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 31, 1999

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
      For the transition period from __________ to __________

                         Commission File Number 1-13066

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

               Delaware                          33-0099676
      -------------------------------        -------------------
      (State or other jurisdiction of        (I.R.S. Employer
       incorporation or organization)         Identification No.)

      One Mikasa Drive, Secaucus, New Jersey           07096
      --------------------------------------         --------
      (Address of principal executive office        (Zip Code)

       Registrant's telephone number, including area code: (201) 867-9210

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

   Title of each class               Name of each  exchange on which  registered
--------------------------------     -------------------------------------------
Common Stock par value $0.01 per     New York Stock Exchange, Inc.

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

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

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

     Aggregate market value of the voting stock (based on the closing price
f such stock as reported on the New York Stock Exchange Composite Transactions)
                    held by non-affiliates of the Registrant
                       As of March 6, 2000 -- $59 million

 Number of Shares of Common Stock outstanding as of March 6, 2000 -- 17,105,045

                      DOCUMENTS INCORPORATED BY REFERENCE
                        (To The Extent Indicated Herein)

Portions of the Definitive Proxy Statement for the 2000 Annual Meeting
(in Part III)

                            Exhibit Index on page 50
<PAGE>


                                  MIKASA, INC.
                           Annual Report on Form 10-K
                               December 31, 1999

                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----
                                     PART I

Item 1.  Business                                                             3
Item 2.  Properties                                                          12
Item 3.  Legal Proceedings                                                   13
Item 4.  Submission of Matters to a Vote of Security Holders                 13

                                    PART II

Item 5.  Market for Registrant's Common Equity and Related                   13
         Stockholder Matters
Item 6.  Selected Consolidated Financial and Operations Data                 14
Item 7.  Management's Discussion and Analysis of Financial                   15
         Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risks         22
Item 8.  Financial Statements and Supplementary Data                         22
Item 9.  Changes in and Disagreements With Accountants on                    43
         Accounting and Financial Disclosure

                                    PART III

Item 10. Directors and Executive Officers of the Registrant                  43
Item 11. Executive Compensation                                              43
Item 12. Security Ownership of Certain Beneficial Owners and                 43
         Management
Item 13. Certain Relationships and Related Transactions                      43

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports                 44
         on Form 8-K
















                                       2
<PAGE>

                                     PART I
                                     ------
Item 1.  BUSINESS

General

Mikasa,  Inc.  ("Mikasa" or the "Company") is a leading designer,  developer and
marketer of quality  tabletop and decorative  home products.  The Company's wide
range  of  products  includes  ceramic  dinnerware,  crystal  stemware,  crystal
serveware,   stainless  steel  flatware,  table  linens,  gifts  and  decorative
accessories  for the home.  The Company  develops  product  designs  through its
internal staff,  independent designers and jointly through certain of its varied
factory relationships.

The Company was  originally  incorporated  in  California in 1936 and during its
early years was primarily a trading company.  In the 1950's, the Company entered
the  dinnerware  market and the Mikasa  trademark was adopted.  Over the past 20
plus years, the Company's product lines have been gradually broadened to include
other  tabletop  items as well as  decorative  and other  products for the home.
During  that  period,  as the  Company  owns  no  manufacturing  facilities,  it
diversified its sources of supply,  which traditionally had been based in Japan.
Today, the Company's  products are  manufactured in 23 countries,  including the
United  States.  The Company  distributes  its products in the United States and
Canada   through   both   retail   accounts   and  direct   consumer   channels.
Internationally  the Company sells its products through subsidiary  companies or
authorized distributors primarily in selected countries.

The  Company  was  reincorporated  in  Delaware  in March  1994.  The  principal
executive offices of the Company are located at One Mikasa Drive,  Secaucus, New
Jersey 07096.

Products

The Company offers a broad line of casual and formal dinnerware, crystalware and
glassware,  stainless steel flatware,  gifts and decorative  accessories for the
home. Styles range from traditional  designs to  fashion-oriented,  contemporary
patterns. The Company's products consist of:

      o     Dinnerware, which includes plates, bowls, cups, saucers and mugs;

      o     Crystalware (or glassware), which includes crystal stemware, crystal
            serveware, drinking glasses and barware;

      o     Flatware, which includes stainless steel knives, forks and spoons;
            and

      o     Gift and decorative  accessories,  which include natural extensions
            to the Company's product lines such as serving platters,  bowls and
            pitchers,  special  ceramic or crystal gift items,  and accessories
            such as  linens,  candlestick  holders,  salt and  pepper  shakers,
            candles, and other household items.

The Company  supports its product mix by offering  different  proprietary  brand
names for different target markets.



                                       3
<PAGE>

Mikasa Brand

The Mikasa  brand is  positioned  as an upscale  product line which is typically
sold in the "upstairs" china and crystal departments of department stores and in
specialty stores. Mikasa products include dinnerware,  crystalware, flatware and
giftware.  Mikasa dinnerware is separated into four basic classifications:  bone
china, fine china,  semi-porcelain and earthenware.  Within each classification,
dinnerware is primarily sold by pattern.  Once a pattern  becomes  popular,  the
Company  may  introduce  dinnerware  accessories  in that  pattern  and may also
introduce  coordinating  stemware,  dinnerware,  stainless  flatware  and  table
linens.  Place settings are also made for  children's  use.  Mikasa  crystalware
includes a range of products  extending from full lead (24% or more lead oxides)
to  unleaded  glassware.  These  products  include  stemware,  barware,  serving
platters and bowls, salt and pepper shakers, vases, candlestick holders, picture
frames,  clocks and paper  weights.  Mikasa  flatware  is  available  in several
configurations,  including all  stainless  steel,  gold and  stainless  steel or
plastic with stainless steel.  Mikasa giftware  products include vases,  serving
trays, carafes, picture frames, mugs and children's products.

Studio Nova Brand

Studio Nova  products are similar to Mikasa  products,  but are designed  with a
more  casual  feel for  everyday  entertaining  and  personal  use.  Studio Nova
products are developed to be sold in the "downstairs"  housewares  department of
department stores and in specialty stores, and include dinnerware,  crystalware,
flatware and giftware.  Studio Nova  dinnerware is primarily  sold by pattern in
prepackaged sets such as 20-piece starter sets and 5-piece  accessory  completer
sets. As patterns gain in popularity,  accessories are added to the line. Studio
Nova crystalware  products  typically  include unleaded  products which are mass
produced.  These products include  serveware,  stemware,  drinkware and tabletop
accessories.  Studio Nova flatware is stainless  steel or plastic with stainless
steel. Patterns are designed to coordinate with dinnerware. Studio Nova giftware
items are  generally  geared  toward  kitchen use and include  storage items and
other kitchen items such as wicker  baskets,  wood and marble cutting boards and
cookware.

Other Brands

Home Beautiful products are similar in nature to those of the Studio Nova brand,
except that they are developed for sale to mass  merchants,  warehouse clubs and
retail drug chains. These products include dinnerware, crystalware, flatware and
giftware.

Christopher Stuart products are limited to dinnerware, crystalware and giftware.
These products are developed to meet promotional price points for the "upstairs"
china and crystal departments of department stores.

Product Development

The Company commits a significant  amount of its resources to product design. As
a marketing,  distribution  and retail  operation,  rather than a  manufacturing
concern,  the Company is able to design  products to meet  consumer  preference,
rather than the capabilities of specific  manufacturing  equipment.  To research
and confirm consumer  preference trends, the Company's product  development team
travels  extensively in Europe,  Asia, and major American  markets,  and attends
major fashion and design shows around the world.

                                       4
<PAGE>

The product  development  team includes  Company staff  designers,  as well as a
number of independent designers. The Company's independent designers are located
around the world and are  utilized on a contract or royalty  basis.  The Company
maintains  agreements  with  its  independent  designers  for  the  purchase  of
exclusive rights to specific tabletop  patterns  originating in whole or in part
from those designers.

The Company utilizes its retail store network to test market new products before
committing to substantial  production.  All products within the Company's retail
store  network are  identified  on a stock keeping unit basis by bar code labels
which  are  read  at  the  point  of  sale.   Daily  sales  records  are  polled
electronically  at the end of each  business  day and  sales  and  profitability
information  for new product  introductions  are analyzed to determine  consumer
acceptance.

Generally,  the Company  introduces new products on a limited item basis. In the
case of dinnerware,  the basic 5-piece place setting with minimal serving pieces
is offered to the  consumer  at  introduction.  As product  lines gain  consumer
acceptance,   the  Company  looks  for  natural  product  extensions,   such  as
coordinating gift items, carafes and cookware.

Supply and Manufacturing

The Company does not own or operate any manufacturing facilities,  but contracts
out production to the  geographically  diverse group of manufacturers with which
the Company maintains business relationships.

More than 90% of the  Company's  products  are  manufactured  outside the United
States. The Company sources its products through approximately 238 factories, in
23 countries,  including the United States.  Until the early 1970's, the Company
sourced its products almost  exclusively from Japan,  and the Company's  product
lines were  limited  to ceramic  dinnerware.  Over the past 20 plus  years,  the
Company has gradually  broadened the countries  from which it sources  products.
Approximately   20%  of  the  Company's   products  are  purchased  from  Japan,
approximately   31%  are  purchased  from  Germany  and  Austria   combined  and
approximately  10% are purchased  from Malaysia.  No other country  accounts for
more than 10% of the Company's products.

The Company  monitors the quality of the products  produced in the  factories of
its suppliers.  The Company's  quality  control  assurance  program has four key
elements:  (i) Selecting  manufacturers  which have appropriate  quality control
procedures which  facilitate the production of products at a consistent  quality
level; (ii) Selecting manufacturers that are committed to maintaining a level of
technology  in their  manufacturing  to  remain  competitive  over  time;  (iii)
Limiting the products sourced from a new supplier until that supplier has proven
to be capable of consistently  producing products at a quality level which meets
the Company's  expectations;  and (iv) Where the Company  deems it  appropriate,
inspection by Company representatives of products at the manufacturer's factory.
Such product inspections  continue until the factory earns the confidence of the
Company,  at which time  inspections  become periodic or are made as the Company
perceives a need.


                                       5
<PAGE>

Generally,  the Company does not maintain  long-term  contractual  relationships
with its  suppliers.  Most product  purchases  are made on the basis of purchase
orders of less than one year's  duration.  A large  percentage  of the Company's
products,   however,   are   manufactured   by  companies   with   long-standing
relationships  with the Company,  certain of which have existed for more than 30
years. As a result of these relationships,  the Company is able to select from a
number  of  manufacturers  with  which it has had  significant  experience  when
ordering its products. If, however, none of these companies are suitable for the
manufacture of a particular  product,  or do not offer  competitive  terms,  the
Company will evaluate  other  suppliers.  The Company's two principal  suppliers
provided  products which accounted for an aggregate of approximately  29% of the
Company's  purchases in 1999. Each of such suppliers accounted for more than 10%
of the  Company's  purchases  for this  year.  Of the  Company's  two  principal
suppliers, one is a Japanese manufacturer of ceramic products and the other is a
German manufacturer of crystal products.  The Company has maintained  beneficial
relationships  with these suppliers for more than 10 years without  interruption
and has no reason to believe that these  relationships  will not continue in the
future.  Management believes that sufficient accessible worldwide  manufacturing
capacity  exists to reduce  the risk to the  Company  of  product  shortages  or
unfavorable pricing terms.

Sales and Marketing

The Company  distributes  its products in the United States  through both retail
accounts and direct consumer channels and outside the United States primarily to
retail  accounts.  Within the United  States,  the Company sells its products to
department  and specialty  stores,  mass  merchants,  warehouse  clubs,  catalog
showrooms,  corporate incentive markets,  military base exchanges, home shopping
television,  hotels and fine  restaurants.  The Company also sells a significant
portion of its product  line  through its own retail  store  network.  No single
customer  or retail  account  buying  group  accounted  for more than 10% of the
Company's  consolidated  net sales.  In 1999, the domestic  direct  consumer and
retail accounts distribution  channels accounted for 58% and 33%,  respectively,
of the Company's total net sales, with the balance attributable to international
sales.

Retail Accounts

The Company sells its  proprietary  branded  products to various  retailers that
resell the products to the consumer and to other  institutional  customers.  The
Mikasa(R), Studio Nova(R) and Christopher Stuart(R) brands are sold primarily to
department stores,  independent  specialty retailers and catalog showrooms.  The
Home Beautiful(R) brand is sold primarily to warehouse clubs and mass merchants.








                                       6
<PAGE>

The Company's  management has divided the United States into selling  regions by
channel of  distribution  and brand.  A sales  manager is  responsible  for each
selling  region.   Each  sales  manager  will  use  as  many  independent  sales
representatives   ("representatives")   or   independent   sales   organizations
("organizations")  as are required to  adequately  service a selling  region.  A
representative  or  organization  sells one or more of the  Company's  brands to
certain channels of distribution in a specific market area. Currently, there are
13 selling regions with approximately 65 representatives or organizations in the
Company's United States retail accounts operations.

Consumer

The Company's  consumer channel of distribution is primarily through its Company
owned and operated  retail store  network.  The  Company's  consumer  sales also
include its semi-annual  warehouse sales made through its  distribution  centers
and consumer direct sales made through its service center.  The Company's retail
stores  represent an opportunity for the Company to raise consumer  awareness of
the  Mikasa and other  brands  owned by the  Company.  Retail  stores  provide a
testing  laboratory for new products where consumer behavior can be more closely
monitored.  They also serve as outlets  for  selling  discontinued  products  at
margins  higher  than  would be  obtained  by  selling  these  products  through
traditional  department and specialty  retailers,  discounters  or  liquidators.
Minimizing  the use of  liquidators  allows  the  Company  to dispose of surplus
inventories  in a fashion which is  non-disruptive  to major market  areas.  The
additional  sales volume  provided by the retail stores,  when combined with the
retail accounts  volume,  also provides the Company with  additional  purchasing
power.

The Company  opened its first  retail  store under the Mikasa  brand name at its
east coast distribution center in Secaucus,  New Jersey in 1978. At December 31,
1999,  the  Company  operated  165 retail  stores in 41 states,  three  Canadian
provinces  and in Puerto Rico.  In 1999,  11 stores were opened,  including 1 in
Canada and 1 in Puerto  Rico;  and 4 stores were closed.  The Company  presently
intends  to open 10 new retail  stores in 2000.  The  Company's  ability to open
additional retail stores, however, is contingent upon several factors, including
the  construction  of retail centers by developers,  the  availability of retail
space and the  appropriateness of a particular location as a site for one of the
Company's retail stores. The Company is selective about the sites for its retail
stores and  evaluates  the  location,  the  developer  and the  quality of other
tenants as well as the tenant mix in the center, among other factors.

The Company uses a  standardized  format for its retail  stores opened under the
Mikasa brand name,  including  lighting,  fixtures and signage. A new store will
range from  approximately  5,000 to 10,000  square  feet and  require an initial
investment in the range of $200,000 to $800,000  (exclusive of pre-opening store
expenses  which  have  averaged  approximately  $130,000),   much  of  which  is
inventory.  Mikasa retail stores  feature a broad line of Mikasa  products,  and
also sell products under the Company's other brand names.

International

Internationally,  the Company sells its products through authorized distributors
primarily in eight countries. In addition, the Company has historically used its
Japanese buying agency to facilitate the development and acquisition of products
from Japanese and other Asian suppliers.  The Company acquired full ownership of

                                       7
<PAGE>

the buying agency in 1993 from a director and  stockholder  of the Company.  The
acquisition  provided  the Company  with a presence  in Asia to handle  existing
business and, as Asian markets evolve,  take advantage of opportunities that may
arise in the future in manufacturing, design developments and distribution.

In 1991,  the Company formed Mikasa Europe  Distribution  GmbH & Co. KG ("Mikasa
Europe"),  a joint marketing  venture in Germany to develop the potential market
for the Company's  products in Western Europe.  The original  partners in Mikasa
Europe included the Company and two of its major suppliers. In 1993, the Company
acquired  the  interest  of  one of  its  partners  and  became  the  two-thirds
controlling partner.

In October 1995, the Company  acquired the assets and operations of its Canadian
distributor.  This company distributed Mikasa and other Company brands in Canada
through retail accounts. In June 1996, the Company opened its first retail store
in Canada and at the end of 1999 had six stores in operation in three provinces.
In 1999 the  Company  opened  one new  retail  store  in  Canada  and  continues
investigating other retail marketing opportunities in Canada.

Advertising and Promotion

The  Company's  advertising  program  seeks  to  reinforce  recognition  of  the
Company's  brands  and to  project a quality  image.  This  advertising  program
includes:

      o      Cooperative advertising efforts with key accounts.

      o      Direct advertising of the Company's retail stores.

      o      Print advertising of the Mikasa brand in national bridal magazines.

      o      Promotional  brochures  which  are  produced  by  the  Company  and
             provided to its department  store and specialty  accounts which, in
             turn, provide them directly to consumers.

Distribution and Warehousing

At the close of 1999, the Company operated two primary  distribution  facilities
in the United States to service its retail account customers,  retail stores and
certain international sales. In Long Beach, California,  the Company occupies an
aggregate  of  271,000  square  feet of  warehouse  space in two  locations.  In
Charleston,  South Carolina, the Company has an aggregate of 580,000 square feet
of warehouse space. The Company receives  virtually all of its imported products
at these distribution  facilities via ocean freight.  These distribution centers
are located in areas  which allow them ready  access to the ports of Los Angeles
and Long Beach, California, and Charleston, South Carolina.

Because of its broad  product  line and need to service  its retail  accounts as
well as its own retail store network,  the Company  maintains a large  inventory
base.  Approximately 27,000 stock keeping units are inventoried in the Company's
domestic distribution facilities.



                                       8
<PAGE>

In light of its large number of stock keeping  units,  the Company  utilizes its
information  systems to quickly  locate each item in its  distribution  centers.
This  system  is  designed  to  permit   efficient   order   picking  and  stock
replenishment.  In a similar  manner,  the  Company has  established  a bar code
tracking  system  within its  distribution  centers  which allows the Company to
track  paperwork,  at various stages of completion,  as each order is processed.
The state of the art distribution  technology in the new Charleston  facility is
more advanced with its paperless on-line system.

Information Technology

The Company's management information systems are designed to serve the Company's
needs for customer service, order processing,  retail test marketing,  inventory
control,  accounting and distribution functions.  The Company has four IBM AS400
computers  located  at  each  of  its  distribution  centers  and  its  Canadian
distribution  center,  which are connected via leased  telecommunication  lines.
Additionally,  the Company has the ability to connect  authorized  personnel and
each of its retail store  locations to one of its main  computers on a "dial-up"
basis for any number of purposes,  including  order  inquiry and stock  inquiry.
Most members of the Company's  management  and  independent  sales force carry a
lap-top or notebook personal computer with communications capability.  With this
personal computer, they are able to access, after proper security clearance, the
Company's data regarding stock  availability  and order status  information,  as
well as other  essential  information.  The new  facility in  Charleston,  South
Carolina was constructed with a state of the art distribution technology that is
a paperless on- line computer system.

The Company has committed to support the  electronic  data  interchange  ("EDI")
function of many of its principal  retail  account  customers.  This has had two
major effects on the Company.  First,  as customers have reduced their inventory
levels,  the Company has had to increase its inventory levels in order to assure
its ability to meet the  specified  delivery time frames.  Second,  in the past,
shipments to stores  typically were made in several bulk shipments  prior to the
main selling  seasons,  and during the selling seasons a number of small fill-in
shipments  would be  made.  In the new EDI  environment,  however,  the  Company
typically makes smaller bulk shipments just prior to the primary selling seasons
and many subsequent fill-in shipments during these seasons.  The Company intends
to continue to assist its  customers  by  converting  as much of its business as
practicable to EDI.

The  Company's  point-of-sale  cash  registers  within its own stores  allow the
Company to scan bar codes for items upon purchase. This information is polled at
the end of each  business  day,  allowing  the  Company to  maintain a perpetual
inventory of store  stocks,  review sales results on new test  products,  adjust
factory orders for fast and/or slow moving  products,  review stock for possible
replenishment  from distribution  centers or retail store  inventories,  analyze
slow moving  inventories,  monitor  inventory  shrinkage  and take any necessary
mark-down action.

Intellectual Property

The Company is the exclusive owner in the United States of its proprietary brand
names,  including Mikasa(R),  Studio Nova(R),  Home Beautiful(R) and Christopher
Stuart(R),  as used in connection with the Company's most significant  products.
The Company has registered these  proprietary brand names with the United States


                                       9
<PAGE>

Patent and  Trademark  Office,  and has  similarly  registered  or  applied  for
trademark  registration of certain brand names in most major markets  throughout
the world.  The Company is also the exclusive  owner of many of the designs used
in the conduct of its business and, with respect to the remaining designs,  owns
such designs jointly with certain key manufacturers or outside designers, or has
the right to use such designs.  The Company has many of its designs  registered,
or pending registration,  with the United States Copyright Office. Periodically,
the  Company  files   additional   applications   for  trademark  and  copyright
registration as the Company deems appropriate.  On occasion, the Company obtains
licenses to use the names and/or designs of others.

Competition

Competition in the better tabletop market is primarily based on quality, product
selection,  design,  price and service. The tabletop market in which the Company
competes includes  hundreds of suppliers,  the majority of which compete in only
part of one of the three principal product segments (dinnerware, crystalware and
flatware). The fragmentation and overlap of market segments and lack of publicly
available  information within the industry make it extremely difficult to obtain
reliable statistics on industry size, growth, market share and comparative data.
Certain of the  Company's  competitors  are larger and have  greater  financial,
marketing and other resources than the Company.

The better dinnerware  market is normally divided into two segments,  formal and
casual.  The Company  believes  that it is the market share leader in the casual
segment of the domestic  market.  In the formal segment of the domestic  market,
management believes that it is fifth in market share.

The Company  also  believes it is the market  share leader in the portion of the
domestic  crystal  stemware  market that is sold through the "upstairs"  crystal
department of department stores and through specialty stores. Management further
believes that the Company has the second  largest market share in the "upstairs"
crystal serveware category.

The Company's direct to consumer  distribution network is subject to competition
from other  suppliers with retail stores.  Certain of the Company's  competitors
have established, or have begun to establish,  retail store networks.  Expansion
of those networks,  or the  establishment of retail store networks by additional
competitors,  may result in increased competition for the Company's retail store
network.

Governmental Regulation

Imports into the United States are affected by import  duties,  quotas,  tariffs
and  other  restrictions.  Currently,  tabletop  product  duties  are based on a
percentage of the value of the product and range from 1% for plastic products to
30% for certain inexpensive, mass-produced glassware. These duties are collected
by the United States  Customs  Service in the normal course of business.  At the
present  time there are no  quotas,  tariffs  or other  restrictions  that would
prevent the  Company  from  importing  products at its  present,  or  increased,
levels.  There can be no  assurance  that  restrictions  on  imports  that would
adversely affect the Company will not be imposed in the future.


                                       10
<PAGE>

The  manufacture  of  ceramic  tabletop  products,   in  particular  those  with
pigmentation or a hard high-gloss  finish,  generally  requires the use of lead,
and sometimes  cadmium,  as raw  materials.  The  manufacture  of leaded crystal
requires  the  use  of  lead  oxide  as  a  raw   material.   The  Federal  Drug
Administration  ("FDA")  has  established  maximum  acceptable  levels  for  the
potential  leaching  of lead and cadmium  from  ceramic  tableware  into food or
liquids.  The FDA has also established a formal,  standardized test protocol for
ceramic  tableware.  The Company has  established  its own  standards,  which it
imposes upon its  manufacturers,  that are more stringent than those established
by the FDA and requires its manufacturers to test their products and certify the
results of such tests in writing. An industry  organization in which the Company
participates  monitors the progress of research to eliminate the requirement for
lead and cadmium in the  manufacture  of ceramic  dinnerware.  An  international
industry  organization for crystal,  of which the Company is also a member,  has
established  maximum  lead  leaching  standards  for  leaded  crystalware.  This
organization  monitors the progress of research to eliminate the requirement for
lead oxide in the  manufacture  of leaded  crystal.  The Company  cannot predict
when, if ever,  it will be possible to eliminate the use of lead and/or  cadmium
from the  manufacture  of ceramic  dinnerware  or the use of lead oxide from the
manufacture of leaded  crystal.  If more rigorous  standards are set by the FDA,
there can be no assurance  that the Company's  products will be able to meet the
new standards.

In addition,  the State of  California  has passed the Safe  Drinking  Water and
Toxic Enforcement Act of 1986 ("Proposition  65"), which requires  manufacturers
to post a warning  notification  regarding possible exposure to lead as a result
of  the  use  of  certain  products,  including  ceramic  tableware  and  leaded
crystalware.  Two  different  types of warnings  are  required,  one relating to
potential  reproductive or birth defect risks  associated with exposure to lead,
and one relating to the potential  carcinogenic effects of exposure to lead. The
State of California  has published its own warning  standards for lead exposure,
which are more stringent than both the FDA and the California sale standards for
lead exposure. The warning standards relate to the posting requirement regarding
reproductive or birth defect risks.  These warning standards were the subject of
two lawsuits,  described below,  involving the Company and most of its principal
competitors.  In the case of the warning notice requirements with respect to the
possible  carcinogenic  effects of exposure to lead,  Proposition  65  initially
provided a safe harbor for  products  which met the FDA  standards.  In December
1993,  however,  this safe harbor was repealed.  As a result,  manufacturers  of
products  containing  lead are now subject to  Proposition  65's cancer  warning
requirements,  unless  they can  demonstrate  that their  products do not expose
consumers  to a level of lead  which is 1,000  times less than that at which any
observable  effect would occur.  The State of California  has  undertaken to set
warning  standards  for lead levels which will be deemed to pose no  significant
risk of cancer, but no such warning standards have yet been announced.  Although
the  Company's  products  meet the FDA and  California  sale  standards for lead
exposure,  no assurance can be given that the State of California will not adopt
more  stringent  warning  standards,  or that the  Company's  products  will not
require the posting of warnings in the future.  Legislation  has been introduced
in several states that is similar to Proposition  65. The Company  monitors this
legislation through its participation in various industry groups.


                                       11
<PAGE>

In December  1992,  the Company,  along with most of its principal  competitors,
including  Lenox,  Noritake,  Royal Doulton and  Waterford-Wedgwood,  reached an
agreement  with the  State of  California  and the  Environmental  Defense  Fund
regarding litigation concerning  Proposition 65 and the alleged failure of these
companies to post a warning notification  regarding possible exposure to lead as
a  result  of the use of  certain  ceramic  tableware  products.  As part of the
settlement,  each  agreed:  (i) To a  specified  testing  protocol  that is more
extensive than the federal requirement;  (ii) To make a payment for past alleged
violations;  and (iii) To  institute a system for the future  posting of warning
notifications  for products with test results above a specified level, as set by
California.

In June 1993,  the Company and most of its principal  competitors in the sale of
leaded crystal  products settled a similar action which had been brought against
them  under  Proposition  65 by a private  litigant.  This suit  related  to the
application of the warning requirements of Proposition 65 to leaded crystalware.
The  settlement  was  approved  by the  California  State  Attorney  General and
required a payment for past violations and the establishment of a system for the
posting of warning notifications by the settling defendants.

Employees

As of December 31, 1999,  the Company had 4,078  employees,  of which 3,224 were
employed in the  Company's  domestic  retail  operations,  686 were  employed in
domestic  wholesale and corporate  support  operations  and 168 were employed in
international operations.

Seasonality

Historically, the Company's operations have been seasonal, with higher sales and
net income  occurring  in the third and fourth  quarters,  reflecting  increased
demand  during the year-end  holiday  selling  season.  For a discussion  of the
seasonality of the Company's business, see "Management's Discussion and Analysis
of Financial  Condition and Results of Operations --  Seasonality  and Quarterly
Fluctuations."


Item 2.  PROPERTIES

The Company leases all of its  facilities,  including  distribution  facilities,
offices,  showrooms,  and  stores,  with  the  exception  of  the  Company-owned
facilities  in  Secaucus,  New Jersey and  Charleston,  South  Carolina.  Of the
421,000 square foot Company owned  facility in Secaucus,  37,000 square feet are
used for  office  space  with the  remainder  leased  as  warehouse  space.  The
Charleston,  South Carolina facility,  of approximately  580,000 square feet, is
primarily used for the Company's east coast distribution center. The facility in
Long Beach,  California of approximately  175,000 square feet is leased pursuant
to a lease expiring in January 2003.  This facility houses 22,000 square feet of
office space with the remainder used for the Company's  west coast  distribution
center. With the inclusion of a second off-site building the combined west coast
warehouse space is approximately 271,000 square feet. The Company's other leases
extend over an average period of five to ten years with various renewal options.
These other  leases  consist of  showrooms  and  primarily  of an  aggregate  of
1,613,000  square feet for Company  operated  retail stores in the United States
and  Canada.  See Note 9 of  Notes  to  Consolidated  Financial  Statements  for
information with respect to the Company's lease obligations.


                                       12
<PAGE>

Item 3.  LEGAL PROCEEDINGS

The Company is a party to various actions and proceedings incident to its normal
business  operations.  The Company  believes that the outcome of such litigation
and  proceedings,  individually  and in the aggregate,  will not have a material
adverse effect on the business or financial condition of the Company.


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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of fiscal year 1999.


                                    PART II
                                    -------

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

MARKET INFORMATION FOR COMMON STOCK

The Company's  common stock trades on the New York Stock Exchange (ticker symbol
MKS). The following table sets forth,  for the periods  indicated,  the high and
low closing  sales  prices of the common stock as reported on the New York Stock
Exchange (in dollars).


                              1999                         1998
                    ------------------------      ----------------------
--------            --------        --------      ---------      -------
Quarter               High            Low            High          Low
--------            --------        --------      ---------      -------
First               12-7/16          7-3/8          14-7/8       13-1/4
Second              11-9/16          7-9/16         13-13/16     12-13/16
Third               13-9/16         11-9/16         15-          11-
Fourth              12-1/16          9-3/4          12-3/4       10-5/16

On March 6, 2000, the closing price of the Company's  common stock,  as reported
on the New  York  Stock  Exchange,  was  $9.50.  As of such  date,  the  Company
estimates that there were  approximately  1,200 holders of record or represented
through  accounts held by clearing  agencies.  The Company  declared a quarterly
dividend  of $0.05 on its common  stock to  stockholders  of record on March 31,
2000 payable on April 11, 2000. The Company paid regular quarterly  dividends of
$0.05 per share on its common stock during fiscal years 1999, 1998 and 1997. The
Company has loan  agreements  with its senior note holders and revolving  credit
lenders which could limit the Company's  future  ability to pay  dividends.  See
Note 7 of Notes to Consolidated Financial Statements.









                                       13
<PAGE>
Item 6.  SELECTED CONSOLIDATED FINANCIAL AND OPERATIONS DATA
              (In thousands, except per share and operations data)
<TABLE>
<CAPTION>
                                                               For The Years Ended December 31,
                                                               --------------------------------
                                                    1999           1998          1997           1996           1995
                                                    ----           ----          ----           ----           ----
Income Statement Data:
<S>                                               <C>            <C>           <C>            <C>            <C>
Net sales                                         $424,615       $410,665      $397,217       $372,331       $362,453
Cost of sales                                      222,564        216,157       208,833        205,016        200,399
                                                  --------       --------      --------       --------       --------
Gross profit                                       202,051        194,508       188,384        167,315        162,054
Selling, general and administrative expenses       160,476        161,442       150,497        130,347        112,845
Restructuring charge                                    --          2,400            --             --             --
Store closure charge                                    --             --            --          4,100             --
                                                  --------       --------      --------       --------       --------
Income from operations                              41,575         30,666        37,887         32,868         49,209
Interest expense, net                                6,666          6,956         2,205          1,437            510
                                                  --------       --------      --------       --------       --------
Income before income taxes                          34,909         23,710        35,682         31,431         48,699
Income tax provision                                13,316          9,447        14,018         12,381         18,927
                                                  --------       --------      --------       --------       --------
Net income                                        $ 21,593       $ 14,263      $ 21,664       $ 19,050       $ 29,772
                                                  ========       ========      ========       ========       ========
Basic and diluted net income per share
  of common stock                                 $   1.23       $   0.78      $   1.18       $   0.91       $   1.34

Weighted average number of shares
  of common stock outstanding
  and dilutive securities                           17,632         18,324        18,445         20,934         22,298

Cash dividend per share of common
  stock                                           $   0.20       $   0.20      $   0.20       $     --       $     --

Net Sales by Channel of Distribution:
Direct to consumers                               $245,151       $238,774      $223,459       $197,463       $177,222
Retail accounts                                    140,423        137,794       145,669        149,901        165,527
International                                       39,041         34,097        28,089         24,967         19,704
                                                  --------       --------      --------       --------       --------
Total                                             $424,615       $410,665      $397,217       $372,331       $362,453
                                                  ========       ========      ========       ========       ========
Operations Data:
Stores at end of year                                  165            158           152            134            119
Percentage increase (decrease) in total
  comparable store net sales (1)                     (0.4%)           0.4%          0.2%         (0.7%)         (1.4%)

                                                                      As of December 31,
                                                                      ------------------
                                                    1999           1998          1997           1996           1995
                                                    ----           ----          ----           ----           ----
Balance Sheet Data:
Working capital                                   $175,101       $171,195      $183,430       $162,385       $219,267
Total assets                                       371,403        364,742       370,433        283,981        299,012
Long-term debt                                      90,000        100,000       110,000         60,000         60,000
Total stockholders' equity                         212,485        201,373       196,092        178,572        200,068
-------------
(1) A store is considered to be comparable only if it is open for all of both periods being compared.
</TABLE>

                                       14
<PAGE>

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

Results of Operations

The following  table sets forth certain  financial and  operations  data for the
years indicated:

                                                     Years Ended December 31,
                                                --------------------------------
                                                   1999       1998       1997
                                                ---------   ---------  ---------
                                                 (Sales dollars in thousands)

Net Sales by Channel of Distribution:
Direct to consumers                              $245,151   $238,774   $223,459
Retail accounts                                   140,423    137,794    145,669
International                                      39,041     34,097     28,089
                                                 --------   --------   --------
     Total                                       $424,615   $410,665   $397,217
                                                 ========   ========   ========

Operations Data:
Stores open at end of the year                        165        158        152

Percentage increase (decrease) in comparable
   store net sales                                  (0.4%)       0.4%       0.2%

Total U.S. store gross square footage at end
  of the year                                   1,554,000  1,502,000  1,459,000

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Net Sales.  Net sales in 1999 were $424.6 million,  an increase of $13.9 million
or 3.4% over 1998 net sales of $410.7  million.  This  increase  in net sales in
1999 was  attributable to a combination of factors.  First, the Company's direct
to consumers channel of distribution,  where sales are generally at higher price
levels than in the retail account channel,  provided an increase of $6.4 million
of sales over 1998.  The Company  opened a total of 11 new retail  stores during
1999 while closing 4 stores. The new store openings consisted of 9 stores in the
U.S.,  1 store in Puerto  Rico and 1 store in  Canada.  The 10 new stores in the
U.S.  and Puerto Rico  accounted  for $5.3  million or 82.8% of the retail sales
growth.  Comparable  store sales  decreased by $0.9 million or 0.4%  compared to
1998  comparable  store sales.  Second,  the  Company's  international  business
contributed  $39.0  million in net sales in 1999, an increase of $4.9 million or
14.5% over 1998 net sales of $34.1  million.  This  increase was due to both the
retail accounts business and Company-owned  retail stores in Canada.  Third, net
sales through the Company's  retail accounts  channel of distribution  increased
$2.6 million in 1999 or 1.9% over 1998.  The increase in net sales was primarily
attributable to an increase in number of units sold rather than in prices.

Gross  Profit.  Gross  profit in 1999 was $202.0  million,  an  increase of $7.5
million  or 3.9% over 1998 gross  profit of $194.5  million.  Gross  profit as a
percentage of net sales increased to 47.6% in 1999 over 47.4% in 1998.


                                       15
<PAGE>

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses in 1999 were $160.4 million, a decrease of $1.0 million
or 0.6%  versus 1998  selling,  general  and  administrative  expenses of $161.4
million.  As a percentage of net sales, such expenses decreased to 37.8% in 1999
from 39.3% in 1998. During 1999, $3.3 million in expenses were added for ongoing
operating  expenses of the 10 new stores  opened in the United States and Puerto
Rico during 1999 and certain  pre-opening  expenses  for these  stores and other
stores expected to open in 2000. This follows the Company's  practice to expense
all costs associated with new store openings at the time incurred. Additionally,
the full year  operations  in 1999 of the 8 new stores opened during 1998 in the
United States added $3.6 million in expenses in 1999 compared to 1998 when those
stores were only in operation for varying portions of the year. During 1999, the
Company's  overall expenses  decreased from 1998 due to expense  reductions from
various operating units,  which offset new stores' expenses.  Expense reductions
include $3.7 million  attributable to closed stores, and from decreased expenses
from  the  Company's  Secaucus,   New  Jersey  warehouse  as  it  completed  its
distribution  function  transfer to the Charleston,  South Carolina  facility in
March 1999.

Income from  Operations.  Income from  operations in 1999 was $41.6 million,  an
increase of $10.9  million or 35.6% over 1998 income  from  operations  of $30.7
million.  This  represented  an increase as a percentage of net sales to 9.8% in
1999  compared to 7.5% in 1998.  This increase was the result of the increase in
gross profit and  decrease in selling,  general and  administrative  expenses in
1999 over 1998.

Interest Expense, Net. Net interest expense was $6.7 million in 1999, a decrease
of $0.3 million from 1998 net interest  expense of $7.0  million.  This decrease
was primarily due to lower interest expense related to short-term  borrowings in
1999 as a result of improved income from operations and reduced inventory levels
during the year in 1999 over 1998 and long-term debt reduction. For a discussion
of the Company's  use of capital  resources,  see  Management's  Discussion  and
Analysis of Financial  Condition  and Results of  Operations  --  Liquidity  and
Capital Resources.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Net Sales.  Net sales in 1998 were $410.7 million,  an increase of $13.5 million
or 3.4% over 1997 net sales of $397.2  million.  This  increase  in net sales in
1998 was  attributable to a combination of factors.  First, the Company's direct
to consumers channel of distribution,  where sales are generally at higher price
levels than in the retail account channel, provided an increase of $15.3 million
of sales over 1997.  The Company  opened a total of 10 new retail  stores during
1998,  which  consisted  of 8 stores in the U.S.  and 2 stores in Canada.  The 8
stores in the U.S.  accounted  for $3.8  million  or 24.8% of the  retail  sales
growth.  Comparable  store sales  increased by $0.8 million or 0.4%  compared to
1997  comparable  store sales.  Second,  the  Company's  international  business
contributed  $34.1  million in net sales in 1998, an increase of $6.0 million or
21.4% over 1997 net sales of $28.1  million.  This increase was primarily due to
both the retail  accounts  business  and the  opening  of two new  Company-owned
stores  in  Canada.  The  increase  in net  sales  for  these  two  channels  of
distribution  was primarily  attributable to an increase in number of units sold
rather than in prices.  These increases were partially  offset by a $7.9 million
decrease of sales  through the retail  accounts  channel of  distribution.  This
decrease  was  primarily  due to  sales  forgone  as a result  of the  Company's
decision to place certain customers on credit watch.


                                       16
<PAGE>

Gross  Profit.  Gross  profit in 1998 was $194.5  million,  an  increase of $6.1
million  or 3.2% over 1997 gross  profit of $188.4  million.  Gross  profit as a
percentage  of net sales was 47.4% in 1998 and  1997.  Excluding  the  Company's
international  business,  gross profit as a percentage of net sales was 48.5% in
1998, up from 48.3% in 1997.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  in 1998 were  $161.4  million,  an  increase  of $10.9
million or 7.3% over 1997 selling, general and administrative expenses of $150.5
million.  As a percentage of net sales, such expenses increased to 39.3% in 1998
from 37.9% in 1997. During 1998, $2.2 million in expenses were added for ongoing
operating  expenses of the 8 new stores  opened in the United States during 1998
and certain  pre-opening  expenses for these stores and other stores expected to
open in  1999.  This  follows  the  Company's  practice  to  expense  all  costs
associated with new store openings at the time incurred.  Additionally, the full
year  operations  in 1998 of the 19 new stores  opened during 1997 in the United
States added $6.5 million in expenses in 1998 compared to 1997 when those stores
were only in operation for varying portions of the year. Operating expenses were
also  impacted  by the  incremental  and  transitional  cost of $6.9  million of
bringing  the  Charleston  facility  on line  while  maintaining  the New Jersey
distribution facility.

Restructuring  Charge. A restructuring charge of $2.4 million was accrued during
1998 for expenses expected in connection with the consolidation of the Company's
east coast  warehousing  operations,  credit and customer service functions into
its Charleston, South Carolina facility.

Income from  Operations.  Income from  operations in 1998 was $30.7  million,  a
decrease of $7.2  million or 19.0%  compared to 1997 income from  operations  of
$37.9 million.  This represented a decrease as a percentage of net sales to 7.5%
in 1998  compared to 9.5% in 1997.  This decrease was the result of the increase
in selling,  general and  administrative  expenses in 1998, the  incremental and
transitional  cost  related to bringing  the  Charleston  facility on line while
maintaining the Company's New Jersey distribution facility and the non-recurring
restructuring charge accrued in 1998 for the Charleston transition.

Interest  Expense,  Net.  Net  interest  expense  was $7.0  million in 1998,  an
increase of $4.8 million from 1997 net interest  expense of $2.2  million.  This
increase was primarily due to recognition of interest expense beginning April 1,
1998  attributable to the Company's  Charleston,  South Carolina  facility which
interest had been previously capitalized during construction.  The increase also
reflects short-term  borrowings to support the Company's inventory levels during
the year.  For a  discussion  of the  Company's  use of capital  resources,  see
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations -- Liquidity and Capital Resources.



                                       17
<PAGE>

Liquidity and Capital Resources

Historically,  the Company has used cash from operations, an equity offering and
debt financing to fund working capital requirements and capital expenditures. In
June 1997,  the Company  placed $60.0 million in unsecured,  senior notes with a
group of  insurance  companies  at an interest  rate of 7.38% per annum  payable
semi-annually  that mature on June 4, 2007.  Principal payments of $15.0 million
per year will be due  annually  commencing  in June 2004.  The Company  also has
outstanding  $40.0  million in unsecured  senior notes with a group of insurance
companies   which  bear  interest  at  the  rate  of  6.66%  per  annum  payable
semi-annually  that  mature in May 2003.  Principal  payments  on these notes of
$10.0  million per year are due  annually  in May each year until May 2003.  The
Company also has a $50.0 million unsecured revolving credit facility provided by
two banks.  The maturity date of the revolving  credit facility is May 19, 2001.
As of December 31, 1999,  $4.0 million had been used for letters of credit under
the revolving credit facility and $46.0 million was unused and available.  For a
discussion  of certain  restrictive  covenants  contained in the senior note and
revolving credit facility loan agreements, including restrictions on the payment
of dividends, see Note 7 of Notes to Consolidated Financial Statements.

The Company had working  capital of $175.1  million at December  31,  1999,  and
working  capital of $171.2  million at December 31, 1998.  Net cash  provided by
operating activities was $37.9 million, $16.2 million and $12.3 million in 1999,
1998 and 1997,  respectively.  The  increase in net cash  provided by  operating
activities  in 1999 compared to 1998 was  primarily  attributable  to higher net
income  of  $7.3  million  in  1999  over  1998,  a  decrease  in the  Company's
inventories  of $2.3  million  in 1999 from 1998,  compared  to an  increase  in
inventories  of $6.4  million in 1998 from 1997,  and an  increase  in  accounts
payable and accrued expenses of $4.4 million in 1999 from 1998.

Net cash used in investing activities was $10.1 million, $19.2 million and $49.7
million in 1999,  1998 and 1997,  respectively.  Cash used  during all years was
primarily  attributable  to  investment  in  capital  expenditures   (consisting
primarily of the construction of the new distribution  center in South Carolina,
new retail stores' fixtures and leasehold improvements, distribution facilities'
fixtures and renovation of existing retail stores).  The capital expenditures in
1998 and 1997  were  mainly  for the  Charleston,  South  Carolina  distribution
facility.

Net cash (used in) provided by financing activities was $(22.2) million, $(18.5)
million and $56.6 million in 1999, 1998 and 1997, respectively.  During 1999 and
1998,  net cash was used for payment of long-term  debt,  repurchases  of common
stock and  payment  of cash  dividends.  Pursuant  to the  Company's  previously
announced  program to  repurchase  up to $20  million of its common  stock,  the
Company  purchased  791,700  shares in 1999 at a total cost of $8.7  million and
427,400  shares in 1998 at a total cost of $5.1 million.  During 1997,  net cash
was provided by a $60.0 million debt placement.

Certain monetary assets and liabilities of the Company are in foreign currencies
and may be subject to foreign exchange risk.  Foreign  currency  exchange losses
have not in the past had a material effect on the Company's  financial condition
since these assets and liabilities are not material to its consolidated monetary
assets  and  liabilities.  As such,  these  items  have not been  hedged  by the
Company. See Note 2 of Notes to Consolidated Financial Statements.


                                       18
<PAGE>

The Company's  inventory  purchases in 1999 were approximately 20% from Japanese
factories and approximately 31% from German and Austrian factories combined. The
significant  portion of inventory  purchases in foreign  currencies  exposes the
Company to foreign  currency  fluctuations  which can affect the Company's gross
profit margin. To hedge against  potential foreign currency swings,  the Company
has  strategies  in place which are intended to minimize  the adverse  impact of
foreign  currency  fluctuations  on its  business.  These  strategies  are:  (i)
Currency risk sharing  arrangements with the Company's Japanese suppliers;  (ii)
Forward exchange contract coverage on part of its German mark related purchases;
(iii)  Sourcing of products  from  countries  other than Japan and Germany where
feasible;  and (iv) Converting  certain  purchases from foreign currency to U.S.
dollar denominations. The currency risk sharing arrangements minimize the impact
of currency swings by the equal sharing of currency  exposures against inventory
purchases  denominated  in Japanese yen between the  suppliers  and the Company.
Future  fluctuations  of the U.S.  dollar in relation to foreign  currencies can
impact earnings in future periods.

At the close of 1999,  the Company had two primary  distribution  centers in the
United States, located in Charleston, South Carolina and Long Beach, California.
The  Charleston  facility is owned and the Long Beach  facility  is leased.  The
Company also leases additional off-site warehouse space in separate buildings to
augment the Long Beach facility.  The Company has its corporate  office facility
in Secaucus,  New Jersey, which is Company owned. After transfer of the Secaucus
facility's warehouse function to the Company's Charleston distribution facility,
the warehouse  portion of the facility was leased to an unrelated third party in
April 1999. The lease term is for 9 years and will provide annually in excess of
$2 million in pre-tax  income.  The Company's  580,000 square foot  distribution
facility in  Charleston,  South  Carolina  became fully  operational  during the
latter part of 1998. The Company incurred certain transition costs in 1999, 1998
and 1997 that impacted earnings. The Company began depreciating this facility in
1998.

During 1999 the Company opened 11 new retail stores, including 1 store in Puerto
Rico, 1 store in Canada,  and closed 4 stores.  As of December  31, 1999,  total
retail  store  count  increased  to 165,  including  1 Puerto  Rican store and 6
Canadian stores.  The Company operates retail stores in 41 states and 3 Canadian
provinces.  The Company plans to pursue continued expansion of its store network
in the United  States and Canada.  Present  plans  include  opening up to 10 new
retail  stores in each of 2000 and 2001.  Each store  requires a  commitment  of
inventory, fixtures, equipment and pre-opening store expenses.  Additionally, as
the Company  expands  its  international  operations,  working  capital  will be
required to fund increased inventories and accounts receivable.

The Company currently estimates that its aggregate capital  expenditures in 2000
and 2001 will approximate up to $20 million.  This includes the expansion of the
Company's retail store network and expansion of its international operations. In
each of these  cases,  there  can be no  assurance  that the  Company's  capital
expenditures will not exceed this estimated amount.

Future Developments

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133,  Accounting for Derivative
Instruments  and Hedging  Activities,  amended by SFAS No. 137.  This  Statement
establishes  accounting  and  reporting  standards for  derivatives  and hedging
activities.   In  accordance  with  this  Statement,  all  derivatives  must  be
recognized as assets or liabilities  and measured at fair value.  This Statement
will be effective for the Company's  fiscal year 2001.  The Company is currently
evaluating the requirements of SFAS No. 133.

                                       19
<PAGE>

Year 2000 Compliance

The Company  established and implemented,  using a standard five phase approach,
its year 2000  program  which was  designed  to  minimize  the risk of  computer
failure upon entering the Year 2000 to the Company's business and its customers.
The  five  phases  included  assessment,   planning,  remediation,  testing  and
validation. All phases of the program were completed by the end of 1999.

The total cost to implement the Year 2000 program was approximately $240,000. To
date,  the  Company  has not  experienced  any major  systems  failures or other
adverse consequences due to Year 2000 noncompliance. While the possibility still
exists for future  computer  failures,  internally  or among its  customers  and
suppliers,  management  does not expect  that these  developments,  should  they
occur, would have a material adverse impact on the financial  position,  results
of operations or cash flows of the Company.

Seasonality and Quarterly Fluctuations

Historically, the Company's operations have been seasonal, with higher sales and
net income  occurring  in the third and fourth  quarters,  reflecting  increased
demand during the year-end  holiday  selling  season.  Since the biggest  retail
selling  season is the year-end  holiday  season,  and as more of the  Company's
principal  department store customers adopt  electronic data  interchange  which
allows them to defer shipments  until later in the selling season,  future sales
are expected to be more heavily  weighted toward the third and fourth  quarters.
In addition,  the Company's retail stores  experience a similar seasonal selling
pattern,  however, sales are more heavily weighted toward the fourth quarter. As
a result,  as the  Company  increases  the number of stores,  the shift of sales
volume toward the latter part of the year is expected to continue.

The Company's  results of operations  may also fluctuate from quarter to quarter
in the future as a result of the amount and timing of sales  contributed by, and
expenses  related to the opening of, new retail  stores and the  integration  of
such stores into the operations of the Company,  as well as other  factors.  The
addition of a significant  number of retail stores,  as is anticipated  with the
Company's store expansion program, can therefore significantly affect results of
operations  on a  quarter-to-quarter  basis.  As  the  addition  of  new  stores
continues,  operating  income  for the first and  second  quarters  will be more
impacted by the combination of seasonally lower sales volumes during this period
and  increased  operating  expenses.  The  increase  in  operating  expenses  is
principally  due to an increased  percentage  of fixed  expenses  that relate to
retail stores and the additional incremental expense from new developing stores.

The following table shows certain  unaudited  quarterly  consolidated  financial
information,  and such information as a percentage of net sales, for the Company
during the fiscal  years 1999 and 1998.  The  unaudited  quarterly  consolidated
financial  information  includes  all  adjustments  (consisting  only of  normal
recurring   adjustments)  that  the  Company  considers  necessary  for  a  fair
presentation of the information shown. The operating results are not necessarily
indicative of results for any future period.




                                       20
<PAGE>
<TABLE>
<CAPTION>
                                                        QUARTERLY FINANCIAL SUMMARY (UNAUDITED)
                                                     (Dollars in thousands, except per share data)

                                                                   Three Months Ended
                                     -------------------------------------------------------------------------------------------
                                           March 31                June 30               September 30             December 31
                                     --------------------    -------------------    --------------------    ---------------------
<S>                                  <C>           <C>       <C>          <C>       <C>             <C>      <C>             <C>
1999:
Net sales                             $80,335       100%     $86,819       100%     $107,594        100%     $149,867        100%
Gross profit                           36,945       46.0      40,525       46.7       50,088        46.6       74,493        49.7
Selling, general and
  administrative expenses              37,305       46.4      38,636       44.5       39,769        37.0       44,766        29.9
Income (loss) from operations           (360)      (0.4)       1,889        2.2       10,319         9.6       29,727        19.8
Net income (loss)                     (1,171)      (1.5)         183        0.2        5,233         4.9       17,348        11.6
Basic and diluted net income (loss)
  per share of common stock          $ (0.07)                $  0.01                $   0.30                 $   1.00

1998:
Net sales                             $76,210       100%     $83,292       100%     $104,053        100%     $147,110        100%
Gross profit                           34,332       45.1      40,513       48.6       49,932        48.0       69,731        47.4
Selling, general and
  administrative expenses              37,870       49.7      39,239       47.1       40,117        38.6       44,216        30.1
Restructuring charge                       --                  2,400        2.9           --                       --
Income (loss) from operations         (3,538)      (4.6)     (1,126)      (1.4)        9,815         9.4       25,515        17.3
Net income (loss)                     (2,543)      (3.3)     (1,906)      (2.3)        4,571         4.4       14,141         9.6
Basic and diluted net income (loss)
  per share of common stock          $ (0.14)                $(0.10)                $   0.25                 $   0.78
</TABLE>

Forward-Looking Information

We believe that certain  statements  or  assumptions  contained in  Management's
Discussion and Analysis constitute "forward-looking"  information (as defined in
the  Private  Securities  Litigation  and  Reform Act of 1995).  These  forward-
looking statements involve risks, uncertainties and other factors that may cause
our actual  results,  performance or  achievements  to vary  materially from our
predicted  results,  performance or  achievements.  Our factors  include,  among
others,  the  impact on future  sales and  profitability  of the  Company's  new
distribution  facility,  foreign exchange and foreign purchasing risks,  planned
expansion of the Company's  retail store  network,  capital  expenditure  levels
associated  with  planned  projects,  future  trends  relating  to  seasonality,
competition  from the  expansion  of retail store  networks by our  competitors,
increased  governmental  quotas,  tariffs or other  restrictions on products the
Company imports,  and various other factors  referenced in this Annual Report on
Form 10-K. We will not update the forward-looking  information to reflect actual
results or changes in factors  affecting the  forward-looking  information.  The
forward-looking  information referred to above includes,  but is not limited to:
(a) expectations  regarding the Company's financial condition and liquidity,  as
well as future cash flows; (b) expectations regarding capital expenditures;  and
(c) expectations regarding sales growth, gross margins, and selling, general and



                                       21
<PAGE>


administrative  expenses.  In  addition  to the risks,  uncertainties  and other
factors  referred to above which may cause the actual  results,  performance  or
achievements to vary from predicted  results,  these estimated amounts are based
on various  factors  and were  derived  using  numerous  important  assumptions,
including:  the Company's successful  performance of internal plans; its ability
to control  inventory  levels;  customer  changes in short  range and long range
plans;  domestic and  international  competition in the Company's product areas;
future  performance  of the Company's new  distribution  facility and successful
completion  of programs to improve  efficiency  of the new  facility;  continued
acceptance  of existing  products  and the  development  and  acceptance  of new
products;  performance  issues with key suppliers;  changes in government import
and export  policies;  risks related to  international  transactions and hedging
strategies;  the ability to  establish a  successful  e-commerce  function;  and
general economic risks and uncertainties.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         None

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
































                                       22
<PAGE>





                       REPORT OF INDEPENDENT ACCOUNTANTS
                                   ------------



To the Board of Directors and Stockholders
Mikasa, Inc.


In our  opinion,  the  accompanying  consolidated  balance  sheets  and  related
consolidated statements of income,  stockholders' equity, and cash flows present
fairly, in all material  respects,  the financial  position of Mikasa,  Inc. and
Subsidiaries at December 31, 1999 and 1998, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 1999 in conformity  with  accounting  principles  generally  accepted in the
United States. These consolidated financial statements are the responsibility of
the Company's  management;  our responsibility is to express an opinion on these
consolidated  financial  statements based on our audits. We conducted our audits
of these statements in accordance with auditing standards  generally accepted in
the United  States,  which  require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.






PricewaterhouseCoopers LLP

Florham Park, New Jersey
February 29, 2000












                                       23
<PAGE>
                         MIKASA, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                     (In thousands, except per share data)
                                   ------------
<TABLE>
<CAPTION>
                                                                                      December 31,
                                                                                  1999         1998
                                                                                  ----         ----
                                                      ASSETS:
<S>                                                                            <C>          <C>
Current assets:
  Cash and cash equivalents                                                    $  45,650    $  39,792
  Accounts receivable trade, net                                                  29,684       25,436
  Inventories                                                                    155,204      156,931
  Deferred income taxes                                                            4,375        4,042
  Prepaid expenses and other current assets                                        3,129        3,966
                                                                               ---------    ---------
          Total current assets                                                   238,042      230,167
  Property and equipment, net                                                    127,665      129,054
  Other assets                                                                       956          774
  Intangible assets, net                                                           4,740        4,747
                                                                               ---------    ---------
          Total assets                                                         $ 371,403    $ 364,742
                                                                               =========    =========
                                       LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Short-term borrowings                                                        $  11,514    $  11,690
  Accounts payable                                                                18,113       11,572
  Accrued expenses                                                                25,807       27,883
  Income taxes payable                                                             7,507        7,827
                                                                               ---------    ---------
          Total current liabilities                                               62,941       58,972
Deferred income taxes                                                              5,977        4,397
Notes payable                                                                     90,000      100,000
                                                                               ---------    ---------
          Total liabilities                                                      158,918      163,369
                                                                               ---------    ---------
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, undesignated, $0.01 par value;
    authorized 20,000 shares; none issued and
    outstanding                                                                        -            -
Common stock, $0.01 par value; authorized 80,000 shares; Issued
    and outstanding 17,179 shares in 1999 and 17,950 in 1998                      49,937       49,719
Accumulated other comprehensive income (loss)                                        748         (745)
Retained earnings                                                                215,265      197,183
                                                                               ---------    ---------
                                                                                 265,950      246,157
Less treasury stock, 5,141 and 4,349 shares at cost in 1999 and 1998,
  respectively                                                                   (53,465)     (44,784)
                                                                               ---------    ---------
          Total stockholders' equity                                             212,485      201,373
                                                                               ---------    ---------
          Total liabilities and stockholders' equity                           $ 371,403    $ 364,742
                                                                               =========    =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
                                       24
<PAGE>

                         MIKASA, INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share data)
                                   ------------



                                                For The Years Ended December 31,
                                                --------------------------------
                                               1999         1998         1997
                                               ----         ----         ----

Net sales                                    $424,615     $410,665     $397,217
Cost of sales                                 222,564      216,157      208,833
                                             --------     --------     --------

      Gross profit                            202,051      194,508      188,384
Selling, general and administrative
  expenses                                    160,476      161,442      150,497
Restructuring charge                               --        2,400           --
                                             --------     --------     --------
      Income from operations                   41,575       30,666       37,887
Interest expense, net                           6,666        6,956        2,205
                                             --------     --------     --------
      Income before income taxes               34,909       23,710       35,682
Income tax provision                           13,316        9,447       14,018
                                             --------     --------     --------

      Net income                             $ 21,593     $ 14,263     $ 21,664
                                             ========     ========     ========

Basic and diluted net income per share of
  common stock                               $   1.23     $   0.78     $   1.18
                                             ========     ========     ========

Weighted average number of shares of
  common stock outstanding and dilutive
  securities                                   17,632       18,324       18,445
                                             ========     ========     ========

Cash dividend per share of common stock      $   0.20     $   0.20     $   0.20
                                             ========     ========     ========










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

                                       25
<PAGE>



                         MIKASA, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              For The Years Ended December 31, 1999, 1998 And 1997
                                 (In thousands)
                                  ------------
<TABLE>
<CAPTION>
                                                                   Accumulated
                                                                      Other
                                         Common Stock             Comprehensive       Retained        Treasury
                                         ------------
                                    Shares          Amount        Income (Loss)        Earnings         Stock
                                    ------          ------        -------------        --------         -----
<S>                                 <C>         <C>                <C>               <C>            <C>
Balance, January 1, 1997            18,359      $   49,532        $        185       $ 168,560      $ (39,705)
Translation adjustment                  --              --              (1,390)             --             --
Net income                              --              --                  --          21,664             --
Dividends paid                          --              --                  --          (2,754)            --
                                ----------      ----------         -----------       ---------      ----------

Balance, December 31, 1997          18,359          49,532              (1,205)        187,470         (39,705)
Translation adjustment                  --              --                 460              --              --
Net income                              --              --                  --          14,263              --
Dividends paid                          --              --                  --          (4,550)             --
Stock options exercised                 18             187                  --              --              --
Treasury stock purchased              (427)             --                  --              --          (5,079)
                                ----------      ----------         -----------       ---------      ----------

Balance, December 31, 1998          17,950          49,719                (745)        197,183         (44,784)
Translation adjustment                  --              --               1,493              --              --
Net income                              --              --                  --          21,593              --
Dividends paid                          --              --                  --          (3,511)             --
Stock options exercised                 21             218                  --              --              --
Treasury stock purchased              (792)             --                  --              --          (8,681)
                                ----------      ----------         -----------       ---------      ----------

Balance, December 31, 1999          17,179      $   49,937         $       748       $ 215,265      $  (53,465)
                                ==========      ==========         ===========       =========      ==========
</TABLE>











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


                                       26
<PAGE>

                         MIKASA, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  ------------
<TABLE>
<CAPTION>
                                                                For The Years Ended December 31,
                                                                --------------------------------
                                                                  1999        1998        1997
                                                                  ----        ----        ----
<S>                                                             <C>         <C>         <C>
Cash flows from operating activities:
  Net income                                                    $ 21,593    $ 14,263    $ 21,664
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                                 12,129      10,502       6,777
  Change in operating assets and liabilities:
    Accounts receivable trade, net                                (3,992)        611      (1,916)
    Inventories                                                    2,260      (6,387)    (18,631)
    Prepaid expenses, other current assets and other assets          442       1,386         (33)
    Accounts payable and accrued expenses                          4,443      (7,142)      4,328
    Income taxes payable                                            (270)      3,272      (1,390)
    Deferred income taxes                                          1,248        (290)      1,506
                                                                --------    --------    --------
         Net cash provided by operating activities                37,853      16,215      12,305
                                                                --------    --------    --------
Cash used in investing activities:
  Capital expenditures                                           (10,123)    (19,239)    (49,671)
                                                                --------    --------    --------
Cash flows (used in) from financing activities:
  Long-term (payments) borrowings under note agreements          (10,000)    (10,000)     60,000
  Net borrowing (payments) of short-term debt                       (176)         57        (179)
  Debt issuance costs                                               --          --          (422)
  Purchase of treasury stock                                      (8,681)     (5,079)       --
  Dividends paid                                                  (3,511)     (3,653)     (2,754)
  Exercise of common stock options                                   218         187        --
                                                                --------    --------    --------
         Net cash (used in) provided by  financing activities    (22,150)    (18,488)     56,645
                                                                --------    --------    --------
         Effect of exchange rate  changes on cash and
           cash equivalents                                          278          86        (348)
                                                                --------    --------    --------
         Net increase (decrease) in cash and cash equivalents      5,858     (21,426)     18,931

Cash and cash equivalents, beginning of year                      39,792      61,218      42,287
                                                                --------    --------    --------

Cash and cash equivalents, end of year                          $ 45,650    $ 39,792    $ 61,218
                                                                ========    ========    ========

Supplemental cash flow disclosures:
  Interest paid                                                 $  7,513    $  8,563    $  5,706
  Income taxes paid                                             $ 12,385    $  5,670    $ 13,635
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       27
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   General:

Mikasa,  Inc.  ("Mikasa" or the "Company") is a leading designer,  developer and
marketer of quality  tabletop  products.  The  Company's  wide range of products
includes ceramic dinnerware,  crystal stemware,  stainless steel flatware, gifts
and decorative accessories for the home. The Company markets its products in the
United  States and  internationally  to retail  accounts,  including  department
stores,  specialty retail stores and mass merchants,  and through  Company-owned
retail stores.

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 those estimates.

2.  Summary Of Significant Accounting Policies:

Principles Of Consolidation:  The consolidated  financial statements include the
accounts of Mikasa, Inc., holding company of American  Commercial,  Incorporated
and  its  wholly-owned  and   majority-owned   subsidiaries   (collectively  the
"Company").  All significant  intercompany  accounts and transactions  have been
eliminated in consolidation.

Cash Equivalents and Short-Term Investments:  Cash equivalents are highly liquid
investments  with a maturity of ninety days or less when  purchased.  Short-term
investments  consist of  instruments  with original  maturities of six months or
less.   These    investments   are   classified   as   short-term    investments
held-to-maturity.  The  carrying  amounts for cash  equivalents  and  short-term
investments approximate their fair values.

Intangible  Assets:  The excess of the purchase price over the fair market value
of the net assets  acquired in the 1985  acquisition  of the Common Stock of the
Company  has been  allocated  to  goodwill.  Goodwill  is  amortized  using  the
straight-line method over its estimated useful life of 40 years.

Other  intangible  assets  consist  of loan  costs to obtain  financing  and are
amortized  over the terms of the related  loans using the  straight-line  method
which approximates the interest method.

The Company assesses whether there has been a permanent  impairment in the value
of intangible  assets by considering  factors such as expected future  operating
income, trends and prospects, as well as the effects of demand,  competition and
other  economic  factors.   Management  believes  no  permanent  impairment  has
occurred.

Inventories:  Inventories  are  stated at the lower of cost or  market.  Cost is
determined on a first-in, first-out basis.


                                       28
<PAGE>

Property And Equipment:  Property and equipment are stated at cost. Depreciation
is computed using the  straight-line  method over the estimated  useful lives of
the related assets as follows:

                                                Useful Life
                                                -----------
             Buildings                    31 to 40 years
             Building improvements        15 years
             Furniture and fixtures       4-15 years
             Leasehold improvements       Lesser of lease term or estimated
                                              useful life of asset

Expenditures for repairs and maintenance are charged to expense as incurred. The
cost and related  accumulated  depreciation  and  amortization  of property  and
equipment  sold or retired are removed from the accounts and resulting  gains or
losses are included in income.

Stock-Based  Compensation:  The Company  follows the disclosure  requirements of
Statement of Financial  Accounting  Standards ("SFAS") No. 123,  "Accounting for
Stock-Based  Compensation."  This statement sets forth alternative  standards of
recognition  of  the  cost  of  stock-based  compensation  and  requires  that a
company's  financial  statements  include certain  disclosures about stock-based
employee compensation  arrangements regardless of the method used to account for
them. As allowed in this statement,  the Company  continues to apply  Accounting
Principles  Board  Opinion  (APB)  No.  25,  "Accounting  for  Stock  Issued  to
Employees," and related interpretations in recording compensation related to its
plans. The supplemental  disclosure requirements and further information related
to the  Company's  stock option plans are  presented in Note 13 to the Company's
financial statements.

Income Taxes:  The Company  follows the provisions of SFAS No. 109,  "Accounting
for Income  Taxes,"  which  requires  the  recognition  of  deferred  income tax
liabilities and assets for the expected  future tax  consequences of events that
have been  included  in the  financial  statements  or tax  returns.  Under this
method,  deferred income tax liabilities and assets are determined  based on the
difference  between  the  financial  statement  and the tax basis of assets  and
liabilities  using enacted rates in effect for the year in which the differences
are expected to reverse.

Revenues:  Revenues are recognized upon shipment of product to customers.  Sales
allowances,   including  cooperative  advertising  allowances,   of  $6,492,000,
$5,814,000 and $7,143,000 in 1999,  1998 and 1997,  respectively,  are accounted
for as a reduction of sales.

Pre-Opening  Store Expenses:  Pre-opening store expenses are charged to selling,
general and administrative expenses as incurred.

Foreign Currency Translation: Assets and liabilities of foreign subsidiaries are
translated at year-end rates of exchange;  income and expenses are translated at
the weighted average rates of exchange during the year. The resultant cumulative
translation  adjustments are included as a separate  component of  stockholders'
equity. Foreign currency transaction gains and losses are included in net income
and were not significant in any period presented.




                                       29
<PAGE>

2.  Summary Of Significant Accounting Policies, Continued:

The Company periodically hedges against foreign currency exposures using forward
exchange contracts to cover identified inventory purchase commitments.  Realized
and  unrealized  gains and losses are  deferred  and  recognized  as the related
transactions  are settled.  At December 31, 1999,  approximately  $5,000,000  of
forward exchange contracts hedging such commitments were outstanding.

Net Income Per Share Available to Common  Stockholders:  The Company adopted the
provisions of SFAS No. 128,  "Earnings Per Share",  effective December 31, 1997.
This  statement  requires  the  presentation  of basic and diluted  earnings per
share. Basic net income per share is calculated by dividing net income available
to common stockholders, adjusted for any cumulative dividends on preferred stock
earned  during  the year,  by the  weighted  average  number  of  common  shares
outstanding  for the period.  Diluted net income per share is calculated  giving
effect to all dilutive  potential common shares that were outstanding during the
period.  Dilutive  potential  common shares  consist of the  incremental  common
shares  issuable upon the conversion of convertible  preferred  stock (using the
"if  converted"  method),  convertible  debt and  exercise of stock  options and
warrants for all periods. See Note 14 "Net Income Per Share."

Comprehensive Income: The Company adopted SFAS No. 130, "Reporting Comprehensive
Income"  during the year ended December 31, 1998.  This  Statement  requires the
Company  to report all  changes  in equity  from  non-owner  sources,  including
unrealized gains and losses on certain investments in debt and equity securities
and  foreign   currency   translation   adjustments,   as  components  of  other
comprehensive  income.  Such amounts are  presented  as a separate  component of
equity  entitled   "Accumulated  Other  Comprehensive   Income  (Loss)"  in  the
Consolidated  Balance Sheets. The individual  components of other  comprehensive
income are also reported  with net income as  "Comprehensive  Income  (Loss)" in
Note 16 of Notes to Consolidated Financial Statements.  Financial statements for
earlier periods have been reclassified for comparative purposes.

Segment Reporting: The Company adopted SFAS No. 131, "Disclosures about Segments
of an Enterprise  and Related  Information",  during the year ended December 31,
1998. This Statement  supercedes  substantially  all the reporting  requirements
previously  required  under  SFAS No.  14,  "Financial  Reporting  for  Business
Segments of an Enterprise",  and establishes  certain disclosures about products
and  services,  geographic  areas and major  customers.  Under SFAS No. 131, the
determination  of segments to be reported in the  financial  statements is to be
consistent  with the manner in which  management  organizes  and  evaluates  the
internal  organization to make operating decisions and assess  performance.  The
adoption of this  Statement did not have an impact upon the Company's  operating
results or financial  position as this  Statement's  provisions  affect only the
disclosure of certain segment information in the financial statements.

Reclassifications:    To   conform   to   the   1999    presentation,    certain
reclassifications   were  made  to  the  prior  years'  consolidated   financial
statements.

3.  Accounts Receivable, Trade:

Receivables  are net of allowances  for  uncollectible  accounts of $774,000 and
$790,000 at December 31, 1999 and 1998, respectively.


                                       30
<PAGE>

4.  Inventories:

      Inventories consist of the following (in thousands):


                                                     December 31,
                                                     ------------
                                                   1999          1998
                                                   ----          ----
      Merchandise inventory:
        United States                            $ 120,700     $ 130,584
        International                               13,343        13,654
      Inventory in-transit                          21,161        12,693
                                                 ---------     ---------
                                                 $ 155,204     $ 156,931
                                                 =========     =========

5.  Property and Equipment:

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


                                                     December 31,
                                                     ------------
                                                   1999          1998
                                                   ----          ----
      Buildings and improvements                 $  58,850     $  56,985
      Furniture and fixtures                        84,520        77,792
      Leasehold improvements                        26,824        25,084
                                                 ---------     ---------
                                                   170,194       159,861
        Less, accumulated depreciation
           and amortization                        (51,824)      (39,988)
                                                 ---------     ---------
                                                   118,370       119,873
      Land                                           9,295         9,181
                                                 ---------     ---------
                                                  $127,665      $129,054
                                                 =========      ========

Depreciation  and  amortization  expense for property and equipment  amounted to
$11,835,000,  $10,213,000  and $6,511,000 for the years ended December 31, 1999,
1998 and  1997,  respectively.  The  Company  capitalized  interest  related  to
construction  of the new  distribution  center in South  Carolina at its cost of
funds.  The  capitalized  interest  amounted to $981,000 and  $2,994,000 for the
years ended  December 31, 1998 and 1997,  respectively,  and will be depreciated
over the estimated useful lives of the distribution center's assets.

In accordance  with SFAS No. 121,  "Accounting  for the Impairment of Long-Lived
Assets and Long-Lived Assets to Be Disposed Of",  long-lived assets are reviewed
for impairment  whenever  events or changes in  circumstances  indicate that the
carrying amount of an asset may not be recoverable.


                                       31
<PAGE>

6.  Intangible Assets:

      Intangible assets consist of the following (in thousands):

                                                     December 31,
                                                     ------------
                                                   1999          1998
                                                   ----          ----
      Goodwill                                   $   5,949     $   5,949
      Other intangible assets                        1,775         1,488
                                                 ---------     ---------
                                                     7,724         7,437
        Less, accumulated amortization              (2,984)       (2,690)
                                                 ---------     ---------
                                                 $   4,740     $   4,747
                                                 =========     =========

Amortization  expense for intangible  assets amounted to $294,000,  $289,000 and
$266,000 for the years ended December 31, 1999, 1998 and 1997, respectively.

7.  Notes Payable:

      Notes payable consist of the following (in thousands):

                                                      December 31,
                                                      ------------
                                                   1999          1998
                                                   ----          ----
      Short-term borrowings                         $1,514        $1,690
      Senior notes                                 100,000       110,000
                                                 ---------     ---------
                                                   101,514       111,690
      Less current portion                          11,514        11,690
                                                 ---------     ---------
      Non-current portion                        $  90,000      $100,000
                                                 =========      ========

In May 1993, the Company entered into an unsecured  revolving  credit  agreement
with two banks in the amount of $50,000,000.  The maturity date is May 19, 2001.
At December 31, 1999,  there were no acceptances  payable and $4,000,000 of this
credit  facility was used for open letters of credit and $46,000,000 of the line
of  credit  was  unused  and  available.  Borrowings  in the form of loans  bear
interest at the higher of the lead bank's "Base Rate" or the Federal  Funds Rate
plus  0.5%.  At  December  31,  1999,  the  interest  rate in effect  was 8.50%.
Borrowings  in the form of  acceptances  bear interest at the lead bank's quoted
treasury rate for  comparable  time periods and amounts plus 0.5%.  The interest
rate in effect at December 31, 1999 was 5.93%.

In May 1993, the Company concurrently entered into Senior Note agreements in the
amount of $60,000,000  through a private  placement of debt which bears interest
at 6.66%  per annum  and is  unsecured.  The  principal  is due in equal  annual
installments of $10,000,000 from 1998 through 2003.

                                       32
<PAGE>

7.  Notes Payable, Continued:

In June 1997, the Company  entered into Senior Note  agreements in the amount of
$60,000,000  through a private  placement of debt which bears  interest at 7.38%
per annum and is unsecured. The principal is due in equal annual installments of
$15,000,000 from 2004 through 2007.

Under the terms of the unsecured  revolving  credit and Senior Note  agreements,
the  Company  is  required  to  maintain  certain  financial  ratios.  The  most
restrictive  covenant requires the Company to maintain a minimum ratio of income
before interest, income taxes and fixed charges to interest and fixed charges of
1.5 to 1.0. The Company's  revolving  credit and Senior Note agreements  contain
restrictive  covenants  regarding cash distributions to stockholders,  including
the payment of  dividends.  Such cash  distributions  made or  authorized  since
December  31,  1996  shall  not  exceed  $35,000,000  plus 65% of the  aggregate
consolidated  net income (or in the case of a consolidated  net loss, minus 100%
of such net loss) for the period  commencing  on December 31, 1996 and ending on
the date such a distribution would be made,  provided no event of default exists
or otherwise would exist.

At December 31, 1999,  a subsidiary  of the Company had a line of credit,  which
was unused and available,  expiring in November 2000,  unless renewed,  totaling
approximately  $2,900,000.  The interest rate at December 31, 1999, was 1.5% and
any borrowings would be collateralized primarily by buildings and land.

Another  subsidiary  of the  Company  had  unsecured  short-term  borrowings  of
$1,514,000 and $1,690,000 at December 31, 1999 and 1998,  respectively,  under a
line of credit totaling approximately  $1,600,000.  The borrowings bear interest
at 7.0% at December 31, 1999 and expire in December 31, 2000.

The fair values of the Company's notes payable,  which  approximate  book value,
were estimated based on current rates offered to the Company for similar debt of
the same  remaining  maturity  and  approximate  market at December 31, 1999 and
1998.

      Maturities of notes payable for the years ended December 31 are as follows
      (in thousands):

          2000                                     $   11,514
          2001                                         10,000
          2002                                         10,000
          2003                                         10,000
          2004                                         15,000
          Thereafter                                   45,000
                                                    ---------
                                                    $ 101,514
                                                    =========

Interest  expense  for  the  periods  presented  is net of  interest  income  of
$1,537,000,  $2,320,000  and  $4,456,000  for the years ended December 31, 1999,
1998 and 1997,  respectively.  The weighted  average interest rate on short-term
notes payable to banks was 8.1%, 6.8%, and 7.0% for the years ended December 31,
1999, 1998 and 1997, respectively.



                                       33
<PAGE>

8.  Income Taxes:

Income tax provision consists of (in thousands):

                                        For The Years Ended December 31,
                                        --------------------------------
                                          1999          1998         1997
                                          ----          ----         ----
     Current:
       Federal                           $   9,548    $   7,335    $   9,475
       State                                 1,181          909        1,347
       Foreign                               1,272        1,493        1,690
                                         ---------    ---------     --------
                                            12,001        9,737       12,512
                                         ---------    ---------     --------
     Deferred:
       Federal                               1,597          279        1,379
       State                                   101           24          127
       Foreign                                (383)        (593)          --
                                         ---------    ---------     --------
                                             1,315         (290)       1,506
                                         ---------    ---------     --------
            Income tax provision         $  13,316    $   9,447     $ 14,018
                                         =========    =========     ========

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

                                         For The Years Ended December 31,
                                         --------------------------------
                                           1999         1998         1997
                                           ----         ----         ----
     Allowance for doubtful accounts     $       6    $     (25)    $     15
     Capitalized inventory costs              (552)        (153)         (29)
     Book/tax difference in depreciation     1,581        1,414        1,310
     Pension and other accrued expenses        683         (930)         198
     Foreign and state taxes, net of
          federal benefit                     (403)        (596)          12
                                         ---------    ---------     --------
                                         $    1,315   $    (290)   $   1,506
                                         ==========   =========    =========

The tax effects of temporary  differences which give rise to deferred income tax
assets and liabilities at December 31, are as follows (in thousands):

                                           1999         1998
                                           ----         ----
     Property and equipment              $  (5,977)   $  (4,397)
     Foreign and state income taxes          1,197          727
     Accounts receivable                       302          308
     Inventories                             1,327          775
     Pension and other accrued liabilities   1,549        2,232
                                         ---------    ---------
                                         $  (1,602)   $    (355)
                                         =========    =========

The Company did not record a valuation allowance against its deferred income tax
assets in 1999 and 1998.

                                       34
<PAGE>

8.  Income Taxes, Continued:

The  provision  for income taxes  differs from the amount that would result from
applying the federal statutory rate as follows:


                                          For The Years Ended December 31,
                                          --------------------------------
                                             1999         1998         1997
                                             ----         ----         ----
     Tax provision at the federal
       statutory rate                        35.0%       35.0%        35.0%
     State tax provision, net of federal
       income tax benefit                     2.3         2.7          3.0
     Other                                    0.9         2.1          1.3
                                             ----        ----         ----
     Effective income tax rate for the year  38.2%       39.8%        39.3%
                                             ====        ====         ====

9.  Commitments And Contingencies:

Leases: The Company is a lessee under long-term  noncancellable  operating lease
agreements  for rental of office,  warehouse,  showroom and retail space.  These
operating  leases  expire at various  dates and are  subject to various  renewal
options and escalation  clauses.  The following is a tabulation of fixed minimum
rental commitments,  not including real estate taxes and other maintenance costs
which are to be paid by the Company (in thousands):

                                           Minimum      Minimum
                                            Rental      Sublease
      Years Ending December 31,            Payments      Income         Net
      -------------------------            --------      ------         ---
           2000                            $ 28,873      $ 2,112     $ 26,760
           2001                              26,766        2,086       24,680
           2002                              25,785        2,086       23,699
           2003                              23,393        2,086       21,307
           2004                              20,239        2,086       18,153
           Thereafter                        45,762        2,404       43,358
                                           --------      -------     --------
                                           $170,818      $12,861     $157,957
                                           ========      =======     ========

     Total rent expense under leases is comprised of the following (in
     thousands):

                                         For The Years Ended December 31,
                                         --------------------------------
                                           1999         1998         1997
                                           ----         ----         ----
     Total rent expense                   $23,509      $23,392    $ 22,639
     Sublease income                       (1,773)      (1,313)     (1,313)
                                          -------      -------    --------
           Net rent expense               $21,736      $22,079    $ 21,326
                                          =======      =======    ========



                                       35
<PAGE>

9.  Commitments And Contingencies, Continued:

Pension Plan: The Company has a  noncontributory  defined  benefit  pension plan
covering  substantially all United States  employees.  The benefits are based on
years of service and compensation during the employee's highest compensated five
consecutive years of employment. The Company's funding policy is to pay at least
the minimum funding  requirement  under the Employee  Retirement Income Security
Act of 1974.  The  following  table  sets forth the plan's  funded  status,  the
pension  liability  and  the  net  pension  cost  recognized  in  the  Company's
consolidated  statements of income for the years ended  December 31, 1999,  1998
and 1997,  which have been  calculated in accordance with Statement of Financial
Accounting Standards No. 87, "Employers' Accounting for Pensions."

The funded status of the plan at December 31, was (in thousands):

                                                         1999         1998
                                                         ----         ----
     Change in benefit obligation
     Benefit obligation at beginning of year          $ 14,513    $ 11,921
     Service cost                                        1,712       1,520
     Interest cost                                       1,014         858
     Plan participants' contributions                       --          --
     Amendments                                             --          --
     Actuarial (gain) loss                              (2,181)        945
     Benefits paid before settlement                        --        (731)
     Settlement                                         (3,743)         --
                                                      --------    --------
     Benefit obligation at end of year                  11,315      14,513
                                                      --------    --------

     Change in plan assets

     Fair value of plan assets at beginning of year     16,116      15,306
     Actual return on plan assets                          997       1,541
     Employer contribution                                 546          --
     Plan participants' contributions                       --          --
     Benefits paid                                      (4,344)       (731)
                                                      --------    --------
     Fair value of plan assets at end of year           13,315      16,116
                                                      --------    --------

     Funded status                                       2,000       1,603
     Unrecognized net actuarial gain                    (2,709)     (2,407)
     Unrecognized prior service cost                      (321)       (350)
     Unrecognized transition assets                         (2)         (4)
                                                      --------    --------
     Prepaid pension cost                             $ (1,032)   $ (1,158)
                                                      ========    ========


                                                     1999      1998       1997
                                                     ----      ----       ----
     Weighted-average assumptions as of December 31
     Discount rate                                   7.75%     6.75%       7.00%
     Rate of increase in future compensation levels  5.00%     5.00%       5.00%
     Expected long-term rate of return on assets     7.50%     7.50%       7.50%

                                       36
<PAGE>

9.  Commitments And Contingencies, Continued:

                                              For The Years Ended December 31,
                                              --------------------------------
                                                1999         1998         1997
                                                ----         ----         ----

     Components of net periodic benefit cost (in thousands)

     Service cost                           $   1,712    $   1,520    $   1,174
     Interest cost                              1,014          858          689
     Expected return on plan assets            (1,214)      (1,157)        (915)
     Amortization of transition asset              (1)          (1)          (1)
     Amortization of prior service cost           (29)         (29)         (29)
     Recognized net actuarial gain                (21)        (109)        (121)
                                            ----------   ----------   ----------
     Net periodic pension cost                  1,461        1,082          797
     Net settlement recognition                (1,041)          --           --
                                            ----------   ----------   ----------
            Pension expense                 $     420    $   1,082    $     797
                                            ==========   ==========   ==========

Profit-Sharing  Plan/401(k):  The  profit-sharing  plan/401(k) (the "Plan") is a
discretionary  plan covering  substantially  all United States  employees of the
Company. The Plan is a defined contribution plan in which eligible employees may
voluntarily  elect  to  contribute   "before-tax"   dollars  (deferred  employee
compensation)  up to the lesser of 10% of their  compensation  or  $10,000,  the
Internal Revenue  Service's  maximum,  for the year ended December 31, 1999. The
Company  contributes  an amount equal to 25% of the first 6% of each  employee's
contribution.

The Company's cost of the Plan was $376,000, $384,000 and $339,000 in 1999, 1998
and 1997, respectively.

Concentration  of Credit Risk:  The  Company's  financial  instruments  that are
exposed to  concentrations of credit risk consist primarily of its cash deposits
and other cash equivalents that are in excess of federally  insured limits.  The
Company's cash  equivalents  and short-term  investments  are placed with a wide
array of institutions  with high credit ratings or governmental  agencies.  This
investment  policy limits the  Company's  exposure to  concentrations  of credit
risk.

Legal  Proceedings:  The Company is not a party to any pending legal proceedings
which it  believes  will have a  material  adverse  effect  on its  consolidated
financial position or consolidated results of operations.

Letters of Credit: At December 31, 1999, the Company was contingently liable for
open letters of credit of approximately $4,000,000.

10.  Restructuring Charge:

During the quarter  ended June 30,  1998,  the Company  recognized  an estimated
restructuring  charge of  $2,400,000  related to the  consolidation  of its east
coast  warehousing  operations,  credit and customer service  functions with the
Company's Charleston,  South Carolina facility.  The consolidation was completed
by the end of the first quarter 1999. The restructuring  charge,  which has been
utilized,  consisted primarily of the estimated costs for employee  separations,
termination of the related warehouse lease and fixed asset impairment.

                                       37
<PAGE>

11.  Stockholders' Equity:

The  authorized  capital  stock of the Company  includes  80,000,000  shares and
20,000,000  shares of common stock and preferred stock,  respectively,  at a par
value of $.01 per share. The Company's Board of Directors has not authorized any
series of this undesignated preferred stock to be issued.

During 1999 and 1998, the Company  repurchased 792,000 shares and 427,000 shares
of its common  stock in the open market at  aggregate  costs of  $8,681,000  and
$5,079,000, respectively.

12.  Related Party Transactions:

The Company  leases a retail store from two of its officers and  directors.  The
lease  expires on August 31,  2009,  with no renewal  options.  The Company paid
these  officers  and  directors  $162,000,  $155,000 and $154,000 in lease costs
during 1999, 1998 and 1997, respectively.

13.  Stock Option Plans:

On May 27, 1998, the  stockholders  approved the 1998 Long-Term  Stock Incentive
Plan (the "1998  Incentive  Plan")  which had been adopted by the Board in April
1998. The 1998 Incentive Plan replaced the Mikasa Long-Term  Incentive Plan (the
"Incentive Plan") adopted on March 17, 1994 as amended on December 18,1996.  The
1998  Incentive  Plan  provides that the number of shares of common stock of the
Company  available  for  issuance  under  this  plan may not  exceed  the sum of
1,000,000 shares plus any shares available for future awards under the Incentive
Plan as of the effective  date of the 1998  Incentive  Plan. The total number of
shares of the  Company's  common stock under both plans to be granted or subject
to options or rights may not exceed 3,225,000. Under the 1998 Incentive Plan, no
participant may be granted, in the aggregate,  awards totaling more than 450,000
shares of common stock.  The plan provides that the exercise  price shall not be
less than the fair  market  value of the shares on the date of grant and that no
portion of the option may be exercised  beyond 10 years from that date.  Options
vest at a rate of 50% one year from the date of grant and the  remaining 50% two
years from the date of grant for options granted during 1994 through 1999.









                                       38
<PAGE>

13.  Stock Option Plans, Continued:

The range of per share  exercise  prices for options  outstanding as of December
31, 1999 is $9.9375 to $16.00.  A summary of the status of the  Company's  stock
options as of December  31,  1999,  1998 and 1997 and  changes  during the years
ended on those dates is presented below:
<TABLE>
<CAPTION>
                                                  1999                       1998                        1997
                                        -----------------------     -----------------------     ----------------------
                                          Shares                      Shares                      Shares
                                          Under      Wgtd. Avg        Under      Wgtd. Avg        Under      Wgtd. Avg
                                          Option    Exer. Price       Option    Exer. Price       Option    Exer. Price
                                          ------    -----------       ------    -----------       ------    -----------
<S>                                     <C>            <C>          <C>            <C>          <C>           <C>
Outstanding at beginning of year        1,598,500      $  12.25     1,360,500      $  12.74     1,051,000     $  12.36
Granted                                   367,000          9.94       313,000         10.38       330,000        14.00
Exercised                                 (21,050)        10.38       (18,000)        10.38            --           --
Canceled                                 (107,250)        12.89       (57,000)        14.23       (20,500)       13.38
                                        ---------      --------     ---------      --------     ---------     --------

Outstanding at end of year              1,837,200      $  11.77     1,598,500      $  12.25     1,360,500     $  12.74
                                        =========      ========     =========      ========     =========     ========


Options exercisable at year-end         1,322,950      $  12.44     1,127,000      $  12.52       741,750     $  13.10
                                        =========      ========     =========      ========       =======     ========


Options available for future grant      1,572,550                   1,608,500                     864,500
                                        =========                   =========                     =======

Weighted average fair value of
options granted during the year         $    3.45                   $    4.33                   $    5.39
                                        =========                   =========                   =========

Weighted average remaining
contractual life in years                       6                           8                           9
                                        =========                   =========                   =========
</TABLE>

On May 25, 1995,  the Company  adopted and approved its  Non-Employee  Directors
Stock Option Plan.  Under this plan, the number of shares of common stock of the
Company to be  granted  or subject to options or rights may not exceed  100,000.
Each non-employee  director shall automatically receive an option at each annual
shareholders'  meeting to purchase all or part of 2,500 shares of common  stock.
The plan  provides  that the exercise  price of the options shall be 100% of the
fair market  value of the common stock on the date of grant.  Options  expire 10
years after the date of grant.  During 1999, 1998 and 1997,  options to purchase
2,500,  5,000 and  5,000  shares of common  stock  were  granted  at a per share
exercise price of $10.94, $12.75 and $11.875, respectively. Options issued under
this  plan  vest  at a rate of 50% one  year  from  the  date of  grant  and the
remaining  50% two years from the date of grant.  At December 31,  1999,  81,250
shares were available for the granting of additional options. During 1999, 1998,
and 1997, no options were exercised or surrendered.


                                       39
<PAGE>

13.  Stock Option Plans, Continued:

The Company applies APB Opinion 25,  "Accounting for Stock Issued to Employees,"
and  related  interpretations  to  account  for the plans.  Under SFAS No.  123,
compensation  cost  would be  recognized  for the fair  value of the  employee's
option rights.  Had  compensation  cost for the Company's grants for stock-based
compensation  plans been determined  consistent with SFAS No. 123, the Company's
net  income and  earnings  per share  would have been  reduced to the pro- forma
amounts  indicated  below. In determining  the fair value,  the Company used the
Modified Black-Scholes American model, assumed a per share dividend of $0.20 per
year beginning with quarterly  payments in April 1999, an expected life of eight
years for all grants,  an expected  volatility of 18.9% and a risk free interest
rate of 6.5% for all years, (in thousands, except per share data):

                                              For The Years Ended December 31,
                                              --------------------------------
                                                 1999       1998       1997
                                                 ----       ----       ----

     Net income as reported                    $ 21,593   $ 14,263   $ 21,664
                                               ========   ========   ========
     Proforma net income                       $ 20,364   $ 12,194   $ 19,857
                                               ========   ========   ========
     Diluted net income per share as reported  $   1.23   $   0.78   $   1.18
                                               ========   ========   ========
     Proforma net income per share             $   1.15   $   0.67   $   1.08
                                               ========   ========   ========

14.  Net Income Per Share:

Net income per share includes the following components (in thousands):

                                              For The Years Ended December 31,
                                              --------------------------------
                                                 1999       1998       1997
                                                 ----       ----       ----
     Basic net income per share:
     Numerator:
       Net income available to common
           stockholders                        $ 21,593   $ 14,263   $ 21,664
                                               ========   ========   ========
     Denominator:
       Average common shares outstanding         17,577     18,221     18,359
                                               ========   ========   ========
     Diluted net income per share:
     Numerator:
       Net income available to common
           stockholders                        $ 21,593   $ 14,263   $ 21,664
                                               ========   ========   ========
     Denominator:
       Average common shares outstanding         17,577     18,221     18,359
       Effect of dilutive securities:
         Common stock options                        55        103         86
                                               --------   --------   --------
                                                 17,632     18,324     18,445
                                               ========   ========   ========

                                       40
<PAGE>

15.  Segment Information

The  Company's  reportable  segments are based on channels of  distribution  and
geographic  operations.  The accounting  policies of the reportable segments are
the same as those described in Note 2 of the Notes to the Consolidated Financial
Statements  except certain of the  information  reported herein is reported upon
the basis of the Company's  internal  management  reporting  systems rather than
under generally accepted  accounting  principles.  Specifically,  if the Company
were to adjust its accounting to generally accepted accounting  principles,  the
result  would be to  increase  cost of sales for its Retail  Accounts  Group and
decrease cost of sales by the identical amount for its Direct to Consumers Group
to adjust for inter-company  profits (i.e. for internal reporting and management
purposes  amounts related to all  inter-company  inventory  profit  eliminations
result in a higher cost of sales to the Direct to Consumers Group). Furthermore,
since  part of the  mission of the  Company's  Direct to  Consumers  Group is to
liquidate  slow  moving  or  out  of  season   products   within  the  Company's
inventories,  the  allocation  of  related  mark  downs  for  this  activity  is
inherently  subjective  and virtually  impossible to account for on the basis of
generally accepted accounting principles within segments.  The Company evaluates
the performance of its operating  segments based on direct  operating  income or
losses.  Each  segment  records  direct  expenses  related and  allocable to its
employees  and its  operations.  The Company  does not  allocate  income  taxes,
interest  or  certain  corporate   overhead  expenses  to  operating   segments.
Identifiable  assets are primarily those directly used in the operations of each
segment  which consist of  inventories.  No  individual  customer  accounted for
greater than 10% of consolidated net sales for any period presented.

Summarized financial information concerning the Company's reportable segments as
of December 31, is shown in the following table (in thousands):

<TABLE>
<CAPTION>
                                                             1 9 9 9
                                     ---------------------------------------------------------
                                     Direct to   Retail     Total
                                     Consumers  Accounts     U.S.   International Consolidated
                                     ---------  --------     ----   ------------- ------------
<S>                                  <C>        <C>        <C>        <C>         <C>
Net sales                            $245,151   $140,423   $385,574   $ 39,041    $424,615
                                     ========   ========   ========   ========    ========
  Direct operating income            $ 37,414   $ 26,399   $ 63,813   $  4,819    $ 68,632
                                     ========   ========
U.S. corporate overhead
  expenses                                                   27,057         --      27,057
                                                           --------   --------    --------
  Operating income                                           36,756      4,819      41,575
Interest expense, net                                         5,889        777       6,666
                                                           --------   --------    --------
  Income before income taxes                               $ 30,867   $  4,042    $ 34,909
                                                           ========   ========    ========

Long lived assets                                          $126,763   $  6,598    $133,361
                                                           ========   ========    ========
Inventories                          $ 46,036   $ 95,825   $141,861   $ 13,343    $155,204
                                     ========   ========   ========   ========    ========
</TABLE>



                                       41
<PAGE>

15.  Segment Information, Continued:
<TABLE>
<CAPTION>
                                                             1 9 9 8
                                     ---------------------------------------------------------
                                     Direct to   Retail     Total
                                     Consumers  Accounts     U.S.   International Consolidated
                                     ---------  --------     ----   ------------- ------------
<S>                                  <C>        <C>        <C>        <C>         <C>
Net sales                            $238,774   $137,794   $376,568   $ 34,097    $410,665
                                     ========   ========   ========   ========    ========
  Direct operating income            $ 32,309   $ 25,048   $ 57,357   $  3,606    $ 60,963
                                     ========   ========
U.S. corporate overhead
  expenses                                                   27,897         --       7,897
Restructuring charge                                          2,400         --       2,400
                                                           --------   --------    --------
  Operating income                                           27,060      3,606      30,666
Interest expense, net                                         6,265        691       6,956
                                                           --------   --------    --------
  Income before income taxes                               $ 20,795   $  2,915    $ 23,710
                                                           ========   ========    ========
Long lived assets                                          $129,143   $  5,432    $134,575
                                                           ========   ========    ========
Inventories                          $ 45,765   $ 97,512   $143,277   $ 13,654    $156,931
                                     ========   ========   ========   ========    ========
</TABLE>

<TABLE>
<CAPTION>
                                                             1 9 9 7
                                     ---------------------------------------------------------
                                     Direct to   Retail     Total
                                     Consumers  Accounts     U.S.   International Consolidated
                                     ---------  --------     ----   ------------- ------------
<S>                                  <C>        <C>        <C>        <C>         <C>
Net sales                            $223,459   $145,669   $369,128   $ 28,089    $397,217
                                     ========   ========   ========   ========    ========
  Direct operating income            $ 32,879   $ 33,013   $ 65,892   $  4,835    $ 70,727
                                     ========   ========
U.S. corporate overhead
  expenses                                                   32,840         --      32,840
                                                           --------   --------    --------
  Operating income                                           33,052      4,835      37,887
Interest expense, net                                         1,775        430       2,205
                                                           --------   --------    --------
  Income before income taxes                               $ 31,277   $  4,405    $ 35,682
                                                           ========   ========    ========
Long lived assets                                          $121,978   $  3,667    $125,645
                                                           ========   ========    ========
Inventories                          $ 46,448   $ 91,759   $138,207   $ 12,210    $150,417
                                     ========   ========   ========   ========    ========
</TABLE>


                                       42
<PAGE>

16.  Comprehensive Income:

The following table reflects comprehensive income as of December 31 (in
thousands):
                                               1999         1998         1997
                                               ----         ----         ----
Net income                                   $  21,593    $  14,263   $  21,664
Other comprehensive income (loss):
  Foreign currency translation adjustment        1,493          460      (1,390)
                                            -----------  ------------ ----------
Comprehensive income                         $  23,086    $  14,723   $  20,274
                                             =========    =========   =========

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

         None.

                                    PART III
                                    --------

Certain information required by Part III is omitted from this Report in that the
Registrant  will file a definitive  proxy  statement  pursuant to Regulation 14A
(the "Proxy Statement") not later than 120 days after the end of the fiscal year
covered by this Report, and certain information included therein is incorporated
herein  by  reference.   Only  those  sections  of  the  Proxy  Statement  which
specifically address the items set forth herein are incorporated by reference.


Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  information  concerning  the Company's  directors  and  executive  officers
required  by this  Item is set forth in the Proxy  Statement  under the  caption
"Directors"  and in the  Notes to the  "Summary  Compensation  Table"  under the
caption "Executive Compensation" and is incorporated herein by reference.

The  information  concerning  compliance  with section 16 of the  Securities and
Exchange Act of 1934  required by this Item is set forth in the Proxy  Statement
under the caption "Section 16(a) Beneficial Ownership Reporting  Compliance" and
is incorporated herein by reference.

Item 11. EXECUTIVE COMPENSATION

The information  required by this Item is set forth in the Proxy Statement under
the caption "Executive Compensation" and is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

The information  required by this Item is set forth in the Proxy Statement under
the caption "Security Ownership of Certain Beneficial Owners and Management" and
is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is set forth in the Proxy Statement under
the caption  "Compensation  Committee Interlocks and Insider  Participation" and
also under the caption  "Certain  Transactions"  and is  incorporated  herein by
reference.

                                       43
<PAGE>

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

  (a) The following documents are filed as a part of this Report:

      (1) Financial Statements:

          Report of Independent Accountants
          Consolidated Balance Sheets at December 31, 1999 and 1998
          Consolidated Statements of Income For The Years Ended
            December 31, 1999, 1998 and 1997
          Consolidated Statements of Stockholders' Equity For The Years
            Ended December 31, 1999, 1998 and 1997
          Consolidated Statements of Cash Flows For The Years Ended
            December 31, 1999, 1998 and 1997
          Notes to Consolidated Financial Statements

      (2) Financial Statement Schedules:

          The  following  financial  statement  schedule  of  Mikasa,  Inc.  and
          Subsidiaries  for the years ended December 31, 1999,  1998 and 1997 is
          filed as part of this  Report and should be read in  conjunction  with
          the   Consolidated   Financial   Statements   of  Mikasa,   Inc.   and
          Subsidiaries.

      Schedule                                                    Page
      --------                                                    ----
        II    Valuation and Qualifying Accounts                    49

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

       (3) Exhibits:

          The Exhibits listed on the accompanying Index to Exhibits  immediately
          following the financial  statement  schedules are filed as part of, or
          incorporated by reference into, this Report.

         Exhibit
            No.                           Description
            ---                           -----------
          * 3.1 -- Restated Certificate of Incorporation of Registrant
          * 3.2 -- By-laws of the Registrant
          * 4.1 -- Specimen certificate for shares of Common Stock of the
                   Registrant
            4.2 -- Note Purchase  Agreements dated as of June 4, 1997 by and
                   among Mikasa, Inc., American Commercial, Incorporated and
                   various Noteholders with Notes issued thereunder,
                   incorporated by reference to exhibit 4.2 filed with the
                   Registrant's Form 10-Q filed May 14, 1997
            4.3 -- Amendment dated June 4, 1997 to Note Purchase  Agreements
                   dated May 1, 1993 by and among Mikasa, Inc., American
                   Commercial, Incorporated and various Noteholders with Notes
                   issued thereunder, incorporated by reference to exhibit 4.3
                   filed with the Registrant's Form 10-Q filed November 14, 1997

                                       44
<PAGE>

         Exhibit
            No.                           Description
            ---                           -----------
          *10.2 -- Management Agreement dated December 31, 1992 by and between
                   American Commercial, Incorporated and Mikasa Nagoya Holdings,
                   Inc.
          *10.4 -- Partnership Agreement for Mikasa Europe Distribution GmbH &
                   Co. KG (German copy and English translation)
          *10.5 -- Note Purchase Agreements dated as of May 1, 1993 by and
                   among Mikasa, Inc., American Commercial, Incorporated and
                   various Noteholders with Notes issued pursuant thereto
          *10.6 -- Revolving Credit Agreement dated May 19, 1993 by and among
                   Mikasa, Inc., American Commercial, Incorporated, The First
                   National Bank of Boston and The Tokai Bank, Ltd. with Notes
                   issued pursuant thereto
           10.7 -- Mikasa,  Inc.  Long-Term  Incentive  Plan  (Amended  and
                   Restated as of December 18, 1996) incorporated by reference
                   to exhibit 10.7 filed with the Registrant's Form 10-K filed
                   March 31, 1997
          *10.8 -- Lease between The Equitable Life Assurance Society of the
                   United States and American Commercial, Incorporated for the
                   lease of premises at 20633 South Fordyce Street, Long Beach,
                   California
         *10.10 -- Lease between Main Street Associates and Tabletop
                   Merchandisers, Inc. for lease of premises at 93-95 Main
                   Street, Flemington, New Jersey
        **10.12 -- Mikasa, Inc. Non-Employee Directors Stock Option Plan
          10.13 -- Stock  Purchase  Agreement  dated  August 6,  1996,  between
                   Alfred J. Blake and Mikasa, Inc., incorporated by reference
                   to exhibit (c) (1) filed with the Registrant's Issuer Tender
                   Offer Statement on Schedule 13E-4 filed August 8, 1996
          10.14 -- Employment and Consulting Agreement dated August 6, 1996,
                   between Alfred J. Blake and American Commercial, Incorporated
                   and Mikasa, Inc., incorporated by reference to exhibit (c)
                   (2) filed with the Registrant's Issuer Tender Offer Statement
                   on Schedule 13E-4 filed August 8, 1996
          10.15 -- Mikasa, Inc. 1998 Long-Term Stock Incentive Plan incorporated
                   by reference to exhibit A filed with the Registrant's Proxy
                   Statement filed April 22, 1998
          10.16 -- Amendment  dated  May  29,  1998  to  Revolving   Credit
                   Agreement dated May 19, 1993 by and among Mikasa, Inc.,
                   American Commercial, Incorporated, BankBoston and The Tokai
                   Bank, Ltd. with Notes issued pursuant thereto, incorporated
                   by reference to exhibit 10.16 filed with the Registrant's
                   Form 10-K filed March 31, 1999
          10.17 -- Amendment  dated March 16, 1999 to Lease dated  September 1,
                   1989 between Main Street Associates and Tabletop,
                   incorporated by reference to exhibit 10.17 filed with the
                   Registrant's Form 10-K filed March 31, 1999
          21.1  -- Subsidiaries of the Registrant
          23.1  -- Consent of PricewaterhouseCoopers LLP
          27    -- Financial Data Schedule


                                       45
<PAGE>

         Exhibit
            No.                           Description
            ---                           -----------
          99    -- Offer to Purchase, dated August 8, 1996, incorporated by
                   reference to exhibit (a) (1) filed with the Registrant's
                   Issuer Tender Offer Statement on Schedule 13E-4 filed August
                   8, 1996

      *  Incorporated  by reference to the exhibit  filed with the  Registrant's
      Registration Statement on Form S-1 (No. 33-76708) filed March 21, 1994 and
      amended  on May 3,  1994 and May 24,  1994 as the same  numbered  exhibit,
      which Registration Statement became effective May 25, 1994.

      **  Incorporated  by reference to the exhibit filed with the  Registrant's
      Registration Statement on Form S-8 (No. 33-93936) filed June 23, 1995.

  (b) Reports on Form 8-K:

      No reports on Form 8-K were filed by the Company during the fiscal quarter
ended December 31, 1999
































                                       46
<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 on the 30th day of March
2000.


                                    MIKASA, INC.


                                    By: /s/ Raymond B. Dingman
                                       -------------------------------------
                                        Raymond B. Dingman
                                        President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated on the 30th day of March 2000.


            Signature                                 Title(s)
            ---------                                 --------


/s/ Alfred J. Blake                  Chairman of the Board
---------------------------------
Alfred J. Blake

/s/ Raymond B. Dingman               President, Chief Executive Officer and
---------------------------------
Raymond B. Dingman                   Director (Principal Executive Officer)

/s/ Brenda W. Flores                 Vice President, and Chief Financial Officer
---------------------------------
Brenda W. Flores                    (Principal Financial and Accounting Officer)

/s/ George T. Aratani                Director
---------------------------------
George T. Aratani

/s/ Robert H. Hotz                   Director
---------------------------------
Robert H. Hotz

/s/ Raymond E. Inouye                Director
---------------------------------
Raymond E. Inouye

/s/ Anthony F. Santarelli            Director
---------------------------------
Anthony F. Santarelli

                                       47
<PAGE>


                       REPORT OF INDEPENDENT ACCOUNTANTS
                                    --------


To The Board of Directors and Stockholders
Mikasa, Inc.


In our  opinion,  the  consolidated  financial  statements  listed  in the index
appearing  under  Item  14(a)(1)  on page 44  present  fairly,  in all  material
respects,  the financial  position of Mikasa,  Inc. and Subsidiaries at December
31, 1999 and 1998, and the results of their  operations and their cash flows for
each of the three years in the period ended  December 31,  1999,  in  conformity
with accounting principles generally accepted in the United States. In addition,
in our opinion,  the  consolidated  financial  statement  schedule listed in the
index appearing under Item 14(a)(2) on page 44 presents fairly,  in all material
respects,  the information  set forth therein when read in conjunction  with the
related  consolidated  financial  statements.  These  financial  statements  and
financial statement schedule are the responsibility of the Company's management;
our  responsibility  is to express an opinion on these financial  statements and
financial  statement  schedule  based on our audits.  We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United  States,  which  require  that we plan and  perform  the  audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.





PricewaterhouseCoopers LLP

Florham Park, New Jersey
February 29, 2000












                                       48
<PAGE>

<TABLE>
<CAPTION>
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)

                                                                 Additions
                                                    Balance at    Charged                Balance
                                                    Beginning     to Costs               at End of
             Description                            of Period       and      Deductions   Period
                                                                 Expenses
--------------------------------------------------  ----------   ---------   ----------  ---------
                                                                                 (a)
<S>                                                    <C>       <C>           <C>         <C>
Year Ended December 31, 1997
Reserves deducted from assets to which they apply:
    Allowance for uncollectible accounts receivable    $ 763     $ 750          $ 773      $ 740

Year Ended December 31, 1998
Reserves deducted from assets to which they apply:
    Allowance for uncollectible accounts receivable    $ 740     $ 225          $ 175      $ 790

Year Ended December 31, 1999                           $ 790     $ 250          $ 266      $ 774
Reserves deducted from assets to which they apply:
    Allowances for uncollectible accounts receivable

-----------------

(a)  Accounts written off, net of recoveries
</TABLE>


























                                       49
<PAGE>




                                  MIKASA, INC.
                           Annual Report on Form 10-K
                               December 31, 1998

                               INDEX TO EXHIBITS


                                                                    Sequentially
 Exhibit                                                               Numbered
   No.                           Description                            Page
   ---                           -----------                            ----

 21.1  -- Subsidiaries of the Registrant                                 51

 23.1  -- Consent of PricewaterhouseCoopers LLP                          53

 27    -- Financial Data Schedule                                        54







































                                       50
<PAGE>

EXHIBIT 21.1
------------

                                                   Dated as of December 31, 1999
                                                   -----------------------------
<TABLE>
<CAPTION>
                          SUBSIDIARIES OF MIKASA, INC.
                                                                     Percentage
                                                                     of Voting                      Names Under
                                            State of                   Stock                   Which Subsidiaries Do
               Company                    Incorporation             (Securities)                      Business
======================================================================================================================
<S>                                    <C>                 <C>                            <C>
American Commercial,                   California          100% owned by                  Mikasa
Incorporated ("ACI")                                       Mikasa, Inc.                   Mikasa Factory Store
                                                                                          Studio Nova
                                                                                          Christopher Stuart
                                                                                          Home Beautiful
-----------------------------------------------------------------------------------------------------------------------
                                                 SUBSIDIARIES OF ACI
-----------------------------------------------------------------------------------------------------------------------
Dinnerware Plus, Holdings Inc.         Delaware            100% owned by ACI              Mikasa
                                                                                          Mikasa Factory Store
-----------------------------------------------------------------------------------------------------------------------
Dinnerware Plus, (MA) Inc.             Delaware            100% owned by ACI              Mikasa
                                                                                          Mikasa Factory Store
-----------------------------------------------------------------------------------------------------------------------
Dinnerware Plus, (Texas) Inc.          Delaware            100% owned by ACI              Mikasa
                                                                                          Mikasa Factory Store
-----------------------------------------------------------------------------------------------------------------------
Mikasa Licensing, Inc.                 Delaware            100% owned by ACI              Mikasa
                                                                                          Mikasa Factory Store
-----------------------------------------------------------------------------------------------------------------------
Mikasa (CA), Inc.                      California          100% owned by ACI
-----------------------------------------------------------------------------------------------------------------------
Sinvalco Associates, Inc.              Delaware            100% owned by ACI
-----------------------------------------------------------------------------------------------------------------------
Secaucus Associates, Inc. (??)         Delaware            100% owned by ACI
-----------------------------------------------------------------------------------------------------------------------
Mikasa Nagoya Holdings, Inc.           Delaware            100% owned by ACI
("MNHI")
-----------------------------------------------------------------------------------------------------------------------
Mikasa International, Inc.             Delaware            100% owned by ACI              Mikasa
("MII")
-----------------------------------------------------------------------------------------------------------------------
                                                  SUBSIDIARY OF TMI
-----------------------------------------------------------------------------------------------------------------------
Dinnerware Plus, (NY) Inc.             Delaware            100% owned by                  Mikasa
                                                           TMI                            Mikasa Factory Store
-----------------------------------------------------------------------------------------------------------------------
                                                 SUBSIDIARY OF MNHI
-----------------------------------------------------------------------------------------------------------------------
Mikasa Corporation                     Japan               100% owned by MNHI             Mikasa
-----------------------------------------------------------------------------------------------------------------------


                                       51
<PAGE>
                                                                    Percentage
                                                                     of Voting                      Names Under
                                            State of                   Stock                   Which Subsidiaries Do
               Company                    Incorporation             (Securities)                      Business
======================================================================================================================
                                                 SUBSIDIARIES OF MII
-----------------------------------------------------------------------------------------------------------------------
Mikasa Europe, Inc.                    Delaware            100% owned by MII              Mikasa
-----------------------------------------------------------------------------------------------------------------------
Table Fashions International, Inc.     Delaware            100% owned by MII              Mikasa
-----------------------------------------------------------------------------------------------------------------------
Mikasa (Canada), Inc. ("MCI")          Canada              100% owned by MII              Mikasa
                                                                                          Studio Nova
                                                                                          Christopher Stuart
                                                                                          Home Beautiful
-----------------------------------------------------------------------------------------------------------------------
Dinnerware Plus (PR), Inc              Puerto Rico         100% owned by Mll              Mikasa Factory Store
-----------------------------------------------------------------------------------------------------------------------
                                                 SUBSIDIARY OF MCI
-----------------------------------------------------------------------------------------------------------------------
Dinnerware Plus (ON), Inc.             Canada              100% owned by MCI              Mikasa
                                                                                          Mikasa Factory Store
-----------------------------------------------------------------------------------------------------------------------
                                                  AFFILIATES OF ACI
-----------------------------------------------------------------------------------------------------------------------
Mikasa Europe Distribution             Germany             66-2/3%                        Mikasa
GmbH ("MED")
-----------------------------------------------------------------------------------------------------------------------
Mikasa Europe Distribution             Germany             66-2/3% (including             Mikasa
GmnH & Co. KG (limited                                     indirect ownership through
partnership)                                               MED)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


















                                       52
<PAGE>



Exhibit 23.1
------------
                       CONSENT OF INDEPENDENT ACCOUNTANTS





We  hereby  consent  to the  incorporation  by  reference  in  the  registration
statements  on Form S-8   (File No.  33-93936)  and Form S-8 (No.  33-83250)  of
Mikasa,  Inc. and subsidiaries of our report dated February 29, 2000 relating to
the  consolidated  financial  statements and  consolidated  financial  statement
schedule, which appears in this Form 10-K.





PricewaterhouseCoopers LLP

Florham Park, New Jersey
March 28, 2000


























                                       53