                      --------------       -------------
</TABLE>


                                       3
<PAGE>


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                        December 27,        December 28,
                                                                            1997               1996
                                                                        ------------        ------------
<S>                                                                     <C>                 <C>         
CURRENT LIABILITIES
   Note payable                                                         $          -        $        908
   Current portion of long-term debt                                             137                 383
   Accounts payable                                                            1,390               5,209
   Accrued payroll and related expenses                                          548               3,596
   Accrued liabilities                                                         3,481               3,595
                                                                        ------------        ------------
       Total current liabilities                                               5,556              13,691
LONG-TERM LIABILITIES
   Long-term debt                                                              3,883              23,512
   Other                                                                           -                 407
                                                                        ------------        ------------
       Total long-term liabilities                                             3,883              23,919
COMMITMENTS AND CONTINGENCIES                                                      -                   -

STOCKHOLDERS' EQUITY
   Preferred stock $1 par value, 500,000 shares
     authorized, 0 and 4,220 shares issued
     and outstanding, respectively                                                 -               3,985
   Common stock, $.01 par value, 50,000,000 shares
     authorized, 44,845,273 and 18,074,120 shares
     issued and outstanding, respectively                                        448                 181
   Additional paid-in capital                                                 67,370              62,108
   Accumulated deficit                                                       (46,875)            (40,340)
   Cumulative translation adjustment                                             (70)                (23)
                                                                        ------------        ------------
                                                                              20,873              25,911
   Less:  341,341 treasury shares - at cost                                    1,750               1,750
                                                                        ------------        ------------
       Total stockholders' equity                                             19,123              24,161
                                                                        ------------        ------------
                                                                        $     28,562        $     61,771
                                                                        ------------        ------------
                                                                        ------------        ------------
</TABLE>


The accompanying notes are an integral part of these statements.


                                       4
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (Dollar amounts in thousands except per share data)

<TABLE>
<CAPTION>

                                                   Year ended           Year ended           Year ended
                                                  December 27,         December 28,         December 30,
                                                     1997                 1996                  1995
                                                 -------------        -------------         ------------
<S>                                               <C>                 <C>                   <C>         
Net sales                                         $     78,400        $    110,955          $     32,422

Cost of sales                                           57,909              82,563                28,244
                                                  ------------        ------------          ------------

Gross profit                                            20,491              28,392                 4,178

Operating expenses                                      21,190              34,235                17,318
                                                  ------------        ------------          ------------
                                                          (699)             (5,843)              (13,140)

Loss on sale of business and
   operating assets                                     (3,792)             (8,311)               (1,147)
Writedown of operating
   assets                                                    -              (2,476)                    -
                                                  ------------        ------------          ------------

Loss from operations                                    (4,491)            (16,630)              (14,287)

Other income and
   (expense)
     Interest expense                                   (1,799)             (2,174)                 (649)
     Other                                                  11                (351)                  273
                                                  ------------        ------------          ------------

       Net loss before
         income taxes                                   (6,279)            (19,155)              (14,663)

Income tax expense                                        (256)               (246)                    -
                                                  ------------        ------------          ------------

       Net loss                                   $     (6,535)       $    (19,401)         $    (14,663)
                                                  ------------        ------------          ------------
                                                  ------------        ------------          ------------


Net loss per common share
   Basic                                          $       (.21)       $     (1.20)          $     (2.33)
   Diluted                                        $       (.21)       $     (1.20)          $     (2.33)

</TABLE>




The accompanying notes are an integral part of these statements.


                                       5
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

     Years ended December 27, 1997, December 28, 1996 and December 30, 1995
                    (Dollars and share amounts in thousands)

<TABLE>
<CAPTION>

                                                             Preferred Stock            
                                  ------------------------------------------------------------------
                                    Series A          Series B           Series C        Series D         Common stock   Additional
                                  --------------   ---------------   ---------------  ---------------   ---------------   Paid-in 
                                  Shares Dollars   Shares  Dollars   Shares  Dollars  Shares  Dollars   Shares  Dollars   Capital 
                                  ------ -------   ------  -------   ------  -------  ------  -------   ------  -------  ---------
<S>                                 <C> <C>           <C>  <C>          <C> <C>         <C>  <C>        <C>      <C>      <C> 

Balance at December 31, 1994          - $    -         - $      -        - $      -       - $      -    3,281    $  33    $ 7,030  

Issuance of stock in acquisitions     -      -         -        -        -        -       -        -      550        5      1,096  
Issuance of preferred stock, net
   of issuance costs of $1,241       87  8,291         3    2,462        1   11,603       2    1,940        -        -          -  
Preferred stock conversions         (72)(6,852)       (2)  (1,232)      (1) (10,231)      -        -    4,086       41     18,274  
Issuance of common shares, net
   of issuance costs of $290          -      -         -        -        -        -       -        -    2,533       25      6,762  
Exercise of stock options, net of
   12 shares exchanged                -      -         -        -        -        -       -        -      196        2        214  
Exercise of warrants                  -      -         -        -        -        -       -        -      250        3        622  
Common stock issued for services      -      -         -        -        -        -       -        -      280        3        557  
Acquisitions of treasury stock        -      -         -        -        -        -       -        -        -        -          -  
Debt conversions                      -      -         -        -        -        -       -        -      450        4        716  
Issuance of warrants for services     -      -         -        -        -        -       -        -        -        -         40  
Compensatory stock options            -      -         -        -        -        -       -        -        -        -        890  
Foreign currency translation
   adjustment                                -         -        -        -        -       -        -        -        -          -  
Net loss                                     -         -        -        -        -          -     -        -        -          -  
                                  ------ -------   ------  -------   ------  -------  ------  -------   ------  -------   ---------
Balance at December 30, 1995         15  1,439         1    1,230        -    1,372       2    1,940   11,626      116     36,201  

</TABLE>




<TABLE>
<CAPTION>


                                                                 Cumulative    Treasury stock          Total  
                                                    Accumulated  Translation   ---------------      Stockholders'
                                                       Deficit   Adjustment    Shares  Dollars    Equity (Deficit)
                                                    -----------  -----------   ------  -------    ----------------
<S>                                                    <C>     <C>                <C>      <C>    <C>           
Balance at December 31, 1994                           $(6,276)   $        -      (69)  $ (796)    $      (9) 
Issuance of stock in acquisitions                            -             -       69      796         1,897    
Issuance of preferred stock, net                                                                                
   of issuance costs of $1,241                               -             -        -        -        24,296    
Preferred stock conversions                                                -        -        -             -    
Issuance of common shares, net                                                                                  
   of issuance costs of $290                                 -             -        -        -         6,787    
Exercise of stock options, net of                                                                               
   12 shares exchanged                                       -             -        -        -           216    
Exercise of warrants                                         -             -        -        -           625    
Common stock issued for services                             -             -                 -           560    
Acquisitions of treasury stock                               -             -      (71)    (215)         (215)   
Debt conversions                                             -             -        -        -           720    
Issuance of warrants for services                            -             -        -        -            40    
Compensatory stock options                                   -             -        -        -           890    
Foreign currency translation                                 -           (19)       -        -           (19)   
   adjustment
Net loss                                               (14,663)            -        -        -       (14,663)   
                                                     ----------    -----------  -------  ------     ------------
Balance at December 30, 1995                           (20,939)          (19)     (71)    (215)       21,125    
</TABLE>

                                       6
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CONTINUED

     Years ended December 27, 1997, December 28, 1996, and December 30, 1995
                    (Dollars and share amounts in thousands)

<TABLE>
<CAPTION>

                                                             Preferred Stock            
                                  -------------------------------------------------------------------  
                                     Series A           Series B          Series C        Series D        Common stock   Additional
                                  --------------   ---------------   ---------------  ---------------   ---------------  Paid-in 
                                  Shares Dollars   Shares  Dollars   Shares  Dollars  Shares  Dollars   Shares  Dollars   Capital
                                  ------ -------   ------  -------   ------  -------  ------  -------   ------  -------  ---------
<S>                               <C>    <C>       <C>     <C>       <C>     <C>      <C>     <C>       <C>     <C>       <C>
Issuance of preferred stock, net
   of issuance costs of $600          -       -        -        -        -       -      20    19,400        -        -          - 
Issuance of common stock              -       -        -        -        -       -       -        -       300        3      1,797 
Preferred stock conversions         (14) (1,317)      (1)  (1,230)       -     (274)   (19)  (18,575)   5,491       55     21,341 
Treasury stock acquired for cash      -       -        -        -        -        -       -        -        -        -          - 
Exercise of stock options             -       -        -        -        -        -       -        -      637        7        988 
Exercise of warrants                  -       -        -        -        -        -       -        -       20        -         40 
Compensatory stock options
   and treasury shares acquired
   via stock rescissions              -       -        -        -        -        -       -        -        -        -      1,741 
Foreign currency translation
   adjustment                         -       -        -        -        -       -        -        -        -        -          -
Net loss                              -       -        -        -        -       -        -        -        -        -          -
                                                                                                                                  
                                  ------ -------   ------  -------   ------  -------  ------  -------   ------  -------   ---------
Balance at December 28, 1996          1     122        -        -        -    1,098       3    2,765   18,074      181     62,108

Purchase and retirement of
   preferred stock                    -       -        -        -        -        -       -     (340)       -        -        246
Preferred stock conversions          (1)   (122)       -        -        -   (1,098)     (3)  (2,425)   3,095       31      3,614
Common stock issued for
   settlement of class action
   lawsuit                            -       -        -        -        -        -       -       -    14,653      146        769
Common stock issued in
   settlement with preferred
   shareholders                       -       -        -        -        -        -       -       -     5,795       58        304
Common stock issued for
   untendered ACPI shares             -       -        -        -        -        -       -       -         3        -        159
Exercise of stock options             -       -        -        -        -        -       -       -     3,225       32         65
Compensatory stock options            -       -        -        -        -        -       -       -         -        -        105
Foreign currency translation
   adjustment                                 -        -        -        -        -       -       -         -        -          - 
Net loss                                      -        -        -        -        -       -       -         -        -          - 
                                                                                                                                  
                                  ------ -------   ------  -------   ------  -------  ------  -------   ------  -------   ---------
Balance at December 27, 1997          -   $   -        -   $    -        -    $   -       -    $  -     44,845    $448     $67,370
                                  ------ -------   ------  -------   ------  -------  ------  -------   ------  -------   ---------
                                  ------ -------   ------  -------   ------  -------  ------  -------   ------  -------   ---------
</TABLE>




<TABLE>
<CAPTION>



                                                                    Cumulative   Treasury stock         Total
                                                     Accumulated   Translation  ---------------      Stockholders'
                                                       Deficit      Adjustment  Shares  Dollars    Equity (Deficit)
                                                     ----------    -----------  -------  ------    ----------------
                                                      <C>            <C>        <C>      <C>        <C> 
Issuance of preferred stock, net                       
   of issuance costs of $600                                -             -         -        -          19,400   
Issuance of common stock                                    -             -         -        -           1,800   
Preferred stock conversions                                 -             -         -        -               -   
<S>                                                         -             -       (50)    (602)           (602)  
Treasury stock acquired for cash                            -             -         -        -             995   
Exercise of stock options                                   -             -         -        -              40   
Exercise of warrants                                                                                          
Compensatory stock options                                                                                    
   and treasury shares acquired                             -             -      (220)    (933)            808   
   via stock rescissions                                                                                      
Foreign currency translation                                -            (4)        -       -               (4) 
   adjustment                                         (19,401)            -         -       -          (19,401) 
                                                     ----------    -----------  -------  ------     ------------
                                                                                                              
                                                      (40,340)          (23)     (341)  (1,750)         24,161 
Balance at December 28, 1996                                                                                  
                                                                                                              
Purchase and retirement of                                  -             -        -        -              (94)
   preferred stock                                          -             -        -        -                - 
Preferred stock conversions                                                                                   
Common stock issued for                                                                                       
   settlement of class action                               -             -        -        -              915
   lawsuit                                                                                                    
Common stock issued in                                                                                        
   settlement with preferred                                -             -        -        -              362
   shareholders                                                                                               
Common stock issued for                                     -             -        -        -              159
   untendered ACPI shares                                   -             -        -        -               97
Exercise of stock options                                   -             -        -        -              105
Compensatory stock options                                                                                    
Foreign currency translation                                -           (47)       -        -              (47)
   adjustment                                          (6,535)            -        -        -           (6,535)  
                                                     ----------    -----------  ------- -------     ------------
Balance at December 27, 1997                         $(46,875)       $  (70)     (341 ) $(1,750)       $19,123  
                                                     ----------    -----------  ------- -------     ------------
                                                     ----------    -----------  ------- -------     ------------
</TABLE>


The accompanying notes are an integral part of this statement.


                                       7
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollar amounts in thousands)

<TABLE>
<CAPTION>



                                                                 Year ended         Year ended       Year ended
                                                                 December 27,      December 28,      December 30,
                                                                     1997              1996              1995
                                                                 -------------     -------------     ------------
<S>                                                               <C>              <C>              <C>
Cash flows used by operating activities:

   Net loss                                                        $    (6,535)     $   (19,401)     $   (14,663)          
Adjustments to reconcile net loss to net
     cash used by operations:
       Loss on sale of operating assets                                  3,792            8,311                -
       Writedown of operating assets                                         -            2,476                -
       Write off of affiliate trade receivables                           (429)               -                -
       Depreciation                                                      1,910            2,108              611
       Loss on disposal of property and
         Equipment                                                         118              400               84
       Stock based compensation expense                                    466              808            1,490
       (Increase) decrease in operating assets,
         net of businesses acquired and disposed:
           Accounts receivable                                            (229)          (1,113)           2,722 
          Inventories                                                    1,218           (3,627)          (2,264)
          Prepaid expenses and other
              current assets                                               572             (385)             342 
          Other assets                                                   1,208           (1,143)            (224)
       Increase (decrease) in operating
         liabilities, net of  businesses
         acquired:
           Accounts payable                                               (189)          (4,222)           3,662
           Accrued liabilities                                            (847)            (585)           1,996
                                                                 -------------     -------------     ------------
                Net cash provided (used) by
                  operating activities                                   1,055          (16,373)          (6,244)
                                                                 -------------     -------------     ------------

Cash flows used by investing activities:
   Acquisitions, net of cash acquired
     American Consumer Products, Inc.                                       -                -           (13,925)
     Alabaster Industries, Inc.                                             -                -              (157)
     Intelock Technologies                                                  -                -               754
     Proceeds from sale of operating assets                             24,021            2,806               -
     Proceeds from sale of property and
       equipment                                                            -                54               -
     Purchases of property and equipment                                (3,937)          (5,931)          (2,365)
     Proceeds from payments on note receivable                              8                -                -
                                                                 -------------     -------------     ------------
              Net cash provided (used) by
                Investing activities                                   20,092            (3,071)         (15,693)
                                                                 -------------     -------------     ------------
</TABLE>


                                       8
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                          (Dollar amounts in thousands)

<TABLE>
<CAPTION>


                                                                        Year ended       Year ended       Year ended
                                                                       December 27,     December 28,     December 30,
                                                                           1997            1996              1995
                                                                      -------------     -------------     ------------
<S>                                                                    <C>               <C>              <C>    
Cash flows provided by financing activities:
   Net proceeds (payment) from short-term
     borrowings                                                             (908)             908                -
   Net borrowings (repayments) on long-term
     revolving line of credit                                              1,330           (2,200)               -
   Proceeds from long-term debt                                            1,985                -                -
   Repayment of long-term debt                                           (22,147)            (599)          (9,331)
   Other long-term liabilities                                              (406)               -                -
   Proceeds from issuance of common
     stock, net of issue costs                                                 -            1,800            6,787
   Proceeds from issuance of preferred
     stock, net of issue costs                                                 -           19,400           24,296
   Proceeds from exercise of stock
     options and warrants                                                     97            1,035              841
   Purchase of treasury stock and warrants                                   (94)            (602)            (215)
                                                                     -------------     -------------     ------------

              Net cash provided (used) by
                financing activities                                     (20,143)          19,742           22,378
                                                                     -------------     -------------     ------------

Effect of exchange rate changes on cash                                      (47)              (4)             (19)
                                                                     -------------     -------------     ------------

Net increase (decrease) in cash during period                                957              294              422

Cash and cash equivalents at the beginning
   of the period                                                           1,165              871              449
                                                                     -------------     -------------     ------------

Cash and cash equivalents at the end of the
   period                                                            $     2,122       $    1,165         $    871
                                                                     -------------    -------------      -----------
                                                                     -------------    -------------      -----------

Supplemental disclosure:
   Interest paid                                                     $     1,769       $    2,750         $    754
   Income taxes paid                                                         313              287                -
</TABLE>


                                       9
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                          (Dollar amounts in thousands)

<TABLE>
<CAPTION>


                                                                 Year ended       Year ended       Year ended
                                                                  December 27,     December 28,     December 30,
                                                                      1997            1996              1995
                                                                 -------------    -------------    -------------
<S>                                                               <C>              <C>             <C>          
Noncash investing and financing activities:
   Acquisition of treasury stock via
     stock rescissions                                            $        -       $     933        $       -
   Assets purchased under long-term
     obligations                                                  $        -       $   3,227        $     170
   Assets sold for assumption of
     related obligation                                           $        -       $     169        $       -
   Capital lease obligations incurred                             $        -       $       -        $     228 
   Conversion of debt to common stock                             $        -       $       -        $     720

   Acquisition of businesses
     Fair value of assets acquired                                $        -       $       -        $  63,330
     Cash paid                                                             -               -          (14,689)
     Common stock issued                                                   -               -           (1,897)
                                                                 -------------    -------------    -------------
     Liabilities assumed                                          $        -       $       -        $  46,744
                                                                 -------------    -------------    -------------
                                                                 -------------    -------------    -------------
</TABLE>




The accompanying notes are an integral part of these statements.


                                       10
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(1) Nature of Business and Summary of Significant Accounting Policies

Nature of Business

Vista 2000, Inc. and its subsidiaries, (the Company), are engaged primarily 
in the manufacture, distribution and sale of specialty consumer products 
including pet products, balloons, gloves, boots and rainwear. The Company's 
customers are primarily mass merchandisers and do-it-yourself retailers 
located throughout North America.

Public Offerings

On October 24, 1994, the Company completed an initial public offering of its 
common stock. The offering resulted in the sale of 1,000,000 units at $5.50 
per unit before underwriting discounts and other offering expenses. Each unit 
consisted of one share of Company common stock and Series A Warrants to 
purchase two Company common shares. Each warrant entitled the holder to 
purchase, for a period of 48 months ending October 26, 1998, one share of 
common stock at an exercise price of $7.00 per share during the first 24 
months and $10.00 per share thereafter, subject to adjustment in certain 
circumstances. In December, 1994, an additional 150,000 of the units, 
representing the underwriters' over-allotment option with respect to the 
offering, were sold.

During 1995 the Company completed four preferred stock offerings and one 
common stock offering pursuant to the exemption from registration under 
Regulation S of the Securities Act of 1933. $24,296 and $6,787, net of 
issuance costs, were raised through the preferred stock offerings and the 
common stock offerings, respectively.

During 1996, the Company completed one preferred stock offering and one 
common stock offering pursuant to the exemption from registration under 
Regulation S of the Securities Act of 1993. $19,400 and $1,800, net of 
issuance costs, were raised through the preferred stock offering and common 
stock offering, respectively.


                                       11
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)

1) Nature of Business and Summary of Significant Accounting Policies - Continued

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of 
Vista 2000, Inc. ("Vista"), and its wholly-owned subsidiaries, American 
Consumer Products, Inc. and subsidiaries ("ACPI"), Alabaster Industries, Inc. 
("Alabaster"), Family Safety Products, Inc. ("FSPI"), and Intelock 
Technologies ("Intelock"), collectively ("the Company"). All significant 
intercompany balances and transactions have been eliminated in the 
consolidated financial statements.

During 1996 and 1997, Vista disposed of substantially all of the operating 
assets of all subsidiaries with the exception of Boss Manufacturing, a 
subsidiary of ACPI and the Warren Pet division of ACPI.

Fiscal Year

The Company maintains a 52/53 week year ending on the last Saturday in the 
calendar year. Fiscal years 1997, 1996 and 1995 each contained 52 weeks.

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Company considers all highly 
liquid debt instruments purchased with a maturity of three months or less to 
be cash equivalents.

Revenue Recognition

The Company recognizes revenue and provides for the estimated cost of returns 
and allowances in the period the products are shipped. Approximately 21% of 
the Company's revenue was from two customers in 1996, accounting for 
approximately 11% and 10%, respectively, of total revenue. Approximately 15% 
of revenue was from one customer in 1995. No single customer accounted for 
10% or more of the Company's revenue in 1997.


                                       12
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


1) Nature of Business and Summary of Significant Accounting Policies - Continued

Inventories

Inventories are stated at the lower of average cost or market. Cost for 
approximately 80% and 83% of inventories at December 27, 1997 and December 
28, 1996, respectively, have been determined using the last-in, first-out 
(LIFO) method. Cost for the remainder of the inventories has been determined 
primarily using the first-in, first-out (FIFO) method.

Had the Company used the first-in, first-out (FIFO) method of accounting for 
all inventories, gross profit would have been substantially the same for all 
years presented.

Advertising Costs

The Company expenses the cost of advertising the first time advertising takes 
place. Costs of trade shows and developing advertising materials are expensed 
at the time of the trade shows or as the advertising materials are produced 
and distributed to customers. Advertising expense for 1997, 1996 and 1995 was 
$651, $1,950 and $1,685, respectively.

Income Taxes

The Company accounts for income taxes using the asset and liability method. 
Under this method, deferred tax assets and liabilities are recognized for the 
future tax consequences attributable to differences between the financial 
statement carrying amounts of existing assets and liabilities and their 
respective tax bases. Deferred tax assets and liabilities are measured using 
enacted tax rates applied to taxable income. The effect on deferred tax 
assets and liabilities of a change in tax rates is recognized in income in 
the period that includes the enactment date. A valuation allowance is 
provided for deferred tax assets when it is more likely than not that the 
asset will not be realized.


                                       13
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(1) Nature of Business and Summary of Significant Accounting Policies-Continued

Property, Equipment, Depreciation and Amortization

Property and equipment are recorded at historical cost. The Company provides 
for depreciation and amortization using the straight-line method over the 
following estimated useful lives:

<TABLE>

         <S>                                         <C>
         Machinery and equipment                     3 to 10 years
         Office Furniture and equipment              3 to 8 years
         Buildings                                   35 years
</TABLE>

Depreciation expense was $1,910, $2,108 and $611 for 1997, 1996 and 1995,
respectively.

Warranty Costs and Returns

The Company provides for estimated warranty costs and returns at the time of 
sale. Accrued costs applicable to warranty obligations and returns are 
classified as accrued liabilities and are not material.

Research and Development Costs

Research and development costs are charged to expense as incurred and totaled 
$396, $590 and $297 for 1997, 1996 and 1995, respectively.

Foreign Currency Translation

Assets and liabilities of the Company's Canadian subsidiary are translated 
into U.S. dollars at fiscal year end exchange rates. Income and expense 
accounts are translated into U.S. dollars at average rates of exchange 
prevailing during the year. Adjustments resulting from translating the 
Canadian accounts are reflected as a foreign currency translation adjustment 
in stockholders' equity. Translation adjustments of the Mexican subsidiary, 
for which the functional currency is U.S. dollars, and transaction gains and 
losses are included in the results of operations for the year.

Net exchange losses included in the results of operations were not 
significant in any of the reported periods.


                                       14
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


1) Nature of Business and Summary of Significant Accounting Policies - Continued

Earnings Per Share

The Company adopted Statement of financial Accounting Standards No. 128 (SFAS 
128), Earnings Per Share, in the fourth quarter of 1997. Basic net earnings 
per common share is based upon the weighted average number of common shares 
outstanding during the period. Diluted net earnings per common share is based 
upon the weighted average number of common shares outstanding plus dilutive 
potential common shares, including options and warrants outstanding during 
the period. All comparative earnings per share data for prior periods 
presented has been restated.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and disclosures 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 these estimates.

Fair Value of Financial Instruments

The Company's financial instruments include cash, cash equivalents and 
long-term debt. The carrying value of cash and cash equivalents approximates 
fair value due to the relatively short period to maturity of the instruments. 
The carrying value of the Company's long-term obligations approximates fair 
value based upon borrowing rates currently available to the Company for 
borrowings with comparable maturities.


                                       15
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(2) Inventories

Inventories consist of the following :

<TABLE>
<CAPTION>
                                                                          December 27,      December 28,
                                                                              1997             1996
                                                                          ------------      ------------
<S>                                                                      <C>               <C>         
   Raw Materials                                                         $       1,752     $      4,714
   Work in Progress                                                                330            2,154
   Finished Goods                                                               10,411           18,289
                                                                         -------------     ------------

                                                                         $      12,493     $     25,157
                                                                         -------------     ------------
                                                                         -------------     ------------

</TABLE>



 (3) Property and Equipment

Property and Equipment consists of the following:

<TABLE>
<CAPTION>

                                                                          December 27,      December 28,
                                                                              1997             1996
                                                                          ------------      ------------
<S>                                                                      <C>               <C>         
   Machinery and equipment                                               $         987     $      8,376
   Buildings and improvements                                                    3,317            7,419
   Office furniture and equipment                                                  216              847
                                                                         -------------     ------------
         Total property and equipment                                            4,520           16,642
   Less accumulated depreciation                                                   588            2,372
                                                                         -------------     ------------
                                                                                 3,932           14,270
   Land                                                                            338            1,657
                                                                         -------------     ------------

                                                                         $       4,270     $     15,927
                                                                         -------------     ------------
                                                                         -------------     ------------
</TABLE>


                                       16
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(4) Notes Payable and Long-term Liabilities

Note Payable

Note payable at December 28, 1996 represented borrowings under a revolving 
credit and demand loan agreement (the Agreement) entered into by Alabaster 
with a financial institution which provided for borrowings of up to $2,500. 
This Agreement was assumed by the purchaser of Alabaster in 1997.

Long-term Debt

Long-term debt, including capital lease obligations, consists of the following:

<TABLE>
<CAPTION>

                                                                          December 27,      December 28,
                                                                             1997              1996
                                                                          ------------      ------------
<S>                                                                      <C>               <C>         
   ACPI revolving line of credit                                         $       3,110     $     20,400
   Boss mortgage note payable to a lender.  Requires
     monthly payments of $10, including interest
     at 11%, through May 1999.  All outstanding
     principal is due in June 1999.  Collateralized
     by all real and personal property of Boss.                                    810                -
   Other                                                                           100            3,495
                                                                         -------------     ------------

          Total long-term debt                                                   4,020           23,895

   Less current maturities                                                         137              383
                                                                         -------------     ------------
         Long-term debt                                                  $       3,883     $     23,512
                                                                         -------------     ------------
                                                                         -------------     ------------
</TABLE>

Scheduled principal payments of long-term debt are as follows:

<TABLE>
<CAPTION>

   Fiscal year:
<S>                                                                        <C>
     1998                                                                  $          137
     1999                                                                             773
     2000                                                                           3,110
                                                                            -------------

        Total                                                               $       4,020
                                                                            -------------

</TABLE>


                                       17
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(4) Long-term Debt - Continued

At December 31, 1996, the ACPI revolving credit agreement represented an 
agreement with two banks that provided for borrowings on a revolving line of 
credit of up to $28,900. Interest at the banks' base rate plus 3/8% 
(effective rate of 8.6% at December 28, 1996) and a loan commitment fee of 
3/8% on the unused portion of the revolving credit commitment were payable 
quarterly. In May 1997, the Company entered into a loan and security 
agreement (the "1997 Agreement") with another bank to refinance the existing 
revolving credit facility. The 1997 Agreement, which expires in May 2000, was 
amended in August 1997, concurrent with the sale of certain ACPI assets (see 
Note 12). The 1997 Agreement, as amended, provides for a credit facility up 
to $10,000, based on a formula that includes eligible accounts receivable and 
inventory. Interest is payable monthly at the bank's prime rate plus .5% or, 
at the ACPI's option, LIBOR plus 2.50% (effective rate of 9% at December 27, 
1997). Available interest rates may decrease based upon financial performance 
of the Company as defined. ACPI will incur an annual facility fee of $33 
payable at the beginning of each contract year and a loan commitment fee of 
3/8% per annum on the unused portion of the credit facility. The 1997 
Agreement provides for certain restrictive covenants including, among others, 
limitations as to intercompany transfers and capital expenditures and 
maintenance of certain minimum financial ratios. The Company has received 
waivers for all events of noncompliance at December 27, 1997.

The credit facility is secured by essentially all the assets of ACPI and its 
subsidiaries and is guaranteed by each of the ACPI subsidiaries. The bank has 
also committed to $3,500 for letters of credit as part of the maximum 
borrowings under the line of credit. At December 27, 1997, borrowings of 
$3,110 and an outstanding letter of credit totaling $2,000 were outstanding 
under the 1997 Agreement.

(5) Commitments and Contingencies

Operating Leases

The Company leases certain office and operating facilities and certain 
equipment under operating lease agreements which expire on various dates 
through 2000 and require the Company to pay all maintenance costs. Rent 
expense under these leases was approximately $1,021, $1,379 and $809 for 
1997, 1996 and 1995, respectively.

Future commitments under noncancellable operating leases as of December 27, 
1997 are $126, $50 and $27 for 1998, 1999 and 2000, respectively.


                                       18
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(5) Commitments and Contingencies - Continued

Operating Leases - Continued

ACPI leased two facilities from related parties. The Company was responsible 
for repairs and maintenance, taxes and insurance of these facilities. 
Expenses for these operating leases were $639 and $735 in 1996 and 1995. ACPI 
purchased one of these facilities during 1996 and purchased the second of 
these facilities during 1997 (see Note 9).

Class Action Lawsuit

In April 1996, the Company together with certain officers, directors and 
third parties were named as a defendant in seventeen (17) class action 
lawsuits filed by stockholders of the Company in the United States District 
Court for the Northern District of Georgia. The lawsuits alleged that the 
Company violated the Federal Securities Laws, particularly Sections 10-b and 
20-a of the Securities Exchange Act of 1934, as amended, and the rules and 
regulations, including Rules 10-b-5 thereunder as well as common law claims.

In August 1996, the court certified the plaintiffs as representatives of a 
class of all persons who purchased the Company's common stock or warrants 
during the period October 24, 1994 through June 8, 1996, except for the 
defendants and certain officers, directors and related parties. The Company 
and the other defendants reached an agreement in principle to settle the 
action in December 1996. Pursuant to the settlement, the Company issued a 
sufficient amount of shares of its common stock to the class to convey 
ownership of forty percent (40%) of the common stock of the Company to the 
class, based on common shares outstanding at December 1, 1996. During 1997, 
the Company issued approximately 14,654,000 common shares in accordance with 
the settlement. Approximately $903 has been charged to 1996 operations 
related to this settlement and was included in accrued liabilities at 
December 28, 1996. The Company's insurance carrier contributed $300 to the 
settlement to cover certain expenses related to the settlement. The 
settlement is in satisfaction of all claims of the class. The district court 
approved the settlement and the judgment became final on April 14, 1997.

Preferred Stockholders

During 1997, Vista settled all claims with its former preferred stockholders. 
The former preferred stockholders agreed to release Vista from all claims in 
exchange for the issuance of approximately 5,795,000 shares of common stock. 
Approximately $362 has been charged to 1997 operations related to this 
settlement. Additionally, all outstanding preferred shares were exchanged for 
approximately 3,095,000 common shares.


                                       19
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(5)  Commitments and Contingencies  - Continued

Sale of ACPI

During 1997, certain assets of ACPI were sold (see Note 12). The sale 
agreement provided for certain post closing adjustments to account for 
changes in assets and liabilities between the date of the agreement and the 
closing of the sale. The Company and the purchaser are currently disputing 
the amount of the post closing adjustments. Additionally, the purchaser has 
asserted claims against the Company for alleged breaches of representations 
and warranties in connection with the purchase agreement. Management believes 
these assertions to be without merit and intends to vigorously defend itself. 
However, the ultimate outcome of these disputes and claims cannot be 
determined at this time. Accordingly, no provision for any liabilities that 
may result on the ultimate outcome of these uncertainties has been provided 
in these financial statements.

Other Litigation

In July 1996, the Company commenced an action against Richard P. Smyth, a 
former officer and director, alleging that Mr. Smyth committed fraudulent and 
unlawful acts resulting in substantial harm to the Company and its 
shareholders. In September 1996, Mr. Smyth filed a counterclaim seeking, 
among other things, indemnification in connection with the class action 
lawsuit described above. The Company intends to vigorously pursue its action 
and contest the allegations in the counterclaim; however, management and 
legal counsel are unable to determine the possible outcome of this matter at 
this time.

The Company is also a defendant or has been notified of claims in several 
other actions against it. In the opinion of management, the ultimate outcome 
of these actions will not have a material adverse effect on the financial 
position of the Company.

SEC Investigation

The Company has been notified by the Securities and Exchange Commission 
("SEC") that it had commenced a formal private investigation of the Company. 
The Company intends to cooperate with the SEC in this matter. The Company 
cannot predict the eventual outcome of this investigation. Independently, the 
Company through its Audit Committee has conducted an internal investigation 
of the facts and circumstances surrounding the investigation.


                                       20
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(6)   Stockholder's Equity

Warrants

At December 30, 1995, warrants for the purchase of 36,408 shares of Company 
common stock that were issued in conjunction with debentures sold by the 
Company were issued and outstanding. These warrants expired as unexercised in 
January 1997. In addition, in March 1994, the Company issued 235,598 of its 
1994 convertible debenture warrants to all the former debenture holders that 
acquired common stock of the Company on September 30, 1993 pursuant to their 
right of conversion. The 1994 convertible debenture warrants each provide for 
the purchase of one share of common stock at an exercise price of $2.50 per 
share and expire in March 1999.

2,000,000 Series A warrants were outstanding at December 27, 1997, which were 
issued in connection with the Company's initial public offering. The warrants 
are exercisable at an exercise price of $10.00 per share through October, 
1998. Additionally, the Company agreed to sell to the Underwriters, as 
additional compensation, warrants to acquire units representing up to 100,000 
shares of common stock at $9.08 per share and up to 200,000 shares of common 
stock underlying the Series A warrants at $11.55 per share. These warrants 
expire in October 1999.

During 1995, the Company issued warrants to various consultants to acquire up 
to 645,529 common shares at prices per share ranging from $2.00 to $12.00. A 
$40 expense was recorded during 1995 as a result of the issuance of these 
warrants. During 1996 and 1995, warrants were exercised to acquire 20,000 and 
250,000 common shares, respectively.

Common Stock Issued for Services in Lieu of Cash

During 1995, the Company issued 280,000 shares of common stock to various 
consultants at per share market values at the agreement dates ranging from 
$1.88 to $2.06. In connection with the issuance of these shares, the Company 
recorded professional fees totaling $560.


                                       21
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(6)   Stockholder's Equity - Continued

Stock Options

The Company has adopted two stock option plans providing for the issuance of 
options covering up to 8,000,000 shares of common stock to be issued to 
officers, directors, or consultants to the Company. Various vesting 
conditions apply to these options, based on either tenure or certain 
performance criteria. For options granted to employees at strike prices less 
than the fair market value of the underlying shares on the date of the grant, 
the difference in value is recognized as compensation expense over the 
applicable vesting periods. Options granted to nonemployees are recognized 
over the related service period based on the estimated fair value of the 
options This resulted in charges to operations amounting to $104, $808 and 
$900 for 1997, 1996 and 1995, respectively.

Stock option transactions are summarized as follows:

<TABLE>
<CAPTION>

                                    Year ended              Year ended                  Year ended
                                December 27, 1997          December 28, 1996         December 30, 1995
                               -------------------       --------------------      ---------------------
                                            Weighted                 Weighted                   Weighted
                                            average                  average                    average
                                            exercise                 exercise                   exercise
                               Shares        price       Shares       price        Shares        price
                            -----------    ---------   -----------  ----------   ----------    ---------
<S>                         <C>             <C>        <C>            <C>        <C>             <C>
  Outstanding, beginning
     of period                 118,550        $4.51     1,550,950      $3.46       225,000       $6.05
   Granted                   7,810,000         0.03       420,000       3.63     1,759,350        3.24
   Exercised                (3,225,000)        0.03      (678,450)      2.15      (208,400)       1.60
   Cancelled                  (112,800)        4.54    (1,173,950)      4.18      (225,000)       6.05
                            -----------    ---------   -----------  ----------   ----------    ---------
   Outstanding, end
     of period               4,590,750        $0.04       118,550      $4.51     1,550,950       $3.46
                            -----------    ---------   -----------  ----------   ----------    ---------
                            -----------    ---------   -----------  ----------   ----------    ---------
</TABLE>


                                       22
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(6)  Stockholder's Equity - Continued

Stock Options - Continued

The following table summarizes information about stock options outstanding at
December 27, 1997:

<TABLE>
<CAPTION>

                     Options outstanding and exercisable                        Options exercisable
          -------------------------------------------------------------    ----------------------------
                                          Weighted
                         Number           average                              Number         Weighted
                      outstanding at       remaining        Weighted        outstanding at     average
           Exercise    December 27,      contractual       average           December 27,     exercise
            price         1997           life (years)    exercise price          1997          price
          ----------  --------------    -------------    --------------    ----------------   ---------
            <S>         <C>              <C>               <C>                 <C>             <C>  
             $3.93          5,750             7.8             $3.93                5,750        $3.93
              0.03      4,585,000             9.0              0.03              680,000         0.03
                      --------------    -------------    --------------    ----------------   ---------
                        4,590,750             8.8             $0.04              685,750        $0.06
                      --------------    -------------    --------------    ----------------   ---------
                      --------------    -------------    --------------    ----------------   ---------
</TABLE>

The Company uses the intrinsic value method in accounting for its stock options
issued to employees. In applying this method, no compensation cost has been
recognized related to the granting of options to employees. Had compensation
cost for the Company's stock options plans been determined based on the fair
value at the grant dates for awards to employees under those plans, the
Company's net loss and loss per share would have resulted in the pro forma
amounts indicated below:

<TABLE>
<CAPTION>

                                                                   1997           1996           1995
                                                               -----------  -------------    ------------
<S>                                                            <C>          <C>              <C>         
   Net earnings                     As reported                $   (6,535)  $    (19,401)    $   (14,663)
                                    Pro forma                  $   (6,548)       (19,414)        (15,927)

   Basic net loss per               As reported                $     (.21)  $      (1.20)    $    (2.33)
     common share                   Pro forma                        (.21)         (1.20)         (2.53)

   Diluted net loss per             As reported                $     (.21)  $      (1.20)    $    (2.33)
     common share                   Pro forma                        (.21)         (1.20)         (2.53)
</TABLE>

For purposes of the pro forma amounts above, the fair value of each option 
grant was estimated on the date of grant using the Black-Scholes 
options-pricing model with the following weighted-average assumptions used 
for grants in 1997, 1996 and 1995; expected volatility of 295%, 295% and 
107%, risk-free interest rates of 5.9%, 5.9% and 6.6%; and expected lives of 
2 years.


                                       23
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(6)   Stockholder's Equity - Continued

Stock Rescissions

During 1996, certain shareholders rescinded approximately 220,000 shares of
common stock previously issued and returned the shares to the Company. The
Company holds these shares in treasury at amounts which were recorded when the
shares and related options were issued, totaling approximately $933.

Series Convertible Preferred Stock:

The Company has designated 142,000 of its 500,000 authorized preferred shares as
follows:

<TABLE>
<CAPTION>

                              Shares authorized               Liquidation preference per share
                              ------------------              --------------------------------
         <S>                            <C>                               <C> 
         Series A                        100,000                           $100
         Series B                         20,000                           $1,000
         Series C                          2,000                           $10,000
         Series D                         20,000                           $1,000
</TABLE>

The remaining 358,000 authorized preferred shares have not been designated as 
a series. The preferred stock was recorded net of issuance costs.

The Company's preferred stock was issued in several series pursuant to 
separate subscription agreements.

During 1997, the Company issued approximately 3,095,000 common shares in 
exchange for all of the remaining outstanding preferred stock. Additionally, 
the Company issued approximately 5,796,000 common shares to certain former 
preferred stockholders as settlement of any and all outstanding claims, 
resulting in a charge to operations of $362.


                                       24
<PAGE>


                       Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(7)   Earnings Per Share

The following table sets forth the computation of basic and diluted loss per 
share.

<TABLE>
<CAPTION>

                                                                   1997           1996           1995
                                                              -----------   ------------     ----------- 
<S>                                                           <C>           <C>              <C>           
 Numerator for basic and diluted net loss per
     common share - loss attributable to
     common stockholders                                      $    (6,535)  $    (19,401)    $   (14,663)
                                                              -----------   ------------     ----------- 
                                                              -----------   ------------     ----------- 

   Denominator for basic net loss per common
     share - weighted average shares outstanding                   31,862         16,134           6,294

   Effective of dilutive options and warrants                           -              -               -
                                                              -----------   ------------     ----------- 
   Denominator for diluted net loss per common
     share - adjusted weighted average shares
     outstanding                                                   31,862         16,134           6,294
                                                              -----------   ------------     ----------- 
                                                              -----------   ------------     ----------- 

   Net loss per common share
     Basic                                                   $       (.21)  $      (1.20)    $    (2.33)
     Diluted                                                 $       (.21)  $      (1.20)    $    (2.33)
</TABLE>


(8)  Employee Retirement Savings Plan

ACPI and Boss contribute to employee retirement plans covering substantially all
of its employees. Charges to consolidated operations for these plans were as
follows:

<TABLE>
<CAPTION>

                                                             1997              1996             1995
                                                       ------------        ------------       ------------
<S>                                                    <C>                 <C>                <C>         
   Discretionary Contribution Profit
     Sharing - 401(k)                                  $        183        $        225       $        223
   Multi-Employer Pension Plan                                  265                 507                774
                                                       ------------        ------------       ------------

                                                       $        448        $        732       $        997
                                                       ------------        ------------       ------------
                                                       ------------        ------------       ------------

</TABLE>


The contributions to the union sponsored, multi-employer pension plan were
determined based upon the number of employees working per week. Participation in
the multi-employer pension plan was attributable to ACPI only, and was assumed
by the purchaser of the ACPI assets in August 1997 (see Note 12).


                                       25
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)


(9)  Related Party Transactions

During 1997 and 1996, fees incurred to stockholders and directors totaled
approximately $1,358 and $225, respectively.

In October 1996, ACPI, through one of its wholly-owned subsidiaries, purchased
certain land and manufacturing facilities from a partnership controlled by
certain officers of ACPI for $1,773 cash and assumption of a $3,227 mortgage
note. This facility was previously leased by ACPI from the related party. These
related parties are no longer affiliated with the Company.

During 1997, ACPI, through one of its wholly-owned subsidiaries, purchased a
second manufacturing facility from a corporation controlled by certain officers
of ACPI for $1,158 cash and assumption of a $842 mortgage note. This facility
was previously leased by ACPI from the related parties. These related parties
are no longer affiliated with the Company.

At December 27, 1997, the Company has a note receivable outstanding from a
former officer. This note is fully reserved pending final settlement with the
Company.


(10) Income Taxes

The Company's temporary differences result in a net deferred income tax asset
which is reduced to zero by a related valuation allowance, summarized as
follows:

<TABLE>
<CAPTION>

                                                                          December 27,       December 28,
                                                                              1997               1996
                                                                          ------------       ------------
<S>                                                                      <C>               <C>
   Deferred tax assets:
     Operating loss carryforwards                                        $       17,999    $       14,531
     Accounts receivable                                                            383               790
     Accruals                                                                       661               661
     Compensation related                                                            44               636
     Tax credit carryforwards                                                       236               236
     Other                                                                            1                28
                                                                           ------------       ------------
       Gross deferred tax assets                                                 19,324            16,882
       Deferred tax asset valuation allowance                                   (17,151)          (14,511)
                                                                           ------------       ------------
       Net deferred tax asset                                                     2,173             2,371
                                                                           ------------       ------------
                                                                           ------------       ------------
</TABLE>


                                       26
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)

(10)  Income Taxes - Continued

<TABLE>
<CAPTION>
                                                                           December 27,         December 28,
                                                                               1997                 1996
                                                                           ------------         ------------
<S>                                                                        <C>                  <C>
   Deferred tax liabilities:
     Inventories                                                                  1,576               1,710
     Fixed assets                                                                   597                 661
                                                                           ------------         ------------
                                                                                  2,173               2,371
                                                                           ------------         ------------
   Net deferred income tax asset                                            $         -          $        -
                                                                           ------------         ------------
                                                                           ------------         ------------
</TABLE>


Included in the tax credit carryforward is approximately $236 of alternative
minimum tax credits and research and experimentation credits available to reduce
future income taxes payable. These credits do not have an expiration date.

Income tax expense for 1997 and 1996 consists primarily of current state taxes
attributable to ACPI and its subsidiaries.

At December 27, 1997, the Company had operating loss carryforwards for U.S.
income tax purposes of approximately $47,365 available to reduce future taxable
income, which expire as follows:

<TABLE>
<CAPTION>

                                            Net
           Year of                       operating
         expiration                        loss
         ----------                    ------------
          <S>                          <C>
             2002                      $     1,436
             2008                            1,693
             2009                            8,483
             2010                            4,284
             2011                           19,249
             2012                           12,220
                                       ------------
                                       $    47,365
                                       ------------
                                       ------------
</TABLE>


                                       27
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)

(10)  Income Taxes - Continued

Included in the operating loss carryforward is $1,436 of losses which expire in
2002 and which can only be utilized by the Boss Manufacturing subsidiary of
ACPI.

The Company has experienced a change in control, as defined under Section 382 
of the Internal Revenue Service Code, during 1995 and 1996. As a result, the 
utilization of the net operating losses which expire in 2011 and prior are 
limited to approximately $1,600 annually. Additionally, management believes 
that a change in control also occurred during 1997, which will limit the 
utilization of the net operating loss which expires in 2012 and could further 
limit the utilization of the net operating losses which expire in 2011 and 
prior. As a result of these limitations, a significant portion of the tax 
loss carryforwards could expire unused.

(11)  Writedown of Operating Assets

During 1996, Alabaster continued to incur significant operating losses. 
Management's estimates of future operations did not support the carrying 
amount of Alabaster's net assets. Accordingly, a charge of $1,817 was 
recorded in the fourth quarter of 1996, representing management's estimate of 
the excess of Alabaster's net assets over their estimated net realizable 
value.

In September 1996, the Company closed the operations of Intelock and wrote 
down all remaining Intelock assets to their estimated net realizable value. 
Vista incurred a charge of $659 as a result of this write down. The assets 
and liabilities of Intelock included in the accompanying December 28, 1996 
consolidated balance sheet were not significant. Intelock, which was acquired 
by Vista in 1995, was a manufacturer and distributor of digital locking 
devices.

Alabaster and Intelock were sold during 1997 (see Note 12).


                                       28
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)

(12) Acquisitions and Dispositions

1997

In August, 1997, Vista sold substantially all of the assets of ACPI, with the 
exception of it's Warren Pet Division and Boss Manufacturing, an ACPI 
subsidiary, for approximately $23,618 in cash, net of transaction costs of 
approximately $1,186, plus the assumption of approximately $3,260 of 
liabilities by the purchaser. Vista recorded a loss of approximately $1,840 
on the sale of ACPI, including expenses related to the sale. Expenses related 
to the sale of ACPI included $1,044 paid to a stockholder and an affiliate of 
a stockholder of Vista.

In June, 1997, Vista sold all of the outstanding common stock of Alabaster 
for $2,000, consisting of $500 cash and a $1,500 promissory note. The 
promissory note requires monthly payments of $14, including interest at 10%, 
through July 1999, at which time all outstanding principal and interest is 
due. The promissory note is collateralized by certain real property of 
Alabaster. Vista recorded a loss on the sale of Alabaster of approximately 
$2,080, including expenses related to the sale.

In April, 1997, Vista sold all of its Intelock common stock for $5 cash and a 
$95 promissory note. All outstanding principal is due in April, 1998. Vista 
recorded a gain of approximately $128 on the sale of Intelock.

1996

In August 1996, the Company sold substantially all the assets of FSPI for 
$1,800 cash and a $100 promissory note. The purchaser also assumed 
substantially all operating liabilities of FSPI. Vista recognized a loss on 
the sale of FSPI assets of $8,783. FSPI was a manufacturer and distributor of 
gas detection devices and other home safety products.

In May 1996, ACPI sold the inventory, tooling and other supplies of a product 
line for $1,059 in cash. The sale resulted in a gain of $472.

The assets and liabilities remaining from the FSPI and the disposed product 
line operations included in the accompanying December 28, 1996 consolidated 
balanced sheet were not significant.


                                       29
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)

(12) Acquisitions and Dispositions - Continued

1995

During fiscal 1995 Vista completed four acquisitions and made one disposition 
which are summarized below.

Effective September 30, 1995, Vista acquired all of the outstanding common 
stock of ACPI, including its Boss Manufacturing subsidiary and Warren Pet 
division, through a cash tender offer totaling approximately $13,834 
exclusive of acquisition costs. ACPI manufactures and distributes consumer 
hardware products including key blanks, related key accessories, knives, 
letters, numbers, signs, gloves and pet products as well as other items.

Effective July 31, 1995, Vista acquired all of the outstanding common stock 
of Alabaster in exchange for 400,000 shares of common stock issued by Vista 
valued at $2 per share or $800, exclusive of acquisition costs. Alabaster 
manufactures and distributes injection molded plastic products for the 
housewares industry.

Effective June 30, 1995, Vista acquired all of the outstanding common stock 
of Intelock and certain manufacturing assets owned by the former parent of 
Intelock in exchange for 219,200 shares of common stock of Vista and warrants 
to acquire 138,400 common shares of Vista, together valued at $1,097, 
exclusive of $5 cash paid and acquisition costs. Intelock manufactures and 
distributes digital locking devices.

The acquisitions of ACPI, Alabaster and Intelock were accounted for as 
purchases. Accordingly, each of the purchase prices were allocated to assets 
and liabilities based on their estimated fair values at the date of 
acquisition. Results of operations of ACPI, Alabaster and Intelock have been 
included in the consolidated financial statements from the respective date of 
each acquisition.

Effective May 1995, Vista acquired all of the outstanding common stock of 
Promotional Marketing, Inc. (PMI) and executed a non-competition agreement 
with former principals of PMI for a total of $610 exclusive of acquisition 
costs. PMI provided direct marketing services to a variety of customers. The 
acquisition has been accounted for as a purchase using the equity method of 
accounting. Effective November 30, 1995, PMI sold substantially all of its 
operating assets net of operating liabilities back to a company owned by the 
former principals of PMI in exchange for a guaranty of payment on a note 
receivable held by Vista. Vista recognized a loss of $1,147 on the sale of 
PMI. The accompanying 1995 consolidated statement of operations includes 
PMI's results of operations for the seven month period from the acquisition 
date to the date of disposition of substantially all the operating assets and 
liabilities of PMI.


                                       30
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)

(12) Acquisitions and Dispositions - Continued

Pro forma Results of Operations (Unaudited)

The pro forma results of operations which follow assume that the acquisition 
of Boss Manufacturing and the Warren Pet division of ACPI occurred on January 
1, 1995, and the disposition of all other subsidiaries and divisions occurred 
on December 31, 1994. Accordingly, the pro forma results of operations which 
follow include the results of operations of Vista, Boss and Warren Pet. In 
addition to combining the historical results of operations of the companies, 
the pro forma calculations include adjustments for the estimated effects on 
the Company's historical results of operations for depreciation, interest and 
other purchase accounting adjustments related to the acquisitions. These 
results are not necessarily indicative of the results that would have 
occurred if the transactions had occurred at the beginning of each period 
presented nor are the results indicative of future results.

                                    UNAUDITED

<TABLE>
<CAPTION>

                                                       1997                1996                  1995
                                                  -------------        -------------        -------------
<S>                                               <C>                   <C>                 <C>
Sales                                             $     42,197          $   43,183          $     43,404
Net loss                                          $       (646)         $   (4,882)         $     (3,018)
Net loss per common share
   Basic                                          $       (.02)         $     (.30)         $       (.48)
   Diluted                                        $       (.02)         $     (.30)         $       (.48)

</TABLE>


(13)  New Accounting Pronouncements

The Financial Accounting Standards Board (FASB) has issued the following 
Statements of Financial Accounting Standards (SFAS):

SFAS 130, Reporting Comprehensive Income, which is effective for fiscal years 
beginning after December 15, 1997. SFAS 130 requires companies to include 
details about comprehensive income that arise during a reporting period. 
Comprehensive income includes revenue, expenses, gains and losses that bypass 
the income statement and are reported directly in a separate component of 
equity.


                                       31
<PAGE>


                        Vista 2000, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                    December 27, 1997 and December 28, 1996
              (Dollars amounts in thousands except per share data)

(13)  New Accounting Pronouncements - Continued

SFAS 131, Disclosure About Segments of An Enterprise and Related Information, 
which is effective for fiscal years beginning after December 15, 1997. SFAS 
131 requires companies to report information about an entity's different 
types of business activities and the different economic environments in which 
it operates, referred to as operating segments.

Management does not expect the adoption of these new standards to have a 
material impact on the Company's results of operations or financial condition.


                                       32
<PAGE>


               Report of Independent Certified Public Accountants
                                   on Schedule




Board of Directors
Vista 2000, Inc.


In connection with our audit of the consolidated financial statements of 
Vista 2000, Inc. and subsidiaries referred to in our reported dated February 
19, 1998, which is included in the annual report to security holders and 
incorporated by reference in Part II of this form, we have also audited 
Schedule II for the years ended December 27, 1997, December 28, 1996 and 
December 30, 1995. In our opinion, this schedule presents fairly, in all 
material respects, the information required to be set forth therein.

GRANT THORNTON

Atlanta, Georgia
February 19, 1998




                                       33
<PAGE>


                       Vista 2000, Inc., and subsidiaries

           CONSOLIDATED SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS



<TABLE>
<CAPTION>

      Column A                                       Column B          Column C          Column D         Column E
      --------                                       --------          --------          --------         --------
                                                    Balance at        Charged                            Balance
                                                     beginning        to                                at end
     Description                                    of period         expenses         Deductions(1)    of period
     -----------                                   -----------       ----------        -------------    ------------
<S>                                                <C>                 <C>             <C>              <C>
Year ended December 27, 1997
   Allowance for doubtful accounts
     and returns                                   $     1,405         $      131      $      1,029     $      507
   Deferred tax asset valuation
     allowance                                          14,511              2,640                 -         17,151

Year ended December 28, 1996
   Allowance for doubtful accounts
     and returns                                         2,230                493             1,318          1,405
   Deferred tax asset valuation
     allowance                                           7,516              6,995                 -         14,511

Year ended December 30, 1995
   Allowance for doubtful accounts
     and returns                                            40              2,190                 -          2,230
   Deferred tax asset valuation
     allowance                                           2,310              5,206                 -          7,516

</TABLE>


(1) - bad debt write offs and reduction in estimate of allowance requirements.


                                       34

<PAGE>


INDEX TO EXHIBITS

<TABLE>

<S>           <C>
(2)      Plan of Acquisition, Reorganization, Arrangements, Liquidation or 
         Succession.
         Not applicable.

(3)      (i)  Articles of Incorporation

3.1(a)        Certificate of Incorporation (Exhibit 3.1)

         (ii) By-Laws

3.2(a)        By-Laws (Exhibit 3.2)

(4)      Instruments defining rights of security holders, including indentures

4.1(c)        Specimen of Common Stock Certificate (Exhibit 4.1)

4.2(a)        Form of Warrant Agreement covering Series A Warrants (Exhibit 4.2)

4.3(c)        Specimen of Series A Warrant (Exhibit 4.3)

4.4(b)        Form of Preferred Stock Certificate covering Series A Preferred 
              Stock (Exhibit 4.1)

4.5(b)        Form of Preferred Stock Certificate covering Series B Preferred 
              Stock (Exhibit 4.2)

4.6(b)        Form of Preferred Stock Subscription Agreement covering Series B 
              Preferred Stock (Exhibit 4.3)

4.7(b)        Form of Preferred Stock Certificate covering Series C Preferred 
              Stock (Exhibit 4.4)

4.8(b)        Form of Preferred Stock Certificate covering Series D Preferred 
              Stock (Exhibit 4.5)

4.9(b)        Form of Preferred Stock Subscription Agreement covering Series D 
              Preferred Stock (Exhibit 4.6)

(9)      Voting Trust Agreement
              Not applicable.

</TABLE>


<PAGE>


<TABLE>
<S>           <C>
(10)     Material Contracts

10.1(a)       Lease Agreement, dated January 5, 1993 between Roswell Business 
              Centers Associates, LP and the Company as amended.  (Exhibit 10.1)

10.2(a)       Patent Rights Purchase Agreement, dated October 1, 1993 between 
              Blue Ridge Ventures, Inc. and the Company. (Exhibit 10.2)

10.3(a)       1993 Incentive Stock Option Plan (Exhibit 10.4)

10.4(b)       1993 Non-Employee Director Stock Option Plan, as amended.  
              (Exhibit 10.2)

10.5(a)       Form of Series 1992B 15% Subordinated Debenture, as amended.  
              (Exhibit 10.8)

10.6(a)       Form of 1992B Warrant to Purchase Common Stock.  (Exhibit 10.9)

10.7(a)       Form of Series 1993A 15% Subordinated Convertible Debenture.  
              (Exhibit 10.10)

10.8(a)       Form of 1993A Warrant to Purchase Common Stock.  (Exhibit 10.11)

10.9(d)       Form of Employment Agreement to be entered into between the 
              Company and Robert M. Fuller, Richard P. Smyth and Norman W. 
              Wicks, respectively.  (Exhibit 10.12)

10.10(a)      Nonstatutory Stock Option Agreement dated December 1, 1993 between
              Robert M. Fuller and the Company.  (Exhibit 10.27)

10.11(a)      Nonstatutory Stock Option Agreement dated December 1, 1993 between
              Richard P. Smyth and the Company.  (Exhibit 10.28)

10.12(a)      Nonstatutory Stock Option Agreement dated December 1, 1993 between
              Norman W. Wicks and the Company.  (Exhibit 10.29)

10.13(b)      Prospectus for the Company's 1993 Incentive Stock Option Plan and
              1993 Non-Employee Director Stock Option Plan.  (Exhibit 10.1)

10.14(b)      First Amendment to the Company's 1993 Incentive Stock Option Plan.
              (Exhibit 10.1)

10.15(b)      Employment Agreement between the Company and Arnold E. Johns, Jr.
              (Exhibit 10.4)

10.16(b)      Employment Agreement between the Company's subsidiary, American 
              Consumer Products, Inc., and Richard Bern. (Exhibit 10.5)

10.17(b)      Employment Agreement between the Company's subsidiary, Alabaster 
              Industries, Inc., and Daniel A. Norris. (Exhibit 10.6)

</TABLE>


<PAGE>


<TABLE>
<S>           <C>
10.18(b)      Employment Agreement between the Company's subsidiary, American 
              Consumer Products, Inc., and Stephen W. Cole. (Exhibit 10.7)

10.19(e)      Employment Agreement between the Company and Robert E. Altenbach
              (Exhibit 10.19)

10.20(f)      Asset Purchase Agreement between Vista 2000, Inc., Family Safety 
              Products, Inc. and Therm Acquisition, Inc. dated August 23, 1996
              (Exhibit 10.20)

10.21(f)      Loan and Security Agreement between Alabaster Industries, Inc. and
              Century Business Credit Corporation dated September 20, 1996
              (Exhibit 10.21)

10.22(g)      Loan and Security Agreement between American Consumer Products,
              Inc., Products Merchandisers, Inc., Boss Manufacturing Company and
              Fleet Capital Corporation dated May 7, 1997. (Exhibit 10.22)

10.23(h)      Stock Purchase Agreement between Vista 2000, Inc. and W. R. Hill
              & co., Inc. dated May 12, 1997 (Exhibit 2.1)

10.24(i)      Asset Purchase Agreement between Vista 2000, Inc. and Axxess 
              Technologies, Inc. dated June 30, 1997 (Exhibit 2.1)

(11)          Statement re Computation of Per Share Earnings

11.1          Statement re computation of per share earnings is included herein
              as Exhibit 11.1 of this Report.

(12)          Statements re Computation of Ratios Not applicable.

(13)          Annual Report to Security Holders, Form 10-Q or Quarterly Report
              to Security Holders Not applicable.

(16)          Letter re Change in Certifying Accountant
              Not applicable.

(18)          Letter re Change in Accounting Principles
              Not applicable.

(21)          Subsidiaries of the Registrant

21.1          Subsidiaries of the Registrant are listed on Exhibit 21.1 included
              in this Report.

</TABLE>


<PAGE>

<TABLE>
<S>           <C>
(22)          Published Report Regarding Matters Submitted to a Vote of Security
              Holders

22.1(b)       Proxy Statement for Special Meeting of Stockholders to be held
              December 18, 1995.  (Exhibit 20.1)

(23)          Consents of Experts and Counsel Not applicable.

(24)          Power of Attorney
              Not applicable.

(27)          Financial Data Schedule  (Filed only by Electronic Filers)

27.1          Financial Data Schedule is included herein as Exhibit 27.1 of this
              Report.

(28)          Information from Reports Furnished to State Insurance Regulatory
              Authorities
              Not applicable.

(99)          Additional Exhibits
              None.

</TABLE>

--------------------
(a)      Exhibit previously filed as part of and is incorporated herein by
         reference to the Company's Registration Statement on Form SB-2
         (Registration No. 33-73118-A). The exhibit number contained in
         parenthesis refers to the exhibit number in such Registration
         Statement.

(b)      Exhibit previously filed as part of and is incorporated herein by
         reference to the Company's Current Report on Form 8-K dated June 9,
         1996. The exhibit number contained in parenthesis refers to the Exhibit
         number in such Form 8-K.

(c)      Exhibit previously filed as part of and is incorporated by reference to
         Amendment No. 2 to the Company's Registration Statement on Form SC-2
         (Registration No. 33-73118-A). The exhibit number contained in
         parenthesis refers to the exhibit numbers in such Registration
         Statement.

(d)      Exhibit previously filed as part of and is incorporated by reference to
         Amendment No. 1 to the Company's Registration Statement on Form SC-2
         (Registration No. 33-73118-A). The exhibit number contained in
         parenthesis refers to the exhibit numbers in such Registration
         Statement.

(e)      Exhibit previously filed as part of and is incorporated herein by
         reference to the Company's Current Report on Form 10-Q for the quarter
         ended March 30, 1996. The exhibit number contained in parenthesis
         refers to the Exhibit number in such Form 10-Q.


<PAGE>


(f)      Exhibit previously filed as part of and is incorporated herein by
         reference to the Company's Current Report on Form 10-Q for the quarter
         ended September 28, 1996. The exhibit number contained in parenthesis
         refers to the Exhibit number in such Form 10-Q.

(g)      Exhibit previously filed as part of and is incorporated herein by
         reference to the Company's Current Report on Form 10-Q for the quarter
         ended June 28, 1997. The exhibit number contained in parenthesis refers
         to the Exhibit number in such Form 10-Q.

(h)      Exhibit previously filed as part of and is incorporated herein by
         reference to the Company's Current Report on Form 8-K dated June 19,
         1997. The exhibit number contained in parenthesis refers to the Exhibit
         number in such Form 8-K.

(i)      Exhibit previously filed as part of and is incorporated herein by
         reference to the Company's Current Report on Form 8-K dated August 25,
         1997. The exhibit number contained in parenthesis refers to the Exhibit
         number in such Form 8-K.