U.S. Securities and Exchange Commission

                      Washington, D.C. 20549

                           FORM 10-KSB



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

For the Fiscal Year Ended December 31, 1997.

                   Commission File No. 2-69336

                           CRAMER, INC.

KANSAS                        I.R.S. Employer Identification
                              Number 48-0638707
625 Adams Street, Kansas City, KS 66105
Telephone: (913) 621-6700

Securities registered under Section 12(g) of the Exchange Act: Common Stock

Check whether the issuer: (1) has filed all reports required to
be filed by Sections 13 or 15(d) of the Exchange Act during the
past 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 __

Check if no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or other information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [X]

The issuer's revenues for the 1997 fiscal year were $12,491,000.

As of December 31, 1997 the aggregate market value of the common
shares of Cramer, Inc. held by non-affiliates was approximately
$2,955,000.  (Calculated assuming a $1.50 value per share on
December 31, 1997.)

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
4,051,400 shares of common stock.

Transitional Small Business Disclosure Format (check one): 
Yes__ No  X 


<PAGE>


                              INDEX

                                                         PAGE NO.

PART I

     Item 1.   Description of Business                           
     Item 2.   Description of Property                          6
     Item 3.   Legal Proceedings                                7
     Item 4.   Submission of Matters to a Vote of Security
               Holders                                          7

PART II

     Item 5.   Market for Common Equity and Related 
               Stockholder Matters                              8
     Item 6.   Management's Discussion and Analysis of 
               Financial Condition and Results of 
               Operations                                       8
     Item 7.   Financial Statements                            12
     Item 8.   Changes in and Disagreements with 
               Accountants on Accounting and Financial 
               Disclosure                                      29

PART III

     Item 9.   Directors, Executive Officers, Promoters 
               and Control Persons; Compliance with 
               Section 16(a) of the Exchange Act               30
     Item 10.  Executive Compensation                          30
     Item 11.  Security Ownership of Certain Beneficial 
               Owners and Management                           30
     Item 12.  Certain Relationships and Related 
               Transactions                                    30
     Item 13.  Exhibits and Reports on Form 8-K                30



<PAGE>


                              PART I

ITEM 1. DESCRIPTION OF BUSINESS

Cramer, Inc. is a Kansas corporation engaged in the manufacture
and sale of seating and utility products designed for office or
industrial settings, and ergonomic articulating keyboards for
intensive data entry environments.  The Company was established
in 1886 as a manufacturer of safes and office products.  The
Company was owned by descendants of the Cramer family until 1961
when it was sold to OLIX Industries, a public company located in
Austin, Texas.  In January 1981, OLIX made a public distribution
of its Cramer common stock.

BUSINESS OF ISSUER

The Company's office seating products compete in the $12 billion
domestic market for office furniture, which includes seating,
desks, files, and panel systems.  Major companies serving this
market are Steelcase, Herman Miller, Knoll, Haworth, Kimball, and
HON Industries.  These six companies supply products in all major
categories of this market.  Together they account for an
estimated 60% of sales in this market.  The remaining 40% of the
market is served by smaller companies (typically sales of less
than $75 million) that primarily compete only in selected
portions of the market.  These portions of the market are
delineated either by product type, such as seating or casegoods,
or by customer category, for example high-style, or wood-finish,
or budget-price.

Cramer's seating products are non-wood characterized by painted
metal finish and upholstered seats and backs.  The product line
includes standard height chairs and a wide range of raised height
models and stools.  All offer ergonomic design with varying
degrees of adjustability to accommodate individual users.  Cramer
manufactures and sells chairs for a variety of demanding
commercial applications, including intensive (24-hour) use,
production facilities, laboratories, hospitals, schools as well
as conference, secretarial and management seating for the general
office.  The Company also manufactures Cleanroom and Electro-
Static Discharge seating which meets the needs of certain
specialized manufacturing and research environments.  The
Company's seating products are recognized for quality
construction and lasting durability.

The Company's utility products include step stools and aluminum
ladders featuring the use of retractable casters. The design of
these products and the retractable caster concept are well
recognized and accepted in the marketplace. These products have
been continuously manufactured by the Company for sale in the
United States since the 1950s.  

The Company's keyboard products, acquired in 1997, include a
patented split keyboard that is designed to be mounted on the
arms of the user's chair. An accompanying product is a
articulating mouse pad that also can be mounted on the arms of a
chair.  



<PAGE>


MARKETING AND COMPETITION

The domestic office furniture market is highly competitive. 
Cramer competes by focusing on the non-wood task seating market
niche with products that have high-quality and a reputation for
long-term reliability.  The Company also differentiates itself by
a commitment to customer service and on-time delivery.  The
Company's 110+ year history and the proven reliability of its
products support a strong reputation and product awareness in the
marketplace.  Cramer frequently competes in its narrow market
area against similar-sized niche manufacturers.  In addition, the
Company has been able to effectively compete against the major
companies in the industry when Cramer's special product features,
reputation for product quality, and Cramer's quality customer
service offer the customer a better price-value relationship than
the large competitors.

The majority of the Company's seating products are sold to
independent office furniture dealers who resell the products to
end users.  Cramer has approximately 1,500 of these accounts. 
For the past several years, sales to independent office furniture
dealers have accounted for approximately 75% of the Company's
revenue.  These sales efforts are focused through approximately
23 independent sales representative organizations located in
major markets throughout the United States.  These sale
organizations typically employ from 1 to 6 people, and represent
3 to 6 complimentary product lines such as desks, panel systems,
and lighting.  Average tenure for the Company's sales
representatives is more than four years.  These representatives
initiate and develop business directly with end users, designers
and architects for specification projects and coordinate and
manage the Company's business relationships with the independent
office furniture dealers in their territories.

The Company's utility products are sold primarily to
approximately 100 wholesale and catalog distributors.  These
distributors include major office supply and industrial
suppliers, and specialty distributors serving end-users' health-
care, scientific, and safety needs.  While other manufacturers
produce competing products, as a result of the Company's
favorable price/value relationship, the variety of applicable
products Cramer has to offer the specific wholesale or catalog
distributor, and its attention to customer service, these
competitors have, thus far, not been successful in reducing the
Company's market share of these products.  However, there is no
guarantee that competitors will not be successful in the future. 
While eight wholesale and catalog distributors accounted for 67%
of the Company's 1997 utility product sales, no single customer
accounted for more than 10% of the Company's total sales in 1996
or 1997.

An emerging area for the Company's seating and utility products
is the home market.   Utility products, principally the Kik-Step
[Registered Trademark] stool, are distributed to this market
primarily through specialty catalog distributors serving domestic
kitchen and workroom needs.  In addition, seating products are
sold by office furniture dealers for home office use.

The Company's keyboard products are sold directly to end-users
through an in-house sales force located in Minneapolis,
Minnesota.  The Company uses a combination of advertisements,
direct solicitation, recommendations from medical or other
professionals, and maintenance of a page on the World Wide Web to
publicize these products and to obtain customer orders.

Cramer regularly participates in national office, industrial, and
ergonomic products trade shows and conferences.  Sales
representatives display product samples and provide <PAGE> demonstration
chairs for dealers and end-users.  The Company maintains
permanent product displays in showrooms in Los Angeles, Chicago,
and New York.

Sales in the contract furnishing industry, where Cramer's office
seating products compete, follow a seasonal pattern of slightly
lower volume in the winter and summer and higher volume in the
spring and fall.  Utility product sales are generally equal
through each quarter of the year.

Cramer's products are sold throughout the United States. 
International sales are not significant.

PRODUCTS

Office Seating - The Company's flagship seating product is the
Triton [Registered Trademark] chair, which was introduced in
1992.  The Company believes this chair is unique in the industry
because it combines a 15 year 3 shift a day warranty and steel
structural components with full ergonomic adjustability.  

The Triton's [Registered Trademark]  design significantly
upgrades the user's ability to meet emerging ergonomic
adjustability requirements, yet have a chair that exceeds
industry durability specifications.  The Triton [Registered
Trademark] is designed to meet or exceed all current standards of
adjustability for prevention of repetitive stress trauma
including the San Francisco VDT work-station standards; meet or
exceed all flame-retarding specifications, including Boston Fire
Marshal, California TB 117, and California TB 133; and meet or
exceed industry testing for strength and component failure
(ANSI/BIFMA specifications).  Additionally, a version of the
Triton [Registered Trademark] has been independently certified to
pass the more rigorous U.S. Federal General Services
Administration Intensive Use Seating specifications.  

Typical purchasers of the Triton [Registered Trademark] are
health-care facilities, professional offices, production lines,
airline reservation centers, police and emergency dispatch
stations and similar 24-hour use applications.  The Triton
product line includes both a regular size version and a larger
version called the Triton Max.  This version was specifically
designed to accommodate larger-sized users.

Other significant office seating products include the Fusion
[Registered Trademark], Aeros [Registered Trademark], Affix and
Avail.  The Fusion [Registered Trademark] chair provides full
ergonomic task seating at a moderate price.  This chair's design
and function follow the strict standards found in all of the
Company's active ergonomic seating lines.  The product is
designed to function within office, light assembly and laboratory
settings.  The chair line is designed to complement the Triton
[Registered Trademark] line with its unique steel seat pan.  The
Aeros [Registered Trademark] and Affix products are lower priced
task seating products with less ergonomic adjustments.  The Avail
is a stacking guest chair intended to compliment the Triton
[Registered Trademark], Fusion [Registered Trademark], and other
task chairs.

Utility - The Company's utility products include the Kik-Step
[Registered Trademark], a round, all-steel, 2-step stool that
rolls on retractable casters and is frequently used in libraries,
file rooms, and warehouses.  This product was designed by Cramer
in 1957 and continues to be an important part of the Company's
product line.  In addition to the Kik-Step [Registered
Trademark], Cramer manufactures StopStep ladders, a series of
steel and light-weight aluminum ladders featuring the same
retractable caster concept as the Kik-Step [Registered
Trademark].



<PAGE> 



The Company's utility product line also includes a series of
aluminum framed seating designed for an industrial setting and
the Rhino seating product line.  The aluminum frame seating
products have been in production for over 25 years and are well
recognized in the market for value and lasting performance. 
These product lines offer a wide range of seating material from
wood or plastic to upholstered products.  The products are
available in both desk height and a range of stools suitable for
counter height tasks. The Rhino seating line is distinguished by
its seat and back which are made from "tough-skinned" urethane
foam.  This technology offers industrial-strength reliability for
factory seating, including the ability to wash the chair without
damaging the upholstery.  The Rhino product-line includes a large
"task" chair and a smaller "operational" chair.  The third
product in the Rhino line is a small sit-stand designed to
relieve weight from an individual's feet in industrial situations
which do not allow a fully seated position.

Keyboard -  The Company's Floating Arm computer keyboard features
full programmability and the ability to be mounted on the arms of
most task chairs sold in the United States.  The keyboard is
split into two separate parts to improve the ergonomic aspects of
the product.  Each of the two sections of the keyboard can be
articulated in an infinite range to fit the size and shape of
individual users.  The Company believes that proper use of the
product reduces the likelihood of repetitive motion injuries
arising from extensive use of electronic keyboards or data entry
devices.  The Company also believes that users may experience
productivity increases due to lessened fatigue during the course
of a regular work day. 

New products - The Company believes that systematic development
and introduction of new products is important for the Company's
growth and continued profitability. In  1997 the Company
introduced the Avail stacking guest chair, and the Ratio, a task
chair with an extended airlift mechanism which allows a single
chair to be used at both a regular height desk and as a stool
behind a higher counter.  The Company also introduced the
Floating Arm keyboard product during 1997.

In 1998, the Company intends to introduce a new series of public
seating products for use in health care environments.  The
Company also intends to introduce the PAL, a value priced
industrial series of portable aluminum ladders.  The PAL will
serve as a compliment to the Company's existing StopStep ladders
which are designed for a more formal office environment.  

PRODUCTION, TRADEMARKS AND GOVERNMENT REGULATION

The Company's products are fabricated from raw materials such as
steel sheet and tubing, aluminum tubing, plastic forms, foam, and
fabric purchased from sources locally and throughout the United
States.  Specialized components, including printed circuit boards
and subassemblies, are likewise purchased from vendors throughout
the United States, and in a few instances, internationally.  

Cramer understands the importance of developing partnerships with
its vendors, and has undertaken a program to work closely with
suppliers to improve quality, delivery, and price, while offering
technical assistance and production planning forecasts.  Although
this approach includes focusing greater purchases with fewer
vendors, the Company believes it retains the ability to change to
alternative suppliers in most cases.



<PAGE> 



Certain components of the Company's products are sourced from a
single vendor.  Any disruption in such supply arrangements could
result in temporary shipment delays or increased costs.  However,
the Company believes it has the ability to substitute suppliers
for any component in less than a three month period of time.

Production machinery and equipment used in the manufacture of the
Company's products are owned and maintained by the Company, and
primarily located in the Company's factory in Kansas City,
Kansas.  Certain tooling for the fabrication of specialized
components is owned by the Company, but located at vendors who
manufacture the components.  The production equipment ranges from
older-model metalworking machinery to a modern powder coat
painting system.  The Company systematically maintains its
equipment at high levels of operation.  Cramer has sufficient
production capacity for substantially increased sales
requirements.

The Company manufactures approximately 60% of all of its orders
specifically to customer requirements.  Cramer is able to
customize product specifications for particular needs.  The
Company's delivery schedule typically is four weeks for seating
products and two weeks for utility products.  This schedule is
typical for the business areas where the Company competes.  The
Company has sufficient manufacturing flexibility to provide
shorter lead times when necessary for special customer needs. 
This ability, plus a small inventory of finished chairs in stock
for immediate delivery, can be a competitive advantage in certain
situations.  At December 31, 1997, the Company's backlog of
unfilled orders was $806,000 the majority of which are scheduled
to be shipped in the first quarter of 1998.

During the past several years the Company has been able to ship
approximately 40% of its sales from stock.  However, the Company
maintains a finished goods inventory of only $138,000.  This
inventory consists of a small inventory of Kik-Step [Registered
Trademark] stools and ladders and the Quick Ship seating
inventory described above.  The Company believes its ability to
maintain its high inventory turnover ratio in this area (36 times
in 1997) is a competitive advantage.

The name Cramer and the Company's Kik-Step [Registered
Trademark], Aeros [Registered Trademark], Triton [Registered
Trademark], and Fusion [Registered Trademark] product names are
registered trademarks.  The Company's other office and utility
seating products are marketed under the Cirrus, Avail, Affix,
Nimbus, and Rhino trademarks.   The keyboard and mouse tray
products are marketed under the name "Workplace Designs, a
division of Cramer, Inc."  Workplace Designs and Floating Arms
Keyboard are trademarks of the Company.  The Company also
considers the overall design and appearance of the Kik-Step
[Registered Trademark] to be a trademark of the product.

The design of the Company's articulating keyboard is protected by
a U.S. patent covering keyswitching devices mounted on the arms
of a chair.  Sales of the Company's keyboard product are subject
to a royalty agreement as discussed in Note 11 to the financial
statements.  

No government approval is required for Cramer's products.  The
Company designs its products to meet voluntary industry standards
for strength and reliability (ANSI/BIFMA).  The Company maintains
ANSI/BIFMA test equipment at its factory and has implemented a
program of systematically testing its products for reliability. 
Certain products are designed to meet the more rigorous
requirements of the General Services Administration.  This
provides the Company with competitive advantages in certain
situations.


<PAGE> 



The Company's current production processes use no known hazardous
or polluting substances.  The Company is subject to various
federal, state, and local laws and regulations governing the
protection of its employees and the environment.  The Company
believes that it is in substantial compliance with such laws, and
that continued compliance will not have a material adverse effect
on its business.

EMPLOYEES

As of December 31, 1997, the Company employed 92 full time
people; 31 office, supervisory, managerial, and executive
personnel, and 61 factory workers.  Cramer management considers
the ability to attract, train, and retain skilled professional
employees and production workers to be an important aspect of the
Company's competitive advantage.  Management believes that it
enjoys a good, interdependent relationship with its employees,
and has instituted personnel policies intended to maintain this
relationship.  The Company is an equal opportunity employer and
an active non-discrimination policy is integral to this concept.

The factory workers are covered by a collective bargaining
agreement with the United Steelworkers of America which expires
on September 30, 1998.  The Company believes that strong labor
relations are important to its ability to achieve product
quality, on-time delivery, and continuous improvement in the
workplace.  No work stoppages have occurred over the past ten
years and the Company does not anticipate any work stoppages
arising as a result of the renewal of the labor contract in 1998. 
The State of Kansas is a right-to work state, so not all factory
workers belong to the Union.  At year end, 19 of the 61 factory
workers were not dues-paying members.  The Company considers its
labor relations to be good.

RESEARCH AND DEVELOPMENT

New products are developed internally by a technical staff who
have an average of more than 5 years experience with seating and
industrial products.  New designs are developed on modern CAD
equipment to shorten development time, improve documentation, and
facilitate sourcing of high-quality components from outside
vendors.  The Company spent approximately $130,000 and $80,000 on
engineering, research and development in 1997 and 1996,
respectively.

Cramer employees are committed to continuous improvement of
products and processes.  The Company believes that this
philosophy is working to develop products with higher
reliability, lower cost, and improved product features.

ITEM 2.  DESCRIPTION OF PROPERTY

The Company's corporate headquarters and manufacturing facility
are located on a 5-acre tract at 625 Adams Street, Kansas City,
KS  in a building owned and occupied by the Company since 1957. 
This faci*lity comprises 165,000 square feet, including 20,000
office, 2,000 showroom, and 143,000 manufacturing space.

The Company considers the facility appropriate for its type of
manufacturing, with sufficient expansion potential for
foreseeable growth.  The facility is in good condition.  No
expansions, renovations, or significant changes are necessary or
planned.  The location is in proximity to a large labor pool and
has good access to transportation, including rail service.



<PAGE> 



The Company believes that its facilities are adequately insured.

Sales showrooms located in furniture design centers in Los
Angeles, Chicago, and New York are subleased by Cramer for
permanent display of the Company's products.  None of these
subleases have terms longer than one year.

The Company's sales office in Minneapolis consists of a small
office leased by the Company in a suburban office park.

ITEM 3. LEGAL PROCEEDINGS

The Company is a defendant in several lawsuits relating to
product liability claims arising from accidents allegedly
occurring in connection with the use of its products.  The claims
are covered by insurance and are being defended by the Company's
independent counsel or by counsel assigned by the Company's
insurance carriers, but are subject to deductibles ranging from
$0 to $100,000.  A number of the claimants allege substantial
damages.  While management believes the Company has substantial
defenses with respect to the claims, the ultimate outcome of such
litigation cannot be predicted with certainty.  The Company has
reasonably estimated and accrued in its financial statements its
portion of the deductible as a product liability contingency. 
Such claims are an ordinary aspect of the Company's business.

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

None



<PAGE> 

                             PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS

Cramer stock is not listed on NASDAQ or any exchange and there is
no public trading market for the Company's stock.

During 1997 the Company purchased substantially all of the assets
of Floating Arms Inc., the designer of the Company's keyboard
product.   This transaction included the issuance of Cramer
common stock as partial payment for the purchased assets.  During
this transaction the parties negotiated the purchase price
assuming a price of  $1.50 per share of the Company's stock.

As of December 31, 1997, there were 697 shareholders of record.

Since being publicly held, the Company has never paid cash
dividends and does not anticipate paying any cash dividends in
the foreseeable future.  The Company's ability to pay cash
dividends on its common stock will depend upon its capital
surplus and cash requirements.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

Except for the historical information contained herein, this
report on Form 10-KSB contains forward-looking statements that
involve risk and uncertainties.  The Company's actual results
could differ materially. In connection with the "safe harbor"
provisions of the Private Securities Litigation Reform Act of
1995, Cramer, Inc. reminds readers that there are many important
factors that could cause the Company's actual results to differ
materially from those projected in forward-looking statements of
the Company made by, or on behalf of, the Company.  When used in
this Form 10-KSB and in other filings by the Company with the
Securities and Exchange Commission, in the Company's press
releases and in oral statements made with the approval of an
authorized executive officer, words or phrases such as "will
likely result", "expects", "are expected to", "will continue",
"is anticipated", "estimate", "project" or similar expressions
are intended to identify forward-looking statements.  The Company
wishes to caution readers not to place undue reliance on such
forward-looking statements.

There are a number of reasons why investors should not place
undue reliance on forward-looking statements.  Among the  risks
and uncertainties that could cause the Company's actual results
for future periods to differ materially from any forward-looking
statements made are the following:

     .    Fluctuations or reductions in product demand and market
          acceptance
     .    The level of product development by the Company
     .    Capacity and supply constraints or difficulties
     .    The results of financing efforts
     .    The effect of new laws and regulations


<PAGE> 


     .    Unexpected additional expenses or operating losses
     .    Competition
     .    The Company's reliance on certain vendors for key
          components.

The foregoing list of risks and uncertainties is not meant to be
complete.

RESULTS OF OPERATIONS

At $12,491,000, net sales for 1997 were 5% higher than in 1996. 
The increase in net sales reflects a general strengthening in the
Company's seating business, the introduction of new products, and
a 42% reduction in the costs of product returns, defects or price
adjustments.  This reduction is a result of the Company's formal
quality initiatives instituted in the second half of 1996.

Intake of new orders in 1997 was $12,429,000, an increase of
3.75% as compared to the Company's total order intake in 1996. 
At December 31, 1997, the Company's backlog was $806,000, a
decrease of $166,000 from the level at December 31, 1996. 
Substantially all of the Company's backlog is scheduled to ship
within the first quarter of 1998.

The Company's gross profit in 1997 was $3,334,000, an increase of
$24,000 as compared to 1996.  As a percentage of net sales, gross
margins in 1997 were 27% as compared to 28% during 1996.  The
decrease in margins reflects (a) increased costs for
manufacturing supplies and higher raw material and component
prices, and (b) an increase in the proportion of products that
are sold freight prepaid with the cost of delivery included in
the price of the product.

Selling expenses in 1997 decreased $25,000 as compared to 1996. 
The decrease primarily reflects the absence of expenses to
recruit and relocate new executive sales management which were
incurred in 1996.  This reduction was partially offset by
additional selling expenses associated with the start-up of the
Company's new Workplace Design Division.

General and administrative expenses in 1997 increased by $174,000
as compared to 1996.  This increase was due to costs associated
with recruiting a new President and additional engineering
expenses necessary to implement a formal quality improvement
program and to expand new product development.

Interest expense decreased by $17,000 in 1997 as compared to
1996.  This 16% difference arose primarily in the first quarter
and reflects the lower interest rates available to the Company
due to its participation in a consolidated Rotherwood banking
arrangement initiated in the second quarter of 1996.  (See Note 3
to the Financial Statements)

As a result of significant tax net operating loss carryforwards
originating in the 1980s, the Company paid no income taxes for
1996 and expects to pay none for 1997.  Deferred tax assets
arising from these tax loss carryforwards and other temporary
differences have not been recorded due to the uncertainty of
future operating success.

Due to the items discussed above, net income for 1997 was
$202,000 as compared to $325,000 in 1996.



<PAGE> 



FINANCIAL CONDITION AND LIQUIDITY

At $990,000, the Company's December 31, 1997 accounts receivable
balance decreased by $44,000 as compared to the balance at
December 31, 1996.  The decrease occurred despite a slight
increase in sales in December 1997 as compared to December 1996
and represents the effects of management's continued emphasis on
reducing the days sales in receivables, which decreased from 30
days in 1996 to 27 days in 1997.

The Company's December 31, 1997 inventories decreased by $44,000
(or 3%) from the 1996 year-end balance.  The reduction was due to
tighter inventory controls and continued management emphasis on
improving inventory turnover, which increased from 8.6 times per
year in 1996 to 10.1 times per year in 1997. 

Capital expenditures in 1997 included $160,000 for investments in
factory tooling and office equipment for the Company's main
Kansas City location.  This amount was $60,000 less than
depreciation which aggregated $221,000 during  the period.

The Company also invested $551,000 in the purchase of 
substantially all of the assets of Floating Arms Inc., the
developer of the Company's new articulating keyboard product. 
Approximately $235,000 of the purchase represented the assumption
of Floating Arm liabilities and the remaining $316,000 was the
negotiated value of the  210,750 shares of Company common stock
issued as part of the transaction.  The assumed liabilities were
settled by the Company shortly after consummation of the
transaction.  The purchase price was allocated as follows:

     Inventories                                       $ 18,000
     Property and equipment                            $135,000
     Other noncurrent intangible assets
          Customer lists                               $150,000
          Patents                                      $ 50,000  
          Goodwill                                     $198,000

The cost of the intangible assets purchased in this transaction
will be amortized to expense over a 10 year period.

During 1997 the Company purchased the U.S. distribution rights to
a product that competes with its Kik-step stool.  A portion of
the purchase price represents payment under a non-compete
agreement with the principal party associated with the other
product.  This payment was recorded as an other non-current asset
and is being amortized to expense over a 3 year period.

The Company's short-term notes payable increased by $129,000
during 1997.  While the Company normal operations generated
sufficient cash to allow a reduction of $98,000 in notes-payable,
the decrease was offset by the payment of the $235,000 in assumed
liabilities arising from the Floating Arm asset acquisition.

The Company's current portion of long term notes payable was
reduced by $76,000 during 1997 in accordance with established
payment conditions.  



<PAGE> 


The Company's accounts payable decreased by $174,000 during 1997.
The reduction was the result of the Company negotiating cash
discounts for accelerated payments with several of its key
vendors.   The Company also increased the speed in which payments
were made to all other vendors.  These actions are part of the
Company's ongoing program to strengthen its relationships with
its primary material suppliers.

Other non-current liabilities increased by $75,000 during 1997 to
a total of $234,000.  The increase was due  to favorable
experience in settling several product liability matters and, as
a result, the Company's regular accrual for product liability
losses exceeded cash payments during the year.

The Company made payments of approximately $217,000 into the
trust for the Company's Pension Plan during 1997.  This decrease
was offset by the increase in the liability resulting from
changes in actuarial assumptions concerning the discount rate and
the expected rate of return on plan assets.  These changes in
assumptions also resulted in a $171,000 increase in the Minimum
Pension Liability Adjustment to equity.

Common stock increased by $316,000 as a result of the issuance of
210,750 shares as partial payment for the acquisition of
substantially all of the assets of  Floating Arms, Inc.

The Company continues to participate in a consolidated Rotherwood
credit facility with Mercantile Bank (the Bank).  The credit
facility provides Rotherwood, and each of its four participating
subsidiaries (including Cramer), with access to a $3,750,000
credit line with interest charged on outstanding borrowings at
one-eighth less than the Bank's prime interest rate.  This is a
reduction in interest rates as compared to the Company's prior
borrowing arrangements with banks.  The Company may borrow up to
the maximum amount of the credit line less any amounts already
borrowed by the other participating Rotherwood companies. The
consolidated credit facility matures in August 1998 and all
borrowings are classified as current liabilities at December 31,
1997.  The Company does not anticipate any difficulty in renewing
the credit line.

The combined credit facility is secured by the inventory,
accounts receivable, and equipment of all of the Rotherwood
subsidiaries.  In addition, each participating Rotherwood
subsidiary has guaranteed repayment of the total amount borrowed
under the credit facility.  However, the current assets pledged
by the other Rotherwood subsidiaries in support of the credit
facility exceeded $4 million at December 31, 1997.  In addition,
Rotherwood's founder has pledged publicly traded equity
securities with a market value in excess of $2 million as
additional collateral for the loan.  Management believes that the
reduction in interest rates and the access to a larger credit
facility more than offset the risk that it would suffer losses
under the guarantee provisions of the credit facility in the
event that one or more of the other Rotherwood subsidiaries would
default under their portion of the credit line.

There is a risk that Cramer will not have access to sufficient
funds for its operations if the other participating Rotherwood
subsidiaries have borrowed more of the funds under the credit
line than anticipated.  However, the $3,750,000 credit line is in
excess of the total aggregate prospective borrowing needs of
Cramer and the other Rotherwood subsidiaries over the next 12
months.  Furthermore, Cramer management participates in regular
assessments of the borrowing needs of all Rotherwood subsidiaries
and believes it would be aware of anticipated credit shortages in
time to arrange new or additional sources of capital.  Therefore,
the Company believes that the current consolidated credit line,
coupled with anticipated cash flow from operations, will be
sufficient to meet current operating requirements over the next
12 months.



<PAGE> 



Management believes that 1998's results will improve on those in
1997.  Intake of orders and sales are expected to increase as the
Company realizes the benefits of new product introductions, price
increases instituted in mid 1997, and the marketing and
distribution enhancements achieved in 1997.  Profitability on
individual orders should be further enhanced as the increased
production volume will allow lower allocation of fixed costs to
individual orders.  Finally, Management anticipates a reduction
in the recruiting and relocation costs associated with hiring new
management and the elimination of the  operating losses generated
in the fourth quarter 1997 in the Company's Workplace Design
Division relating to the introduction of the new articulating
keyboard product.  Due to these factors, profitability is
anticipated to increase at a faster rate than sales volume.

New Accounting Pronouncements:  In June 1997, the Financial
Accounting Standards Board issued SFAS No. 130, Reporting
Comprehensive Income.  SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general-
purpose financial statements.  This statement is effective for
fiscal years beginning after December 15, 1997.  The Company does
not believe the reporting and display of comprehensive income
will materially impact the financial statements.

In June 1997, the Financial Accounting Standards Board issued
SFAS No. 131, Disclosures about Segments of an Enterprise and
Related Information.  SFAS No. 131 establishes standards for the
way public and business enterprises report information about
operating segments in annual financial statements and requires
that those enterprises report selected information about
operating segments in interim financial reports issued to
shareholders.  SFAS No. 131 also establishes standards for
related disclosures about products and services, geographic
areas, and major customers.  This statement is effective for
financial statements for periods beginning after December 15,
1997.

Year 2000 Compliance:  Certain of the Company's information
systems are not presently compliant with the requirements of the
year 2000.  The Company has committed the resources necessary to
ensure that its critical information systems are "Year 2000"
compliant before transactions for the year 2000 are expected. 
The cost of this conversion is not expected to be material.

ITEM 7.   FINANCIAL STATEMENTS

The following financial statements of Cramer, Inc., are included
herewith:
                                                         Page No.
Independent Auditor's Report                                F-1

Balance Sheet - December 31, 1997                           F-2

Statements of Income for the Years Ended
December 31, 1996 and 1997                                  F-3




<PAGE> 


Statements of Stockholders' Equity (Deficit) for
the Years Ended December 31, 1996 and 1997                  F-4

Statements of Cash Flows for the Years Ended
December 31, 1996 and 1997                                  F-5

Notes to Financial Statements                               F-6




                                                              F-1

                   Independent Auditors' Report



To the Board of Directors and Stockholders of
Cramer, Inc.
Kansas City, Kansas

We have audited the accompanying balance sheet of Cramer, Inc. as
of December 31, 1997 and the related statements of income,
stockholders' equity (deficit), and cash flows for the year then
ended.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.  The
financial statements of the Company for the year ended December
31, 1996 were audited by other auditors whose report, dated
February 17, 1997, expressed an unqualified opinion on those
statements.

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

In our opinion, such 1997 financial statements present fairly, in
all material respects, the financial position of the Company at
December 31, 1997, and the results of its operations and its cash
flows for the year then ended in conformity with generally
accepted accounting principles.



/s/Deloitte & Touche LLP

Deloitte & Touche LLP
Kansas City, Missouri
February 27, 1998



<PAGE> 



                           CRAMER INC.                        F-2
                          BALANCE SHEET
            (Amounts in Thousands, Except Share Data)


ASSETS                                          December 31, 1997
 Current Assets:
   Cash                                              $      52 
   Accounts receivable, 
        net of allowance of $21                            990 
   Inventories                                           1,242 
   Prepaid expenses                                        302 
        Total Current Assets                             2,586 

 Property, Plant and Equipment, net                        733 

 Other Assets:
   Intangible pension asset                                212 
   Goodwill                                                198 
 Other noncurrent assets                                   219

   Total Assets                                        $ 3,948 

LIABILITIES AND STOCKHOLDERS' EQUITY
 Current Liabilities:
   Note payable                                        $ 1,188 
   Accounts payable                                        498
   Accrued liabilities                                     549

        Total Current Liabilities                        2,235

 Noncurrent Liabilities:
   Pension benefits payable                                581
   Other                                                   234

        Total Noncurrent Liabilities                       815

 Stockholders' Equity:
   Common stock, no par value; authorized, 
        6,000,000 shares; issued and 
        outstanding 4,051,400 shares                     3,824
   Accumulated deficit                                  (2,712)

                                                         1,112

   Minimum pension liability adjustment                  (214)

        Net Stockholders' Equity                          898

   Total Liabilities and Stockholders' Equity          $3,948

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


<PAGE> 


                           CRAMER INC.                        F-3
                       STATEMENTS OF INCOME
          (Amounts in Thousands, Except Per Share Data)


                                        Year Ended December 31,
                                          1997          1996

Net Sales                                $12,491       $11,872
Cost of Sales                              9,157         8,562

     Gross Profit                          3,334         3,310

Operating Expenses:
  Selling                                  1,908         1,933
  General and administration               1,095           921

       Total Operating Expenses            3,003         2,854

          Income from Operations             331           456

Other Expenses:
  Interest expense                           (88)          (105)
  Other, net                                 (41)           (26)

       Income Before Income Taxes            202            325

Income Taxes                                   0              0

Net Income                               $   202       $    325

Net Income Per Common Share - 
  Basic and Diluted                      $  0.05       $   0.08

Weighted Average Number of Common and 
  Common Equivalent Shares Outstanding   

     Basic                                 3,876         3,841
     Diluted                               3,895         3,861


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



<PAGE> 



                           CRAMER, INC.                       F-4
           STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                      (Amounts in Thousands)

                                             Minimum
                                             Pension       Total
           Number of Common   Accumulated  Liability    Stockholders' 
           Shares    Stock      Deficit    Adjustment   Equity (Deficit)

Balance at 
January 1, 
1996         3,841  $3,508    $(3,239)     $   (59)          $  210

Adjustment to 
Additional 
Minimum Pension 
Liability                                       17               17

Net Income                        325                           325
Balance at 
December 31, 
1996         3,841   3,508     (2,914)         (42)             552

Adjustment to 
Additional 
Minimum Pension 
Liability                                     (172)           (172)

Issuance of 
Common Stock 
in connection 
with asset 
acquisition    210     316                                    316

Net Income                        202                         202

Balance at 
December 31, 
1997         4,051  $3,824  $  (2,712)    $     (214)  $      898



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



<PAGE> 


                           CRAMER, INC.                       F-5
                     STATEMENTS OF CASH FLOWS
                      (Amounts in Thousands)


                                          Year Ended December 31,
                                                1997     1996

Cash flows from operating activities:
 Net income                                  $   202   $   325
 Adjustments to reconcile net 
   income to net cash provided by 
   operating activities:
     Depreciation and amortization               221       177
     Changes in operating assets 
      and liabilities,net of effects 
      from acquisition:
        Accounts receivable                       44       68
        Inventories                               62      202
        Prepaid expenses                         (18)     (38)
        Other assets                              32       52
        Accounts payable and accrued 
          liabilities                           (198)    (437)
        Noncurrent pension benefits payable     (142)     (26)
        Other noncurrent liabilities              75       24

        Net cash provided by operating 
          activities                             278      347

Cash flows from investing activities:
 Capital expenditures                           (164)    (227)
 Proceeds from sale of property, 
   plant and equipment                             3        0

        Net cash used in investing 
          activities                            (161)    (227)

Cash flows from financing activities:
 Principal payments on notes payable 
   and long-term notes                        (4,289)  (6,840)
 Proceeds from issuance of notes payable 
   and long-term notes                         4,107    6,753

      Net cash used in financing activities     (182)     (87)

Net increase (decrease) in cash                  (65)      33
Cash at beginning of year                        117       84

Cash at end of year                          $    52   $  117

Supplemental disclosures of cash flow information:
 Cash paid during the year for:
   Interest                                  $    84   $  102
   Income tax                                $     0   $    0

Non-cash transactions:
 Stock issued in acquisition of assets       $   316

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



<PAGE> 



                           Cramer, Inc.                       F-6
                  Notes to Financial Statements
                        December 31, 1997



1.   SUMMARY OF ACCOUNTING POLICIES

ORGANIZATION

Cramer is a manufacturer of seating and utility products for
office and industrial use.  The Company sells its products
throughout the United States.  International sales are limited. 
The Company's principal customers are office furniture dealers
(seating products) and wholesale catalog distributors (utility
and seating products).  Cramer is a 51% owned subsidiary of
Rotherwood Corporation (Rotherwood), a Minneapolis, Minnesota
based holding company.


INVENTORIES

Inventories are valued at the lower of cost (determined by the
first-in, first-out method) or market.  The closing inventory is
comprised of raw material $722,000, work in progress $382,000,
and finished goods $138,000.


PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are carried at cost.  Depreciation
is provided for in amounts sufficient to charge the cost of
depreciable assets to operations over their estimated service
lives, principally on a straight-line basis.

                                                       Estimated
                                                        Useful
                                      Cost                Life
                                   (In Thousands)       (In Years)     
          Land                     $          29            ------
          Buildings                          726           20-40
          Machinery and Equipment          3,590            3-10
          Furniture and Office Equipment   1,269            5-10
                                           5,614
          Less Accumulated Depreciation    4,881
          Net Property, Plant and 
            Equipment              $         733


<PAGE> 



INCOME TAXES

Income taxes have been provided using the liability method in
accordance with FASB Statement No. 109, Accounting for Income
Taxes.


USE OF ESTIMATES

The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes.  Actual
results could differ from those estimates.


WARRANTIES

Depending on the model, the Company warranties its products for
periods up to 15 years.  The Company's reserve for anticipated
warranty costs of $154,500 is included in accrued liabilities. 
The warranty reserve is estimated based on durability testing,
engineering studies, and actual costs in prior years.


STOCK-BASED COMPENSATION

The Company adopted the disclosure provisions of SFAS No. 123,
Accounting for Stock-Based Compensation.  The Statement
encourages rather than requires companies to adopt a method that
accounts for stock compensation awards based on their estimated
fair value at the date they are granted.  Companies are
permitted, however, to account for stock compensation awards
under Accounting Principles Board ("APB") Opinion No. 25 which
requires compensation cost to be recognized based on the excess,
if any, between the quoted market price of the stock at the date
of grant and the amount an employee must pay to acquire the
stock.  The Company has elected to continue to apply APB Opinion
No. 25 and has disclosed the pro forma net earnings and earnings
per share, determined as if the fair value method had been
applied, in Note 4.


EARNINGS PER SHARE

The Company adopted SFAS No. 128, Earnings Per Share, during
1997.  SFAS No. 128 requires presentation of basic and diluted
earnings per share.  Basic earnings per share is computed by
dividing income available to common shareholders by the weighted
average number of common shares outstanding for the reporting
period.  Diluted earnings per share reflects the potential
dilution that could occur if securities or other contracts to
issue common stock  were exercised or converted into common
stock.  All prior period weighted average and per share
information has been restated in accordance with SFAS No. 128. 
Outstanding stock options issued by the Company represent the
only dilutive effect on weighted average shares.



<PAGE> 



NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued
SFAS No. 130, Reporting Comprehensive Income.  SFAS No. 130
establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements.  This
statement is effective for fiscal years beginning after December
15, 1997.  The Company does not believe the reporting and display
of comprehensive income will materially impact the financial
statements.

In June 1997, the Financial Accounting Standards Board issued
SFAS No. 131, Disclosures about Segments of an Enterprise and
Related Information.  SFAS No. 131 establishes standards for the
way public and business enterprises report information about
operating segments in annual financial statements and requires
that those enterprises report selected information about
operating segments in interim financial reports issued to
shareholders.  SFAS No. 131 also establishes standards for
related disclosures about products and services, geographic
areas, and major customers.  This statement is effective for
financial statements for periods beginning after December 15,
1997.

2.   BENEFIT PLANS

DEFINED BENEFIT PLAN

The Company has a defined benefit pension plan covering all of
its bargaining unit employees working as of September 30, 1988. 
Effective September 30, 1988, the plan was amended to freeze
future benefit accruals.  As a result of freezing the benefits,
no further benefits accrue to plan participants.  The amount of
the monthly pension a participant will receive was frozen at
$9.00 multiplied by the number of years of service from the later
of the date of hire or January 1, 1942, through September 30,
1988.  Effective September 30, 1988, new employees have not
accrued benefits under the defined benefit plan.  The Company's
funding of the plan is equal to, or exceeds, the minimum
contribution required by ERISA and totaled $216,900 and $181,400
in 1997 and 1996, respectively.

Net pension costs included the following components (in
thousands):

                                     Year Ended December 31,
                                         1997      1996

Service cost - benefits earned 
     during the period                  $    0    $     0
Interest cost on projected 
     benefit obligation                     86         79
Expected return on plan assets             (28)       (33)
Net amortization and deferral               56         52
     Net regular periodic pension 
          cost                             114         98
Settlement costs                             0         68

          Total pension costs           $  114    $    166


<PAGE> 




     Net regular periodic pension cost was calculated using the
following assumptions:

                                        Year Ended December 31,
                                             1997      1996 

     Weighted Average Discount Rate          7.75%     8.0%
     Expected Long-Term Rate of Return       8.00%     8.9%


The plan's funded status as of December 31, 1997 is summarized
below (in thousands):

     Actuarial present value of projected 
          benefit obligation                      $    952
     Plan assets at fair value                         370
     Projected benefit obligation in 
          excess of plan assets                       (582)
     Remaining unrecognized net 
          transition obligation                        196
     Unrecognized prior service cost                    16
     Unrecognized net loss                             214
     Adjustment required to recognize 
          minimum liability                           (425)

     Net pension liability recognized             $    (581)

An intangible asset of $212,000 equal to the unrecognized prior
service cost and transition obligation has been included in the
balance sheet.  The remaining additional minimum liability of
$214,000 related to the unrecognized net loss has been recorded
as a decrease in stockholders' equity at December 31, 1997.

In order to reduce administrative costs, in 1996 the Company
settled its pension obligation with retirees that had a vested
benefit of less than $3,500.  The Company also transferred its
pension obligation for certain retirees to an insurance company
in exchange for the portion of the Plan assets for which the
insurance company had previously served as trustee.  These
transactions reduced the accumulated plan benefit obligation by
approximately $159,000 and was accounted for as a settlement
under Statement of Financial Accounting Standards No. 88,
Employers Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits.  Settlement
costs of $68,000 are included as a portion of 1996's other non-
operating income and expense.

Plan assets are held by trust funds devoted to servicing pension
benefits and are invested in a diversified portfolio of fixed
income and equity securities.


DEFINED CONTRIBUTION PLAN

The Company sponsors a 401(k) plan covering substantially all
employees.  Participants may contribute from one percent (1%) to
fifteen percent (15%) of compensation, subject to annual
limitations.  Company contributions are at the discretion of the
Board of Directors.  There were no Company contributions in 1997
or 1996.



<PAGE> 


3.   SHORT-TERM BORROWINGS

The Company, Rotherwood, and certain other subsidiaries of
Rotherwood participate in a combined credit facility with
Mercantile Bank.  The credit facility provides Rotherwood and its
participating subsidiaries with access to a credit line of
$3,750,000 with interest charged at a rate of one-eighth of a
percent less than the Bank's prime rate (8.375% at December 31,
1997).  The Company's share of these borrowings at December 31,
1997 was $993,000.  The total amount borrowed by all Rotherwood
companies at December 31, 1997 was $2,443,000.

The combined credit facility, which matures in August 1998, is
secured by the general intangibles, inventory, accounts
receivable and equipment of all of the participating Rotherwood
subsidiaries.

The Company, and each of the other Rotherwood subsidiaries, has
guaranteed repayment of the total debt to Mercantile Bank.  The
current assets pledged by the other Rotherwood subsidiaries
exceeded $4 million at December 31, 1997.  In addition,
Rotherwood's founder has pledged publicly traded equity
securities with a market value in excess of $2 million as
additional collateral for the loan.  The Company's management
believes that there is minimal risk associated with the guarantee
provisions of the credit facility.

4.   STOCKHOLDERS' EQUITY

The Company has a stock option plan (the Plan) which provides for
the grant of incentive awards to directors, officers and other
key employees.  Under the Plan, stock options are granted at the
fair market value of the Company's common stock at the date of
the grant.   In accordance with APB opinion No. 25, Accounting
for Stock Issued to Employees, no compensation expense is
recognized for grants under the Plan.  There were no stock option
grants under the plan in 1996 or 1997.

During 1997, the Company repurchased, for a nominal amount, and
canceled a previously issued option for  20,000 shares.  At
December 31, 1997, the Plan had a total of 829,000 shares
authorized for issuance.  There were no shares granted,
outstanding, or vested under the Plan at December 31, 1997.

On December 8, 1997, the Board of Directors issued nonqualified
stock options for a total of  50,000 shares of the Company's
common stock to two of the Company's Directors.  The options have
an exercise price of $1.50 per share and have ten year terms.  
The option price represented Management's best estimate of the
fair market value of the Company's stock at the issuance of the
options.  

Vested shares under these options are exercisable in whole or in
part from the vesting date.    A total of 26,000 shares under
these options were immediately vested and exercisable.  The
remaining  24,000 shares vest evenly over a 24 month period
beginning December 1997.  There were no shares exercised during
1997 under these options. 



<PAGE> 



The following table summarizes information about stock options
outstanding at December 31, 1997:

          Options Outstanding                Options Exercisable
   Number     Remaining        Exercise    Number     Remaining      Exercise
Outstanding  Contractual Life  Price    Outstanding  Contractual Life  Price

  50,000       9.9 years      $1.50       27,000       9.9 years       $1.50


The Company applies APB Opinion No. 25 in accounting for the
options granted in 1997.  Accordingly, no compensation cost was
recognized.  Had compensation cost for the Company's new stock
option plan been determined based on the fair value at the grant
date consistent with SFAS No. 123, Accounting for Stock Based
Compensation,  the Company's net income and basic and diluted
income per common share for the year ended December 31, 1997
would have been reduced to the proforma amounts indicated below:

Net Income (In thousands)

As reported         202
Proforma            184

Net Income Per Common Share

                         Basic     Diluted

As reported              $.05      $.05
Proforma                 $.05      $.05

The fair value of options at date of grant was estimated using
the Black-Scholes valuation model with the following assumptions:

Expected Life (years)    10
Risk Free Interest Rate  6%
Expected Dividend Yield  0%

No volatility assumption was made due to the lack of historical
stock transactions which would support the existence of
volatility.  The estimated weighted average fair value of options
granted during 1997 was $0.67 per share.


5.   NET INCOME PER SHARE

In accordance with SFAS No. 128, Earnings per share, the Company
has replaced the presentation of primary earnings per share with
the presentation of basic and diluted Net Income per Common Share
for the years ended December 31, 1997 and 1996.  Basic EPS
represents the amount of earnings for the period available to
each share of common stock outstanding during the reporting
period.  Basic EPS excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average
number of common shares outstanding for the period.  



<PAGE> 


The computation of diluted EPS is similar to the computation of
basic EPS except that the denominator is increased to include the
number of additional common shares that would have been
outstanding if the dilutive potential common shares had been
issued.  The difference between basic and diluted shares relates
to the shares potentially issuable under outstanding stock option
agreements.  See Note 4.

Income available to common stockholders equals the Company's
income from continuing operations and is $202,000 and $325,000
for 1997 in 1996, respectively.   Weighted-average number of
common shares outstanding equals the number of shares issued
during the period and shares reacquired during the period
weighted for the portion of the period that they were
outstanding.  Basic weighted-average number of common shares is
3,876,000 and 3,841,000 for 1997 and 1996, respectively.  Diluted
weighted-average number of common shares are 3,895,000 and
3,861,000 for 1997 and 1996, respectively.


6.   INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes.  Significant components of the Company's
deferred tax assets and liabilities as of December 31, 1997 are
as follows (in thousands):

     Deferred tax assets:
          Net operating loss carryforwards   $    3,430
          Tax credit carryforwards                  317
          Pension costs                             227
          Warranty accrual                           60
          Product liability accrual                  91
          Vacation accrual                           20
          Inventory                                  20
          Other - net                                21

     Total deferred tax assets                    4,186
          Deferred tax liabilities:
               Depreciation                         (12)
          Net deferred tax assets                 4,178
          Valuation allowance                    (4,178)
                                             $        0

A reconciliation of the income tax provision to the amounts
computed at the federal statutory rate is as follows (in
thousands):


<PAGE> 


                                      Year Ended December 31,
                                          1997      1996

     Tax provision at statutory rate    $    69   $    110
     State income taxes, net of 
          federal taxes                      10         15
     Changes in valuation reserve 
          related to utilization of 
          net operating loss carryforward   (75)       (130)
     Other                                   (4)          5
                                        $     0   $       0

At December 31, 1997, the Company has available the following net
operating loss and credit carryforwards to reduce future income
taxes.  These amounts are subject to applicable limitations. 
(Amounts in thousands.)

                                   Amount           Expiration
                                   Available           Dates

          Net operating losses     $    8,974       2001 - 2009
          Targeted jobs tax credit $      261       1999 - 2001
          Investment tax credit    $       56       1999 - 2000
          Contributions            $        4       1997 - 1999


7.   FINANCIAL INSTRUMENTS

The Company grants credit to customers who meet the Company's
pre-established credit requirements.  Credit losses are provided
for in the Company's financial statements based on factors
surrounding the credit risk of specific customers, historical
trends and other information and have consistently been within
management's expectations.

The Company's concentrations of credit risk with respect to trade
receivables arising from the sale to office furniture dealers are
minor due to the large number of entities comprising the
Company's customer base.  However, as of December 31, 1997, the
Company had approximately $170,000 of receivables from eight
companies, all of whom are wholesale catalogers of office or
industrial products and who are the principal purchasers of the
Company's utility products.

At December 31, 1997, the carrying value of the Company's cash,
accounts receivable, and accounts payable approximate fair value. 
Based on borrowing rates currently available to the Company for
bank loans with similar terms and collateral, the fair value of
the Company's short-term notes payable approximates its carrying
value.


9.   COMMITMENTS AND CONTINGENCIES

The Company is a defendant in several lawsuits relating to
product liability claims arising from accidents allegedly
occurring in connection with the use of its products.  The claims
are covered by insurance and are being defended by the Company's
counsel or by counsel assigned by the Company's insurance
carriers, but are subject to <PAGE> deductibles ranging from $0 to
$100,000.  A number of the claimants allege substantial damages. 
The ultimate outcome of such litigation cannot be predicted at
this time.  However, management believes the Company has
substantial defenses with respect to the claims and that the
ultimate outcome of these claims will not have a material adverse
effect on the Company's financial position.  The company has
accrued and included with other noncurrent liabilities the
estimated amount of losses not covered by insurance which may be
incurred from presently known and anticipated product liability
claims.


10.  RELATED PARTY TRANSACTIONS

Rotherwood, the Company's majority owner, provides management
services to the Company.  Certain employees of the Company
provide management service to other subsidiaries of Rotherwood. 
In 1997 and 1996, the net cost to the Company for these services
was approximately $32,000 and $46,000, respectively.   See Item
12 - Certain Relationships and Related Transactions.


11.  ACQUISITION OF ASSETS

On October 31, 1997, the Company entered into an Asset Purchase
Agreement with Floating Arms, Inc., the developer of a split
articulating keyboard capable of being mounted on the arms of a
chair.

Under the agreement, the Company acquired substantially all of
the assets of Floating Arms, Inc. in exchange for total payments
of $551,000.  Approximately $235,000 of the purchase represented
the assumption of Floating Arms, Inc.'s liabilities and the
remaining $316,000 was the negotiated value of 210,750 shares of
the Company's common stock issued as part of the transaction
($1.50 per share).

This acquisition was accounted for as a purchase, and
accordingly, the purchase price was allocated to the fair value
of net assets acquired as follows:

     Inventories                                       $ 18,000
     Property and equipment                            $135,000
     Other noncurrent Intangible assets
          Customer lists                               $150,000
          Patents                                      $ 50,000  
          Goodwill                                     $198,000

The cost of the intangible assets purchased in this transaction
will be amortized to expense on a straight-line basis over a 10
year period.  The Company's 1997 financial statements reflect the
results of operations for the acquired assets during the period
subsequent to the date of acquisition.

The Asset Purchase Agreement also obligates the Company to pay a
7% royalty to Floating Arms, Inc. on Cramer sales of split
mounted keyboard products that exceed $2,500,000 in the three
year period subsequent to the acquisition.  These royalty
payments are capped at a maximum of $3,000,000.  No provision has
been made at December 31, 1997 for any royalties that may become
payable under this portion of the <PAGE> purchase agreement, as the
achievement of this level of sales during the three year period
in question is uncertain.

Listed below is supplemental proforma information concerning what
the Company's results of operations would have been assuming the
acquisition had occurred at the beginning of the period shown
(unaudited):

Amounts in 1000's except per share information

For the year ended December 31, 1997

     Revenue                                 $  12,547
     Income before Extraordinary Items       $       4
     Net Income                              $       4
     Basic Net Income per common share       less than $0.01 per
                                             share

For the year ended December 31, 1996

     Revenue                            $  11,974
     Income before Extraordinary Items  $     (11)
     Net Income (Loss)                  $     (11)
     Basic Net Loss per common share    less than $(0.01) per
                                        share

The operating losses experienced by Floating Arms, Inc. in 1996
and 1997, which are reflected in the above proforma results,
occurred because, as a start-up company, Floating  Arms, Inc.
expended significantly more moneys for research and development
than its intake of revenue and gross profit.  Management does not
anticipate this level of operating losses continuing throughout
all of 1998.

12.  INTANGIBLE ASSETS

Intangible assets consist of the following at December 31, 1997:

                         Accumulated         Amortization Period
               Cost     Amortization     Net       In Years
Goodwill       $ 201     $    3         $ 198          10

Other 
Noncurrent 
assets:

  Customer 
   Lists       $ 150     $    1         $ 149          10
  Patents         50          0            50          10
  Non Compete 
   Agreement      28          5            20           3

               $ 228     $   10         $ 219



<PAGE> 



ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

In April 1997 the Company dismissed Ernst & Young, LLP as its
principal accountant.  Ernst & Young, LLP audited the Company's
financial statements for the fiscal years ended December 31,
1996.  Ernst & Young, LLP's report on these financial statements
did not contain an adverse opinion or disclaimer of opinion, nor
was such report modified as to uncertainty, audit scope or
accounting principles.

There were no disagreements between the Company and Ernst &
Young, LLP on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.

In April 1997, the Company engaged Deloitte & Touche, LLP as its
principal accountant for the fiscal year ending December 31,
1997.  There were no disagreements between the Company and
Deloitte & Touche, LLP on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure.



<PAGE> 



                             PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
          ACT - This information will be included in the
          Company's 1998 Proxy Statement pursuant to Section 14A
          of the Securities and Exchange Act and is incorporated
          by reference herein.


ITEM 10.  EXECUTIVE COMPENSATION - This information will be
          included in the Company's 1998 Proxy Statement pursuant
          to Section 14A of the Securities and Exchange Act and
          is incorporated by reference herein.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT - This information will be included in the Company's
1998 Proxy Statement pursuant to Section 14A of the Securities
and Exchange Act and is incorporated by reference herein.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - This
information will be included in the Company's 1998 Proxy
Statement pursuant to Section 14A of the Securities and Exchange
Act and is incorporated by reference herein.


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Number

2.1  Floating Arms Asset Purchase Agreement dated October 31,
     1997 (previously filed)
10.1 1989 Incentive Stock Option Plan (previously filed)
10.2 1996 Loan Documents - Mercantile  (previously filed)
23a  Consent of Ernst & Young
23b  Consent of Deloitte & Touche
27   Financial Data Schedule


The following current reports were filed by the Company during
1997.

April 4, 1997 -  Dismissal of Ernst & Young, LLP as the Company's
principal accountant

April 21, 1997 - Retained Deloitte & Touche, LLP as the Company's
principal accountant

October 31, 1997 (Amendment No. 1, December 31, 1997) -
Acquisition of certain assets from Floating Arms, Inc.


<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, as
duly authorized.

                           CRAMER, INC.



3/16/98             /s/ James R. Zicarelli 
                         James R. Zicarelli
                         CEO
                         (Principal Executive Officer)

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



3/16/98             /s/ James R. Zicarelli 
                         James R. Zicarelli
                         Director



3/16/98             /s/ James E. Workman
                         James E. Workman
                         Director



3/16/98             /s/ Ev F. Carter
                         Ev F. Carter
                         Director



<PAGE> 



3/16/98             /s/ Mark L. de Naray
                         Mark L. de Naray
                         Director



3/16/98             /s/ Robert J. Kovach
                         Robert J. Kovach
                         Director



3/16/98             /s/ Gary A. Rubin 
                         Gary A. Rubin
                         Vice President, Finance
                         (Principal Financial and Accounting
                         Officer)




<PAGE> 



                          EXHIBIT INDEX


Number

2.1  Floating Arms Asset Purchase Agreement dated October 31,
     1997 (previously filed)
10.1 1989 Incentive Stock Option Plan (previously filed)
10.2 1996 Loan Documents - Mercantile Bank (previously filed)
23a  Consent of Ernst & Young
23b  Consent of Deloitte & Touche
27   Financial Data Schedule