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                            FORM 10-K


               SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C. 20549


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

For the fiscal year ended December 31, 1997


                               OR


[ ]  TRANSITION  REPORT PURSUANT TO SECTION 13 OR  15(d)  OF  THE
     SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ___________ to ____________.

Commission file number 1-3329

                    WILSON BROTHERS USA, INC.
     (Exact name of registrant as specified in its charter)

     (Each name of registrant as specified in its charter)

            ILLINOIS                        36-1971260
(State or other jurisdiction of          (I.R.S. Employee
 incorporation or organization)         Identification No)

     902 South Main Street                     15474
        Point Marion, PA                    (Zip Code)
(Address of principal executive
            offices)

 Registrant's telephone number,           (412) 725-5231
      including area code:



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

Securities registered pursuant to Section 12(g) of the Act:

                  Common Stock. $1.00 Par Value
                         Title of Class

     Indicate by check mark whether the registrant (1) has  filed
all  reports required to be filed by Section 13 or l5(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days. Yes X  No

      Indicate  by check mark if disclosure of delinquent  filers
pursuant  to Item 405 of Regulation S-K is not contained  herein,
and will not be contained, to the best of registrant's knowledge,
in  definitive  proxy or information statements  incorporated  by
reference in Part III of this Form 10-K or any amendment to  this
Form 10-K.  [ x ]

      The aggregate market value of the voting stock held by non-
affiliates  cannot  be  determined since  no  established  market
exists for the Company's common stock.

      There  were  3,321,039  shares of the  registrant's  common
stock  ($l.00 par value) outstanding at April 1, 1998,  of  which
non-affiliates  and  affiliates  held  1,544,653  and   1,776,386
shares, respectively, representing 46.5% and 53.5%, respectively,
of the registrant's common stock outstanding.

                             PART I

     Item 1.   Business.

     Forward-Looking Statements

     The  following  discussion contains certain  forward-looking
statements with respect to anticipated results, which are subject
to  a number of risks and uncertainties.  From time to time,  the
Company  may publish forward-looking statements relating to  such
matters as anticipated financial performance, business prospects,
technological   developments,   new   products,   research    and
development   activities  and  similar  matters.    The   Private
Securities Litigation Reform Act of 1995 provides safe harbor for
forward-looking statements.  In order to comply with the terms of
the  safe  harbor,  the Company notes that a variety  of  factors
could cause the Company's actual results and experience to differ
materially  from  the anticipated results or  other  expectations
expressed in the Company's forward-looking statements.  The risks
and  uncertainties  that may affect the operations,  performance,
development and results of the Company's business include,  among
other  things, the following: business conditions and  growth  in
the Company's industry; general economic conditions; the addition
or  loss  of  significant customers; the loss of  key  personnel;
product   development;  competition;  fluctuations   in   foreign
currency  exchange rates; rising costs of raw materials  and  the
unavailability of sources of supply; the timing of orders  placed
by  the Company's customers; failure by the Company's subsidiary,
Houze,  to  renegotiate its credit facility  beyond  the  current
expiry  date of September 30, 1998; and other risk factors listed
from time to time in the Company's quarterly reports.

     General Development of Business

     Wilson  Brothers USA, Inc. was incorporated in  Illinois  in
1898.   Reference  herein to "the Company" includes  collectively
Wilson Brothers USA, Inc. and its subsidiaries unless the content
indicates  otherwise.  As of December 31, 1997, the  Company  has
three  wholly owned subsidiaries, Numo Manufacturing Acquisition,
Inc.  ("Numo"),  Houze Glass Company ("Houze"),  Houze  West  LLC
("Houze  West"), and a 90 percent owned subsidiary, LM  Plastics,
Inc.  ("LMP").   Houze  West was formed prior  to,  but  had  not
commenced  operations  as  of December  31,  1997,  and  LMP  had
discontinued substantially all of its operations as of that date.
All  subsidiaries  operate in the specialty advertising  business
and engage in the decoration of glass, ceramic and plastic items,
cloth  and vinyl bags, and visor style caps.  Their products  are
primarily distributed throughout the United States through  sales
representatives.  The Company's principal executive  offices  are
located at 902 South Main Street, Point Marion, PA 15474.

     The LMP Acquisition

     On  April 9, 1997, the Company entered into a stock purchase
agreement  with G&L Consultants, Inc. to purchase  a  90  percent
ownership,  represented  by  171,000 shares  of  the  outstanding
common  stock  of  LMP,  a North Carolina  corporation  with  its
principal  office in Shelby, North Carolina.  The purchase  price
for  the  common stock consisted of the payment  of  $1,  plus  a
personal  indemnity by John Sanford, the Company's President,  to
G&L  Consultants, Inc. for the payment of a promissory note  from
LMP  to a bank in the original principal amount of $70,000.   The
Company has the option to purchase at any time, or after 3  years
is  obliged to purchase at the request of G&L Consultants,  Inc.,
the  remaining  10 percent outstanding shares for the  amount  of
$10,450,  with  such price increasing at an  annual  rate  of  20
percent  for each month after April 9, 1997.  The acquisition  is
accounted for using the purchase method of accounting,  of  which
the purchase price over net assets acquired was insignificant.

     The NUMO Acquisition

     On  April  30,  1997,  Numo,  a  newly  formed  wholly-owned
subsidiary  of the Company, purchased certain assets and  assumed
certain  liabilities of Numo Manufacturing Company, Inc. and  its
wholly-owned subsidiary Diamond Cap Company, Inc. (the "Seller"),
each  of  which  has principal offices in Mesquite,  Texas.   The
aggregate  purchase  price  for  the  acquired  assets  of   both
companies  and covenants not to compete given by the  Seller  and
their shareholders, was $1,100,000 consisting of $45,000 paid  in
cash   and  the  execution  and  delivery  of  promissory   notes
("Purchase Notes") in the aggregate principal amount of  $855,000
and   $200,000   payable  pursuant  to  non-compete   agreements,
described  as  follows.  The Purchase Notes and  amounts  payable
under  the non-compete agreements bear interest initially at  the
rate  of 8% per annum subject to adjustment on each April  1  and
October  1,  with the first adjustment occurring  on  October  1,
1997.   On  each  adjustment date (October 1  and  April  1)  the
interest  rate shall be increased or decreased (but not below  8%
per  annum or above 11% per annum) by an amount equal to  50%  of
the  difference  between the prime rate  published  by  The  Wall
Street  Journal  on  the  adjustment date  in  question  and  the
immediately  preceding adjustment date.  Principal  and  interest
payable   on   the  Purchase  Notes  and  under  the  non-compete
agreements will be paid on the first day of each January,  April,
July  and October, commencing on July 1, 1997.  The entire unpaid
principal  balance  on  all such obligations  shall  be  due  and
payable  April  1,  2004.  The Purchase Notes are  secured  by  a
pledge of substantially all of the acquired assets.  In addition,
payment of the Purchase Notes is guaranteed by the Company.  Numo
also entered into consulting agreements with the two shareholders
of  the Seller for a term of one year pursuant to which Numo paid
each of such consultants $224,000 on May 1, 1997.

     In  order to finance the cash portion of the purchase  price
and  the  consulting fees paid at the time of  the  closing,  the
Company  borrowed $550,000 from Blind John, LLC which is  wholly-
owned  by  members of the family of John Sanford,  the  Company's
President,  of  which Mr. Sanford is a less than 1%  owner.   The
loan  bore  interest  at the annual rate of 10  percent  and  the
outstanding  principal balance was repaid in full, with  interest
on  July  9,  1997.  The Company paid an origination fee  to  the
lender in the amount of $3,500 and an additional loan origination
fee in the amount of $30,000 is payable on or before May 1, 1998.
At  the  option of the lender exercisable before May 1, 1998,  in
lieu  of  receiving payment of the $30,000 additional origination
fee,  the  lender shall have the right to purchase the number  of
shares  of  Common  Stock  of the Company  equal  to  3%  of  the
Company's  fully diluted shares of Common Stock at  the  time  of
such  election  or a cash fee of $10,000 and 2% of the  Company's
fully diluted shares of Common Stock at the time of such election
or  a  cash fee of $20,000 and 1% of the Company's fully  diluted
shares of Common Stock at the time of such election, provided the
Company  has  sufficient shares of Common Stock  which  are  then
authorized and unissued available for purchase by the lender.  On
April  16, 1998, the Company and Blind John, LLC agreed to extend
the option to May 1, 1999.

     Numo  continues the pre-existing business activities of Numo
Manufacturing Company, Inc. and Diamond Cap Company, Inc. at  the
same  premises  in Mesquite, Texas for which it  entered  into  a
lease agreement with one of the selling entities for a term of  7
years  at  an  annual  base  rent of  $76,000.    Numo's  primary
business  activity is custom manufacturing, sewing and decorating
of  a variety of cloth and vinyl bags and related accessories and
visor  style caps.  Similarly to Houze Glass Corporation,  Numo's
sales  are  made through sales representatives and are  generally
for  advertising specialties, premiums, souvenirs and the  retail
trade.

     The  acquisition was accounted for using the purchase method
of   accounting  and,  accordingly,  the  consolidated  financial
statements   include  Numo's  operations   from   the   date   of
acquisition.   The  amounts  paid in connection  with  consulting
agreements of $450,000 are being amortized over the terms of such
agreements,  which is 12 months.  The amounts paid for  covenants
not to compete of $224,000 are being amortized over the terms  of
those  agreements, which is 3 years.  The Company  allocated  the
remaining  excess  of  purchase price over net  assets  acquired,
which  is  approximately  $95,000 to  goodwill,  which  is  being
amortized   over  20  years.   Acquisition  costs   incurred   in
connection   with  this  purchase  transaction  which   consisted
principally  of  professional  and  borrowing  fees,   were   not
material.

     Acquisition of Houze West

     On November 12, 1997, the Company became the sole owner of a
newly  formed Nevada limited-liability company, Houze  West,  LLC
("Houze  West").  In January 1998, the Company ownership interest
changed   to   75   percent,  an  unaffiliated  company,   Cactus
Enterprises,  LLC,  purchased the remaining 25 percent  interest.
House   West  will  maintain  its  manufacturing  operations   in
Henderson,  Nevada, where it has entered into a  lease  agreement
for approximately 15,000 square feet of manufacturing facilities.
Houze  West  will  operate in the same business  segment  as  the
Company,  primarily in the decoration of mugs and glassware,  and
will  be  a  manufacturing and sales distribution center  to  the
Company's customers in the western United States.

     The   Company   has  agreed  to  make  an  initial   capital
contribution  to  Houze  West of cash and  other  assets  in  the
approximate aggregate amount of $133,000.

     Shareholder Changes

     At  the beginning of fiscal year 1993 approximately 53.7% of
the  Company's common stock was owned by DWG Corporation ("DWG").
On  April 23, 1993, DWG Acquisition Group L.P. acquired 28.6%  of
DWG's  then  outstanding shares of common stock.  DWG Acquisition
Group  L.P.  subsequently changed its name to  Triarc  Companies,
Inc. ("Triarc").

     On  September  28,  1993, the Company's Board  of  Directors
authorized  the  sale  or liquidation of  all  of  its  operating
businesses.   On  December  28,  1993,  Triarc  entered  into   a
Securities Purchase Agreement with Bruce Paparella and Warren  B.
Kanders  (the  "Purchase Agreement"). Pursuant  to  the  Purchase
Agreement,  on  January  10, 1994, Mr.  Paparella  acquired  from
Triarc  1,296,436  shares  of  the Company's  common  stock,  Mr.
Kanders  acquired  from Triarc 648,217 shares  of  the  Company's
common  stock, Triarc assigned to Mr. Paparella and  Mr.  Kanders
that certain note made by the Company and owned by Triarc with  a
remaining  principal  balance  of  $1,500,000  which  note  bears
interest  at the prime rate and at the time was convertible  into
956,937  shares  of the Company's common stock (the  "Convertible
Note"), and Triarc assigned to Mr. Paparella and Mr. Kanders  cer
tain accounts receivable by Triarc in the amount at September 30,
1993 of $1,230,000 (the "Accounts Receivable").  As a consequence
of  said transactions, Mr. Paparella owned a 75% interest in  the
Convertible Note and the Accounts Receivable and Mr.  Kanders  ob
tained  a  25% interest in the Convertible Note and the  Accounts
Receivable and, Mr. Paparella and Mr. Kanders together  owned  ap
proximately 59% of the Company's outstanding common stock and, as
a  result  of such transactions, may be deemed to have controlled
the  Company.   Effective December 30, 1994, Mr. Kanders  entered
into  three separate stock purchase agreements pursuant to  which
Mr.  Kanders transferred the aggregate of 648,217 shares  of  the
Company's   common  stock  owned  by  him  to  four  individuals,
including Mr. Paparella who purchased 348,217 shares for  $5,000.
Mr.   Kanders  sold  the  remainder  of  these  shares  to  three
individuals who are not related to Mr. Paparella. On December 22,
1994  Mr.  Kanders  made  a  gift  of  his  25%  portion  of  the
Convertible  Note, which was convertible into 239,234  shares  of
Common  Stock (representing 6.9% of the Common Stock on  a  fully
diluted  basis assuming the Convertible Note was fully  converted
into  such shares of Common Stock), and Mr. Kanders' 25% interest
in  the  Accounts  Receivable to a charitable foundation,  Choate
Rosemary  Hall  Foundation, Inc., leaving  Mr.  Kanders  with  no
remaining beneficial interest in the Company's common stock.   On
April  18,  1995, John Sanford, the Company's then Vice President
and  Chief  Financial Officer, acquired in a private  transaction
with  Mr. Walter Carucci, a $362,500 interest in such convertible
note  which  is convertible into 231,259 shares of the  Company's
Common  Stock and, as such, Mr. Sanford may be deemed to  be  the
beneficial  owner  of 231,259 shares issuable  to  him  upon  his
election  to  convert his interest in the notes.   On  April  21,
1996,   Mr.  Bruce  Paparella,  the  Company's  President,  Chief
Executive  Officer and a Director died from cancer.  On September
6,  1996,  in a private transaction, the Estate of Mr.  Paparella
sold  to  Mr.  Sanford 1) a 37.5% interest in such  Note  in  the
principal  sum  of  $562,500, which is convertible  into  358,852
shares  of  the  Company's  Common  Stock,  2)  certain  accounts
receivable  in  the  amount of $461,250 of the  Company,  and  3)
1,644,653  shares of the Company's common stock, for an aggregate
purchase  price of $330,000.  On November 22, 1996, Mr.  Sanford,
in a private transaction, made gifts to non-affiliated persons of
1)  100,000 shares of the Company's Common Stock, and 2)  $56,250
of  the principal amount plus accrued interest of the Convertible
Note,  which  is convertible into 35,886 shares of the  Company's
Common  Stock.   On February 13, 1997, in a private  transaction,
Choate  Rosemary  Hall  Foundation,  Inc.  sold  to  Mr.  Sanford
pursuant to a Note and Accounts Receivable Purchase Agreement (i)
their  interest  of $375,000 principal amount of the  Convertible
Note,  which is convertible into 239,234 shares of the  Company's
Common  Stock, and (ii) their interest in the Accounts Receivable
for an aggregate purchase price of $200,000.  On August 12, 1997,
in  private  transactions, Mr. Sanford pursuant to separate  Note
and Accounts Receivable Purchase Agreements sold his interest  in
$375,000 principal amount and accrued interest of the Convertible
Note  and  $307,500 in the Accounts Receivable for  an  aggregate
amount  of  $226,445.  Of this amount, $187,000 principal  amount
and  accrued interest on the Convertible Note and 12.5%  interest
in  the  Accounts  Receivable were purchased  by  Carucci  Family
Partners, (the "Partnership" ) in which Mr. Walter P. Carucci  is
a  general  partner,  for $113,223.  As a  result  of  the  above
transaction,  Mr. Carucci may be considered the beneficial  owner
of  an  aggregate of $387,500 of the Convertible Note, consisting
of  (i) $200,000 of the Convertible Note convertible into 127,592
shares of Common Stock previously owned by Mr. Carucci, and  (ii)
$187,500 of the Convertible Note convertible into 119,617  shares
of  Common Stock owned by the Partnership, of which the aggregate
principal and accrued interest thereon is convertible at any time
into  247,209  shares  and 101,112 shares, respectively,  of  the
Company's Common Stock, constituting 7.5% of the Company's Common
Stock.   As a result of the above transactions, as of August  12,
1997, Mr. Sanford is the beneficial holder of (i) $868,750 of the
Convertible  Note  of  which the principal and  accrued  interest
thereon  is  convertible at any time into  approximately  554,226
shares  and  226,686 shares, respectively, of Common  Stock,  and
(ii) 1,544,653 shares of the Company's Common Stock, constituting
approximately  49.8  percent of the Company's outstanding  Common
Stock.

     Mr.  Sanford  is  the Company's President,  Chief  Executive
Officer and a member of the Board of Directors.

     Discontinued Operations

     From  September  28,  1993  through  January  9,  1994,  the
Company's  two  wholly-owned  subsidiaries,  Houze  and  Northern
Engineering  Corporation,  a Delaware  corporation  ("Northern"),
were treated as discontinued operations.  As of January 10, 1994,
however,  the  Company's  Board of Directors  deemed  it  in  the
Company's  best  interest to continue the  operations  of  Houze.
Accordingly, the consolidated financial statements  for  each  of
the  periods  presented have been restated to  reflect  only  the
operations of Northern as discontinued.

        On  May 12, 1994, the Company sold all of the outstanding
shares  of  Northern  to  a corporation controlled  by  a  former
director  of the Company.  In consideration for the sale  of  the
Northern  shares, the Company received $10,000,  plus  a  secured
promissory note (the "Note") in the principal amount of  $750,000
repayable on or before May 1, 1999, which bears interest  payable
quarterly at 8 percent per annum. Such note is collateralized  by
certain  real  property  of Northern (the "Mortgaged  Property").
The  Mortgaged Property was not appraised in connection with  the
transaction.  Effective October 28, 1994, the Company  agreed  to
reduce the percentage from 50 percent to 30 percent of the amount
that  the  Company shall be entitled to receive if the  Mortgaged
Property  is  sold  in  excess  of  $750,000.  In  exchange,  the
purchaser made a partial prepayment of the principal of the  Note
in  the  amount of $150,000, which was paid by November 7,  1994,
and  agreed  to  make  an additional $150,000 partial  prepayment
which was paid on January 15, 1995.  The purchaser had the option
to prepay the remaining principal balance of the Note by June 30,
1995.  Such prepayment was not made, and therefore, the purchaser
was  to  additionally compensate the Company $50,000 by July  15,
1995,  of  which only $10,000 has been paid.  As  a  result,  the
Company  believed  that  the principal amount  of  the  Note  and
accrued interest thereon was not collectible, and therefore as of
September 30, 1995 made a full valuation reserve in the financial
statements  of $450,000 for the principal balance and $6,000  for
the  accrued interest balance on the note as well as the  $40,000
balance  on  the option fee. On July 1, 1997, the  principal  and
accrued  interest on the Note were paid in full in the  aggregate
amount  of  $539,700, including accrued interest  of  $6,200  and
$43,500  representing 30 percent of the amount that  the  Company
shall be entitled to receive if the Mortgaged Property is sold in
excess  of  $750,000.   As a result, as of  June  30,  1997,  the
valuation  reserve  for  principal of $490,000  and  interest  of
$6,000  were reversed, and included in other income and  interest
income, respectively.

     On   November  16,  1995,  the  Company  received   $472,541
representing the net proceeds distributed in connection with  the
resolution of all litigation claims of Northern, retained by  the
Company after the sale of Northern, with Pennsylvania Engineering
Corporation.   These  proceeds  were  applied  to  interest   and
principal  under the Note.  The Consolidated Financial Statements
included elsewhere in this Annual Report on Form 10-K reflect the
stock sale of Northern.

     Industry Segments

     The  Company presently operates in one business segment, the
specialty advertising business.

     Business

     The Company is a holding company whose business is conducted
through   its   wholly-owned  subsidiaries,  Numo   Manufacturing
Acquisition, Inc. ("Numo"), Houze Glass Company ("Houze"), its 75
percent  owned subsidiary Houze West LLC ("Houze West"), and  its
90  percent  owned subsidiary, LM Plastics, Inc. ("LMP").   Houze
West was formed prior to, but had not commenced operations as  of
December   31,   1997.    LMP's  operations   are   substantially
discontinued.    All  subsidiaries  operate  in   the   specialty
advertising  business  and  engage in the  decoration  of  glass,
ceramic and plastic items, cloth and vinyl bags, and visor  style
caps.   Their  products are primarily distributed throughout  the
United States through sales representatives.

     Except  as  described below, the Company does not anticipate
that present environmental regulations will materially affect its
capital expenditures, earnings or competitive position.  To date,
the  Company  has  not been required to make significant  capital
expenditures in order to meet current environmental standards.

      As  of December 31, 1997, the Company had approximately 219
employees  of which 33 were salaried employees and the  remainder
were  hourly personnel.  The workers at Houze are represented  by
the  American  Flint Glass Workers Union under a contract,  which
expires  in  March 1999.  The employees at Numo are not  under  a
union  contract.   The Company believes its  relations  with  its
employees are satisfactory.

     Except  as  described below, patents, trademarks,  licenses,
franchises  and concessions are not material to the  business  of
the  Company.   Working capital requirements of the  Company  are
expected to be fulfilled from operating cash flow supplemented by
a revolving line of credit facility arranged with a bank on March
4,  1994  and  extended  on  various dates  through  maturity  on
September 30, 1998.  During the last three years, the Company has
not  had  any  material  expenditures  for  Company  or  customer
sponsored   research  and  development  activities.   No   single
customer   accounted  for  more  than  10%   of   the   Company's
consolidated revenues in 1997.

     The  Company is engaged in the decoration of glass,  ceramic
and  plastic  items, cloth and vinyl bags, and visor style  caps.
Sales  are  made through sales representatives and are  generally
for  advertising specialties, premiums, souvenirs and the  retail
trade.   The  Company's business is highly  competitive.   Custom
imprinted  items  generally lend more  exposure  per  advertising
dollar  to  customers because of their frequency of  use  in  the
business atmosphere.  From time to time, the Company also obtains
special  contract orders.  Such special contract  orders  do  not
necessarily  occur  each  year  and  there  were  no  significant
contract  orders in 1995, 1996 or 1997.  The decorative specialty
advertising products business is highly competitive, particularly
in connection with items such as tumblers, mugs and glasses.  The
Company  competes  on  the basis of price,  quality,  design  and
customer  service.   Many  of  its competitors  are  much  larger
companies,  with  far  greater  resources.   Competing  with  the
Company  in  the  specialty  advertising  products  business  are
companies  such as Norwood Promotional Products and  Bemrose  USA
that  are  dominant  in  this industry.   Using  price,  quality,
service  and  expertise  of  design as  priorities,  the  Company
believes  that  it  can  maintain  a  competitive  edge  in   the
advertising specialty market.

     For  the  last  two years the custom decorated  ceramic  mug
product  line has been approximately 85% of the Company's overall
business.  Through certain acquisitions, management has  expanded
the  Company's decorative products to include a large variety  of
custom imprinted glass, plastic, foam and ceramic beverage  ware,
visor  style caps, Igloor plastic products, and vinyl  and  cloth
beverage coolers, bags, and notepads.  Additionally, the  Company
has   expanded   its  traditional  decorating  processes,   which
principally  included  direct  screening  multiple  colors   onto
glassware  and  ceramic mugs. The Company's imprinting  processes
now  include, direct embroidery for bags and caps, debossing  and
hot  stamping  for vinyl products, and up to four  color  process
sublimation for selected ceramic and steel mugs, tote bags, mouse
pads, foam beverage ware and ceramic tiles and magnets.

     The  Company  incorporates  the  use  of  "special  effects"
processes in certain of its decorating applications.  The "magic"
process is a thermal chromatic process whereby ceramic pigment is
activated by either high or low temperatures.  This allows for  a
visual  change  in  the  product to reveal  an  advertisement  or
artistic effect, making images appear and/or disappear when a hot
or  cold  beverage  is  added.  The Company  offers  the  "magic"
process  as  an option for most ceramic and glass beverage  ware.
This  process  is  now available through other  manufacturers  in
United States.  Consequently, competition in this market area  is
increasing  to  some  extent.  Other "special effects"  processes
include  the  use of iridescent colors, and "see-vue" decorating,
which enables an message or decorative imprint to be seen on  the
inside  of  a  glassware product through the design of  an  clear
opening on the opposite side of the glass.

     The  Company purchases much of its raw material supplies  of
glass   and   ceramic   items  from  five  principal   suppliers.
Management believes that such raw materials are readily available
from other sources at competitive prices.

     The  Company enters into licensing agreements with customers
who  permit  it to imprint specific logos or designs directly  on
products.

     In  recent  years,  the Company's sales have  been  greatest
during  the  fall  quarter  as  a result  of  customers'  holiday
programs.   Backlog or orders believed to be firm as of  December
31,  1997  were  $400,000 compared to $223,000 at year-end  1996.
Backlog orders are filled within the current fiscal year.

     Certain  of  the Company's inventory, such as  ceramic  mugs
must  be  imported,  and therefore, the Company  is  required  to
maintain inventories in those items to cover needs for  45  -  60
days  at  a  minimum.   If  a  shortfall  occurs,  inventory   is
supplemented  with items purchased from distributors  located  in
the   United   States.  Because  of  the  Company's   method   of
distribution,  it is not dependent on any single  customer.   The
Company's  subsidiaries are members of the Advertising  Specialty
Institute  and  are suppliers to the advertising  industry.   The
Company maintains a nationwide distribution network through  over
12,500  distributors offering its products. The Company does  not
offer extended payment terms to customers.

     As an advertising specialty supplier, no material portion of
the Company's business is affected by renegotiation of profits or
termination  of  contracts at the election  of  any  governmental
agency.

     In  February 1993, the Company became aware that certain  of
Houze's products might have concentrations of lead and cadmium at
levels,  which  might constitute hazardous  waste.   While  after
testing,  it  was  ascertained  that  products  currently   being
produced   are   within  acceptable  levels,  certain   products,
generally  those produced prior to 1980, had unacceptable  levels
of  lead and cadmium.  These products had been disposed of  in  a
disposal  site  located  on Houze's property.   The  Pennsylvania
Department  of  Environmental Protection (PDEP) and  the  Company
agreed to a consent order on September 22, 1994, which outlined a
plan  for  Houze to remove and encapsulate all of  the  hazardous
waste  and  thereby  comply  with  residual  waste  pile  closure
requirements.  The estimated cost of the Company's original  plan
of  remediation  was  increased  during  1993  by  $700,000  from
$200,000, based on advice from its consultant, which was provided
for  in  the 1993 consolidated financial statements.  The Company
incurred  actual remediation expenses in the aggregate amount  of
$215,000,  of which $45,000, $25,000 and $41,000 were charged  to
the  reserve  in 1997, 1996 and 1995, respectively.  On  February
12,  1998, a final closure inspection was conducted by the  PDEP.
On  February  23, 1998, the PDEP determined that the Company  had
satisfactorily  complied  with the requirements  of  the  consent
order,  and  the Company was released from any further obligation
with  respect to such consent order.  Accordingly, as of December
31,  1997,  the balance of the reserve in the amount of  $775,000
was reversed into other income.

     The Company has no foreign operations or any material export
sales.

     Subsequent Events

     On  February  18, 1998, the Company formed a new subsidiary,
Surplus Salvage Supply, LLC ("Surplus Salvage"), a Texas Limited-
Liability Company, which on February 26, 1998, agreed to purchase
certain  assets  of  B.J.'s  Warehouse,  a  Texas  company.   The
purchase  price is $150,000, of which $125,000 was paid in  cash,
and  the balance payable in the form of a promissory note in  the
amount of $25,000, over 24 months with interest calculated  at  8
percent per annum.

     In  order  to  finance the purchase, the Company capitalized
Surplus Salvage in the amount of $76,500, and made a demand  loan
in the amount of $73,500.  To finance the capitalization and loan
to  Surplus  Salvage,  the Company borrowed  $140,000,  including
$60,000  from  Margaret Peyton, the mother of  Mr.  Sanford,  and
$40,000  from  a  company  of which a  member  of  the  Board  of
Directors  is  the principal owner.  These loans are  payable  on
demand.

     Effective  March  1,  1998, Harris Trust  and  Savings  Bank
("Harris")  terminated its appointment as the Company's  transfer
agent  and  registrar due to overdue balances and non-payment  of
its  invoices  for fees.  Until such time that the  Company  pays
Harris  for  all past due fees plus reimbursement  of  reasonable
expenses, Harris will not release the Company's records and stock
certificate inventory for further processing.

     Item 2.   Properties.

     Operations  of  Houze  occupy a facility  in  Point  Marion,
Pennsylvania  which  has  approximately 175,000  square  feet  of
manufacturing and office space on a 16 acre site.  The operations
of  Numo  occupy  a  facility in Mesquite, Texas  under  a  lease
agreement,  which  has  approximately  35,000  square   feet   of
manufacturing and office space on a 9-acre site.  Such facilities
are substantially utilized.

     Item 3.   Legal Proceedings.

      While  the  Company is not currently engaged in litigation,
the  Company is from time to time involved in routine  litigation
incidental  to its business.  The Company does not  believe  that
any  of  such  routine litigation will have  a  material  adverse
effect  on  its  consolidated financial position  or  results  of
operations.

     Item 4. Submission of Matters to a Vote of Security Holders.


      Not applicable.


PART II

     Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.

     There is no current established public trading market for
the Company's common stock.

     On  September  14,  1993,  the Company's  common  stock  was
delisted  from the Pacific Stock Exchange for failure  to  comply
with  minimum  listing criteria.  Since that time  the  Company's
common  stock  has been traded over the counter through  National
Quotation Bureau's "pink sheets".   Since December 12, 1993,  the
"pink sheets" has listed no bid for the Company's common stock.

     As  of December 31, 1996, there were 3,027 record holders of
the Company's common stock. Effective March 1, 1998, Harris Trust
and  Savings  Bank ("Harris") terminated its appointment  as  the
Company's  transfer agent and registrar due to  overdue  balances
and  non-payment of its invoices for fees.  Until such time  that
the  Company pays Harris for all past due fees plus reimbursement
of  reasonable  expenses, Harris will not release  the  Company's
records  and  stock certificate inventory for further processing.
While the Company is not aware of any transactions regarding  its
common  stock,  or  changes in ownership during  the  year  ended
December 31, 1997, Harris will not confirm such information.

     The Company did not declare or pay any cash dividends during
the  past three years.  The applicable provisions of the Business
Corporation  Act  of  Illinois,  the  Company's  jurisdiction  of
incorporation, limit the payment of dividends to an amount  equal
to  the  difference between the assets of a corporation  and  its
liabilities.   Under  such provisions at December  31,  1997,  no
dividends were permitted to be paid.  The Company has no  present
plans for the payment of any dividends.

     On  January  10,  1994,  pursuant to a  Securities  Purchase
Agreement  dated December 28, 1993 among Bruce Paparella,  Warren
B.  Kanders  and  Triarc  Companies,  Inc.  ("Triarc"),  (i)  Mr.
Paparella  acquired from Triarc 1,296,436 shares of the Company's
common  stock,  (ii)  Mr. Kanders acquired  from  Triarc  648,217
shares  of  the Company's common stock, (iii) Triarc assigned  to
Mr.  Paparella  and Mr. Kanders that certain  note  made  by  the
Company and owned by Triarc with a remaining principal balance of
$1,500,000 which note bears interest at the prime rate and at the
time  was  convertible into 956,937 shares of Common  Stock  (the
"Note"),  and  (iv)  Triarc assigned to  Mr.  Paparella  and  Mr.
Kanders certain accounts receivable held by Triarc in the  amount
at  September 30, 1993 of $1,230,000 (the "Accounts Receivable").
Triarc  is  the successor to DWG Corporation ("DWG"), the  former
controlling shareholder of the Company.  As a consequence of said
transactions, Mr. Paparella obtained a 75% interest in  the  Note
and  the  Accounts  Receivable and Mr.  Kanders  obtained  a  25%
interest in the Note and the Accounts Receivable.

           Effective December 30, 1994, Mr. Kanders entered  into
three  separate stock purchase agreements pursuant to  which  Mr.
Kanders  transferred the aggregate of 648,217 shares of  the  Com
pany's  Common Stock owned by him to four individuals,  including
Mr.  Paparella  who  purchased 348,217 shares  for  $5,000.   The
remainder  of  these  shares were sold by Mr.  Kanders  to  three
individuals  who are not related to Mr. Paparella.  In  addition,
the  Company  has been informed that, on December  22,  1994  Mr.
Kanders  made  a gift of his 25% portion of the Convertible  Note
which  was convertible into 239,234 shares of Common Stock (repre
senting  6.9% of the Common Stock on a fully diluted basis  assum
ing the Convertible Note was fully converted into such shares  of
Common Stock) and Mr. Kanders 25% interest in the Accounts Receiv
able to a charitable foundation, Choate Rosemary Hall Foundation,
Inc.,  leaving Mr. Kanders with no remaining beneficial  interest
in  the Company's Common Stock.  On April 18, 1995, John Sanford,
the  Company's  then Vice President and Chief Financial  Officer,
acquired,  in a private transaction with Mr. Carucci, a  $362,500
interest  in  such  convertible note which  is  convertible  into
231,259  shares of the Company's Common Stock and, as  such,  Mr.
Sanford  may  be  deemed to be the beneficial  owner  of  231,259
shares  issuable to him upon his election to convert his interest
in  the  notes.   On  April 21, 1996, Mr.  Bruce  Paparella,  the
Company's President, Chief Executive Officer and a Director  died
from cancer.  On September 6, 1996, in a private transaction, the
Estate  of Mr. Paparella sold to Mr. Sanford 1) a 37.5%  interest
in  such  Note  in  the  principal  sum  of  $562,500,  which  is
convertible into 358,852 shares of the Company's Common Stock, 2)
certain  accounts  receivable in the amount of  $461,250  of  the
Company,  and 3) 1,644,653 shares of the Company's common  stock,
for  an aggregate purchase price of $330,000.  November 22, 1996,
Mr.  Sanford,  in  a  private transaction,  made  gifts  to  non-
affiliated  persons of 1) 100,000 shares of the Company's  Common
Stock,  and  2)  $56,250  of the principal  amount  plus  accrued
interest  of  the  Convertible Note, which  is  convertible  into
35,886  shares  of the Company's Common Stock.  On  February  13,
1997,  in a private transaction, Choate Rosemary Hall Foundation,
Inc.  sold  to  Mr.  Sanford pursuant  to  a  Note  and  Accounts
Receivable  Purchase  Agreement (i)  their interest  of  $375,000
principal  amount of the Convertible Note, which  is  convertible
into 239,234 shares of the Company's Common Stock, and (ii) their
interest  in  the  Accounts Receivable for an aggregate  purchase
price  of $200,000.  On August 12, 1997, in private transactions,
Mr.  Sanford  pursuant to separate Note and  Accounts  Receivable
Purchase  Agreements  sold  his interest  in  $375,000  principal
amount  and accrued interest of the Convertible Note and $307,500
in  the  Accounts Receivable for an aggregate amount of $113,227.
Of this amount, $187,000 principal amount and accrued interest on
the   Convertible  Note  and  12.5%  interest  in  the   Accounts
Receivable  were  purchased  by  Carucci  Family  Partners,  (the
"Partnership"  )  in  which Mr. Walter P. Carucci  is  a  general
partner,  for $55,222. As a result of the above transaction,  Mr.
Carucci may be considered the beneficial owner of an aggregate of
$387,500  of the Convertible Note, consisting of (i) $200,000  of
the  Convertible Note convertible into 127,592 shares  of  Common
Stock  previously owned by Mr. Carucci, and (ii) $187,500 of  the
Convertible Note convertible into 119,617 shares of Common  Stock
owned  by  the Partnership, of which the aggregate principal  and
accrued  interest thereon is convertible at any time into 247,209
shares  and 101,112 shares, respectively, of the Company's Common
Stock,  constituting 7.5% of the Company's Common Stock.    As  a
result  of  the  above transactions, as of August 12,  1997,  Mr.
Sanford  is  the  beneficial  holder  of  (i)  $868,750  of   the
Convertible  Note  of  which the principal and  accrued  interest
thereon  is  convertible at any time into  approximately  554,226
shares  and  226,686 shares, respectively, of Common  Stock,  and
(ii) 1,544,653 shares of the Company's Common Stock, constituting
approximately  49.8  percent of the Company's outstanding  Common
Stock.   As  such,  Mr.  Sanford may be  deemed  to  control  the
Company.


     Mr.  Sanford  is  the Company's President,  Chief  Executive
Officer and a member of the Board of Directors.


     Item 6.   Selected Financial Data.(1)

For the Year        1997      1996     1995      1994    1993

Net sales           $8,379   $5,715   $5,041    $5,495  $7,021
Operating profit (loss) $    (613)    $  14     $(517)  $(652)
$                   (2,251)
Income (loss) from
 continuing operations  $    497 $    (58)$     (602)   $(588)
$                   (3,492)
Loss from discontinued
 operations, net of tax $    -   $    -   $     -   $   (161)
$                   (1,837)

Net income (loss)   $ 497    $(58)    $(602)    $(749)  $(5,329)
Net income (loss) per common and
 equivalent share:
  Continuing operations      $0.15    $(0.02)   $(0.18) $(0.18)
$ (1.05)
  Discontinued operations     -         -        -
(0.05)              (0.55)
     Basic          $0.15    $(0.02)  $(0.18)   $(0.23) $
(1.60)
     Diluted        $0.13    $(0.02)  $(0.18)   $(0.23) $  (1.60)

Shares used in computing
                    Net income (loss) per common and
 equivalent share
     Basic          3,321    3,321    3,321     3,321   3,321
     Diluted (2)    4,809    3,321    3,321     3,321   3,321

Cash dividend per share      $ -      $  -      $ -     $  -
$                   -

At Year-End

Total assets        $4,014   $1,998   $2,095    $2,655  $3,104

Long-term debt      $   -    $   -    $   -     $   -   $   9

Note payable to majority
   owners           $1,500   $1,500   $1,500    $1,500  $1,500






(1)  Restated to reflect the operations of Northern Engineering
     Corporation as discontinued.
(2)  Includes 1,348,338 shares assuming the conversion principal
     and accrued interest of certain Notes, and 140,081 shares issued
     pursuant to a loan origination fee agreement for the year ended
     December 31, 1997.
_______________________________






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

     Forward-Looking Statements

     The  following  discussion contains certain  forward-looking
statements with respect to anticipated results, which are subject
to  a number of risks and uncertainties.  From time to time,  the
Company  may publish forward-looking statements relating to  such
matters as anticipated financial performance, business prospects,
technological   developments,   new   products,   research    and
development   activities  and  similar  matters.    The   Private
Securities Litigation Reform Act of 1995 provides safe harbor for
forward-looking statements.  In order to comply with the terms of
the  safe  harbor,  the Company notes that a variety  of  factors
could cause the Company's actual results and experience to differ
materially  from  the anticipated results or  other  expectations
expressed in the Company's forward-looking statements.  The risks
and  uncertainties  that may effect the operations,  performance,
development and results of the Company's business include,  among
other  things, the following: business conditions and  growth  in
the Company's industry; general economic conditions; the addition
or  loss  of  significant customers; the loss of  key  personnel;
product   development;  competition;  fluctuations   in   foreign
currency  exchange rates; rising costs of raw materials  and  the
unavailability of sources of supply; the timing of orders  placed
by  the Company's customers; failure by the Company's subsidiary,
Houze,  to  renegotiate its credit facility  beyond  the  current
expiry  date of September 30, 1998; and other risk factors listed
from time to time in the Company's quarterly reports.

     Trends

     The following discussion and analysis of financial condition
pertains primarily to Houze and Numo, which represent the primary
business activities of the Company.

     The  Company  continues  to  face  significant  competition,
particularly in its core business, which consists principally  of
the  decoration of items, which are sold to advertising specialty
distributors.  In an effort to gain market share and  to  compete
with its competitors, many of whom are larger companies with  far
greater  resources, the Company instituted price  reductions  for
large  orders and has increased its marketing efforts  to  retail
distributors and holders of licensed products.  Additionally, the
Company   has  made  significant  improvements  to  its  customer
services area in response to the higher level of service demanded
by its customers.

     Liquidity and Capital Resources

     The   Company's  consolidated  cash  and  equivalents,  were
$462,000  at  December 31, 1997 compared to $170,000 at  December
31,  1996.   During  this period, cash and equivalents  increased
primarily  due  to the collection of the secured promissory  Note
underlying certain mortgaged property in the amount of $490,000.

     Capital  expenditures of the Company, were $69,000,  $12,000
and  $0  in 1997, 1996 and 1995, respectively.  The Company  does
not anticipate any material capital expenditures in 1998.

     From  June  1987 through May 1989, the Company made  certain
secured  loans  to  Pennsylvania Engineering Corporation  ("PEC")
which  may be deemed to have been an affiliate of the Company  at
such time, and in connection therewith, at December 31, 1994  the
Company  was  owed  a  principal balance  of  $1,555,000  on  its
outstanding  loans to PEC and $1,032,000 of accrued interest  and
$78,000  of fees.  Such outstanding loans to PEC were payable  on
demand,  bore  interest  at  the  prime  rate  plus  3%  and  are
collateralized  by a mortgage on certain real property  owned  by
PEC's  subsidiary, Lectromelt Corporation.  On February 4,  1992,
PEC  and  its subsidiaries, Birdsboro Corporation and  Lectromelt
Corporation, filed petitions for relief under Chapter  7  of  the
Federal Bankruptcy Code in the United States Bankruptcy Court for
the Western District of Pennsylvania.  A trustee was appointed in
such proceedings on February 7, 1992.  In accordance with Chapter
7  of  the  Code,  upon  such  appointment  the  trustee  assumed
jurisdiction over the assets and all powers with respect  to  the
business  of  PEC and such subsidiary. On December 28,  1994  the
Company received $60,000 in satisfaction of the mortgage from the
sale   of  certain  real  property  owned  by  PEC's  subsidiary,
Lectromelt  Corp. Such proceeds were applied to accrued  interest
receivable  and  a  comparable amount  was  charged  against  the
valuation  reserve and recorded as other income in the  statement
of  operations.   On  September 11, 1995,  the  Company  and  the
Bankruptcy  Trustee  for PEC entered into a Settlement  Agreement
pursuant   to  which  the  Company's  claims  against  PEC   were
recognized  as an allowed, general unsecured claim in the  amount
of  $1,399,986 and provided for a contingent minimum distribution
to  the Company in settlement of such claim in an amount equal to
at  least  33  percent  of  its allowed  claim.   The  Settlement
Agreement  permitted the Company to withdraw from the  settlement
if   the  Trustee's  proposed  distribution  plan  provided   for
distribution  to  the  Company of less than  33  percent  of  the
recognized  claim.   On  October 16, 1995, the  Bankruptcy  Court
approved  the  Trustee's  settlement  with  the  Company  and  on
November 16, 1995 the Trustee made a distribution to the  Company
in  the  amount of $472,541 in full and final settlement  of  the
Company's  claim  against  PEC.  Such proceeds  were  applied  to
accrued  interest receivable, and a comparable amount was charged
against the valuation reserve and recorded as other income in the
statement of operations.
     On  March 11, 1994, Houze entered into an agreement  with  a
bank for a revolving line of credit facility in an amount not  to
exceed  $400,000. The line of credit has since been increased  to
$500,000  and extended to September 30, 1998.  Advances  on  such
line  of  credit bear interest at the lending bank's  prime  rate
plus 3.5%.  In addition, the bank is entitled to reimbursement of
fees for auditing Houze's accounts receivable during the term  of
the   commitment.   Advances  are  collateralized   by   accounts
receivable,  inventory and an assignment of a $50,000 Certificate
of  Deposit  from  Fay  Penn  Economic  Development  Council  and
$100,000  Certificates  of  Deposit from  the  Company,  and  are
guaranteed by the Company and Mr. Sanford.  No assurances can  be
given  as to the success of obtaining an extension or refinancing
subsequent  to  September  30,  1998.   A  failure  by  Houze  to
renegotiate such credit facility beyond September 30, 1998  would
have a material adverse effect on the Company.

     The  Company compensated Mr. Sanford $12,000 for  management
services  for the year ended December 31, 1997, all of which  has
been  deferred.  Mr. Sanford's annual compensation for 1998  will
be $12,000.

     In  accordance  with an agreement with the Company's  former
lender, DWG made a principal payment on December 31, 1982 on  the
Company's behalf and purchased interest notes, which were  issued
by  the  Company  to such lender in payment of accrued  interest.
Pursuant  to  a Conversion Rights Agreement entered into  between
the  Company and DWG, the obligations of the Company arising from
the  principal payment by DWG and purchase of interest notes were
convertible  into  newly-issued shares of  the  Company's  common
stock.   In  1983,  DWG  converted $651,445 principal  amount  of
interest notes into 651,445 shares of the Company's common stock.
In November and December 1988, the Company repaid all outstanding
interest notes, which aggregated $2,132,000, repaid $4.5  million
of  the  $6.0 million note evidencing such principal payment  and
paid  substantially  all  accrued  interest  owed  to  DWG.   The
remaining principal balance of a $1.5 million note owed to Triarc
Companies, Inc., successor to DWG, as of December 31, 1993  bears
interest at the prime rate and is convertible into 956,937 shares
of  the Company's common stock.  Effective January 10, 1994, such
convertible  note  was purchased by Mr. Bruce Paparella  and  Mr.
Warren  B. Kanders in connection with their acquisition of common
stock from Triarc Companies, Inc., as described elsewhere herein.
On  December 22, 1994, Mr. Kanders donated his 25% rights in such
note  to  a  charitable  institution.  On April  18,  1995,  John
Sanford,   the  Company's  Vice  President  and  Chief  Financial
Officer,  acquired a $362,500 interest in such  convertible  note
which  is convertible into 231,259 shares of the Company's Common
Stock  and,  as  such,  Mr.  Sanford may  be  deemed  to  be  the
beneficial  owner  of 231,259 shares issuable  to  him  upon  his
election  to  convert his interest in the notes.   On  April  21,
1996,   Mr.  Bruce  Paparella,  the  Company's  President,  Chief
Executive  Officer and a Director died from cancer.  On September
6,  1996,  in a private transaction, the Estate of Mr.  Paparella
sold  to  Mr.  Sanford 1) a 37.5% interest in such  Note  in  the
principal  sum  of  $562,500, which is convertible  into  358,852
shares  of  the  Company's  Common  Stock,  2)  certain  accounts
receivable  in  the  amount of $461,250 of the  Company,  and  3)
1,644,653  shares of the Company's common stock, for an aggregate
purchase price of $330,000.  November 22, 1996, Mr. Sanford, in a
private transaction, made gifts to non-affiliated persons  of  1)
100,000  shares of the Company's Common Stock, and 2) $56,250  of
the  principal  amount plus accrued interest of  the  Convertible
Note,  which  is convertible into 35,886 shares of the  Company's
Common  Stock.   On February 13, 1997, in a private  transaction,
Choate  Rosemary  Hall  Foundation,  Inc.  sold  to  Mr.  Sanford
pursuant to a Note and Accounts Receivable Purchase Agreement (i)
their  interest  of $375,000 principal amount of the  Convertible
Note,  which is convertible into 239,234 shares of the  Company's
Common  Stock, and (ii) their interest in the Accounts Receivable
for an aggregate purchase price of $200,000.  On August 12, 1997,
in  private  transactions, Mr. Sanford pursuant to separate  Note
and Accounts Receivable Purchase Agreements sold his interest  in
$375,000 principal amount and accrued interest of the Convertible
Note  and  $307,500 in the Accounts Receivable for  an  aggregate
amount  of  $113,227.  Of this amount, $187,000 principal  amount
and  accrued interest on the Convertible Note and 12.5%  interest
in  the  Accounts  Receivable were purchased  by  Carucci  Family
Partners, (the "Partnership" ) in which Mr. Walter P. Carucci  is
a  general  partner,  for $55,222.  As  a  result  of  the  above
transaction,  Mr. Carucci may be considered the beneficial  owner
of  an  aggregate of $387,500 of the Convertible Note, consisting
of  (i) $200,000 of the Convertible Note convertible into 127,592
shares of Common Stock previously owned by Mr. Carucci, and  (ii)
$187,500 of the Convertible Note convertible into 119,617  shares
of  Common Stock owned by the Partnership, of which the aggregate
principal and accrued interest thereon is convertible at any time
into  247,209  shares  and 101,112 shares, respectively,  of  the
Company's Common Stock, constituting 7.5% of the Company's Common
Stock.   As a result of the above transactions, as of August  12,
1997, Mr. Sanford is the beneficial holder of (i) $868,750 of the
Convertible  Note  of  which the principal and  accrued  interest
thereon  is  convertible at any time into  approximately  554,226
shares  and  226,686 shares, respectively, of Common  Stock,  and
(ii) 1,544,653 shares of the Company's Common Stock, constituting
approximately  49.8  percent of the Company's outstanding  Common
Stock.

     The  Company has incurred losses from operations and  as  of
December 31, 1997, the Company had a stockholders' deficiency  of
$3.5  million and a consolidated working capital deficit of  $1.4
million.   The collection of a note receivable in the  amount  of
$490,000,  and  reversal  of  an  environmental  reserve  due  to
compliance  with all obligations pertaining to waste  containment
in  the  amount of $775,000 were included in other income  during
the year ended December 31, 1997.

     The  Company's ability to meet its cash requirements in  the
next  year  is  dependent  upon substantial  improvement  in  the
results  of  operations and cash flows, maintaining and  renewing
its  financing from its bank or others.  If these conditions  are
not  satisfactorily  achieved,  the  Company  may  be  unable  to
generate  sufficient  cash  flow to meet  its  requirements,  and
therefore, may be unable to continue operations.

     The  financial  statements have been  prepared  on  a  going
concern  basis,  and accordingly, do not include any  adjustments
relating  to  the recoverability and classification  of  recorded
asset  amounts nor the amounts and classification of  liabilities
that  might be necessary should the Company be unable to continue
in existence or be required to sell its assets.

     Recent Acquisitions

     On  April 9, 1997, the Company entered into a stock purchase
agreement  with G&L Consultants, Inc. to purchase  a  90  percent
ownership,  represented  by  171,000 shares  of  the  outstanding
common  stock  of  LMP,  a North Carolina  corporation  with  its
principal  office in Shelby, North Carolina.  The purchase  price
for  the  common stock consisted of the payment  of  $1,  plus  a
personal  indemnity by Mr. Sanford to G&L Consultants,  Inc.  for
the  payment  of  a promissory note from LMP to  a  bank  in  the
original principal amount of $70,000.  The Company has the option
to  purchase at any time, or after 3 years is obliged to purchase
at the request of G&L Consultants, Inc., the remaining 10 percent
outstanding  shares for the amount of $10,450,  with  such  price
increasing  at an annual rate of 20 percent for each month  after
April  9,  1997.   The acquisition was accounted  for  using  the
purchase  method of accounting, of which the purchase price  over
net assets acquired is insignificant.

     On  April  30,  1997,  Numo,  a  newly  formed  wholly-owned
subsidiary  of the Company, purchased certain assets and  assumed
certain  liabilities of Numo Manufacturing Company, Inc. and  its
wholly-owned subsidiary Diamond Cap Company, Inc. (the "Seller"),
each  of  which  has principal offices in Mesquite,  Texas.   The
aggregate  purchase  price  for  the  acquired  assets  of   both
companies  and covenants not to compete given by the  Seller  and
their shareholders, was $1,100,000 consisting of $45,000 paid  in
cash   and  the  execution  and  delivery  of  promissory   notes
("Purchase Notes") in the aggregate principal amount of  $855,000
and   $200,000   payable  pursuant  to  non-compete   agreements,
described  as  follows.  The Purchase Notes and  amounts  payable
under  the non-compete agreements bear interest initially at  the
rate  of 8% per annum subject to adjustment on each April  1  and
October 1, with the first adjustment to occur on October 1, 1997.
On each adjustment date (October 1 and April 1) the interest rate
shall  be  increased or decreased (but not below 8% per annum  or
above  11% per annum) by an amount equal to 50% of the difference
between  the prime rate published by The Wall Street  Journal  on
the  adjustment  date  in question and the immediately  preceding
adjustment date.  Principal and interest payable on the  Purchase
Notes  and under the non-compete agreements will be paid  on  the
first day of each January, April, July and October, commencing on
July  1,  1997.  The entire unpaid principal balance on all  such
obligations shall be due and payable April 1, 2004.  The Purchase
Notes  are  secured  by  a  pledge of substantially  all  of  the
acquired  assets.  In addition, payment of the Purchase Notes  is
guaranteed  by  the Company.  Numo also entered  into  consulting
agreements with the two shareholders of the Seller for a term  of
one  year  pursuant to which Numo paid each of  such  consultants
$224,000 on May 1, 1997.

     In  order to finance the cash portion of the purchase  price
and  the  consulting fees paid at the time of  the  closing,  the
Company  borrowed $550,000 from Blind John, LLC which is  wholly-
owned  by  members of the family of John Sanford,  the  Company's
President,  of  which Mr. Sanford is a less than 1%  owner.   The
loan  bore  interest  at the annual rate of 10  percent  and  the
outstanding  principal balance was repaid in full, with  interest
on  July  9,  1997.  The Company paid an origination fee  to  the
lender in the amount of $3,500 and an additional loan origination
fee in the amount of $30,000 is payable on or before May 1, 1998.
At  the  option of the lender exercisable before May 1, 1998,  in
lieu  of  receiving payment of the $30,000 additional origination
fee,  the  lender shall have the right to purchase the number  of
shares  of  Common  Stock  of the Company  equal  to  3%  of  the
Company's  fully diluted shares of Common Stock at  the  time  of
such  election  or a cash fee of $10,000 and 2% of the  Company's
fully diluted shares of Common Stock at the time of such election
or  a  cash fee of $20,000 and 1% of the Company's fully  diluted
shares of Common Stock at the time of such election, provided the
Company  has  sufficient shares of Common Stock  which  are  then
authorized and unissued available for purchase by the lender.  On
April  16, 1998, the Company and Blind John, LLC agreed to extend
the option to May 1, 1999.

     Numo  continues the pre-existing business activities of Numo
Manufacturing Company, Inc. and Diamond Cap Company, Inc. at  the
same  premises  in Mesquite, Texas for which it  entered  into  a
lease agreement with one of the selling entities for a term of  7
years  at  an  annual  base  rent of  $76,000.    Numo's  primary
business  activity is custom manufacturing, sewing and decorating
of  a variety of cloth and vinyl bags and related accessories and
visor  style caps.  Similarly to Houze Glass Corporation,  Numo's
sales  are  made through sales representatives and are  generally
for  advertising specialties, premiums, souvenirs and the  retail
trade.

     The  acquisition was accounted for using the purchase method
of   accounting  and,  accordingly,  the  consolidated  financial
statements   include  Numo's  operations   from   the   date   of
acquisition.   The  amounts  paid in connection  with  consulting
agreements of $450,000 are being amortized over the terms of such
agreements,  which is 12 months.  The amounts paid for  covenants
not to compete of $224,000 are being amortized over the terms  of
those  agreements, which is 3 years.  The Company  allocated  the
remaining  excess  of  purchase price over net  assets  acquired,
which  is  approximately  $95,000 to  goodwill,  which  is  being
amortized   over  20  years.   Acquisition  costs   incurred   in
connection   with  this  purchase  transaction  which   consisted
principally  of  professional  and  borrowing  fees,   were   not
material.

     Environmental Matters

     As described elsewhere herein, the Company became aware that
certain  of  the  products of Houze might have concentrations  of
lead  and  cadmium  at  levels, which might constitute  hazardous
waste.  While  after  testing, it was ascertained  that  products
currently  being  produced are within acceptable levels,  certain
products,   generally  those  produced   prior   to   1980,   had
unacceptable levels of lead and cadmium.  These products had been
disposed of in a disposal site located on Houze's property.   The
Pennsylvania  Department of Environmental Protection  (PDEP)  and
the  Company  agreed  to a consent order on September  22,  1994,
which outlined a plan for Houze to remove and encapsulate all  of
the  hazardous waste and thereby comply with residual waste  pile
closure  requirements.   The  estimated  cost  of  the  Company's
original  plan  of  remediation  was  increased  during  1993  by
$700,000  from  $200,000, based on advice  from  its  consultant,
which  was  provided  for  in  the  1993  consolidated  financial
statements.  The Company incurred actual remediation expenses  in
the  aggregate amount of $215,000, of which $45,000, $25,000  and
$41,000  were  charged  to the reserve in 1997,  1996  and  1995,
respectively.   On February 12, 1998, a final closure  inspection
was  conducted  by  the PDEP.  On February  23,  1998,  the  PDEP
determined that the Company had satisfactorily complied with  the
requirements  of the consent order, and the Company was  released
from  any further obligation with respect to such consent  order.
As of December 31, 1997, the balance of the reserve in the amount
of $775,000 was reversed into other income.

     Year 2000 Capabilities

     The  Company  is developing an action plan with  respect  to
modifying  is  computer systems to be Year 2000  compliant.   The
process  involves  system reviews, testing, and  modification  or
replacement of date-sensitive software.  This conversion  is  not
expected  to  have any effect on customers or a material  adverse
effect  on  the business operations or its consolidated financial
position,  results  of  operations or cash  flows.   The  Company
intends   to  communicate  with  suppliers,  dealers,   financial
institutions  and  others, which it does business  to  coordinate
Year  2000  compliance.  At this time, the Company is  unable  to
determine  the  cost of necessary software or  computer  hardware
upgrades and replacements in connection with achieving Year  2000
compliance.

     Inflation and Changing Prices

     Management   believes  that  inflation  did   not   have   a
significant effect on the results of operations during  the  last
three years.



     Results of Operations

     1997 Compared with 1996

     Net  sales  increased  to $8.4 million  in  1997  from  $5.7
million in 1996.  Of this increase, $2.3 million was attributable
to  10  months  of  operations of Numo, the balance  was  due  to
increased  sales  of Houze.  Gross profit as  a  ratio  to  sales
decreased to 22 percent from 24 percent due to lower gross profit
margins on sales of Numo, which was 20 percent in 1997.

     Selling  general  and administrative expenses  increased  to
$2.4  million  in 1997 from $1.4 million in 1996, of  which  $.84
million was attributable to 10 months of operations of Numo, $.08
million  was attributable to the LMP acquisition and $.05 million
was attributable to an overall increase in professional fees.

     Other  income  includes $490,000 related  to  collection  of
notes receivable and reversal of related reserves associated with
certain  property sold by Northern in 1993, and the  reversal  of
$775,000  of  environmental  reserves  of  Houze  resulting  from
favorable  compliance  and resolution  of  a  consent  order  and
agreement.

     1996 Compared with 1995

     Net  sales  increased  to $5.7 million  in  1996  from  $5.0
million  in  1995.   The  increase in  net  sales  resulted  from
increased marketing and sales efforts initiated in 1995, as  well
as  special  orders related to the 1996 Olympics.   During  1996,
sales orders related to the 1996 Olympics aggregated $.5 million.

     The  Company sold 3.1 million units of decorative  mugs  and
glassware  at an average price of approximately $1.82 versus  2.6
million  units  sold at an average price of $1.91  in  1995.   In
addition,  the  Company  sold  .15  and  .5  million   units   of
"misprinted  mugs at an average price of $.07 and  of  $.07,  for
1996  and 1995, respectively, for which the inventory values were
reduced  to  zero  in prior years when such mugs  were  produced,
because they were deemed not salable.

     While  selling,  general  and administrative  expenses  have
decreased from $1.4 million in 1995 to $1.3 million in 1996,  due
to  decreased  legal  fees  and salaries,  selling,  general  and
administrative expenses of Houze increased by $.1 million due  to
increased estimated charges for bad debts, and salaries.

     Item 8.   Financial Statements and Supplementary Data Index.

          Report of Independent Public Accountants           19
          Consolidated Financial Statements:
            Consolidated Balance Sheets - December 31,  1997  and
            1996                                            20
            Consolidated Statements of Operations and
            Accumulated Deficit -
            Three years ended December 31, 1997             21
            Consolidated Statements of Cash Flows -  Three  years
            ended December 31, 1997                         22
            Notes to Consolidated Financial Statements      23
          Financial Statement Schedules:  Schedules included  are
               set forth in Item 14.
            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Wilson Brothers USA, Inc.:


We have audited the accompanying consolidated balance sheets of
Wilson Brothers USA, Inc. (an Illinois corporation) and
subsidiaries as of December 31, 1997 and 1996 and the related
consolidated statements of operations and accumulated deficit and
cash flows for each of the three years in the period ended
December 31, 1997.  These financial statements and the schedule
referred to below are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Wilson Brothers USA, Inc and subsidiaries as of December 31,
1997 and 1996, and the results of their operations and their cash
flows for each of the three years in the period ended December
31, 1997 in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern.  As discussed in Note 16 to the consolidated financial
statements, the Company has suffered recurring losses from
operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going
concern.  Management's plans in regard to these matters are also
described in Note 16.  The consolidated financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.

Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole.  The schedule listed
in Item 14.(A) 2. is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the
basic financial statements.  This schedule has been subjected to
the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a
whole.  The schedule does not include any adjustments that might
result from the outcome of the uncertainty regarding the Company
discussed above.

                                   ARTHUR ANDERSEN LLP

Roseland, New Jersey
April 29, 1998
Item 8. Financial Statements and Supplementary Data.
           Wilson Brothers USA, Inc. and Subsidiaries
                   CONSOLIDATED BALANCE SHEETS
                        As of December 31
                                             1997         1996
          Assets                              (In thousands)
Current assets
     Cash and equivalents                  $   462       $    170
     Receivables, less allowance of $143,000 in 1997
       and $160,000 in 1996                  1,328        1,059
     Inventories                             1,053          332
     Note receivable, less valuation reserve of $490,000 in 1996
     -                                     -
     Prepaid consulting agreements             150            -
     Other                                      49           74
          Total current assets               3,042        1,635
Goodwill, less accumulated amortization of $4,000 in 1997
92                                               -
Non-compete agreements, less accumulated amortization of $50,000
in 1997                                        174            -
Properties, at cost less accumulated depreciation of $2,013,000
in 1997                                        706          363
           and $1,922,000 in 1996
                                           $ 4,014       $1,998
 Liabilities and Stockholders' Deficit
Current liabilities:
     Short-term borrowings                 $   421       $  140
     Current portion of notes payable           85            -
     Accounts payable                        1,413          705
     Accrued salaries and other employee costs           254
     259
     Environmental reserve                       -          820
     Accrued interest due affiliates           524          415
     Accrued interest due others               124           84
     Due to affiliates                       1,192        1,230
     Other current liabilities                 395          217
          Total current liabilities          4,408        3,870

Notes payable to affiliates                  1,256        1,244
Notes payable to others                      1,225          256
Other liabilities                              616          639
                                             3,097        2,139
Commitments and Contingencies
Stockholders' deficit:
     Preferred stock, $1 par value; authorized 5,000,000
     shares; none issued                         -            -
     Common stock, $1 par value; authorized 10,000,000
     shares; issued and outstanding 3,321,039 shares      3,321
     3,321
     Capital in excess of par value          7,464        7,464
     Minimum pension liability                   -         (23)
     Accumulated deficit                         (14,276)     (14,773)
          Total stockholders' deficit       (3,491)      (4,011)
                                            $4,014       $1,998

  See accompanying notes to consolidated financial statements.
           Wilson Brothers USA, Inc. and Subsidiaries
  CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
                  Three years ended December 31


                                1997    1996      1995
                           (In thousands except per share amou
                          nts)

Net sales                      $8,379   $5,715    $5,041

Cost of sales                   6,564   4,324     4,109
Selling, general and administrative expenses      2,428
1,377                           1,449
                                8,992   5,701     5,558

Operating profit (loss)         (613)      14     (517)

Other expense (income):
   Interest expense               127      57        38
   Interest expense - affiliates        119       102  127
   Interest income               (32)    (78)      (39)
   Provision for doubtful notes and interest
    receivable from affiliate       -      40       457
   Other - net                 (1,324)   (49)     (498)
                               (1,110)     72        85
      Income (loss)
        before provision for income taxes         497       (58)
(602)

Provision for income taxes          -       -         -
      Net income (loss)           497    (58)     (602)

Accumulated deficit - beginning of year (14,773)  (14,715)
(14,113)

Accumulated deficit - end of year   $   (14,276)  $(14,773) $
(14,715)

Net income (loss) per share:
   Basic                         $0.15   $(0.02)   $(0.18)
   Diluted                       $0.13   $(0.02)   $(0.18)



  See accompanying notes to consolidated financial statements.

           Wilson Brothers USA, Inc. and Subsidiaries
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Three years ended December 31


                                     1997     1996     1995
                                         (In thousands)
Cash flows from operating activities:
   Net income (loss)               $  497    $ (58)    $(602)
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
   Depreciation and amortization      144        62        84
   Liabilities in excess of assets purchased     46         -
-
   Gain on sale of assets               -       (5)         -
   Provision on uncollectible notes
     receivable from former affiliate        (490)     -     450
   (Increase) decrease in receivables, net     (18)     (274)
130
   (Increase) decrease in inventories        (460)     104    61
   Decrease (increase) in other current assets         30    (41)
(23)
   (Decrease) increase in accounts payable      604        84
(73)
   Increase (decrease) in accrued salaries and
      other employee costs            (5)     (122)       109
   Increase in accrued interest       149       122       126
   Increase in other current liabilities        324        11
27
   (Decrease) in environmental reserve        (820)      (25)
(41)
  Net cash provided by (used in) operating activities          1
(142)                             208
Cash flows from investing activities:
   Acquisition of businesses net of cash acquired      (997)   -
-
   Capital expenditures              (69)      (12)         -
   Proceeds from sale of assets         -         5         -
   Net cash provided by (used in) investing activities (1,066)
(7)     -
Cash flows from financing activities:
   Repayment of long-term debt       (98)          (4)    (4)
   Increase (decrease) in short-term borrowings        331   (10
5)   (62)
   Proceeds from notes payable - other       1,058     -       -
   Proceeds from notes payable - affiliate       66         -
-
   Repayment of note receivable         -         -       150
   Net cash provided by financing activities           1,357 (10
9)   84
Net increase (decrease) in cash and equivalents           292
(258)                             292
Cash and equivalents at beginning of period            170   428
136
Cash and equivalents at end of period   $    462$       170 $428


Supplemental disclosures of cash flow information:
   Cash paid during the period for:
     Interest                      $  105    $   36    $   38


  See accompanying notes to consolidated financial statements.

(1)  Basis of Presentation

     Wilson  Brothers (the "Company") is a holding company  whose
     business is conducted through its wholly-owned subsidiaries,
     Numo  Manufacturing  Acquisition, Inc.  ("Numo")  and  Houze
     Glass  Company  ("Houze"), its 75 percent  owned  subsidiary
     Houze  West  LLC  ("Houze West"), and its 90  percent  owned
     subsidiary,  LM  Plastics, Inc. ("LMP").   All  subsidiaries
     operate in the specialty advertising business and engage  in
     the  decoration of glass, ceramic and plastic  items,  cloth
     and  vinyl  bags, and visor style caps.  Their products  are
     primarily  distributed throughout the United States  through
     sales representatives.

     Principles of Consolidation

     All  significant  intercompany items and  transactions  have
     been eliminated in consolidation.

     On  April  23,  1993,  DWG Acquisition Group  L.P.  acquired
     shares  of  DWG Corporation ("DWG"), representing  28.6%  of
     DWG's   then  outstanding  shares  of  common  stock.    DWG
     subsequently  changed  its name to  Triarc  Companies,  Inc.
     ("Triarc").   DWG owned at the time approximately  53.7%  of
     the Company's outstanding common stock.

     On  January  10,  1994,  pursuant to a  Securities  Purchase
     Agreement  dated  December 28, 1993 among  Bruce  Paparella,
     Warren  B.  Kanders and Triarc, Mr. Paparella acquired  from
     Triarc  1,296,436 shares of the Company's common stock,  and
     Mr.  Kanders  acquired  from Triarc 648,217  shares  of  the
     Company's common stock, collectively replacing Triarc as  59
     percent ownership of the Company's outstanding common stock.
     In  addition, Triarc assigned to Mr. Paparella (75  percent)
     and  Mr.  Kanders  (25  percent) the $l,500,000  outstanding
     balance  of note payable to parent ("Convertible Note")  and
     certain accounts receivable ("Accounts Receivable") held  by
     Triarc in the amount at September 30, 1993 of $l,230,000.

     Effective December 30, 1994, Mr. Kanders entered into  three
     separate  stock purchase agreements pursuant  to  which  Mr.
     Kanders transferred the aggregate of 648,217 shares  of  the
     Company's  Common  Stock owned by him to  four  individuals,
     including  Mr.  Paparella who purchased 348,217  shares  for
     $5,000.   The  remainder of these shares were  sold  by  Mr.
     Kanders  to  three individuals who are not  related  to  Mr.
     Paparella.  Effective December 22, 1994 Mr. Kanders  made  a
     gift  of  his 25% portion of the Convertible Note which  was
     convertible  into  239,234 shares  of  Common  Stock  (repre
     senting  6.9%  of the Common Stock on a fully diluted  basis
     assuming the Convertible Note was fully converted into  such
     shares of Common Stock) and Mr. Kanders' 25% interest in the
     Accounts Receivable to a charitable foundation, leaving  Mr.
     Kanders  with  no  remaining  beneficial  interest  in   the
     Company's  Common Stock.  On April 18, 1995,  John  Sanford,
     the  Company's  Vice President and Chief Financial  Officer,
     acquired a $362,500 interest in such convertible note  which
     is  convertible into 231,259 shares of the Company's  Common
     Stock  and,  as such, Mr. Sanford may be deemed  to  be  the
     beneficial owner of 231,259 shares issuable to him upon  his
     election to convert his interest in the notes. On April  21,
     1996,  Mr.  Bruce Paparella, the Company's President,  Chief
     Executive  Officer  and a Director  died  from  cancer.   On
     September  6, 1996, in a private transaction, the Estate  of
     Mr.  Paparella  sold to Mr. Sanford 1) a 37.5%  interest  in
     such  Note  in  the  principal sum  of  $562,500,  which  is
     convertible  into  358,852 shares of  the  Company's  Common
     Stock,  2)  certain accounts receivable  in  the  amount  of
     $461,250  of  the Company, and 3) 1,644,653  shares  of  the
     Company's common stock, for an aggregate purchase  price  of
     $330,000.  On November 22, 1996, Mr. Sanford, in  a  private
     transaction,  made  gifts to non-affiliated  persons  of  1)
     100,000 shares of the Company's Common Stock, and 2) $56,250
     of  the  principal  amount  plus  accrued  interest  of  the
     Convertible Note, which is convertible into 35,886 shares of
     the  Company's  Common Stock. On February  13,  1997,  in  a
     private  transaction, Choate Rosemary Hall Foundation,  Inc.
     sold  to  Mr.  Sanford  pursuant  to  a  Note  and  Accounts
     Receivable   Purchase  Agreement  (i)   their  interest   of
     $375,000 principal amount of the Convertible Note, which  is
     convertible  into  239,234 shares of  the  Company's  Common
     Stock,  and  (ii) their interest in the Accounts  Receivable
     for  an aggregate purchase price of $200,000.  On August 12,
     1997,  in  private  transactions, Mr.  Sanford  pursuant  to
     separate  Note  and Accounts Receivable Purchase  Agreements
     sold  his interest in $375,000 principal amount and  accrued
     interest  of  the  Convertible  Note  and  $307,500  in  the
     Accounts Receivable for an aggregate amount of $113,227.  Of
     this  amount, $187,000 principal amount and accrued interest
     on  the  Convertible Note and 12.5% interest in the Accounts
     Receivable  were purchased by Carucci Family Partners,  (the
     "Partnership" ) in which Mr. Walter P. Carucci is a  general
     partner,  for $55,222. As a result of the above transaction,
     Mr.  Carucci  may be considered the beneficial owner  of  an
     aggregate of $387,500 of the Convertible Note, consisting of
     (i)  $200,000  of  the  Convertible  Note  convertible  into
     127,592  shares  of  Common Stock previously  owned  by  Mr.
     Carucci,   and   (ii)  $187,500  of  the  Convertible   Note
     convertible into 119,617 shares of Common Stock owned by the
     Partnership,  of which the aggregate principal  and  accrued
     interest  thereon  is convertible at any time  into  247,209
     shares  and  101,112 shares, respectively, of the  Company's
     Common  Stock,  constituting 7.5% of  the  Company's  Common
     Stock.   As a result of the above transactions, as of August
     12,  1997,  Mr.  Sanford  is the beneficial  holder  of  (i)
     $868,750 of the Convertible Note of which the principal  and
     accrued  interest thereon is convertible at  any  time  into
     approximately    554,226   shares   and   226,686    shares,
     respectively, of Common Stock, and (ii) 1,544,653 shares  of
     the  Company's Common Stock, constituting approximately 49.8
     percent of the Company's outstanding Common Stock.


(2)                            Summary of Significant Accounting Policies

     Use of Estimates

     The  preparation of the financial statements  in  conformity
     with   generally  accepted  accounting  principles  requires
     management to make estimates and assumptions that affect the
     reported amounts of assets and liabilities and disclosure of
     contingent  assets  and  liabilities  at  the  date  of  the
     financial  statements and the reported amounts  of  revenues
     and expenses during the period.  Actual results could differ
     from those estimates.

     Properties

     Properties    are   carried   at   cost   less   accumulated
     depreciation.  Depreciation is computed on the straight-line
     method over the estimated useful lives of the assets ranging
     from four to forty years.

     Assets,  which have been fully depreciated, are retained  in
     the  accounts for as long as they are useful to  operations.
     Upon  disposition, it is the Company's policy  to  eliminate
     from  the accounts the carrying value of the asset  and  the
     related  accumulated  depreciation or  amortization  and  to
     credit or charge the resulting profit or loss to operations.

     Net Income (loss) per Share

     Effective  December 31, 1997, the Company adopted  Statement
     of  Financial  Accounting  Standards  "Earnings  per  Share"
     ("SFAS") No. 128.  Under SFAS 128, the Company is require to
     replace   the   traditional  earnings  per   share   ("EPS")
     disclosures with dual presentation of "Basic" and  "Diluted"
     EPS.   The implementation of SFAS did not have an impact  on
     the Company's financial position or results of operations or
     on previously reported EPS.

     Basic  EPS  is  calculated by dividing income  available  to
     common shareholders by the weighted average number of shares
     of  common  stock  outstanding during  the  period.   Income
     available  to common shareholders used in determining  basic
     EPS  was $622 thousand in 1997, $ (58) thousand in 1996, and
     $  (602) thousand in 1995.   The weighted average number  of
     shares  of  common stock used in determining basic  EPS  was
     3,321  million  in 1997, 3,321 million in  1996,  and  3,321
     million in 1995.

     Diluted  EPS  is calculated by dividing income available  to
     common  shareholders,  adjusted to  add  back  dividends  or
     interest on convertible securities, by the weighted  average
     number of shares of common stock outstanding plus additional
     common  shares  that  could  be issued  in  connection  with
     potentially dilutive securities.  Income available to common
     shareholders  used  in  determining  diluted  EPS  was  $622
     thousand  in  1997,  $ (58) thousand in 1996,  and  $  (602)
     thousand in 1995.   The weighted average number of shares of
     common  stock  used  in determining diluted  EPS  was  4,809
     million in 1997, 3,321 million in 1996, and 3,321 million in
     1995  and  reflects  additional shares  in  connection  with
     convertible   notes  (1,348  million  in  1997)   and   loan
     origination fee (140 thousand in 1997).

     Concentration of Credit Risk

     The  Company's  financial instruments that  are  exposed  to
     concentrations of credit risk consist primarily of cash  and
     accounts and notes receivable and are carried at fair market
     value, which approximates cost.  The Company places its cash
     with high quality financial institutions.

     Cash and Equivalents

     The  Company classifies as cash and equivalents  all  highly
     liquid  investments with maturity of three  months  or  less
     when purchased.

     Recent Accounting Pronouncements

     In June 1997, the Financial Accounting Standards Board issued SFAS 130, "Re
     porting Com
     prehensive Income", which is effective for periods beginning
     after  December 15, 1997.  The Statement requires businesses
     to disclose comprehensive income and its components in their
     general-purpose financial statements. The implementation  of
     SFAS  130 is not expected to have a material impact  on  the
     Company's financial position or results of operations.

     Supplemental Cash Flow Information

     During  1997,  the Company acquired assets  net  of  assumed
     liabilities in connection with the acquisition  of  Numo  in
     exchange for notes payable of $1,055,000.  The Company  also
     acquired  $6,000 in equipment through related capital  lease
     obligations.

(3)  Acquisitions

     On April 9, 1997, the Company entered into a stock purchase
     agreement with G&L Consultants, Inc. to purchase a 90
     percent ownership, represented by 171,000 shares of the
     outstanding common stock of LMP, a North Carolina
     corporation with its principal office in Shelby, North
     Carolina.  The purchase price for the common stock consisted
     of the payment of $1, plus a personal indemnity by Mr.
     Sanford to G&L Consultants, Inc. for the payment of a
     promissory note from LMP to a bank in the original principal
     amount of $70,000.  The Company has the option to purchase
     at any time, or after 3 years is obliged to purchase at the
     request of G&L Consultants, Inc., the remaining 10 percent
     outstanding shares for the amount of $10,450, with such
     price increasing at an annual rate of 20 percent for each
     month after April 9, 1997.  The acquisition is accounted for
     using the purchase method of accounting, of which the
     purchase price over net assets acquired was not
     insignificant.  The pro forma effect on prior periods'
     results of operations is not material.  In January 1998, the
     Company agreed to purchase the remaining 10 percent of
     outstanding shares of LMP for $8,000.  The purchase
     transaction will be for cash and will be accounted for as an
     adjustment to the original purchase price in the March 31,
     1998 financial statements.

     On  April  30,  1997,  Numo,  a  newly  formed  wholly-owned
     subsidiary  of  the  Company, purchased certain  assets  and
     assumed  certain liabilities of Numo Manufacturing  Company,
     Inc.  and  its wholly-owned subsidiary Diamond Cap  Company,
     Inc. (the "Seller"), each of which has principal offices  in
     Mesquite,  Texas.   The  aggregate purchase  price  for  the
     acquired  assets  of  both companies and  covenants  not  to
     compete  given  by  the Seller and their  shareholders,  was
     $1,100,000  consisting  of $45,000  paid  in  cash  and  the
     execution   and  delivery  of  promissory  notes  ("Purchase
     Notes")  in  the aggregate principal amount of $855,000  and
     $200,000   payable   pursuant  to  non-compete   agreements,
     described  as  follows.   The  Purchase  Notes  and  amounts
     payable  under  the  non-compete  agreements  bear  interest
     initially  at the rate of 8% per annum subject to adjustment
     on  each April 1 and October 1, with the first adjustment to
     occur  on October 1, 1997.  On each adjustment date (October
     1  and  April  1)  the interest rate shall be  increased  or
     decreased  (but  not below 8% per annum  or  above  11%  per
     annum)  by an amount equal to 50% of the difference  between
     the  prime rate published by The Wall Street Journal on  the
     adjustment  date  in question and the immediately  preceding
     adjustment  date.   Principal and interest  payable  on  the
     Purchase Notes and under the non-compete agreements will  be
     paid  on  the  first day of each January,  April,  July  and
     October,  commencing  on July 1, 1997.   The  entire  unpaid
     principal balance on all such obligations shall be  due  and
     payable April 1, 2004.  The Purchase Notes are secured by  a
     pledge  of  substantially all of the  acquired  assets.   In
     addition, payment of the Purchase Notes is guaranteed by the
     Company.  Numo also entered into consulting agreements  with
     the  two  shareholders of the Seller for a term of one  year
     pursuant  to  which  Numo  paid  each  of  such  consultants
     $224,000 on May 1, 1997.

     In  order to finance the cash portion of the purchase  price
     and the consulting fees paid at the time of the closing, the
     Company  borrowed  $550,000 from Blind John,  LLC  which  is
     wholly-owned  by members of the family of John Sanford,  the
     Company's President, of which Mr. Sanford is a less than  1%
     owner.   The  loan bore interest at the annual  rate  of  10
     percent and the outstanding principal balance was repaid  in
     full,  with interest on July 9, 1997.  The Company  paid  an
     origination fee to the lender in the amount of $3,500 and an
     additional loan origination fee in the amount of $30,000  is
     payable  on  or  before May 1, 1998.  At the option  of  the
     lender  exercisable before May 1, 1998, in lieu of receiving
     payment  of  the  $30,000 additional  origination  fee,  the
     lender shall have the right to purchase the number of shares
     of  Common Stock of the Company equal to 3% of the Company's
     fully  diluted shares of Common Stock at the  time  of  such
     election  or  a cash fee of $10,000 and 2% of the  Company's
     fully  diluted shares of Common Stock at the  time  of  such
     election  or  a cash fee of $20,000 and 1% of the  Company's
     fully  diluted shares of Common Stock at the  time  of  such
     election,  provided  the Company has  sufficient  shares  of
     Common   Stock  which  are  then  authorized  and   unissued
     available  for purchase by the lender.  On April  16,  1998,
     the Company and Blind John, LLC agreed to extend such option
     to May 1, 1999.

     Numo  continues the pre-existing business activities of Numo
     Manufacturing Company, Inc. and Diamond Cap Company, Inc. at
     the  same  premises in Mesquite, Texas for which it  entered
     into a lease agreement with one of the selling entities  for
     a  term  of  7  years  at an annual base  rent  of  $76,000.
     Numo's  primary  business activity is custom  manufacturing,
     sewing  and decorating of a variety of cloth and vinyl  bags
     and related accessories and visor style caps.  Similarly  to
     Houze Glass Corporation, Numo's sales are made through sales
     representatives   and   are   generally   for    advertising
     specialties, premiums, souvenirs and the retail trade.

     The  acquisition was accounted for using the purchase method
     of  accounting and, accordingly, the consolidated  financial
     statements  include  Numo's  operations  from  the  date  of
     acquisition.  The amounts paid in connection with consulting
     agreements of $450,000 are being amortized over the terms of
     such  agreements, which is 12 months.  The amounts paid  for
     covenants  not  to compete of $224,000 are  being  amortized
     over  the terms of those agreements, which is 3 years.   The
     Company  allocated  the remaining excess of  purchase  price
     over net assets acquired, which is approximately $95,000  to
     goodwill,   which  is  being  amortized   over   20   years.
     Acquisition costs incurred in connection with this  purchase
     transaction which consisted principally of professional  and
     borrowing fees, were not material.  The following table sets
     forth the unaudited pro forma combined condensed results  of
     operations for the year ended December 31, 1996 and for  the
     year ended December 31, 1997, and assumes that the foregoing
     purchase  transaction had been consummated as of January  1,
     1996  and  1997, respectively.  These pro forma results  are
     not  necessarily indicative of the results that  would  have
     been  achieved had these acquisitions occurred on the  dates
     indicated or that may occur in the future.

                                      Year ended      Year ended
                                December 31, 1997December 31, 199
     6

                                      (Unaudited)     (Unaudited)

     Revenues                         $ 9,682         $9,315

     Income (loss) from operations    $(861)          $(609)

     Net income                       $  326          $(617)

     Net Income (loss) per share:

                  Basic               $ 0.10          $(0.19)

                  Diluted              $0.09          $(0.19)



     On November 12, 1997, the Company became the sole owner of a
     newly formed Nevada limited-liability company, Houze West,
     LLC ("Houze West").  In January 1998, the Company ownership
     interest changed to 75 percent, when an unaffiliated
     company, Cactus Enterprises, LLC, purchased the remaining 25
     percent interest.  Houze West will maintain its
     manufacturing operations in Henderson, Nevada, where it has
     entered into a lease agreement for approximately 15,000
     square feet of manufacturing facilities. Houze West will
     operate in the same business segment as the Company,
     primarily in the decoration of mugs and glassware, and will
     be a manufacturing and sales distribution center to the
     Company's customers in the western United States.

     The   Company   has  agreed  to  make  an  initial   capital
     contribution to Houze West of cash and other assets  in  the
     approximate  aggregate  amount of $133,000.    This  capital
     contribution  will be accounted for using the equity  method
     of accounting.

(4)  Discontinued Operations

     On September 28, 1993, the Company's Board of Directors authorized the sale
     or liquidation  of  its  wholly owned subsidiary Northern  Engineering
     Corporation  ("Northern"),  the  Company's  crane   business
     segment.   On May 12, 1994, the Company sold all of the outstanding shares
     of Northern to a corporation controlled by a former director
     of the Company.

     In  consideration for the sale of the Northern  shares,  the
     Company  received  $10,000, plus a secured  promissory  note
     (the  "Note") in the principal amount of $750,000  repayable
     on  or  before  May  1, 1999, which bears  interest  payable
     quarterly   at   8  percent  per  annum.    Such   note   is
     collateralized  by certain real property  of  Northern  (the
     "Mortgaged  Property").   The  Mortgaged  Property  was  not
     appraised  in  connection  with  the  transaction.   If  the
     Mortgaged  Property  is  sold,  all  of  the  principal  and
     interest is immediately due and payable.

     Effective October 28, 1994, the Company agreed to reduce the
     percentage from 50 percent to 30 percent of the amount  that
     the  Company  shall be entitled to receive if the  Mortgaged
     Property  is  sold in excess of $750,000.  In exchange,  the
     purchaser made a partial prepayment of the principal of  the
     Note  in  the amount of $150,000, which was paid by November
     7,  1994, and made an additional $150,000 partial prepayment
     on January 15, 1995.  The purchaser had the option to prepay
     the  remaining  principal balance of the Note  by  June  30,
     1995.   Such  prepayment was not made,  and  therefore,  the
     purchaser was to additionally compensate the Company $50,000
     by  July  15, 1995, of which $10,000 had been  paid.   As  a
     result,  the Company believed that the principal  amount  of
     the  Note  and accrued interest thereon was not collectible,
     and therefore had made a full valuation reserve in the March
     31,  1997 and December 31, 1996 financial statements in  the
     amount  of  $490,000 for principal, plus $6,000 for  accrued
     interest.   On  July  1,  1997, the  principal  and  accrued
     interest  on  the  Note were paid in full in  the  aggregate
     amount of $539,700, including accrued interest of $6,200 and
     $43,500  representing  30 percent of  the  amount  that  the
     Company  shall  be  entitled to  receive  if  the  Mortgaged
     Property is sold in excess of $750,000.  As a result, as  of
     June  30,  1997,  the  valuation reserve  for  principal  of
     $490,000  and interest of $6,000 were reversed, and included
     in other income and interest income, respectively.


 (5) Inventories

     Inventories,  stated at the lower of cost (first-in,  first-
     out  basis)  or market, consisting of materials,  labor  and
     overhead, are as follows:
                                          December 31,
                                         1997    1996

     Raw materials                    $968,000 $313,000
     Work in process                   18,000       -
     Finished goods                    67,000  19,000
                                      $1,053,000    $               332,000

 (6) Properties
     The  following is a summary of the major classifications  of
     properties:
                                          December 31
                                         1997    1996
     Classification
     Land                             $18,000   $18,000
     Buildings and improvements       667,000   667,000
     Machinery and equipment          2,034,000 1,600,000
                                      2,719,000 2,285,000
     Less: accumulated depreciation   2,013,000 1,922,000
                                      $706,000  $363,000

(7)  Notes Receivable from Affiliates

     From  June  1987 through May 1989, the Company made  certain
     secured  loans  to Pennsylvania Engineering  Corp.  ("PEC"),
     which  may  be  deemed  to have been  an  affiliate  of  the
     Company.  In connection therewith, as of December 31,  1994,
     the  Company  was owed a principal balance of $1,555,000  on
     its  outstanding  loans  to PEC and  $1,032,000  of  accrued
     interest and $78,000 of fees.  PEC filed for bankruptcy.  On
     December   28,  1994,  the  Company  received   $60,000   in
     satisfaction  of the mortgage from the sale of certain  real
     property  owned by PEC's subsidiary, Lectromelt Corporation.
     Such  proceeds were applied to accrued interest  receivable,
     and  a  comparable amount was charged against the  valuation
     reserve  and  recorded as other income in the  statement  of
     operations.   On  September 11, 1995, the  Company  and  the
     Bankruptcy   Trustee  for  PEC  entered  into  a  Settlement
     Agreement pursuant to which the Company's claims against PEC
     were  recognized as an allowed, general unsecured  claim  in
     the   amount  of  $1,399,986.   On  October  16,  1995,  the
     Bankruptcy Court approved the Trustee's settlement with  the
     Company  and  on  November  16,  1995  the  Trustee  made  a
     distribution  to the Company in the amount  of  $472,541  in
     full  and  final settlement of the Company's  claim  against
     PEC.    Such  proceeds  were  applied  to  accrued  interest
     receivable, and a comparable amount was charged against  the
     valuation  reserve  and  recorded as  other  income  in  the
     statement of operations.

(8)  Income Taxes and Other Liabilities

     As of December 31, 1997 and 1996 the Company provided a full
     valuation  allowance  for the net  deferred  tax  assets  of
     $586,000  and $1,024,000.  The deferred tax assets primarily
     result  from net losses and certain differences in  the  tax
     basis  and  book  basis  of  inventories,  receivables   and
     liabilities.

     The  reported tax provision and a computed tax benefit based
     on the loss before income taxes are reconciled as follows:
                                      Year ended December 31,
                                       1997     1996    1995

     Income (loss) before income taxes        $ 497    $(58)             $ (602)
     Statutory rate                   35%      35%     35%
      Total computed tax expense (benefit)             174        (20)    (211)
     (Decrease) increase in taxes resulting from:
      Reversal of environmental valuation
        allowance                    (271)        -       -
      Effect of net operating losses for which
        no tax is available             97       20     211
                                     $   -    $   -    $  -

(9)  Short-term Borrowings

     On  March  4, 1994, Houze entered into an agreement  with  a
     bank  for  a revolving line of credit facility in an  amount
     not  to  exceed $400,000.  Advances on such line  of  credit
     bear  interest at the lending bank's prime rate  plus  3.5%.
     In  addition, the bank is entitled to reimbursement of  fees
     for auditing Houze's accounts receivable during the term  of
     the  commitment.   Advances are collateralized  by  accounts
     receivable,  inventory  and  an  assignment  of  a   $50,000
     Certificate  of  Deposit from Fay Penn Economic  Development
     Council  and  $100,000  Certificates  of  Deposit  from  the
     Company,  and are guaranteed by the Company and Mr. Sanford,
     the  Company's Chief Executive Officer.  On March 11,  1994,
     Houze  was advanced $160,000 of the revolving line of credit
     and   used  the  proceeds  to  repay  the  then  outstanding
     borrowings under the previous accounts receivable  financing
     arrangement.  The revolving line of credit facility maturity
     was  extended from December 31, 1995 to September  30,  1998
     with a limit of $500,000.  No assurances can be given as  to
     the   success  of  obtaining  an  extension  or  refinancing
     subsequent  to September 30, 1998.  A failure  by  Houze  to
     renegotiate  such  credit facility  would  have  a  material
     adverse effect on the Company.

     The  short-term borrowings of Houze as of and for the  years
     ended December 31 are as follows:

                               1997    1996   1995
     End of year balance       $421,0  $140,  $245,0
                                   00    000      00
     Maximum           amount
     outstanding  during  the  $479,0  $419,  $380,0
     year                          00    000      00
     Average          balance          $259,  $280,0
     outstanding  during  the  $314,0    000      00
     year                          00
     Weighted         average   11.5%  11.5%   11.8%
     interest   rate   during
     the year
     Interest  rate  at  year   11.5%  11.3%   11.5%
     end




 (10)                   Notes Payable to Affiliates and Others

     Notes payable to majority owners as of December 31, 1997 and
     December 31, 1996 in the aggregate amount of $1,500,000 bear
     interest  at the prime rate and are convertible  to  956,937
     shares  of  the  Company's common stock.  In December  1994,
     Warren  B.  Kanders made a gift of his 25% interest  in  the
     Note  to  a charitable foundation of 239,234 shares  of  the
     Company's  Common  Stock  issuable upon  conversion  of  its
     interest in the Note.  On April 18, 1995, John Sanford,  the
     Company's  then Vice President and Chief Financial  Officer,
     acquired a $362,500 interest in such convertible note.  As a
     result,  Mr. Sanford may be deemed the beneficial  owner  of
     231,259  shares issuable to him upon his election to convert
     his  interest  in  the notes.  Conversion  by  the  majority
     owners  would  be  dilutive of their  individual  percentage
     ownership  of  the  Company's aggregate  outstanding  common
     stock.   On  April  21,  1996,  Mr.  Bruce  Paparella,   the
     Company's President, Chief Executive Officer and a  Director
     died  from  cancer.   On September 6,  1996,  in  a  private
     transaction, the Estate of Mr. Paparella sold to Mr. Sanford
     a  37.5%  interest  in  such Note in the  principal  sum  of
     $562,500,  which is convertible into 358,852 shares  of  the
     Company's Common Stock.  On November 22, 1996, in a  private
     transaction,  Mr.  Sanford made gifts  to  a  non-affiliated
     person  of $56,250 principal amount and accrued interest  of
     the  Convertible  note,  which is  convertible  into  35,886
     shares of the Company's Common Stock.  On February 13, 1997,
     in  a  private transaction, Choate Rosemary Hall Foundation,
     Inc.  sold  to  Mr. Sanford pursuant to a Note and  Accounts
     Receivable   Purchase  Agreement  (i)   their  interest   of
     $375,000 principal amount of the Convertible Note, which  is
     convertible  into  239,234 shares of  the  Company's  Common
     Stock,  and  (ii) their interest in the Accounts  Receivable
     for  an aggregate purchase price of $200,000.  On August 12,
     1997,  in  private  transactions, Mr.  Sanford  pursuant  to
     separate  Note  and Accounts Receivable Purchase  Agreements
     sold  his interest in $375,000 principal amount and  accrued
     interest  of  the  Convertible  Note  and  $307,500  in  the
     Accounts Receivable for an aggregate amount of $113,227.  Of
     this  amount, $187,000 principal amount and accrued interest
     on  the  Convertible Note and 12.5% interest in the Accounts
     Receivable  were purchased by Carucci Family Partners,  (the
     "Partnership" ) in which Mr. Walter P. Carucci is a  general
     partner,  for $55,222. As a result of the above transaction,
     Mr.  Carucci  may be considered the beneficial owner  of  an
     aggregate of $387,500 of the Convertible Note, consisting of
     (i)  $200,000  of  the  Convertible  Note  convertible  into
     127,592  shares  of  Common Stock previously  owned  by  Mr.
     Carucci,   and   (ii)  $187,500  of  the  Convertible   Note
     convertible into 119,617 shares of Common Stock owned by the
     Partnership,  of which the aggregate principal  and  accrued
     interest  thereon  is convertible at any time  into  247,209
     shares  and  101,112 shares, respectively, of the  Company's
     Common  Stock,  constituting 7.5% of  the  Company's  Common
     Stock.   As a result of the above transactions, as of August
     12,  1997,  Mr.  Sanford  is the beneficial  holder  of  (i)
     $868,750 of the Convertible Note of which the principal  and
     accrued  interest thereon is convertible at  any  time  into
     approximately    554,226   shares   and   226,686    shares,
     respectively, of Common Stock, and (ii) 1,544,653 shares  of
     the  Company's Common Stock, constituting approximately 49.8
     percent of the Company's outstanding Common Stock.

     In  connection  with the acquisition of certain  assets  and
     liabilities of Numo Manufacturing Company, Inc. and  Diamond
     Cap  Company,  Inc.,  Numo  entered  into  promissory  notes
     ("Purchase  Notes")  in the aggregate  principal  amount  of
     $855,000   and  $200,000  payable  pursuant  to  non-compete
     agreements,  described as follows.  The Purchase  Notes  and
     amounts  payable  under  the  non-compete  agreements   bear
     interest  initially at the rate of 8% per annum  subject  to
     adjustment  on  each April 1 and October 1, with  the  first
     adjustment  to occur on October 1, 1997.  On each adjustment
     date  (October  1  and  May 1) the interest  rate  shall  be
     increased or decreased (but not below 8% per annum or  above
     11%  per  annum) by an amount equal to 50% of the difference
     between  the prime rate published by The Wall Street Journal
     on  the  adjustment  date in question  and  the  immediately
     preceding  adjustment date.  Principal and interest  payable
     on  the  Purchase Notes and under the non-compete agreements
     will  be paid on the first day of each January, April,  July
     and  October, commencing on July 1, 1997.  The entire unpaid
     principal balance on all such obligations shall be  due  and
     payable April 1, 2004.  The Purchase Notes are secured by  a
     pledge  of  substantially all of the  acquired  assets.   In
     addition, payment of the Purchase Notes is guaranteed by the
     Company.

     In  order to finance the cash portion of the purchase  price
     and the consulting fees paid at the time of the closing, the
     Company  borrowed  $550,000 from Blind John,  LLC  which  is
     wholly-owned  by members of the family of John Sanford,  the
     Company's President, of which Mr. Sanford is a less than  1%
     owner.   The  loan bore interest at the annual  rate  of  10
     percent and the outstanding principal balance was repaid  in
     full,  with  interest  on July 9, 1997  using  the  proceeds
     collected from the Northern Note.

     During  the  year ended December 31, 1997, the Company  from
     time  to  time  made  short-term  borrowings  from  Combahee
     Partners, L.P. ("Combahee") a limited-partnership  that  Mr.
     Sanford  is  the  general partner.  During  the  year  ended
     December 31, 1997, the Company incurred interest on loans to
     Combahee in the amount of $1,228.  As of December 31,  1997,
     the  Company owed $66,100 to Combahee payable on demand with
     interest calculated at 8 percent per annum.

     During  the  year ended December 31, 1997, the Company  made
     short-term  borrowings from Margaret Peyton, the  mother  of
     Mr.  Sanford.   As  of December 31, 1997, the  Company  owed
     $50,000  to  Mrs.  Peyton payable on  demand  with  interest
     calculated at 10 percent per annum.

     LMP  has a promissory note payable to a bank in the original
     principal  amount of $70,000, repayable over  7  years  with
     interest  calculated  at 1 percent  over  the  bank's  prime
     interest  rate,  the  payment  of  principal  of  which   is
     indemnified by Mr. Sanford.  The note is due on February 22,
     2002.

(11) Long-Term Debt

     Long-term debt consists of the following:

                                          December 31
                                         1997    1996
     Description                         (In thousands)
     Purchase notes bearing interest at rates ranging
       from 8% to 11%, maturing in 2004     $   1,013$                 -
     Note payable to bank bearing interest at 9.50%,
       maturing in 2002                    47        -
     Equipment capital lease obligations (see note 14)                   6   -
                                        1,066        -
     Less-current maturities               85        -
                                      $   981   $    -


 (12)                   Pension Plan

     Houze  has  a  defined  benefit  plan  covering  hourly-paid
     employees.   Contributions are computed using the  projected
     unit credit method of funding, the objective of which is  to
     fund  each  participant's benefits under the  plan  as  they
     accrue.  Houze's funding policy is to contribute the minimum
     amount  required by the Employee Retirement Income  Security
     Act  of  1974.  During 1997, 1996 and 1995, no contributions
     were required to be made under the plan.

     The net periodic pension cost for the plan in 1997, 1996 and
     1995 was $37,000, $42,000 and $45,000, respectively.  The
     components of the net periodic pension cost are as follows:

                                      Year ended December 31,
                                      1997      1996     1995
                                           (In thousands)
     Current service cost            $  41    $  41     $  52
     Interest cost on projected benefit obligation     42              43   43
     Actual return on assets            70       96       (3)
     Unrealized (gain) loss on plan experience          (107)              (129)
     (38)
     Amortization of unrecognized net asset at transition               (9) (9)
     (9)
     Net periodic pension cost       $  37    $  42     $  45




     The following table sets forth the plans' projected funded
     status:


                                                 December 31,
                                                1997     1996
                                                (In thousands)
     Actuarial present value of benefit obligations:

       Accumulated benefit obligation, including vested benefits
       of $635,000 in 1997 and $647,000 in 1996  $     625$     658

     Reconciliation of funded status:

       Plan assets at fair value             $ 699     $635
       Projected benefit obligation            635      658
          Plan assets in excess (short) of projected benefit
          obligation                             64     (23)
          Unrecognized net (gain) loss from plan experience     (95)       (17)
       Unrecognized prior service cost          34       37
       Unrecognized net asset at January 1, 1987,
          amortized over 13 to 17 years        (63)     (72)
            Additional minimum liability     $(60)     $(75)


     An assumed discount rate of 7% for 1997 and 1996, and
     long-term rate of return on assets of 8% for 1997 and 1996,
     were used in developing this data.  Plan assets are invested
     in a managed portfolio, consisting primarily of corporate
     bonds and common stock.


(13) Related Party Transactions

     There were no charges from affiliates for the years ended
December 31, 1997, 1996 and 1995.

     For information concerning certain other transactions
     between the Company and other corporations or entities,
     which may be deemed to be, affiliates of the Company, see
     other Notes included elsewhere herein.

(14) Capital Leases

     The  Company  has entered into a capital lease  for  certain
     computer  equipment.  Future minimum lease payments required
     by  the  capital lease and net future minimum lease payments
     are as follows:

     Year ending December 31:
        1998                         $ 1,968
        1999                           1,968
        2000                           1,804
          Total minimum lease payments          5,740
        Less amount representing interest       (971)
          Future minimum lease payments    $                4,769

 (15)                                 Operating Leases

     The  Company  leases office and manufacturing facilities  in
     Mesquite,  Texas for which it entered into a lease agreement
     for the annual base rent of $76,000.  Such lease expires  on
     April 30, 2004.

     Minimum   annual  rental  commitments  under   noncancelable
     operating leases are as follows:


     Year ending December 31:
          1998                       $76,000
          1999                         76,000
          2000                         76,000
          2001                         76,000
          2002                         76,000


     Rent expense for the years ended December 31, 1997, 1996 and
     1995 was $50,677, $0 and $0, respectively.

(16) Commitments and Contingencies

     The  Company has incurred losses from operations and  as  of
     December   31,   1997,  the  Company  had  a   stockholders'
     deficiency  of  $3.5  million  and  a  consolidated  working
     capital deficit of $1.4 million.

     The  Company's ability to meet its cash requirements in  the
     next  year is dependent upon substantial improvement in  the
     results  of  operations  and  cash  flows,  maintaining  and
     renewing  it's financing from its bank or others.  If  these
     conditions are not satisfactorily achieved, the Company  may
     be  unable  to  generate sufficient cash flow  to  meet  its
     requirements,  and  therefore, may  be  unable  to  continue
     operations.

     The  financial  statements have been  prepared  on  a  going
     concern   basis,  and  accordingly,  do  not   include   any
     adjustments    relating    to   the    recoverability    and
     classification of recorded asset amounts nor do they include
     adjustments to the amounts and classification of liabilities
     that  might  be necessary should the Company  be  unable  to
     continue in existence or be required to sell its assets.

     The Company has become aware that certain of the products of
     Houze may have concentrations of lead and cadmium at levels,
     which   might  constitute  hazardous  waste.   While   after
     testing,  it  was ascertained that products currently  being
     produced  are  within acceptable levels,  certain  products,
     generally  those  produced prior to 1980,  had  unacceptable
     levels  of  lead  and  cadmium.   These  products  had  been
     disposed  of in a disposal site located on Houze's property.
     The  Pennsylvania  Department  of  Environmental  Protection
     (PDEP)  and  the  Company  agreed  to  a  consent  order  on
     September  22,  1994, which outlined a  plan  for  Houze  to
     remove  and  encapsulate  all of  the  hazardous  waste  and
     thereby    comply   with   residual   waste   pile   closure
     requirements.  The estimated cost of the Company's  original
     plan  of  remediation was increased during 1993 by  $700,000
     from  $200,000,  based on advice from its consultant,  which
     was   provided  for  in  the  1993  consolidated   financial
     statements.    The   Company  incurred  actual   remediation
     expenses  in  the  aggregate amount of  $215,000,  of  which
     $45,000, $25,000 and $41,000 were charged to the reserve  in
     1997, 1996 and 1995, respectively.  On February 12, 1998,  a
     final  closure  inspection was conducted by  the  PDEP.   On
     February 23, 1998, the PDEP determined that the Company  had
     satisfactorily complied with the requirements of the consent
     order,  and  the  Company  was  released  from  any  further
     obligation with respect to such consent order.  Accordingly,
     as  of December 31, 1997, the balance of the reserve in  the
     amount of $775,000 was reversed into other income.

     By  agreement dated January 1, 1995, the Company, Houze  and
     Triarc  agreed to settle an outstanding claim  by  a  former
     officer  of Houze for bonuses owed.  The agreement  provided
     that Houze pay to the former officer the aggregate amount of
     $37,500  in  several installments by December  31,  1996  of
     which $31,350 was paid in 1995, and $6,150 was paid in 1996.
     The original amount of such claim previously recorded in the
     financial statements of approximately $116,000 plus interest
     was reduced accordingly.

     In  addition to the litigation noted above, the  Company  is
     from  time  to  time  involved in other  routine  litigation
     incidental  to  its business, the outcome of  which  in  the
     opinion  of  management  will not have  a  material  adverse
     effect  on the Company's consolidated financial position  or
     results of operations.


(17) Subsequent Events

     On  February  18, 1998, the Company formed a new subsidiary,
     Surplus  Salvage  Supply, LLC ("Surplus Salvage"),  a  Texas
     Limited-Liability  Company,  which  on  February  26,  1998,
     agreed  to  purchase certain assets of B.J.'s  Warehouse,  a
     Texas  company.   The purchase price is $150,000,  of  which
     $125,000  was paid in cash, and the balance payable  in  the
     form of a promissory note in the amount of $25,000, over  24
     months with interest calculated at 8 percent per annum.

     The  Company  capitalized Surplus Salvage in the  amount  of
     $76,500,  and made a demand loan in the amount  of  $73,500.
     To  finance the capitalization and loan to Surplus  Salvage,
     the   Company  borrowed  $140,000,  including  $60,000  from
     Combahee,  and $40,000 from a company of which a  member  of
     the  Board of Directors is the principal owner.  These loans
     are payable on demand.

     Effective  March  1,  1998, Harris Trust  and  Savings  Bank
     ("Harris")  terminated  its  appointment  as  the  Company's
     transfer agent and registrar due to overdue balances and non-
     payment of its invoices for fees.  Until such time that  the
     Company pays Harris for all past due fees plus reimbursement
     of   reasonable  expenses,  Harris  will  not  release   the
     Company's  records  and  stock  certificate  inventory   for
     further processing.


 (18)     Other Matters
     In   May  1997,  the  Company  learned  that  its  state  of
     incorporation,  Illinois,  administratively  dissolved   the
     Company  for failure to file the State of Illinois  Domestic
     Corporation Annual Report for 1995 and 1996.   In July 1997,
     the  Company  filed with the Secretary of State of  Illinois
     for  reinstatement retroactive to June 1, 1995, and  amended
     its  name to Wilson Brothers USA, Inc.  Effective August 20,
     1997, the Company was notified by the State of Illinois that
     its certificate of incorporation was reinstated.



Item  9.    Changes  in  and Disagreements  with  Accountants  on
Accounting and Financial Disclosure.

     None.


                            PART III

Item 10.  Directors and Executive Officers of the Registrant.

     The table below sets forth the names, ages and positions  of
the Company's directors and executive officers:

Name                            Age       Position

John Sanford                    32        President,        Chief
                                          Financial      Officer,
                                          Treasurer,    Secretary
                                          and Director

Brett R. Smith                  32        Director

Frank Zanin                     31        Director


     The   Board  of  Directors  currently  consists   of   three
directors.  Mr.  Arthur  Williams, Vice President  and  Secretary
resigned as a director and officer on April 4, 1995.  Mr. Sanford
was appointed to the Board of Directors in April 1995 filling the
vacancy of Mr. Nicholson who resigned on May 12, 1994.  Directors
are  elected  at  the  annual meeting of shareholders,  and  hold
office  until  the next succeeding annual meeting of shareholders
or  until  their  successors  are  elected  and  qualified.   Mr.
Paparella who was appointed to the Board of Directors on  January
10,  1994 to fill vacancies created by the resignation of members
of  the  Board  of  Directors  who were  elected  by  the  former
controlling shareholder of the Company, died on April  21,  1996.
Mr.  Brett  R.  Smith and Mr. Frank Zanin were appointed  to  the
Board  of  Directors  on  April 17,  1997  and  April  24,  1997,
respectively, to fill the vacancies created by the death  of  Mr.
Paprella  and  resignation of Mr. Williams.   Directors  who  are
employees  of  the Company do not receive an annual  retainer  or
meeting attendance fees.

     The Company's officers are elected by the Board of Directors
and hold office at the discretion of the Board.

     John  Sanford  has  been President since the  death  of  Mr.
Paparella  in  1996  and  previously served  as  Vice  President,
Treasurer and Chief Financial Officer of the Company since  March
7,  1994.   He also became Secretary and Director in April  1995.
Since  September 1993, Mr. Sanford has been an equity trader  for
Carr  Securities, Inc., a New York brokerage firm.   From  August
1991  through September 1993, Mr. Sanford was earning his  M.B.A.
degree  at the University of North Carolina at Chapel Hill.   Mr.
Sanford  was  the President of Fortress Marine Construction  from
August 1990 through August 1991.

     Brett R. Smith has been a director since April 17, 1997, and
since 1993 co-founded and has been a principal of Counter Culture
Coffee in Durham, North Carolina.  From Fall 1991 to Spring  1993
earned  his M.B.A. at the University of North Carolina at  Chapel
Hill.

     Frank  Zanin has been a director since April 24,  1997,  and
since  Fall  1993  has served as a Financial  Analyst  for  Roper
Health Systems Inc.  Previously, he was earning his M.B.A. degree
at The College of William and Mary through 1991.

Item 11.  Executive Compensation.

     During  the  year  ended  December  31,  1997,  the  Company
compensated John Sanford $12,000 for management services, all  of
which  has been deferred.  Mr. Sanford's annual compensation  for
1998 will be $12,000.

     The  Company's  executive officer holds a  position  with  a
non-affiliated  company (see Item 10) that pays  compensation  to
such  officer.   The officer devotes the time  necessary  to  the
Company  and  to his non-affiliated employer as is necessary  for
the effective discharge of his duties.  The Company is unable  to
estimate  the  approximate amount of time spent  by  the  officer
listed  in  Item  10  on  the affairs  of  the  Company  and  its
subsidiaries.   No  minimum amount of  time  is  required  to  be
devoted to such affairs by such officer.

Item  12.   Security Ownership of Certain Beneficial  Owners  and
Management.

     The  following  table sets forth information  regarding  the
beneficial ownership of shares of the Company's Common Stock,  as
of  March 1, 1998, by each person who beneficially owns more than
five percent of such shares, by each director of the Company,  by
each executive officer named in Item 10 and by all directors  and
executive officers of the Company as a group.  Each person  named
in the table has sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned by him  or
it, except as otherwise set forth in the notes to the table.

 Name and Address        Amount of
of Beneficial Owner      Beneficial          Percent
                         Ownership

  John Sanford
  One Penn Plaza,
  Suite 4720            2,325,565(1)          49.8%
  New York, NY
  10119-0002


  All Directors and
  Executive              2,325,565            49.8%
  Officers (1
  person)

(1)  Includes  1,544,653 shares as to which Mr. Sanford has  sole
     voting  and dispositive power and 554,226 shares and 226,686
     shares, respectively, issuable upon conversion of the principal
     and accrued interest thereon of a certain promissory note made by
     the Company in the principal amount of $1,500,000 as to which Mr.
     Sanford has a 57.9 percent interest.

Item 13.  Certain Relationships and Transactions.

     In  connection  with  the  sale of control  of  the  Company
pursuant  to  a Securities Purchase Agreement dated December  28,
1993,  Triarc Companies, Inc. ("Triarc"), the former  controlling
shareholder   of  the  Company,  assigned  to  Bruce   Paparella,
President  and Chief Executive Officer of the Company and  Warren
B.  Kanders, a beneficial owner of more than 5% of the  Company's
common  stock, the $1,500,000 outstanding balance of a note  (the
"Note")  by  the  Company  and certain accounts  receivable  (the
"Accounts  Receivable") of the Company  held  by  Triarc  in  the
amount, at September 30, 1993, of $1,230,000.

     Effective December 30, 1994, Mr. Kanders entered into  three
separate   stock   purchase  agreements,  whereby   Mr.   Kanders
transferred  all of his shares of the Company's common  stock  to
four  individuals, including Mr. Paparella who purchased  348,217
shares  for  $5,000.   In  addition, on December  22,  1994,  Mr.
Kanders  made  a  gift of his portion of the  Note  and  Accounts
Receivable  to  a  charitable foundation,  leaving  him  with  no
remaining beneficial interest in the Company's common stock.   On
April  18,  1995, John Sanford, the Company's Vice President  and
Chief  Financial  Officer, acquired a $362,500 interest  in  such
convertible note which is convertible into 231,259 shares of  the
Company's Common Stock and, as such, Mr. Sanford may be deemed to
be  the  beneficial owner of 231,259 shares issuable to him  upon
his  election to convert his interest in the notes.  On April 21,
1996,   Mr.  Bruce  Paparella,  the  Company's  President,  Chief
Executive  Officer and a Director died from cancer.  On September
6,  1996,  in a private transaction, the Estate of Mr.  Paparella
sold  to  Mr.  Sanford 1) a 37.5% interest in such  Note  in  the
principal  sum  of  $562,500, which is convertible  into  358,852
shares  of  the  Company's  Common  Stock,  2)  certain  accounts
receivable  in  the  amount of $461,250 of the  Company,  and  3)
1,644,653  shares of the Company's common stock, for an aggregate
purchase price of $330,000.  November 22, 1996, Mr. Sanford, in a
private transaction, made gifts to non-affiliated persons  of  1)
100,000  shares of the Company's Common Stock, and 2) $56,250  of
the  principal  amount plus accrued interest of  the  Convertible
Note,  which is convertible into 35, 886 shares of the  Company's
Common  Stock.   On February 13, 1997, in a private  transaction,
Choate  Rosemary  Hall  Foundation,  Inc.  sold  to  Mr.  Sanford
pursuant to a Note and Accounts Receivable Purchase Agreement (i)
their  interest  of $375,000 principal amount of the  Convertible
Note,  which is convertible into 239,234 shares of the  Company's
Common  Stock, and (ii) their interest in the Accounts Receivable
for an aggregate purchase price of $200,000.  On August 12, 1997,
in  private  transactions, Mr. Sanford pursuant to separate  Note
and Accounts Receivable Purchase Agreements sold his interest  in
$375,000 principal amount and accrued interest of the Convertible
Note  and  $307,500 in the Accounts Receivable for  an  aggregate
amount  of  $113,227.  Of this amount, $187,000 principal  amount
and  accrued interest on the Convertible Note and 12.5%  interest
in  the  Accounts  Receivable were purchased  by  Carucci  Family
Partners, (the "Partnership" ) in which Mr. Walter P. Carucci  is
a  general  partner,  for $55,222.  As  a  result  of  the  above
transaction,  Mr. Carucci may be considered the beneficial  owner
of  an  aggregate of $387,500 of the Convertible Note, consisting
of  (i) $200,000 of the Convertible Note convertible into 127,592
shares of Common Stock previously owned by Mr. Carucci, and  (ii)
$187,500 of the Convertible Note convertible into 119,617  shares
of  Common Stock owned by the Partnership, of which the aggregate
principal and accrued interest thereon is convertible at any time
into  247,209  shares  and 101,112 shares, respectively,  of  the
Company's Common Stock, constituting 7.5% of the Company's Common
Stock.   As a result of the above transactions, as of August  12,
1997, Mr. Sanford is the beneficial holder of (i) $868,750 of the
Convertible  Note  of  which the principal and  accrued  interest
thereon  is  convertible at any time into  approximately  554,226
shares  and  226,686 shares, respectively, of Common  Stock,  and
(ii) 1,544,653 shares of the Company's Common Stock, constituting
approximately  49.8  percent of the Company's outstanding  Common
Stock.


                             PART IV

Item  14.  Exhibits, Financial Statements Schedules, and  Reports
on Form 8-K.

(A)  1.   Financial Statements:

          See Index to Financial Statements (Item 8)

     2.   Financial Statement Schedule:

                    II.   Valuation  and  Qualifying  Accounts  -
                    Three years ended December 31, 1997.

                    All   other  schedules  are  omitted  as  the
                    required information is inapplicable  or  the
                    information  is  presented in  the  financial
                    statements or the notes thereto.

     3.   Exhibits:

          Copies  of  the following exhibits are available  at  a
          charge  of  $.25 per page upon written request  to  the
          Secretary  of  the  Company at 902 South  Main  Street,
          Point Marion, PA 15474.

          3.1  Articles    of   Incorporation   (including    all
               amendments    thereto)   of    Wilson    Brothers,
               incorporated   herein  by  reference   to   Wilson
               Brothers Form 10-K for the year ended December 31,
               1980, Exhibit 3.1.

          3.2  By-Laws of Wilson Brothers, incorporated herein by
               reference  to  Wilson Brothers Form 10-K  for  the
               year ended December 31, 1980, Exhibit 3.2.

          4.1  Conversion Rights Agreement dated as of  April  1,
               1982  by  and  between  Wilson  Brothers  and  DWG
               Corporation,  incorporated herein by reference  to
               Wilson  Brothers Form 10-Q for the  quarter  ended
               June 30, 1982, Exhibit 4.2.

          4.2  Amendment  to  Conversion Rights  Agreement  dated
               April 1, 1982, incorporated herein by reference to
               Wilson  Brothers  Form 10-K  for  the  year  ended
               December 31, 1984, Exhibit 4.1.

          10.1 Loan Agreement dated March 11, 1994 by and between
               Houze  Glass  Corporation and Integra  Bank/South,
               incorporated by reference to Wilson Brothers  Form
               10-K for the year ended December 31, 1993, Exhibit
               10.1.

          10.2      Security Agreement dated March 11, 1994, by and between
               Houze Glass Corporation and Integra Bank/South, incorporated by
               reference to Wilson Brothers Form 10-K for the year ended
               December 31, 1993, Exhibit 10.2.

          10.3      Revolving Credit Note dated September 14, 1994 between
               Houze Glass Corporation and Integra Bank/South, incorporated by
               reference to Wilson Brothers Form 10-K for the year ended
               December 31, 1994, Exhibit 10.3.

10.4      First Amendment to Loan Agreement and Note Modification
Agreement dated September 14, 1994 between Houze Glass
Corporation and Integra Bank/South, incorporated by reference to
Wilson Brothers Form 10-K for the year ended December 31, 1994,
Exhibit 10.4.
10.5      Amended and Restated Security Agreement dated December
30, 1994 between Houze Glass Corporation and Integra/Bank
Pittsburgh, incorporated by reference to Wilson Brothers Form 10-
K for the year ended December 31, 1994, Exhibit 10.5.
          10.6 Third Amendment to Loan Agreement and Note
               Modification Agreement between Houze Glass
               Corporation and Integra Bank/South dated July 21,
               1995, incorporated by reference to Wilson Brothers
               Form 10-K for the year ended December 31, 1995,
               Exhibit 10.7.
          10.7 Fourth Amendment to Loan Agreement and Note Modification
               Agreement between Houze Glass Corporation and Integra Bank/South
               dated July 21, 1995, incorporated by reference to Wilson Brothers
               Form 10-K for the year ended December 31, 1995, Exhibit 10.8.
10.8 Fifth Amendment to Loan Agreement and Note Modification
Agreement between Houze Glass Corporation and National City Bank
of Pennsylvania dated June 18, 1996, incorporated by reference to
Wilson Brothers Form 10-K for the year ended December 31, 1996,
Exhibit 10.8.
10.9 Sixth Amendment to Loan Agreement and Note Modification
Agreement between Houze Glass Corporation and National City Bank
of Pennsylvania December 20, 1996, incorporated by reference to
Wilson Brothers Form 10-K for the year ended December 31, 1996,
Exhibit 10.8.
10.10     Certificate of Resolution to Amend Articles of
Incorporation as to change of name from Wilson Brothers to Wilson
Brothers USA, Inc. incorporated by reference to Wilson Brothers
Form 10-Q for the quarter ended June 30, 1997, Item 6. Exhibits.
          11.1 Computation  of  Earnings (Loss)  per  Common  and
               Equivalent  Share - Five Years Ended December  31,
               1997.*
__________________
*  being filed herewith.

(B)  Reports on Form 8-K

          The  registrant did not file any reports  on  Form  8-K
          during the three months ended December 31, 1997.

                           SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934, the registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized.

                                   WILSON BROTHERS USA, Inc.


Dated: July 15, 1998                 By:    /s/ John Sanford
                                     John Sanford
                                     President

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

Date         Signature             Titles


July 15,     /s/ John Sanford      President, Chief Executive
1998         John Sanford          Officer and Director
                                   (Principal Executive Officer)


July 15,     /s/ Brett R. Smith    Director
1998         Brett R. Smith

July 15,     /s/ Frank Zanin       Director
1998         Frank Zanin

             INDEX TO FINANCIAL STATEMENT SCHEDULES

                                                         Page

II.  Valuation and Qualifying Accounts - Three            42
     years ended December 31, 1997



                                                      Schedule II

           WILSON BROTHERS USA, INC. AND SUBSIDIARIES

                Valuation and Qualifying Accounts

               Three years ended December 31, 1997

                                        Additions
                               Balance   charged   Deduction   Balance
                                 at        to          s          at
Description                   beginnin  costs and     from       end
                                  g     expenses    reserves   of year
                               of year

Year ended December 31, 1997:

     Receivables - allowance
for doubtful                   $160,000  $132,000    $149,000   $143,000
accounts
           Note receivable -   $490,000 $       -    $490,000  $      --
valuation reserve                               -
           Accrued interest -    $6,000         $      $6,000  $      --
valuation reserve                               -


Year ended December 31, 1996:

           Receivables -       $130,000   $86,000     $56,000   $160,000
allowance for
                doubtful
accounts
           Notes receivable -
                 valuation     $450,000   $40,000           $   $490,000
reserve                                                     -
           Accrued interest -    $6,000         $           $     $6,000
valuation reserve                               -          --


Year ended December 31, 1995:

     Receivables - allowance   $243,000   $96,000    $210,000   $130,000
for
                doubtful
accounts
           Notes receivable
from affiliate-                $2,665,0         $   $2,665,00  $       -
                  valuation          00        --           0          -
reserve
           Note receivable -          $  $450,000           $   $450,000
valuation reserve                    --                    --
           Accrued interest -         $    $6,000           $     $6,000
valuation reserve                    --                    --









                          EXHIBIT INDEX
                                                 Pa
                                                 ge

11.1                Computation of Earnings      44
                    (Loss) per Common and
                    Equivalent Share - five
                    years ended December 31,
                    1997





Exhibit 11.1



           WILSON BROTHERS USA, INC. AND SUBSIDIARIES
 Computation of Earnings (Loss) per Common and Equivalent Share
               Five Years Ended December 31, 1997
            (In thousands, except per share amounts)

                              1997    1996    1995   1994  1993

Income (loss) from continuing operations $    497$  (58)      $
(602)                         $(588)  $(3,492)

Loss from discontinued operations, net of tax          -      -
-  (161)                      (1,837)

Add: Interest on convertible
   note payable                 125        *       *           *
*
                                622   (58)   (602) (749)(2,352)
                                      -         -        -
-           -
     Adjusted net income (loss)   $   622$     (58) $ (602)   $
(749)                         $(2,352)
Average common stock and common
   equivalents:

Common stock                  3,321  3,321   3,321 3,321  3,321
Conversion of note payable,
   including interest thereon   1,348         *        *        *
*
Issuable pursuant to a loan origination fee    140     *      *
*    *
                              4,809  3,321   3,321 3,321  3,321

Net income (loss) per common and
   equivalent share:

     Continuing operations       $0.15 $(0.02) $(0.18)$(0.18)$(
1.05)
     Discontinued operations       -       -         -   (0.05)
(0.55)
      Basic                      $0.15 $(0.02) $(0.18)$(0.23)$(
1.60)
      Diluted                    $0.13 $(0.02) $(0.18)$(0.23)$(
1.60)

*Antidilutive