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                                  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 September 30, 2001

/ /  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 /X/  No / /

                      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: 4,041,400 shares of common stock, no
par value, as of September 30, 2001.


<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
              ASSETS                                                        9/30/01    12/31/00
                                                                            -------    --------
<S>                                                                         <C>        <C>
CURRENT ASSETS:
Cash                                                                        $   159    $     0
Accounts receivable, net of allowance of $24 at September 1, 2001,
   and $39 at December 31, 2000                                               1,187      1,509
Inventories     , net of allowance of $216 at September 1, 2001,
   and $202 at December 31, 2000                                                931      1,558
Prepaid expenses and other current assets                                       305        336
                                                                            -------    -------
              Total current assets                                            2,582      3,403

PROPERTY, PLANT AND EQUIPMENT
     At cost                                                                  6,214      6,187
     Accumulated depreciation                                                 5,530      5,369
                                                                            -------    -------
                                                                                684        818
OTHER ASSETS:
     Intangible pension asset                                                    56         56
                                                                            -------    -------

              Total Assets                                                  $ 3,322    $ 4,277
                                                                            =======    =======

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Cash Overdrafts                                                        $     0    $   282
     Note Payable                                                             2,314      2,302
     Accounts payable                                                           855      1,004
     Accrued liabilities                                                        681        664
                                                                            -------    -------
              Total current liabilities                                       3,850      4,252

NON-CURRENT LIABILITIES:
     Pension benefits payable                                                   306        316
     Other                                                                      176        185
                                                                            -------    -------
              Total non-current liabilities                                     482        501

STOCKHOLDERS' EQUITY:
     Common stock, no par value; authorized, 6,000,000 shares; issued and
         outstanding 4,041,400 shares at September 31, 2001
         and 4,051,400 at December 31, 2000                                   3,820      3,824
     Accumulated deficit                                                     (4,526)    (3,996)
                                                                            -------    -------
                                                                               (706)      (172)
     Minimum pension liability adjustment                                      (304)      (304)
                                                                            -------    -------
              Net stockholders' equity                                       (1,010)      (476)
                                                                            -------    -------

              Total Liabilities and Stockholders' Equity                    $ 3,322    $ 4,277
                                                                            =======    =======
</TABLE>

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

<TABLE>
<CAPTION>
                                                            QUARTER ENDED              NINE MONTHS ENDED
                                                        9/30/01       10/1/00        9/30/01        10/1/00
                                                     -----------    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>            <C>
NET SALES                                            $     2,628    $     3,165    $     8,445    $     9,947
COST OF SALES                                              1,888          2,268          6,291          7,186
                                                     -----------    -----------    -----------    -----------

              Gross profit                                   740            897          2,154          2,761

OPERATING EXPENSES:
     Selling expenses                                        435            555          1,499          1,976
     General and administrative                              337            279            980            910
                                                     -----------    -----------    -----------    -----------
              Total operating expenses                       772            834          2,479          2,886
                                                     -----------    -----------    -----------    -----------

              Income (loss) from operations                  (32)            63           (325)          (125)

OTHER EXPENSE:
     Interest expense, net                                   (48)           (58)          (147)          (159)
     Other, net                                              (17)           (21)           (56)           (50)
                                                     -----------    -----------    -----------    -----------
              Total other expense                            (65)           (79)          (203)          (209)
                                                     -----------    -----------    -----------    -----------

LOSS BEFORE INCOME TAXES                                     (97)           (16)          (528)          (334)
INCOME TAX BENEFIT                                             0              0              0              0
                                                     -----------    -----------    -----------    -----------

NET LOSS                                             $       (97)   $       (16)   $      (528)   $      (334)
                                                     ===========    ===========    ===========    ===========


     Net loss per share based on basic and diluted
          weighted average number of common
          equivalent shares outstanding              $     (0.02)   $     (0.00)   $     (0.13)   $     (0.08)

     Weighted Average Common Equivalent
         Shares Outstanding  Basic                     4,041,400      4,051,400      4,044,807      4,051,400
                             Diluted                   4,041,400      4,051,400      4,044,807      4,051,400
</TABLE>

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


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


<TABLE>
<CAPTION>
                                                                     Nine Months Ended
                                                                   9/30/01      10/1/00
                                                                   -------      -------
<S>                                                                 <C>         <C>
Cash flows from operating activities:
Net loss                                                            $(528)      $(334)
Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
     Depreciation and amortization                                    161         184
     Changes in operating assets and liabilities:
         Accounts receivable                                          322         (51)
         Inventories                                                  628         (86)
         Prepaid expenses                                              31        (119)
         Accounts payable and other current liabilities              (415)        308
         Other non-current liabilities                                (19)        (89)
                                                                    -----       -----

                      Net cash flows from operating activities        180        (187)
                                                                    -----       -----

Cash flows from investing activities:
     Capital expenditures                                             (28)       (242)
                                                                    -----       -----

Cash flows from financing activities:
         Net change in note payable                                    12         473
         Retirement of common stock                                    (5)          0
                                                                    -----       -----
Net cash flows from financing activities                                7         473

Net increase in cash                                                  159          44
Cash at beginning of year                                               0          49
                                                                    -----       -----

Cash at end of quarter                                              $ 159       $  93
                                                                    =====       =====

Supplemental disclosures:
     Cash paid during the period for:
         Interest                                                   $ 147       $ 159
                                                                    =====       =====
         Income tax                                                 $   0       $   0
                                                                    =====       =====
</TABLE>

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

A.       FORWARD LOOKING STATEMENTS

         Except for the historical information contained herein, this report on
         Form 10-QSB contains forward-looking statements that involve risks and
         uncertainties. The Company's actual results could differ materially
         from the forward looking statements. 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.

         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  Fluctuations or reductions in product demand and market
                  acceptance

               o  The level of product development by the Company

               o  Capacity and supply constraints or difficulties

               o  The results of financing efforts

               o  The effect of new laws and regulations

               o  Unexpected additional expenses or operating losses

               o  Competition

               o  The Company's reliance on certain vendors for key components.

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

B.       SUMMARY OF OPERATIONS

         At $8,445,000, net sales for the first three quarters of 2001 were
         $1,502,000 lower than the same period in 2000. The Company attributes
         its decline in sales to an overall softening in the marketplace for its
         products and discontinuance of certain products.

         The Company's backlog at the end of the third quarter of 2001 was
         $497,000, down $270,000 from the third quarter of 2000 backlog of
         $767,000.

         As a percentage of net sales, gross margins in the first nine months of
         2001 were 25.5% as compared to 27.8% in the first nine months of 2000.


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         At $2,479,000, total operating expenses during the first three quarters
         of 2001 are $407,000 lower than the total operating expenses of
         $2,886,000 for the same period in 2000.


         Interest expense in the first three-quarters of 2001 decreased by
         $12,000 as compared to the first three-quarters of 2000.

         Other non-operating expenses increased by $6,000 in the first nine
         months of 2001 as compared to the same period in 2000.




C.       FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         The Company's trade accounts receivable declined by $322,000 from
         December 31, 2000 to September 30, 2001. The decline in receivables is
         directly attributable to the decline in sales.

         Inventories declined by $628,000 during the period from December 31,
         2000 to September 30, 2001. The difference represents management's
         focus to carry less inventory in conjunction with the reduced sales
         volumes.

         Prepaid expenses and other current assets declined by $31,000 during
         the first three quarters of 2001.

         Capital expenditures aggregated $28,000 during the first three-quarters
         of 2001.

         The Company's accounts payable balance at September 30, 2001 declined
         by $149,000 from the December 31, 2000 level. The decrease is
         attributable to the reduced purchasing activity related to the decline
         in sales volume.

         The Company's notes payable decreased by $12,000 during the first three
         quarters of 2001.

         Cash overdrafts decreased to $0 at September 30, 2001 from $282,000 at
         December 31, 2000.

         The Company participates in a revolving credit facility with its
         affiliate company, Pacer Corporation, which is provided by Firstar
         Bank, N.A. The total credit available under this facility is
         $2,320,000, which is split into two separate lines of $2,000,000 and
         $320,000, respectively. The former line is secured by a letter of
         credit, while the latter portion is secured by the Company's
         receivables, inventory and remaining unpledged assets. The credit
         facility expires on January 27, 2002. Events during the past several
         months have decreased the certainty that the facility will be renewed
         by the current lender. The Company has continued to operate at a loss
         and remains in violation of


                                     - 6 -

<PAGE>


         its financial net worth covenant under the loan agreement.
         Additionally, the lending parameters offered by the current lender, or
         through replacement financing, may not offer sufficient liquidity to
         allow the Company to continue current operations.


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 insurance carriers, but are subject to
         deductibles ranging from $0 to $100,000. A number of the claimants
         allege substantial damages. While management believes the Company has
         substantial defenses with respect to the claims, the ultimate outcome
         of such litigation cannot be predicted with certainty. The Company has
         reasonably estimated and accrued in its financial statements its
         portion of the deductible as a product liability contingency. Such
         claims are an ordinary aspect of the Company's business.

ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         None.


                                     - 7 -

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                                   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:  11/14/01            /s/ Gregory Coward
    --------------         --------------------------------------------------
                                                               Gregory Coward
                                                               President


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