<PAGE>


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

                                   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
625 Adams Street
Kansas City, Kansas  66105                         Telephone No. (913) 621-6700

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 July 31, 2002.


<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                  CRAMER, INC.
                                  BALANCE SHEET
                                    UNAUDITED
                    (Amounts in Thousands, Except Share Data)

<Table>
<Caption>
                                                                                   6/30/02             12/31/01
                                                                                ------------        ------------

<S>                                                                             <C>                 <C>
ASSETS

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                                                      229                 101
     Accrued liabilities                                                                 602                 801
                                                                                ------------        ------------
              Total current liabilities                                                3,901               3,707

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                                                              (5,215)             (5,198)
                                                                                ------------        ------------
                                                                                      (1,395)             (1,378)
     Minimum pension liability adjustment                                               (352)               (348)
                                                                                ------------        ------------
              Net stockholders' equity (deficit)                                      (1,747)             (1,726)
                                                                                ------------        ------------

              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                           390               341               703               638
                                                 ------------      ------------      ------------      ------------
              Total operating expenses                    728               838             1,419             1,659
                                                 ------------      ------------      ------------      ------------
              Income (loss) from operations                18              (126)               34              (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)
                                                 ------------      ------------      ------------      ------------

Loss before income taxes                                   (4)             (297)              (17)             (448)
Income tax expense (benefit)                                0                 0                 0                 0
                                                 ------------      ------------      ------------      ------------

Net loss                                         $         (4)     $       (297)     $        (17)     $       (448)
                                                 ============      ============      ============      ============

     Net loss per share based on weighted
         average number of common equivalent
         shares outstanding                      $      (0.00)     $      (0.07)            (0.00)     $      (0.11)

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

There is no difference between Net Loss and Total Comprehensive 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 10-KSB.









                   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)                                                               $        (17)             (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                                           194              (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 August 14, 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. 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 currently outstanding alleges 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.

3. 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,





                                      -5-
<PAGE>

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 $49,000 to $390,000
         during the second quarter of 2002, compared to $341,000 in the second
         quarter of 2001. Fees related to Rotherwood's provision of a securities
         pledge as security for the bank line were the primary reason for the
         increase. These fees totaled $40,000 in the second quarter of 2002 and
         were not in effect during the second quarter 2001. Rotherwood has
         agreed to accept common stock in payment of these fees at the rate of
         one share for each $0.05 of the fee amount (800,000 shares per
         quarter). Legal costs also increased in the second quarter, 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".

         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 incurred a net operating loss before tax of $4,000 in the
         second quarter of 2002, compared to a loss of $297,000 in the second
         quarter of 2001. Operating losses 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 $703,000 in the first six months of 2002,
         an increase of $65,000. Fees related to Rotherwood's provision of a
         securities pledge as security for the bank line were the primary reason
         for the increase. These pledge fees totaled $80,000 in the first six
         months of 2002 and were not in effect during the first six months of
         2001. Rotherwood has agreed to accept common stock in payment of these
         fees. An increase in legal fees during the first six months of 2002 was
         offset in part by reduced labor costs.

         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 incurred a net operating loss before tax of $17,000 in the
         first six months of 2002, compared to a loss of $448,000 in the first
         six months of 2001. Operating losses 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 $101,000 at December 31,
         2001 to $129,000 at June 30, 2002. This increase was the result of
         combined loan guarantee fees of $80,000 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 are 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 $2,320,000, the maximum amount allowed under the agreement,
         throughout the second quarter of 2002. The combined facility is secured
         by a $2,000,000 securities pledge by Rotherwood, the Company's parent,
         and security interests in the assets of both Cramer and Pacer
         Corporation, a company owned by Rotherwood. Cramer and Pacer are
         co-borrowers on the total amount of the credit facility. In exchange
         for Rotherwood's financial accommodation to the Company, the Company
         agreed to pay Rotherwood a






                                      -9-
<PAGE>

         fee equal to 2% per quarter of the total amount of the pledge agreement
         until the pledge agreement expires. As of June 30, 2002, the Company
         had accrued $120,000 of such fees. The Company plans to pay for these
         fees by issuing common stock at the rate of one share for each $0.05 in
         fee amount, or 800,000 shares per quarter.

         On June 28, 2002, the Company obtained an extension of the credit
         facility through October 3, 2002. 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 October 2002.

         Since the Company has no additional borrowing capacity and there is no
         assurance the Company can obtain an extension of or increase in the
         current credit facility or a substitute credit facility, 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 support operations, reduce amounts owed under the
         bank line of credit and enable the Company to continue its turnaround
         plans. If Rotherwood makes an additional equity investment in the
         Company, Rotherwood plans to take the Company private following a
         short-form cash-out merger of the Company into Rotherwood. There is no
         assurance the Company will be able to obtain any equity investment from
         Rotherwood or any other investor. See Item 6- "Management's Discussion
         and Analysis of Financial Condition and Results of Operations" in the
         2001 Form 10-KSB/A filed on August 14, 2002 and incorporated by
         reference herein for additional discussion of the credit facility and
         the proposed transactions with Rotherwood.

         If the bank does not renew or increase the credit facility and the
         Company cannot obtain substitute or additional debt financing or obtain
         an equity investment in the Company, the Company may 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





                                      -10-
<PAGE>

         expected to", "will continue", "is anticipated", "estimate", "project"
         or similar expressions are intended to identify forward-looking
         statements. The Company wishes to caution readers not to place undue
         reliance on such forward-looking statements.

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

            o     The inability of shareholders other than Rotherwood to
                  participate in any future upturn in the Company's operations
                  or financial condition, if the short-form merger is
                  consummated

            o     The Company's continuing declines in revenues and continuing
                  losses

            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 possibility that the bank will not renew the Company's
                  credit facility and that the Company could not obtain
                  substitute or additional debt financing, or obtain any equity
                  financing

            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, facility and supply constraints or difficulties

            o     The possibility that Cramer's sister company will borrow more
                  funds than anticipated under the Rotherwood credit facility,
                  which would further reduce the Company's borrowing capacity
                  under the Company's credit facility

            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 plant maintenance and the cost of future maintenance

            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.







                                      -11-
<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 $15 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
         alleges 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
         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





                                      -12-
<PAGE>

         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 ("Plaintiff") in the Superior Court of
         Massachusetts, Norfolk County. On October 20, 2000, the Plaintiff made
         a demand of $375,000 against the Company. The Plaintiff claims she was
         injured when she fell from a three-step ladder manufactured and/or
         distributed by the Company, suffering a foot injury. The Company's
         $50,000 insurance deductible is now exhausted and the Company's
         insurance carrier has assumed defense of this claim. All future legal
         expenses, including attorney's fees, settlement and any verdict against
         the Company, are the responsibility of the Company's insurer.

         The Company was assessed $117,500 in penalties by OSHA as a result of
         an inspection conducted in 2000 and signed a settlement agreement from
         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 August 14, 2002 and
         incorporated by reference herein).


ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.




                                      -13-
<PAGE>

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 its bank debt, enable the Company to move to a
smaller, more efficient facility and pursue other initiatives in connection with
its turnaround plan. There can be no assurance that this equity investment will
support the turnaround. 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

         Exhibits

                  99.1     Certification of Principal Executive Officer

                  99.2     Certification of Principal Financial Officer



                                   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: August 20, 2002
                                                 W. Gregory Coward
                                                 Chief Executive Officer


                                                 Nicholas M. Christianson
                                                 Interim Chief Financial Officer



                                      -14-