<PAGE>



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              450 Fifth Street, NW
                             Washington, D.C. 20549

                               AMENDMENT NO. 1 TO

                                   FORM 10-QSB



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

                                          For the quarterly period ended 6/30/02

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

                         For the transition period from            to
                                                        ----------    ----------

                                                  Commission file number 2-69336



                                  CRAMER, INC.

A Kansas Corporation                             IRS Employment I.D. #48-0638707
1222 Quebec Street
North Kansas City, MO 64116                         Telephone No. (816) 471-4433

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes __ No X (The issuer's annual report on Form 10-KSB for the year ended
December 31, 2000 and the issuer's quarterly report on Form 10-QSB for the
quarter ended April 1, 2001 were filed late.)

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 4,039,607 shares of common stock, no
par value as of November 30, 2002.


<PAGE>

                         PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                  CRAMER, INC.
                                  BALANCE SHEET

                    (Amounts in Thousands, Except Share Data)

ASSETS

<Table>
<Caption>
                                                                              6/30/02       12/31/01
                                                                              --------      --------
                                                                             (Unaudited)
<S>                                                                           <C>           <C>
Current assets:
     Cash                                                                           35           282
     Accounts receivable, net of allowance of $30                                  884           563
     Inventories, net of allowance of $105                                         897           721
     Prepaid expenses and other current assets                                     264           325
                                                                              --------      --------
              Total current assets                                               2,080         1,891

Property, plant and equipment
     At cost                                                                     6,233         6,215
     Accumulated depreciation                                                   (5,662)       (5,595)
                                                                              --------      --------
                                                                                   571           630
Other assets:
     Intangible pension asset                                                        0             4
                                                                              --------      --------


              Total Assets                                                    $  2,651      $  2,525
                                                                              ========      ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
     Note payable                                                                2,320         2,320
     Accounts payable                                                              750           485
     Accounts payable- related party                                               133            69
     Accrued liabilities                                                           602           801
                                                                              --------      --------
              Total current liabilities                                          3,805         3,675

Noncurrent liabilities:
     Pension benefits payable                                                      279           326
     Other                                                                         218           218
                                                                              --------      --------
              Total noncurrent liabilities                                         497           544

Stockholders' Equity (Deficit):
     Common stock, no par value; authorized, 6,000,000 shares; issued and
         outstanding 4,039,607 shares at July 31, 2002
         and 4,041,400 at December 31, 2001                                      3,820         3,820
     Accumulated deficit                                                        (5,119)       (5,166)
                                                                              --------      --------
                                                                                (1,299)       (1,346)
     Minimum pension liability adjustment                                         (352)         (348)
                                                                              --------      --------
              Net stockholders' equity (deficit)                                (1,651)       (1,694)
                                                                              --------      --------

              Total Liabilities and Stockholders' Equity (Deficit)            $  2,651      $  2,525
                                                                              ========      ========
</Table>


                   See Notes to Condensed Financial Statements


                                      -2-
<PAGE>


                                  CRAMER, INC.
                            STATEMENTS OF OPERATIONS
                                    UNAUDITED
                  (Amounts in Thousands, Except Per Share Data)



<Table>
<Caption>
                                                               QUARTER ENDED                      SIX MONTHS ENDED
                                                         6/30/02            7/1/01            6/30/02           7/1/01
                                                       ------------      ------------      ------------      ------------
<S>                                                    <C>               <C>               <C>               <C>
Net sales                                              $      2,217      $      2,519      $      4,249      $      5,817
Cost of sales                                                 1,471             1,807             2,796             4,381
                                                       ------------      ------------      ------------      ------------
              Gross profit                                      746               712             1,453             1,436

Operating expenses:
     Selling expenses                                           338               497               716             1,021
     General and administrative                                 358               341               639               638
                                                       ------------      ------------      ------------      ------------
              Total operating expenses                          696               838             1,355             1,659
                                                       ------------      ------------      ------------      ------------
              Income (loss) from operations                      50              (126)               98              (223)

Other income (expense):
     Interest expense, net                                      (28)              (45)              (58)              (99)
     Other, net                                                   6              (126)                7              (126)
                                                       ------------      ------------      ------------      ------------
              Total other income (expense)                      (22)             (171)              (51)             (225)
                                                       ------------      ------------      ------------      ------------

Income (loss) before income taxes                                28              (297)               47              (448)
Income tax expense (benefit)                                      0                 0                 0                 0
                                                       ------------      ------------      ------------      ------------

Net income (loss)                                      $         28      $       (297)     $         47      $       (448)
                                                       ============      ============      ============      ============

     Net income (loss) per share based on weighted
         average number of common equivalent
         shares outstanding                            $       0.01      $      (0.07)             0.01      $      (0.11)

     Weighted Average Common Equivalent
         Shares Outstanding   Basic                       4,039,607         4,041,400         4,040,504         4,041,400
                              Diluted                     4,039,607         4,041,400         4,040,504         4,041,400
</Table>

There is no difference between Net Income (loss) and Total Comprehensive Income
(loss) for the quarter or six-month periods ending June 30, 2002 and July 1,
2001.

These interim financial statements contain all adjustments required for them to
be comparable to the annual financial statements issued on Form 10KSB.

                   See Notes to Condensed Financial Statements

                                      -3-
<PAGE>


                                  CRAMER, INC.
                            STATEMENTS OF CASH FLOWS
                                    UNAUDITED
                             (Amounts in Thousands)


<Table>
<Caption>
                                                                      Six Months Ended
                                                                   6/30/02        7/1/01
                                                                   --------      --------
<S>                                                                <C>           <C>
Cash flows from operating activities:
     Net income (loss)                                             $     47          (448)
     Adjustments to reconcile net income (loss) to net cash
         flows from operating activities:
         Depreciation and amortization                                   78           106
         Changes in operating assets and liabilities:
              Accounts receivable                                      (321)          385
              Inventories                                              (178)          451
              Prepaid expenses and other assets                          61           (57)
              Intangible pension asset                                    4             0
              Accounts payable and accrued expenses                     130          (223)
              Other noncurrent liabilities                              (49)          (29)
                                                                   --------      --------

                      Net cash flows from operating activities         (228)          185
                                                                   --------      --------

Cash flows from investing activities:
     Capital expenditures                                               (19)          (28)
                                                                   --------      --------


                      Net cash flows from investing activities          (19)          (28)
                                                                   --------      --------

Cash flows from financing activities:
     Principal payments on notes payable                                  0          (157)
                                                                   --------      --------

                      Net cash flows from financing activities            0          (157)
                                                                   --------      --------

Net increase (decrease) in cash                                        (247)            0
Cash at beginning of year                                               282             0
                                                                   --------      --------

Cash at end of quarter                                             $     35      $      0
                                                                   ========      ========

Supplemental disclosures:
     Cash paid during the period for:
         Interest                                                  $     58      $     99
                                                                   ========      ========
         Income tax                                                $      0      $      0
                                                                   ========      ========
</Table>

                   See Notes to Condensed Financial Statements


                                      -4-
<PAGE>


                                  CRAMER, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


     1. Interim Financial Statements

     The condensed interim financial statements included herein have been
     prepared by Cramer, Inc. (the "Company"), without audit, pursuant to the
     rules and regulations of the Securities and Exchange Commission (the
     "Commission"). The financial statements reflect adjustments of a normal
     recurring nature that are, in the opinion of management, necessary to
     present fairly such information. Although the Company believes that the
     disclosures are adequate to make the interim information presented not
     misleading, certain information and footnote disclosures, including
     significant accounting policies, normally included in financial statements
     prepared in accordance with generally accepted accounting principles have
     been condensed or omitted pursuant to such rules and regulations. These
     interim financial statements should be read in conjunction with the
     financial statements and the notes thereto included in the Annual Report on
     Form 10-KSB/A for the fiscal year ended December 31, 2001 filed by the
     Company with the Commission on December 26, 2002 and incorporated by
     reference herein. Quarterly operating results may vary significantly and
     are not necessarily indicative of the results for the full year or any
     future period.

     2. Restatement of Accrued Loan Guaranty Expense

     The Company accrued a loan guarantee expense of $40,000 for the fourth
     quarter of 2001 and $40,000 in each of the first and second quarters of
     2002 (aggregating $120,000). The Company has since determined that the loan
     guarantee expense should have been accrued at $8,000 per quarter
     (aggregating $24,000) and has filed amendments to its 2001 Form 10-KSB/A
     and first and second quarter 2002 10-QSB's for the purpose of restating its
     earnings (loss) for the affected periods to take such revised expense
     accrual into account (see Item 2 - "Management's Discussion and Analysis").

     3. Legal Proceedings

     The Company is a defendant in several lawsuits relating to product
     liability claims arising from accidents allegedly occurring in connection
     with the use of its products. The claims are covered by insurance and are
     being defended by the Company's independent counsel or by counsel assigned
     by the Company's insurance carriers. One such claim had alleged damages of
     $375,000. The Company has included a more complete discussion of product
     liability claims and related accruals in Part II, Item 1 "Legal
     Proceedings" below.

     The Company believes its products are safe and reliable when assembled,
     used and maintained in a reasonable manner, and believes it adequately
     reserves against its reasonably likely exposure under these claims based
     upon past experience.


                                      -5-
<PAGE>


     4. Use of Estimates

     Accounting estimates are an integral part of the financial statements and
     are based on management's knowledge and experience about past and current
     events and assumptions about future events. Certain accounting estimates
     are particularly sensitive because of their significance to the financial
     statements and because of the possibility that future events affecting them
     may differ significantly from those expected. The most sensitive estimates
     affecting the financial statements were the warranty and product liability
     accruals, and the inventory reserve.

     The Company offers product warranties with terms of up to fifteen years.
     The majority of the Company's warranty claims relate to failed seating
     parts. The Company estimates its accrual for future warranty costs based on
     durability testing, engineering studies, actual costs incurred in prior
     years and historical sales data. The warranty accrual decreased from
     $218,000 at March 31, 2002 to $213,000 at June 30, 2002. This decrease was
     the result of continued declining warranty costs in the second quarter of
     2002. This decrease can be attributed to more aggressive management of
     warranty claims, which has resulted in fewer claims and lower costs.

     The reserve for obsolete and slow-moving inventory is based on management's
     analysis of inventory turns, historical write-offs, future production plans
     including any product line changes, and sales trends. There were no changes
     to the inventory reserve, which remained at $105,000.

     A discussion of the product liability accrual is included in Part II, Item
     1, Legal Proceedings.



                                      -6-
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS


     RESULTS OF OPERATIONS

     Quarter ended June 30, 2002, compared to the quarter ended July 1, 2001:

     Sales for the second quarter were $2,217,000, a decrease of 12% from 2001
     second quarter sales of $2,519,000. The recent recession and related
     reductions in capital expenditures by potential customers resulted in a
     decline in seating sales of over $250,000. The furniture industry as a
     whole has experienced a downturn in sales over the past twelve months.
     Utility sales remained consistent, with a modest decline in ladder sales
     offset by a slight increase in Kik-Step sales, reflecting the continued
     strength of this product.

     Gross margins increased from $712,000, or 28%, in the second quarter of
     2001 to $746,000, or 34% in the second quarter of 2002. Increased margins
     as a percent of sales were the combined result of lower material costs and
     significant overhead reductions. These overhead reductions included a
     decrease in utilities, indirect labor and maintenance costs, due in part to
     increased outsourcing of the manufacture of certain products in 2002.

     Selling expenses decreased from $497,000 in the second quarter of 2001 to
     $338,000 in the second quarter of 2002, a reduction of approximately
     $159,000. A decrease in commissions and catalog program costs due to lower
     sales contributed to over $50,000 of the decline. The remaining decrease
     was related primarily to staff reductions and lower travel costs.

     General and administrative expenses increased $17,000 to $358,000 during
     the second quarter of 2002, compared to $341,000 in the second quarter of
     2001. The increase was primarily the result of higher legal costs in the
     second quarter of 2002, due in part to favorable resolution of an
     employment matter and costs associated with filing an amended Form 10-KSB
     and the proposed going private transaction referred to in "Financial
     Condition, Liquidity and Capital Resources". In addition, guarantee fees
     related to Rotherwood's provision of a $2M letter of credit/securities
     pledge totaled $8,000 in the second quarter of 2002 and were not in effect
     during the second quarter of 2001.

     Interest expense totaled $28,000 in the second quarter of 2002, compared to
     $45,000 in the comparable period last year. This reduction was the result
     of lower interest rates in 2002.

     The Company had a net operating profit before tax of $28,000 in the second
     quarter of 2002, compared to a loss of $297,000 in the second quarter of
     2001. Operating results improved, despite declining sales, due to
     reductions in overhead and improved margins.


                                      -7-
<PAGE>


     Six months ended June 30, 2002, compared to the six months ended July 1,
     2001:

     Sales for the first six months of 2002 were $4,249,000, a decrease of 27%
     from $5,817,000 in the first six months of 2001. The majority of the
     decline related to reduced seating sales, particularly in the first quarter
     of 2002. The recent recession and related reductions in capital
     expenditures by potential customers have resulted in a significant sales
     decline across the industry. In addition, the seating business is highly
     competitive. Ladder sales experienced a modest decline due to weakening
     catalog performance. Kik-Step sales increased by approximately $50,000 in
     the first six months of 2002, compared to the same period in 2001,
     reflecting the continued strength of this product.

     Gross margins increased from $1,436,000 or 25% of sales, in the first six
     months of 2001 to $1,453,000 or 34% of sales in the first six months of
     2002. Lower material costs and significant overhead reductions resulted in
     a substantial increase in margins for both the first and second quarters of
     2002, compared to the first two quarters of 2001. The overhead reductions
     included a decrease in utilities, indirect labor, supplies and maintenance,
     due in part to increased outsourcing of the manufacture of certain products
     in 2002. The Company also focused on streamlining production processes,
     which contributed to the decrease in indirect labor.

     Selling expenses decreased from $1,021,000 in the first six months of 2001
     to $716,000 in the first six months of 2002, a reduction of over $300,000.
     The decrease in selling costs can be attributed to a decline in commissions
     and catalog program costs as a result of lower sales, in addition to staff
     reductions and lower travel costs. Selling expenses were lower in both the
     first and second quarters of 2002 compared to the prior year.

     General and administrative expenses increased from $638,000 in the first
     six months of 2001 to $639,000 in the first six months of 2002. An increase
     in legal fees during the first six months of 2002 was offset in part by
     reduced labor costs. In addition, fees related to Rotherwood's provision of
     a letter of credit/securities pledge as security for the $2M bank loan
     totaled $16,000 in the first six months of 2002 and were not in effect
     during the first six months of 2001.

     Interest expense totaled $58,000 in the first six months of 2002, compared
     to $99,000 in the comparable period last year. This reduction was the
     result of lower interest rates in 2002.

     The Company had a net operating profit before tax of $47,000 in the first
     six months of 2002, compared to a loss of $448,000 in the first six months
     of 2001. Operating results improved, despite declining sales, due to
     reductions in overhead and improved margins.


                                      -8-
<PAGE>


     FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     Cash flow activity for the first six months of 2002 is presented in the
     Statement of Cash Flows. During the first six months of 2002, the Company
     used $228,000 in cash from its operating activities.

     Accounts receivable totaled $884,000 at June 30, 2002 compared to $563,000
     at December 31, 2001. The increase was a result of higher sales in June
     2002 compared to December 2001. In addition, the June 30, 2002 balance
     included a $150,000 order that was collected in July 2002.

     Inventories increased from $721,000 at December 31, 2001 to $897,000 at
     June 30, 2002, a 24% increase. This increase related primarily to a large
     seating order that was in production as of June 30, 2002.

     Accounts payable increased $265,000 from December 31, 2001 to June 30,
     2002. An increase in inventories in connection with several large
     production orders mentioned above contributed to the increase in accounts
     payable.

     Accrued liabilities decreased $199,000 from December 31, 2001 to June 30,
     2002. This decrease was due in part to a decline in accrued catalog program
     costs and accrued insurance premiums.

     Accounts payable, related party increased from $69,000 at December 31, 2001
     to $133,000 at June 30, 2002. This increase was the result of combined loan
     guarantee fees of $16,000 charged by Rotherwood for the first two quarters
     of 2002, in addition to fees charged by Rotherwood for the services of Greg
     Coward and Nick Christianson, who were not compensated directly by the
     Company.

     Capital expenditures of $19,000 during the second quarter of 2002 related
     to the purchase of additional plant equipment. In the first quarter of
     2002, management began exploring the feasibility of relocating to a new
     facility that more closely matches the Company's current size and
     manufacturing needs. The Company has signed a lease for a 34,000 square
     foot facility and is planning to relocate in September 2002. The minimum
     lease term is three years with the right to extend for an additional eight
     years. Annual rent during the initial term is $111,000/ year. The Company
     anticipates that relocating the business could reduce operating overhead
     significantly and improve production efficiency. However, there is no
     assurance we can sell or lease our existing facility without spending
     significantly on renovation.

     The outstanding balance under the Company's bank line of credit remained at
     $2,320,000, the maximum amount allowed under the facility, throughout the
     second quarter of 2002. The facility consists of a $2,000,000 loan and a
     $320,000 line of credit. The $2,000,000 loan is secured by a pledge of
     $2,000,000 in securities by Rotherwood, the Company's parent. The combined
     credit facility is also secured by security interests in the assets of both
     Cramer and Pacer Corporation, a company owned by Rotherwood.


                                      -9-
<PAGE>


     Cramer and Pacer are co-borrowers on the total amount of the credit
     facility. In exchange for Rotherwood's financial accommodation to the
     Company, without which the bank would probably call the $2,000,000 loan,
     the Company agreed to pay Rotherwood a fee equal to 2% per quarter of the
     total amount of the pledge until the pledge agreement expires. Rotherwood
     agreed to accept 800,000 shares of common stock per quarter in payment of
     the guarantee fee at an agreed upon exchange value of $0.05 per share. The
     Company originally accrued guarantee fees of $40,000 for the fourth quarter
     of 2001 and $40,000 in each of the first and second quarters of 2002 based
     upon that exchange rate. The Company in 2001 obtained an independent
     appraisal which determined that the fair market value of the Company's
     common stock was $0.01 per share. The Company and Rotherwood determined
     that the $0.05 per share exchange rate would be less dilutive to the
     Company's shareholders other than Rotherwood (the "Public Shareholders"),
     because it would result in fewer shares being issued to Rotherwood each
     quarter (800,000 shares) than if the shares were valued at an exchange rate
     of $0.01 (4,000,000 shares). The $0.05 per share exchange value was also
     consistent with the price per share being paid by Rotherwood for 18 million
     new shares of the Company, and the price being paid by Rotherwood to the
     Public Shareholders in a proposed cash-out merger, as described below. The
     Company has since determined that the guarantee fee should have been
     recorded on the basis of the fair market value of the consideration being
     paid to Rotherwood in the form of common stock ($8,000, or 800,000 shares x
     $0.01 per share) rather than on the basis of the exchange rate agreed to by
     Rotherwood ($40,000, or 800,000 shares x $0.05 per share). The effect of
     this accounting change is to decrease accrued expenses and decrease net
     loss by $32,000 for the fourth quarter of 2001 and to decrease accrued
     expenses and increase net income by $32,000 in each of the first two
     quarters of 2002. The Company has restated the financial results reported
     in its 2001 Form 10-KSB/A and its first and second quarter 2002 Form
     10-QSB's to reflect this change in accounting treatment related to the
     guarantee fee.

     The Company has no additional borrowing capacity under the credit facility,
     and the lender has requested that the principal balance of the $320,000
     line of credit either be reduced or collateralized by additional security
     by February 3, 2003. The Company does not believe it will be able to reduce
     the $320,000 line of credit balance or provide additional security by that
     date. The Company does not believe it could obtain substitute or additional
     debt financing, nor is there any assurance the bank will extend the line of
     credit beyond the February 2003 maturity date. Rotherwood has advised the
     Company that it does not wish to continue the securities pledge
     indefinitely. The Company intends to obtain needed additional capital by
     selling shares of common stock to Rotherwood. Although the Company has no
     definitive agreement with Rotherwood, the Company is planning to sell 18
     million shares of common stock to Rotherwood for cash at a purchase price
     of $0.05 per share. This transaction would provide $900,000 in much needed
     capital to the Company to reduce amounts owed under the bank credit
     facility and credit Rotherwood for a $125,000 advance used by the Company
     to pay


                                      -10-
<PAGE>


     relocation expenses. If Rotherwood makes the equity investment in the
     Company, Rotherwood plans to take the Company private following a
     short-form cash-out merger of the Company into Rotherwood. See Item 6-
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations" in the 2001 Form 10-KSB/A filed on December 26, 2002 and
     incorporated by reference herein for additional discussion of the credit
     facility and the proposed transactions with Rotherwood.

     In November 2002 the Company borrowed $125,000 from Rotherwood in the form
     of a demand note bearing interest at 7% to cover a portion of its
     relocation expenses. Rotherwood intends to convert this $125,000 demand
     note into common stock as part of the $900,000 proposed investment
     discussed above.

     Although the Company earned net income of $28,000 in the second quarter of
     2002 and net income of $47,000 in the first six months of 2002, the Company
     remains in a liquidity crisis, and there remains substantial doubt about
     the Company's ability to continue as a going concern.

     On October 3, 2002, the Company obtained an extension of the credit
     facility through February 3, 2003. The Company is not in compliance with
     the financial net worth covenant in the loan agreement governing the credit
     facility. For this and other reasons, the Company is unable to predict
     whether the bank will renew the credit facility when it matures in February
     2003. If Rotherwood does not make the proposed equity investment in the
     Company and the Company does not reduce the principal balance of or further
     collateralize the $320,000 line of credit, the bank may not renew the
     credit facility and the Company could be required to seek bankruptcy
     protection or to cease operations.


FORWARD LOOKING STATEMENTS

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


                                      -11-
<PAGE>


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

         o  The inability of shareholders other than Rotherwood to participate
            in any future improvement in the Company's operations or financial
            condition, if the short-form merger and going private transaction
            are consummated

         o  The Company's continuing declines in revenues, history of losses and
            uncertain future profitability

         o  Questions about the Company's continuing viability as a going
            concern and management's plans to address that issue

         o  Any failure of the Company's turnaround plan to achieve its
            objectives

         o  The lack of borrowing capacity under the Company's bank credit
            facility

         o  The possibility that the bank will not renew the Company's credit
            facility

         o  The Company's lack of prospects for obtaining substitute or
            additional debt financing or any equity financing from a party other
            than Rotherwood

         o  The possibility that the bank may call the credit facility if
            Rotherwood does not make the proposed investment in the Company or
            Rotherwood decides not to continue the securities pledge

         o  Rotherwood's intention to take the Company private

         o  Fluctuations or reductions in product demand and market acceptance

         o  Continued adverse conditions in the office furniture industry

         o  The level of product development by the Company

         o  Capacity and supply constraints or difficulties

         o  The effect of new laws and regulations

         o  Unexpected additional expenses or operating losses

         o  Strong competition

         o  Reliance on certain vendors for key products and components

         o  Deferred maintenance at the Company's owned facility from which it
            recently relocated, the potential need to renovate the facility in
            order to sell or lease it and the cost of future maintenance of that
            facility

         o  If product and warranty liability claims exceed the amounts reserved

         o  Control by insiders

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

ITEM 3.  CONTROLS AND PROCEDURES

     A review and evaluation was performed by the Company's Acting Chief
     Executive Officer and Interim Chief Financial Officer (the "Executive
     Officer") of the effectiveness of the design and operation of the Company's
     disclosure controls and procedures as of a date within 90 days prior to the
     filing of this amended quarterly report. Based on that review and
     evaluation, the Executive Officer has concluded that the Company's current
     disclosure controls and procedures, as designed and implemented by him,
     were effective. There have been no significant changes in the Company's
     internal controls subsequent to the date of his evaluation. There were no
     significant material weaknesses identified in the course of such review and
     evaluation and, therefore, no corrective measures were taken by the
     Company.


                                      -12-
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company is a defendant in several lawsuits relating to product
     liability claims arising from accidents allegedly occurring in connection
     with the use of its products. The claims are covered by insurance and are
     being defended by the Company's independent counsel or by counsel assigned
     by the Company's insurance carriers. These claims are subject to a $50,000
     deductible. The Company maintains product liability insurance coverage with
     limits of $1 million per occurrence and $2 million aggregate, plus $10
     million in umbrella coverage. After the Company has exhausted its
     deductible by paying a total of $50,000 (whether in legal fees and
     expenses, settlement amounts, damages awards, or any combination thereof)
     on any single claim, its liability insurance carrier is obligated to pay
     any sums owed for legal fees and expenses, settlement amounts and damages
     awards in excess of $50,000 for that claim. The Company has been able to
     offset settlement costs through amounts paid by co-defendants in certain
     cases historically.

     Over the last five fiscal years, the Company has averaged 3.7 new claims
     per year. An average of approximately 50% of those claims resulted in
     defense costs and settlement amounts or awards exceeding $50,000. The
     average total cost of defense and settlement awards paid by the Company
     over that period was $35,000 per claim. The number of new claims made or
     lawsuits filed against the Company during years 2000 and 2001 were two and
     three, respectively. The Company's claims history has leveled out over the
     past three years at two to three claims per year.

     The Company had six open claims at December 31, 2001 and five open claims
     at June 30, 2002. During the second quarter of 2002, no new claims were
     filed against the Company. On April 22, 2002, the Company settled one of
     the six claims for $7,500. The total cost of legal fees and settlement
     costs for this claim was $49,500. The Company does not believe the
     remaining open claims will have materially different average results than
     historical experience described above. None of the claims allege damages in
     excess of policy limits. One of the claimants alleged damages of $375,000
     and is discussed below. While management believes the Company has
     substantial defenses with respect to these claims, the ultimate outcome of
     such litigation cannot be predicted with certainty. Such claims are an
     ordinary aspect of the Company's business and industry. The Company
     believes its products are safe and reliable when assembled, used and
     maintained in a reasonable manner, and believes it adequately reserves
     against its reasonably likely exposure under these claims based upon past
     experience.

     The Company discusses each claim with its product liability counsel to
     determine the merits of the case and the most likely outcome. In some
     cases, it is too early to make that assessment. The Company determines


                                      -13-
<PAGE>


     a reserve for specific claims based on average claims history, the specific
     merits of the case, the amount of damages alleged, the costs incurred to
     date and the amount of the insurance deductible. The Company recorded a
     reserve for specific claims of $105,000 at December 31, 2001 and at June
     30, 2002.

     In addition to reserves for specific cases, the Company estimates its
     exposure for unasserted claims and records additional reserves using the
     claims history discussed above as well as recent trend insights. The
     Company had received notice of six incidents for which no claims had been
     asserted at December 31, 2001 and did not receive notice of any additional
     unasserted claims during the second quarter of 2002. The Company maintained
     a reserve for unasserted claims of $113,000 at December 31, 2001 and at
     June 30, 2002. The underlying assumptions regarding claims history and
     average costs per claim did not change during the second quarter of 2002.
     Accordingly, the Company did not change its reserve for unasserted claims.
     Although the Company's claims history has stabilized in recent years, the
     Company cannot be certain that future claims experience will be consistent
     with historical claims experience. An increase in the frequency or average
     cost of future claims could increase the Company's exposure to product
     liability expense. However, the maximum total legal defense and settlement
     costs for each claim is limited to the $50,000 deductible.

     On February 25, 1998, the Company was served with a suit filed by Pauline
     and Daniel Robitaille in the Superior Court of Massachusetts, Norfolk
     County. The claim alleged damages of $375,000 due to personal injury. The
     Company's $50,000 self-insured retention was exhausted and the Company's
     insurance carrier assumed defense of the claim. The Company therefore has
     no further financial responsibility for this claim. The case was recently
     settled by the carrier.

     The Company was assessed $117,500 in penalties by OSHA as a result of an
     inspection conducted in 2000 and signed a settlement agreement with OSHA
     which calls for scheduled payments totaling $23,000 through February 1,
     2004 (see "Patents, Trademarks and Government Regulation" in Item 1 of the
     2001 10-KSB/A filed on December 26, 2002 and incorporated by reference
     herein).


ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.


                                      -14-
<PAGE>


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

         None

ITEM 5.  OTHER INFORMATION


Going Private Transaction


As a result of the Company's tenuous cash/liquidity position and its need for
additional capital to execute its restructuring plans, the Company plans to
enter into an investment transaction with Rotherwood. Rotherwood intends to
purchase 18 million shares of newly issued Company common stock for a cash
purchase price of $0.05 per share. This equity investment of $900,000 would
allow the Company to reduce the amount owed under its bank line of credit and
credit Rotherwod for a $125,000 advance used by the Company to pay relocation
expenses. Upon Rotherwood's purchase of the shares, combined with the issuance
of 800,000 shares of common stock per quarter in payment of a letter of
credit/pledge fee to Rotherwood, Rotherwood would own more than 90% of the
Company's outstanding shares of common stock. Rotherwood then plans to cause a
"short-form" merger to occur during the year 2002 in which each outstanding
share of the Company's common stock owned by shareholders other than Rotherwood
would be converted into the right to receive a cash payment of $0.05 per share
for an aggregate cash consideration of $98,000, after which Rotherwood plans to
take the Company private. The Company plans to amend its articles of
incorporation to increase its authorized shares of common stock from 8,200,000
to 74,200,000 shares to permit Rotherwood to acquire the 18 million shares of
common stock and permit Cramer to pay the 800,000 share quarterly letter of
credit/pledge fee. Rotherwood intends to enter into such a transaction, but is
not subject to any binding obligation to do so.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

None.


                                      -15-
<PAGE>
                                   SIGNATURES

Pursuant to the requirements 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.



                                       CRAMER, INC.
                                       (Registrant)



Date: December 26, 2002                /s/ Nicholas M. Christianson
                                       -------------------------------------
                                       Nicholas M. Christianson
                                       Acting Chief Executive Officer and
                                       Secretary and Interim Chief Financial
                                       Officer
<PAGE>

                                 CERTIFICATIONS

I, Nicholas Christianson, Acting Chief Executive Officer and Secretary and
Interim Chief Financial Officer of Cramer, Inc., certify that:

     1.   I have reviewed this quarterly report on Form 10-QSB of Cramer, Inc.;

     2.   Based on my knowledge, this quarterly report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the periods covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this quarterly report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we have:

     a) Designed such disclosure controls and procedures to ensure that material
        information relating to the registrant, including its consolidated
        subsidiaries, is made known to us by others within those entities,
        particularly during the period in which this quarterly report is being
        prepared;

     b) Evaluated the effectiveness of the registrant's disclosure controls and
        procedures as of a date within 90 days prior to the filing date of this
        quarterly report (the "Evaluation Date"); and

     c) Presented in this quarterly report our conclusions about the
        effectiveness of the disclosure controls and procedures based on our
        evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of the registrant's board of directors (or persons
          performing the equivalent function):

     a) All significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have identified
        for the registrant's auditors any material weaknesses in internal
        controls; and

     b) Any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.

     Date: December 26, 2002      By:  /s/ Nicholas Christianson
                                     ------------------------------------------
                                  Nicholas Christianson
                                  Acting Chief Executive Officer and Secretary
                                  and Interim Chief Financial Officer

In connection with this quarterly report on Form 10-QSB of Cramer, Inc., I,
Nicholas Christianson, Acting Chief Executive Officer and Secretary and Interim
Chief Financial Officer of the registrant, hereby certify to the best of my
knowledge and belief, that:

               (1)  This quarterly report fully complies with the requirements
                    of Section 13(a) or 15(d) of the Securities Exchange Act of
                    1934; and


                                      -17-
<PAGE>


               (2)  The information contained in this quarterly report fairly
                    presents, in all material respects, the financial condition
                    and results of operations of the registrant for and as of
                    the end of such quarter.


                                       By:   /s/ Nicholas Christianson
                                             -------------------------
                                             Nicholas Christianson
                                             Acting Chief Executive Officer and
                                             Secretary and Interim Chief
                                             Financial Officer

Date: December 26, 2002