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

For the fiscal year ended December 31, 1996

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

Commission File No. 0-10894

ARNOLD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Pennsylvania 23-2200465
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

625 South Fifth Avenue, Lebanon, Pennsylvania 17042
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (717) 274-2521

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 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]

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

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 28, 1997, computed by reference to the immediately
preceding closing sale price of such stock (3/27/97), was $366,754,850.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Class Outstanding at March 28, 1997
Common Stock 26,673,080

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant's Annual Report to Stockholders for the year ended
December 31, 1996, and Registrant's definitive proxy statement for the Annual
Meeting of Stockholders to be held on May 7, 1997, are incorporated into
Parts II and III, respectively, as set forth herein.

The total number of pages included in this report, including the cover page,
is 23. The exhibit index is located on sequentially numbered page 16.

PART I
Item 1. BUSINESS

Arnold Industries, Inc. (hereinafter sometimes referred to as "Arnold
Industries" or the "Company") was incorporated on February 1, 1982, under the
laws of the Commonwealth of Pennsylvania at the direction of the Board of
Directors of New Penn Motor Express, Inc. to become a holding company and to
effect a reorganization pursuant to which, through requisite stockholder
approval, New Penn Motor Express, Inc. became a wholly owned subsidiary of
Arnold Industries as of March 31, 1982. The Company is engaged in the
trucking and warehousing business.

The Company's business activities are primarily conducted by four (4)
operating subsidiaries. New Penn Motor Express, Inc. ("New Penn") is a less-
than-truckload ("LTL") transportation company. LebArnold, Inc. ("LebArnold")
provides truckload ("TL") service and, under the name Arnold Logistics,
warehousing and warehouse-related trucking operations. SilverEagle Transport,
Inc. ("SilverEagle"), acquired on March 23, 1992, utilizing the pooling of
interests method to account for the acquisition, is a truckload carrier. DW
Freight, Inc. ("DW"), acquired on April 17, 1992, utilizing the purchase
method to account for the acquisition, is a truckload carrier. In 1996, New
Penn, the Company's LTL carrier, contributed approximately fifty-one percent
(51%) of the Company's Operating Revenue. The Company's three TL carriers
combined contributed forty-three percent (43%), and Arnold Logistics, its
warehousing and related trucking operations, contributed approximately six
percent (6%).

NEW PENN MOTOR EXPRESS, INC.

New Penn maintains general offices in Lebanon, Pennsylvania, and
transports commodities by motor vehicle on a less-than-truckload basis,
operating primarily in interstate commerce in New England and the Middle
Atlantic states. The southeastern United States, Indiana, Ohio and Quebec and
Ontario, Canada, are serviced through correspondent agreements with certain
other high-service carriers in each area. Certain areas in Canada, including
Montreal, are now serviced directly by New Penn. Puerto Rico is serviced by
New Penn land service in conjunction with correspondent ocean service.
Commodities transported include paper products, food products, textiles,
building products, metal products, pharmaceuticals, office equipment and
supplies, and wearing apparel.

New Penn operates from twenty-two (22) terminals from which it also
consolidates and distributes freight. It also utilizes a correspondent's
terminal in Puerto Rico.

Rates and Regulations

In common with other interstate motor carriers, New Penn is subject to
limited Federal economic regulation of its operations, including the terri-
tories it serves and the commodities it carries.

The ICC Termination Act of 1995, effective January 1, 1996, abolished
the Interstate Commerce Commission ("ICC") and the traditional economic
regulatory scheme administered by that agency, and replaced it with signifi-
cantly lessened economic regulation, administered by the Federal Highway
Administration ("FHWA").

To the extent rates and charges assessed by New Penn for interstate
transportation are published on behalf of New Penn by regional tariff bureaus,
such collectively published rates and charges are exempt from the anti-trust
laws. However, price competition is now widespread, and such bureau-published
rates are of relatively little influence today.

As a result of Federal law enacted in the past two years, neither
interstate rates nor intrastate rates are filed with any regulatory agencies.
Changes in rates and charges may now be effected without regulatory approval.

The FHWA also has jurisdiction over the qualification and the maximum
hours of service of drivers and the general safety of operations and motor
carrier equipment.

New Penn's operations are subject to limited regulation by the states
through which it operates.

Certificates

The authorized routes, territories, and commodities to be transported
for all property carriers by motor vehicle (except carriers of exempt commodi-
ties) are determined by operating authorities issued, in the case of inter-
state operations, by FHWA (formerly by the ICC), and, in the case of intra-
state operations, by regulatory agencies of the individual states. Operating
authorities relating to the operations of New Penn have been issued to it by
the respective regulatory agencies having jurisdiction. Recent legislation
has greatly eased or in many cases eliminated the requirements for obtaining
interstate and intrastate operating authority.

Employees and Employee Relations

New Penn has approximately fourteen hundred (1,400) full-time employees
(including its officers). Most of the hourly paid employees are covered by
contracts with the International Brotherhood of Teamsters, Chauffeurs,
Warehousemen, and Helpers of America (Teamsters) effective April 1, 1994,
through March 31, 1998.

Most of the contracts in the trucking industry are negotiated on an
industry-wide basis for three to four year periods and contain uniform wage
rates, fringe benefits, and other working conditions applicable to all covered
motor carriers, including competitors of New Penn, subject to local differenc-
es established in riders to the national contracts.

New Penn employs a sales staff of approximately sixty-five (65) people,
augmented by sales and related efforts of its four (4) regional managers and
twenty-three (23) terminal managers, together with various other marketing and
sales staff, to solicit new business and to handle service programs with
existing customers.

Competition

The motor carrier industry is highly competitive, particularly as a
result of deregulation of Interstate Commerce Commission operating authori-
ties. New Penn competes primarily with other motor common carriers, motor
contract carriers, private transportation and railroads. A very substantial
number of motor carriers operate within the same areas served by New Penn.
Some of the competing carriers are larger than New Penn in terms of tonnage
handled and net worth. Furthermore, as a result of deregulation, even more
carriers may begin to operate in interstate and intrastate commerce in the
same geographical territory in which New Penn is currently operating.

New Penn believes the competitive position of a trucking company depends
upon rates as well as consistency and dependability of service. Price cutting
in the trucking industry has become intense. Profitability depends upon New
Penn's ability to maximize utilization of revenue equipment and to minimize
handling costs.

LEBARNOLD, INC.

LebArnold, Inc. has two primary operating divisions: LebArnold (Truck-
ing) and Arnold Logistics (Warehousing and Related Trucking).

LebArnold's trucking division has 48-state authority to serve the
general public, although its basic business, that of truckload carriage, is
conducted East of the Mississippi. The main operating location for this
division is in Camp Hill, Pennsylvania, with another terminal located in
Charlotte, North Carolina. LebArnold also conducts operations from a cus-
tomer's location in Dayton, Ohio, and a leased terminal near Albany, New York.
Most services are being performed in company-owned equipment with company
drivers, although in 1992 LebArnold began utilizing owner-operators to
complement its fleet.

Arnold Logistics serves the assembly, distribution and warehousing needs
of its customers primarily from eight (8) separate warehouses in four (4)
operating locations with a total capacity of approximately 2 million square
feet. These facilities are located in Camp Hill, Mountville and Mechanics-
burg, Pennsylvania, and Fort Worth, Texas. Arnold Logistics also maintains
approximately 300,000 square feet of warehouse in Wilmington, North Carolina,
presently leased to a third party.

LebArnold, Inc. has approximately seven hundred sixty (760) employees
(including its officers).

SILVEREAGLE TRANSPORT, INC.

SilverEagle is a regional dry freight truckload carrier based in
Jacksonville, Florida. Its primary customer base is in the food industry and
it has terminals located in Florida, Georgia, North Carolina, New York and
Ohio. SilverEagle has approximately seven hundred twenty (720) employees
(including its officers), but supplements these with owner/operators.

In January 1994, SilverEagle opened a terminal in Atlanta, Georgia, to
serve the greater Atlanta market (i.e., the area within an approximate 250-
mile radius of Atlanta) and to support the SilverEagle linehaul fleet. In
January 1995, Arnold Industries, Inc., through its subsidiary, SilverEagle
Transport, Inc., acquired substantially all of the assets of T.W. Owens & Sons
Trucking, Inc., a Georgia corporation ("Owens"). Owens had been providing
transportation services as a truckload carrier in Georgia, South Carolina and
other southeastern states, as well as in Ohio and New York. Substantial
operating revenues of Owens have involved food and beverage containers and
building materials.

DW FREIGHT, INC.

The primary operating unit of DW Freight, Inc. is Dalworth Trucking Co.
Dalworth is a truckload carrier based in Grand Prairie, Texas. Its primary
customer base is in the container business (typically plastic and glass
bottles and aluminum cans). Its fleet consists primarily of 57' trailers--the
largest in the industry. This is a highly service-sensitive business where
many of the customers require same-day service. Dalworth's main area of
operation is in Texas and Oklahoma. However, there are a total of ten states
which allow 57' trailers, providing a substantial area for growth of the
Dalworth operations. Dalworth has approximately three hundred eighty (380)
employees but supplements this with a substantial number of owner-operators.

In March 1994 Arnold Industries, Inc., through DW Ventures, Inc., a
sister corporation to Dalworth Trucking Co., acquired substantially all of the
assets of H.R. Hill, Inc., an Oklahoma corporation, and certain related
entities (collectively "Hill"). DW Ventures, Inc. did not assume any of
Hill's liabilities in the transaction. Hill had been providing transportation
services as a truckload carrier in Texas, Oklahoma, Louisiana, Arkansas and
other midwestern states primarily to serve the beverage and food industries.
Pursuant to the transaction, Arnold Industries acquired Hill's warehousing
facilities in Fort Worth, Texas, and Hill's principal operating facility
located in Muskogee, Oklahoma.

GENERAL

Truckload carriers no longer file tariff rates with the ICC. LebArnold,
SilverEagle and D.W. Freight trucking operations are, in general, subject to
limited regulation and competitive factors in their respective areas of
operation similar to that experienced by New Penn.

LebArnold, SilverEagle and D.W. Freight are not subject to collective
bargaining.

Item 2. PROPERTIES

Headquarters. Arnold Industries and New Penn maintain executive and
general offices at 625 South Fifth Avenue, Lebanon, Pennsylvania 17042.
LebArnold, Inc. maintains its principal office at 4410 Industrial Park Road,
Camp Hill, Pennsylvania 17011. SilverEagle Transport, Inc.'s principal office
is located at 9523 Florida Mining Boulevard, Jacksonville, Florida 32257.
Dalworth Trucking Co.'s principal office is located at 3375 High Prairie
Avenue, Grand Prairie, Texas 75050. The companies own their principal office
locations.

Facilities. New Penn maintains general commodities terminal facilities
in twenty-two (22) cities situated in seven (7) states and Quebec province of
Canada. On December 31, 1996, seventeen (17) of the terminals were owned by
the Company or its subsidiaries and five (5) were leased from unrelated
parties. The terminals owned are located as follows: Southington, CT;
Elkridge, MD; Billerica, MA; South Kearney, NJ; Trenton, NJ; Albany, NY;
Cheektowaga, NY; Maspeth, LI, NY; Rochester, NY; Camp Hill, PA; Lancaster, PA;
Cinnaminson, NJ; Neville Island, PA; Reading, PA; Dunmore, PA; Milton, PA; and
Cranston, RI. Leases for terminal sites in Springfield, MA; Rock Tavern, NY;
Syracuse, NY; Altoona, PA; and Stanhope, Quebec, expire from time to time over
the next several years. Management believes the leases will be renewed or
replaced by other leases in the normal course of business. New Penn also
operates from a correspondent terminal in Cantano, Puerto Rico.

LebArnold owns and operates trucking terminals in Camp Hill, Pennsylva-
nia, and Charlotte, North Carolina. It also leases a terminal in Selkirk, New
York (near Albany), which it will renew or replace in the normal course of
business. LebArnold owns and, through Arnold Logistics, operates five (5)
warehouse facilities in two (2) locations, Camp Hill, Pennsylvania and
Mechanicsburg, Pennsylvania, totaling approximately 1,577,000 square feet.
LebArnold also leases approximately 300,000 square feet of additional ware-
house space for Arnold Logistics' use in Mountville, Pennsylvania. The lease
runs to February 1998, and will be renewed or replaced in the normal course.
In 1982, LebArnold acquired, from an unrelated third party, 90 acres near
Wilmington, North Carolina, on which are located approximately 320,000 square
feet of warehouse space. This facility is presently leased to an unrelated
third party.

SilverEagle presently maintains seven (7) terminals to support its
operations. These are located in Jacksonville and Jasper, Florida; Albany,
Atlanta and Fairburn, Georgia; Greensboro, North Carolina; and Newark, Ohio.
The terminals in Jacksonville, Jasper, Albany, Atlanta and Fairburn are owned
by SilverEagle. The remaining facilities are leased from unrelated third
parties. These leases expire from time to time over the next several years.
Management believes these leases will be renewed or replaced in the normal
course of business. The terminals in Fairburn, Georgia, and Newark, Ohio,
were added in January 1995 with the acquisition of substantially all of the
assets of T.W. Owens & Sons Trucking, Inc.

Dalworth presently maintains four (4) terminal and/or drop-off locations
in, respectively, Grand Prairie, Texas; Houston, Texas; Paris, Texas; Muskogee,
Oklahoma; and Henrietta, Oklahoma. Dalworth owns its facility in Grand Prairie,
Texas. A Dalworth affiliate presently owns the Paris, Texas, facilities. The
remaining facilities are all under current leases with unrelated parties, which
expire from time to time over the next several years. Management believes these
leases will be renewed or replaced in the normal course of business. A
Dalworth affiliate also owns two warehouses totalling approximately 150,000
square feet in the Ft. Worth, Texas area, which are managed by Arnold Logis-
tics.

Item 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business of the Company, to which the
Registrant or its subsidiaries are party or to which any of their property is
subject.

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

NONE

PART II

Item 5. MARKET INFORMATION

There is incorporated herein by reference the information appearing
under the captions "Quarterly Performance" and "Price Range Common Stock" on
page 19 of the Registrant's Annual Report to Stockholders for the year ended
December 31, 1996. It is anticipated that comparable cash dividends will
continue to be paid in the future.

The number of holders of record of the Company's common stock as of
March 28, 1997, was approximately 1,430. However, the Company believes there
are substantially more beneficial owners of Company stock than reflected by
the number of record holders.

The Registrant's common stock is traded in the over-the-counter market
on the NASDAQ National Market System under the symbol "AIND." Prices shown
are the actual high and low close for the periods given. The closing price of
the Company's common stock on March 27, 1997, was $13.75. The NASDAQ National
Market was closed on March 28, 1997, the record date for the Company's annual
shareholders meeting.

Item 6. SELECTED FINANCIAL DATA

There is incorporated herein by reference the information appearing
under the caption "Eleven-Year Financial Summary" on pages 20-21 of the
Registrant's Annual Report to Stockholders for the year ended December 31,
1996.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

There is incorporated herein by reference the information appearing
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations" on pages 18 and 19 of the Registrant's Annual
Report to Stockholders for the year ended December 31, 1996.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated financial statements of Arnold Industries,
Inc. and its subsidiaries, included on pages 9 through 15 of the Registrant's
Annual Report to Stockholders for the year ended December 31, 1996, are
incorporated by reference herein:

Consolidated Balance Sheets - December 31, 1996 and 1995.
Consolidated Statements of Income - Years Ended December 31, 1996, 1995
and 1994.
Consolidated Statements of Stockholders' Equity - Years Ended
December 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows - Years Ended December 31, 1996,
1995 and 1994.
Notes to Consolidated Financial Statements.

Also, there is incorporated herein by reference the "Report of Indepen-
dent Accountants" and information appearing under the caption "Quarterly
Performance" on pages 16 and 17, respectively, of the Registrant's Annual
Report to Stockholders for the year ended December 31, 1996.

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

There is incorporated herein by reference the information appearing
under the captions "Directors" and "Executive Officers" in the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders on May 7,
1997.

There have been no events under the bankruptcy act, no criminal proceed-
ings and no judgments or injunctions during the past five (5) years which
would be material to an evaluation of any Director or Executive Officer.

Item 11. EXECUTIVE COMPENSATION

There is incorporated herein by reference the information appearing
under the captions "Executive Officers", "Executive Compensation and Other
Benefits", "Performance Graph," "Report on Executive Compensation" and
"Compensation Committee Interlocks and Insider Participation" in the Regis-
trant's definitive proxy statement for the Annual Meeting of Stockholders on
May 7, 1997.

No other remuneration payments are proposed to be made in the future,
directly or indirectly, by or on behalf of Arnold Industries and its subsid-
iaries, pursuant to any plan or arrangement, to any Director or Executive
Officer of the Company except as disclosed above.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

There is incorporated herein by reference the information appearing
under the caption "Security Ownership of Directors, Officers and Certain
Beneficial Owners" in the Registrant's definitive proxy statement for the
Annual Meeting of Stockholders on May 7, 1997.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There is incorporated herein by reference the information appearing
under the caption "Certain Transactions" in the Registrant's definitive proxy
statement for the Annual Meeting of Stockholders on May 7, 1997.

PART IV

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

(a)(1) The following consolidated financial statements of the registrant
and its subsidiaries, included on pages 9 to 15 in the Registrant's
Annual Report to Stockholders for the year ended December 31, 1996 and
the report of independent accountants on page 16 of such report are
incorporated herein by reference in Item 8:

Financial statements:

Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Income - Years Ended December 31, 1996,
1995 and 1994
Consolidated Statements of Stockholders' Equity - Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years ended December 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements

Independent Accountants' Report

Selected Quarterly Financial Data - Years Ended December 31, 1996 and
1995:

Quarterly performance data, included on page 17 in the
Registrant's Annual Report to Stockholders for the year
ended December 31, 1996, is incorporated herein by reference.

(2) The following financial statement schedules for the years 1996,
1995 and 1994 are submitted herewith:

Schedule II - Valuation and qualifying accounts
and reserves
Report of Independent Accountants

All other schedules are omitted because they are not required, inappli-
cable or the information is otherwise shown in the financial statements
or notes thereto.

(3) Exhibits included herein:

Exhibit 3 - Articles of Incorporation and Bylaws (Articles of
Incorporation of the Company, as amended, and Bylaws of the
Company (filed as Exhibits 3.1 and 3.2 to Registrant's Form 10-K
for the fiscal year ended December 31, 1989, and incorporated
herein by reference).

Exhibit 13 - 1996 Annual Report to Stockholders

Exhibit 22 - Subsidiaries of the Registrant

Exhibit 24.1 - Consent of Coopers & Lybrand L.L.P.

Exhibit 27 - Financial Data Schedule

(b) Reports on Form 8-K

No reports on Form 8-K have been filed by the Registrant during the last
quarter of the period covered by this report.

ARNOLD INDUSTRIES, INC. AND SUBSIDIARIES
Schedule II
Valuation and Qualifying Accounts and Reserves
for the years ended December 31, 1996, 1995 and 1994

Additions
Balance at Charged to Charged to
beginning costs and other Balance at
Description of period expenses accounts<FN1> Deductions<FN2> end of year

Year ended December 31, 1996

Allowance for doubtful accounts $ 1,108,051 $ 1,232,565 $ 94,245 $ 710,755 $ 1,724,106

Estimated liability for claims $15,325,791 $17,666,656 - $12,878,516 $20,140,931

Year ended December 31, 1995

Allowance for doubtful accounts $ 895,563 $ 589,513 $ 88,797 $ 465,822 $ 1,108,051

Estimated liability for claims $15,045,879 $12,765,543 - $12,458,631 $15,352,791

Year ended December 31, 1994

Allowance for doubtful accounts $ 883,725 $ 644,893 $ 62,086 $ 695,141 $ 895,563

Estimated liability for claims $13,388,882 $ 9,992,022 - $ 8,335,025 $15,045,879

<FN>
<FN1>
1 Recoveries
<FN2>
2 Accounts deemed to be uncollectible and charged to allowance for
doubtful accounts and payments made for estimated liability for
claims.
</FN>

[Letterhead of Coopers & Lybrand L.L.P.]

Report of Independent Accountants

The Board of Directors
Arnold Industries, Inc.
Lebanon, Pennsylvania

Our report on the consolidated financial statements of Arnold Industries, Inc.
and Subsidiaries has been incorporated by reference in this Form 10-K from
page 16 of the 1996 Annual Report to Stockholders of Arnold Industries, Inc.
In connection with our audits of such financial statements, we have also
audited the related financial statement Schedule II included in this
Form 10-K. This supplementary financial statement schedule is the responsi-
bility of the Company's management. Our responsibility is to express an
opinion on this supplementary financial statement schedule based on our audit.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statement taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P.

One South Market Square
Harrisburg, Pennsylvania
February 28, 1997

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on March 31, 1997.

ARNOLD INDUSTRIES, INC.

By /s/ E. H. Arnold
E. H. Arnold, President

By /s/ Ronald E. Walborn
Ronald E. Walborn, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the
report has been signed by the following persons in their capacities as
indicated below.

Name Date

/s/ E. H. Arnold March 31, 1997
E. H. Arnold
President and Director

/s/ Kenneth F. Leedy March 31, 1997
Kenneth F. Leedy
Executive Vice President and Director

/s/ Ronald E. Walborn March 31, 1997
Ronald E. Walborn
Treasurer and Director

/s/ Heath L. Allen March 31, 1997
Heath L. Allen
Secretary and Director

APPENDIX TO ARNOLD INDUSTRIES, INC.
1996 ANNUAL REPORT
DESCRIBING GRAPHIC AND IMAGE MATERIAL

Front cover -

Picture of New Penn tractor and trailer in rural setting.

Picture of Arnold Transportation Services tractor and trailer in rural
setting.

Picture of inside of an Arnold Logistics warehouse.

Page 1 - President's Letter to Stockholders includes a picture of E.H. Arnold,
Company President.

Pages 2 and 3 - Description of New Penn includes the following material:

Map of Eastern and Middle United States with portions of Quebec
and Ontario Provinces and Puerto Rico shaded to indicate New
Penn's Northeast regional service, Inter-regional service and
International service areas;

Bar graph representing New Penn revenue (in millions) for years
1992 ($138); 1993 ($157); 1994 ($159); 1995 ($167) and 1996
($1182);

Bar graph representing New Penn operating income (in millions) for
years 1992 ($31); 1993 ($35); 1994 ($33); 1995 ($34) and 1996
($33);

Bar graph representing the number of full-time New Penn employees
for year 1994 (1,324); 1995 (1,315) and 1996 (1,410);
Bar graph representing the number of tractors and trucks owned by
New Penn in 1994 (630); 1995 (651) and 1996 (660);

Bar graph representing the number of trailers owned by New Penn in
1994 (1,315); 1995 (1,315) and 1996 (1,365);

Bar graph representing the number of shipments (in thousands)
transported by New Penn in 1994 (1,505); 1995 (1,578) and 1996
(1,757);

Bar graph representing the weight of freight (in millions of
pounds) transported by New Penn in 1994 (1,776); 1995 (1,841) and
1996 (2,017);

Picture of New Penn tractor and trailer in rural setting;
Background graphics of the New Penn name and logo (appearing on
each of page 2 and page 3);

Pages 4 and 5 - Description of Arnold Transportation Services includes the
following material:

Picture of Arnold Transportation tractor and trailer in urban
setting;

Bar graph representing revenue of Arnold Transportation Services
(in millions) for years 1992 ($96); 1993 ($116); 1994 ($143); 1995
($163) and 1996 ($174);

Bar graph representing operating income of Arnold Transportation
Services (in millions) for years 1992 ($9); 1993 ($12); 1994
($16); 1995 ($15) and 1996 ($8);

Bar graph representing the number of employees of Arnold Transpor-
tation for years 1994 (1,544); 1995 (1,760) and 1996 (1,810);

Bar graph representing the number of owner-operators of Arnold
Transportation for years 1994 (218); 1995 (262) and 1996 (298);

Bar graph representing the number of tractors owned by New Penn in
1994 (856); 1995 (990) and 1996 (1,075);

Bar graph representing the number of trailers owned by Arnold
Transportation in 1994 (3,245); 1995 (3,732) and 1996 (4,248);

Map of Eastern and Middle United States with various states shaded
to indicate Arnold Transportation's primary and secondary service
areas;

Background graphics of Arnold Transportation name and logo appear-
ing on each of page 4 and page 5;

Background graphic of the word "Dependable" appearing on page 4;
and

Background graphic of the word "Responsive" appearing on page 5.

Page 6 - Description of Arnold Logistics includes the following materials:

Picture of warehouse employees packing computer software materials
into product box;

Picture of three employees, two of whom are reviewing computerized
data print-out and one of whom is in background with headset;

Background graphic of Arnold Logistics name and logo; and

Background graphic of the word "Customization."

Page 7 - Consolidated Five-Year Statistical Summary: the information on this
page of the Annual Report is presented in bar-graph format.

Page 8 - Table of Contents for Financial Statements with background graphic of
the words "Financial Statements."