<PAGE>

================================================================================


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

                                   FORM 10-K


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


For the fiscal year ended December 31, 1997

                                       OR


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

For the transition period from               to

                        COMMISSION FILE NUMBER 33-97056


                                  CALMAR INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
            Delaware                                             95-3833709
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                                 Identification No.)
</TABLE>

                         333 South Turnbull Canyon Road
                       City of Industry, California 91745
                    (Address of principal executive offices)


      Registrant's telephone number, including area code:  (626) 330-3161

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

       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. [X]


     The aggregate market value of the common stock of Calmar Inc. held by non-
affiliates of Calmar Inc. is inapplicable as the common stock of Calmar Inc. is
privately held.


     The number of shares of common stock of Calmar Inc. outstanding on March
15, 1998 was 3,092,031.


                      DOCUMENTS INCORPORATED BY REFERENCE


                                     NONE.


================================================================================
                                                              Page 1 of __ Pages
                                                Exhibit Index begins on Page __.
<PAGE>

                                  CALMAR INC.


                      INDEX TO ANNUAL REPORT ON FORM 10-K


                  For the fiscal year ended December 31, 1997


<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
                                              PART I
<S>           <C>                                                                       <C>
Item 1.       Business...............................................................      3
Item 2.       Properties.............................................................     10
Item 3.       Legal Proceedings......................................................     11
Item 4.       Submission of Matters to a Vote of Security Holders....................     12

                                              PART II
Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters..     13
Item 6.       Selected Financial Data................................................     13
Item 7.       Management's Discussion and Analysis of Financial Condition and Results
              of Operations..........................................................     15
Item 7A.      Quantitative and Qualitative Disclosure About Market Risk..............     19
Item 8.       Financial Statements and Supplementary Data............................     19
Item 9.       Changes In and Disagreements With Accountants on Accounting and
              Financial Disclosure...................................................     20

                                             PART III
Item 10.      Directors and Executive Officers of the Registrant.....................     21
Item 11.      Executive Compensation.................................................     24
Item 12.      Security Ownership of Certain Beneficial Owners and Management.........     30
Item 13.      Certain Relationships and Related Transactions.........................     31

                                              PART IV
Item 14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K.......     32
</TABLE>
<PAGE>

                                     PART I


ITEM 1.        BUSINESS.

     As used in this Annual Report on Form 10-K ("Form 10-K"), unless the
context indicates otherwise, the terms "Company" and "Calmar" refer to Calmar
Inc., a Delaware corporation, and its predecessor companies.

GENERAL

     Calmar believes it is the leading worldwide manufacturer of plastic
dispensing and spraying systems.  Calmar offers the broadest range of such
systems in the world, including a full line of fine mist, regular and trigger
sprayers; regular, large and high-viscosity dispensers; and other specialty
products.  These products are used primarily for dispensing and packaging
personal care, household, automotive, chemical and pharmaceutical products.
Management attributes the Company's success to its global relationships with
major customers, excellent product quality and service, advanced manufacturing
capabilities and development of innovative products.  The Company's largest
customers include most major consumer products companies.  The Company has been
doing business with its ten largest customers, which together accounted for
approximately 30% of its net sales in 1997, for an average of over 20 years.

     The markets for Calmar's products are generally characterized by stable
aggregate end-user demand.  These markets have grown as:  (i) the demand for
consumer products has grown, particularly internationally; (ii) Calmar's
customers have increasingly used high-value-added dispensing and spraying
systems to differentiate, add convenience and improve their products; (iii) new
applications for the Company's technology have been developed, such as drug
delivery systems, certain food applications and body sprays; and (iv) the cost
of these products has continued to decline as technology and manufacturing
techniques have improved.

     Calmar was incorporated in 1983 to carry on the business formerly conducted
by the Calmar division of Diamond International Corporation.  In 1987, Beijer
Industries AB ("Beijer"), a Swedish corporation and the 65% stockholder of the
Company, through two wholly-owned subsidiaries, acquired the remaining 35% of
the common stock of the Company.  In 1988, FS Equity Partners II, L.P., a
California limited partnership and an affiliate of Freeman Spogli & Co.
("FS&Co."), purchased a 52% interest in Calmar and has, from time to time, made
additional equity investments in the Company to support its growth.  In a
creditor proceeding in 1994 involving Beijer and its parent Kongsbo Industrier
AB, a Swedish corporation, the equity interest in the Company retained by Beijer
was transferred to AB Handel och Industri, a Swedish corporation.


THE REFINANCING

     On August 18, 1995, the Company refinanced a substantial portion of its
long-term debt.  The Company sold $120.0 million aggregate principal amount of
its 11 1/2 Senior Subordinated Notes due 2005, Series A (the "Old Notes").
Concurrently therewith, Calmar entered into a new senior secured credit
agreement (the "New Credit Facility") which provides for term loan facilities
aggregating $105.0 million and a revolving credit facility of up to $20.0
million (the "Revolver").  The Revolver expires in 1999.  The New Credit
Facility is secured by, among other things, a first priority lien on all of the
Company's domestic real properties.

     On September 18, 1995, net proceeds from the sale of the Old Notes
(approximately $116.0 million), together with borrowings under the term loan
portion of the New Credit Facility ($105.0 million), were used:  (i) to redeem
the $90.0 million outstanding principal amount of the Company's 12% Senior
Secured Notes due 1997 (the "Senior Secured Notes"); (ii) to redeem the $104.8
million outstanding principal amount of the Company's 14% Subordinated Notes due
1999 (the "Subordinated Notes"); (iii) to pay related call premiums aggregating
$5.7 million plus associated redemption costs and accrued interest on such
securities to their date of redemption; (iv) to repay all outstanding amounts
($6.5 million) under the Company's then existing revolving credit agreement; and
(v) for working capital and general corporate purposes.

                                       3
<PAGE>

     As used herein, the term "Refinancing" shall refer to the transactions
which occurred on August 18, 1995 and September 18, 1995 described above.

     On January 10, 1996, the Company consummated an offer to exchange (the
"Exchange Offer") $1,000 principal amount of its 11 1/2 Senior Subordinated
Notes due 2005, Series B (the "Senior Subordinated Notes") which were registered
under the Securities Act of 1933, as amended, pursuant to a Registration
Statement on Form S-4, for each $1,000 principal amount of its outstanding Old
Notes, of which $120.0 million principal amount was outstanding.  As of March
15, 1998, $120.0 million principal amount of the Senior Subordinated Notes was
outstanding.

     On October 4, 1996, the Company amended its New Credit Facility.  The
amendment replaced its current lender under the Revolver within the New Credit
Facility, reduced the maximum borrowings permitted under the Revolver from $20.0
million to $12.0 million, revised certain financial covenants pursuant to the
New Credit Facility and provided some technical revisions to the New Credit
Facility.  At December 31, 1997, the borrowing base test permitted the Company
to borrow up to $12.0 million.

     On July 16, 1997, the Company amended (the Second Amendment) its New Credit
Facility to permit the Company to acquire certain assets of an existing licensee
in Argentina and Brazil. See "--International Operations." On January 20, 1998,
the Company amended (the Third Amendment) the New Credit Facility by increasing
the amount the Company may borrow under its AXEL Series A facility by $5.0
million to support the Company's working capital requirements.

     The Company's executive offices are located at 333 South Turnbull Canyon
Road, City of Industry, California 91749, and its telephone number is (626) 330-
3161.

     Unless otherwise indicated, as used in this Form 10-K (i) all references to
square feet are to gross square feet, rather than net selling space; and (ii)
all references to a year shall mean the fiscal year of the Company which
commences in such year (for example, the fiscal year commencing January 1, 1997
and ending December 31, 1997 is referred to herein as "1997").


PRODUCTS

     Calmar believes it is the largest manufacturer of plastic pump spraying and
dispensing systems in the world.  Calmar manufactures three types of plastic
pump sprayers (fine mist, regular and trigger sprayers), three types of plastic
pump dispensers (regular, large and high-viscosity dispensers), child-resistant
closures as well as custom-molded inhaler casings and aerosol valves.  Calmar's
products are designed, developed and manufactured using the Company's patents,
proprietary processes and technology.

     The following table shows the contribution to Calmar's net sales made by
plastic pump sprayers, plastic pump dispensers and other products during each of
the last three years.


<TABLE>
<CAPTION>
                                      YEAR ENDED DECEMBER 31,
                 --------------------------------------------------------------
                       1995                   1996                  1997
                 ----------------        --------------         ---------------
                                    (DOLLARS IN THOUSANDS)
<S>              <C>                     <C>                    <C>
Sprayers.........  $129,331   58%        $129,107   59%         $135,910   59%
Dispensers.......    71,209   32           69,469   32            74,301   32%
Other Products...    23,925   10           20,861    9            20,034    9%
                   --------  ---         --------  ---          --------  ---
    Total........  $224,465  100%        $219,437  100%         $230,245  100%
                   ========  ===         ========  ===          ========  ===
</TABLE>

                                       4
<PAGE>

Plastic Pump Sprayers
---------------------

     Calmar's plastic pump sprayers are used to dispense a wide variety of
liquid products for various applications.  Different applications require the
sprayers to have different performance characteristics.  Calmar has designed and
developed or acquired three basic types of sprayers and has several relevant
patents related to these products.

     Fine Mist Sprayers.   Fine mist sprayers emit a fine spray for use with
such products as hair sprays, fragrances, nasal sprays and other pharmaceutical
products.  Calmar is a major supplier of fine mist sprayers to the hair care
industry in the U.S. and to the hair care, deodorant, fragrance and
pharmaceutical markets in Europe. The Company currently manufactures nine models
of fine mist sprayers. Fine mist sprayers are required for the application of
fragrances and hair spray products in order to avoid concentrations of the
products on any one area and to promote rapid drying. Pharmaceutical products,
such as nasal sprays, require fine, micron sized particles for product efficacy.
The Company's products are used for nasal applications in both the over-the-
counter and prescription pharmaceutical markets. Recently, these sprayers have
also begun to be used for food applications and body sprays.

     Regular Sprayers.   Regular sprayers emit a wetter, larger particle sized
spray than fine mist sprayers and are used with household cleaners, including
window, tile and all-purpose cleaners, as well as throat sprays, automotive
cleaners and insecticides.  In Europe, regular sprayers are typically used in
certain hair care and medical applications.  The Company currently manufactures
two models of regular sprayers.  Regular sprayers are typically used with
smaller-sized packages.

     Trigger Sprayers.   Trigger sprayers emit a spray similar to that of the
regular sprayers described above but are generally used for larger sized
containers such as household, automotive and chemical products.  The world
market for trigger sprayers has experienced significant growth over the past
five years primarily as a result of: (i) a significant decrease in trigger
sprayer prices and manufacturing costs; (ii) the conversion from regular
sprayers to trigger sprayers for larger applications; and (iii) the conversion
from conventional closures to trigger sprayers for added convenience.  Calmar
currently manufactures three models of trigger sprayers.


Plastic Pump Dispensers
-----------------------

     The Company's plastic pump dispensers are primarily used to dispense pre-
measured amounts of liquids, lotions and high-viscosity products.

     Regular Dispensers.   Regular dispensers are used primarily with products
such as liquid soaps, hand, face and body lotions and other applications
requiring pre-measured amounts of products.  The Company currently manufactures
five models of regular dispensers, with several designs of each.  Growth in this
category has been driven by liquid soap products which have gained market share
from traditional bar soaps.  Regular dispenser sales have increased further as
hand, face and body lotions were packaged to use dispensers.

     Large Dispensers.   Large dispensers dispense from one-eighth of an ounce
to one ounce of product at a time, which is a greater output than that of
Calmar's regular dispensers.  Large dispensers are used primarily for shampoos,
hair conditioners, syrups, food products (such as mustard and ketchup in
institutional size containers) and liquid detergents.  The Company currently
manufactures four models of large dispensers, with several designs of each,
which include a product line with a locking pump which does not require outer
protection for shipping.

     High-Viscosity Dispensers.   High-viscosity dispensers, which are sold
mainly in the U.S., are used almost exclusively with one major toothpaste
manufacturer.

                                       5
<PAGE>

Other Products
--------------

     The Company is a supplier to Rhone-Poulenc Rorer of an inhaler casing used
by asthmatics and sold under the Azmacort brand name.  The product was
introduced by Rhone-Poulenc Rorer in 1991 and is produced by Calmar in a clean
room environment.

     Calmar is a leading manufacturer of child-resistant closures for use in the
U.S. over-the-counter pharmaceutical market.  The Company manufactures a one
piece plastic child-resistant safety cap under the trademark Snap-Safe(R) which
meets the protocol standards established by the United States Consumer Products
Safety Commission for "child-resistant" closures.  This cap is used with dry
pharmaceutical products such as analgesics, cold tablets and vitamins.

     Calmar also sells aerosol valves that are manufactured at its facility in
Spain.  These products are sold to the Spanish market only.


MARKETING STRATEGY AND DISTRIBUTION

     In North America, product managers are responsible for marketing and
distribution and also act as liaisons with the Company's technology,
manufacturing and finance personnel.  Sales to customers in North America are
made directly through the Company's direct sales force located throughout North
America and indirectly through packaging distributors.  In Europe, country
managers have key account responsibilities for major customers, while sales and
marketing are handled by a direct sales force under the direction of the Vice
President of European Operations.  Sales to the Pacific Rim are conducted
through a direct sales force and licensees and are coordinated by a Managing
Director based in Singapore.  South American sales are conducted both through
direct sales and licensees.  Calmar also actively markets its products worldwide
in trade journals and at trade shows.


CUSTOMERS

     The Company's largest customers include most major consumer products
companies.  The Company has long-standing relationships with and is the sole
supplier to many of its major customers.  Management believes that Calmar's
focus on product development, quality and excellent service has allowed the
Company to develop and maintain close and long-standing relationships with its
customers.

     Although the Company has over 1,500 customers, approximately 30% of
Calmar's net sales in 1997 were to its ten largest customers.  The personal care
and household products industry has consolidated over the past several years led
primarily by multinational companies.  These companies are increasingly
demanding that their suppliers provide high quality products directly to their
operations around the world on a cost-efficient and timely basis.  Furthermore,
as these companies continue to rationalize their supplier base, management
believes that Calmar's ability to provide a broad range of products will improve
the Company's competitive position.

     The Company sells components and finished goods to licensees in South
America and the Pacific Rim.  Calmar typically supplies such licensees with
molded parts and such licensees then assemble the parts into finished products
for sale in a specific market.


COMPETITION

     The markets for Calmar's products are highly competitive.  Calmar competes
with a number of public and privately-held companies, including divisions of
larger companies, some of which have greater financial resources than the
Company.  Nonetheless, Calmar is the largest manufacturer of plastic pump
spraying and dispensing systems in the world, measured by the number of units
sold.  In North America, Calmar believes that it has or shares a leading
position in each of the markets in which it competes.  In addition, the Company

                                       6
<PAGE>

believes that no other manufacturer produces as wide a variety of plastic
spraying and dispensing systems as Calmar.

     The European markets for Calmar's products are highly fragmented.  In
addition to the presence of North American competitors in Europe, there are a
number of local competitors in most of the major product categories.  Calmar
believes it has a leading market share in Europe for trigger sprayers, regular
sprayers and large dispensers and has the second largest market share in its
other product categories.  Calmar's European competitors are focused largely on
one or two major product areas while Calmar offers the widest variety of options
for their customers' needs.

     In the Pacific Rim and South America, Calmar typically competes with other
multinational companies as well as local producers. In an effort to take
advantage of the rapidly growing markets in the Pacific Rim and South America,
Calmar has created three new wholly owned subsidiaries, Calmar Mercosur, S.A.,
Calmar do Brasil in South America, and Calmar Wuxi Dispensing Systems Ltd. in
China. In addition, Calmar has signed a joint venture agreement in Indonesia in
an effort to further increase presence and market share in the Pacific Rim. See
"-International Operations."

     Calmar believes that it effectively competes primarily on the basis of its
reputation and the quality, reliability, performance and prompt delivery of its
products.  Many of the Company's major customers are multinational companies
competing on a global basis with worldwide brands and place increased emphasis
on global sourcing of input materials and components.  Management believes that
Calmar's ability to serve these customers globally from its North American,
European, South American, and Asian production bases will continue to be an
important competitive factor.


RESEARCH AND DEVELOPMENT

     Management believes that Calmar is a leader in the technological
development and innovation of products in the industry.  The focus of the
Company's research, development and engineering efforts is to: (i) develop
products that will increase the size of the available market; (ii) provide the
highest level of quality; (iii) develop unique value-added product features;
(iv) customize products for specific customer applications; and (v) continue to
simplify the design/production process to reduce costs.

     The Company's technology effort is very closely associated with its
customers.  Many development projects are conducted jointly with customers and,
in some instances, are partially or fully funded by these customers.  These
projects may include cost sharing agreements regarding the purchase of
manufacturing equipment for new products and/or additional capacity.  These
arrangements help the Company to share some of the risk in both product
development and product sales associated with introducing a new product or a
modified product into the market.  Calmar is currently working on several
confidential joint development projects with major multinational companies to
develop new proprietary products.

     In 1995, 1996 and 1997, Research and Development expenditures totalled $4.5
million, $5.1 million and $5.0 million, respectively.



MANUFACTURING, DESIGN AND RAW MATERIAL

     The Company molds precision plastic components using tight tolerance,
multi-cavity molds in standard injection molding machines.  Plastic components
are produced primarily at Calmar's manufacturing facilities, with support from
contract molders.  The extent to which contract molders are used varies monthly
and depends on current product demand.  In addition, Calmar operates a captive
spring-making plant which manufactures the majority of metal springs used in its
pump products; the remaining springs and certain other components are purchased
from outside suppliers.  The Company also manufactures most of its own extruded
tubing for its pumps.

                                       7
<PAGE>

     Pump components are assembled automatically on proprietary design assembly
machines.  Each pump is inspected for product integrity and tested for
functionality throughout the assembly process, utilizing state-of-the-art
sensors and computer controls to minimize defective products.  Calmar has
developed significant expertise in automated assembly equipment, having designed
and built the majority of its assembly equipment to exacting product design and
manufacturing requirements.

     The principal raw materials used by Calmar are polypropylene and high-
density polyethylene resins.  These raw materials are available from a number of
suppliers in the United States and in Europe.  Approximately 15% of Calmar's
cost of sales in 1997 was attributable to plastic resin costs.  The cost of
plastic resins purchased by Calmar is subject to commodity pricing.  The
overall average price of plastic resins purchased by Calmar remained relatively
unchanged during 1997.  To date, the Company has been able to obtain sufficient
quantities of plastic resin for its requirements.  Calmar does not have long-
term supply contracts for the purchase of raw materials, although it has long-
standing relationships with its major suppliers.

     Calmar's manufacturing facilities (the majority of which are Company owned)
and equipment represent advanced technology for the industry. The Company's
Spanish and German plants have been International Standards Organization (ISO)
9001 certified. All of the Company's plants in the United States have been (ISO)
9001 certified. The production capacity of Calmar's manufacturing facilities
depends to a great extent on the products manufactured. Since most of Calmar's
injection molding machines are readily adapted to the manufacture of various
products or components, production capacity may be shifted among various
products by reallocating the injection molding machines or by contracting with
independent molders who are provided with the Company's molds. Currently Calmar
is at capacity with respect to the production of certain of its products. One of
the Company's European subsidiaries has recently completed construction of a new
facility which has reduced the Company's reliance on independent molders.


BACKLOG

     Calmar's largest customers typically provide Calmar with quarterly or
annual estimates of their product requirements and confirm specific orders on a
monthly basis.  Calmar's backlog of orders, which it believes to be firm, was
approximately $119 million as of February 28, 1998.  Calmar expects that
substantially all of its present backlog will be filled within the next 12
months.


INTERNATIONAL OPERATIONS

     The Company's German subsidiary, Calmar-Albert GmbH, manufactures and sells
plastic pump sprayers and dispensers, primarily in the European market.  The
Company's Spanish subsidiary, Monturas S.A., is the largest producer of
sprayers, dispensing pumps and aerosol valves in Spain.  Calmar's French,
Belgian, English and Italian subsidiaries are trading companies selling products
produced by Calmar-Albert GmbH and Monturas S.A., as well as products
manufactured by the Company in the U.S.  The Company's Canadian subsidiary sells
certain of Calmar's products manufactured in the U.S.  The Company's Argentinean
and Brazilian subsidiaries sell plastic pump sprayers and dispensers in South
America.  The Company's Chinese subsidiary assembles and sells plastic pump
sprayers and dispensers in Asia.  For a discussion of the amounts of revenue,
operating income and identifiable assets attributable to the Company's
international operations and the amount of export sales, see Note 12 to the
Company's Consolidated Financial Statements.

     In August 1997, Calmar acquired certain assets of a licensee in Argentina
and Brazil, Magiplast S.A. through its two new wholly-owned subsidiaries,
Calmar Mercosur, S.A. and Calmar do Brasil.  The main purpose for this
acquisition was to take advantage of the rapidly growing South American market
and to provide Calmar control of its sales, marketing and distribution channel
in this market.  Calmar's manufacturing operations in South America continue to
be performed by Magiplast S.A.

                                       8
<PAGE>

     In October 1997, Calmar incorporated a Chinese subsidiary, Calmar Wuxi
Dispensing Systems Ltd., to take advantage of the rapidly growing Chinese market
and to provide Calmar control of its sales, marketing and distribution channel
in this market.

     The Company also has licensees located in Japan, South Korea, Hong Kong,
South Africa, Australia, Argentina and India.

     The Company signed a joint venture agreement in Indonesia in August 1997
and is waiting for government approval for consummation of the joint venture
arrangement.

     Sales outside of North America (including export sales) accounted for
approximately 47% and 45% of the Company's total revenues in 1996 and 1997,
respectively.  These sales are subject to a number of inherent risks, including
the impact of inflationary environments in economies outside the United States
and generally longer receivables collection periods, as well as tariffs and
other potential trade barriers which may reduce the profitability to the Company
of such sales.

     The U.S. dollar value of revenues derived from products sold outside the
United States (excluding U.S. export sales) varies with currency exchange rate
fluctuations, and the Company's consolidated revenues may be unfavorably
impacted by significant increases in the value of the U.S. dollar relative to
certain foreign currencies. Calmar's domestic operations currently export
products with invoices denominated in U.S. dollars to eliminate any such
exchange rate risk. During 1997, many Asian nations including Indonesia,
experienced significant currency devaluation. In previous years, similar
circumstances have occurred in certain South American economies. See Note 1 to
the Consolidated Financial Statements. In addition, with respect to product
sales which are denominated in a currency other than the functional currency of
the country in which the Company subsidiary making the sale is located, the
Company may be exposed to gains or losses based upon fluctuations in exchange
rates. In practice, Calmar's subsidiaries invoice in their own functional
currency whenever possible and are involved in some hedging arrangements with
respect to foreign currencies. See "Item 7.--Management's Discussion and
Analysis of Financial Condition and Results of Operations."


PATENTS AND TRADEMARKS

     Many of Calmar's products are protected by patents and the Company is
continually exploring opportunities for new patentable products through research
and development.  While Calmar believes that its patents are important to its
business and enhance its competitive position, Calmar does not believe that the
loss of any one particular patent would have a material adverse effect on
Calmar's business.

     Most of Calmar's products are sold under registered trademarks.  Although
Calmar believes that its trademarks are useful, it does not believe that their
loss would have a material adverse effect on Calmar's business.


EMPLOYEES

     As of December 31, 1997, Calmar employed 1,950 persons. At such date, 28%
of Calmar's U.S. employees were covered by collective bargaining agreements.
Approximately 130 employees in Germany and 217 employees in Spain were
represented by national labor unions. The collective bargaining agreement
covering employees at the Company's facility which represents 12% of the
workforce in California will expire during 1998.

     Calmar believes that its relationship with its employees is excellent and
is not aware of any threatened labor activity affecting its employees.  Calmar
has never experienced a work stoppage due to a labor dispute.

                                       9
<PAGE>

ITEM 2.        PROPERTIES.


     Calmar manufactures products at six Company-owned plants located in
California, Ohio, Missouri, Germany and Spain and a leased plant located in
Germany and assembles products in leased facilities in Argentina and China, and
manufactures springs at one Company-owned facility in Ohio.  Calmar also leases
a number of sales offices throughout the world.  All of the Company's domestic
real properties are subject to a first priority lien securing the New Credit
Facility.  See "Item 1.  Business--The Refinancing."

     Calmar's manufacturing operations are conducted at the facilities described
below:


<TABLE>
<CAPTION>
                                         SIZE
                                      (APPROX.)
             LOCATION                  SQ. FT.
-----------------------------------   ----------
<S>                                   <C>
City of Industry, California.......      125,800
Washington Court House, Ohio.......      117,000
Washington Court House, Ohio.......       15,600
Lee's Summit, Missouri.............      133,100
Lee's Summit, Missouri.............       65,000
Hemer, Germany.....................       90,000
Hemer, Germany (leased)............       43,000
Barcelona, Spain...................      129,000
Buenos Aires, Argentina (leased)...       22,000
Wuxi, China (leased)...............       20,000
</TABLE>

     The Company believes that its existing facilities are in good condition and
are suitable and adequate to meet its current needs.  The Company has plans to
purchase a building in the United States to handle its anticipated future
growth.  Currently, the Company's planned capital expenditures contemplate the
acquisition of additional molding equipment.  Historically, contract molders
have been readily available to provide the Company with additional molding
capacity and the Company expects that contract molders will continue to be
readily available.


ENVIRONMENTAL REGULATIONS

     Management believes the Company is in substantial compliance with national,
state and local laws and regulations governing the use, discharge and disposal
of hazardous materials, except as outlined below.  In June 1987, the California
Regional Water Quality Control Board (Water Control Board) required the Company
to conduct an investigation of possible soil and groundwater contamination of
the Company's City of Industry facility.  This investigation indicated that
soils and groundwater under the site had been impacted by industrial cleaning
solvents.  Since 1987, the Company has continued to investigate and monitor the
site.  The investigations performed to date indicate that some of the
contamination on the site may result from off-site sources unrelated to the
Company.  The Water Control Board has requested that the Company begin soil
remediation at the site.  In October 1997, the Company submitted a remediation
plan to the Water Control Board and is currently waiting for Board approval.
The Company also continues to evaluate soil cleanup options.  The Company
believes it will have some insurance coverage for this matter.

     In June 1993, the EPA sent 64 companies and individuals, including the
Company, letters notifying the recipients that they were considered potentially
liable for groundwater contamination in the Puente Valley Operable Unit of the
San Gabriel Superfund Site.  The Company's City of Industry facility is located
in the Puente Valley Operable Unit.  In response to the EPA's request, the
Company and a majority of the recipients of the notice formed a steering
committee known as the Puente Valley Steering Committee (PVSC).  In September
1993, 47 companies (including Calmar) and individuals in the Puente Valley,
entered into an Administrative Order on Consent (AOC) whereby such companies and
individuals, including the Company, agreed to conduct a remedial investigation
and feasibility study under the oversight of the EPA.  A remedial

                                       10
<PAGE>

investigation report and feasibility study were issued in May 1997.  The total
costs related to conducting this study were estimated to be approximately
$5,000,000 of which $4,800,000 has been paid to date.  The Company's share is
expected to be approximately $150,000 of which $132,000 has been paid to date.
The Company believes that it will have some insurance coverage in this matter.

     In January 1998, the EPA issued a proposed remediation plan which
identified a remedial system for intermediate and shallow groundwater zones as
the preferred remedy.  The estimated cost of the plan, if ultimately approved,
is approximately $29 million if only treatment for industrial solvents is
necessary or $51 million if treatments for total dissolved solids and nitrates
is also required.  The EPA is expected to issue its final Record of Decision by
mid 1998.  Upon issuance of the final Record of Decision, it is expected that
the potentially responsible parties (PRPs) identified by the EPA will develop
specific remediation plans in response to a demand by the EPA and that the
parties will participate in a cost allocation process whereby each PRP will be
allocated a percentage share of the remediation responsibility (and thus a
percentage share of the remediation costs).  A precise estimate of the total
remediation cost ultimately to be paid by the Company is not yet determinable.
A more precise estimate of costs will be available upon issuance of the Record
of Decision and demand by the EPA, the development of the response and
remediation plan by the PRPs, and an agreement on allocable percentages of
responsibility of the PRPs.  It is expected that any remediation plan developed
by the PRPs will include ongoing monitoring of the site, as well as intermediate
groundwater zones.  It is estimated that any remediation would require at least
15 years to complete and perhaps significantly longer.  The Company believes it
has insurance coverage for legal defense costs, and possibly indemnity, in this
matter.  Some amounts of defense costs have already been paid by the carriers.
No amounts have yet been incurred for remediation and therefore no claims have
been forwarded to the carriers for payment.  At December 31, 1997, the Company
has accrued approximately $400,000 for potential environmental liability.
Estimates of ultimate liability (as well as the Company's allocated percentage
of responsibility) may change significantly based upon the nature of the
proposed remediation plan which has yet to be developed by the PRPs.

     The Company may be required to incur other costs and expenses from time to
time in order to generally comply with environmental laws and regulations;
however, the Company does not anticipate that such costs and expenses will have
a material adverse effect on the Company's results of operations.  No assurances
can be given, however, that the historical, current or future uses and
conditions of the Company's facilities or operations will not result in the
imposition of liability under environmental laws.


GOVERNMENT REGULATION

     Although the Company is not generally subject to significant government
regulation of its products, several states have mandated a reduction in the
level of volatile organic compounds ("VOC") in the formulation of certain
products, such as hairspray, that may be dispensed by Calmar's fine mist
products.  The current regulations require manufacturers of hairsprays to
maintain a VOC level of no more than 80%.  Effective June 1, 1999, the maximum
permissible VOC level will be reduced to 55% in California.  In reduced VOC
level hairspray formulations, VOC's are typically replaced by water.  Currently,
formulations are being developed and the Company is aggressively working to
adapt fine mist sprayer products to reduced VOC level formulations.  Although
the Company has been successful in redesigning a fine mist sprayer to
accommodate currently allowable VOC formulations and is aggressively working to
adapt a fine mist sprayer to accommodate further reductions in the permitted VOC
content of product formulations mandated in 1999, there can be no assurance that
consumers will find reduced VOC hairspray acceptable, that such reductions would
be compatible with a fine mist sprayer or that an effective fine mist sprayer
could be developed at a reasonable cost and, in such event, there may be an
adverse impact on the Company's results of operations.


ITEM 3.        LEGAL PROCEEDINGS.

     There are no material legal proceedings pending against the Company or any
of its properties, except as noted in "Item 2.  Properties--Environmental
Regulations."  In addition, please see Note 11 to the Consolidated Financial
Statements and "Item 7.  Management's Discussion and Analysis of Financial
Condition

                                       11
<PAGE>

and Results of Operations--Liquidity and Capital Resources" for a discussion of
the pending tax audit of the Company.


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

     Not applicable.

                                       12
<PAGE>

                                    PART II


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

     There is no established public trading market for the common stock of the
Company.  As of March 15, 1998, the number of record holders of common stock of
the Company was 36.

     The Company has not declared or paid cash dividends to its stockholders.
The Company anticipates that all of its earnings in the near future will be
retained for the development and expansion of its business and, therefore, does
not anticipate paying dividends on its common stock in the foreseeable future.
Declaration of dividends on the common stock will depend, among other things,
upon levels of indebtedness, future earnings, the operating and financial
condition of the Company, its capital requirements and general business
conditions.  The agreements governing the Company's indebtedness contain
provisions which restrict the ability of the Company to pay dividends on its
common stock.  See "Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."


ITEM 6.        SELECTED FINANCIAL DATA.

     The following selected consolidated financial information has been derived
from the historical consolidated financial statements of the Company.

     The information set forth below should be read in conjunction with "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and notes thereto included
elsewhere in this Form 10-K.


                      SELECTED CONSOLIDATED FINANCIAL DATA




<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                  ------------------------------------------------------------------------------
                                                    1993              1994             1995(1)          1996              1997
                                                   ------            ------           ---------        ------            ------
                                                                             (dollars in thousands)
<S>                                               <C>               <C>               <C>             <C>               <C>
STATEMENT OF OPERATIONS DATA:
Net sales..........................     $175,364          $203,344          $224,465        $219,437          $230,245
Gross profit.......................       42,812            53,284            56,021          56,450            63,295
Selling, general and
 administrative expenses...........       34,437            34,641            35,559          37,097            37,956
Operating income...................        8,375            18,643            20,462          19,353            25,339
Income before net interest and
 taxes(2)..........................        8,918            19,201            21,520          20,555            26,289
Interest expense...................      (28,277)          (27,788)          (27,265)        (24,487)          (24,943)
Interest income....................          382               413               396             320               285
Income (loss) before income taxes,
 extraordinary item and cumulative
 effect of accounting change.......      (18,977)           (8,174)           (5,349)         (3,612)            1,697
Income (loss) before extraordinary
 item and cumulative effect of
 accounting change.................      (17,813)           (9,090)           (6,432)         (3,398)            1,631
Net income (loss)..................      (25,527)           (9,090)          (15,960)         (4,016)            1,697

BALANCE SHEET DATA:
Total assets.......................     $280,595          $282,405          $289,785        $282,738          $284,641
Long-term debt.....................      212,859           208,705           235,785         232,867           238,571
Stockholders' equity (deficiency)..       (2,428)           (9,632)          (23,619)        (29,398)          (32,241)

OTHER DATA:
Capital expenditures...............     $ 22,930          $ 18,707          $ 18,290        $ 16,681          $ 22,947
Research and development costs.....        3,262             4,065             4,546           5,139             5,017
Depreciation and amortization
 expense...........................       23,970            24,835            25,135          24,167            24,502
EBITDA(3)..........................       36,565            44,574            47,212          45,190            51,007
Ratio of EBITDA to total interest
 expense(4)........................         1.29x             1.60x             1.73x           1.85x             2.04x
Ratio of earnings to fixed
 charges(5)........................           -                 -                 -               -               1.06x
Net cash provided by operating
 activities........................        9,233            12,976            17,274          21,233            10,767
Net cash used in investing
 activities........................      (20,503)          (14,873)          (14,361)        (15,228)          (23,506)
Net cash provided by (used in)
 financing activities..............        7,462            (3,298)            3,534          (5,701)           10,942
</TABLE>
                                                     Footnotes on following page

                                       13
<PAGE>

___________________
(1) The consolidated financial information includes adjustments to reflect the
    issuance of the Old Notes and New Credit Facility, redemption of the Senior
    Secured Notes and Subordinated Notes and recognition of an extraordinary
    loss for redemption of such former indebtedness.  See the Consolidated
    Financial Statements.

(2) Income before net interest and taxes is before the effect of an
    extraordinary charge for certain extinguishments of debt in 1995 and 1996
    and a change in the method of accounting for postretirement benefits in
    1993.

(3) EBITDA represents income before interest, income taxes, depreciation and
    amortization and certain other non-recurring items.  EBITDA data is included
    because the Company believes that such information is an indicator of a
    leveraged company's ability to service debt and because such data is used in
    certain financial tests in the Indenture.  However, EBITDA is not intended
    to be a performance measure that should be regarded as an alternative either
    to net income as an indicator of operating performance or to cash flows as a
    measure of liquidity, as determined in accordance with generally accepted
    accounting principles.  Under the Company's former and existing credit
    agreements, EBITDA excludes the effects of certain non-recurring items
    amounting to $3,677, $538, $557, $469 and $216 for the years ended December
    31, 1993 through 1997, respectively. Non-recurring items in fiscal 1993
    consisted of additional consulting services, termination expenses associated
    with the closure of the Mexican manufacturing facility and the relocation of
    such facility to the United States, and certain operating expenses related
    to the adoption of Statement of Financial Accounting Standards ("SFAS") No.
    106 for postretirement benefits other than pensions. In each of the other
    periods presented above, non-recurring items resulted from certain operating
    expenses associated with SFAS No. 106. The adoption of the accounting change
    for postretirement benefits did not require any cash outlay.

(4) The ratio of EBITDA (as defined in footnote 3 above) to total interest
    expense is calculated by dividing EBITDA by total interest expense.  Total
    interest expense consists of total interest paid or accrued on the Company's
    debt obligations.  This ratio is included because the Company believes it is
    a measure of the availability of cash from operations to pay interest and
    because such data is used in certain financial tests in the Company's debt
    agreements.  However, this ratio is not intended to be a substitute for the
    ratio of earnings to fixed charges.

(5) For purposes of determining the ratio of earnings to fixed charges, earnings
    consist of income (loss) before income taxes, and fixed charges. Fixed
    charges consist of interest expense, amortization of debt issuance costs and
    that portion of operating lease rental expense which represents the interest
    factor. As set forth in the table above, the consolidated earnings of the
    Company were inadequate to cover fixed charges during 1993 through 1996. The
    deficiency of earnings available to cover fixed charges for these years
    amounted to ($18,997), ($8174), ($5349) and ($3612) respectively. The ratio
    of earnings to fixed charges is calculated by dividing earnings by fixed
    charges.

                                       14
<PAGE>

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


GENERAL


     The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's
consolidated financial condition and results of operations.  The discussion
should be read in conjunction with the "Selected Consolidated Financial Data"
and the Consolidated Financial Statements and notes thereto included elsewhere
in this Form 10-K.


     The following table sets forth selected results of operations as a
percentage of net sales for the periods indicated:


<TABLE>
<CAPTION>
                                                                        FISCAL YEARS
                                                               --------------------------
                                                                   1995     1996     1997
                                                               --------------------------

<S>                                                               <C>      <C>      <C>
                Sprayers.......................................    57.6%    58.8%    59.0%
                Dispensers.....................................    31.7     31.7     32.3
                Other products.................................    10.7      9.5      8.7
                                                                 ------   ------   ------
                 Net sales.....................................   100.0%   100.0%   100.0%

                Gross profit...................................    25.0%    25.7%    27.5%
                Selling, general and administrative expenses...    15.8     16.9     16.5
                Operating income...............................     9.1      8.8     11.0
</TABLE>


RESULTS OF OPERATIONS


     Comparison of the Year Ended December 31, 1997 to the Year Ended December
31, 1996


     Net sales for the year ended December 31, 1997 totaled $230.2 million, an
increase of $10.8 million, or 4.9%, from 1996.  Net sales would have grown by
10.3% but for the unfavorable impact in foreign exchange rates of $11.7 million.
Sprayer sales experienced sales growth of 5.3% in the aggregate from the prior
year.  Of the sprayer sales increase, trigger sprayers increased 11.1% from the
prior year.  The increased trigger sprayer sales in North America and Europe
resulted from product promotions and increased business from certain major
customers.  Although fine mist sales in units increased by 14.6%, sales in
dollars increased only slightly primarily due to lower selling prices and the
negative impact of exchange rate translations relating to Europe.  Total
dispenser sales experienced sales growth of 7.0% in the aggregate from the prior
year.  The increase in dispenser sales was a result of increased demand for
liquid soaps and body lotions.


     Gross profit for the year ended December 31, 1997 increased $6.8 million,
or 12.1%, from the comparable 1996 period.  Gross profit percentage of sales
increased from 25.7% in 1996 to 27.5% in 1997.  The increase in gross profit as
a percentage of sales is a result of higher sales volumes, increased cost
absorption and lower outside molding costs in Europe.


     Selling, general, and administrative expenses were $38.0 million, or 16.5%,
of net sales for the year ended December 31, 1997 as compared to $37.1 million,
or 16.9%, of net sales for 1996. The increase in selling, general, and
administrative expenses is primarily due to incremental expenses related to
South America. Selling, general, and administrative expenses remained relatively
consistent for North America and the other subsidiaries.


     Operating income for the year ended December 31, 1997 increased to $25.3
million, or 11.0%, of net sales as compared to $19.4 million, or 8.8%, of net
sales for 1996.  The increase was achieved principally through significant
growth in sales as discussed above.

                                       15
<PAGE>

     Interest expense increased $0.5 million, or 2%, from the previous year due
to increases in the Company's borrowing levels. The income tax benefit for 1997
was primarily due to the decrease in deferred tax liabilities from the Company's
European operations. The U.S. tax liability for the year ended December 31, 1997
was partially offset by the Company utilizing U.S. net operating loss
carryforward.


     Net income for the year ended December 31, 1997 increased to $1.7 million
as compared to a net loss of $4.0 million in 1996. The increase was principally
a result of increased operating profit due to significant growth in sales in the
current year.


     Comparison of the Year Ended December 31, 1996 to the Year Ended December
31, 1995


     Net sales for the year ended December 31, 1996 totaled $219.4 million, a
decrease of $5.0 million or 2.2% from 1995.  Net sales were unfavorably impacted
by $2.8 million due to foreign exchange rate changes.  Sprayer sales were
generally unchanged from the prior year; although sales were up in North
America, they were offset by decreases in Europe.  The increase in sales in
North America was primarily from increased demand for trigger sprayers.  The
decrease in sales in Europe was primarily due to weaker demand and lower selling
prices.  Total dispenser sales decreased slightly from the prior year due to the
effects of non-recurring product promotions in North America, the switch by
certain customers towards lower-priced non-pump alternatives and lower selling
prices.  Lower selling prices have been influenced by the negotiations of long-
term contracts and competitive pressures.  Other product sales decreased as the
result of lower sales to licensees, lower aerosol valve sales, which are
produced and sold in Spain, and a customer's major product promotion in 1995
which did not repeat in 1996.


     Gross profit for the year ended December 31, 1996 was $56.4 million as
compared to $56.0 million in 1995.  Gross profit as a percentage of sales
increased from 25.0% in 1995 to 25.7% in 1996.  The increase in gross profit as
a percentage of sales resulted primarily from improvements in North American
operations.  The increase reflects lower unit costs resulting from higher sales
volume, enhanced automation of certain assembly operations, lower resin prices
and lower purchase costs associated with new purchasing programs.  The
improvements in North America were partially offset by lower gross margins in
Europe which were due to increased outsourcing of molding requirements, lower
overall prices and the effect of foreign exchange rate changes.


     Selling, general and administrative expenses were $37.1 million or 16.9% of
net sales for the year ended December 31, 1996 as compared to $35.6 million or
15.8% of net sales for 1995.  The increase in selling, general and
administrative expenses is due to higher compensation, legal expenses,
professional fees, research and development, and the effect of changes in
foreign exchange rates.


     Operating income for the year ended December 31, 1996 decreased to $19.4
million or 8.8% of net sales as compared to $20.5 million or 9.1% of net sales
in 1995.  The decrease was primarily the result of higher selling, general and
administrative expenses as discussed above.


     Interest expense decreased $2.8 million to $24.5 million from the previous
year.  The decrease reflects the benefits of lower interest rates resulting from
the refinancing of the majority of the Company's long-term debt in 1995.  As no
income tax benefit was recorded against the U.S. losses due to uncertainty of
its ultimate realization, the income tax provision for 1996 was primarily
related to income from the Company's European operations.


     In 1996, the Company recognized an extraordinary loss on extinguishment of
debt of $0.6 million, consisting principally of prepayments, other fees and
write-offs of the unamortized portion of related deferred financing costs in
connection with the replacement of the Company's lender under the Revolver
within the New Credit Facility which was treated for accounting purposes as an
extinguishment of debt.  See "Item 1.  Business--The Refinancing."


     Net loss for the year ended December 31, 1996 decreased to $4.0 million as
compared to $16.0 million in 1995.  The decrease was principally as a result of
lower interest expense and significantly lower extraordinary items of $0.6
million in 1996 related to the amendment of the Revolver discussed above as
compared to extraordinary items of $9.5 million incurred in 1995 in connection
with the Refinancing.

                                       16
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES


     The Company funds its cash needs through cash flow from operations,
existing cash balances, equipment financing and the Revolver under the New
Credit Facility.  See "Item 1.  Business--The Refinancing."


     The Company's primary source of cash continues to be its cash flow from
operations. In addition, the Revolver is available to support the Company's
working capital requirements. The net cash provided by operating activities
decreased by $10.5 million for the year ended December 31, 1997 under the
comparable 1996 period. The decrease in cash flows from operations was mainly
due to the cash used by the changes to support increases in accounts receivable
and inventories and decreases in accounts payable. Working capital at December
31, 1997 was $27.7 million compared to $20.5 million at December 31, 1996. The
increase in working capital is primarily attributable to an increase in accounts
receivables and inventories partially offset by increased short-term borrowings.

     The net cash used in investing activities for the year ended December 31,
1997 increased by $8.3 million due primarily to increased purchases of property
and equipment. For the year ended December 31, 1997, capital expenditures were
$22.9 million which were funded primarily by available cash. Capital
expenditures, primarily for the purchase of new manufacturing equipment, for
fiscal 1998 and for fiscal 1999 are expected to exceed $23.0 million for each
year. These amounts represent both expected cash outlays and equipment
financings. Currently Calmar is at capacity with respect to the in-house molding
of certain of its products and the Company's planned capital expenditures
contemplate expanding its molding capacity. The production capacity of Calmar's
manufacturing facilities depends to a great extent on the products manufactured.
Since most of Calmar's injection molding machines are readily adapted to the
manufacture of various products or components, production capacity may be
shifted among various products by reallocating molding machines or by
contracting with independent molders who are provided with the Company's molds.
The Company's capital expenditure program is designed, in part, to reduce the
Company's use of contract molders, and thereby increase the Company's margins.
The Company plans to fund new equipment purchases through equipment financing
and leasing, existing cash balances (which were $7.2 million as of December 31,
1997) and cash flow from operations. The Company did not have any other material
commitments for capital expenditures as of the end of fiscal 1997.


     The net cash provided by financing activities increased by $16.6 million
for the year ended December 31, 1997 from the comparable period of 1996
primarily due to the Company utilizing $5.0 million on the "Revolver," lower
principal payments on long-term debt and the increase in cash overdraft.
Additionally, in 1996, the Company prepaid certain equipment debt and certain
Monturas acquisition obligations which totalled approximately $3.5 million. The
Company has entered into certain interest rate cap agreements to reduce the risk
of significant increases in interest payments for the term loan portion of the
New Credit Facility that would be caused by interest rate increases. In January
1998, the Company amended its New Credit Facility to increase the amount the
Company may borrow under its AXEL Series A facility by $5.0 million to support
the Company's working capital requirements.


     In 1997, the Company made scheduled principal payments of $1.1 million
and $4.7 million with respect to the New Credit Facility and other long-term
debt, respectively.  The scheduled principal payments over the next five years
pursuant to the New Credit Facility are $1.1 million in 1998; $10.0 million in
1999; $12.0 million in 2000; $15.0 million in 2001; and $17.0 million in 2002.
In addition, other long-term debt requires scheduled principal payments of
approximately $4.1 million, $8.6 million, $3.5 million, $3.1 million and $1.3
million in 1998 through 2002, respectively.  There is no principal amortization
of the Senior Subordinated Notes during these periods.  It is expected that
these payments will be funded through cash flow from operations.


     In 1997, cash interest expense for existing borrowings was $24.7 million.
The Company estimates that cash interest expense for existing borrowings for the
fiscal years 1998 through 2002 will be approximately $23.4 million, $23.1
million, $22.5 million, $21.4 million and $20.2 million, respectively, assuming
(i) the interest rate for borrowings under the Senior Subordinated Notes, the
Series A term loan under the New Credit Facility, the Series B term loan under
the New Credit Facility and other long-term debt is 11.5%, 9.0%, 9.2% and
various

                                       17
<PAGE>

rates ranging from 5.5% to 10.5%, respectively; and (ii) only scheduled
amortization payments on the term loans and other long-term debt are made during
this period.


     In October 1996, the Company amended its New Credit Facility.  The
amendment replaced the Company's current lender under the Revolver within the
New Credit Facility through assignment of the Revolver to a new lender which was
deemed to be a repayment of the Revolver, reduced the maximum borrowings
permitted under the Revolver from $20.0 million to $12.0 million, revised
certain financial covenants pursuant to the New Credit Facility and provided
some technical revisions to the New Credit Facility.  As amended, the Revolver
under the New Credit Facility has a remaining term of three years and permits
borrowing of up to the lesser of $12.0 million or the maximum amount permitted
under an eligible borrowing base test and contains a $5.0 million sublimit for
letters of credit.  At December 31, 1997, the borrowing base test permitted the
Company to borrow up to $12.0 million.  At such date, the Company had
outstanding borrowings of $5.0 million in the aggregate and letters of credit of
$1.0 million, leaving $6.0 million available for borrowing.


     In connection with obtaining the amendment and significantly modifying the
New Credit Facility, the Company incurred fees (to lenders and advisors) of $0.7
million.  These amounts were recorded as debt issue costs and are amortized over
the remaining terms of the respective components of the New Credit Facility.  In
addition, as discussed above, the Company recognized an extraordinary loss on
the extinguishment of the Revolver under the New Credit Facility in the amount
of $0.6 million.


     The indenture which governs the terms of the Senior Subordinated Notes (the
"Indenture") and the New Credit Facility contain significant financial and
operating covenants.  The Indenture contains certain covenants that, among other
things, limit the ability of the Company and its subsidiaries to incur debt,
issue certain preferred stock, create liens securing subordinated debt, sell or
transfer assets, make restricted payments (dividends, redemptions, investments,
and unscheduled payments on subordinated debt) and engage in certain
transactions with affiliates and certain mergers.  The New Credit Facility
contains certain financial covenants, including, but not limited to, covenants
related to a minimum interest coverage ratio, a minimum consolidated EBITDA, a
maximum leverage ratio and a minimum current ratio.  In addition, the New Credit
Facility contains other affirmative and negative covenants relating to (among
other things) limitations on capital expenditures, other indebtedness, liens,
investments, guarantees, restricted junior payments (dividends, redemptions, and
payments on subordinated debt), mergers and acquisitions, sales of assets,
leases and transactions with affiliates.  The New Credit Facility also contains
customary events of default, including certain changes of control of the
Company.  As of December 31, 1997, the Company was in compliance with all
covenants contained in such debt instruments.


     The terms of the Indenture allow for the incurrence of additional
indebtedness, including Senior Debt (as defined in the Indenture) and secured
indebtedness.  The incurrence of additional indebtedness is limited by certain
conditions, including compliance with a Consolidated Cash Flow Ratio (as defined
in the Indenture), calculated on a pro forma basis to reflect such additional
indebtedness, of 2.0 to 1.0.  At December 31, 1997, the Consolidated Cash Flow
Ratio was 2.0 to 1.0.  In addition and notwithstanding the foregoing, the
Indenture permits the Company, and in certain cases its subsidiaries, to incur
certain specified additional indebtedness without regard to the compliance with
the Consolidated Cash Flow Ratio referred to above.  The terms of the New Credit
Facility permit the Company, and in certain cases its subsidiaries, to incur
additional indebtedness only under certain circumstances.


     The Company has a substantial amount of indebtedness.  The degree to which
the Company is leveraged could have important consequences to investors,
including the following:  (i) the Company's ability to obtain additional
financing in the future for refinancing indebtedness, working capital, capital
expenditures, acquisitions or general corporate purposes may be impaired, (ii) a
substantial portion of the Company's consolidated cash flow from operations must
be used for the payment of interest and principal on its indebtedness, (iii) the
Company may be more highly leveraged than its competitors, which may place it at
a competitive disadvantage, (iv) the Indenture and the New Credit Facility
contain restrictive financial and operating covenants, (v) the borrowings under
the New Credit Facility have floating rates of interest, which cause the Company
to be vulnerable to increases in interest

                                       18
<PAGE>

rates, and (vi) the Company's substantial degree of leverage could make it more
vulnerable to a downturn in general economic conditions.


     Cumulative dividends aggregating $78.5 million have accumulated on the
Company's outstanding Series A and Series B Preferred Stock through December 31,
1997.  Such dividends, payable in shares of Series A and Series B Preferred
Stock, respectively, had not been declared as of December 31, 1997.


     The Company had unused credit facilities available to its European
subsidiaries of $2.9 million at December 31, 1997.


     The Company believes that cash flow from operations, existing cash balances
and the financial resources available to it, including the Revolver under the
New Credit Facility and equipment financing and leasing, will be sufficient to
meet its debt service, working capital and capital investment needs through the
term of the Revolver.


     The Company's Federal income tax returns for calendar years 1986 through
1991 are currently under examination by the Internal Revenue Service ("IRS").
On March 10, 1997, the Company received notice from the IRS of proposed
adjustments for such calendar years which would result in additional federal
taxes of up to $5.5 million, plus interest from the date when such additional
taxes would have been due, and in the reduction of the Company's net operating
loss carryovers from $36.7 million to $27.6 million.  Most of the proposed
adjustments relate to the Company's amortization deductions with respect to a
covenant not to compete purchased from the Company's former parent corporation
when that corporation sold a controlling interest in the Company in 1988.


     The Company, after consultation with tax counsel, continues to believe in
the propriety of its positions set forth in its tax returns and will vigorously
contest the adjustments being proposed by the IRS.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard Nos. 130 and 131, "Reporting Comprehensive
Income" (SFAS No. 130) and "Disclosures about Segments of an Enterprise and
Related Information" (SFAS No. 131), respectively; in February 1998, FASB issued
Statement of Financial Accounting Standards No. 132, "Employers' Disclosure
about Pensions and Other Postretirement Benefits" (SFAS No. 132) (collectively,
the Statements). The Statements are effective for fiscal years beginning after
December 15, 1997. SFAS No. 130 established standards for reporting of
comprehensive income and its components in annual financial statements. SFAS No.
131 establishes standards for reporting financial and descriptive information
about an enterprise's operating segments in it annual financial statements SFAS
No. 132 revised employers disclosures about pension and other postretirement
benefit plans. Reclassification or restatement of comparative financial
statements or financial information for earlier periods is required upon
adoption of SFAS No. 130, SFAS No. 131 and SFAS No. 132, respectively.
Application of the Statements' requirements is not expected to have a material
impact on the Company's consolidated financial position, results of operations
or liquidity.


YEAR 2000


     The Company recognizes the need to ensure its operations will not be
adversely impacted by Year 2000 software failures. Processing errors due to Year
2000 software failures are a known risk. The Company has established processes
for evaluating and managing the risks and costs associated with this potential
problem. The cost of achieving Year 2000 compliance is estimated to be
approximately $200,000 over the cost of normal software upgrades and
replacements and will be incurred and expensed through fiscal 1999.


EFFECT OF INFLATION


     The effect of inflation on the Company's results of operations has not been
material in the periods  discussed.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.


     Not applicable.


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


     See the Index to Consolidated Financial Statements and the Index to
Financial Statement Schedules included at "Item 14.  Exhibits, Financial
Statement Schedules, and Reports on Form 8-K."

                                       19
<PAGE>

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


     None.

                                       20
<PAGE>

                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.


     The current executive officers and directors of the Company are listed
below, together with their ages and all Company positions and offices held by
them.


<TABLE>
<CAPTION>
            NAME                AGE                      POSITION
-----------------------------   ---   -----------------------------------------
 <S>                             <C>   <C>
Richard J. Hartl.............    60   President, Chief Executive Officer,
                                      Chairman of the Board and Director
C. Richard Huebner...........    51   Executive Vice President, Chief Financial
                                      Officer, Secretary and Director
Jacques J. Barriac...........    57   Vice President, Technology
David C. Guinta..............    49   Vice President, North American Sales
Ramon Marti..................    46   Vice President and Managing Director,
                                      European and South American Operations
Christopher M. Harrison(1)...    50   Managing Director and Vice President,
                                      European Operations and Director
Aldie E. Johnson, III........    46   Vice President and General Manager,
                                      Personal Care Products Division
John P. McKernan.............    38   Vice President and General Manager,
                                      Chemical and Cleaning Products Division
Donald K. Miller.............    60   Vice President, Engineering
Thomas F. Perong.............    58   Vice President, Human Resources
Gunnar Backman(2)............    60   Director
Matt L. Figel................    38   Director
Donald E. Knox...............    78   Director
Harry T.J. Roberts...........    63   Director
John M. Roth.................    39   Director
Ronald P. Spogli.............    50   Director
William M. Wardlaw...........    51   Director
</TABLE>
______________

(1)  Mr. Harrison resigned from the Company and as director effective March 31,
     1997.

(2)  Mr. Backman resigned as director effective December 31, 1997.


     Mr. Hartl has served as President since September 1991 and as Chairman of
the Board of Directors of Calmar Inc. (the "Board") since September 1995.  Prior
to joining Calmar, Mr. Hartl had been employed for 16 years by Avery-Dennison
where he held various positions, including Group Vice President for the
Specialty Tapes and Adhesives Group and Group Vice President for Technology and
Ventures.  Mr. Hartl's previous employment included senior management positions
with General Electric in its Engineering Plastics operation and with the
Plastics Division of Monsanto.  Mr. Hartl has been a director of the Company
since September 1991.


     Mr. Huebner has served as Executive Vice President since August 1988 and
Chief Financial Officer and Secretary since December 1988.  From March 1988 to
August 1988, Mr. Huebner served as Senior Vice President of Finance, and from
April 1983 to March 1988 he served as Vice President-Finance, Treasurer and
Secretary.  Mr. Huebner has been a director of the Company since April 1983.


     Mr. Barriac has served as Vice President of Technology of the Company since
July 1992.  Prior to joining Calmar, Mr. Barriac was Vice President of
Technology for West Company where he had been employed since

                                       21
<PAGE>

1987.  Mr. Barriac also was employed by Owens Illinois as Manager of Technology
for Plastic Closures.  Mr. Barriac holds a Ph.D. in Polymer Chemistry from the
Sorbonne University.


     Mr. Guinta joined Calmar in September 1991 and became Vice President of
North American Sales in January 1997.  From 1991 to January 1997, Mr. Guinta
held various positions in sales, including Sales Representative, East Coast
Regional Manager and Director North American Sales.  Prior to joining Calmar,
Mr. Guinta was employed for five years with Amoco Container Company Division of
Amoco Oil Company as Sales Representative and for eight years with VCA Molded
Products Division of Ethyl Corporation as Sales Representative.


     Mr. Harrison has served as Managing Director of European Operations of the
Company since February 1992 and Vice President, European Operations since April
1992.  Prior to joining Calmar, Mr. Harrison had been employed by CMB Packaging,
S.A. since 1989 where he held various positions, including Group Director of CMB
Bottles and Closures PLC.  From 1987 until 1989, he was employed by MB Group
P.L.C. where he was Managing Director of UCP-Metalbox.  Mr. Harrison became a
director of the Company in March 1996.  Mr. Harrison resigned from the Company
and as a director effective March 31, 1997.


     Mr. Marti has served as Vice President and Managing Director of European
and South American Operations of the Company since June 1997 and Managing
Director of Monturas S.A., which became Calmar's Spanish subsidiary in December
1992, from June 1989 to June 1997. Prior to such time, Mr. Marti was employed as
Deputy General Manager of Monturas S.A. from July 1988 to June 1989 and then was
appointed Chief Executive Officer in December 1992. From 1980 to 1988, Mr. Marti
was employed by CCL Iberica-Barcelona as General Manager and then was promoted
to President in 1984.


     Mr. Johnson has served as Vice President and General Manager of the
Personal Care Products Division of the Company since February 1996.  From July
1990 to February 1996, Mr. Johnson served as Vice President of Manufacturing.
Prior to joining Calmar, Mr. Johnson served as Vice President and General
Manager of the Specialty Plastics Product Division of Kerr from March 1983 until
July 1990.


     Mr. McKernan joined Calmar in February 1996 as Vice President and General
Manager of the Chemical and Cleaning Products Division of Calmar.  Prior to
joining Calmar, Mr. McKernan was employed for 10 years by Setco, a division of
McCormick and Company, where he held various positions, including Vice President
of Sales and Marketing.


     Mr. Miller has served as Vice President of Engineering since January 1988.
From March 1978 to December 1987, he served as Engineering Director and from
March 1976 to February 1978, he served as Chief Engineer of the Company.


     Mr. Perong joined Calmar in August 1991 and become Vice President of Human
Resources in January 1996.  From August 1991 to January 1996, Mr. Perong served
as Director of Human Resources.  Prior to joining Calmar, Mr. Perong was
employed for 15 years by Bourns, Inc. as Division Vice President of Human
Resources.


     Mr. Backman has been with Svenska Handelsbanken, a major Swedish bank,
since 1970 serving in various capacities before becoming General Manager and
Senior Vice President of Svenska Handelsbanken New York in 1983.  In 1986, Mr.
Backman was appointed Deputy of the Central Credit Department in Sweden and
became an Executive Vice President of Svenska Handelsbanken Sweden in 1989.
Since 1994, Mr. Backman has also served on the boards of directors of several
subsidiaries of the bank.  AB Handel och Industri, which owns 36.4% of the
outstanding common stock of Calmar, is a wholly-owned subsidiary of Svenska
Handelsbanken Sweden.  Mr. Backman became a director of the Company in December
1995.  Mr. Backman resigned as director effective December 31, 1997.


     Mr. Figel founded Doramar Capital, a private investment firm, in January
1997.  From October 1986 to December 1996, Mr. Figel was employed by FS&Co. (or
its affiliates).  FS&Co. is a private investment company that was founded in
1983.  Mr. Figel became a Director of the Company in January 1995.  Mr. Figel is
also a member of the Board of Directors of Buttrey Food and Drug Stores Company.

                                       22
<PAGE>

     Mr. Knox continues to be a director of the Company.  He served as Chairman
of the Board from September 1987 until October 1991.  From April 1983 to August
1988, he served as President and Chief Executive Officer of the Company.


     Mr. Roberts became a director of the Company in December 1995.  Since 1985
Mr. Roberts has been Senior Vice President and in general management of Svenska
Handelsbanken New York, a branch of Svenska Handelsbanken Sweden.  Mr. Roberts
holds a fellowship in the Chartered Institute of Bankers.  Mr. Roberts is also a
member of the Board of Directors of D.V.I. Inc.


     Mr. Roth joined FS&Co. in March 1988 and became a general partner in March
1993.  From 1984 to 1988 Mr. Roth was employed by Kidder, Peabody & Co.
Incorporated, his most recent position being Vice President in the Merger and
Acquisition Group.  Mr. Roth became a director of the Company in 1988.  Mr. Roth
is also a member of the Boards of Directors of EnviroSource, Inc. and Brylane
Inc.


     Mr. Spogli is a founding partner of FS&Co.  Mr. Spogli became a director of
the Company in 1988.  Mr. Spogli is the Chairman of the Board and a director of
EnviroSource, Inc.  Mr. Spogli also serves on the Boards of Directors of Buttrey
Food and Drug Stores Company and Brylane Inc.


     Mr. Wardlaw joined FS&Co. in March 1988 and became a general partner in
January 1991.  From 1984 to 1988, Mr. Wardlaw was a principal of the law firm of
Riordan & McKinzie.  Mr. Wardlaw became a director of the Company in 1988.  Mr.
Wardlaw is also a member of the Board of Directors of Buttrey Food and Drug
Stores Company.


     All directors hold office until the next annual meeting of stockholders and
until their successors have been elected and qualified.  Officers serve at the
discretion of the Board.  The Board has a Compensation Committee, consisting of
all of the members of the Board except Messrs. Hartl and Huebner, which
administers both the Company's stock option plan and the Company's bonus plan.
The members of the Board do not receive compensation for services on the Board
or for services on the Compensation Committee but are reimbursed for their out-
of-pocket expenses in serving on the Board and any committee thereof.  There are
no family relationships between any member of the Board and any executive
officer of the Company.


ITEM 11.  EXECUTIVE COMPENSATION.


     The following table sets forth all compensation awarded to, earned by or
paid to the Chief Executive Officer and the other four most highly compensated
executive officers (the "Named Executive Officers") for their services to the
Company for (i) the year ended December 31, 1995, (ii) the year ended December
31, 1996, and (iii) the year ended December 31, 1997.

                                       23
<PAGE>

                                 SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                            ANNUAL COMPENSATION
                                           ---------------------------------------------------------   ----------------
                                                                                      OTHER ANNUAL         ALL OTHER
        NAME AND PRINCIPAL POSITION           YEAR    SALARY(1)       BONUS(2)      COMPENSATION(3)     COMPENSATION(4)
----------------------------------------------------------------------------------------------------   ----------------

<S>                                           <C>    <C>            <C>            <C>                  <C>
Richard J. Hartl...........................   1997    $301,000       $175,000               --                  $32,214
President and Chief Executive Officer         1996     301,000        145,000               --                   22,609
                                              1995     301,000        150,000               --                   22,270

C. Richard Huebner.........................   1997     196,000         80,000               --                   46,333
Executive Vice President and Chief            1996     192,000         60,202               --                   47,577
 Financial Officer                            1995     188,000         64,814               --                   45,390

Aldie E. Johnson, III......................   1997     162,000         80,000               --                   10,528
Vice President and General Manager,           1996     153,558         52,963               --                    3,341
 Personal Care Products Division              1995     134,000         43,557               --                    7,533

Ramon Marti(5).............................   1997     146,704         17,810               --                        0
Vice President and Managing Director,         1996     151,077          7,845               --                        0
 European and South American Operations       1995     143,392          8,927               --                        0

John McKernan(6)...........................   1997     146,415         54,000               --                    4,974
Vice President and General Manager,           1996     126,000         43,458           64,183   (7)              1,325
 Chemical and Cleaning Products Division
</TABLE>
___________________


(1) Amounts include $41,000 of supplemental deferred compensation earned by Mr.
    Hartl in 1995, 1996 and 1997.

(2) Represents payments made to executive officers pursuant to the Calmar Inc.
    Executive Incentive Plan in 1995, 1996 and 1997 with the exception of
    $150,000, $145,000 and $175,000 bonuses earned but deferred by Mr. Hartl in
    1995, 1996 and 1997 respectively.

(3) While certain officers received certain perquisites, such perquisites do not
    exceed the lesser of $50,000 or 10% of such officers' respective salaries
    and bonuses.

(4) Amounts shown include compensation earned and received by executive officers
    as well as amounts earned but deferred at the election of those officers
    which specifically include the following for Messrs. Hartl, Huebner,
    Johnson, Marti and McKernan, respectively:  (i) Company contributions to the
    401(k) Plan of:  Hartl:  $4,750 in 1997, $4,750 in 1996 and $4,620 in 1995;
    Huebner:  $4,750 in 1997, $4,750 in 1996 and $4,620 in 1995; Johnson:  $0 in
    1997, 1996 and 1995; Marti:  $0 in 1997, 1996 and 1995; and McKernan:
    $4,750 in 1997 and $1,131 in 1996; (ii) Company payments to the Deferred
    Compensation Plan of:  Hartl:  $22,550 in 1997, $14,709 in 1996 and $14,500
    in 1995; Huebner:  $12,841 in 1997, $12,792 in 1996 and $9,950 in 1995;
    Johnson:  $9,856 in 1997, $2,712 in 1996 and $7,225 in 1995; Marti:  $0 in
    1997, 1996 and 1995; and McKernan:  $0 in 1997 and 1996; (iii) Company
    payments of term life insurance premiums of:  Hartl:  $4,914 in 1997, $3,150
    in 1996 and 1995; Huebner:  $1,405 in 1997, $1,371 in 1996 and $807 in 1995;
    Johnson:  $672 in 1997, $629 in 1996 and $308 in 1995; and McKernan:  $224
    in 1997 and $194 in 1996.  In addition, amounts shown include imputed
    interest on certain employee loans for Mr. Huebner of $27,337 in 1997,
    $28,664 in 1996 and $30,013 in 1995.

(5) Mr. Marti joined the Company in December 1992 and became Vice President and
    Managing Director, European and South American Operations in June 1997.

(6) Mr. McKernan joined the Company in February 1996.

(7) Consists of a moving allowance of $39,183 and a signing bonus of $25,000
    paid to Mr. McKernan in 1996.

                                       24
<PAGE>

EXECUTIVE INCENTIVE PLAN


     In January 1993, the Company adopted the Calmar Inc. Executive Incentive
Compensation Plan (the "Executive Incentive Plan") which provides for the
payment of bonuses to (i) persons who hold a Vice Presidential title, (ii)
Directors, and (iii) Key Managers approved by the President/CEO.  The
President/CEO's incentive compensation is determined separately by the Board of
Directors.  Each eligible participant may be paid a bonus according to a formula
which takes into account the participant's level of responsibility and quality
of performance, and the Company's performance as a whole.  If the Company's
performance-to-budget is below 85%, bonuses are given only at the discretion of
the President/CEO and Board of Directors.  No bonuses are given if performance
is less than 50% of budget.


     Bonuses paid or to be paid to the Named Executive Officers under the
Executive Incentive Plan in 1995, 1996 and 1997 have been included in the
Summary Compensation Table set forth above.



401(k) PLAN


     The Company maintains a 401(k) plan (the "401(k) Plan") pursuant to which
all domestic salaried and hourly employees (except employees covered by a union
retirement plan), after completing six months of service with the Company, can
elect to defer Federal income taxation on up to 15% of their total annual
compensation, including salaries and bonuses, by having such amount contributed
by Calmar to the trust established under the plan rather than paid to the
employee.  All salary deferral and voluntary contributions made for or by the
employee participant are immediately fully vested.  Calmar will make a
contribution each year in an amount equal to 50% of the employee's salary
deferral contributions for management employees, up to a maximum of 3% of the
employee's total compensation (not to exceed $4,750).  Calmar will make a
contribution each year in an amount equal to 75% of the employee's salary
deferral contributions for qualified hourly employees, up to a maximum of 4.5%
of the employee's total compensation (not to exceed $7,125).  Company matching
contributions vest at the rate of 20% thereof for each full year of service.
Although generally amounts held for the account of the employee under the 401(k)
Plan cannot be distributed until the employee reaches the age of 65, or 55 and
has 10 full years of service, or has 30 full years of service, early
distribution of (or borrowing from) voluntary contributions is permitted, and
early distribution of salary deferred contributions is permitted, in certain
circumstances of hardship.


     Salary deferral and Company matching contributions to the 401(k) Plan made
or to be made for or by the Named Executive Officers of the Company have been
included in the notes to the Summary Compensation Table set forth above.


DEFERRED COMPENSATION PLAN


     Calmar maintains a deferred compensation plan (the "Deferred Compensation
Plan") which provides certain executives with retirement income and permits such
executives to determine the manner in which they will receive such income.
Under such plan, for the calendar years 1987 through 1994, the Company credited
to an account established for each eligible participant 5% of such participant's
base salary and bonus.  For calendar years after 1994, the Company shall
determine, in its sole discretion, the deferral percentage or amount that shall
be credited to the participant's deferred compensation account (the "Deferred
Compensation Account").  The amount contributed is typically used to purchase an
insurance policy on the life of the participant.  A participant who, after five
years of consecutive employment with the Company, is terminated for cause or
resigns prior to the established retirement date, is entitled to receive a
benefit equal to 100% of the amount in the participant's Deferred Compensation
Account.  This amount will be distributed in a lump sum or 20 equal quarterly
installments.  A participant who is terminated without cause, is entitled to a
benefit equal to 120% of the amount in the participant's Deferred Compensation
Account.  If a participant's employment is terminated for any reason other than
death before five consecutive years of employment, such participant's Deferred
Compensation Account is forfeited to the Company.  If the participant dies
before completing five years of consecutive employment, the designated
beneficiary is entitled to 50% of the net proceeds of the participant's policy,
while the beneficiary of a participant dying after five years of consecutive
employment is entitled to 100% of the net proceeds of the participant's policy.
Benefits for death

                                       25
<PAGE>

and termination without cause may be disbursed in a lump sum or in 20 equal
quarterly installments.  As of December 31, 1997, approximately $893,000 has
been provided for in the Deferred Compensation Accounts established under the
Deferred Compensation Plan.


     Company payments to the Deferred Compensation Accounts of the Named
Executive Officers have been included in the notes to the Summary Compensation
Table set forth above.


NONQUALIFIED STOCK OPTION PLAN


     Officers, key employees and consultants, including directors who are
officers, key employees or consultants of the Company or its direct or indirect
subsidiaries (the "Subsidiaries") who are chosen by the Compensation Committee
of the Company are eligible to participate in the Company's 1988 Employee Stock
Option Plan (the "Option Plan") of the Company.  Under the Option Plan, the
participants may be granted nonqualified options to purchase shares of common
stock of the Company (the "Options") at an option price (the "Option Price")
determined by the Board of Directors of the Company.  The Options are not
intended to qualify for treatment as incentive stock options under Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code").


     Up to 216,360 shares of Calmar's common stock may be issued under the
Option Plan upon the exercise of Options granted thereunder.  On September 3,
1991, in connection with its offer of employment, the Company granted a
nonqualified stock option under the Option Plan to Mr. Hartl for 50,000 shares
of common stock at an exercise price of $10.00 per share.  As of March 15, 1998,
Options covering an aggregate of 152,177 shares (including Mr. Hartl's option)
of the Company's common stock were outstanding under the Option Plan.


     The Options terminate at the earlier of (i) three months after termination
of employment other than by resignation or for cause, (ii) on the effective date
of the participant's voluntary resignation or termination for cause, (iii) one
year after death or permanent disability, or (iv) ten years and one month from
the date of grant.  Options vest in annual installments of 20% per year over
five years.  The exercisability of Options may be accelerated, at the discretion
of the Compensation Committee, upon the occurrence of certain events
constituting an Extraordinary Corporate Event (as defined in the Option Plan).
However, no Option granted to an officer or director of Calmar will be
exercisable within six months from the date of its grant as a result of
acceleration.  Under the Option Plan, any time prior to four years after the
date of grant of an Option, the Company has the option to repurchase all or any
portion of the shares of its common stock acquired by the participant by the
exercise of the Options for a period of six months after the date of termination
of the participant for any reason except death or disability.  The purchase
price for such repurchased shares shall equal the price set forth in the
individual nonqualified stock option agreements.  The Company has a right of
first refusal in the event a participant proposes to sell after the fourth
anniversary of the date of grant any shares purchased upon exercise of such
participant's Options.


     The Option Plan also provides for the grant of "Limited Rights" to any
holders of Options granted thereunder.  A Limited Right may be granted at any
time during the term of a related Option.  The purpose of the Limited Rights
feature is to allow participants who are subject to the short-term trading
provisions of the federal securities laws to obtain the full economic benefit of
their related Options in the event an Extraordinary Corporate Event occurs.  A
Limited Right permits the holder to receive upon exercise cash equal to the
number of shares as to which the Limited Right is being exercised multiplied by
the difference between the Option Price per share and the price per share of
common stock paid or to be paid to the holder of the Limited Right in any
Extraordinary Corporate Event in effect at the time such Limited Right is
exercised.


     The following table sets forth information concerning the number and value
of securities underlying unexercised Options held by each of the Named Executive
Officers at December 31, 1997.  No Options were granted to the Named Executive
Officers or exercised by the Named Executive Officers in 1997.

                                       26
<PAGE>

                                 FISCAL YEAR-END OPTION VALUES




<TABLE>
<CAPTION>
                                NUMBER OF SECURITIES               VALUE OF UNEXERCISED
                                     UNDERLYING                        IN-THE-MONEY
                         UNEXERCISED OPTIONS AT FY-END (#)         OPTIONS AT FY-END ($)(1)
                        ----------------------------------   ---------------------------------
          NAME                EXERCISABLE/UNEXERCISABLE          EXERCISABLE/UNEXERCISABLE
----------------------  ----------------------------------   ---------------------------------
<S>                        <C>                                <C>
Richard J. Hartl........            50,000/0                               N/A
C. Richard Huebner......            61,331/0                               N/A
Aldie E. Johnson, III...                 0/0                               N/A
Ramon Marti.............                 0/0                               N/A
John McKernan...........                 0/0                               N/A
</TABLE>

_______________
(1) Because there is no established public trading market for the common stock
    of the Company, the Board of Directors of the Company determines the fair
    market value of the Company's common stock from time to time. The Company
    believes that the fair market value of the Company's common stock was $10.00
    per share as of December 31, 1997. The exercise price of each of the Options
    listed above is $10.00 per share. On this basis, none of the Options held by
    the Named Executive Officers were "in-the-money" as of December 31, 1997.


1995 STOCK OPTION PLAN


     In December 1995, the Board of Directors of the Company approved and
adopted the Calmar Inc. 1995 Employee Stock Option Plan (the "New Plan").  The
New Plan is a successor to the Calmar Inc. 1988 Employee Stock Option Plan (the
"Old Plan") and was established to replace the Old Plan and to grant additional
options to officers, certain directors, key employees and consultants of the
Company.  Under the New Plan, persons holding unexercised stock options (the
"Old Options") under the Old Plan will be allowed to exchange such Old Options
for similar options (the "New Options") under the New Plan.  The New Options
will cover the same number of shares and be exercisable at the same option price
as the Old Options.  In addition, optionees will be vested in the New Options to
the same extent as they are vested in their Old Options.  The expiration dates
of the New Options will extend for two years beyond the respective expiration
dates of the Old Options.


     The New Plan authorizes granting of options to purchase up to 910,000
shares of the Company's common stock.  The New Options will be designated as
either Incentive Stock Options or Nonqualified Stock Options.  Incentive Stock
Options may not be granted to directors who are not otherwise employees of the
Company; while Nonqualified Stock Options may be granted to directors only if
they are outside directors (i.e., non-employees).  The exercise price of the
Incentive Stock Options will be not less than the fair market value of the
shares underlying such option on the date of the grant.  The exercise price of
the Nonqualified Stock Options shall be not less than 85 percent of the fair
market value of the shares underlying such option on the date of the grant.
Vesting of all options may be based on the Company's attaining of performance
criteria as specified at the time of the granting and/or may also be based on
the passage of time.  The Options terminate at the earliest of (i) ninety (90)
days after termination of employment other than (a) by death or disability, (b)
for cause, or (c) if the participant dies within ninety (90) days of termination
(other than for cause), (ii) thirty (30) days after the participant's
termination for cause, (iii) one year after death, permanent disability or
termination if the participant dies within ninety (90) days of termination
(other than for cause), or (iv) ten years from the date of grant.  The New
Options also provide for certain "tag along" rights whereby, in the event that
FS Equity Partners II, L.P., the majority stockholder of Calmar ("FSEP II"),
finds a third party buyer for all or part of its shares of common stock,
participants will have the right to sell an equivalent percentage of their
shares of common stock on the same terms.  Similarly, the New Options also
provide for certain "drag along" rights whereby, in the event that FSEP II finds
a third party buyer for all of its shares of common stock, participants will be
obligated to sell all of their New Options and/or common stock on the same
terms.  To date, no New Options have been granted and no Old Options have been
exchanged for New Options under the New Plan.

                                       27
<PAGE>

EMPLOYMENT AGREEMENTS


     Mr. Hartl is party to an employment agreement with the Company which
contains customary employment terms and provides for a current annual base
salary of $301,000, an annual incentive bonus under the Executive Incentive
Plan, fringe benefits, participation in benefit plans, and such other
compensation as approved by the Board of Directors. The term of the employment
agreement is the latter of the close of business on the date of a Change of
Control (as defined below) or May 2, 1998, unless earlier terminated as provided
therein. The Company may terminate Mr. Hartl's employment during the term for
cause, upon Mr. Hartl's disability or without cause. If Mr. Hartl is terminated
without cause, he would be entitled to, among other things, 125% of his base
annual salary payable for the remainder of the term as if he had not been
terminated but no less than the amount of the annual base salary and the bonus
payable to him under the Incentive Plan for the most recently completed fiscal
year prior to termination (if not previously paid by the Company). In addition,
the Company would continue to pay all benefits, including his premiums for
health care continuation coverage under the Calmar Inc. Retiree Health Benefit
Plan. Upon a change of control, Mr. Hartl will be entitled to the use of his
company vehicle for the remainder of the current lease term, the transfer of
ownership of a certain personal computer and continued participation in the
Calmar Medical Plan until he reaches age 65. The employment agreement also
contains noncompetition and confidentiality provisions. Pursuant to the Deferred
Compensation Arrangement effective as of January 1, 1995, by and between Mr.
Hartl and the Company, Mr. Hartl may defer until a subsequent year up to 100% of
his compensation. The Company maintains a Supplemental Executive Retirement Plan
for the benefit of Mr. Hartl. Under this Plan, Mr. Hartl will, upon retirement,
receive an annual benefit in an amount determined by Mr. Hartl's age at
retirement.


     Mr. Huebner is a party to an employment agreement with the Company which
contains customary employment terms and provides for an annual base salary of
$196,000 and for an annual incentive bonus under the Executive Incentive Plan.
If the successor to all or substantially all of the business and/or assets of
the Company does not assume the Company's obligations under Mr. Huebner's
employment agreement, then Mr. Huebner would be entitled to a payment equal to
two times the sum of his base salary and all incentive compensation awarded
pursuant to the Executive Incentive Plan during the 12 months preceding such
termination of his employment agreement.  In addition, upon termination of his
employment agreement under certain circumstances (including the failure of a
successor entity to assume the obligations of his employment contract), Mr.
Huebner would be entitled to the continuation of all employee benefit plans for
two years following such termination and payment of any legal fees incurred by
Mr. Huebner as a result of such termination of employment.  The employment
agreement also includes confidentiality provisions.


     Certain employees, including Messrs. Johnson, McKernan and Marti are
parties to agreements affording them certain rights upon a Change of Control (as
defined below) of the Company.  If any such employee is terminated without cause
within one year of a Change of Control, he will be entitled to (i) a lump sum
amount equal to his base annual salary prior to the Change of Control and (ii)
the reimbursement of reasonable expenses accrued through the effective date of
such termination.  For purposes of such agreements and Mr. Hartl's employment
agreement discussed above, the term "Change of Control" is defined as:  (i) the
acquisition in one or more transactions of beneficial ownership (within the
meaning of Rule 13d(3) under the Exchange Act) by (y) any person or entity
(other than FS&Co. and its affiliates) or (z) any group (as defined in Section
13(d) under the Exchange Act) other than FS&Co. and its affiliates of any voting
stock of the Company such that, as a result of such acquisition, such person,
entity or group has the ability to elect, directly or indirectly, a majority of
the members of the Board, or (ii) the sale of all or substantially all of the
assets of the Company (including within such assets the capital stock of any
subsidiary) and its subsidiaries, in a single transaction or a series of
transactions, to any person or persons.


PENSION PLAN


     Each of Calmar's domestic employees (except employees covered by a union
retirement plan) including executive officers, participate in Calmar's Salaried
Retirement Plan, a defined benefit plan (the "Pension Plan").  The Pension Plan
is funded entirely through cash contributions made by the Company.  Because
contributions are calculated on an actuarial basis for all participants, it is
not practicable to determine actuarial amounts set aside or accrued for an
individual or group of individuals.  An employee's years of service and average
annual compensation during the highest consecutive five years over the last ten
years of employment before retirement are the major factors affecting the amount
of their pension.  Credit for this purpose is given for service under a plan
sponsored

                                       28
<PAGE>

by Realex Corporation, a company purchased by Calmar in 1985, which plan was
merged into the Pension Plan.  The normal retirement age under the Pension Plan
is 65.


     The following table sets forth estimated annual benefits payable upon
retirement to persons in specified remuneration and years of service
classifications under the Pension Plan (without regard to the maximum annual
accrued benefit permitted by the Code, which, except for certain grandfather
rights or in the event of early or late retirement, was $125,000 for 1997,
subject to cost of living adjustments).  Remuneration covered by the Pension
Plan consists of total cash compensation including any bonuses.  The benefits
shown in the table below are not subject to deduction for Social Security
benefits or other offset amounts.  As of December 31, 1997, the credited years
of service under the Pension Plan of Messrs. Hartl, Huebner, Johnson and
McKernan were approximately 6, 24, 7 and 1, respectively.


<TABLE>
<CAPTION>

                                               ESTIMATED ANNUAL PENSION
AVERAGE ANNUAL COMPENSATION                    FOR REPRESENTATIVE YEARS
    DURING THE HIGHEST                         OF CREDITED SERVICES OVER
  CONSECUTIVE FIVE YEARS                          THE FOLLOWING YEARS
---------------------------              -------------------------------------
                                           10          20           30 OR MORE
                                         -------       -------      ----------
<S>                                      <C>           <C>          <C>

   $40,000............................   $ 4,753       $ 9,506        $ 14,259
    60,000............................     7,753        15,506          23,259
    80,000............................    10,753        21,506          32,259
   100,000............................    13,753        27,506          41,259
   154,000............................    21,854        43,710          65,562
</TABLE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION


     No officer or employee of the Company or its subsidiaries participated in
the deliberations of the Board of Directors concerning executive officer
compensation during fiscal 1997.

                                       29
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.


     The following table sets forth certain information regarding beneficial
ownership of the Company's common stock, Series A Preferred Stock and Series B
Preferred Stock, as of March 15, 1998, by each person who is known by the
Company to own beneficially more than 5% of the capital stock, by each director
of the Company, each of the Named Executive Officers and by all directors and
officers of the Company as a group.


<TABLE>
<CAPTION>
                                                                        PERCENTAGE       NUMBER OF                   NUMBER OF
                                                                        OF COMMON        SHARES OF   PERCENTAGE      SHARES OF
                                                       PERCENTAGE      STOCK ON A        SERIES A    OF SERIES A     SERIES B
                                NUMBER OF SHARES OF    OF COMMON      FULLY DILUTED      PREFERRED    PREFERRED     PREFERRED
           NAME                   COMMON STOCK(1)      STOCK(1)           BASIS           STOCK(1)     STOCK(1)      STOCK(1)
-----------------------------  -------------------   ----------       -------------     ----------   -----------   ------------
<S>                            <C>                   <C>              <C>               <C>          <C>           <C>
Freeman Spogli & Co. (2).....       5,332,922(3)        78.3%              59.2%          254,197        57.4%     1,000,000(4)
 John M. Roth
 Ronald P. Spogli
 William M. Wardlaw
AB Handel och Industri
 Humlegardsgatan 6
 S-114 46 Stockholm,
 Sweden......................       3,033,046(5)        60.7%              33.7%               --          --            --
REXAM PLC
 114 Knightsbridge
 London SWIX 7NN
 United Kingdom..............              --             --                 --           177,938(6)        40.2%           --
Richard J. Hartl.............         100,000(7)         3.2%               1.1%               --          --            --
C. Richard Huebner...........         137,414(8)         4.4%               1.5%              250           *            --
Aldie E. Johnson, III........           5,000(9)           *                  *               375           *            --
Donald E. Knox...............          54,553(10)        1.8%                 *               500           *            --
Directors and officers as a
 group (16 persons)..........       5,655.674(11)       81.2%              62.8%          255,522        57.7%           --
</TABLE>
-----------------------------
*   Less than 1%.

(1) The persons named in this table have sole voting power and investment power
    with respect to all shares of capital stock shown as beneficially owned by
    them, subject to community property laws where applicable and the
    information contained in this table and these notes.

(2) All shares are held of record by FSEP II of which FS&Co. is the general
    partner.  As general partner of FSEP II, FS&Co. has the sole power to vote
    and dispose of such shares.  Messrs. Spogli, Wardlaw and Roth (each of whom
    are directors of the Company) and Messrs. Bradford M. Freeman and J.
    Frederick Simmons are general partners of FS&Co., and as such may be deemed
    to be the beneficial owners of the Company's capital stock indicated as
    beneficially owned by FS&Co.  The business address of FS&Co. and its general
    partners is 11100 Santa Monica Boulevard, Suite 1900, Los Angeles,
    California 90025.

(3) Includes 3,722,627 shares issuable upon exercise of warrants.

(4) Constitutes 100% of the outstanding shares of Series B Preferred Stock.

(5) Includes 1,905,840 shares issuable upon exercise of warrants.

(6) Constitutes all of the preferred stock owned by and transferred from AB
    Handel och Industri.

(7) Includes 50,000 shares issuable with respect to options exercisable within
    60 days of March 15, 1998.

(8) Includes 72,750 shares of common stock held by C. Richard Huebner and Debra
    Ann Huebner, as Co-Trustees of the C. Richard Huebner and Debra Ann Huebner
    Family Trust dated August 5, 1988.  Includes 3,333 shares issuable upon
    exercise of warrants and 61,331 shares issuable with respect to options
    exercisable within 60 days of March 15, 1998.

(9) Consists of 5,000 shares issuable upon exercise of warrants.

(10) Includes 6,667 shares issuable upon exercise of warrants and 17,886 shares
     issuable with respect to options exercisable within 60 days of March 15,
     1998.

(11) Includes 3,739,960 shares issuable upon exercise of warrants and 136,669
     shares issuable with respect to options exercisable within 60 days of March
     15, 1998.

                                       30
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


      On August 5, 1988, the Company loaned C. Richard Huebner, Executive Vice
President, Chief Financial Officer and a director of the Company, and his wife
$398,000.  The loan is evidenced by a promissory note secured by a deed of
trust.  Principal is payable in equal monthly payments based on a 30-year
amortization.  As of March 15, 1998, the outstanding principal amount was
$264,000.  The note does not bear interest unless Mr. Huebner is terminated by
the Company for other than reasonable cause, at which time the note shall bear
interest at the rate of 10% per annum.  Upon termination for cause, the entire
amount of the loan may become due and payable at the option of the Company.  In
addition, on December 8, 1988, in connection with his acquisition of 72,750
shares of Calmar's common stock at a price of $10.00 per share, Mr. Huebner paid
$466,000 in cash and gave his promissory note for approximately $262,000 which
note, together with all accrued and unpaid interest thereon, is payable in full
upon the earlier of December 31, 1998 or a Change of Control (as defined).  As
of March 15, 1998, the outstanding principal amount of the note was $384,000.


      On September 3, 1991, Richard J. Hartl, President and Chief Executive
Officer and a director of the Company, purchased 50,000 shares of common stock
of Calmar at a price of $7.50 a share, for an aggregate purchase price of
$375,000.  Of such price, $375,000 was represented by a promissory note which
bears interest at a defined prime rate which as of March 15, 1998 was 8.25%.
The principal balance of and all accrued and unpaid interest on the note are
payable in full upon the earlier of December 31, 1998 or a Change of Control (as
defined).  As of March 15, 1998, the outstanding principal amount was $189,000.
The note is secured by a pledge of the 50,000 shares of common stock purchased
by Mr. Hartl.


      On December 19, 1991, the Company loaned Ramon Marti, Vice President
and Managing Director, European and South American Operations, $131,700, payable
in full on December 31, 2006.  The note evidencing the loan bears interest at a
rate of 0.25%.  As of March 15, 1998, the outstanding principal amount was
$131,700.

                                       31
<PAGE>

                                    PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>

                                                                                       PAGE
                                                                                       NUMBER
                                                                                       ------
<S>                                                                                    <C>
(a)(1) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS:


       CALMAR INC. AND SUBSIDIARIES

       Independent Auditors' Report....................................................   F-1
       Consolidated Balance Sheets as of December 31, 1997 and 1996....................   F-2
       Consolidated Statements of Operations for the years ended December 31, 1997,
        1996 and 1995..................................................................   F-3
       Consolidated Statements of Stockholders' Deficiency for the years
        ended December 31, 1997, 1996 and 1995.........................................   F-4
       Consolidated Statements of Cash Flows for the years ended December 31, 1997,
        1996 and 1995..................................................................   F-5
       Notes to Consolidated Financial Statements......................................   F-7

(a)(2) INDEX TO FINANCIAL STATEMENT SCHEDULES:

       Schedule II -- Valuation and Qualifying Accounts.................................   S-1
</TABLE>
       All other schedules are omitted as the required information is
inapplicable or not present in amounts sufficient to require submission of the
schedule, or because the information is presented in the consolidated financial
statements or related notes.

(a)(3)  EXHIBITS:


        The exhibits listed on the accompanying Exhibit Index are filed as part
of this Form 10-K. In addition, following is a list of each executive
compensation plan and arrangement required to be filed as an exhibit.


        EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS


        Calmar Inc. Salaried Retirement Plan dated as of June 22, 1983, as
        amended--Exhibit 10.46 to 1992 Form 10-K (No. 0-12054).


        Calmar Inc. Incentive Plan dated December 1983, as amended--Exhibit
        10.43 to 1992 Form 10-K (No. 0-12054).


        Stock Subscription Agreement dated as of December 8, 1988 among CSS
        Holding Corporation, FS Equity Partners II, L.P. (formerly RFS Equity
        Partners II, L.P.) (hereinafter, "FSEP II") and C. Richard Huebner, with
        form of note and pledge agreement attached thereto as Exhibits A and B,
        respectively--Exhibit 10.4 to Registration Statement on Form S-1 (No.
        33-26281).


        Form of Stock Subscription Agreement dated as of December 1, 1988 by and
        between CSS Holding Corporation and certain members of management who
        purchased shares of common stock of CSS Holding Corporation for cash--
        Exhibit 10.1 to Registration Statement on Form S-1 (No. 33-26281).


        Form of Stock Subscription Agreement dated as of December 1, 1988 by and
        between CSS Holding Corporation and certain members of management who
        purchased shares of common stock of CSS Holding Corporation for
        promissory notes, with form of note attached thereto as Exhibit A--
        Exhibit 10.2 to Registration Statement on Form S-1 (No. 33-26281).

                                       32
<PAGE>

        Form of Stock Subscription Agreement dated as of December 1, 1988 by and
        between CSS Holding Corporation and certain members of management who
        purchased shares of common stock of CSS Holding Corporation for cash and
        promissory notes, with form of note attached thereto as Exhibit A--
        Exhibit 10.3 to Registration Statement on Form S-1 (No. 33-26281).


        Stock Subscription Agreement dated as of December 8, 1988 by and among
        CSS Holding Corporation, FSEP II (formerly RFS Equity Partners II, L.P.)
        and Donald E. Knox--Exhibit 10.5 to Registration Statement on Form S-1
        (No. 33-26281).


        CSS Holding Corporation 1988 Employee Stock Option Plan dated December
        1, 1988, as amended--Exhibit 10.3 to Registration Statement on Form S-4
        (No. 33-47304).


        Form of Nonqualified Stock Option Agreement by and between CSS Holding
        Corporation and certain members of management--Exhibit 10.9 to
        Registration Statement on Form S-1 (No. 33-26281).


        Form of Nonqualified Stock Option Agreement dated as of December 8, 1988
        between CSS Holding Corporation and C. Richard Huebner--Exhibit 10.10 to
        Registration Statement on Form S-1 (No. 33-26281).


        Form of Nonqualified Stock Option Agreement by and between CSS Holding
        Corporation and Donald E. Knox--Exhibit 10.11 to Registration Statement
        on Form S-1 (No. 33-26281).


        Employment Agreement dated January 13, 1988 between Calmar Inc. and C.
        Richard Huebner--Exhibit 10.23 to Registration Statement on Form S-1
        (No. 33-26281).


        Calmar Inc. 401(k) Plan dated as of January 1, 1989, as amended--Exhibit
        10.45 to 1992 Form 10-K (No. 0-12054).


        Securities Subscription Agreement dated as of September 28, 1990 by and
        among CSS Holding Corporation, FSEP II and C. Richard Huebner--Exhibit
        10.22 to Registration Statement on Form S-4 (No. 33-97056).


        Form of Securities Subscription Agreement dated as of September 28, 1990
        by and between CSS Holding Corporation and certain members of
        management--Exhibit 10.23 to Registration Statement on Form S-4 (No.
        33-97056).


        Securities Subscription Agreement dated as of September 28, 1990 by and
        among CSS Holding Corporation, FSEP II and Donald E. Knox--Exhibit 10.24
        to Registration Statement on Form S-4 (No. 33-97056).


        Form of Warrant dated as of October 5, 1990 issued to certain members of
        management--Exhibit 10.9 to Registration Statement on Form S-4 (No. 33-
        47304).


        Stock Subscription Agreement dated as of September 3, 1991 between CSS
        Holding Corporation and Richard J. Hartl, with form of note and pledge
        agreement attached thereto as Exhibits A and B, respectively--Exhibit
        10.29 to Registration Statement on Form S-4 (No. 33-47304).


        Nonqualified Stock Option Agreement dated as of September 3, 1991
        between CSS Holding Corporation and Richard J. Hartl--Exhibit 10.32 to
        Registration Statement on Form S-4 (No. 33-47304).


        Calmar Inc. Supplemental Executive Retirement Plan dated as of September
        3, 1991--Exhibit 10.31 to Registration Statement on Form S-4 (No. 33-
        97056 ).

                                       33
<PAGE>

        Form of Securities Subscription Agreement dated as of October 31, 1991
        by and between CSS Holding Corporation and certain members of
        management--Exhibit 10.35 to Registration Statement on Form S-4 (No.
        33-97056).


        Form of Warrant dated as of October 31, 1991 issued to certain members
        of management--Exhibit 10.38 to Registration Statement on Form S-4 (No.
        33-47304).


        Calmar Inc. Deferred Compensation Plan 1993 Restatement effective as of
        January 1, 1993--Exhibit 10.41 to Registration Statement on Form S-4
        (No. 33-97056).


        Form of Stock Subscription Agreement dated as of April 1, 1993 by and
        between Calmar, Inc. and certain members of management who purchased
        shares of common stock of Calmar Inc. for cash--Exhibit 10.42 to
        Registration Statement on Form S-4 (No. 33-97056).


        Stock Subscription Agreement dated as of April 1, 1993 by and between
        Calmar Inc. and Jacques Barriac, with form of note and pledge agreement
        attached thereto as Exhibits A and B, respectively--Exhibit 10.43 to
        Registration Statement on Form S-4 (No. 33-97056).


        Form of Key Employee Retention Agreement between Calmar Inc. and certain
        members of management--Exhibit 10.49 hereto.


        Employment Agreement dated as of January 1, 1998 by and between Calmar
        Inc. and Richard J. Hartl--Exhibit 10.50 hereto.


        Calmar Inc. Deferred Compensation Arrangement effective as of January 1,
        1995 between Calmar Inc. and Richard J. Hartl--Exhibit 10.48 to
        Registration Statement on Form S-4 (No. 33-97056).


        Calmar Inc. Executive Incentive Compensation Plan dated January, 1993--
        Exhibit 10.49 to Registration Statement on Form S-4 (No. 33-97056).


(b)     REPORTS ON FORM 8-K:


        None.


(c)     EXHIBITS:


        The exhibits listed on the accompanying Exhibit Index are filed as part
        of this Form 10-K.

                                       34
<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, in the City of
Industry, State of California, on March 27, 1998.


                                         Calmar Inc.



                                         By:  /s/  Richard J. Hartl
                                              ----------------------------------
                                              Richard J. Hartl
                                              President, Chief Executive Officer
                                              and Chairman of the Board


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


<TABLE>
<CAPTION>
       SIGNATURE                         TITLE                        DATE
<S>                       <C>                                    <C>

/s/ Richard J. Hartl      President, Chief Executive Officer,    March 27, 1998
-----------------------   Chairman of the Board and Director
Richard J. Hartl          (Principal Executive Officer)


/s/ C. Richard Huebner    Executive Vice President,              March 27, 1998
-----------------------   Chief Financial Officer,
C. Richard Huebner        Secretary and Director
                          (Principal Financial and
                          Accounting Officer)


/s/ Matt L. Figel         Director                               March 27, 1998
-----------------------
Matt L. Figel

/s/ Donald E. Knox        Director                               March 27, 1998
-----------------------
Donald E. Knox

/s/ Harry T.J. Roberts    Director                               March 27, 1998
-----------------------
Harry T.J. Roberts

/s/ John M. Roth          Director                               March 27, 1998
-----------------------
John M. Roth

/s/ Ronald P. Spogli      Director                               March 27, 1998
-----------------------
Ronald P. Spogli

/s/ William M. Wardlaw    Director                               March 27, 1998
-----------------------
William M. Wardlaw
</TABLE>

<PAGE>

[LOGO OF PEAT MARWICK LLP]





                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Calmar Inc.:

We have audited the consolidated balance sheets of Calmar Inc. and subsidiaries
as of December 31, 1997 and 1996 and the related consolidated statements of
operations, stockholders' deficiency and cash flows for each of the years in the
three-year period ended December 31, 1997.  In connection with our audits of the
consolidated financial statements, we have also audited the financial statement
schedule as listed in the accompanying index.  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 in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Calmar Inc. and
subsidiaries as of December 31, 1997 and 1996 and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1997 in conformity with generally accepted accounting
principles.  Also in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.





/s/ KPMG Peat Marwick LLP


Orange County, California
March 9, 1998

                                      F-1
<PAGE>

                                   CALMAR INC
                                AND SUBSIDIARIES

                          Consolidated Balance Sheets

                           December 31, 1997 and 1996

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                 ASSETS                                                 1997                       1996
                                                                                      ---------                  ---------
<S>                                                                                   <C>                        <C>
Current assets:
 Cash and cash equivalents                                                            $   7,218                  $   9,198
 Accounts receivable, less allowance for doubtful accounts of $994
  in 1997 and $1,563 in 1996                                                             41,350                     35,153
 Inventories                                                                             24,767                     20,679
 Income taxes receivable                                                                     44                        444
 Prepaid expenses                                                                         1,273                      1,710
                                                                                      ---------                  ---------
         Total current assets                                                            74,652                     67,184
Property and equipment, net                                                             105,839                    106,619
Cost in excess of net assets acquired, less accumulated amortization
 of $28,909 in 1997 and $26,360 in 1996                                                  90,759                     93,649
Other intangible assets, less accumulated amortization of $12,501 in
 1997 and $12,758 in 1996                                                                 4,721                      6,275
Other assets, net                                                                         8,670                      9,011
                                                                                      ---------                  ---------
                                                                                      $ 284,641                  $ 282,738
                                                                                      =========                  =========

                        LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
 Short-term borrowings                                                                $   4,502                  $   2,640
 Current installments of long-term debt                                                   5,199                      5,857
 Accounts payable                                                                        19,140                     18,941
 Accrued liabilities                                                                     18,142                     19,246
                                                                                      ---------                  ---------
         Total current liabilities                                                       46,983                     46,684
Long-term debt                                                                          238,571                    232,867
Deferred income taxes                                                                    10,831                     12,380
Other liabilities                                                                        20,497                     20,205
                                                                                      ---------                  ---------
         Total liabilities                                                              316,882                    312,136
                                                                                      ---------                  ---------

Stockholders' deficiency:
 Preferred stock, par value $.01 per share; liquidation preference
  aggregating $54,250 for all outstanding preferred stock:
    Series A Preferred Stock, liquidation preference $100 per share;
     authorized 450,000 shares; issued and outstanding 442,500
     shares in 1997 and 1996                                                                  4                          4
    Series B Preferred Stock, liquidation preference $10 per share.
     Authorized 1,000,000 shares; issued and outstanding 1,000,000
     shares in 1997 and 1996                                                                 10                         10
    Common stock, par value $.01 per share.  Authorized 8,500,000
     shares; issued and outstanding 3,092,031 in 1997 and 3,097,031
     in 1996                                                                                 31                         31
 Additional paid-in capital                                                              77,936                     77,986
 Accumulated deficit                                                                   (101,705)                  (103,402)
 Accumulated translation adjustment                                                      (7,947)                    (3,473)
 Notes receivable from officers for purchase of common stock                               (570)                      (554)
                                                                                      ---------                  ---------
         Total stockholders' deficiency                                                 (32,241)                   (29,398)
                                                                                      ---------                  ---------
                                                                                      $ 284,641                  $ 282,738
                                                                                      =========                  =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-2
<PAGE>

                                   CALMAR INC
                                AND SUBSIDIARIES

                     Consolidated Statements of Operations

                  Years ended December 31, 1997, 1996 and 1995

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                             1997           1996           1995
                                                          ----------     ----------     ----------

<S>                                                        <C>           <C>           <C>
Net sales                                                 $  230,245     $  219,437     $  224,465
Cost of sales                                                166,950        162,987        168,444
                                                          ----------     ----------     ----------

      Gross profit                                            63,295         56,450         56,021

Selling, general and administrative expenses                  37,956         37,097         35,559
                                                          ----------     ----------     ----------

      Operating income                                        25,339         19,353         20,462

Other income                                                   1,235          1,522          1,454
Interest expense                                             (24,943)       (24,487)       (27,265)
                                                          ----------     ----------     ----------

      Income (loss) before income taxes and
       extraordinary item                                      1,631         (3,612)        (5,349)


Income tax provision (benefit)                                   (66)          (214)         1,083
                                                          ----------     ----------     ----------

      Income (loss) before extraordinary item                  1,697         (3,398)        (6,432)

Extraordinary item - loss on extinguishment of debt                -           (618)        (9,528)
                                                          ----------     ----------     ----------

      Net income (loss)                                   $    1,697     $   (4,016)    $  (15,960)
                                                          ==========     ==========     ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>

                                   CALMAR INC
                                AND SUBSIDIARIES

              Consolidated Statements of Stockholders' Deficiency

                 Years ended December 31, 1997, 1996  and 1995

                             (Dollars in thousands)

<TABLE>
<CAPTION>



                                           PREFERRED STOCK
                                ----------------------------------------
                                    SERIES A               SERIES B              COMMON STOCK        ADDITIONAL
                                -----------------     ------------------      -------------------     PAID-IN    ACCUMULATED
                                SHARES     AMOUNT      SHARES     AMOUNT       SHARES      AMOUNT     CAPITAL      DEFICIT
                                -------    ------     ---------   ------      ---------    ------    ----------    --------
<S>                             <C>        <C>        <C>         <C>         <C>          <C>        <C>          <C>
Balance, December 31, 1994      442,550    $    4     1,000,000   $   10      3,098,531    $   31     78,019        (83,425)

Additions to notes
 receivable from officers            --        --            --       --             --        --         --             --
Repurchase of preferred
 stock                              (50)       --            --       --             --        --         (5)            --
Issuance of common stock             --        --            --       --          1,000        --          1             --
Repurchase of common stock           --        --            --       --         (2,500)                 (29)            --
Foreign currency
 translation adjustment              --        --            --       --             --        --         --             --
Net loss                             --        --            --       --             --        --         --        (15,960)
                                -------    ------     ---------   ------      ---------    ------     ------       --------
Balance, December 31, 1995      442,500         4     1,000,000       10      3,097,031        31     77,986        (99,385)

Additions to notes
 receivable from officers            --        --            --       --             --                   --             --
Foreign currency
 translation adjustment              --        --            --       --             --        --         --             --
Net loss                             --        --            --       --             --        --         --         (4,015)
                                -------    ------     ---------   ------      ---------    ------     ------       --------
Balance, December 31, 1996      442,500         4     1,000,000       10      3,097,031        31     77,986       (103,402)

Additions to notes
 receivable from officers            --        --            --       --             --        --        --              --
Repurchase of common stock           --        --            --       --         (5,000)       --       (50)             --
Foreign currency
 translation adjustment              --        --            --       --             --        --        --              --
Net income                           --        --            --       --             --        --        --           1,697
                                -------    ------     ---------   ------      ---------    ------     ------       --------
Balance, December 31, 1997      442,500    $    4     1,000,000   $   10      3,092,031    $   31     77,936       (101,705)
                                =======    ======     =========   ======      =========    ======     ======       ========

<CAPTION>

                                                    NOTES
                                                  RECEIVABLE
                                                 FROM OFFICERS      TOTAL
                                   ACCUMULATED   FOR PURCHASE    STOCKHOLDERS'
                                   TRANSLATION     OF COMMON        EQUITY
                                   ADJUSTMENT       STOCK        (DEFICIENCY)
                                   -----------   -------------   ---------------
<S>                               <C>            <C>             <C>
Balance, December 31, 1994           (3,746)            (524)         (9,632)

Additions to notes
 receivable from officers                --              (15)            (15)
Repurchase of preferred
 stock                                   --               --              (5)
Issuance of common stock                 --               --               1
Repurchase of common stock               --               --             (29)
Foreign currency
 translation adjustment               2,021               --           2,021
Net loss                                 --               --         (15,960)
                                   --------             ----         -------
Balance, December 31, 1995           (1,725)            (539)        (23,619)

Additions to notes
 receivable from officers                --              (15)            (15)
Foreign currency
 translation adjustment                  --               --          (1,148)
Net loss                                 --               --          (4,016)
                                   --------             ----         -------
Balance, December 31, 1996           (3,473)            (554)        (29,398)

Additions to notes
 receivable from officers                --              (16)            (16)
Repurchase of common stock               --               --             (50)
Foreign currency
 translation adjustment              (4,474)              --          (4,474)
Net income                               --               --           1,697
                                   --------             ----         -------
Balance, December 31, 1997           (7,947)            (570)        (32,241)
                                  =========             ====         =======
</TABLE>
See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                                   CALMAR INC
                                AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows

                  Years ended December 31, 1997, 1996 and 1995

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                       1997         1996         1995
                                                     --------     --------     --------
<S>                                                  <C>          <C>          <C>
Cash flows from operating activities:
 Net income (loss)                                   $  1,697     $ (4,016)    $(15,960)
 Adjustments to reconcile net income (loss)
  to net cash provided by operating
  activities:
    Extraordinary item                                      -          618        9,528
    Depreciation and amortization                      24,502       24,167       25,135
    Amortization of discount on notes payable              37          103          201
    Deferred income tax benefit                        (1,203)        (888)      (1,104)
    Additions to notes receivable from officers
     for purchase of common stock                         (16)         (15)         (15)
    Gain on sale of property and equipment                (69)         (81)        (104)
    Changes in assets and liabilities:
     Accounts receivable                               (8,719)      (1,341)         915
     Inventories                                       (5,553)      (3,814)         635
     Income taxes receivable                              353           11          (45)
     Prepaid expenses                                     277          659          148
     Accounts payable                                  (1,378)       4,399          (14)
     Accrued liabilities                                 (346)        (237)      (3,292)
     Other long-term liabilities                        1,185        1,668        1,246
                                                     --------     --------     --------
          Net cash provided by operating
           activities                                  10,767       21,233       17,274
                                                     ========     ========     ========
Cash flows from investing activities:
 Purchases of property and equipment                  (22,414)     (15,940)     (14,208)
 Proceeds from sales of equipment                         124          626          180
 Increase in other intangibles                           (463)         (66)          --
 Decrease (increase) in other assets                     (753)         152         (333)
                                                     --------     --------     --------

          Net cash used in investing activities       (23,506)     (15,228)     (14,361)
                                                     ========     ========     ========
</TABLE>
                                  (Continued)

                                      F-5
<PAGE>

                                   CALMAR INC
                                AND SUBSIDIARIES

                Consolidated Statements of Cash Flows, Continued

                  Years ended December 31, 1997, 1996 and 1995

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                        1997          1996           1995
                                                     ---------     ---------     -----------
<S>                                                 <C>           <C>             <C>
Cash flows from financing activities:
 Proceeds (repayments) of short-term borrowings,
  net                                                  $ 2,338    $ 2,343    $    (909)
 Increase (decrease) in cash overdraft                   3,364     (2,578)        (844)
 Net change in revolver                                  5,000         --           --
 Proceeds from issuance of senior and
  subordinated debt                                         --         --      225,000

 Redemption of senior and subordinated debt                 --         --     (194,847)
 Payment of deferred financing fees                         --       (704)      (7,928)
 Payment of call premiums for debt redemption               --        (81)      (5,697)
 Proceeds from issuance of long-term debt                6,064      5,002        3,224
 Principal payments on long-term debt                   (5,774)    (9,683)     (14,432)
 Repurchase of preferred stock                              --         --           (5)
 Proceeds from issuance of common stock                     --         --            1
 Repurchase of common stock                                (50)        --          (29)
                                                        ------    -------    ---------

          Net cash provided by (used in)
           financing activities                         10,942     (5,701)       3,534
                                                        ------    -------    ---------

Effect of exchange rate changes on cash and cash
 equivalents                                              (183)      (143)         (49)
                                                        ------    -------    ---------

          Net increase (decrease) in cash and
           cash equivalents                             (1,980)       161        6,398


Cash and cash equivalents, beginning of year             9,198      9,037        2,639
                                                        ------    -------    ---------

Cash and cash equivalents, end of year                 $ 7,218    $ 9,198    $   9,037
                                                        ======    =======    =========

Supplemental disclosures of cash flow
 information:
 Cash paid during the year for:
   Income taxes                                        $ 1,463    $ 2,168    $   3,259
                                                       =======    =======    =========
   Interest                                            $24,742    $24,306    $  28,559
                                                       =======    =======    =========

Supplemental schedule of noncash investing and
 financing activities - equipment acquired in
 exchange for long-term debt                           $   533    $   741    $   4,082
                                                       =======    =======    =========
</TABLE>
See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

                          December 31, 1997 and 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    NATURE OF OPERATIONS

    Calmar Inc. is a multinational manufacturer of plastic dispensing and
    spraying systems. The primary products manufactured and sold by Calmar Inc.
    include a full line of fine mist, regular and trigger sprayers; regular,
    large and high-viscosity dispensers; and other specialty products.
    Manufacturing is performed in the United States, Spain and Germany. The
    Company sells through direct sales forces in the United States, Canada,
    Western Europe, South America, Mexico, Indonesia and China, distributors in
    the United States and Western Europe, and licensees in South America and
    Asia. The principal markets for Calmar Inc.'s products are North American,
    Western European, South American and Asian based dispensing and packaging
    personal care, household, automotive, chemical and pharmaceutical
    businesses.

    Approximately 50% of Calmar's workforce is covered by collective bargaining
    agreements. Contracts representing 12% of the workforce are subject to
    renegotiation in 1998.

    PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements of Calmar Inc. include the accounts of
    its wholly owned subsidiaries: Calmar International, Inc., Calmar - Albert
    GmbH, Monturas, S.A., Calmar - Spanish Branch, Calmar - Albert France
    S.A.R.L., Calmar - Albert (U.K.) Limited, Calmar Plastics Limited, Calmar -
    Albert Belgium S.A., Calmar - Albert Italia, Calmar Mercosur, S.A., Calmar
    do Brazil Ltda and Calmar Wuxi Dispensing Systems Ltd. (collectively, the
    Company). All significant intercompany balances and transactions have been
    eliminated in consolidation.

    RECLASSIFICATIONS

    Certain reclassifications have been made to the 1996 and 1995 balances to
    conform to the 1997 presentation.

    FOREIGN CURRENCY TRANSLATION

    The Company uses the local currency as the functional currency for most
    foreign operations. Assets and liabilities are translated at year-end
    exchange rates, and income and expense items are translated at average
    exchange rates prevailing during the year. Translation adjustments are
    recorded as a separate component of stockholders' deficiency. The net gain
    (loss) from foreign exchange transactions was insignificant in 1997, 1996
    and 1995.

    REVENUE RECOGNITION

    Revenue is recognized upon shipment of products to customers.

                                      F-7
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


   CASH AND CASH EQUIVALENTS

   Cash equivalents consist principally of interest bearing foreign currency
   accounts.  For purposes of the consolidated statements of cash flows, the
   Company considers all short-term investments with original maturities of 90
   days or less to be cash equivalents.  The carrying amount approximates fair
   value because of the short maturity of the financial instruments.

   INVENTORIES

   Inventories are stated at the lower of cost or market using the first-in,
   first-out (FIFO) method.

   PROPERTY AND EQUIPMENT

   Property and equipment are recorded at cost and depreciated using the
   straight-line method over the estimated useful lives of the related assets up
   to 40 years for buildings and land improvements, 3 to 10 years for machinery
   and equipment, and the respective lease term for assets under capital leases.

   COST IN EXCESS OF NET ASSETS ACQUIRED

   Cost in excess of net assets acquired (goodwill) is amortized over 10 to 40
   years using the straight-line method.  Such amortization expense amounted to
   $3,353,000 in both 1997 and 1996 and $3,543,000 in 1995 and is included in
   selling, general and administrative expenses in the accompanying consolidated
   statements of operations.

   OTHER INTANGIBLE ASSETS

   The costs of patents, trademarks, licenses and other intangible assets are
   amortized over the estimated lives of the related assets ranging from 5 to 17
   years using the straight-line method.  Such aggregate amortization expense
   amounted to $1,539,000 in both 1997 and 1996 and $1,542,000 in 1995 and is
   included in selling, general and administrative expenses and cost of sales in
   the accompanying consolidated statements of operations.

   IMPAIRMENT OF ASSETS

   The Company adopted the provisions of SFAS No. 121, "Accounting for the
   Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
   on January 1, 1994.  This Statement requires that long-lived assets and
   certain identifiable intangibles be reviewed for impairment whenever events
   or changes in circumstances indicate that the carrying amount of an asset may
   not be recoverable.  Recoverability of assets to be held and used is measured
   by a comparison of the carrying amount of an asset to future net cash flows
   expected to be generated by the asset.  If such assets are considered to be
   impaired, the impairment to be recognized is measured by the amount by which
   the carrying amount of the assets exceed the fair value of the assets.
   Assets to be disposed of are reported at the lower of the carrying amount or
   fair value less costs to sell.  Adoption of this Statement did not have a
   material impact on the Company's financial position, results of operations or
   liquidity.

   DEFERRED FINANCING COSTS

   Deferred financing costs are amortized over the lives of the respective debt
   agreements using the effective interest method and are included in other
   assets in the accompanying consolidated balance sheets.

                                      F-8
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


   OTHER POSTRETIREMENT BENEFITS

   The Company accounts for other postretirement benefits under Statement of
   Financial Accounting Standards No. 106, "Employers' Accounting for
   Postretirement Benefits Other Than Pensions." Postretirement benefit expense
   was $342,000, $415,000 and $509,000 in 1997, 1996 and 1995, respectively.
   Cash paid for actual claims in 1997, 1996 and 1995 was $100,000, $161,000 and
   $51,000, respectively.

   OTHER POSTEMPLOYMENT BENEFITS

   The Company accounts for other postemployment benefits under Statement of
   Financial Accounting Standards No. 112, "Employers' Accounting for
   Postemployment Benefits."  The Company currently provides for certain
   postemployment benefits, primarily in the form of limited continuation of
   health care insurance, to nearly all domestic employees.  The premiums for
   these benefits are paid for by the employees, and any additional costs are
   paid by the Company.  Such were immaterial in 1997, 1996 and 1995.

   FAIR VALUE OF FINANCIAL INSTRUMENTS

       LONG-TERM DEBT

   The fair value of the Company's long-term debt is estimated based on the
   quoted market prices for the same or similar issues or on the current rates
   offered to the Company for debt of the same remaining maturities.

       INTEREST RATE CAP AND FOREIGN CURRENCY AGREEMENT

   An interest rate cap used to establish an effective maximum rate for certain
   long-term debt and a foreign currency agreement used for hedging purposes are
   carried at amortized costs which approximate market.  The agreements are in
   effect for three years and expire in 1998.  The Company is exposed to credit
   losses in the event of nonperformance by the counterparties to its agreements
   but has no off-balance-sheet credit risk of accounting loss.  The Company
   anticipates, however, that the counterparties will be able to fully satisfy
   their obligations under the agreements.

   INCOME TAXES

   The Company accounts for income taxes under Statement of Financial Accounting
   Standards No. 109 (SFAS 109), "Accounting for Income Taxes."  Deferred tax
   assets and liabilities are recognized for the future tax consequences
   attributable to differences between the financial statement carrying amounts
   of existing assets and liabilities and their respective tax bases.

   United States income taxes are not provided, with certain exceptions, on the
   undistributed earnings of the foreign subsidiaries as such earnings are
   intended to be indefinitely reinvested in those operations.

   RESEARCH AND DEVELOPMENT COSTS

   Research and development costs are charged to operations as incurred.  Such
   costs amounted to $5,017,000, $5,139,000 and $4,546,000 in 1997, 1996 and
   1995, respectively, and are included in selling, general and administrative
   expenses in the accompanying consolidated statements of operations.

                                      F-9
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


   EARNINGS (LOSS) PER SHARE

   The Company does not currently have publicly traded equity securities
   pursuant to the Securities Act of 1933, therefore earnings (loss) per share
   information has not been disclosed.

   USE OF ESTIMATES AND UNCERTAINTIES

   Management of the Company has made a number of estimates and assumptions
   relating to the reporting of assets and liabilities and the disclosure of
   contingent assets and liabilities to prepare these financial statements in
   conformity with generally accepted accounting principles.  Actual results
   could differ from those estimates.

   The Company currently operates subsidiaries in Western Europe, Canada, South
   America and Asia.  In addition, the Company signed a joint venture agreement
   in Indonesia in August 1997 and is waiting for government approval to
   finalize the formation of the joint venture.  The Company anticipates that
   the joint venture will be operational by June 1998.  The Joint venture calls
   for the Company to share 51% of profits and losses and joint venture
   ownership.  In subsequent periods it is expected that the Company will make
   more substantial investments in its Asian and South American operations.
   During 1997, many Asian nations including Indonesia, experienced significant
   currency devaluation.  In previous years, similar circumstances have occurred
   in certain South American economies.  Investments in foreign operations are
   subject to foreign currency translation losses during times of declining
   foreign currency values.

   STOCK OPTION PLANS

   Prior to January 1, 1996, the Company accounted for its stock option plans in
   accordance with the provisions of Accounting Principles Board (APB) Opinion
   No. 25, "Accounting for Stock Issued to Employees," and related
   interpretations.  As such, compensation expense would be recorded on the date
   of grant only if the current market price of the underlying stock exceeded
   the exercise price.  On January 1, 1996, the Company adopted Statement of
   Financial Accounting Standards No. 123 (SFAS No. 123), "Accounting for Stock-
   Based Compensation," which permits entities to recognize as expense over the
   vesting period the fair value of all stock-based awards on the date of grant.
   Alternatively, SFAS No. 123 also allows entities to continue to apply the
   provisions of APB Opinion No. 25 and provide pro forma net income and pro
   forma earnings per share disclosures for employee stock option grants made in
   1995 and future years as if the fair-value-based method defined in SFAS No.
   123 had been applied.  The Company has elected to continue to apply the
   provisions of APB Opinion No. 25 and provide the pro forma disclosure
   provisions of SFAS No. 123.  No stock options were granted in 1995, 1996 or
   1997, thus there are no further disclosures required under SFAS No. 123.

                                      F-10
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



(2) INVENTORIES

    Inventories consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                                   DECEMBER 31
                                                ------------------
                                                  1997      1996
                                                -------    -------
                    <S>                         <C>        <C>
                    Raw materials               $ 4,483    $ 4,713
                    Work in process              10,960     10,063
                    Finished goods                9,324      5,903
                                                -------    -------
                                                $24,767    $20,679
                                                =======    =======
</TABLE>

(3) PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                                   DECEMBER 31
                                              --------------------
                                                1997       1996
                                              ---------  ---------
<S>                                           <C>        <C>
Land and land improvements                    $  11,842  $  12,097
Buildings                                        35,767     36,941
Machinery and equipment                         180,222    170,077
Assets under capital leases                       3,116      4,011
Construction in progress                         12,932     12,629
                                              ---------  ---------

Accumulated depreciation and amortization      (138,040)  (129,136)
                                              ---------  ---------
                                              $ 105,839  $ 106,619
                                              =========  =========
</TABLE>

(4) SHORT-TERM BORROWINGS

    Short-term borrowings consist principally of European bank overdrafts and
    other facilities, which are used principally for working capital purposes
    and are secured by accounts receivables and inventories of certain European
    subsidiaries. Borrowings aggregating $4,502,000 and $2,640,000 were
    outstanding as of December 31, 1997 and 1996, respectively, at weighted
    average interest rates of 7.4% and 8.6%, respectively.

    The Company has unused credit facilities available to its European
    subsidiaries of $2,902,000 at December 31, 1997.

                                      F-11
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



(5) LONG-TERM DEBT

    Long-term debt consists of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                             DECEMBER 31
                                          ------------------
                                            1997      1996
                                          --------  --------

<S>                                       <C>       <C>
          Senior Subordinated Notes       $120,000  $120,000
          New Credit Facility              102,638   103,688
          Revolving credit agreement         5,000        --
          Other                             16,132    15,036
                                          --------  --------
                                           243,770   238,724
          Less current installments          5,199     5,857
                                          --------  --------
                                          $238,571  $232,867
                                          ========  ========
</TABLE>

    SENIOR SUBORDINATED NOTES


    On August 18, 1995, the Company sold $120,000,000 principal amount of Senior
    Subordinated Notes due 2005 (Senior Subordinated Notes) to consummate the
    refinancing of a substantial portion of the Company's long-term debt. In
    connection with the refinancing transactions, the Company recognized an
    extraordinary loss of $9,528,000, which included call premiums of redeemed
    notes, certain fees and the write-off of the related deferred financing
    costs.

    Interest on the Senior Subordinated Notes accrues at a rate of 11.5% per
    annum and is payable semiannually, which commenced February 15, 1996. The
    notes are redeemable at the option of the Company, in whole or in part, at
    any time on or after August 15, 2000, at a redemption price of 105.75% of
    the principal amount, decreasing to 102.875% in 2001 and to 100% by 2002. No
    principal payments are due until August 15, 2005.

    NEW CREDIT FACILITY

    On August 18, 1995, the Company entered into a senior secured credit
    agreement (New Credit Facility) pursuant to which $105,000,000 was made
    available on September 18, 1995, to consummate the refinancing of a
    substantial portion of the Company's long-term debt. In addition, the New
    Credit Facility included a $20,000,000 revolving line of credit (Revolver)
    to support the Company's working capital requirements.

    The term loan component of the New Credit Facility includes two portions:
    Series A with a face value of $60,000,000 due 2003 and Series B with a face
    value of $45,000,000 due 2004. The Series A bears interest at either London
    Interbank Offered Rate (LIBOR) which was 5.81% at December 31, 1997 plus 3%
    per annum or a Base Rate which was 8.50% at December 31, 1997, as defined,
    plus 2% per annum. The Series B bears interest at either a LIBOR rate plus
    3.25% per annum or a Base Rate, as defined, plus 2.25% per annum. In
    connection with LIBOR interest rate options, interest is payable at the
    Company's election, for either a one-, two-, three- or six-month period.

    The New Credit Facility is secured by a first priority interest in nearly
    all domestic assets, including both tangible and intangible assets, of the
    Company and a pledge of a portion of the capital shares of the Company's
    subsidiaries.

                                      F-12
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


    On July 16, 1997, the Company amended (Second Amendment) the Credit
    Agreement to permit the Company to acquire certain assets of its existing
    licensee in Argentina and Brazil, and to make certain other amendments, as
    they relate to the Second Amendment.

    Subsequent to year end, on January 20, 1998, the Company amended (Third
    Amendment) the Credit Agreement by increasing the Series A obligation by
    $5,000,000 to support the Company's working capital requirements.

    REVOLVING CREDIT AGREEMENTS

    On September 18, 1995, the Revolver of the New Credit Facility became
    available to the Company. The Revolver provided for borrowings of up to
    $20,000,000 based on 75% of eligible domestic accounts receivable and 40% of
    eligible domestic inventory.

    In October 1996, the Company amended its New Credit Facility. The amendment
    replaced its current lender under the Revolver within the New Credit
    Facility through assignment and repayment, reduced the maximum borrowings
    permitted under the Revolver from $20,000,000 to $12,000,000, revised
    certain financial covenants pursuant to the New Credit Facility and provided
    some technical revisions to the New Credit Facility. Commitment fees
    relating to the Revolver increased from $75,000 to $125,000 for an annual
    administration fee and continue to include a 0.5% non-use fee based on a
    daily average of the unused credit facility balances. The Revolver
    terminates in 1999 and bears interest at either LIBOR plus 2.5% or a Base
    Rate, as defined, plus 1.5%. At December 31, 1997, the borrowing base test
    permitted the Company to borrow up to $12,000,000. At such date, the Company
    had borrowings outstanding and letters of credit of $5,000,000 and
    $1,000,000, respectively leaving $6,000,000 available for borrowing.

    In connection with obtaining the amendment and significantly modifying the
    New Credit Facility, the Company incurred fees (to lenders and advisors) of
    $704,000. These amounts were recorded as debt issue costs and are amortized
    over the remaining terms of the respective components of the New Credit
    Facility. In addition, the Company recognized an extraordinary loss on the
    extinguishment of the Revolver under the New Credit Facility in the amount
    of $618,000.

    COVENANTS

    In connection with the New Credit Facility and other debt agreements, the
    Company has agreed to comply with a number of restrictive and financial
    covenants that require, among other things, limiting the ability of the
    Company and its subsidiaries to incur debt, issue certain preferred stock,
    create liens securing subordinated debt, sell or transfers assets, make
    restricted payments (dividends, redemptions, investments and unscheduled
    payments on subordinated debt) and engage in certain transactions with
    affiliates and certain mergers. The New Credit Facility also contains
    certain financial covenants, including, but not limited to, covenants
    related to a minimum interest coverage ratio, a minimum consolidated EBITDA,
    a maximum leverage ratio and a minimum current asset ratio. In addition, the
    New Credit Facility contains other affirmative and negative covenants
    relating to (among other things) limitations on capital expenditures, other
    indebtedness, liens, investments, guarantees, restricted junior payments
    (dividends, redemptions and payments on subordinated debt), mergers and
    acquisitions, sales of assets, leases and transactions with affiliates. The
    New Credit Facility also contains customary events of default, including
    certain changes of control of the Company. As of December 31, 1997, the
    Company was in compliance with all covenants contained in such debt
    instruments.

                                      F-13
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


   MONTURAS ACQUISITION OBLIGATIONS

   In connection with the acquisition of the remaining 51% interest in Monturas
   in December 1992, the Company agreed to pay certain amounts aggregating
   $7,949,000 through February 1, 1998 (Monturas Acquisition Obligations).  Such
   payments were discounted to a present value of $6,553,000 at the date of
   acquisition using an estimated market rate of interest of 8% and have been
   included as part of the cost of the acquisition.  The fixed portion of the
   Monturas acquisition obligation was fully paid during 1996.  Additional
   payments beyond the above amounts may be payable to the seller through 1998
   based on a fixed formula of worldwide sales of specific products.  Such
   additional amounts will be expensed if and when they are earned.  No such
   amounts were earned through December 31, 1997.

   OTHER

   Other long-term debt consists of (1) domestic equipment notes payable
   aggregating $9,417,000 and $7,999,000 as of December 31, 1997 and 1996,
   respectively, bearing interest at rates ranging from 7.6% to 10.2% and due in
   various monthly installments through 2002; (2) notes payable aggregating
   $5,892,000 and $5,465,000 as of December 31, 1997 and 1996, respectively, to
   four German commercial banks, bearing interest at rates ranging from 5.5% to
   8.3%, due in scheduled maturities of various amounts through 2005,
   collateralized by land, building and equipment; (3) various capital lease
   obligations aggregating $823,000 and $1,572,000 as of December 31, 1997 and
   1996, respectively, due in scheduled maturities of various amounts through
   2000.

   Principal amounts due under all long-term debt agreements are presented below
   (dollars in thousands):

<TABLE>
<CAPTION>
               Year ending  December 31:
               <S>                             <C>
                1998                           $  5,199
                1999                             18,591
                2000                             15,464
                2001                             18,054
                2002                             18,297
                Thereafter                      168,165
                                               --------
                     Total                     $243,770
                                               ========
</TABLE>

                                      F-14
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



(6) FAIR VALUE OF FINANCIAL INSTRUMENTS

    Accounts receivable, short-term borrowings and accrued liabilities are
    carried at cost which approximate fair value due to their short-term
    maturity. The estimated fair values of the Company's other financial
    instruments are as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                               DECEMBER 31, 1997
                                            ----------------------
                                             CARRYING      FAIR
                                              AMOUNT       VALUE
                                            ---------    ---------
                                                        (UNAUDITED)
               <S>                          <C>          <C>
               Cash and cash equivalents    $   7,218    $   7,218
                                            =========    =========
               Long-term debt:
                Senior Subordinated Notes   $ 120,000    $ 126,600
                New Credit Facility           102,638      102,638
                Revolver                        5,000        5,000
                Long-term debt - other         16,132       16,132
                                            ---------    ---------

                     Total long-term debt   $ 243,770    $ 250,370
                                            =========    =========

               Interest rate cap            $      55    $      55
                                            =========    =========

               Foreign currency agreement   $      29    $      29
                                            =========    =========
</TABLE>

(7) ACCRUED LIABILITIES

    Accrued liabilities consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                                 DECEMBER 31
                                            ----------------------
                                              1997         1996
                                            ---------    ---------

               <S>                          <C>          <C>
               Compensation and benefits    $   6,626    $   6,646
               Interest payable                 5,668        5,625
               Other                            5,848        6,975
                                            ---------    ---------

                                            $  18,142    $  19,246
                                            =========    =========
</TABLE>

(8) STOCKHOLDERS' DEFICIENCY

    PREFERRED STOCK

    The Company has issued two series of preferred stock, Series A Preferred
    Stock (Series A) and Series B Preferred Stock (Series B). The Senior
    Subordinated Notes and the New Credit Facility limit the ability of the
    Company to pay dividends on or redeem the Series A and Series B. Dividends
    on the Series A and Series B accrue and compound quarterly at the rate of
    15% per annum and are each payable in

                                      F-15
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



    shares of the Company's Series A and Series B. Subject to certain
    limitations, the Series A and Series B may each be redeemed, at the option
    of the Board, in cash for $100 and $10, respectively, per share, plus
    accrued and unpaid dividends. Subject to certain limitations, the Series A
    and Series B are exchangeable at any time at the option of the Company for
    ten year 15% junior subordinated notes. Holders of outstanding shares of the
    Series A and Series B shall each vote as a single class with the common
    stock and are entitled to two votes per share of Series A and Series B.

    Cumulative dividends aggregating 78,463,000 had accrued on the Series A and
    Series B through December 31, 1997. Such dividends, payable in shares of
    Series A and Series B, were not declared as of the balance sheet date and
    therefore are not reflected as issued. Such dividends per weighted average
    share of preferred stock were $37.85, $32.66 and $28.19 in 1997, 1996 and
    1995, respectively.

    WARRANTS

    In conjunction with certain equity issuances, including the issuance of
    preferred stock, the Company has issued warrants to purchase shares of
    common stock. The warrants are immediately exercisable in exchange for one
    share of common stock and expire eight years from the date of issuance. The
    warrants begin to expire 1996 through 2001. A summary of warrant activity is
    as follows:

<TABLE>
<CAPTION>
                                        NUMBER OF       PRICE PER
                                        WARRANTS         SHARES
                                        ---------     --------------

     <S>                                <C>           <C>
     Outstanding, December 31, 1995     5,832,233     $ 7.50 - 10.00

     Warrants expired                     (75,000)     10.00
                                        ---------     --------------

     Outstanding, December 31, 1996     5,757,233       7.50 - 10.00

     Warrants expired                          --                 --
                                        ---------     --------------

     Outstanding, December 31, 1997     5,757,233     $ 7.50 - 10.00
                                        =========     ==============
</TABLE>

(9) STOCK OPTIONS

    The Company has a Nonqualified Stock Option Plan which authorizes the
    granting of options to directors, officers and key employees of the Company
    or its subsidiaries to purchase, within a period of ten years and one month
    from date of grant, up to 216,360 shares of the Company's common stock at a
    price per share determined by the Board of Directors. All options granted
    have an exercise price of $10 per share which was estimated to be no less
    than the fair market value on the date of grant. As of December 31, 1997,
    there were 64,183 shares available for grant under the plan.

    Options granted under the Nonqualified Stock Option Plan generally vest over
    a five-year period. The exercisability of the options may be accelerated at
    the option of the Compensation Committee of the Board of Directors. Options
    outstanding and exercisable at December 31, 1997, 1996 and 1995 were
    152,177, 154,177 and 152,777 and 158,217 and 144,817 respectively.

                                      F-16
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



   Changes in the number of shares represented by all outstanding options are as
   follows:

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31
                                                      ------------------------------------
                                                       1997          1996           1995
                                                      -------       -------       --------

<S>                                                   <C>           <C>           <C>
Outstanding at beginning of year ($10 per share)      154,177       158,217        295,023

Options granted ($10 per share)

Options canceled ($10 per share)                       (2,000)       (4,040)      (136,806)
                                                      -------       -------       --------

Outstanding at end of year ($10 per share)            152,177       154,177        158,217
                                                      =======       =======       ========
</TABLE>

   In December 1995, the Board approved and adopted the Calmar Inc. 1995
   Employee Stock Option Plan (the New Plan).  The New Plan is a successor to
   the Calmar Inc. 1988 Employee Stock Option Plan (the Old Plan) and has been
   established to replace the Old Plan and grant additional options to officers,
   outside directors, key employees and consultants of the Company.  Under the
   New Plan, the employees owning options under the Old Plan are allowed to
   exchange their old options for new options.  The new options cover the same
   number of shares and are exercisable at the same option price as the old
   options.  The employees are vested in the new option to the same extent as
   they are vested in the old options.  The expiration dates on the new options
   will extend for two years beyond the expiration date of the old options.  At
   December 31, 1997, no holders of options under the old plan have exchanged
   for options under the new plan.

   The New Plan authorizes granting of up to 910,000 options to purchase shares
   of common stock.  The options under the New Plan are designated as either
   Incentive Stock Options or Nonqualified Stock Options.  The options expire no
   more than ten years from the date of grant.  The exercise price of the
   Incentive Stock Options are not less than the fair market value at the date
   of the grant.  The exercise price of the Nonqualified Stock Options are not
   less than 85% of the fair market value on the date of the grant.  Vesting of
   all options may be based on the Company's attaining of performance criteria
   as specified at the time of the granting and on the passage of time.  As of
   December 31, 1997, no options had been granted under the Plan.

                                      F-17
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



(10) EMPLOYEE BENEFITS

     POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

     At December 31, 1997 and 1996, the actuarial and recorded liabilities for
     post-retirement benefits other than pensions for eligible domestic
     employees, none of which have been funded, were as follows (dollars in
     thousands):

<TABLE>
<CAPTION>
                                                                      1997       1996
                                                                     ------     ------

      <S>                                                            <C>        <C>
      Accumulated postretirement benefit obligation:
         Retirees                                                    $3,960     $3,744
         Active employees fully eligible                                699        977
         Other active employees                                       1,611      1,742
                                                                      -----      -----
             Total                                                    6,270      6,463

      Plan assets at fair value                                                     --
                                                                      -----      -----
             Excess of accumulated postretirement benefit
              obligation over plan assets
                                                                      6,270      6,463

      Unrecognized net gain                                           4,192      3,841
      Unrecognized prior service cost                                  (552)      (636)
                                                                      -----      -----
            Accrued postretirement benefit cost
                                                                     $9,910     $9,668
                                                                      =====      =====
</TABLE>

     The components of periodic expense for these postretirement benefits for
     1997, 1996 and 1995 were as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                       1997     1996     1995
                                                      -----    -----    -----
<S>                                                   <C>      <C>      <C>
     Service cost                                     $ 131    $ 164    $ 177
     Interest cost                                      413      416      499
     Net amortization                                  (202)    (165)    (167)
                                                      -----    -----    -----
         Net periodic postretirement benefit cost     $ 342    $ 415    $ 509
                                                      =====    =====    =====
</TABLE>

     The weighted-average discount rates used in determining the accumulated
     postretirement benefit obligation and net periodic postretirement benefit
     cost were 7.25% and 7.75% in 1997, 7.75% and 7.25% in 1996 and 7.25% and 9%
     in 1995, respectively.

                                      F-18
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


   The health care cost trend rates for both the indemnity and HMO Plans for
   1995 through 2007 and thereafter are as follows:

<TABLE>
<CAPTION>
                                1997      1996      1995
                                ----      ----      ----

     <S>                        <C>       <C>       <C>
     Indemnity plan               9%       10%       10%
     HMO plan                     7         7         7
     Ultimate indemnity plan      5         5         5
     Ultimate HMO plan            4         4         4
</TABLE>

   The health care trend rate has a significant effect on the amounts reported.
   To illustrate, increasing the health care trend rates by one percentage point
   each year would increase the accumulated postretirement benefit obligation as
   of December 31, 1997 by $488,000 and the aggregate of the service and
   interest cost components of the net periodic postretirement benefit cost for
   1997 by $58,000.

   PENSION PLANS

   The Company has domestic and foreign noncontributory defined benefit plans
   covering substantially all employees except certain domestic hourly factory
   employees who are covered by union retirement plans and all employees at the
   Company's subsidiary in Spain.  Employees with more than one year of service
   are eligible to participate in the plans.  The benefits payable under the
   plans are generally determined on the basis of the employee's length of
   service and earnings.

   The Company's funding policy for the U.S. plan is to contribute annually the
   minimum recommended contribution, while no funding is made for the foreign
   plan.  The following table sets forth the funded status and amounts
   recognized in the Company's consolidated balance sheets as of December 31,
   1997 and 1996 for the U.S. and foreign plans (dollars in thousands):

<TABLE>
<CAPTION>
                         DECEMBER 31, 1997                             U.S. PLAN   FOREIGN PLAN
--------------------------------------------------------------------   ---------   ------------

<S>                                                                    <C>          <C>
Actuarial present value of benefit obligations:
 Vested benefit obligation                                              $ 16,884     $ 2,663
                                                                        ========     =======
 Accumulated benefit obligation                                         $ 18,078     $ 3,536
                                                                        ========     =======
Projected benefit obligation for service rendered to date               $ 21,880     $ 4,367
      Plan assets at fair value on December 31, 1997                      18,742          --
                                                                        --------     -------
Projected benefit obligation in excess of plan assets                      3,138       4,367
Unrecognized net gain from past experience different from that
 assumed and effects of changes in assumptions                              (342)      1,200

Prior service cost not yet recognized in net periodic
pension cost                                                                 (42)         --
                                                                        --------     -------
      Accrued pension cost                                              $  2,754     $ 5,567
                                                                        ========     =======
</TABLE>

                                      F-19
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



<TABLE>
<CAPTION>
                            DECEMBER 31, 1996                             U.S. PLAN  FOREIGN PLAN
   --------------------------------------------------------------------   ---------  ------------

   <S>                                                                     <C>         <C>
   Actuarial present value of benefit obligations:
    Vested benefit obligation                                              $13,785     $2,783
                                                                           =======     ======
    Accumulated benefit obligation                                         $14,801     $3,881
                                                                           =======     ======
   Projected benefit obligation for service rendered to date               $18,062     $4,917
   Plan assets at fair value on December 31, 1996                           15,897          -
                                                                           -------     ------
         Projected benefit obligation in excess of plan assets               2,165      4,917
   Unrecognized net gain from past experience different from that
    assumed and effects of changes in assumptions                              204      1,177
   Prior service cost not yet recognized in net periodic
    pension cost                                                               (83)         -
                                                                           -------     ------
         Accrued pension cost                                              $ 2,286     $6,094
                                                                           =======     ======
</TABLE>

   Plan assets consist of equity securities, U.S. Government obligations and
   cash equivalents.

   Net periodic pension costs for 1997, 1996 and 1995 consist of the following
   (dollars in thousands):

<TABLE>
<CAPTION>
                                     U.S. PLAN               FOREIGN PLAN
                            ---------------------------   ------------------
                              1997      1996      1995    1997   1996   1995
                            -------    ------    ------   ----   ----   ----

<S>                         <C>        <C>       <C>       <C>    <C>    <C>
Service cost                $   889       879       611    219    249    251
Interest cost                 1,373     1,305     1,146    285    316    332
Actual return on assets      (3,237)   (2,137)   (3,202)     -      -      -
Net amortization and
 deferral                     1,922     1,192     2,268    (59)   (53)   (48)
                            -------    ------    ------    ---    ---    ---
      Net periodic
       pension cost         $   947     1,239       823    445    512    535
                            =======    ======    ======    ===    ===    ===
</TABLE>

   The weighted-average discount rate and rate of increase in future
   compensation levels used in determining the actuarial present value of the
   projected benefit obligation for the U.S. plan were 7.25% and 5% in 1997,
   7.75% and 5% in 1996 and 7.25% and 5% in 1995.  The average expected long-
   term rate of return on assets was 9% in 1997 and 1996 and 8.5% in 1995,
   respectively.

   The weighted-average discount rate and rate of increase in future
   compensation levels used in determining the actuarial present value of the
   projected benefit obligation for the foreign plan were 7% and 4% in 1997 and
   1996 and 7.5% and 4.5% in 1995.

                                      F-20
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


     MULTIEMPLOYER PENSION PLAN

     Certain of the Company's domestic hourly employees are covered by union-
     sponsored, collectively-bargained multiemployer pension plans.
     Contributions into multiemployer pension plans are based upon collectively-
     bargained agreements and were $587,000, $486,000 and $479,000 in 1997, 1996
     and 1995, respectively.

     SAVINGS PLAN (401(K) PLAN)

     In general, all domestic employees other than those covered under union
     agreements are eligible to participate in a defined contribution plan
     sponsored by the Company, which is qualified under section 401(k) of the
     Internal Revenue Code. The Company contributes to the plan an amount equal
     to a portion of each participant's contribution. Expense for the Company's
     401(k) Plan was $660,000, $627,000 and $624,000 in 1997, 1996 and 1995,
     respectively.

     INCENTIVE PLANS

     The Company has incentive plans covering certain domestic personnel of the
     Company. Incentive bonuses of $1,709,000, $1,250,000 and $971,000 were
     provided for under these plans in 1997, 1996 and 1995, respectively.

     EMPLOYMENT CONTRACTS

     Certain executive officers are employed under employment contracts
     containing customary employment terms and providing for base annual
     salaries and for annual incentive bonuses as the Board of Directors may, in
     its discretion, determine pursuant to its incentive plan in accordance with
     past practices or otherwise. Upon termination, they are entitled to certain
     severance benefits, unless termination is for cause, at which point the
     Company will have no further obligation. These benefits have not been
     accrued since it is not probable the liability will be incurred.

(11) INCOME TAXES

     The components of the income (loss) before income tax provision (benefit)
     and extraordinary item are as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                  YEAR ENDED DECEMBER 31
                                               -----------------------------
                                               1997       1996        1995
                                              ------     -------     -------

<S>                                           <C>        <C>         <C>
        Domestic earnings (loss)              $2,175     $(4,455)    $(8,467)
        Foreign earnings (loss)                 (544)        843       3,118
                                              ------     -------     -------

             Income (loss) before income tax
              provision (benefit) and
              extraordinary item              $1,631     $(3,612)    $(5,349)
                                              ======     =======     =======
</TABLE>

                                      F-21
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



   There was no tax benefit recorded in connection with the extraordinary items.

   The income tax provision (benefit) associated with the income (loss) before
   extraordinary item is comprised of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                      YEAR ENDED DECEMBER 31
                                  ------------------------------
                                   1997        1996        1995
                                  -------     -------     ------
     <S>                          <C>         <C>         <C>
     Current:
      Domestic                    $   149     $    22     $  (79)
      Foreign                       1,334         815      2,093
     Deferred - foreign            (1,549)     (1,051)      (931)
                                  -------     -------     ------

           Total                  $   (66)    $  (214)    $1,083
                                  =======     =======     ======
</TABLE>

   Provision has not been made, with certain exceptions, for U.S. or additional
   foreign taxes on approximately $13,500,000 of undistributed earnings of
   foreign subsidiaries, as those earnings are intended to be indefinitely
   reinvested.  If, not withstanding management's intent in this regard, such
   undistributed earnings become taxable in the U.S. by repatriation or other
   means, net operating loss carryforwards and foreign tax credits would be
   available to mitigate substantially all of the U.S. tax liability
   attributable to such earnings.

   The income tax provision (benefit) related to the income (loss) before
   extraordinary item differs from the amounts computed by applying the United
   States statutory income tax rate as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                    YEAR ENDED DECEMBER 31
                                                -------------------------------
                                                 1997        1996        1995
                                                -------     -------     -------
<S>                                             <C>         <C>         <C>
Income tax provision (benefit) at statutory
 tax rate                                       $   571     $(1,264)    $(1,872)
Extraordinary item                                   --        (216)     (3,293)
Effect of foreign operations                        (42)       (301)        (23)
Effect of domestic net operating loss            (1,962)       (688)      5,931
Amortization of goodwill                          1,005       1,005       1,005
Accrued bonuses                                      --         438
Other                                               362         812        (665)
                                                -------     -------     -------

     Income tax provision (benefit)             $   (66)    $  (214)    $ 1,083
                                                =======     =======     =======
</TABLE>

                                      F-22
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued



   The tax effects of temporary differences that give rise to significant
   portions of the deferred tax assets and deferred tax liabilities at
   December 31, 1997 and 1996 are presented below (dollars in thousands):

<TABLE>
<CAPTION>
                                                      1997         1996
                                                    --------     --------
     <S>                                            <C>          <C>
     Deferred tax assets:
      Self insurance reserves                       $    401     $    469
      Inventories, principally due to additional
       costs for tax purposes                            223          293
      Deferred bonus payments                            710          520
      Accrued vacation                                 1,233        1,038
      Accrued postretirement benefit obligation        4,117        4,067
      Accrued pension                                  1,501        1,415
      Net operating loss carryforward                 14,246       18,826
      Other                                            1,134        1,378
                                                    --------      -------
           Total gross deferred tax assets            23,565       28,006
      Less valuation allowance                       (15,368)     (19,079)
                                                    --------      -------
           Net deferred tax assets                     8,197        8,927
                                                    --------      -------
     Deferred tax liabilities:
      Plant and equipment, principally due to
       differences in depreciation                    (9,198)     (10,212)
      Intangibles, principally due to differences
       in amortization                                  (463)        (639)
      Difference in basis of noncurrent assets
       related to Monturas acquisition                (6,037)      (7,086)
      Other                                           (3,330)      (3,370)
                                                    --------      -------
           Total gross deferred tax liabilities      (19,028)     (21,307)
                                                    --------      -------
           Net deferred tax liabilities             $(10,831)    $(12,380)
                                                    ========      =======
</TABLE>

   The increase or (decrease) in the valuation allowance in 1997, 1996 and 1995
   was $(3,711,000), $1,068,000 and $7,371,000, respectively.

   As of December 31, 1997, the Company had Federal net operating loss
   carryforwards for tax purposes of approximately $36,700,000, which, if not
   utilized, will expire in 2003 through 2010.

   The Company's Federal income tax returns for calendar years 1986 through 1991
   are currently under examination by the Internal Revenue Service (IRS).  On
   March 1997, the Company received notice from the IRS of proposed
   adjustments for such calendar years which would result in additional Federal
   taxes of up to $5,500,000, plus interest from the date when such additional
   taxes would have been due, and in the reduction of the Company's net
   operating loss carryovers from $36,700,000 to $27,600,000.  Most of the
   proposed adjustments relate to the Company's amortization deductions with
   respect  to a covenant not to compete purchased from the Company's former
   parent corporation when that corporation sold a controlling interest in the
   Company in 1988.

                                      F-23
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


     The Company, after consultation with tax counsel, continues to believe in
     the propriety of its positions set forth in its tax returns and will
     vigorously contest the adjustments being proposed by the IRS.

     At December 31, 1997, the Company has recorded a significant valuation
     allowance against its net deferred tax assets, which includes net operating
     loss carryovers. No additional amounts have been accrued for any alleged
     deficiency resulting from the proposed adjustments as the Company does not
     presently believe that any payment amount is probable.

(12) SEGMENT AND FOREIGN OPERATIONS

     The Company operates in one industry segment: the design, manufacture and
     sale of plastic pump sprayers, dispensers, valves and closures as well as
     various custom-molded products.

     The foreign subsidiaries operate in four geographical areas: Western
     Europe, Canada, South America and Asia. Information relating to the
     Company's foreign and domestic operations are as follows (dollars in
     thousands):

<TABLE>
<CAPTION>
                                              YEAR ENDED DECEMBER 31
                                   ------------------------------------------
                                      1997            1996            1995
                                   ----------      ----------       ---------
     <S>                          <C>             <C>             <C>
     Sales:
      United States                $  158,926      $  144,094      $  143,428
      Western Europe                   78,679          81,122          85,991
      Canada                            6,498           6,045           6,489
      South America                     3,881              --              --
      Eliminations                    (17,739)        (11,824)        (11,443)
                                   ----------      ----------       ---------
                                   $  230,245      $  219,437      $  224,465
                                   ==========      ==========       =========
<CAPTION>
                                              YEAR ENDED DECEMBER 31
                                   ------------------------------------------
                                      1997            1996             1995
                                   ----------      ----------       ---------
     <S>                          <C>             <C>             <C>
     Operating income (loss):
      United States                $   25,719      $   18,918      $   17,669
      Western Europe                      145            (120)          2,149
      Canada                              243             426             471
      South America                      (436)             --              --
      Eliminations                       (332)            129             173
                                   ----------      ----------       ---------
                                   $   25,339      $   19,353      $   20,462
                                   ==========      ==========       =========
</TABLE>

                                      F-24
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


<TABLE>
<CAPTION>
                                                  DECEMBER 31
                                   -----------------------------------------
                                      1997           1996            1995
                                   ----------     ----------      ----------
<S>                                <C>            <C>             <C>
     Identifiable assets:
      United States                $  181,214     $  176,431      $  181,014
      Western Europe                   96,333        104,551         106,977
      Canada                            2,146          2,415           2,474
      South America                     5,586              -               -
      Eliminations                       (638)          (659)           (680)
                                   ----------     ----------      ----------

                                   $  284,641     $  282,738      $  289,785
                                   ==========     ==========      ==========
</TABLE>

     Export sales from the United States aggregated $20,577,000, $21,668,000 and
     $20,887,000 in 1997, 1996 and 1995, respectively.

(13) RELATED PARTY TRANSACTIONS

     The Company has made loans to certain executive officers which are
     evidenced by promissory notes and secured by deeds of trust. The loans have
     maturities up to 30 years. As of December 31, 1997 and 1996, outstanding
     principal amounts of $772,000 and $619,000, respectively, are included in
     other assets in the accompanying consolidated balance sheets. Included in
     the above amounts are loans in the amount of $289,000 and $339,000 at
     December 31, 1997 and 1996, respectively, which carry interest at a rate of
     0.25% per annum and are payable in the year 2006. The remaining notes do
     not bear interest unless the officers are terminated for other than
     reasonable cause, at which time the notes will bear interest at the rate of
     10% per annum. Upon termination for cause, the entire amount of the loan
     may become due and payable. The terms of the loan may be more favorable
     than terms which would be obtained from an unrelated third party.

     The Company holds promissory notes from certain executive officers for the
     purchase of common stock. These notes aggregated $570,000 and $554,000 at
     December 31, 1997 and 1996, respectively, and mature in 1998. Interest on
     these stock subscription notes accrue at defined interest rates which
     approximated 8.25% at December 31, 1997 and 1996.

     As of December 31, 1997, a certain executive officer had deferred $779,000
     of compensation. The Company is paying interest on this deferred amount.

(14) COMMITMENTS AND CONTINGENCIES

     ROYALTIES

     Under the terms of various exclusive and nonexclusive licensing agreements,
     the Company is obligated to pay royalties based on percentages of the net
     sales (as defined) of products subject to such agreements. The agreements,
     which generally extend for the life of the respective patents, are
     cancelable by the Company at any time. The licensor has the right to cancel
     the agreements under certain conditions, primarily default on royalty
     payments. Royalty expense related to the agreements was $137,000 in both
     1997 and 1996 and $160,000 in 1995.

                                      F-25
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


   LEASES

   The Company leases certain warehouse and office facilities and equipment
   under noncancelable operating leases. The aggregate minimum future lease
   commitments under operating leases with noncancelable terms of one year or
   more are as follows (dollars in thousands):

<TABLE>
<CAPTION>
                   Year ending December 31:
                   <S>                             <C>
                    1998                           $1,108
                    1999                              900
                    2000                              520
                    2001                              389
                    2002                              376
                    Thereafter                      3,183
                                                   ------
                                                   $6,476
                                                   ======
</TABLE>

   Rental expense was $1,317,000, $1,103,000 and $992,000 1997, 1996 and 1995,
   respectively.

   ENVIRONMENTAL


   Management believes the Company is in substantial compliance with national,
   state and local laws and regulations governing the use, discharge and
   disposal of hazardous materials, except as outlined below.  In June 1987, the
   California Regional Water Quality Control Board (Water Control Board)
   required the Company to conduct an investigation of possible soil and
   groundwater contamination of the Company's City of Industry facility.  This
   investigation indicated that soils and groundwater under the site had been
   impacted by industrial cleaning solvents.  Since 1987, the Company has
   continued to investigate and monitor the site.  The investigations performed
   to date indicate that some of the contamination on the site may result from
   off-site sources unrelated to the Company.  The Water Control Board has
   requested that the Company begin soil remediation at the site.  In October
   1997, the Company submitted a soil remediation plan to the Water Control
   Board and is currently waiting for Board approval.  The Company also
   continues to evaluate soil cleanup options.  The Company believes it will
   have some insurance coverage for this matter.

   In June 1993, the EPA sent 64 companies and individuals, including the
   Company, letters notifying the recipients that they were considered
   potentially liable for groundwater contamination in the Puente Valley
   Operable Unit of the San Gabriel Superfund Site.  The Company's City of
   Industry facility is located in the Puente Valley Operable Unit.  In response
   to the EPA's request, the Company and a majority of the recipients of the
   notice formed a steering committee known as the Puente Valley Steering
   Committee (PVSC).  In September 1993, 47 companies (including Calmar) and
   individuals in the Puente Valley, entered into a Administrative Order on
   Consent (AOC) whereby such companies and individuals, including the Company,
   agreed to conduct a remedial investigation/feasibility study under the
   oversight of the EPA.  A Remedial Investigation Report and Feasibility Study
   were issued in May 1997.  The total costs related to conducting this study
   were estimated to be approximately $5,000,000, of which $4,800,000 has been
   paid to date.  The Company's share is expected to be approximately $150,000
   of which $132,000 has been paid to date.  The Company believes that it will
   have some insurance coverage in this matter.

                                      F-26
<PAGE>

                                  CALMAR INC
                               AND SUBSIDIARIES

             Notes to Consolidated Financial Statements, Continued


   In January 1998, the EPA issued a proposed remediation plan which identified
   a remedial system for intermediate and shallow groundwater zones as the
   preferred remedy.  The estimated cost of the plan, if ultimately approved, is
   approximately $29 million if only treatment for industrial solvents is
   necessary or $51 million if treatments for total dissolved solids and
   nitrates is also required.  The EPA is expected to issue its final Record of
   Decision by mid 1998.  Upon issuance of the final Record of Decision, it is
   expected that the potentially responsible parties (PRP) identified by the EPA
   will develop specific remediation plans in response to a demand by the EPA
   and that the parties will participate in a cost allocation process whereby
   each PRP will be allocated a percentage share of the remediation
   responsibility (and thus a percentage share of the remediation cost).  A
   precise estimate of total remediation cost ultimately to be paid by the
   Company is not yet determinable.  A more precise estimate of cost will be
   available upon issuance of the Record of Decision and a demand by the EPA,
   the development of the response and remediation plan by the PRP, and an
   agreement on allocable percentages of responsibility to the PRP.  It is
   expected that any remediation plan developed by the PRP will include ongoing
   monitoring of the site, as well as, some response action for the shallow and
   intermediate groundwater zones.  It is estimated that any remediation would
   require at least 15 years to complete and potentially significantly longer.
   The Company believes it has insurance coverage for legal defense costs, and
   possibly, indemnity in this matter.  Some amounts of defense costs have
   already been paid by the carriers.  No amounts have yet been incurred for
   remediation and therefore no claims have been forwarded to the carriers for
   payment.  At December 31, 1997, the Company has accrued approximately
   $400,000 for potential environmental liability.  Estimates of ultimate
   liability may change significantly based upon the nature of the proposed
   remediation plan which has yet to be developed by the PRP, as well as, the
   Company's final allocated percentage of responsibility.

   The Company may be required to incur other costs and expenses from time to
   time in order to generally comply with environmental laws and regulations,
   however, the Company does not anticipate that such costs and expenses will
   have a material adverse effect on the Company's results of operations.  No
   assurances can be given, however, that the historical, current or future uses
   and conditions of the Company's facilities or operations will not result in
   the imposition of liability under environmental laws.

                                      F-27
<PAGE>

                         CALMAR INC. AND SUBSIDIARIES

                Schedule II - Valuation and Qualifying Accounts
                                 Consolidated
                 Years ended December 31, 1995, 1996 and 1997
                            (dollars in thousands)

<TABLE>
<CAPTION>
                                                                  Additions
                                       Balance           Charges to       Charges to                          Balance
                                    at Beginning         Costs and          Other         Deductions/          at End
Description                         of the Period         Expenses         Accounts      Write-offs (1)     of the Period
-----------                         -------------         --------         --------      --------------     -------------

<S>                                 <C>                   <C>              <C>           <C>                <C>
December 31, 1995:
 Allowance for doubtful accounts           $1,305           $  209            $   0             $  (113)           $1,401

 Reserve for obsolete inventories           1,387              381               70                (755)            1,083

 Self-insurance reserves (2)                2,155            4,558               36              (5,087)            1,662

 Environmental reserve                        500                -                -                (103)              397

 Defective product liability (3)               73              137              474                (356)              328
                                           ------           ------            -----             -------            ------

                    Total                   5,420            5,285              580              (6,414)            4,871
                                           ======           ======            =====             =======            ======
December 31, 1996:
 Allowance for doubtful accounts            1,401              501               13                (352)            1,563

 Reserve for obsolete inventories(4)        1,083              320             (270)               (706)              427

 Self-insurance reserves                    1,662            4,031                -              (4,569)            1,124

 Environmental reserve                        397              159                -                (156)              400

 Defective product liability (4)              328              130              232                (149)              541
                                           ------           ------            -----             -------            ------

                    Total                   4,871            5,141              (25)             (5,932)            4,055
                                           ======           ======            =====             =======            ======
December 31, 1997:
 Allowance for doubtful accounts(5)         1,563             (219)               -                (350)              994

 Reserve for obsolete inventories             427              546               86                (623)              436

 Self-insurance reserves                    1,124            3,974                -              (4,311)              787

 Environmental reserve                        400               33                -                 (25)              408

 Defective product liability                  541               46             (124)               (141)              322
                                           ------           ------            -----             -------            ------

                    Total                  $4,055           $4,380            $ (38)            $(5,450)           $2,947
                                           ======           ======            =====             =======            ======
</TABLE>
<PAGE>

(1)  Deductions/Write-offs include the effects of foreign currency translation
     totaling $116,000, ($20,000) and ($211,000) in 1995, 1996 and 1997,
     respectively.

(2)  Charges to other accounts includes excess liability insurance refunds on
     certain workman's compensation claims totaling $36,000 in 1995.

(3)  Charges to other accounts represents a reclassification of Calmar-Albert
     GmbH reserves to defective product liability in 1995.

(4)  Charges to other accounts primarily represents a reclassification of
     domestic reserves for obsolete inventories to domestic defective product
     liability.

(5)  Charges to costs and expenses includes a reduction in reserves of $302,640
     in 1997.
<PAGE>

                                 EXHIBIT INDEX

    Exhibit
    Number                               Description
    -------                              -----------
      3.1++  Certificate of Incorporation of Calmar Inc., as amended to date
             (with Certificate of Correction attached thereto).
      3.2*** Bylaws of Calmar Inc., as amended to date.
      4.1++  Indenture dated as of August 18, 1995 between Calmar Inc. and
             United States Trust Company of New York, as Trustee, with respect
             to the 11 1/2% Senior Subordina ted Notes due 2005.
      4.2++  Purchase Agreement, dated August 3, 1995, by and among Calmar Inc.,
             Goldman, Sachs & Co. and Merrill Lynch & Co.
      4.3++  Registration Rights Agreement, dated as of August 18, 1995, by and
             among Calmar Inc., Goldman, Sachs & Co. and Merrill Lynch & Co.
      4.4++  Credit Agreement dated as of August 18, 1995 between Calmar Inc.
             and Pearl Street L.P., Bankers Trust Company and the financial
             institutions listed therein (collectively, including Pearl Street
             L.P. and Bankers Trust Company, "Lenders"), Goldman, Sachs & Co.,
             as syndication agent, Bankers Trust Company, as administrative
             agent for Lenders, and Mellon Bank, N.A., as documentation agent
             and collateral agent for Lenders.
      4.5+++ Security Agreement, dated as of September 18, 1995, by and between
             Calmar Inc. and Mellon Bank, N.A., as Collateral Agent.
      4.6+++ Pledge Agreement, dated as of September 18, 1995, by and between
             Calmar Inc. and Mellon Bank, N.A., as Collateral Agent.
      4.7+++ Trademark Collateral Security Agreement, dated as of September 18,
             1995, by and between Calmar Inc. and Mellon Bank, N.A., as
             Collateral Agent.
      4.8+++ Patent Collateral and Security Agreement, dated as of September 18,
             1995, by and between Calmar Inc. and Mellon Bank, N.A., as
             Collateral Agent.
      4.9+++ Collateral Account Agreement, dated as of September 18, 1995, by
             and between Calmar Inc. and Mellon Bank, N.A., as Collateral Agent.
     4.10++  Deed of Trust, Assignment of Rents, Security Agreement and Fixture
             Filing (California), dated August 16, 1995, executed by Calmar
             Inc., as Trustor, in favor of Mellon Bank, N.A., as Collateral
             Agent, as Beneficiary, covering property located at 333 South
             Turnbull Canyon Road, City of Industry, California 91749.
     4.11++  Deed of Trust, Assignment of Rents, Security Agreement and Fixture
             Filing (Missouri), dated August 16, 1995, executed by Calmar Inc.,
             as Trustor, in favor of Mellon Bank, N.A., as Collateral Agent, as
             Beneficiary, covering property located at 1001 S.E. 291 Highway,
             Lee's Summit, Missouri 64081.
     4.12++  Deed of Trust, Assignment of Rents, Security Agreement and Fixture
             Filing (Missouri), dated August 16, 1995, executed by Calmar Inc.,
             as Trustor, in favor of Mellon Bank, N.A., as Collateral Agent, as
             Beneficiary, covering property located at 1204 Southwest Jefferson
             Road, Lee's Summit, Missouri 64081.
     4.13++  Mortgage, Assignment of Rents, Security Agreement and Fixture
             Filing (Ohio), dated August 16, 1995, executed by Calmar Inc., as
             Trustor, in favor of Mellon Bank, N.A., as Collateral Agent, as
             Beneficiary, covering properties located at 2550 Kenskill Avenue,
             Washington Court House, Ohio 43160, and 238 South Main Street,
             Washington Court House, Ohio 43160.
    10.1@@   Calmar Inc. Salaried Retirement Plan dated as of June 22, 1983,
             as  amended.
    10.2@@   Calmar Inc. Incentive Plan dated December 1983, as amended.
    10.3*    Stock Subscription Agreement dated as of December 8, 1988 among CSS
             Holding Corporation, FS Equity Partners II, L.P. (formerly RFS
             Equity Partners II, L.P.) (hereinafter, "FSEP II") and C. Richard
             Huebner, with form of note and pledge agreement attached thereto as
             Exhibits A and B, respectively.
    10.4*    Form of Stock Subscription Agreement dated as of December 1, 1988
             by and between CSS Holding Corporation and certain members of
             management who purchased shares of common stock of CSS Holding
             Corporation for cash.
    10.5*    Form of Stock Subscription Agreement dated as of December 1, 1988
             by and between CSS Holding Corporation and certain members of
             management who purchased shares of common stock of CSS Holding
             Corporation for promissory notes, with form of note attached
             thereto as Exhibit A.

                                       1

<PAGE>


  Exhibit
  Number                               Description
  -------                              -----------
   10.6*     Form of Stock Subscription Agreement dated as of December 1, 1988
             by and between CSS Holding Corporation and certain members of
             management who purchased shares of common stock of CSS Holding
             Corporation for cash and promissory notes, with form of note
             attached thereto as Exhibit A.
   10.7*     Stock Subscription Agreement dated as of December 8, 1988 by and
             among CSS Holding Corporation, FSEP II (formerly RFS Equity
             Partners II, L.P.) and Donald E. Knox.
   10.8***   CSS Holding Corporation 1988 Employee Stock Option Plan dated
             December 1, 1988, as amended.
   10.9*     Form of Nonqualified Stock Option Agreement by and between CSS
             Holding Corporation and certain members of management.
   10.10*    Form of Nonqualified Stock Option Agreement dated as of December 8,
             1988 between CSS Holding Corporation and C. Richard Huebner.
   10.11*    Form of Nonqualified Stock Option Agreement by and between CSS
             Holding Corporation and Donald E. Knox.
   10.12*    Registration Rights Agreement dated December 9, 1988 by and among
             CSS Holding Corporation, Beijer Industries AB and FSEP II.
   10.13*    Stockholders' Agreement dated December 9, 1988 among FSEP II
             (formerly RFS Equity Partners II, L.P.), Beijer Industries AB,
             Calmar Inc., CSS Holding Corporation and Calmar Spraying Systems,
             Inc.
   10.14*    Registration Rights Agreement dated as of December 8, 1988 by and
             among CSS Holding Corporation and the investors who are signatories
             thereto.
   10.15*    Purchase and Warrant Agreement dated as of December 8, 1988 by and
             among CSS Holding Corporation and the investors who are signatories
             thereto.
   10.16*    Promissory Note secured by Deed of Trust dated August 5, 1988 of C.
             Richard Huebner and Debra A. Huebner in favor of Calmar Inc., its
             successors and assigns.
   10.17*    Employment Agreement dated January 13, 1988 between Calmar Inc. and
             C. Richard Huebner.
   10.18@@   Calmar Inc. 401(k) Plan dated as of January 1, 1989, as amended.
   10.19***  Shareholders Agreement dated July 26, 1990 between
             Antonio Puig, S.A. and Others, J.M. Puig Planas and Others and
             Monturas S.A., on the one hand, and Calmar Spraying Systems, Inc.,
             on the other hand.
   10.20***  License Agreement dated as of July 27, 1990 between Monturas S.A.
             and Calmar Inc.
   10.21***  Distributorship Agreement dated as of July 27, 1990 between
             Monturas S.A. and Calmar Inc.
   10.22***  Agency Agreement dated as of July 27, 1990 between Monturas S.A.
             and Calmar Inc.
   10.23***  Sale and Purchase Agreement dated as of July 30, 1990 among Aerosol
             Research (Participations) S.A., Calmar Spraying Systems, Inc. and
             Cope Allman Packaging PLC.
   10.24***  Subscription Agreement dated as of September 28, 1990 among CSS
             Holding Corporation, FSEP II and Beijer Industries AB.
   10.25++   Securities Subscription Agreement dated as of September 28, 1990 by
             and among CSS Holding Corporation, FSEP II and C. Richard Huebner.
   10.26++   Form of Securities Subscription Agreement dated as of September 28,
             1990 by and between CSS Holding Corporation and certain members of
             management.
   10.27++   Securities Subscription Agreement dated as of September 28, 1990 by
             and among CSS Holding Corporation, FSEP II and Donald E. Knox.
   10.28***  Warrant to purchase 722,627 shares of common stock dated as of
             October 5, 1990 issued to FSEP II.
   10.29***  Subscription Agreement dated as of October 4, 1990 by and among CSS
             Holding Corporation, FSEP II and Chesterfield Investments.
   10.30***  Warrant to purchase 66,667 shares of common stock dated as of
             October 5, 1990 issued to Atwell & Co.
   10.31***  Form of
             Warrant dated as of October 5, 1990 issued to certain members of
             management.
   10.32***  Stock Subscription Agreement dated as of September 3, 1991 between
             CSS Holding Corporation and Richard J. Hartl, with form of note and
             pledge agreement attached thereto as Exhibits A and B,
             respectively.

                                       2

<PAGE>

  Exhibit
  Number                                  Description
  -------                                 -----------
   10.33***    Nonqualified Stock Option Agreement dated as of September 3, 1991
               between CSS Holding Corporation and Richard J. Hartl.
   10.34++     Calmar Inc. Supplemental Executive Retirement Plan dated as of
               September 3, 1991.
   10.35***    Subscription Agreement dated as of October 31, 1991 among CSS
               Holding Corporation, FSEP II and Beijer Industries AB.
   10.36***    Warrant to purchase 2,000,000 shares of common stock dated as of
               October 31, 1991 issued to FSEP II.
   10.37***    Subscription Agreement dated as of November 1, 1991 among Calmar
               Spraying Systems, Inc. (formerly CSS Holding Corporation), FSEP
               II and Beijer Industries AB.
   10.38++     Form of Securities Subscription Agreement dated as of October 31,
               1991 by and between CSS Holding Corporation and certain members
               of management.
   10.39***    Form of Warrant dated as of October 31, 1991 issued to certain
               members of management.
   10.40++     Amendment Agreement dated as of February 15, 1992 among FSEP II,
               Beijer Industries AB, Kongsbo Industrier AB and Calmar Inc.
   10.41+      Subscription Agreement dated as of May 7, 1992 among Calmar Inc.,
               Calspray Investors, L.P., FSEP II and Kongsbo Industrier AB.
   10.42+      Warrant to purchase 25,000 shares of common stock dated as of May
               7, 1992 issued to Jefco.
   10.43++     Promissory Note secured by Deed of Trust dated September 10, 1992
               of Jacques J. Barriac and Jessica M. Barriac in favor of Calmar
               Inc., its successors and assigns.
   10.44++     Calmar Inc. Deferred Compensation Plan 1993 Restatement effective
               as of January 1, 1993.
   10.45++     Form of Stock Subscription Agreement dated as of April 1, 1993 by
               and between Calmar, Inc. and certain members of management who
               purchased shares of common stock of Calmar Inc. for cash.
   10.46++     Stock Subscription Agreement dated as of April 1, 1993 by and
               between Calmar Inc. and Jacques Barriac, with form of note and
               pledge agreement attached thereto as Exhibits A and B,
               respectively.
   10.47++     Warrant to purchase 500,000 shares of common stock dated as of
               September 10, 1993 issued to FSEP II.
   10.48++     Warrant to purchase 500,000 shares of common stock dated as of
               October 11, 1993 issued to FSEP II.
   10.49##     Form of Key Employee Retention Agreement between Calmar Inc. and
               certain members of management.
   10.50##     Form of Employment Agreement dated as of January 1, 1998 by and
               between Calmar Inc. and Richard J. Hartl.
   10.51++     Calmar Inc. Deferred Compensation Arrangement effective as of
               January 1, 1995 between Calmar Inc. and Richard J. Hartl.
   10.52++     Calmar Inc. Executive Incentive Compensation Plan dated January,
               1993.
   10.53++     Warrant to purchase 1,400,000 shares of common stock dated as of
               May 25, 1995 issued to AB Handel och Industri.
   10.54++     Warrant to purchase 505,840 shares of common stock dated as of
               May 25, 1995 issued to AB Handel och Industri.
   10.55@      Waiver and Agreement dated as of January 15, 1993 among Calmar
               Inc., FSEP II, Kongsbo Industrier AB In Bankruptcy and Svenska
               Handelsbanken.
   10.56@      Waiver and Agreement dated as of October 27, 1993 among Calmar
               Inc., FSEP II, Kongsbo Industrier AB In Bankruptcy, Svenska
               Handelsbanken and AB Handel och Industri.
   10.57#      Amendment No. 1 to Senior Secured Credit Facility dated as of
               October 4, 1996.
   10.58##     Amendment No. 2 to Senior Secured Credit Facility dated July 16,
               1997.
   10.59##     Amendment No. 3 to Senior Secured Credit Facility dated January
               20, 1998.
   12.1##      Computation of ratio of earnings to fixed charges.
   12.2##      Computation of ratio of consolidated long-term debt to
               consolidated stockholders' deficiency.
   21.1##      Subsidiaries of Calmar Inc.
   27.1##      Financial Data Schedule.

                                       3

<PAGE>

 __________
       *       Filed as an exhibit to Registration Statement on Form S-1
               (No. 33- 26281) filed on December 23, 1988.
       **      Filed as an exhibit to Amendment No. 2 to Registration Statement
               on Form S-1 (No. 33-26281) filed on February 14, 1989.
       ***     Filed as an exhibit to Registration Statement on Form S-4
               (No. 33-47304) filed on April 21, 1992.
       +       Filed as an exhibit to Amendment No. 1 to Registration Statement
               on Form S-4 (No. 33-47304) filed on June 2, 1992.
       ++      Filed as an exhibit to Registration Statement on Form S-4
               (No. 33- 97056) filed on September 18, 1995.
       +++     Filed as an exhibit to Amendment No. 1 to Registration Statement
               on Form S-4 (No. 33-97056) filed on October 11, 1995.
       @       Filed as an exhibit to Amendment No. 3 to Registration Statement
               on Form S-4 (No. 33-97056) filed on November 30, 1995.
       @@      Filed as an exhibit to Annual Report on Form 10-K (No. 0-12054)
               for the fiscal year ended December 31, 1992, filed on March 31,
               1993.
       #       Filed as an exhibit to Quarterly Report on Form 10-Q (No. 33-
               97056) for the quarterly period ended September 28, 1996, filed
               on November 12,  1996.
       ##      Filed herewith.


SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.


     No annual report or proxy material has been sent to security holders during
the fiscal year ended December 31, 1997.

                                       4