SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 1, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from ______ to ______.

COMMISSION FILE NO. 1-8044

HUNT MANUFACTURING CO.
------------------------
(Registrant)

PENNSYLVANIA 21-0481254
(State of Incorporation) (IRS Employer Identification No.)

ONE COMMERCE SQUARE,
2005 MARKET STREET, PHILADELPHIA, PA 19103-7085
(Address of Principal Executive Offices) (ZIP Code)

Registrant's telephone number, including area code: (215) 656-0300

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

TITLE OF EACH CLASS: NAME OF EACH EXCHANGE ON WHICH REGISTERED:
Common Shares, par value $.10 per share New York Stock Exchange

Rights to Purchase Series A Junior New York Stock Exchange
Participating Preferred Stock

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

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, 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 registrant's Common Shares (its only voting
stock) held by nonaffiliates of the registrant as of January 3, 1997 was
approximately $182,000,000. (Reference is made to the final paragraph of Part I
herein for a statement of the assumptions upon which this calculation is based.)

The number of shares of the registrant's Common Shares outstanding as of
January 3, 1997 was 10,987,796.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's 1997 definitive proxy statement relating to
its scheduled April 1997 Annual Meeting of Shareholders (which proxy statement
is expected to be filed with the Commission not later than 120 days after the
end of the registrant's last fiscal year) are incorporated by reference into
Part III of this report.

PART I
ITEM 1. BUSINESS
GENERAL

Hunt Manufacturing Co. and its subsidiaries (herein called the "Company," unless
the context indicates otherwise) are primarily engaged in the manufacture and
distribution of office products and art/craft products which the Company markets
worldwide.

In December 1995 and January 1996, the Company repurchased an
aggregate of 5,104,543 of its Common Shares in a private transaction and in a
cash tender offer for an aggregate purchase price, including related expenses,
of approximately $86.6 million. In a related transaction, the Company obtained a
five-year $125 million credit facility and used borrowings under such facility,
together with cash on hand, to fund such Common Share repurchases. The
borrowings under this credit facility subsequently were reduced by the proceeds
from the private placement of $50 million of senior notes with several insurance
companies. See Item 7 of this report and Notes 2 and 8 to Consolidated Financial
Statements herein.

As part of this strategic assessment, in January 1997, the Company reached
agreements in principle to sell its LIT-NING Products business and its Hunt Data
Products' MEDIAMATE and CALISE brand products. The sale of both businesses,
which are subject to typical conditions, are expected to be completed during the
first quarter of 1997. The combined net sales for these business units were
$23.9 million, $27.0 million, and $26.8 million for fiscal years 1996, 1995, and
1994, respectively, which are included under the office products business
segment. The divestiture of these businesses is not expected to result in a
material gain or loss but will allow the Company to focus on its core office
products and art/craft businesses.

BUSINESS SEGMENTS

The following table sets forth the Company's net sales and operating profit by
business segment for the last three fiscal years:

(IN THOUSANDS) 1996 1995 1994
---------------------------------------------------------------------
NET SALES:
Office products ............ $161,169 $163,378 $160,307
Art/Craft products ......... 166,356 150,503 127,896
-------- -------- --------
Total ...................... $327,525 $313,881 $288,203
======== ======== ========

OPERATING PROFIT:
Office products ............ $ 9,892 $ 6,966 $ 12,172
Art/Craft products ......... 24,435 21,678 21,211
-------- -------- --------
Total ...................... $ 34,327 $ 28,644 $ 33,383
======== ======== ========

See Items 6 and 7 herein and Note 17 to consolidated financial statements herein
for further information concerning the Company's business segments (including
information concerning identifiable assets).

OFFICE PRODUCTS
The Company has three major classes of office products: mechanical and
electromechanical products; office furniture; and desktop accessories and
supplies. The amounts and percentages of net sales of these product classes for
the last three fiscal years were as follows:

(DOLLARS IN THOUSANDS) 1996 1995 1994
-------------------------------------------------------------------------------------------

PRODUCT CLASS:
Mechanical and
electromechanical.......... $ 67,777 42% $ 69,018 42% $ 76,897 48%
Office furniture.............. 63,068 39 60,278 37 51,715 32
Desktop accessories
and supplies............... 30,324 19 34,082 21 31,695 20
-------- --- -------- --- -------- ---
Total........................ $161,169 100% $163,378 100% $160,307 100%
======== === ======== === ======== ===

The Company's mechanical and electromechanical office products currently consist
of a variety of items sold under the Company's BO STON brand, including manual
and electric pencil sharpeners; paper punches, trimmers and shredders; electric
letter openers; spring clips used to hold sheets of paper; manual and electronic
staplers; electric air cleaners; fans and heaters; laminators; and other related
products. In 1996, the Company obtained the exclusive distribution rights in the
United States and Canada for RAPID(1) manual and electric stapling machines
which are included under the mechanical and electromechanical product class. The
Company's office furniture products are sold primarily under the BEVIS bra nd
name. These products include conference, computer, utility and folding tables;
office chairs; bookcases and screen panels; metal and wood workstations for
computer terminals, personal computers, word processors, printers and other
similar electronic office equipment; and home/office furniture. The Company's
desktop accessories and supplies currently consist of a broad range of products
that support the use of computers, such as computer diskette, CD and CD ROM
storage and filing devices; printer stands; mousepads; and other
computer-related accessories which are marketed under the MEDIAMATE brand name.
Also included in desktop accessories and supplies are an array of items marketed
under the LIT-NING brand name, including metal horizontal and vertical files,
letter trays, desk organizers and paper sorting racks.

As discussed above, in January 1997, the Company reached agreements in principle
to sell its LIT-NING Products business and its Hunt Data Products' MEDIAMATE
and CALISE brand products. The divestiture of these businesses is expected to
allow the Company to focus on its core office products and art/craft businesses.

The Company consistently has sought to expand its office products business
through internal product development, the acquisition of distribution rights to
products which complement or extend the Company's established lines, the
acquisition of complementary businesses and through broadened distribution.
Examples of new office product introductions by the Company in recent years are
BOSTON brand electronic staplers, grip and stand-up staplers, electric letter
openers and folders, various models of air cleaners, rotary paper trimmers, fans
and heaters, personal paper shredders, electric and battery powered pencil
sharpeners and desktop laminators; BEVIS UNIWORX, BEVIS ULTRAWORX and BEVIS
MEGAWORX lines of modular office furniture systems; BEVIS CONVERGENCE panel
systems; BEVIS PRACTICAL FOUNDATIONS and BEVIS ESSENTIAL FOUNDATIONS training
room furniture. In 1994, the Company obtained exclusive distribution rights in
the United States and Canada for Schwan-STABILO(2) highlighter markers and
writing instruments, and in 1995, the Company acquired the rights to the CALISE
line of laptop computer carrying cases, which are included under desktop
accessories and supplies.

1 Trademark of Isaberg AB.
2 Trademark of Schwan-STABILO Schwanhausser GmbH & Co.

There are three major and generally distinct domestic markets for the Company's
office products: commercial offices, home offices and the general consumer. The
commercial line of the Company's office products is distributed primarily
through a network of office supply wholesalers and dealers and office product
superstores. Sales to the home office and the general consumer include
mechanical and electromechanical, and desktop accessories and supplies products
which are sold through large retail outlets, such as office products
superstores, drug and food chain stores, variety stores, discount chains,
catalog showrooms and membership chains. The consumer market has increased
significantly over the last several years primarily due to the dramatic growth
of office products superstores. A more limited line of products is sold to
schools through specialized school supply distributors.

ART/CRAFT PRODUCTS
The Company manufactures and distributes three major classes of art/craft
products: presentation graphics products; art supplies; and hobby/craft
products. The amounts and percentages of net sales of these three product
classes for the last three fiscal years were as follows:

(DOLLARS IN THOUSANDS) 1996 1995 1994
-------------------------------------------------------------------------------------------

PRODUCT CLASS:
Presentation graphics $121,339 73% $104,271 69% $ 83,354 65%
Art supplies . . 26,492 16 26,610 18 26,772 21
Hobby/craft . . . 18,525 11 19,622 13 17,770 14
-------- --- -------- --- -------- ---
Total . . . . . . . . . $166,356 100% $150,503 100% $127,896 100%
======== === ======== === ======== ===

The Company's presentation graphics products are used largely by picture
framers, graphic artists, display designers and photo laboratories, and include
a range of BIENFANG and CENTAFOAM foam boards (which constitute a significant
portion, although less than 40%, of presentation graphics products); TECHMOUNT
dry mount adhesive products; pressure sensitive and dry mount adhesive products
sold under the SEAL brand, as well as under the COLORMOUNT, SEALEZE, PRINT
GUARD, PRINT MOUNT and GARDIAN brand names; THE RMASHIELD laminating films; an
array of mounting and laminating equipment sold under the CLEAR TECH, SEALEZE,
and IMAGE brand names; and specialty tapes and films supplied under various
private brands. The Company's art supply products are used primarily by
commercial and amateur artists, and include commercial and fine art papers which
the Company converts, finishes and sells under its BIENFANG brand name; various
types of X-ACTO brand knives and blades; SPEEDBALL acrylic and watercolor
paints; SPEEDBALL PAINTERS and FABRIC PAINTERS markers; and CONTE(3) pastels,
crayons and related drawing products, for which the Company is the exclusive
United States and Canadian distributor. The Company's hobby/craft products
generally are used by hobbyists and craft enthusiasts and include SPEEDBALL
print-making products; ACCENT MATS beveled-edge picture framing mats; SPEEDBALL
ELEGANT WRITERS; LETTE RSHOP calligraphy kits and PANACHE calligraphy products;
a range of punch quilting products; PAPER KRAZE paper making and casting
products; CANDLE KRAZE candle-making products; and X-ACTO brand tools and kits.

3 Trademark of Conte S.A.

The Company consistently has sought to expand its art/craft business primarily
through acquisitions of complementary businesses and of distribution rights to
complementary products manufactured by others, through internal product
development, and through broadened distribution. Major art/craft products
introduced during the last several fiscal years include SINGLE STEP adhesive
coated BIENFANG foa m board; BIENFANG project display boards; ARMORCORE,
STRATOCORE and MIGHTYCORE line of board products; SHOWTIME portable display
products; PANACHE calligrap hy products; LETTERSHOP calligraphy kits; punch
quilting products; CANDLE KRAZE candle-making products; the X-ACTO X-2000 knife;
CLEAR TECH pouch laminators; IMAGE brand large format laminators; GARDIAN
outdoor protective laminates and adhesives; PRINT MOUNT pressure-sensitive
adhesives; and THERMASHIELD laminati ng films. In 1993, the Company acquired
IMAGE TECHNOLOGIES, Inc., a start-up company engaged in the development and
production of large format laminators, which has allowed the Company to broaden
its distribution into the digital imaging market.

In 1995, the Company acquired the Centafoam business of Spicers, Ltd., a
division of David S. Smith (Holdings) PLC, a United Kingdom manufacturer and
marketers of a line of styrene-based foam board products, which has enabled the
Company to be more competitive in international foam board markets, and has
provided the Company with a base from which to build a rigid substrate business
for sign and display markets in Europe.

BIENFANG foam board has been particularly important as it has allowed the
Company to penetrate the picture framing, sign, display and exhibit markets, yet
it also holds wide appeal to the traditional customer groups in art supply,
hobby/craft and office markets. The success of foam board has been attributable,
in significant part, to the Company's ability to offer the end-user a variety of
value-added foam board products, such as colored or adhesive-coated foam board.

Traditionally, the Company's art/craft products have been distributed primarily
through wholesalers (framing, photomounting, art and hobby), dealers
(specialized art supply and hobby/craft stores), general consumer-oriented
retail outlets (primarily office product superstores and chain stores),
industrial concerns (photo labs, screen printers) and through specialized school
supply distributors. Over the last several years, consumer-oriented retail
outlets have become an increasingly important distribution channel for the
Company's art/craft products.

SALES AND MARKETING

GENERAL

The Company has over 12,000 active customers, the 10 largest of which accounted
for approximately 37% of its sales in fiscal 1996. Three of these 10 largest
customers were office products superstore chains. The largest single customer
accounted for 9.7% of sales for that year. There is a continuing trend toward
consolidation of wholesalers, dealers and superstores, particularly in the
office products market. This has resulted in an increasing percentage of the
Company's sales being attributable to a smaller number of customers and
increased buying and bargaining power in customers. See Item 7 of this report.

Because most of the Company's sales are made from inventory, the Company
generally operates without a material backlog. The Company's sales generally are
not subject to material seasonal fluctuations. See Note 16 to the Consolidated
Financial Statements herein.

DOMESTIC OPERATIONS

Domestic marketing of the Company's office products and art/craft products is
effected principally through six separate sales forces, one each of office
products, furniture, computer accessory products, art/craft products,
photomounting, and mass market. The combined sales forces are comprised of over
30 company salespeople and over 240 independent manufacturers' representatives.

The Company maintains domestic distribution operations in Florence, Alabama for
office products; in Naugatuck, Connecticut and Cottage Grove, Wisconsin for
art/craft products; and in Statesville, North Carolina for both office and
art/craft products.

FOREIGN OPERATIONS

The Company distributes its products in more than 60 foreign markets through its
own sales force of eight area sales managers and nine salespersons, and through
over 20 independent sales agents and over 300 distributors.

Sales of office products and art/craft products represented approximately 48%
and 52%, respectively, of the Company's export sales in fiscal 1996, with
electrical and mechanical pencil sharpeners, paper punches, staplers, X-ACTO
brand knives and blades, BIENFANG paper and foam board products, and
pressure-sensitive and dry mount adhesive products accounting for the major
portion of these sales. Sales from foreign operations in Europe included
principally presentation grap hics products. See Note 17 to Consolidated
Financial Statements herein for further information concerning the Company's
foreign operations.

The Company maintains distribution operations in Ontario, Canada; Basildon,
England; Kornwestheim, Germany; and Hong Kong.

Foreign operations are subject to the usual risks of doing business abroad,
particularly currency fluctuations and foreign exchange controls. See also Note
1 to Consolidated Financial Statements herein for information concerning
hedging.

MANUFACTURING AND PRODUCTION

The Company's operations include manufacturing and converting of products, as
well as purchasing and assembly of various component parts. Excluding products
for which it acts as a distributor, the vast majority of the Company's sales are
of products which are either manufactured, converted or assembled by it. See
Item 2 herein for information concerning the Company's major manufacturing
facilities.

The Company customarily has more than one source of supply for its critical raw
materials and component parts, and its businesses have not been materially
hindered by shortages or increased prices of such items. Although higher costs
were experienced, particularly during the first quarter of fiscal 1996 for
commodities, such as wood, corrugated packaging material, steel and styrene
plastic, the Company began experiencing moderation of prices of some of its raw
materials near the end of the first quarter of fiscal 1996. However, management
expects the price of some of its raw materials to increase in fiscal 1997. See
Item 7 herein.

COMPETITION

The Company does not have any single competitor which offers substantially the
same overall lines of either office products or art/craft products as the
Company. However, competition in a number of areas of the Company's businesses,
such as electric pencil sharpeners, paper punches, staplers, office furniture,
computer diskette storage and related accessory products, paints and foam board,
is substantial, and some of the Company's competitors are larger and have
considerably greater financial resources than the Company.

Because of the fragmented nature of the office products and art/craft products
businesses, the multiple markets served by the Company, and the absence of
published market data, the Company generally is not able to determine with
certainty its relative domestic or foreign market share for its various
products. Nevertheless, the Company believes that it is among the leaders in
domestic markets in a number of its products, including manual and electric
pencil sharpeners; electronic staplers; metal desktop paper organizing products;
BIENFANG foam board products; presentation graphics materials and equipment;
X-ACTO brand knives and blades; and calligraphy products. The Company also
believes that it is among the leaders in the United Kingdom picture framing and
photomounting market for dry mounting products.

The Company considers product performance and brand recognition to be important
competitive factors in its businesses, but competitive pricing and promotional
discounts also have become increasingly important factors.

TRADEMARKS, PATENTS AND LICENSES

The Company's business is not dependent, to a material extent, upon any patents.
However, the Company regards its many trademarks as being of substantial value
in the marketing of its various products. The following trademarks, some of
which are mentioned in this report, are owned by the Company: ACCENT MATS
Registration Mark, ADEMCO-SEAL trademark, AQUASEAL trademark, ARMORCORE
Registration Mark, BEVIS Registration Mark, BEVIS Registration Mark, CONVERGENCE
Registration Mark, BEVIS Registration Mark ESSENTIAL FOUNDATIONS trademark,
BEVIS Registration Mark, MEGAWORX Registration Mark, BEVIS Registration Mark,
PRACTICAL FOUNDATIONS trademark, BEVIS Registration Mark, ULTRAWORX Registration
Mark, BEVIS Registration Mark, UNIWORX Registration Mark, BIENFANG Registration
Mark, BOSTON Registration Mark, CALISE trademark, CANDLE KRAZE trademark,
CENTAFOAM trademark, CLEAR TECH Registration Mark, COLORMOUNT Registration Mark,
FLOOR GUARD trademark, GARDIAN Registration Mark, IMAGE Registration Mark, JET
GUARD trademark, LETTERSHOP Registration Mark, LIT-NING Registration Mark,
MEDIAMATE Registration Mark, MEDIAMATE Registration Mark DISCFINDER trademark,
MEDIAMATE Registration Mark FASTRAC Registration Mark, MEDIAMATE Registration
Mark LASERRAK Registration Mark, MEDIAMATE Registration Mark ROLL 'N RAK
Registration Mark, MIGHTYCORE trademark, PANACHE Registration Mark, PAPER KRAZE
trademark, PRINT GUARD Registration Mark, PRINT MOUNT Registration Mark, SEAL
Registration Mark, SEALEZE Registration Mark, SHOWTIME trademark, SINGLE STEP
Registration Mark, SPEEDBALL Registration Mark, SPEEDBALL Registration Mark
ELEGANT WRITERS Registration Mark, SPEEDBALL Registration Mark FABRIC PAINTERS
trademark, SPEEDBALL Registration Mark PAINTERS Registration Mark, STRATOCORE
trademark, TECHMOUNT Registration Mark, THERMASHIELD trademark, X-2000 trademark
and X-ACTO Registration Mark.

The Company also has been granted exclusive distribution rights in designated
territories with respect to various products, including CONTE drawing products;
Schwan-STABILO highlighter markers and writing instruments (the distribution
rights to which in the U.S. and Canada were obtained in fiscal 1994), air
cleaners, fans and heaters which are manufactured by other companies and sold by
the Company under the BOSTON brand name; RAPID manual and electric stapling
machines (the distribution rights to which were obtained in fiscal 1996); and
PERFECT DATA(4) computer cleaning products. Such rights customarily are granted
for limited

4 Trademark of Perfect Data Corporation.

periods, after which they expire or may be terminated at the option of the
grantor. The Company's distribution rights generally are of limited duration
(the longest usually not exceeding approximately seven years) and may be
terminated or expire, in certain cases, with as little as approximately six
months notice from the grantor of such rights. While the Company's business is
not dependent upon any of these distribution rights (no line of such distributed
products having accounted for as much as 3% of the Company's net sales in fiscal
1996), the loss of the right to market certain products could have an adverse
effect on the Company's profitability.

RESEARCH AND DEVELOPMENT

During fiscal 1996, the Company spent approximately $2.3 million on
Company-sponsored research and development, compared with approximately $1.7
million in fiscal 1995 and $1.6 million in fiscal 1994.

PERSONNEL

As of January 3, 1997, the Company had approximately 2,100 full-time employees.

ENVIRONMENTAL MATTERS

Prior to the Company's acquisition of Seal Products, Inc. ("Seal") from Bunzl
plc in May 1990, it was discovered that some hazardous waste materials had been
stored at Seal's premises located in Naugatuck, Connecticut. In compliance with
applicable state law, this environmental condition was reported to the
Connecticut Department of Environmental Protection by Bunzl. Seal, which now is
a subsidiary of the Company, may be partially responsible under law for this
environmental condition on the premises and any liabilities resulting therefrom.
However, in connection with the Company's acquisition of Seal, Bunzl agreed to
take responsibility for correcting this environmental condition and to indemnify
Seal and the Company for resulting liabilities, subject to certain limitations.
Bunzl is continuing the process of remediating the environmental conditions. A
substantial portion of the remediation has been completed, although testing is
continuing.

The Company is also involved on a continuing basis in monitoring its compliance
with environmental laws and in making capital and operating improvements
necessary to comply with existing and anticipated environmental requirements.
Despite its efforts, the Company has been cited for occasional violations or
alleged violations of environmental laws or permits and on several occasions has
been named as a potentially responsible party for remediation of sites. Expenses
incurred by the Company to date relating to violations of and compliance with
environmental laws and permits and site remediation have not been material.
While it is impossible to predict with certainty, management currently does not
foresee such expenses in the future as having a material effect on the Company's
business, results of operations or financial condition. See Note 13 to
Consolidated Financial Statements herein.

ITEM 2. PROPERTIES

The Company presently maintains its principal executive offices at One Commerce
Square, 2005 Market Street, Philadelphia, PA 19103 in approximately 56,000
square feet of leased space under a sublease expiring in 2002. The following
table sets forth information with respect to certain of the other
facilities of the Company:

INDUSTRY PRIMARY APPROXIMATE OWNED
SEGMENT FUNCTION LOCATION SIZE OR LEASED
---------------------------------------------------------------------------------------------------

OFFICE Manufacturing Florence, KY 108,000 sq. ft. bldg. (1)
PRODUCTS & Offices on 27 acres

Manufacturing, Florence, AL 293,000 sq. ft. bldg. Owned
Distribution, on 24 acres
& Offices
- ----------------------------------------------------------------------------------------------------------

ART/CRAFT Manufacturing Statesville, NC 219,000 sq. ft. bldg. (2)
PRODUCTS & Offices on 13 acres

Manufacturing, Naugatuck, CT 86,000 sq. ft. bldg. Leased
Distribution, on 15 acres (exp. 2000)
& Offices

Manufacturing, Basildon, England 64,000 sq. ft. Owned
Distribution, in two bldgs.
& Offices on 3 acres
- ----------------------------------------------------------------------------------------------------------
OFFICE PRODUCTS Manufacturing Statesville, NC 218,000 sq. ft. bldg. Owned
AND ART/CRAFT & Offices on 16 acres
PRODUCTS
Distribution Statesville, NC 320,000 sq. ft. bldg. Leased
& Offices (exp. 2005)

Distribution Ontario, Canada 59,000 sq. ft. bldg. Leased
& Offices (exp. 2001)
- ----------------------------------------------------------------------------------------------------------

(1) The construction and expansion of this facility was financed by the issuance
of industrial revenue bonds by the City of Florence, Kentucky, which bonds
have matured and been paid off. The City retains title to the property and
leases it to the Company for a nominal consideration, and the Company has
the option, subject to certain conditions, to purchase the property for a
nominal consideration. It is anticipated that this facility will be part of
the sale of the Company's Lit-Ning Products business.

(2) A portion of this facility was financed by the issuance of industrial
revenue bonds, due 2004, by the Iredell County Industrial Facilities and
Pollution Control Financing Authority. The Authority retains title to the
property and leases it to the Company for rental payments equal to principal
and interest payments on the bonds. The Company has the option, subject to
certain conditions, to purchase the property for a nominal consideration
upon payment of the bonds.

At present, the above facilities generally are believed to be adequately
utilized and suitable for the Company's present needs.

ITEM 3. PENDING LEGAL PROCEEDINGS

There currently are no material pending legal proceedings (within the meaning of
the Form 10-K Instructions), other than routine litigation incidental to the
business of the Company, to which the Company is a party or to which any of its
property is subject. See Note 13 to Consolidated Financial Statements herein and
Item 1-"Environmental Matters" herein.

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

No matters were submitted to a vote of the security holders of the Company
during the fourth quarter of the fiscal year covered by this report. ADDITIONAL
INFORMATION The following information is furnished in this Part I pursuant to
Instruction 3 to Item 401(b) of Regulation S-K:

EXECUTIVE OFFICERS OF THE COMPANY
--------------------------------------------------------------------------
NAME AGE POSITION
--------------------------------------------------------------------------

Donald L. Thompson 55 Chairman of the Board, President and Chief
Executive Officer
John W. Carney 53 Vice President-Human Resources/Strategic
Planning
William E. Chandler 53 Senior Vice President, Finance; Chief
Financial Officer and Secretary
Spencer W. O'Meara 50 Executive Vice President and General
Manager, Hunt Products
W. Ernest Precious 55 Executive Vice President and
General Manager, Presentation Graphics
Eugene A. Stiefel 49 Vice President-Information Services

The executive officers of the Company customarily are elected annually by the
Board of Directors to serve, at the pleasure of the Board, for a period of one
year or until their successors are elected. All of the executive officers of the
Company, except for Messrs. Thompson, Chandler and Stiefel, have served in
varying executive capacities with the Company for over five years.

Mr. Thompson joined the Company and was elected an executive officer in June,
1996 after 23 years at Avery Dennison Corporation where he served in a variety
of positions, the most recent as Group Vice President of the Office Products
business.

Mr. Chandler was elected an executive officer of the Company in February, 1993.
He joined the Company in September, 1992 after three years at Bally
Manufacturing Corporation during which he held positions as Acting Chief
Financial Officer and Vice President, Financial Operations and Controller.

Mr. Stiefel was elected an executive officer of the Company in April, 1993. He
joined the Company in February, 1985 and has served as Vice
President-Information Services since 1987.

For the purposes of calculating the aggregate market value of the common shares
of the Company held by nonaffiliates, as shown on the cover page of this report,
it has been assumed that all the outstanding shares were held by nonaffiliates
except for the shares held by directors and officers of the Company. However,
this should not be deemed to constitute an admission that all directors and
officers of the Company are, in fact, affiliates of the Company, or that there
are not other persons who may be deemed to be affiliates of the Company. Further
information concerning shareholdings of officers, directors and principal
shareholders is included in the Company's definitive proxy statement filed or to
be filed with the Securities and Exchange Commission.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED STOCK HOLDER MATTERS

The Company's common shares are traded on the New York Stock Exchange (trading
symbol "HUN"). The following table sets forth the high and low quarterly sales
prices of the Company's common shares during the two most recent fiscal years
(all as reported by THE WALL STREET JOURNAL):

Fiscal Quarter 1996
----------------------------------------------------------------------------------------
First Second Third Fourth
----------------------------------------------------------------------------------------

High ................................. $17 1\2 $17 3\8 $16 5\8 $17 5\8
Low .................................. 13 5\8 15 12 3\4 14 1\2

Fiscal Quarter 1995
----------------------------------------------------------------------------------------
First Second Third Fourth
----------------------------------------------------------------------------------------
High ................................. $14 3\4 $15 1\2 $15 1\4 $18 3\8
Low .................................. 12 5\8 13 13 1\2 13 3\4

See Note 12 to Consolidated Financial Statements herein for information
concerning certain Rights which were distributed by the Company to shareholders
and which currently are deemed to be attached to the Company's common stock.

As of January 3, 1997, there were over 750 record holders of the Company's
common shares, which number does not include shareholders whose shares were held
in nominee name.

During the past two fiscal years, the Company has paid regular quarterly cash
dividends on its common shares at the following rates per share: 1996 and
1995-$.095 per quarter. Certain of the Company's credit agreements contain
representations, warranties, covenants and conditions, the violation of which
could result in restrictions on the Company's present and future ability to pay
dividends. See Note 8 to Consolidated Financial Statements herein.

During fiscal 1996, the Company issued from its Treasury an aggregate of 14,385
unregistered Common Shares as awards and grants under its long-term incentive
compensation program. Registration of such shares was not required because their
issuance did not involve a "sale" under Section 2(3) of the Securities Act of
1933, or, alternatively, their issuance was exempt pursuant to the private
offering provisions of that Act and the rules thereunder.

ITEM 6. SELECTED FINANCIAL DATA

The following table contains selected financial data derived from the Company's
audited Consolidated Financial Statements for each of the last five fiscal
years. This data should be read in conjunction with the Company's Consolidated
Financial Statements (and related notes) appearing elsewhere in this report and
with Item 7 of this report.

(IN THOUSANDS, EXCEPT PER SHARE DATA) Year Ended
- ------------------------------------------------------------------------------
DEC. 1, Dec. 3, Nov. 27, Nov. 28, Nov. 29,
1996(1) 1995(2) 1994 1993 1992
- ------------------------------------------------------------------------------
Net sales .......... $327,525 $313,881 $288,203 $256,150 $234,929
Income from
continuing
operations ....... 15,219 15,335 17,197 14,928 13,302
Income from
continuing
operations per
common share ..... 1.33 .96 1.07 .93 .83
Total assets ....... 175,674 182,810 173,385 156,317 144,170
Long-term debt ..... 64,559 3,559 3,559 3,003 6,160
Cash dividends
declared per share .38 .38 .36 .35 .34

(1) In fiscal 1996, the Company recorded a charge to net income of approximately
$.2 million, or $.02 per share, for costs related to the relocation and
consolidation of certain manufacturing and distribution operations.

(2) In fiscal 1995, the Company recorded a charge to net income of approximately
$3.5 million, or $.22 per share, for costs relating to organizational
changes and relocation and consolidation of operations.

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

CERTAIN OF THE INFORMATION SET FORTH BELOW AND ELSEWHERE IN THIS REPORT CONTAINS
FORWARD LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO MATERIALLY DIFFER FROM THOSE SET FORTH IN THE
FORWARD LOOKING STATEMENTS.

FINANCIAL CONDITION

The Company's working capital decreased to $58.3 million at the end of fiscal
1996 from $69.1 million at the end of fiscal 1995 due largely to the Company's
repurchases of its common shares discussed below. The debt capitalization
percentage increased to approximately 51% at the end of fiscal 1996 from 3% at
the end of fiscal 1995 as a net result of the Company's first quarter 1996
repurchases of an aggregate of 5,104,543 of its common shares and related debt
incurred to finance the repurchases. Net cash flow of $25.6 million, provided by
operating activities in fiscal 1996 combined with available cash balances, were
more than sufficient to fund a portion of the common stock repurchases
(approximately $10 million), to repay a portion of long-term debt ($17.2
million), to purchase property, plant, and equipment of $7.5 million and to pay
cash dividends of $4.2 million.

During the first quarter of fiscal 1996, the Company repurchased an aggregate of
5,104,543 of its common shares in a private transaction and a subsequent tender
offer. The price of the common shares acquired in the private transaction and
tender offer, including related expenses, aggregated approximately $86.6
million. The Company also obtained a new five-year $125 million credit facility,
of which $75 million was used to finance the aforementioned repurchases. This
new credit facility replaced the revolving credit agreements which were in
effect at the end of fiscal 1995. (See Notes 2 and 8 of the Notes to the
Consolidated Financial Statements herein.)

During the third quarter of fiscal 1996, the Company refinanced $50 million of
its $125 million floating rate credit facility through a private placement of
senior notes to various insurance companies (see Note 8 to Consolidated
Financial Statements herein). This refinancing has provided the Company with
long-term capital at a fixed rate and cash flow flexibility that allows for
continued growth through both internal investment and possible strategic
acquisitions.

The return on equity (computed on a 12-month rolling average) before special
charges and an accounting change (discussed below) improved to 21.7% in fiscal
1996 from 13.9% in fiscal 1995 and 13.8% in fiscal 1994.

The Company's current assets decreased to $92.0 million at the end of fiscal
1996 from $100.1 million at the end of fiscal 1995, primarily as a result of a
$14.0 million decrease in cash and cash equivalents, attributable, in part, to
the uses of cash mentioned above. Accounts receivable increased to $48.9 million
at the end of fiscal 1996 from $42.0 million at fiscal 1995 year-end largely due
to higher sales in the last month of fiscal 1996 compared to those at the end of
fiscal 1995 and to a reduction in the allowance for doubtful accounts to $1.8
million at the end of fiscal 1996 from $2.3 million at the end of fiscal 1995 as
a result of improved collections. The decrease in inventories from $36.1 million
at fiscal 1995 year-end to $35.4 million at the end of fiscal 1996 was
principally attributable to improved manufacturing processes.

Current liabilities of $33.7 million at the end of fiscal 1996 increased from
$31.0 million at the end of fiscal 1995 largely due to a $2.5 million increase
in accounts payable, which was primarily due to timing of and payment for raw
materials received near the end of the fiscal year.

Other noncurrent liabilities increased to $10.1 million at the end of
fiscal 1996 from $7.6 million at the end of fiscal 1995 due to several factors,
including increases in pension liability and accrued incentive compensation for
the new Chief Executive Officer hired on June 1, 1996, partially offset by
payments associated with the provision for special charges discussed below. The
increase in noncurrent deferred income taxes was due largely to excess tax
depreciation over book depreciation.

The effect of favorable currency exchange rates for the British pound sterling
(the functional currency of the Company's U.K. operations) was the principal
cause for a $1.9 million increase in the cumulative translation adjustment
account in stockholders' equity.

At December 1, 1996, the Company had a revolving credit facility and a line of
credit with several banks, providing for borrowing capacity totaling $77.5
million. There were borrowings of $11 million under these credit arrangements at
December 1, 1996.

Management believes that funds generated from operations, combined with the
existing credit facility, will be sufficient to meet currently anticipated
working capital and other capital and debt service requirements (see Note 8 to
Consolidated Financial Statements herein). Should the Company require additional
funds, management believes that the Company could obtain them at competitive
costs.

RECENT DEVELOPMENTS

The Company is currently undergoing, with the assistance of an outside
consulting firm, an intensive strategic assessment of its various business
segments and markets, the purpose of which is to assist the Company in promptly
developing and implementing a strategic plan for the operation and direction of
the Company. Management anticipates that it will take the balance of the 1997
fiscal year to complete this implementation plan and anticipates incurring
charges associated with this plan during fiscal 1997. Obviously, there are risks
inherent in the implementation of any major strategic change, but management
believes that the result will be a faster-growing, more profitable and
forward-looking Company.

As part of this strategic assessment, in January 1997, the Company reached
agreements in principle to sell its Lit-Ning Products business and its Hunt Data
Products' MediaMate and Calise brand products. The sale of both businesses,
which are subject to typical conditions, are expected to be completed during the
first quarter of 1997. The combined net sales for these business units were
$23.9 million, $27.0 million, and $26.8 million for fiscal years 1996, 1995, and
1994, respectively, which are included under the office products business
segment. The divestiture of these businesses is not expected to result in a
material gain or loss but will allow the Company to focus on its core office
products and art/craft businesses.

RESULTS OF OPERATIONS

COMPARISON OF FISCAL 1996 VS. 1995

The Company's 1996 fiscal year comprises 52 weeks, compared to 53 weeks for
fiscal 1995.

NET SALES. Net sales increased 4.3% to $327.5 million in fiscal 1996 from $313.9
million in fiscal 1995 primarily as a result of higher unit volume, particularly
from new products, and from average selling price increases of approximately
2.5%.

Art/craft products sales increased 10.5% to $166.4 million in fiscal 1996 from
$150.5 million in fiscal 1995. This increase was led by higher sales of
presentation graphics products (up 16.4%), partially offset by lower sales of
hobby/craft products (down 5.6%). Art supplies products sales were essentially
unchanged in fiscal 1996 when compared to fiscal 1995. The increase in
presentation graphics products sales was largely attributable to higher sales of
mounting and laminating products (e.g., Seal and Image brand mounting and
laminating equipment; and Bienfang and Centafoam brand foam boards and project
display boards). The decrease in hobby/craft products sales was due principally
to lower sales of Accent Mats brand pre-cut framing mats, craft products, and
X-Acto brand knives and tool sets. Export sales of art/craft products were
essentially unchanged in fiscal 1996 from fiscal 1995. Foreign sales of
art/craft products continued to increase substantially, growing 27.5% in 1996 as
compared to fiscal 1995. This increase was primarily due to higher sales of
presentation graphics products in Europe, which included sales of products
manufactured by the Centafoam operation (acquired in late April, 1995).
Excluding the sales of the Centafoam operation, foreign sales grew 17% in fiscal
1996.

Office products sales decreased 1.4% in fiscal 1996 to $161.1 million from
$163.4 million in fiscal 1995 as a net result of lower sales of desktop
accessories and supplies (down 11.1%) and lower mechanical and electromechanical
products sales (down 1.8%), partially offset by higher sales of office furniture
products (up 4.6%). The sales decrease in desktop accessories and supplies was
largely due to lower sales of MediaMate computer accessory products and lower
sales of Lit-Ning brand metal desk organizing products. The sales decrease in
mechanical and electromechanical products was principally attributable to lower
sales of electric and manual pencil sharpeners and paper shredders, partially
offset by higher sales of staplers, which were due principally to sales of Rapid
brand manual and high-quality electric staplers (the distribution rights to
which in the United States and Canada were obtained during the latter part of
fiscal 1996). The sales decreases in desktop accessories and supplies and
mechanical and electromechanical products were due to a combination of factors:
lower consumer demand for certain products, lost distribution at some of the
Company's large retail customers, and general softness in demand. The increase
in office furniture products sales was due primarily to higher sales

of Bevis brand furniture products, particularly folding tables, screen panels,
and new products. Export sales of office products grew 34.7% in fiscal 1996 as
compared to fiscal 1995, primarily as a result of higher sales in Canada, in
Latin America (particularly Mexico), and in Australia.

GROSS PROFIT. The Company's gross profit improved slightly to 37.4% of net sales
in fiscal 1996 from 37.3% in fiscal 1995. This slight improvement was largely
the net result of higher selling prices and lower raw material costs, partially
offset by changes in sales mix (i.e., higher sales of office furniture products
and foreign sales, which yield lower gross profit percentages than many of the
Company's other products) and higher customer rebates and returns. The gross
profit percentages for foreign sales were 26.7% in fiscal 1996 and 28.5% in
fiscal 1995. Although the Company has realized positive effects from its recent
selling price increases and, to some extent, from the stabilization of costs of
some of its raw materials, management is uncertain if future selling price
increases will offset anticipated raw material increases in fiscal 1997.

SELLING, SHIPPING, ADMINISTRATIVE, AND GENERAL EXPENSES. Selling and shipping
expenses decreased slightly to 19.0% of net sales in fiscal 1996 from 19.1% in
fiscal 1995. This decrease was largely the net result of lower field sales
related expenses, such as promotions, partially offset by higher shipping and
distribution costs, primarily from higher freight expenses and marketing
administrative expenses.

Administrative and general expenses increased $4.1 million, or 14.5%, in fiscal
1996 over the previous year. This increase was principally the result of a
charge related to incentive compensation arrangements from the June 1, 1996
hiring of a new Chief Executive Officer ($1.6 million pre-tax, or $.09 per share
after-tax) and to costs associated with issuance of stock grants to certain
employees ($.6 million pre-tax, or $.04 per share after-tax).

PROVISION FOR SPECIAL CHARGES. During the first quarter of fiscal 1996, the
Company recorded a pre-tax charge of $.4 million, or $.02 per share after-tax,
relating to the Company's fiscal 1995 decision to relocate and consolidate
certain manufacturing and distribution operations. In fiscal 1995, the Company
recorded a provision for organizational changes of $5.3 million (approximately
$3.5 million after income taxes, or $.22 per share) for costs incurred in
connection with the resignation and replacement of the Company's Chairman and
Chief Executive Officer and other organizational changes. (See "Comparison of
Fiscal 1995 vs. 1994" below.) Approximately $1.1 million of this provision is
included in liabilities as of December 1, 1996, which principally relates to
future severance related payments.

INTEREST EXPENSE. Interest expense increased to $4.6 million in fiscal 1996 from
$.1 million in fiscal 1995 due to significant borrowings under various debt
arrangements discussed in Note 8 to Consolidated Financial Statements herein and
under "Financial Condition" above.

OTHER EXPENSE, NET. Other expense, net, decreased to $18,000 in fiscal 1996 from
$.4 million in fiscal 1995 primarily due to a gain on sale of certain
distribution rights in fiscal 1996.

PROVISION FOR INCOME TAXES. The Company's effective tax rate decreased to 34.6%
in fiscal 1996 from 35.1% in fiscal 1995 as a result of several factors,
including resolution of certain prior years' tax exposures.

EXTRAORDINARY ITEM. During the third quarter of fiscal 1996, the Company placed
$50 million of senior notes with several insurance companies, the proceeds of
which were used to repay the outstanding balance of the Company's term loan and
part of the revolving credit facility. (See Note 8 to Consolidated Financial
Statements herein and "Financial Condition" above.) As a result, the Company
recorded an after-tax loss of $.3 million, or $.02 per share, for early
extinguishment of debt which has been reflected in the Company's Consolidated
Statements of Income as an extraordinary item.

NEW ACCOUNTING STANDARDS

SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," requires changes in accounting and
reporting for impairments of long-lived assets, certain identifiable intangibles
and goodwill related to those assets to be held and used, and for long-lived
assets and certain identifiable intangibles to be disposed of. SFAS No. 121 is
effective for fiscal years beginning after December 15, 1995. Accordingly, the
Company will adopt SFAS No. 121 in fiscal 1997. Management does not believe the
adoption of SFAS No. 121 will have a material effect on its results of
operations or financial position.

SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does
not require, companies to recognize compensation expense for grants of stock,
stock options, and other equity instruments to employees based upon fair value
or, alternatively, permits them to continue to apply the existing accounting
rules contained in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB No. 25). Companies choosing not to adopt the
expense recognition provisions of SFAS No. 123 are required to disclose pro
forma net income and earnings per share data as if such provisions had been
applied. The Company anticipates continuing to account for stock-based
compensation in accordance with APB No. 25 and, therefore, the adoption of SFAS
No. 123 will not have an impact on the Company's financial position or results
of operations. The disclosure requirements of SFAS No. 123 are effective for
fiscal years beginning after December 15, 1995; therefore, the Company intends
to make such disclosures in fiscal 1997.

Statement of Position (SOP) 96-1, "Environmental Remediation Liabilities,"
provides guidance on specific accounting issues that are present in the
recognition, measurement, display and disclosure of environmental remediation
liabilities. SOP 96-1 is effective for fiscal years beginning after December 15,
1996. Accordingly, the Company will adopt SOP 96-1 when required. Management
believes that the adoption of this statement will not have a material impact on
its results of operations or financial position.

ENVIRONMENTAL MATTERS

The Company is involved, on a continuing basis, in monitoring its compliance
with environmental laws and in making capital and operating improvements
necessary to comply with existing and anticipated environmental requirements.
Despite its efforts, the Company has been cited for occasional violations or
alleged violations of environmental laws or permits and on several occasions has
been named a potentially responsible party for the remediation of sites.
Expenses incurred by the Company for all years presented in the consolidated
financial statements relating to violations of and compliance with environmental
laws and permits and site remediation have not been material. While it is
impossible to predict with certainty, management currently does not foresee such
expenses in the future as having a material effect on the Company's business,
results of operations, or financial condition. (See Note 13 of the Notes to
Consolidated Financial Statements.)

COMPARISON OF FISCAL 1995 VS. 1994

The Company's 1995 fiscal year was comprised of 53 weeks compared to 52 weeks
for fiscal 1994.

NET SALES AND EARNINGS. Net sales increased 8.9% to $313.9 million in fiscal
1995 from $288.2 million in fiscal 1994. The increase was primarily the result
of higher unit volume, particularly from new products, and from average selling
price increases of approximately 2%.

Office products sales increased 1.9% in fiscal 1995 to $163.4 million from
$160.3 million in fiscal 1994 as a result of higher sales of office furniture
products (up 16.6%) and desktop accessories and supplies (up 7.5%), partially
offset by lower sales of mechanical and electromechanical products (down 10.2%).
The sales growth in office furniture products was due primarily to higher sales
of Bevis brand products, particularly folding tables, computer-related
furniture, conference tables, and screen panels. The sales increase in desktop
accessories and supplies was the result of higher sales of MediaMate brand
products and Schwan-STABILO brand products, partially offset by lower sales of
Lit-Ning brand metal desk organizing products. The decrease in mechanical and
electromechanical sales was largely due to lower sales of Boston brand products,
particularly pencil sharpeners, manual staplers, paper punches, and office
machines. The decrease in Boston brand products was primarily attributable to
lost distribution at some of the Company's large retail customers and to general
softness in demand. Management is taking measures aimed at regaining such lost
market share. Export sales of office products decreased 10.7% in fiscal 1995 as
compared to fiscal 1994, primarily due to lower sales to Latin America
(particularly Mexico) and, to a lesser extent, the Middle East and Europe.

Art/craft products sales of $150.5 million for fiscal 1995 increased 17.7% from
fiscal 1994 sales of $127.9 million. This increase was led by higher sales of
presentation graphics products, which were up 25.1% due to a combination of
factors, including higher sales in Europe, growth in the digital imaging market,
and increases in sales of certain mounting and laminating products (e.g., Seal
and Image mounting and laminating equipment and Bienfang and Centafoam brand
foam boards). Sales of hobby/craft products increased 10.4%, largely due to
higher sales of Speedball Elegant Writer calligraphy markers and Speedball
Painters markers as well as to the introduction of new products. Art supplies
products sales were essentially unchanged in fiscal 1995 when compared to fiscal
1994. Export sales of art/craft products grew by 2.7% in fiscal 1995 from fiscal
1994. Foreign sales of art/craft products continued to increase substantially,
growing 51.9% in fiscal 1995 as compared to fiscal 1994. This increase was due
primarily to higher sales of presentation graphics products in Europe, which
includes sales of products of Centafoam (acquired in late April, 1995).
Excluding sales from the Centafoam business, foreign sales grew 33.9% in fiscal
1995.

Net income of $15.3 million, or $.96 per share, for fiscal 1995 decreased
approximately 15% from fiscal 1994 due to several factors, including a provision
in fiscal 1995 for organizational changes and relocation and consolidation of
operations aggregating $5.3 million (approximately $3.5 million after income
taxes, or $.22 per share) discussed below and the adoption of Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," in
fiscal 1994, the cumulative effect of which increased fiscal 1994 net income by
$.8 million, or $.05 per share.

GROSS PROFIT. The Company's gross profit margin decreased to 37.3% of net sales
in fiscal 1995 from 39.3% in fiscal 1994. The decrease was primarily the result
of changes in product sales mix (i.e., higher sales for certain office furniture
products and higher foreign sales, which yield lower gross profit percentages
than many of the Company's other products), higher raw material costs, and lower
sales and production volume of Boston brand products. The gross profit
percentages for foreign sales were 28.5% in fiscal 1995 and 28.7% in fiscal
1994. Higher costs of commodities, such as wood, styrene plastics, and
corrugated packaging materials had the greatest impact on raw material cost
increases.

SELLING, SHIPPING, ADMINISTRATIVE, AND GENERAL EXPENSES. Selling and shipping
expenses decreased to 19.1% of net sales in fiscal 1995 from 20.3% in fiscal
1994, largely as a result of lower packing and shipping expenses, primarily
freight expenses, and lower sales commission expenses attributable to changes in
customer sales mix.

Administrative and general expenses increased 3.5% to $28.3 million primarily as
a result of salary and wage increases, offset partially by lower fees for
professional services.

PROVISION FOR ORGANIZATIONAL CHANGES AND RELOCATION AND CONSOLIDATION OF
OPERATIONS. During fiscal 1995, the Company recorded a pre-tax charge
aggregating $5.3 million (approximately $3.5 million after income taxes, or $.22
per share) as a provision for costs relating to organizational changes and
relocation and consolidation of certain manufacturing and distribution
operations. The pre-tax charge was comprised of $2.4 million for costs expected
to be incurred in connection with organizational changes being made to more
effectively align the Company's organization with its markets, including the
resignation and planned replacement of the Company's former Chairman and Chief
Executive Officer, and $2.9 million for costs relating to the relocation and
consolidation of its Hunt Data Products manufacturing and distribution
operations located in Nuevo Laredo, Mexico, and Laredo, Texas with its
manufacturing facilities in Statesville, North Carolina, and the move of the
distribution operations of its Lit-Ning business from Florence, Kentucky to
Statesville. The provision included recognition of future lease obligations,
write-off of property, plant and equipment, relocation costs, employee severance
costs, and other related costs.

INTEREST INCOME. Interest income increased $229,000 in fiscal 1995 from fiscal
1994 due primarily to higher average cash balances.

PROVISION FOR INCOME TAXES. The Company's effective tax rate decreased to 35.1%
in fiscal 1995 from 36.5% in fiscal 1994. This decrease was principally a result
of a reversal of valuation allowances relating to tax net operating loss
carryforwards from the European operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements and supplementary financial information specified by this
Item, together with the report of Coopers & Lybrand L.L.P. thereon, are
presented following Item 14 of this report.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.

PART III

INCORPORATED BY REFERENCE

The information called for by ITEM 10, "DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT" (other than the information concerning executive officers set forth
after Part I, Item 4 herein); ITEM 11, "EXECUTIVE COMPENSATION;" ITEM 12,
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT;" and ITEM 13,
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS," is incorporated herein by
reference to the Company's definitive proxy statement for its Annual Meeting of
Shareholders scheduled to be held April 16, 1997, which definitive proxy
statement is expected to be filed with the Commission not later than 120 days
after the end of the fiscal year to which this report relates.

PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A) DOCUMENTS FILED AS PART OF THE REPORT

1. FINANCIAL STATEMENTS: PAGES
-----------------------------------------------------------
Report of Independent Accountants F-1

Consolidated Statements of Income for the
fiscal years 1996, 1995 and 1994 F-2

Consolidated Balance Sheets, December 1, 1996
and December 3, 1995 F-3

Consolidated Statements of Stockholders' Equity
for the fiscal years 1996, 1995 and 1994 F-4

Consolidated Statements of Cash Flows
for the fiscal years 1996, 1995 and 1994 F-5

Notes to Consolidated Financial Statements F-6-21

2. FINANCIAL STATEMENT SCHEDULE:
-----------------------------------------------------------
II. Valuation and Qualifying Accounts for the
fiscal years 1996, 1995 and 1994 F-22

All other schedules not listed above have been omitted,
since they are not applicable or are not required, or
because the required information is included in the
consolidated financial statements or notes thereto.

Individual financial statements of the Company have
been omitted, since the Company is primarily an
operating company and any subsidiary companies included
in the consolidated financial statements are directly
or indirectly wholly-owned and are not indebted to any
person, other than the parent or the consolidated
subsidiaries, in an amount which is material in
relation to total consolidated assets at the date of
the latest balance sheet filed, except indebtedness
incurred in the ordinary course of business which is
not overdue and which matures in one year.

3. EXHIBITS:
-----------------------------------------------------------
(3) Articles of incorporation and bylaws:

(a) Restated Articles of Incorporation, as amended
(composite) (incorp. by ref. to Ex. 4(a) to Reg.
Stmt. No. 33-57105 on Form S-8) (reference also is
made to Exhibit 4(c) below for the Designation of
Powers, Preferences, Rights and Qualifications of
Preferred Stock).

(b) By-laws, as amended (incorp. by ref. to Ex. 3(b) to
Form 10-Q for quarter ended May 28, 1995).

(4) Instruments defining rights of security holders,
including indentures:*

(a) Note Purchase Agreement dated as of August 1, 1996
between the Company and several insurance companies
(incorp. by ref. to Ex. 4.2 to Form 10-Q for quarter
ended September 1, 1996).

(b) (1) Credit Agreement dated December 19, 1995 between
the Company and NationsBank, N. A. (incorp. by ref.
to Ex. 9(b) to the Company's Schedule 13E-4 filed
with the SEC on December 21, 1995 (the "1995
Schedule 13E-4"); (2) Amendment dated as of February
1, 1996 to Credit Agreement (incorp. by ref. to Ex.
(4)(a)(2) to fiscal 1995 Form 10-K); and (3)
Amendment dated as of February 26, 1996 to Credit
Agreement (incorp. by ref. to Ex. (4)(a)(3) to
fiscal 1995 Form 10-K); (4) Amendment dated as of
August 1, 1996 to Credit Agreement (incorp. by ref.
to Ex. 4.1 to Form 10-Q for quarter ended September
1, 1996).

(c) Rights Agreement dated as of August 8, 1990
(including as Exhibit A thereto the Designation of
Powers, Preferences, Rights and Qualifications of
Preferred Stock), between the Company and Mellon
Bank (East), N. A., as original Rights Agent
(incorp. by ref. to Ex. 4.1 to August 1990 Form 8-K)
and Assignment and Assumption Agreement dated
December 2, 1991, with American Stock Transfer and
Trust Company, as successor Rights Agent (incorp. by
ref. to Ex. 4(d) to fiscal 1991 Form 10-K).

Miscellaneous long-term debt instruments and credit
facility agreements of the Company, under which the
underlying authorized debt is equal to less than 10%
of the total assets of the Company and its
subsidiaries on a consolidated basis, may not be
filed as exhibits to this report. The Company agrees
to furnish to the Commission, upon request, copies
of any such unfiled instruments.

(10) Material contracts:

(a) Lease Agreement dated June 1, 1979 and First
Supplemental Lease Agreement dated as of July 31,
1994 between the Iredell County Industrial
Facilities and Pollution Control Financing Authority
and the Company (incorp. by ref. to Ex. 10(a) to
fiscal 1994 Form 10-K).

(b) 1978 Stock Option Plan, as amended, of the Company
(incorp. by ref. to Ex. 28(a) to Reg. Stmt. No.
33-25947 on Form S-8).**

(d) 1993 Stock Option and Stock Grant Plan of the
Company, as amended (filed herewith).**

(e) 1988 Long-Term Incentive Compensation Plan of the
Company (incorp. by ref. to Ex. 10(e) to fiscal 1994
Form 10-K).**

(f) Form of Stock Grant Agreement between the Company
and Messrs. Carney, Chandler, O'Meara and Precious
(incorp. by ref. to Ex. 10(f) to fiscal 1995 Form
10-K).**

(g) 1994 Non-Employee Directors' Stock Option Plan
(incorp. by ref. to Ex. 10(f) to fiscal 1993 Form
10-K).**

(h) (1) Form of Change in Control Agreement between the
Company and various officers of the Company (incorp.
by ref. to Ex. 10(i) to fiscal 1994 Form 10-K)** and
(2) list of executive officers who are parties
(filed herewith).**

(i) Employment-Severance Agreement between the Company
and William E. Chandler (incorp. by ref. to Ex.
10(j) to fiscal 1993 Form 10-K).**

(j) (1) Supplemental Executive Benefits Plan of the
Company, effective January 1, 1996, and (2) related
Amended and Restated Trust Agreement, effective
January 1, 1996 (filed herewith).**

(k) Employment-Severance arrangements with Robert B.
Fritsch (filed herewith).**

(l) Transition Agreement dated June 13, 1995 between the
Company and Ronald J. Naples (incorp. by ref. to Ex.
10 to Form 10-Q for quarter ended September 3,
1995).**

(m) Stock Purchase Agreement, dated December 19, 1996,
between the Company and Mary F. Bartol (incorp. by
ref. to Ex. 9(c) to the 1995 Schedule 13E-4).

(n) Employment Agreement, dated as of April 8, 1996,
between the Company and Donald L. Thompson (incorp.
by ref. to Ex. 10 to Form 10-Q for quarter ended
June 2, 1996).**

(11) Statement re: computation of per share earnings (filed herewith).

(21) Subsidiaries (incorp. by ref. to Ex. 21 to fiscal 1993 Form 10-K).

(23) Consent of Coopers & Lybrand L.L.P. to incorporation by reference
in Registration Statements Nos. 33-70660, 33-25947, 33-6359, 2-83144, 33-57105,
and 33-57103 on Form S-8 of their report on the consolidated financial
statements and schedule included in this report (filed herewith).

(27) Financial Data Schedule (filed herewith).

(B) REPORTS ON FORM 8-K

The Company did not file any reports on Form 8-K during the last
quarter of the fiscal year covered by this report.

* Reference also is made to (i) Articles 5th, 6th, 7th, and 8th of the
Company's composite Articles of Incorporation (Ex. 3(a) to this report) and
(ii) to Sections 1, 7, and 8 of the Company's By-laws (Ex. 3(b) to this
report).

** Indicates a management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13 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.

HUNT MANUFACTURING CO.

Dated: February 12, 1997 By: \s\ Donald L. Thompson
-------------------------------------
Donald L. Thompson
Chairman of the Board,
President and Chief Executive Officer

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

\s\ Donald L. Thompson February 12, 1997
- -------------------------------------
Donald L. Thompson
Chairman of the Board,
President and Chief Executive Officer

\s\ William E. Chandler February 12, 1997
- -------------------------------------
William E. Chandler
Senior Vice President, Finance
(Principal Financial and
Accounting Officer)

\s\ Jack Farber February 12, 1997
- -------------------------------------
Jack Farber
Director

\s\ William F. Hamilton, Ph.D. February 12, 1997
- -------------------------------------
William F. Hamilton, Ph.D.
Director

\s\ Mary R. Henderson February 12, 1997
- -------------------------------------
Mary R. (Nina) Henderson
Director

\s\ Gordon A. MacInnes February 12, 1997
- -------------------------------------
Gordon A. MacInnes
Director

\s\ Wilson D. McElhinny February 12, 1997
- -------------------------------------
Wilson D. McElhinny
Director

\s\ Robert H. Rock February 12, 1997
- -------------------------------------
Robert H. Rock
Director

\s\ Roderic H. Ross February 12, 1997
- -------------------------------------
Roderic H. Ross
Director

\s\ Victoria B. Vallely February 12, 1997
- -------------------------------------
Victoria B. Vallely
Director

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and
the Board of Directors of
Hunt Manufacturing Co.:

We have audited the consolidated financial statements and the financial
statement schedule of Hunt Manufacturing Co. and Subsidiaries listed in the
index on page 19 of this Form 10-K. These financial statements and the financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement 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 consolidated financial position of Hunt Manufacturing
Co. and Subsidiaries as of December 1, 1996 and December 3, 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 1, 1996 in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.

As discussed in Notes 1 and 9 to the consolidated financial statements, the
Company changed its method of accounting for income taxes in fiscal year 1994.

COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 23, 1997

F-1

HUNT MANUFACTURING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE FISCAL YEARS 1996, 1995 AND 1994 (IN THOUSANDS EXCEPT PER SHARE
AMOUNTS)

1996 1995 1994
(52 weeks) (53 weeks) (52 weeks)
- ---------------------------------------------------------------------------------------------------------------------------

Net sales ......................................................................... $327,525 $313,881 $288,203

Cost of sales ..................................................................... 204,976 196,720 174,927
-------- -------- --------
Gross profit ................................................................ 122,549 117,161 113,276

Selling and shipping expenses ..................................................... 62,241 59,960 58,572
Administrative and general expenses ............................................... 32,387 28,296 27,338
Provision for organizational changes and relocation and consolidation of operations 354 5,342 --
-------- -------- --------
Income from operations ...................................................... 27,567 23,563 27,366

Interest expense (less $336, $229 and $354 capitalized
in 1996, 1995 and 1994, respectively) ......................................... (4,579) (109) (85)
Interest income ................................................................... 301 571 342
Other expense, net ................................................................ (18) (380) (542)
-------- -------- --------
Income before income taxes, extraordinary item and
cumulative effect of accounting change .................................... 23,271 23,645 27,081
Provision for income taxes ........................................................ 8,052 8,310 9,884
-------- -------- --------
Income before extraordinary item and cumulative effect of accounting change . 15,219 15,335 17,197
Extraordinary loss on early extinguishment of debt
(net of income tax benefit of $134) ........................................... (251) -- --
Cumulative effect of change in accounting for income taxes ........................ -- -- 795
-------- -------- --------
Net income .................................................................. $ 14,968 $ 15,335 $ 17,992
========= ========= =========
Average shares of common stock outstanding ........................................ 11,462 16,003 16,102
========= ========= =========
Earnings per common share:
Income before extraordinary item and cumulative effect of accounting
change .................................................................... $ 1.33 $ .96 $ 1.07
Extraordinary loss on early extinguishment of debt .......................... (.02) -- --
Cumulative effect of change in accounting for income taxes .................. -- -- .05
--------- --------- ---------
Net income per share ........................................................ $ 1.31 $ .96 $ 1.12
========= ========= =========

See accompanying notes to consolidated financial statements.

F-2

HUNT MANUFACTURING CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 1, 1996 AND DECEMBER 3, 1995 (IN THOUSANDS EXCEPT SHARE AND PER SHARE
AMOUNTS)

1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:

Cash and cash equivalents ...................................................................... $ 1,528 $ 15,503
Accounts receivable, less allowance for doubtful accounts: 1996, $1,809; 1995, $2,305 .......... 48,912 42,036
Inventories .................................................................................... 35,391 36,131
Deferred income taxes .......................................................................... 4,563 4,938
Prepaid expenses and other current assets....................................................... 1,606 1,484
------- --------
Total current assets . ................................................................... 92,000 100,092
Property, plant and equipment, at cost, less accumulated depreciation and amortization ............. 52,711 52,008
Excess of acquisition cost over net assets acquired, less accumulated amortization ................. 18,239 18,204
Intangible assets, at cost, less accumulated amortization .......................................... 6,738 7,793
Other assets ....................................................................................... 5,986 4,713
------- --------
TOTAL ASSETS ................................................................... $175,674 $182,810
======== ========

LIABILITIES
Current liabilities:
Current portion of long-term debt ............................................................... $ -- $ 766
Accounts payable ................................................................................ 13,271 10,759
Accrued expenses:
Salaries, wages and commissions ............................................................... 5,284 5,446
Income taxes .................................................................................. 3,770 3,064
Insurance ..................................................................................... 2,082 2,449
Compensated absences .......................................................................... 2,145 1,673
Other ......................................................................................... 7,123 6,793
------- --------
Total current liabilities ................................................................. 33,675 30,950
Long-term debt, less current portion ................................................................ 64,559 3,559
Deferred income taxes ............................................................................... 4,704 4,520
Other non-current liabilities ....................................................................... 10,056 7,588
Commitments and contingencies

STOCKHOLDERS' EQUITY
Capital stock:
Preferred, $.10 par value, authorized 1,000,000 shares
(including 50,000 shares of Series A Junior Participating Preferred); none issued ............. -- --
Common, $.10 par value, authorized 40,000,000 shares;
issued: 1996 and 1995-16,152,322 shares ....................................................... 1,615 1,615
Capital in excess of par value ...................................................................... 6,434 6,434
Cumulative translation adjustment ................................................................... 894 (983)
Retained earnings ................................................................................... 141,587 131,216
Less cost of treasury stock: 1996-5,178,127 shares; 1995-159,159 shares ......................... (87,850) (2,089)
------- --------
Total stockholders' equity ................................................................ 62,680 136,193
------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...................................... $175,674 $182,810
======== ========

See accompanying notes to consolidated financial statements.

F-3

HUNT MANUFACTURING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE FISCAL YEARS 1996, 1995 AND 1994 (IN THOUSANDS EXCEPT SHARE AND PER
SHARE AMOUNTS)

Common Stock Capital in Cumulative
------------------- Excess of Translation Retained
Issued Treasury Par Value Adjustments Earnings
- ------------------------------------------------------------------------------------------------------------------------------------

Balances, November 28, 1993 (issued 16,125,321 shares;
treasury 18,634 shares) ..................................... $1,613 $ (299) $6,158 $(1,495) $110,290
Net income ...................................................... 17,992
Cash dividends on common stock ($.36 per share).................. (5,794)
Translation adjustments ......................................... 856
Purchase of treasury stock (45,600 shares)....................... (728)
Exercise of stock options (issued 1,988 shares; treasury 25,925
shares, net of shares received as payment upon exercise) .... 416 16 25
Issuance of stock grants (issued 2,759 shares;
treasury 8,364 shares)....................................... 136 43 5
------ --------- ------ ------- --------
Balances, November 27, 1994 (issued 16,130,068 shares;
treasury 29,945 shares)...................................... 1,613 (475) 6,217 (639) 122,518
Net income ...................................................... 15,335
Cash dividends on common stock ($.38 per share) ................. (6,081)
Translation adjustments . ....................................... (344)
Purchase of treasury stock (204,900 shares) ..................... (2,853)
Exercise of stock options (issued 8,044 shares; treasury 70,580
shares, net of shares received as payment upon exercise) .... 1 1,168 55 (562)
Issuance of stock grants (issued 14,210 shares;
treasury 5,106 shares)....................................... 1 71 162 6
------ --------- ------ ------- --------
Balances, December 3, 1995 (issued 16,152,322 shares;
treasury 159,159 shares)..................................... 1,615 (2,089) 6,434 (983) 131,216
Net income ...................................................... 14,968
Cash dividends on common stock ($.38 per share) ................. (4,168)
Translation adjustments ......................................... 1,877
Purchase of treasury stock (5,104,543 shares) ................... (86,550)
Exercise of stock options (treasury 71,190 shares,
net of shares received as payment upon exercise) ............ 561 (442)
Issuance of stock grants (treasury 14,385 shares) ............... 228 13
------ --------- ------ ------- --------
Balances, December 1, 1996 (issued 16,152,322 shares;
treasury 5,178,127 shares) .................................. $1,615 $(87,850) $6,434 $ 894 $141,587
====== ======== ====== ====== ========

See accompanying notes to consolidated financial statements.

F-4

HUNT MANUFACTURING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE FISCAL YEARS 1996, 1995 AND 1994 (IN THOUSANDS)

1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------

Cash flows from operating activities:
Net income .................................................................................. $14,968 $15,335 $17,992
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ........................................................... 9,170 8,758 8,039
Provision for inventory obsolescence .................................................... 2,216 1,778 2,083
Provision for doubtful accounts ......................................................... 655 916 921
Extraordinary loss on early extinguishment of debt ...................................... 251 -- --
Cumulative effect of change in accounting for income taxes .............................. -- -- (795)
Deferred income taxes ................................................................... 559 410 (1,155)
Loss on disposal of property, plant and equipment ....................................... 633 184 634
Provision (payments) for organizational changes and
relocation and consolidation of operations ............................................ (1,305) 4,109 (132)
Issuance of stock under management incentive bonus and stock grant plans ................ 241 240 312
Changes in operating assets and liabilities, net of acquisition of businesses:
Accounts receivable ................................................................... (6,921) (705) (2,609)
Inventories ........................................................................... (1,139) (4,332) (7,485)
Prepaid expenses and other current assets ............................................. 684 44 1,124
Accounts payable ...................................................................... 2,257 529 (1,352)
Accrued expenses ...................................................................... 1,763 (2,240) 400
Other noncurrent assets and liabilities ............................................... 1,559 (1,660) 2,820
--------- --------- ---------
Net cash provided by operating activities ......................................... 25,591 23,366 20,797
--------- --------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment .............................................. (7,504) (9,523) (9,305)
Acquisition of business ................................................................. -- (2,919) --
Other, net .............................................................................. (684) (667) (620)
--------- --------- ---------
Net cash used for investing activities ............................................ (8,188) (13,109) (9,925)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from long-term debt ............................................................ 127,404 930 --
Payments of long-term debt, including current maturities ................................ (67,170) (1,167) (1,600)
Purchases of treasury stock ............................................................. (86,550) (2,853) (728)
Payments of debt issuance costs ......................................................... (1,134) -- --
Proceeds from exercise of stock options ................................................. 119 662 331
Dividends paid .......................................................................... (4,168) (6,081) (5,794)
Other, net .............................................................................. (36) (20) (45)
--------- --------- ---------
Net cash used for financing activities ............................................ (31,535) (8,529) (7,836)
--------- --------- ---------
Effect of exchange rate changes on cash and cash equivalents ................................ 157 (32) (7)
--------- --------- ---------
Net (decrease) increase in cash and cash equivalents ........................................ (13,975) 1,696 3,029
Cash and cash equivalents, beginning of year ................................................ 15,503 13,807 10,778
--------- --------- ---------
Cash and cash equivalents, end of year ...................................................... $ 1,528 $ 15,503 $ 13,807
========= ========= =========

See accompanying notes to consolidated financial statements

F-5

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION:
The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly-owned. The preparation of 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 reporting period. Actual results could differ from those
estimates. The Company's fiscal year ends on the Sunday nearest the end of
November. Fiscal year 1996 ended December 1, 1996; fiscal year 1995 ended
December 3, 1995; fiscal year 1994 ended November 27, 1994. Fiscal year 1996
comprised 52 weeks; fiscal year 1995 comprised 53 weeks; fiscal year 1994
comprised 52 weeks.

CASH EQUIVALENTS:
The Company considers all highly liquid temporary cash investments purchased
with a maturity of three months or less to be cash equivalents.

INVENTORIES:
Inventories are valued at the lower of cost or market. Cost is determined by the
last-in, first-out (LIFO) method for over half of the inventories and by the
first-in, first-out (FIFO) method for the remainder. The Company uses the FIFO
method of inventory valuation for certain acquired businesses because the
related products and operations are separate and distinct from the Company's
other businesses.

PROPERTY, PLANT AND EQUIPMENT:
Expenditures for additions and improvements to property, plant and equipment are
capitalized, and normal repairs and maintenance are charged to expense as
incurred. The related cost and accumulated depreciation of depreciable assets
disposed of are eliminated from the accounts, and any profit or loss is
reflected in other expense, net.

EXCESS OF ACQUISITION COST OVER NET ASSETS ACQUIRED AND INTANGIBLE ASSETS:
Excess of acquisition cost over net assets acquired relates principally to the
Company's acquisitions of X-Acto (1981), Bevis Custom Tables, Inc. (1985), the
Graphic Arts Group of Bunzl plc (1990) and Centafoam (1995). The Company's
policy is to record an impairment loss against the net unamortized excess of
acquisition cost over net assets acquired and net intangible assets in the
period when it is determined that the carrying amount of the net assets may not
be recoverable. The Company performs this evaluation on a quarterly basis. This
determination includes evaluation of factors such as current market value,
future asset utilization, business climate and future net cash flows
(undiscounted and without interest) expected to result from the use of the net
assets.

DEPRECIATION AND AMORTIZATION:
Depreciation for financial reporting purposes is computed using the
straight-line method over the estimated useful life of the asset as follows:
buildings, 12 to 40 years; machinery and equipment, four to 12 years; and
leasehold improvements over the lease term. Depreciation for tax purposes is
computed principally using accelerated methods. The excess of acquisition cost
over net assets acquired is amortized on a straight-line basis over periods
ranging from 20 to 40 years. The costs of intangible assets are amortized on a
straight-line basis over their respective estimated useful lives, ranging from
five to 30 years. Amortization of assets under capital leases which contain
purchase options is provided over the assets' useful lives. Other capital leases
are amortized over the terms of the related leases or asset lives, if shorter.

F-6

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

CURRENCY TRANSLATION:
The assets and liabilities of subsidiaries having a functional currency other
than the U.S. dollar are translated at the fiscal year-end exchange rate, while
elements of the income statement are translated at the weighted average exchange
rate for the fiscal year. The cumulative translation adjustment is recorded as a
separate component of stockholders' equity. Gains and losses on foreign currency
transactions are included in the determination of net income and are reflected
in other expense, net. Such gains and losses were not material in any of the
years presented in the consolidated financial statements.

INCOME TAXES:
Effective November 29, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." The adoption
of SFAS No. 109 changed the Company's method of accounting for income taxes from
the deferral method under Accounting Principles Board Opinion No. 11 to an
asset/liability approach. The adoption of SFAS No. 109 has been recognized as
the effect of a change in accounting principle and increased net income in
fiscal 1994 by $795, or $.05 per share. The increase in net income results
primarily from adjusting deferred tax balances to current tax rates.

HEDGING:
In fiscal year 1995, the Company adopted SFAS No. 119, "Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments."
Derivative financial instruments are used to hedge risk caused by fluctuating
currency. The Company periodically enters into forward exchange contracts to
hedge foreign currency transactions for periods generally consistent with its
committed exposure. These transactions were not material in any of the years
presented in the consolidated financial statements. Cash flows from hedges are
classified in the statement of cash flows in the same category as the item being
hedged. The Company does not hold or issue financial instruments for trading
purposes.

EARNINGS PER SHARE:
Earnings per share are calculated based on the weighted average number of common
shares outstanding. The effect of outstanding stock options and stock grants is
not material and has not been included in the calculation.

EMPLOYEE BENEFIT PLANS:
The Company and its subsidiaries have noncontributory, defined benefit pension
plans covering the majority of its employees. It is the Company's policy to fund
pension contributions in accordance with the requirements of the Employee
Retirement Income Security Act of 1974. The benefit formula used to determine
pension costs is the final-average-pay method.

In fiscal year 1995, the Company adopted SFAS No. 112, "Employers' Accounting
for Postemployment Benefits," which requires the accrual of postemployment
benefits if the obligation is attributable to employees' services already
rendered, employees' rights to those benefits accumulate or vest, payment of the
benefits is probable and the amount of the benefits can be reasonably estimated.
The adoption of this standard did not have a material effect on the Company's
results of operations or financial condition.

ENVIRONMENTAL MATTERS:
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are also expensed. The Company records liabilities for
environmental costs when environmental assessments and/or remedial efforts are
probable and the costs can be reasonably estimated. The liability for future
environmental remediation costs is evaluated on a quarterly basis by management.
Generally, the timing of these accruals coincides with the earlier of the
completion of a feasibility study or the Company's commitment to a plan of
action based on the then-known facts. Recoveries of expenditures are recognized
as a receivable only when they are estimable and probable.

F-7

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

2. PRIVATE STOCK PURCHASE AND TENDER OFFER:
On December 19, 1995, the Company purchased from Mary F. Bartol an aggregate of
2,150,165 of the Company's common shares for a cash purchase price of $16.32 per
share, or $35.1 million in a private transaction. Mrs. Bartol is the widow of
George E. Bartol III, the late Chairman of the Board, the mother-in-law of
Gordon A. MacInnes, the then Chairman of the Board, and the mother of Victoria
B. Vallely, another Director of the Company. On December 21, 1995, the Company
commenced a tender offer to purchase up to 3,230,000 of the Company's common
shares at a price of $17.00 net per share in cash. The Company purchased
2,954,378 common shares in January 1996 under the terms and subject to
conditions of the tender offer. The aggregate purchase price of the common
shares and estimated expenses pursuant to the tender offer was $51.5 million.

In connection with these transactions, the Company entered into certain credit
facilities and debt agreements which are discussed in detail in Note 8.

3. PROVISION FOR ORGANIZATIONAL CHANGES AND RELOCATION AND CONSOLIDATION OF
OPERATIONS:
During fiscal 1996 and 1995, the Company recorded pre-tax charges aggregating
$.4 million (approximately $.2 million after taxes, or $.02 per share) and $5.3
million (approximately $3.5 million after income taxes, or $.22 per share),
respectively, as a provis ion for costs relating to organizational changes and
relocation and consolidation of certain manufacturing and distribution
operations. The fiscal 1996 charge of $.4 million and $2.9 million of the fiscal
1995 charge were for costs relating to the relocation and consolidation of its
Hunt Data Products manufacturing and distribution operations located in Nuevo
Laredo, Mexico, and Laredo, Texas, with its manufacturing facilities in
Statesville, North Carolina, and the move of the distribution operations of its
Lit-Ning business from Florence, Kentucky, to Statesville. The fiscal 1995
pre-tax charge was also comprised of $2.4 million for costs incurred in
connection with organizational changes being made to more effectively align the
Company's organization with its markets including the resignation and
replacement of the Company's former Chairman and Chief Executive Officer. The
relocation and consolidation of operations is expected to reduce costs and
improve product quality and distribution performance. The provision included
recognition of future lease obligations, write-off of property, plant, and
equipment, relocation costs, employee severance costs, and other related costs.
Approximately $1.1 million and $2.2 million of this provision is included in
liabilities as of December 1, 1996 and December 3, 1995, respectively, which
principally relates to future severance related payments.

4. BUSINESS ACQUISITION:
In late April 1995, the Company acquired the Centafoam business of Spicers,
Ltd., a division of David S. Smith (Holdings) PLC, for cash consideration and
related costs aggregating approximately $2.8 million. Centafoam, whose
facilities are located in the United Kingdom, manufactures and markets a line of
styrene-based foam board products. Pro forma information is not presented as
this acquisition had no material effect on the Company's results of operations
or financial condition for any of the years presented.

5. INVENTORIES:
The classification of inventories at the end of fiscal years 1996 and 1995 is as
follows:

1996 1995
- --------------------------------------------------------------------------------
Finished goods ............................... $19,664 $18,118
Work in process .............................. 4,839 5,452
Raw materials ................................ 10,888 12,561
------ ------
$35,391 $36,131
======= =======

F-8

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

5. INVENTORIES (CONTINUED):

Inventories determined under the LIFO method were $20,696 and $18,446 at
December 1, 1996 and December 3, 1995, respectively. The current replacement
cost for these inventories exceeded the LIFO cost by $7,287 and $6,226 at
December 1, 1996 and December 3, 1995, respectively.

Inventory quantities were reduced in fiscal years 1996, 1995 and 1994, resulting
in a liquidation of certain LIFO inventories carried at lower costs prevailing
in prior years. The effect of these reductions was to increase net income by
$109, or $.01 per share, $115, or $.01 per share, and $315, or $.02 per share in
fiscal years 1996, 1995 and 1994, respectively.

6. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment at the end of fiscal years 1996 and 1995 is as
follows:

1996 1995
- --------------------------------------------------------------------------------
Land and land improvements .......................... $ 4,031 $ 3,823
Buildings ........................................... 18,253 17,655
Machinery and equipment ............................. 80,830 70,874
Leasehold improvements .............................. 1,041 907
Construction in progress ............................ 2,493 6,860
----- -----
106,648 100,119
Less accumulated depreciation and amortization ...... 53,937 48,111
------ ------
$ 52,711 $ 52,008
======== ========

Depreciation expense was $6,940, $6,669 and $6,001 for fiscal years 1996, 1995
and 1994, respectively.

7. EXCESS OF ACQUISITION COST OVER NET ASSETS ACQUIRED AND INTANGIBLE ASSETS:

Excess of acquisition cost over net assets acquired at the end of fiscal years
1996 and 1995 is as follows:

1996 1995
- --------------------------------------------------------------------------------
Excess of acquisition cost over net assets acquired .... $22,674 $21,902
Less accumulated amortization .......................... 4,435 3,698
------- -------
$18,239 $18,204
======= =======

Intangible assets at the end of fiscal years 1996 and 1995 are as follows:

1996 1995
- --------------------------------------------------------------------------------
Covenants not to compete ......................... $11,551 $11,646
Customer lists ................................... 1,510 1,510
Patents .......................................... 1,533 1,533
Trademarks ....................................... 1,443 1,411
Licensing agreements ............................. 1,154 1,154
Other ............................................ 2,338 2,137
------ ------
19,529 19,391
Less accumulated amortization .................... 12,791 11,598
------ ------
$ 6,738 $ 7,793
======= =======
F-9

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. EXCESS OF ACQUISITION COST OVER NET ASSETS ACQUIRED AND INTANGIBLE
ASSETS (CONTINUED):

NEW ACCOUNTING STANDARD:
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," requires changes in accounting and
reporting for impairments of long-lived assets, certain identifiable intangibles
and goodwill related to those assets to be held and used, and for long-lived
assets and certain identifiable intangibles to be disposed of. SFAS No. 121 is
effective for fiscal years beginning after December 15, 1995. Accordingly, the
Company will adopt SFAS No. 121 in fiscal 1997. Management does not believe the
adoption of SFAS No. 121 will have a material effect on its results of
operations or financial condition.

8. DEBT:

CREDIT FACILITY, SENIOR NOTES AND LINES OF CREDIT:
During the first quarter of fiscal 1996, the Company obtained a new five-year
$125 million bank credit facility, consisting of a revolving credit facility in
an amount up to $81.725 million, and an amortizing term loan in the amount of
$43.275 million. The Company used borrowings of $75 million under this credit
facility, together with cash on hand, to fund the shares repurchased from Mary
F. Bartol and in the tender offer. (See Note 2 above.) An additional $2.4
million was borrowed through the revolving credit facility during the second and
third quarters of fiscal 1996 to meet current working capital needs. This credit
facility replaced the revolving credit agreements (totaling $45 million) which
were in effect at December 3, 1995.

During the second half of fiscal 1996, the Company placed $50 million of senior
notes with several insurance companies. The proceeds of this transaction were
used to repay the outstanding balance of the amortizing term loan referred to
above and to reduce the outstanding balance on the revolving credit facility. In
addition, the terms of the credit facility were revised, among other things, to
reduce the amount of funds available under the facility from $81.725 million to
$75 million; to modify certain limitations, covenants, borrowings and facility
fee margins; and to provide for additional borrowing options.

The costs associated with these financing activities are amortized over the life
of each of the respective instruments and charged to interest expense. The
charge to interest expense with respect to this amortization was $122 in fiscal
year 1996.

At December 1, 1996, the Company also had a line of credit agreement that
provides for unsecured borrowings up to $2.5 million. There were no borrowings
under this agreement at December 1, 1996.

LONG-TERM DEBT:
Long-term debt at the end of fiscal years 1996 and 1995 is as follows:

1996 1995
- --------------------------------------------------------------------------------
Senior notes (a) ........................................ $50,000 --
Revolving credit facility (b) ........................... 11,000 --
Line of credit .......................................... -- $ 766
Capitalized lease obligation ............................ 2,000 2,000
Industrial development revenue bond (c) ................. 1,559 1,559
------- ------
64,559 4,325
Less current portion .................................... -- 766
------- ------
Long-term debt, less current portion .................... $64,559 $3,559
======= ======

(a) The senior notes are payable in 10 annual payments of $5,000,000 beginning
August 1, 2002 and bear interest at a rate of 7.86%.

F-10

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

8. DEBT (CONTINUED):

(b) The revolving credit facility, which allows for borrowings of up to $75
million, matures on December 31, 2000. The interest rates under this
facility (5.73% at December 1, 1996) are, at the option of the Company, one
of the following: a base rate (defined as the higher of (i) the applicable
prime rate of the bank or (ii) the federal funds rate plus 50 basis
points); LIBOR plus a margin of between 27.5 and 50.0 basis points, the
margin in each case to be adjusted quarterly based on the Company's
leverage ratio (as defined in the credit facility); a competitive bid rate
based on a competitive bid made by a competitive bid lender; or a quoted
rate offered by a swingline lender.

(c) This industrial development revenue bond has a maturity date of June 15,
1999. The interest rate (5.3625% at December 1, 1996) is 65% of the lending
bank's average daily prime rate.

The senior notes and credit facility contain certain representations,
warranties, covenants, and conditions, including, but not limited to,
requirements that the Company comply with certain financial covenants, including
interest coverage, fixed charge coverage and leverage ratios, and maintenance of
certain levels of net worth, and also contain limitations on liens,
indebtedness, investments, changes in lines of business, acquisitions,
transactions with affiliates, and modifications of certain documents. Under the
most restrictive covenant, the Company is required to maintain a minimum
consolidated net worth that is the sum of $45 million plus an aggregate amount
equal to 30% of its consolidated net income for each completed fiscal quarter
subsequent to December 3, 1995. As of December 1, 1996, the Company had $13.2
million excess consolidated net worth under this provision which would be
available for payment of dividends.

As a result of the Company's issuance of the senior notes and the use of the
proceeds to pay down debt referred to above, the Company recorded an after-tax
loss of $.3 million, or $.02 per share, for the early extinguishment of debt
which has been reflected in the Company's Consolidated Statements of Income as
an extraordinary item.

The capitalized lease obligation is collateralized by the property, plant and
equipment described in Note 13.

Aggregate annual maturities for all long-term debt, including the capitalized
leases, for each of the four fiscal years subsequent to November 30, 1997 are as
follows:

1998 -- 2000 --
1999 $ 1,559 2001 $11,000

9. INCOME TAXES:
Income before provision for income taxes, net of extraordinary item, consists of
the following:

1996 1995 1994
- --------------------------------------------------------------------------------
Domestic ............................... $18,637 $19,999 $24,935
Foreign ................................ 4,249 3,646 2,146
------- ------- -------
$22,886 $23,645 $27,081
======= ======= =======

The provision for income taxes, net of extraordinary item, consists of the
following:

1996 1995 1994
- --------------------------------------------------------------------------------
Currently payable:
Federal ................................ $6,411 $7,084 $ 9,863
State .................................. 237 707 1,009
Foreign ................................ 711 109 167
------ ------ -------
7,359 7,900 11,039
Deferred ............................... 559 410 (1,155)
------ ------ -------
$7,918 $8,310 $ 9,884
====== ====== =======

F-11

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

9. INCOME TAXES (CONTINUED):

The following is a reconciliation of the statutory federal income tax rate with
the Company's effective income tax rate:

1996 1995 1994
- --------------------------------------------------------------------------------
Statutory federal rate .................... 35.0% 35.0% 35.0%
State income taxes, net of federal tax
benefit ................................. 1.9 1.8 2.1
Tax benefit of loss carryforwards
of foreign subsidiaries ................. (.3) (2.3) (.4)
Resolution of certain prior years' tax
exposures .............................. (2.7) -- --
Other, net ................................ .7 .6 (.2)
---- ---- ----
Effective tax rate ........................ 34.6% 35.1% 36.5%
==== ==== ====

Effective November 29, 1993, the Company adopted SFAS No. 109. (See Note 1.)

The significant components of deferred tax assets and liabilities at December
1, 1996 and December 3, 1995 consist of:

1996 1995
- ------------------------------------------------------------------------------------------------------
Assets Liabilities Assets Liabilities
- ------------------------------------------------------------------------------------------------------

Inventories ......................................... $1,982 -- $2,138 --
Accrued expenses .................................... 3,293 $ 434 3,277 $ 499
Allowance for doubtful accounts ..................... 595 -- 746 --
Net operating loss
carryforwards - foreign ............................ 121 -- 207 --
Pensions ............................................ 1,014 12 1,014 441
Net operating loss
carryforward - states .............................. 539 -- 347 --
Depreciation and amortization ....................... 99 6,767 759 6,701
------ ------ ------ ------
7,643 7,213 8,488 7,641
Valuation allowance ................................. (571) -- (429) --
------ ------ ------ ------
$7,072 $7,213 $8,059 $7,641
====== ====== ====== ======

As of December 1, 1996, the Company had foreign net operating loss carryforwards
of approximately $467 which may be carried forward indefinitely, approximately
$48 of which were acquired in connection with business acquisitions.

The valuation allowance of approximately $571 relates to net operating losses
for which realization is not more likely than not as of December 1, 1996. The
net change in the total valuation allowance for the year ended December 1, 1996
was an increase of approximately $142. The Company has recognized approximately
$27 of deferred tax assets relating to the likely future utilization of net
operating losses. Of this amount, approximately $9 relates to net operating
losses acquired in connection with business acquisitions.

10. EMPLOYEE BENEFIT PLANS:

PENSION PLANS:
Net pension costs for fiscal years 1996, 1995, and 1994 consist of the
following:

1996 1995 1994
- --------------------------------------------------------------------------------
Service cost-benefits earned during the period $ 2,206 $ 1,901 $ 2,049
Interest cost on projected benefit obligation 2,696 2,387 2,155
Actual return on plan assets ................. (4,598) (4,749) (1,031)
Net amortization and deferral ................ 2,101 2,643 (759)
------- ------- -------
Net pension costs ............................ $ 2,405 $ 2,182 $ 2,414
======= ======= =======

F-12

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

10. EMPLOYEE BENEFIT PLANS (CONTINUED):

Net amortization and deferral consists of the deferral of the excess of actual
return on assets over estimated return and amortization of the net unrecognized
transition asset on a straight-line basis, principally over 15 years.

The funded status of the Company's pension plans at September 30, 1996 and 1995
(dates of actuarial valuations) was as follows:

1996 1995
- -------------------------------------------------------------------------------------------------------------
Over- Under- Over- Under-
funded funded funded funded
- -------------------------------------------------------------------------------------------------------------

Plan assets at fair value ............................ $ 36,753 $ 791 $ 32,192 $ 728
-------- -------- -------- --------
Actuarial present value of benefit obligations:
Vested .............................................. 25,618 3,355 23,324 2,429
Non-vested .......................................... 152 281 79 390
-------- -------- -------- --------
Accumulated benefit obligation ....................... 25,770 3,636 23,403 2,819
Effect of increase in compensation ................... 9,950 707 8,634 1,396
-------- -------- -------- --------
Projected benefit obligation ......................... 35,720 4,343 32,037 4,215
-------- -------- -------- --------
Projected benefit obligation
less than (in excess of)
plan assets ........................................ 1,033 (3,552) 155 (3,487)
Unrecognized net (gain) loss ......................... (2,319) 619 123 816
Unrecognized transition asset ........................ (1,231) (12) (1,457) (16)
Unrecognized prior service cost ...................... 435 1,202 495 1,344
Minimum liability adjustment ......................... (35) (1,096) -- (763)
-------- -------- -------- --------
Pension liability .................................... $ (2,117) $ (2,839) $ (684) $ (2,106)
======== ======== ======== ========

Pension costs are determined using the assumptions as of the beginning of the
year. The funded status is determined using the assumptions as of the date of
the actuarial valuation and is deemed overfunded or underfunded based on a
comparison of the plan assets at fair value with the accumulated benefit
obligation. Plan assets consist principally of common stock and U.S. Government
and corporate obligations.

Significant assumptions as of the dates of actuarial valuations include:

1996 1995 1994
- --------------------------------------------------------------------------------
Discount rate ..................................... 7.75% 7.50% 8.00%
Rate of increase in compensation levels ........... 6.00% 6.00% 6.00%
Expected long-term rate of return on plan assets .. 7.50% 7.50% 7.50%

SUPPLEMENTAL EXECUTIVE BENEFITS PLAN:
The Company has instituted a nonqualified, Supplemental Executive Benefits Plan
which constitutes a significant portion of the underfunded status above and
covers all officers. Expenses of $421, $505 and $394 in fiscal years 1996, 1995
and 1994, respectively, relating to this plan were actuarially determined and
are included in the pension costs described above. In 1994, the Company added an
elective salary deferral feature to this plan. Contributions to this portion of
the plan by the Company were $36 and $32 for fiscal 1996 and 1995, respectively.

EMPLOYEE SAVINGS PLAN:
The Company has a defined contribution 401(k) plan available to a majority of
its employees in the United States. For participating employees, the Company
matches 25 cents for each dollar contributed up to a maximum of 6% of pre-tax
compensation, subject to limitations of the plan and the Internal Revenue Code.
Contributions to the 401(k) plan by the Company were $461, $433 and $407 for
fiscal years 1996, 1995 and 1994, respectively.

F-13

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

11. STOCK OPTION, STOCK GRANT AND
LONG-TERM INCENTIVE COMPENSATION PLANS:

In 1993, the Company adopted the 1993 Stock Option and Stock Grant Plan which
replaced the expired 1983 Stock Option and Stock Grant Plan. The 1993 plan
authorizes the issuance of up to 1,750,000 common shares, for the granting of
incentive stock options, nonqualified stock options and stock grants to key
employees. The option price of options granted under the plan may not be less
than the market value of the shares at the date granted. Options may be granted
for terms of between two and 10 years and generally become exercisable not less
than one year following the date of grant. Stock grants under the 1993 plan,
which are limited to an aggregate of 525,000 shares, are subject to a vesting
period or periods of between one and five years from the date of grant. Common
shares are not actually issued to recipients of stock grants until such shares
have vested under the plan. The plan also provides for the payment of an annual
cash bonus to recipients of stock grants in an amount equal to the cash
dividends which would have been received had the shares not yet vested under the
grant been actually held by the recipients.

The Company's 1983 Stock Option and Stock Grant Plan and 1978 Stock Option Plan
expired by their terms in February 1993 and November 1988, respectively, and no
further options may be granted under these two plans, although some options
remain outstanding under the 1983 plan. The terms of the 1983 plan are
essentially similar to the terms of the 1993 plan described above. Under the
1978 plan, options for common shares were authorized for the granting of options
to key employees at option prices not less than the market value of the common
shares at the date of grant. Options granted under that plan had terms of not
more than 10 years and generally became exercisable not less than one year
following the date of grant.

Payment upon exercise of stock options under the 1993, 1983 and 1978 plans may
be by cash and/or in common shares in an amount equivalent to the market value
of the stock at the date exercised.

A summary of options under the Company's stock option plans is as follows:

1993 Plan 1983 Plan
- --------------------------------------------------------------------------------------------
1996 1995 1996 1995
- --------------------------------------------------------------------------------------------

Outstanding, beginning of year .... 634,800 363,400 631,842 730,003
Options granted ................... 364,923 317,300 -- --
Options exercised (at an average
price per share of $15.63, $12.74
and $9.55, respectively) ........ (5,000) -- (256,236) (89,561)
Options expired ................... -- -- -- --
Options terminated ................ -- (45,900) (20,000) (8,600)
-------- -------- -------- --------
Outstanding, end of year .......... 994,723 634,800 355,606 631,842
======== ======== ======== ========
Average option price per share .... $ 15.56 $ 15.05 $ 14.49 $ 13.95
Outstanding exercisable options,
end of year ..................... -- -- 355,606 631,842
Shares reserved for future stock
options and grants .............. 750,277 1,115,200 -- --

In 1994, there were 31,501 options exercised at an average price of $13.44 under
the 1983 Plan. At the end of 1995, there remained 2,638 outstanding exercisable
options at an average option price per share of $10.58 under the 1978 plan.
These options were exercised in fiscal 1996.

The Company's 1988 Long-Term Incentive Compensation Plan provided for the
granting to management- level employees of long-term incentive awards, payable
in cash and/or by the Company's common stock at the end of a designated
performance period of from two to five years, based upon the degree of
attainment of pre-established performance standards during the performance
period. A maximum of 180,000 shares were authorized for issuance under this
plan. This plan was terminated during fiscal 1996.

F-14

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

11. STOCK OPTION, STOCK GRANT AND LONG-TERM INCENTIVE COMPENSATION
PLANS (CONTINUED):

As of the end of fiscal 1996, an aggregate of 97,339 shares had been earned
under this plan (12,217, 19,114 and 17,042 shares in fiscal years 1996, 1995 and
1994, respectively, and 48,966 shares in all previous years), and an aggregate
of 9,350 shares were subject to outstanding unvested grants. The charges to
administrative and gene ral expenses relating to this plan were $84, $186 and
$532 in fiscal years 1996, 1995 and 1994, respectively.

In fiscal 1994, the Company adopted the 1994 Non-Employee Directors' Stock
Option Plan authorizing the granting of up to an aggregate of 90,000 common
shares to nonofficer directors of the Company. Options to purchase an aggregate
of 45,000 common shares at $16.875 per share were automatically granted in
January 1994 in equal amounts to each of the nonofficer directors of the
Company. Options granted under this plan extend for a term of 10 years and
become exercisable at the rate of 20% per year over five years commencing one
year after the date of grant. No other options have been granted and, as of
December 1, 1996, no options have been exercised.

OTHER GRANTS:

During 1995, the Company made stock grants under the 1993 Stock Option and Stock
Grant Plan in the amount of 84,759 common shares to certain officers and other
employees. By their terms, these grants will vest at varying times during 1997.
The charges to administrative and general expense with respect to these grants
were $955 and $310 in fiscal years 1996 and 1995, respectively.

The Company has a long-term incentive compensation agreement with Donald L.
Thompson, Chairman of the Board, President and Chief Executive Officer, who
joined the Company in fiscal 1996. Among the provisions of this agreement is a
so-called "Phantom Stock Plan." Under this plan, Mr. Thompson earns the right to
the cash value of a total of 175,000 common shares to be awarded as follows,
provided that he is employed by the Company on each of the dates shown: 25% on
December 1, 1996, 50% on December 1, 1997, 75% on December 1, 1998 and 100% on
December 1, 1999. The charge to administrative and general expenses with respect
to this plan was $1,621 in fiscal 1996.

NEW ACCOUNTING STANDARD:

SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but does
not require, companies to recognize compensation expense for grants of stock,
stock options, and other equity instruments to employees based upon fair value
or, alternatively, permits them to continue to apply the existing accounting
rules contained in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB No. 25). Companies choosing not to adopt the
expense recognition provisions of SFAS No. 123 are required to disclose pro
forma net income and earnings per share data as if such provisions had been
applied. The Company anticipates continuing to account for stock-based
compensation in accordance with APB No. 25; and, therefore, the adoption of SFAS
No. 123 in fiscal 1997 will not have an impact on the Company's financial
position or results of operations.

12. SHAREHOLDERS' RIGHTS PLAN:

In 1990, the Company adopted a Shareholders' Rights Agreement and declared a
dividend of one right (a "Right") for each outstanding share of the Company's
common shares held of record as of the close of business on August 22, 1990. The
Rights initially are deemed to be attached to the common shares and detach and
become exercisable only if (with certain exceptions and limitations) a person or
group attempts to obtain beneficial ownership of 15% or more of the Company's
common shares or is determined to be an "adverse person" by the Board of
Directors of the Company. Each Right, if and when it becomes exercisable,
initially will entitle holders of the Rights to purchase one one-thousandth of a
share of Junior Participating Preferred Shares (Series A, of which 50,000 shares
currently are authorized for issuance) for $60, subject to adjustment. The
Rights will convert into the right to purchase common shares or other securities
or property of the Company or an acquiring company in certain other potential or
actual takeover situations. The Rights are redeemable by the Company at $.01 per
Right in certain circumstances and expire, unless exercised or redeemed earlier,
on December 31, 2000.

F-15

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

13. COMMITMENTS AND CONTINGENCIES:

LEASES:

The capitalized lease obligation (see Note 8) represents the amount payable
under a lease which is, in substance, an installment purchase. Property, plant
and equipment includes the following assets under a capital lease:

1996 1995
- --------------------------------------------------------------------------------
Land ......................................... $ 314 $ 314
Buildings .................................... 2,632 2,632
Machinery and equipment ...................... 1,009 1,009
Accumulated depreciation ..................... (2,960) (2,853)
------- ------
$ 995 $ 1,102
======= =======

The Company has the option to purchase the above assets at any time during the
term of the lease for amounts sufficient to redeem and retire the underlying
lessor debt obligation. The capitalized lease obligation has one principal
payment at maturity on June 15, 2004.

The minimum rental commitments under all noncancellable leases as of December 1,
1996 are as follows:

Fiscal Operating
Period Leases
- -------------------------------------------------------------------
1997 .................................................. $ 3,783
1998 .................................................. 3,389
1999 .................................................. 2,960
2000 .................................................. 2,830
2001 .................................................. 1,785
Thereafter ............................................ 6,788
-------
Minimum lease payments ................................ $21,535
=======

Rent expense, including related real estate taxes charged to operations,
amounted to $4,932, $4,637 and $3,912 for fiscal years 1996, 1995 and 1994,
respectively.

CONTINGENCIES:

The Company has employment/severance (change in control) agreements with its
officers under which severance payments and benefits would become payable in the
event of specified terminations of employment following a change in control (as
defined) of the Company. The Company also has a termination policy applicable to
other employees which provides severance payments and benefits in the event of
certain terminations of employment. In the event of a change in control of the
Company and subsequent termination of all employees, the maximum contingent
severance liability would have been approximately $17.7 million at December 1,
1996.

Prior to the acquisition of the Graphic Arts Group by the Company from Bunzl plc
in May 1990, it was discovered that some hazardous waste materials had been
stored on the premises of one of the Graphic Arts Group companies, Seal, located
in Naugatuck, Connecticut. In compliance with applicable state law, this
environmental condition was reported to the Connecticut Department of
Environmental Protection by Bunzl. Seal, which is now a subsidiary of the
Company, may be partially responsible under law for this environmental condition
on the premises and any liabilities resulting therefrom. However, in connection
with the Company's acquisition of Seal, Bunzl agreed to take responsibility for
correcting this environmental condition and to indemnify Seal and the Company
for resulting liabilities, subject to certain limitations. Management believes
that this contingency will not have a material effect on the Company's results
of operations or financial condition.

F-16

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

13. COMMITMENTS AND CONTINGENCIES (CONTINUED):

The Company is also involved on a continuing basis in monitoring its compliance
with environmental laws and in making capital and operating improvements
necessary to comply with existing and anticipated environmental requirements.
Despite its efforts, the Company has been cited for occasional violations or
alleged violations of environmental laws or permits and on several occasions has
been named as a potentially responsible party for the remediation of sites.
Expenses incurred by the Company to date relatin g to violations of and
compliance with environmental laws and permits and site remediation have not
been material. While it is impossible to predict with certainty, management
currently does not foresee such expense in the future as having a material
effect on the Company's business, results of operations or financial condition.

There are other contingent liabilities with respect to product warranties, legal
proceedings and other matters occurring in the normal course of business. In the
opinion of management, all such matters are adequately covered by insurance or
by accruals, and if not so covered, are without merit or are of such kind, or
involve such amounts, as would not have significant effect on the financial
condition or results of operations of the Company, if disposed of unfavorably.

NEW ACCOUNTING STANDARD:
Statement of Position (SOP) 96-1, "Environmental Remediation Liabilities,"
provides guidance on specific accounting issues that are present in the
recognition, measurement, display and disclosure of environmental remediation
liabilities. SOP 96-1 is effective for fiscal years beginning after December 15,
1996. Accordingly, the Company will adopt SOP 96-1 when required. Management
believes that the adoption of this statement will not have a material impact on
its results of operations or financial position.

14. RESEARCH AND DEVELOPMENT:
Research and development expenses were approximately $2,320, $1,705 and $1,606
in fiscal years 1996, 1995 and 1994, respectively.

15. CASH FLOW INFORMATION:
Cash payments for interest and income taxes (net of refunds) were as follows:

1996 1995 1994
- --------------------------------------------------------------------------------
Interest paid ........................................ $3,500 $ 282 $ 408
Income taxes ......................................... 6,653 8,941 9,481

Excluded from the Consolidated Statements of Cash Flows are the effects of
certain non-cash investing and financing activities as follows:

1996 1995 1994
- --------------------------------------------------------------------------------
Fair value of assets acquired .................... -- $3,863 --
Liabilities assumed or created ................... -- 944 --
Value of common shares received as payment
upon exercise of stock options ................... $3,227 150 $ 62

F-17

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

16. QUARTERLY FINANCIAL DATA (UNAUDITED):

Results of operations for each of the quarters during fiscal years 1996 and 1995
are as follows:

1996
- --------------------------------------------------------------------------------
First Second Third Fourth Total
- --------------------------------------------------------------------------------
Net sales .......... $ 73,668 $ 81,225 $ 83,881 $ 88,751 $327,525
Gross profit ....... 26,788 30,080 31,795 33,886 122,549
Net income ......... 2,826 3,273 3,150 5,719 14,968
Net income
per share ........ .22 .30 .29 .52 1.31

1995
- --------------------------------------------------------------------------------
First Second Third Fourth Total
- --------------------------------------------------------------------------------
Net sales .......... $ 70,530 $ 74,881 $ 86,302 $ 82,168 $313,881
Gross profit ....... 25,642 28,086 31,247 32,186 117,161
Net income ......... 3,347 2,934 3,655 5,399 15,335
Net income
per share ...... .21 .18 .23 .34 .96

The number of weighted average shares outstanding decreased during fiscal 1996
as a result of the private purchase and stock tender offer discussed in Note 2.
For this reason, the sum of the quarterly net income per share data is not the
same as net income per share for the year.

The first quarter of fiscal 1996 includes charges to net income of $.2 million,
or $.02 per share, and the second, third and fourth quarters of fiscal 1995
results include charges to net income of approximately $1.4 million, or $.09 per
share; $1.0 million, or $.06 per share; and $1.1 million, or $.07 per share,
respectively, relating to the provision for organizational changes and
relocation and consolidation of operations as described in Note 3.

The third quarter of fiscal years 1996 and 1995 contained 13 weeks and 14 weeks,
respectively.

17. INDUSTRY SEGMENT INFORMATION:

The Company operates in two industry segments, Office Products and Art/Craft
Products. Total export sales aggregated $23,354 in fiscal 1996, $20,559 in
fiscal 1995 and $21,235 in fiscal 1994, of which $14,913, $12,921, and $11,844
in fiscal years 1996, 1995 and 1994, respectively, were made in Canada.

Operating profits include all revenues and expenses of the reportable segment
except for general corporate expenses, interest expense, interest income, other
expenses, other income and income taxes.

Identifiable assets are those assets used in the operations of each business
segment.

Corporate assets include cash and miscellaneous other assets not identifiable
with any particular segment. Capital additions include amounts related to
acquisitions.

F-18

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

17. INDUSTRY SEGMENT INFORMATION (CONTINUED):

Office Art/Craft Corp. Consoli-
FISCAL YEAR 1996 Products Products Assets dated
- -----------------------------------------------------------------------------------------------------

Net sales ................................... $161,169 $166,356 $327,525
======== ======== ========
Operating profit* ........................... $ 9,892 $ 24,435 $ 34,327
======== ========
General corporate ........................... (6,760)
Interest expense ............................ (4,579)
Interest income ............................. 301
Other expense, net .......................... (18)
--------
Income before income taxes .................. $ 23,271
========
Identifiable assets ......................... $ 78,648 $ 83,063 $ 13,963 $175,674
======== ======== ======== ========
Capital additions ........................... $ 4,085 $ 3,212 $ 207 $ 7,504
======== ======== ======== ========
Depreciation and amortization ............... $ 4,621 $ 3,837 $ 712 $ 9,170
======== ======== ======== ========

* Includes the provision for organizational changes and relocation and
consolidation of operations which reduced the office products operating
profit by $.4 million.

Office Art/Craft Corp. Consoli-
FISCAL YEAR 1995 Products Products Assets dated
- -----------------------------------------------------------------------------------------------------

Net sales ................................... $163,378 $150,503 $313,881
======== ======== ========
Operating profit* ........................... $ 6,966 $ 21,678 $ 28,644
======== ========
General corporate ........................... (5,081)
Interest expense ............................ (109)
Interest income ............................. 571
Other expense, net .......................... (380)
--------
Income before income taxes .................. $ 23,645
========
Identifiable assets ......................... $ 78,272 $ 77,310 $27,228 $182,810
======== ======== ======= ========
Capital additions ........................... $ 5,619 $ 3,550 $ 1,473 $ 10,642
======== ======== ======= ========
Depreciation and amortization ............... $ 4,494 $ 3,676 $ 588 $ 8,758
======== ======== ======= ========

* Includes the provision for organizational changes and relocation and
consolidation of operations which reduced the office products operating
profit by $4.1 million and art/craft products operating profit by $1.2
million.
** Includes $1.1 million of capital additions relating to business
acquisitions.

Office Art/Craft Corp. Consoli-
FISCAL YEAR 1994 Products Products Assets dated
- -----------------------------------------------------------------------------------------------------

Net sales ................................... $160,307 $127,896 $288,203
======== ======== ========
Operating profit ............................ $ 12,172 $ 21,211 $ 33,383
======== ========
General corporate ........................... (6,017)
Interest expense ............................ (85)
Interest income ............................. 342
Other expense, net .......................... (542)
--------
Income before income taxes .................. $ 27,081
========
Identifiable assets ......................... $ 80,218 $ 70,362 $22,805 $173,385
======== ======== ======= ========
Capital additions ........................... $ 5,923 $ 3,109 $ 273 $ 9,305
======== ======== ======= ========
Depreciation and amortization ............... $ 4,123 $ 3,286 $ 630 $ 8,039
======== ======== ======= ========

F-19

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

17. INDUSTRY SEGMENT INFORMATION (CONTINUED):

The Company's operations by geographical areas for fiscal years 1996, 1995 and
1994 are presented below. Intercompany sales to affiliates represent products
which are transferred between geographic areas on a basis intended to reflect as
nearly as possible the market value of the products.

Europe Adjustments
North and and Consoli-
FISCAL YEAR 1996 America Other Corporate Eliminations dated
- ---------------------------------------------------------------------------------------------------------------------

Net sales:
Customers ................................ $293,099 $34,426 -- $327,525
Intercompany ............................. 7,111 3,369 $(10,480) --
-------- ------- -------- --------
Total ...................................... $300,210 $37,795 $(10,480) $327,525
======== ======= ======== ========
Operating profit ........................... $ 31,768 $ 2,559 -- $ 34,327
======== ======= ======== ========
Identifiable assets ........................ $133,824 $27,887 $13,963 -- $175,674
======== ======= ======= ======== ========

Europe Adjustments
North and and Consoli-
FISCAL YEAR 1995 America Other Corporate Eliminations dated
- ---------------------------------------------------------------------------------------------------------------------
Net sales:
Customers ................................ $285,313 $28,568 -- $313,881
Intercompany ............................. 8,866 3,257 $(12,123) --
-------- ------- -------- --------
Total ...................................... $294,179 $31,825 $(12,123) $313,881
======== ======= ======== ========
Operating profit ........................... $ 26,622 $ 2,022 -- $ 28,644
======== ======= ======== ========
Identifiable assets ........................ $131,496 $24,086 $27,228 -- $182,810
======== ======= ======= ======== ========

Europe Adjustments
North and and Consoli-
FISCAL YEAR 1994 America Other Corporate Eliminations dated
- ---------------------------------------------------------------------------------------------------------------------
Net sales:
Customers ................................ $268,710 $19,493 -- $288,203
Intercompany ............................. 5,060 2,154 $ (7,214) --
-------- ------- -------- --------
Total ...................................... $273,770 $21,647 $ (7,214) $288,203
======== ======= ======== ========
Operating profit ........................... $ 32,648 $ 735 -- $ 33,383
======== ======= ======== ========
Identifiable assets ........................ $131,310 $19,270 $22,805 -- $173,385
======== ======= ======= ======== ========

F-20

HUNT MANUFACTURING CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

18. FINANCIAL INSTRUMENTS:

OFF-BALANCE SHEET RISK:
Letters of credit are issued by the Company during the ordinary course of
business through major domestic banks as required by certain vendor contracts.
As of December 1, 1996 and December 3, 1995, the Company had outstanding letters
of credit for $115 and $400, respectively.

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of temporary cash investments and trade
receivables. The Company places its temporary cash investments ($.1 million and
$13.7 million at December 1, 1996 and December 3, 1995, respectively) with
quality financial institutions and, by policy, limits the amount of credit
exposure to any one financial institution.

The Company provides credit, in the normal course of business, to a large number
of distributors and retailers and generally does not require collateral or other
security to support customer receivables. Management believes that
concentrations of credit risk with respect to trade receivables are limited due
to the large number of customers comprising the Company's customer base, their
dispersion across many different industries and geographies, with no single
customer accounting for more than 10% of net sales; however, the Company's 10
largest customers accounted for approximately 36% and 37% of accounts receivable
at December 1, 1996 and December 3, 1995, respectively. The Company performs
ongoing credit evaluations of its customers, maintains allowances for potential
credit losses and carries credit insurance coverage for most of its large
customer accounts.

FAIR VALUE:
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

CASH AND CASH EQUIVALENTS - The carrying amount approximates fair value because
of the short maturity of these instruments.

DEBT (EXCLUDING CAPITAL LEASE OBLIGATION) - The fair value of the Company's debt
is estimated based on the current rates offered to the Company for debt of the
same remaining maturities.

The estimated fair values of the Company's financial instruments at December 1,
1996 and December 3, 1995 are as follows:

1996 1995
- --------------------------------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
- --------------------------------------------------------------------------------
Cash and cash equivalents ...... $ 1,538 $ 1,538 $15,503 $15,503
Debt (excluding capital
lease obligation) ........... 62,559 67,622 2,325 2,303

DEBT AND EQUITY SECURITIES:
In fiscal 1995, the Company adopted SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," which requires changes in accounting
and reporting for certain investments in debt and equity securities. The
adoption of this standard had no effect on the Company's results of operations
or financial position for any of the years presented.

F-21

HUNT MANUFACTURING CO. AND SUBSIDIARIES

SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS (CONTINUED)

FOR THE FISCAL YEARS 1996, 1995 AND 1994 (IN THOUSANDS)

Column C
Column A Column B Additions Column D Column E
- ----------------------------------------------------------------------------------------------------------------------------------
Charged
Balance at to Costs Charged Balance
Beginning and to Other End of
Classification of Period Expenses Accounts Deductions Period
- ----------------------------------------------------------------------------------------------------------------------------------
1996:

Allowance for doubtful accounts ............................ $2,305 $ 655(a) -- $1,151(c) $1,809
====== ====== ====== ====== ======
Reserve for customer returns and deductions ................ $1,721 $ 34(b) -- $ 867(d) $ 888
====== ====== ====== ====== ======
Reserve for inventory obsolescence ......................... $2,421 $2,216 -- $2,408(e) $2,229
====== ====== ====== ====== ======

1995:
Allowance for doubtful accounts ............................ $2,510 $ 916 -- $1,121(c) $2,305
====== ====== ====== ====== ======
Reserve for customer returns and deductions ................ $1,267 $ 735(b) -- $ 281(d) $1,721
====== ====== ====== ====== ======
Reserve for inventory obsolescence ......................... $3,530 $1,778 -- $2,887(e) $2,421
====== ====== ====== ====== ======

1994:
Allowance for doubtful accounts ............................ $2,643 $ 921 -- $1,054(c) $2,510
====== ====== ====== ====== ======
Reserve for customer returns and deductions ................ $ 702 $1,539(b) -- $ 974(d) $1,267
====== ====== ====== ====== ======
Reserve for inventory obsolescence ......................... $2,236 $2,083 -- $ 789 $3,530
====== ====== ====== ====== ======

(a) Decrease versus prior years due, in part, to increased use of credit
insurance for larger accounts and improved collection efforts.
(b) Represents reserves which principally relate to specific, known returns not
yet received as of year-end.
(c) Doubtful accounts written off, net of collection expenses.
(d) Primarily credits issued to customers.
(e) Largely the result of programs in effect during 1996 and 1995 to dispose of
fully reserved obsolete inventory. Amount is net of recoveries.

EXHIBIT INDEX

(Exhibits being filed with this Form 10-K)

(10) Material Contracts:

(d) 1993 Stock Option and Stock Grant Plan of the Company, as
amended.

(h)(2) List of executive officers who ar parties to Change in Control
Agreement.

(j)(1) Supplemental Executive Benefits Plan of the Company, effective
January 1, 1996.

(j)(2) Amended and Restated Trust Agreement, effective January 1,
1996.

(k) Employment-Severance arrangements with Robert B. Fritsch.

(11) Statement re: computation of per share earnings.

(23) Consent of Coopers & Lybrand L.L.P. to incorporation by reference, in
Registration Statement Nos. 33-70660, 33-25947, 33-6359, 2-83144, 33-57105,
and 33-57103 on Form S-8 of their report on the consolidated financial
statements and schedules included in the report.

(27) Financial Data Schedule.