1
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
                            ------------------------
(MARK ONE)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
       SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
 
                FOR THE FIFTY TWO WEEKS ENDED DECEMBER 30, 1995
 
                                       OR
 
[  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
       SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
 
                          COMMISSION FILE NO. 0-17237
 
                                  SELFIX, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                            ------------------------
 

                                           
                   DELAWARE                                     36-2490451
       (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)
            4501 WEST 47TH STREET
              CHICAGO, ILLINOIS                                    60632
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)

 
       REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE (312) 890-1010.
                            ------------------------
 
        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
                             NAME OF EACH EXCHANGE
                               ON WHICH REGISTERED
                                      None
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
 
                              TITLE OF EACH CLASS
                       Common, Par Value $0.01 Per Share
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X No
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
 
     Shares of common stock, par value $0.01 outstanding at February 27,
1996 -- 3,878,094. Aggregate market value of such shares held by non-affiliates
as of that date -- $7,817,006.
 
     Documents Incorporated by Reference.
 
     Selfix, Inc. Proxy Statement for 1995 Annual Meeting ("Proxy
Statement") -- Part III
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
   2
 
                                     PART I
 
ITEM 1. BUSINESS
 
     Selfix, Inc. was founded in 1952, and has operated as a public company
since 1988. Selfix, Inc. is an international consumer products company,
specializing in the design, manufacture and marketing of quality products for
home use, the majority of which are made of plastic. "Selfix" or "the Company"
refers to Selfix, Inc. alone or with its wholly-owned subsidiary, Shutters,
Inc., as the context requires. The Company is headquartered in Chicago, IL.
 
GENERAL
 
     Selfix operates in two industry segments:
 
          (1) The design, manufacture, and marketing of quality HOUSEWARES
     through the primary parent company. These products, generally branded as
     "Selfix" products, are sold principally through mass market trade channels:
     discount, variety, supermarket, drug, hardware/home center, and specialty
     stores. The Company sells both direct to retailers and through wholesale
     distributors. Housewares products generally retail from $1 to $20, with a
     substantial majority retailing for under $5. The Company believes it is a
     leading manufacturer of value-priced, high-volume bath accessories and
     organization products.
 
          (2) The design, manufacture, and marketing of quality HOME IMPROVEMENT
     products, through its wholly owned subsidiary, Shutters, Inc. These
     products, generally branded as "Shutters, Inc." products, are sold
     principally through wholesalers that service the residential construction,
     repair and remodeling industry. In addition, Shutters, Inc. markets its
     products direct to hardware/home center retailers. The Company believes
     that Shutters, Inc. is a leading manufacturer of durable, plastic exterior
     shutters.
 
PRODUCTS
 
  Net Sales:
 
     The following tables set forth the amounts and percentages of the Company's
gross sales for its product categories, for the periods indicated. For a
discussion of the trends in the sales by product categories see Item 7
Management's Discussion and Analysis and Results of Operations.
 


                                                1995                1994                1993
                                           ---------------     ---------------     ---------------
                                            SALES       %       SALES       %       SALES       %
                                           -------     ---     -------     ---     -------     ---
                                                     (IN THOUSANDS, EXCEPT PERCENTAGES)
                                                                             
Home Bathwares...........................  $15,071      35     $15,300      34     $14,715      35
Hooks & Home Helpers.....................    8,645      20       7,398      17       8,105      19
Juvenile Products........................    6,683      15       8,259      19       6,021      15
Home Organization Products...............    4,144       9       4,848      11       5,411      13
                                           -------     ---     -------     ---     -------     ---
     Subtotal Housewares Products........  $34,543      79     $35,805      81     $34,252      82
Home Improvement Products................    8,993      21       8,417      19       7,667      18
                                           -------     ---     -------     ---     -------     ---
Total Selfix, Inc. Gross Sales...........   43,536     100      44,222     100      41,919     100
                                                       ===                 ===                 ===
Allowances...............................   (2,497)             (3,237)             (2,208)
                                           -------             -------             -------
     Total Selfix, Inc. Net Sales........  $41,039             $40,985             $39,711
                                           =======             =======             =======

 
     Home Bathwares: Selfix markets a broad line of value-priced bath
accessories and organizers, primarily under the brand name Dura-Bilt(R) Bath.
These include shower organizers, towel bars, soap dishes, shelves, portable
shower sprays, and fog-free shower mirrors. The Company believes it holds a
dominant position in the opening price-point plastic bath accessories segment.
 
     Hooks and Home Helpers: Selfix markets a complete line of over 150 hooks
and hanging hardware products, primarily made of plastic. The Company's original
product was a plastic hook, unique in that it employed a proprietary no-tools
mounting system. Selfix has expanded its offering of these patented, self-
 
                                        2
   3
 
adhesive hooks, and the Company believes it offers the most complete line in the
opening price point segment. Augmenting the plastic hooks are a line of metal
picture hooks, sold to the same customer base.
 
     Juvenile Products. Selfix markets a line of quality children's organization
products, under the brand name Tidy Kids(R) and KidtivityTM. These include
closet extenders, hook racks, storage cubes, clothes hangers, and under-the-bed
storage trolleys. These products are sold in the juvenile or housewares
departments of its core customers, and also through specialty juvenile retailers
like Toys R Us and Baby Superstores. Selfix believes it created a market niche
of children's organization in the development and successful sales of its Tidy
Kids products, and that it offers the premier children's organization program in
the industry.
 
     On October 24, 1995, Selfix, Inc. acquired Mericon Child Safety Products of
Livonia, Michigan. Mericon marketed a line of high-quality children's safety
products under the Fisher-Price(R) brand name, through a licensing agreement
with Fisher-Price, Inc. of East Aurora, New York. Selfix assimilated the sales,
administrative and shipping functions for those products into its Chicago,
Illinois facility. The acquired products will be marketed and sold along with
Selfix Tidy Kids(R) brand of children's organization products.
 
     Home Organization Products. Selfix offers a variety of products for general
home organization, including vinyl coated wire kitchen organizers, and various
closet and clothing care products. In 1995, the Company intentionally abandoned
certain product segments that were less profitable than others, and discontinued
a substantial number of products in this category. Generally characterized as
plastic clothes hanger products sold to retailers, these products were of a
commodity nature, and the Company was not able to command trade price increases
commensurate with rapidly escalating raw material prices incurred in 1994/1995.
The Company saw its only long-term growth opportunities through price
competition, and elected to re-direct its sales and marketing efforts to other
categories. The remaining Home Organization products offer relatively higher
margins and more long-term market opportunities.
 
     Home Improvement Products. Through its Shutters, Inc. subsidiary, Selfix
markets a unique line of plastic exterior shutters to the construction trades,
and retail Do-It-Yourself channels. Because of a patented design, the shutters
are assembled from components, rather than formed in a single piece. This allows
the shutters to be configured in the largest variety of sizes and colors in the
industry. Shutters, Inc. markets the shutters in component form to remodeling
distributors, and in finished form to home center retailers. In both cases, the
key competitive advantage is customization of size and color, and quick
turnaround service.
 
MARKETING AND DISTRIBUTION
 
     The Company's housewares products are sold through national and regional
discount, variety, supermarket, drug, hardware/home center, and specialty
stores. Selfix sells directly to major retail customers through its senior vice
president of sales, two vice presidents of sales, two regional sales managers,
plus one director of international sales. The Company's sells to approximately
2500 other customers, through a network of approximately 30 independent
manufacturers representatives. During 1995, one customer, Wal-Mart stores,
accounted for approximately 12% of Selfix, Inc. gross sales. The loss of this
customer would have a material adverse effect on the Company. Kmart accounted
for approximately 5% of gross sales. A change in the financial or operating
structure of Kmart could have a significant impact on the Company's sales and
profits. No other customer accounted for more than 7% of sales.
 
     The Company's primary marketing strategy is to design innovative products
with consumer features and benefits, and focus on marketing the product to its
retail selling partners. Selfix believes its primary competitive advantage is
prompt and reliable product delivery of volume selling products, allowing
customers to maintain minimal inventories to achieve exceptional Gross Margin
Return On Investment (GMROI). The Company believes that by offering
customer-specific merchandising programs that allow retailers to achieve an
outstanding profit return, it is well positioned for growth with volume
retailers. To that end, Selfix offers its customer a variety of retail support
services, including customized merchandise planogramming, small shipping packs,
point-of-purchase displays, Electronic-Data-Interchange (EDI) order
transmission, and just-in-time (JIT) product delivery.
 
                                        3
   4
 
     The Company's home improvement products are sold through 20 independent
manufacturers' representatives to approximately 800 customers, the majority of
which are distributors who supply home repair and remodeling contractors. The
Company also sells directly to national and regional home center retailers.
 
PRODUCT AND RESEARCH DEVELOPMENT
 
     The Company employs 4 persons in Product Research and Development, and uses
a computer-aided design (CAD) system to enhance its product development efforts.
During 1995, 1994 and 1993, the Company introduced 65, 47 and 25 new products,
respectively. Although the Company's historical accounting records do not
separately present research and development expenses, it estimates that for
1995, 1994 and 1993, expenses associated with research and development were
$501,000, $436,000, and $430,000, respectively.
 
FOREIGN AND EXPORT SALES
 
     In 1995, sales to customers outside the United States accounted for
approximately 16% of its total net sales. Sales to Canada, through the Company's
subsidiaries, Selfix of Canada and Shutters, Inc. accounted for 9% of the
Company's net sales in 1995. All other international sales are exports directly
from Selfix, Inc. in Chicago, IL.
 
     In 1995, the Company decided to cease operations at two subsidiaries,
Selfix of Canada and Selfix (H.K.) Ltd., in Hong Kong. In 1994, the Company
decided to suspend operations of its United Kingdom subsidiary, Selfix
(Housewares) Ltd.
 
     Selfix of Canada had been operating as a packaging and distribution
facility, occupying a 34,000 square foot plant in Scarborough, Ontario. Costs
associated with the Selfix of Canada facility were disproportionately high
relative to sales. The Canadian market for the Company's housewares products is
now being serviced through Selfix main shipping headquarters in Chicago, with
sales management and account representation remaining in Canada.
 
     Selfix (Housewares) Ltd. had been operating as a sales and distribution
office for sales to the United Kingdom and Europe. These sales are now being
channeled to distributors in these markets, and are handled administratively
through the export department of Selfix, Inc.
 
     Similarly, sales to Asian markets, previously handled by the Selfix (H.K.)
Ltd. subsidiary, have been absorbed into the export department of Selfix, Inc.
In addition, product sourcing responsibilities were tranferred from Hong Kong to
Chicago.
 
     See Management's Discussion and Analysis of Financial Condition and Results
of Operations and Note K of Notes to Consolidated Financial Statements for
information regarding the net sales, operating profit (loss) and identifiable
assets attributable to each reportable and geographic reporting segment.
 
SEASONALITY
 
     Sales are generally higher in the second and third quarter of the calendar
year because of the seasonality of the Company's home improvement products.
Sales of these products are impacted by weather conditions which are generally
better in the late spring, summer and early fall. Net earnings vary
proportionally more than the variation in sales due to the effect of fixed
costs.
 
COMPETITION
 
     Selfix, Inc. competes with a number of well established domestic and
foreign manufacturers, many with greater resources than the Company. Many
competitor companies are either privately held or divisions of larger entities.
Many of the Company's products also compete with substitute products made of
alternate materials. There is no reliable qualitative method of determining the
Company's position in its various markets. The Company believes it is recognized
as a strong competitive factor in the marketplace, based on its innovative yet
value-priced products and reliable, timely volume delivery.
 
                                        4
   5
 
     The Company exports products manufactured in the United States and
purchases finished goods products from Asia and Latin America. Consequently, the
Company's competitive position may be affected by fluctuations in the exchange
rates of certain foreign currencies, relative to the U.S. dollar.
 
PATENTS, TRADEMARKS, AND LICENSES
 
     Through the acquisition of Mericon Child Safety Products in 1995, Selfix
entered into a licensing agreement with Fisher-Price, Inc. of East Aurora, N.Y.
The contractual agreement calls for a percentage-based royalty to be paid to
Fisher-Price for Selfix sales of the branded Fisher-Price product, which is
designed, manufactured and marketed by Selfix. The agreement, which calls for
certain conditions to be met by both parties, is in effect through December 31,
1997.
 
     Selfix owns a number of trademarks and approximately 100 United States
mechanical and design patents relating to various products and manufacturing
processes. The Company believes that in the aggregate its patents enhance its
business, in part by discouraging competitors from adopting patented features of
its products. The Company believes, however, that there are no patents,
trademarks or licenses material to the business.
 
RAW MATERIALS AND PRODUCTION
 
     The Company manufactures the majority of its housewares products at its
Chicago, Illinois facility using injection molding and extrusion processes. The
Company's production processes utilize automated raw material handling systems
and high speed packaging equipment. Many of the injection molding and extrusion
operations are also automated and are supported by incentive based, manually
performed secondary operations.
 
     Products marketed by the Shutters, Inc. subsidiary are manufactured using
the same processes, at its Hebron, Illinois facility.
 
     Plastic resins used to manufacture the majority of the Company's products
comprise approximately 15 - 20% of total product costs. Fluctuations in resin
raw material costs can be significant from year to year. The Company has
multiple sources of supply for substantially all of its raw material
requirements.
 
INVENTORY CONTROL
 
     The Company produces based on forecasted unit sales. The Company operates a
computer-based material resource planning (MRP) system which processes orders,
schedules production, controls inventory levels and schedules shipping. As a
result, the Company generally ships within a short period of time after receipt
of an order. Consequently, the Company does not believe that information with
respect to backlog is material.
 
ENVIRONMENT
 
     Compliance with federal, state or local provisions relating to protection
of the environment is not expected to have a material effect on the Company's
capital expenditures, earnings or competitive position.
 
EMPLOYEES
 
     As of December 30, 1995, the Company employed 368 persons in the United
States, approximately 185 of which are hourly employees at its Chicago facility,
covered by a collective bargaining agreement which expires in January, 1998. The
Company has not experienced a significant work stoppage and believes that its
union and employee relations are favorable.
 
ITEM 2. PROPERTIES
 
     The Company's headquarters and principal manufacturing, assembly, packaging
and distribution operations for its housewares business are located in a leased
building of approximately 186,000 square feet on 10.5
 
                                        5
   6
 
acres in Chicago, Illinois. The lease expires in July 2010 and grants the
Company a right of first refusal on the sale of the property at any time during
its term.
 
     The Company also leases 83,505 square feet as a storage and distribution
facility in Chicago, Illinois. This lease expires on March 31, 1997.
 
     The Company's shutter manufacturing, assembly, packaging and distribution
facilities are located in a building owned by the Company of approximately
62,500 square feet on 12 acres in Hebron, Illinois.
 
     The Company assembles and packages products for distribution in Canada at
its 34,000 square foot Scarborough, Ontario facility, which the Company occupies
under a lease expiring in October 1999. The Company plans to close this facility
during 1996 and to enter into an early termination agreement. It is not expected
that such early termination will have a significant impact on the Company's
earnings. The Company considers that its properties are generally in good
condition and well maintained, and are suitable and adequate to carry on the
Company's business.
 
ITEM 3. LEGAL PROCEEDINGS
 
     A patent design suit brought by Selfix Independent Products Co., Inc. and
Selfix, Inc. against Victory Button Company, Inc., Julian Barnett, Barker Sales
Corp, Plaza Plastics Corp & Barker Group Industries, Inc. was settled in
December, 1994. Selfix, Inc., through its subsidiary, Selfix Independent
Products Company, Inc. purchased all rights, titles and interests of all patents
and trademarks owned by Independent Products Company, Inc. The purchase included
the right to recover certain amounts for past infringements. In 1994, the
Company recorded approximately $.5 million as its share of the settlement after
providing for estimated legal fees and other sharing of the proceeds. (See Note
C to the consolidated financial statements -- Notes and other receivables)
 
     The Company has investigated and remediated an environmental matter at its
principal facility in Chicago. A $.3 million accrual was recorded in fiscal 1994
for the cost of such investigation and remediation. Final acceptance of the
Company's remediation actions has not yet been obtained from the State of
Illinois, but the Company does not expect such approval to be withheld. Actions
to date have been funded within the accrual established in 1994. (See Note H to
the consolidated financial statements -- Commitments and Contingencies).
 
     The Company is not aware of any other legal matters of significance.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     Not applicable.
 
EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The Company's executive officers are as follows:
 


          NAME           AGE                         POSITION
          ----           ---                         --------
                          
James R. Tennant         42     Chairman of the Board and Chief Executive Officer
James E. Winslow         41     Senior Vice President, Chief Financial Officer and
                                Secretary
Jeffrey R. Dolan         39     Senior Vice President Sales
Theodore W. Lucore       54     Senior Vice President Operations
Raymond E. Anderson      61     Vice President Sales
David A. Bures           46     Vice President and General Manager, Shutters, Inc.
Peter L. Graves          39     Vice President Marketing
Michael J. Ricard        56     Vice President Sales, Shutters, Inc.
Gino T. Tersigni         35     Vice President Sales

 
                                        6
   7
 
     JAMES R. TENNANT joined the Company as Chairman of the Board and Chief
Executive Officer in April 1994. He was elected a Director of the Company in
December 1992 and was a member of the Company's Compensation Committee until
April 1994. From 1982 to 1994, Mr. Tennant was President of Foote, Cone &
Belding/Direct, an international advertising agency. From 1979 to 1982, he was
employed by Young and Rubicam, an advertising agency, his final position being
Senior Vice President.
 
     JAMES E. WINSLOW joined the Company as Senior Vice President, Chief
Financial Officer in November 1994. In 1994, Mr. Winslow was Executive Vice
President and Chief Financial Officer of Stella Foods, Inc. From 1983 to 1994,
Mr. Winslow was employed by Wilson Sporting Goods Co. in various capacities, his
final position being Vice President and Chief Financial Officer.
 
     JEFFREY R. DOLAN joined the Company as Senior Vice President Sales in
August, 1995. From 1982 to 1995, Mr. Dolan was employed by Rubbermaid, Inc., in
various sales management capacities, his final position being Vice President
National Accounts.
 
     THEODORE W. LUCORE joined the Company as Senior Vice President Operations
in January 1995. From 1993-1994, Mr. Lucore was Vice President Operations of M.
Kamenstein, Inc. From 1991 to 1993, he was Executive Vice President and Chief
Operating Officer of Hirsch Company. From 1989 to 1991, he was General Manager
Manufacturing of St. Charles Manufacturing Company. From 1968 to 1989, Mr.
Lucore was a Plant Manager for General Electric.
 
     RAYMOND E. ANDERSON has been Vice President Sales since June 1993. He
joined the Company in 1980 as a Regional Sales Manager and became the National
Sales Manager in 1983.
 
     DAVID A. BURES has been Vice President and General Manager of the Company's
Shutters, Inc. subsidiary since October, 1995. He joined the Company in 1989 as
Controller of Shutters, Inc. From 1993 to 1995 he was Administrative Manager of
Shutters, Inc. From 1980 to 1989, Mr. Bures was employed in various capacities
by Packaging Corporation of America, his final position being Financial Systems
Manager.
 
     PETER L. GRAVES has been Vice President Marketing since October 1994. He
joined the firm in 1981 as a copywriter and has served in various sales and
marketing positions in the Company, with his previous position in the Company
being Manager of Sales and Marketing Administration.
 
     MICHAEL J. RICARD has been Vice President Sales of the Company's Shutters,
Inc. subsidiary since October, 1995. He joined the Company in 1988 as Product
Development Manager of Selfix, Inc. He became National Sales Manager of
Shutters, Inc. in 1989. From 1986 to 1989, he was employed by Cedco as General
Manager. From 1983 to 1986 he was Vice President Sales of Superior Plastics.
 
     GINO T. TERSIGNI has been Vice President Sales since September, 1995. He
joined the Company in 1995 as Vice President and National Sales Manager of the
Company's Canadian subsidiary. From 1990 to 1995, Mr. Tersigni was zone manager
for Bernzomatic/Newell Torch Manufacturing. From 1984 to 1990, he was national
accounts manager for Ryobi Canada.
 
     Officers serve at the discretion of the Board of Directors, except as
provided in the employment contract with Mr. Tennant. See "Executive
Compensation -- Employment Agreements."
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The Company's common stock is traded on the NASDAQ National Market System
under the symbol SLFX. As of February 27, 1996, the Company believes there were
160 holders of record and in excess of 700 beneficial holder's of the Company's
common stock.
 
     The Company has never paid a cash dividend on its common stock and
currently anticipates that all of its earnings will be retained for use in the
operation and expansion of its business.
 
                                        7
   8
 
     The following table lists the high and low closing stock prices as reported
by NASDAQ for the periods indicated:
 
                               MARKET PRICE RANGE
 


                                                         HIGH                     LOW
                                                  ------------------       ------------------
                      QUARTERS                     1995        1994        1995         1994
    --------------------------------------------  ------       -----       -----       ------
                                                                           
    First.......................................  $5.25        $9.25       $4.00       $6.375
    Second......................................   5.25         8.75        4.25        6.125
    Third.......................................   5.75         7.25        4.25        4.00
    Fourth......................................   5.875        5.25        4.75        4.25

 
ITEM 6. SELECTED FINANCIAL INFORMATION
 
     Selected financial information of the Registrant appears on page 17 of this
Form 10-K Annual Report.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
     The Company reports on a 52-53 week year ending on the last Saturday of
December. In the discussion and analysis that follows, references to the fiscal
years 1995, 1994, and 1993 are for the fifty-two weeks ended December 30, 1995,
the fifty-three weeks ended December 31, 1994 and the fifty-two weeks ended
December 25, 1993, respectively.
 
RESULTS OF OPERATIONS
 
     In April, 1994, the Board of Directors elected Mr. James R. Tennant as
Chairman and Chief Executive Officer. This was the initial step in the turnover
of senior management, a restructuring of operations and an in depth analysis of
customer and market trends.
 
     During fiscal 1995 and 1994, the following officers all left the Company:
President and Chief Operating Officer; Vice President, Secretary and Chief
Financial Officer; Vice President of Operations; Vice Presidents of Domestic and
International Sales. These positions were all replaced. See 'Executive Officers
of the Registrant' in Part I for further background information on the new
management team.
 
     The new senior management team conducted a restructuring of operations and
an analysis of customer and market trends during the third and fourth quarters
of fiscal 1994. As a result of the restructuring and market analysis, the
Company decided to exit certain product lines, consolidate its facilities and
increase investments in R&D/new product development. During 1995, it was
determined that additional restructuring actions were required, additional
product lines needed to be discontinued and further management initiatives were
needed to reduce fixed costs. These actions had a significant impact on fiscal
1995 and 1994 financial results. In the section that follows, the impact of
several items affecting financial comparability is detailed. The items include
management initiatives resulting from the business analysis completed in 1995
and 1994 as well as other significant items.
 
ITEMS AFFECTING COMPARABILITY
 
  UNUSUAL CHARGES
 
     Unusual charges totaled $3.0 million in 1995 and $5.3 million in 1994.
These unusual charges were as follows:
 
     1995
 
     Restructuring charges totaling $2.1 million related to the decisions to
exit certain unprofitable product lines, close the Company's Canadian facility
and move the Canadian operations to Chicago. Such charges included severance
benefits, the write-off of Canadian fixed assets, run out costs on the Canadian
building
 
                                        8
   9
 
lease and the write-off of inventory and intangibles related to discontinued
product lines. For additional discussion of restructuring charges, see "Fiscal
Year 1995 as Compared to Fiscal Year 1994".
 
     Allowances for uncollectible accounts receivable were increased $.4 million
to address the uncertain financial condition of several retailers.
 
     Charges of $.5 million were recorded to implement management initiatives to
re-engineer operations from both a customer service and manufacturing
perspective.
 
     Fixed asset values were reduced $.3 million as a result of a reassessment
of expected utility and useful lives.
 
     Other income was positively impacted by the favorable settlement of a
non-compete and consulting agreement. The favorable settlement allowed $.3
million of related accruals to be reversed into earnings.
 
     The impact of these unusual charges on operating profit (loss) and earnings
(loss) before income taxes was to increase the loss by $3.3 million and $3.0
million, respectively.
 
     1994
 
     Restructuring charges totaled $1.7 million related to a work force
reduction in the Chicago facility, termination of existing employee arrangements
and the writedown of inventory and fixed assets related to product lines to be
discontinued. For additional discussion of restructuring charges, see "Fiscal
Year 1994 as Compared to Fiscal Year 1993".
 
     Reserves for returns and allowances were increased $.8 million to reflect
current market pricing trends and potential product warranty claims.
 
     Inventory reserves were increased $1.0 million to address slow moving and
obsolete finished goods and packaging.
 
     Fixed asset write-offs of $.4 million were recorded for assets that had
significantly diminished useful lives.
 
     Search and relocation costs of $.2 million were incurred for the turnover
of the senior management team.
 
     Accounts receivable of $.2 million were written off related to the
bankruptcy of a significant home improvement products customer.
 
     Intangible assets from previous acquisitions were reduced $.6 million due
to projected sales declines on the related product lines acquired.
 
     Other expense was increased $.5 million related to the write-off of future
benefits from non-compete and consulting agreements arising from a previous
acquisition; $.3 million related to the investigation and remediation of an
environmental matter; and $.1 million for losses on fixed assets sold. Partially
offsetting these additional expenses was $.5 million of income from the
favorable settlement of a patent infringement lawsuit. For additional discussion
of these items see "Fiscal Year 1994 as Compared to Fiscal Year 1993".
 
     The impact of these unusual charges on operating profit (loss) and earnings
(loss) before income taxes was to increase the loss by $4.9 million and $5.3
million, respectively.
 
FISCAL YEAR
 
     1994 consisted of 53 weeks and the years 1995 and 1993 consisted of 52
weeks. The estimated favorable impact on net sales of the fifty-third week was
offset by additional salaries and operating expenses of the additional week.
Management believes the fifty-third week had no meaningful impact on 1994
results or on comparisons between years.
 
FISCAL YEAR 1995 AS COMPARED TO FISCAL YEAR 1994
 
     Net sales of $41.0 million were unchanged from the prior fiscal year.
During the year, however, the Company identified certain products to discontinue
primarily in the home organization category. As a result,
 
                                        9
   10
 
product sales of this category declined 15%. Further, juvenile products declined
19% as a result of reduced trade channel fill in of initial product offerings.
These reductions were offset by healthy improvements (up 4%) in the Company's
stronger categories of home bathwares and hooks, where the Company has larger
market shares. Increased sales of these products were driven by a 16% increase
in domestic sales to the Company's largest customer due to improved distribution
and new product offerings. Sales of the Company's home improvement products
increased 7% as a result of increased penetration of the home center retail
market and also through increased volume with remodeling distributors.
Penetration of the home center retail market was supported by the Company's make
to order program allowing consumers to customize both the color and size of
their shutters.
 
     Gross profit, net of the unusual charges discussed above, declined from
42.0% of net sales in 1994 to 38.5% in 1995. The decrease in gross profit is
primarily the result of continued cost increases related to plastic resin, the
Company's primary raw material. During 1995, the Company's cost of plastic resin
increased 34% causing gross profit margins to decline by 2.6%. Plastic resin
costs declined in the third and fourth quarters from their mid year highs and
continuing lower resin costs are expected to contribute to improved gross profit
margins in 1996. Gross profit margins were also impacted by Canadian sales mix
shifts away from high margin core product categories to the lower margin hanging
hardware product line. The Company does not believe it can effectively and
profitably compete in hanging hardware and has decided to exit this product
line. The related costs to exit this product line are included in the 1995
restructuring charge.
 
     Selling expenses, net of the unusual charges discussed above, were 25.6% of
net sales as compared to 25.9% in 1994. The decrease was a result of the
Company's consolidation of its Chicago warehousing facilities from 4 to 2. This
action was taken to improve customer service, increase operating efficiencies
and reduce costs. The Company's ability to consolidate warehouses was also a
direct result of actions taken in 1994 and 1995 to reduce Stock Keeping Units
(SKU's) and inventory. The Company's restructuring actions in 1994 to reduce
headcount also had a favorable impact on selling expenses. Offsetting much of
the savings from the above actions, were increased payroll and travel costs for
sales personnel.
 
     Administrative expenses, net of the unusual charges discussed above,
increased slightly from 13.2% of net sales in 1994 to 13.7% in 1995. The
increase is attributable to costs incurred related to the Company's search for
strategic acquisitions. During 1995, the Company evaluated several acquisition
targets and incurred legal, audit and investment banking fees during the
evaluation and negotiation process. Fees and costs related to acquisition
activities are expensed as incurred unless a transaction is completed.
Administrative expenses also increased as a result of the Company's management
incentive plans. Expenses for such plans increased as a result of the Company
achieving its operating budget in 1995. The operating budget was not achieved in
1994 and no management incentive costs were incurred.
 
     Amortization of intangibles, net of the unusual charges discussed above,
decreased from 2.1% of sales in 1994 to 1.2% in 1995. The decrease is the result
of the reduction in patents, trademarks and other intangibles during 1994. The
reduction in these assets resulted in reduced amortization in 1995. Further,
some of the Company's intangibles reached the end of their respective
amortization periods during early 1995 further reducing amortization expense as
compared to 1994.
 
     Restructuring charges were incurred in both 1995 and 1994. Such charges
increased from $1.7 million in 1994 to $2.1 million in 1995. In 1994, the
Company's new senior management team began a restructuring of operations,
analysis of customer and market trends, assessment of product lines, SKU's and
customers served together with a review of operating strategies. In 1994, the
Company recorded a $1.7 million restructuring charge related to the analysis and
assessments completed at that time. The 1994 charge relates to costs of
severance and termination benefits paid or accrued for a change in level and
composition of employees at its Chicago facilities, the termination of existing
employee arrangements, as well as inventory adjustments and fixed asset
writedowns related to product lines to be discontinued.
 
     In the fourth quarter of 1995, the Company announced its intent to further
consolidate facilities and exit additional product lines. The 1995 restructuring
charge is a result of the Company's decision to exit certain unprofitable
product lines, close the Company's Canadian facility and move the Canadian
operations to the Chicago manufacturing and distribution facilities. The
restructuring charges for these initiatives totaled
 
                                       10
   11
 
$2.1 million. The charges for the closing and relocation of the Canadian
operation totaled $1.0 million including severance benefits of $.2 million
covering all of the Canadian employees. The relocation of the Canadian operation
is expected to be completed in the first half of 1996. The remaining $1.1
million of restructuring charges pertains to product lines the Company has
decided to exit and the write-off of related product molds, inventory and
patents.
 
     Interest income was essentially unchanged from the prior year. Interest
expense declined $.1 million as a result of lower debt levels. Changes in
interest rates between years had no significant impact on interest income or
expense. Other income, net of the unusual items discussed above, increased $.3
million as a result of gains on sales of fixed assets and a franchise tax refund
from prior years.
 
     An income tax benefit of $.3 million was recorded in 1995 through the
utilization of alternative minimum tax carrybacks. This compares to income tax
expense in 1994 of $.2 million related to foreign income taxes. During 1995, the
Company ceased operation of its United Kingdom and Hong Kong subsidiaries and as
such did not generate any foreign taxed earnings or losses of significance. The
Company was unable to record a significant tax benefit on the 1995 or 1994
pre-tax losses because of the unavailability of tax loss carrybacks. The losses
from both years will be available to reduce future taxable income.
 
     The net loss in 1995 was $4.0 million or $1.11 per share based on 3,616,924
weighted average common share and common share equivalents. This compares to the
net loss of $6.0 million recorded in 1994 or $1.70 per share based on 3,538,758
of weighted average common share and common share equivalents. The increase in
common share and common share equivalents is the result of stock issued in
connection with the acquisition of Mericon Child Safety Products and the
partially offsetting impact of treasury shares acquired. The $2.0 million
decrease in net loss between years was due primarily to the $2.3 million
reduction in unusual charges discussed above.
 
OUTLOOK
 
     The management initiatives during 1994 and 1995 have resulted in the
elimination of many unprofitable and other poorly performing product lines
together with reduced overhead and improved operating efficiencies. Significant
reductions in SKU's have been achieved further enhancing the operating
effectiveness achieved through consolidation of operations. During 1994 and
1995, spending on new product development and packaging was increased
significantly. As a result, the Company will be going to market in 1996 with a
new packaging look and over 60 new products. These actions, coupled with
expected cost reductions of plastic resin and a new, highly focused sales
management team will provide the Company with the opportunity to significantly
improve results. Although the Company has significantly reduced its fixed costs,
future profitability is dependent on the stability of resin costs below 1995
averages, increased sales and the success of new product introductions.
 
FISCAL YEAR 1994 AS COMPARED TO FISCAL YEAR 1993
 
     Net sales during fiscal year 1994 amounted to $41.0 million as compared to
$39.7 million for fiscal year 1993, an increase of 3%. Home bathware sales
increased 3% while juvenile products increased 38% due to new placement at a
major national toy retailer. Hooks and home organization products fell by 9% and
10%, respectively due to the exit from certain SKU's. Sales increases were unit
driven. Product price changes had little or no effect on the sales increase.
 
     Gross profit, net of the unusual charges discussed above, was 42.0% as
compared to 43.3% in 1993. The increase in the cost of sales from 1993 is the
result of the following:
 
          1. Material costs increased approximately 50% due to raw material and
             packaging price increases incurred primarily during the third and
             fourth quarter of the year. The Company has a limited ability to
             recover these cost increases through its selling prices.
 
          2. Manufacturing labor costs decreased slightly as a percentage of
             sales because of the change in product mix and, as a result,
             manufacturing labor costs were lower on a percentage basis in
             fiscal 1994 compared to 1993.
 
                                       11
   12
 
     Selling expenses, net of the unusual charges discussed above, increased to
25.9% of net sales in 1994 from 20.6% in 1993. Freight costs, as a percentage of
sales, increased because of increased rate charges by freight carriers. Other
costs relating to sales volume remained constant in relationship to sales with
absolute increases related to the following activities: personnel costs as a
result of increased staffing of the marketing and product development
departments ($.3 million); selling expenses due to servicing stores of a major
customer and increased spending related to home improvement products ($.4
million); professional services, brochures and displays for market research,
product research, prototypes and packaging graphics ($.5 million); and warehouse
renovations designed to improve order fulfillment ($.1 million). The Company
also incurred higher warehousing costs due to increased inventory levels in the
first half of the year.
 
     Administrative expenses, net of the unusual charges discussed above, were
13.2% of net sales in 1994 as compared to 13% in 1993. The slight increase was
the result of annual wage and benefit increases as well as supply costs and
depreciation for new computer auxiliary equipment and software.
 
     Amortization of intangible assets, net of the unusual charges discussed
above, decreased $.1 million due to the expiration of certain intangible assets.
 
     The 1994 restructuring charge of $1.7 million relates to costs of severance
and termination benefits paid or accrued for a change in the level and
composition of employees, termination of existing employee arrangements,
inventory adjustments and fixed asset writedowns related to product lines to be
discontinued. The Company provided for severance benefits approximating $1.0
million for employee terminations during the third and fourth quarters. Such
benefits cover approximately 25 employees across most departments, which
represented 17% of the administrative staff, or 5% of total employees. All such
terminations were completed by the end of the first quarter of 1995. Inventory
and fixed asset write-offs related to products to be discontinued were $.5
million and $.2 million, respectively.
 
     In fiscal 1994, interest income increased over fiscal 1993 due to increased
availability of cash for investment as well as increased rates of return.
Interest expenses decreased primarily because of a reduction in the Industrial
Revenue Bond (IRB) debt. The interest rates associated with the IRB debt did not
increase as quickly as the increases in the prime rate.
 
     The increase in other income and expense resulted from an accrual of
approximately $.5 million for the remaining obligation to a former owner of IPC
under consulting and non compete agreements. The Company believes there is no
future value to its remaining obligation because of recent events in connection
with litigation and the absence of any substantive services being provided under
the agreements. In addition, fixed asset losses on disposal increased $.1
million and the Company recorded an accrual for costs ($.3 million) related to
the investigation and potential remediation of an environmental matter.
Partially offsetting these expense items was additional income of $.5 million
from the favorable settlement of two lawsuits related to patent infringements.
 
     The effective tax rate for 1994 of 4% is the result of foreign taxed
income. The Company was not able to record an income tax benefit on its loss
before income taxes of $5.8 million because of the unavailability of tax loss
carrybacks. The deferred tax asset valuation allowance increased $2.6 million
due to the uncertain realizability of the deferred tax asset. Tax losses from
fiscal 1994 will be available to reduce future taxable income.
 
     The net loss in 1994 was $6.0 million or $1.70 per share (based on
3,538,758 of weighted average common share and common share equivalents). This
compares to net income of $1.5 million or $0.43 per share (based on 3,511,100
weighted average common share and common share equivalents) when also taking
into consideration the cumulative effect of the change in income tax accounting
during fiscal year 1993.
 
OPERATING RESULTS BY INDUSTRY SEGMENT
 
     The Company operates in two industry segments: Housewares and Home
Improvement Products. Although both segments use plastic resin as the primary
raw material, the products of each segment are quite different and are sold
through different trade channels. The two segments operate independently with
separate management teams. The unusual charges discussed previously impacted
both segments. The housewares
 
                                       12
   13
 
segment was negatively impacted in 1995 and 1994 by $3.3 million and $4.0
million, respectively. The home improvement segment was not impacted in 1995 but
was negatively impacted by $.9 million in 1994.
 
HOUSEWARES
 
     The operating loss of the housewares segment, net of the unusual charges
previously discussed, was $2.0 million in 1995 as compared to an operating loss
of $.5 million in 1994. The increase in the loss was primarily the result of
higher resin costs. Other factors impacting results were the decline in gross
profit margins due to Canadian sales mix shifts to a lower margin hardware
product line, the costs associated with the Company's search for strategic
acquisitions and the additional costs of new management incentive plans. The
majority of the Company's anticipated improved results in 1996 are expected to
come from the housewares segment.
 
     The housewares segment reported an operating profit in 1993 of $1.9
million, significantly better than the $.5 million operating loss, net of
unusual charges, reported in 1994. The decline in profitability is a direct
result of increased material costs of 50%, higher freight costs, additional
marketing spending to support new product development and sales mix shifts
towards less profitable products which were subsequently discontinued.
 
HOME IMPROVEMENT PRODUCTS
 
     The operating profit of the home improvement segment improved significantly
in 1995. Operating profits in 1995 of $.8 million were up $.5 million as
compared to 1994's result of $.3 million (net of the unusual charges). Increased
profitability was the result of improved manufacturing efficiencies through
reduced turnover of personnel and improved work flows. These cost efficiencies
offset the increased cost of plastic resins and are expected to continue to
benefit future results. Additional savings occurred in operating expenses
related to new product development costs and amortization of intangibles.
Amortization expenses were reduced as a result of the expiration of non-compete
and consulting agreements arising from the 1988 acquisition of Shutters, Inc. by
the Company.
 
     Operating profits in 1994 of $.3 million (net of the unusual charges) were
down slightly from 1993 profits of $.5 million. The decrease was entirely the
result of increased raw material costs.
 
CAPITAL RESOURCES AND LIQUIDITY
 
     Cash and cash equivalents at December 30, 1995 were $3.0 million as
compared to $4.9 million at December 31, 1994. The decrease in cash is primarily
due to debt paydowns of $2.5 million. During 1995, the Company was able to
finance operations, capital spending and a small acquisition through the
collection of a $1.4 million patent suit settlement and cash from operations.
Despite a $4.0 million loss, cash flow from operations was positive due to the
non cash nature of much of the loss even though severance and other unusual
items from 1994 were funded in 1995.
 
     The key components of 1995 cash uses and sources were as follows:
 
     - Inventories declined $.5 million as a result of reduced SKU's and safety
       stocks. The decrease in inventory was accomplished despite a 34% average
       increase in plastic resin costs. Raw materials accounts for approximately
       21% of total inventories.
 
     - Collection of a $1.4 million patent suit settlement. The collection had
       no impact on 1995's operating results but had a positive benefit on cash
       flow.
 
     - Capital spending in 1995 was $1.2 million, the majority of which was for
       the purchase and tooling of molds to support new products.
 
     - The Company acquired Mericon Child Safety Products for cash and stock.
       The cash portion of the transaction was $.9 million.
 
     - The Company purchased 58,762 shares of Selfix, Inc. common stock from the
       Company's Profit Sharing and Savings Plan at a cost of $.3 million. The
       buyback was done to facilitate a change in
 
                                       13
   14
 
trustee of the Profit Sharing and Savings Plan assets. The shares were held in
treasury at December 30, 1995.
 
     - Scheduled installment payments of $.8 million were made on the Company's
       variable rate demand bonds.
 
     - A note payable to a bank of $1.5 million was paid down in December, 1995
       with excess available cash.
 
     The Company's plans for 1996 include continuing to invest in new product
development, to aggressively grow sales and to pursue strategic acquisitions. In
the near term, the Company expects to fund operations and capital spending from
its operating cash and existing cash and cash equivalents. To facilitate longer
term potential cash needs, the Company is in the process of consolidating its
banking relationships and obtaining new lines of credit. The new lines of credit
will provide borrowing capability up to $8 million subject to asset based
availability formulas. It is expected the new lines of credit will be in place
beginning in the second quarter of 1996. The Company currently has no operating
lines of credit other than for minimal letters of credit to finance inventory
purchases.
 
     The terms of the Company's debt agreements include certain financial
covenants which were not met as of December 30, 1995. The Company has received
waivers of compliance from its lenders.
 
     To minimize interest rate risk, the Company has entered into interest rate
swap contracts. Please see Note G to the consolidated financial statements for a
further explanation of these contracts.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     Listed below are the financial statements and supplementary data included
in this part of the Annual Report on Form 10-K:
 


                                                                                        PAGE
                                                                                         NO.
                                                                                       -------
                                                                                 
    (a)   FINANCIAL STATEMENTS
          Report of Independent Certified Public Accountants.........................  18
          Consolidated Balance Sheets at December 30, 1995 and December 31, 1994.....  20
          Consolidated Statements of Operations for 1995, 1994 and 1993..............  19
          Consolidated Statements of Stockholders' Equity for 1995, 1994 and 1993....  21
          Consolidated Statements of Cash Flow for 1995, 1994 and 1993...............  22
          Notes to the Consolidated Financial Statements.............................  23-36
    (b)   SUPPLEMENTARY DATA
          Summary of Quarterly Data..................................................  36
          Financial statement schedule is included in page 38 of this report. See
          Item 14.

 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     Not applicable.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     Information regarding the Company's executive officers is included under
Part 1 of this Form 10-K.
 
     Information set forth under "Election of Directors" in the Proxy Statement
is incorporated herein by reference. The information set forth under "Executive
Officers of the Registrant" in Part 1 of this Annual Report on Form 10-K is
incorporated by reference herein.
 
ITEM 11. EXECUTIVE COMPENSATION
 
     The information set forth under "Additional Information -- Executive
Compensation" and "Additional Information -- Employment Agreements" in the Proxy
Statement is incorporated herein by reference.
 
                                       14
   15
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information set forth under the "Security Ownership of Principal
Holders and Management" in the Proxy Statement is incorporated herein by
reference.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information set forth under "Certain Transactions" in the Proxy
Statement is incorporated herein by reference.
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
     Listed below are the financial statements, additional financial
information, reports and exhibits included in this part of the Annual Report on
Form 10-K:
 
     (A) FINANCIAL STATEMENTS
 
          The financial statements and notes to the consolidated financial
     statements are referred to in Item 8.
 


                                                                                 PAGE
                                                                                  NO.
                                                                                 -----
                                                                           
(B)  ADDITIONAL FINANCIAL INFORMATION
     Report of Independent Certified Public Accountants on Schedule............   37
     Schedule II -- Valuation and Qualifying Accounts..........................   38

 
     (C) REPORTS FILED ON FORM 8-K
 
          On December 28, 1995 the Company filed a Form 8-K disclosing that it
     had elected not to proceed with the acquisition of Studio RTA, a marketer
     of computer furniture, multimedia work stations and organizational
     accessories to the small office/home market.
 
                                       15
   16
 
     (D) EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-K)
 

           
      3.1     Certificate of Incorporation of the Registrant. Incorporated by reference from
              Exhibit 3.1 to Form S-1 Registration Statement No. 33-23881.
      3.2     By-Laws of the Registrant. Incorporated by reference from Exhibit 3.2 to Form
              S-1 Registration Statement No. 33-23881.
     10.7     Stock Option Plan adopted by the Registrant's Stockholders on May 15, 1987.
              Incorporated by reference from Exhibit 10.8 to Form S-1 Registration Statement
              No. 33-23881.
     10.8     Lease, dated July 24, 1980, among the Registrant as Tenant and NLR Gift Trust
              and MJR Gift Trust as Landlord concerning the Registrant's facility in Chicago,
              Illinois. Incorporated by reference from Exhibit 10.9 to Form S-1 Registration
              Statement No. 33-23881.
     10.9     Lease, dated November 1, 1979, between the Registrant as Tenant and the Ragir
              Children's Building Trust as Landlord concerning the Registrant's facility in
              Scarborough, Ontario. Incorporated by reference from Exhibit 10.10 to Form S-1
              Registration Statement No. 33-23881.
     10.11    Patent licensing agreement, dated as of November 2, 1971, between the
              Registrant and Meyer J. Ragir concerning M.J. Molding Process. Incorporated by
              reference from Exhibit 10.13 to Form S-1 Registration Statement No. 33-23881.
     10.12    Patent licensing agreement, dated as of November 15, 1971, between the
              Registrant and Meyer J. Ragir concerning Suction Lock Products. Incorporated by
              reference from Exhibit 10.14 to Form S-1 Registration Statement No. 33-23881.
     10.13    Patent licensing agreement, dated as of June 1, 1981, between the Registrant
              and Meyer J. Ragir concerning Shower Organizer Products. Incorporated by
              reference from Exhibit 10.15 to Form S-1 Registration Statement No. 33-23881.
     10.21    Loan Agreement dated December 1989 between the Registrant and Illinois
              Development Finance Authority in connection with the Registrant's Industrial
              Revenue Bond incorporated by reference from the Registrant's Form 10-K for the
              year ended May 31, 1990.
     10.22    Loan Agreement dated September 1990 between the Registrant and Illinois
              Development Finance Authority in connection with the Registrant's Industrial
              Revenue Bond incorporated by reference from the Registrant's Form 10-K for the
              year ended December 28, 1991.
     10.23    Employment Agreement dated May 1, 1994 between the Registrant and James R.
              Tennant, Chairman of the Board and Chief Executive Officer.
     11.0     Statement Regarding Computation of Earnings Per Share is included in the Notes
              to the Consolidated Financial Statements referred to in Item 8 above.
     27.0     Financial Data Schedule.

 
                                       16
   17
 
ITEM 6. SELECTED FINANCIAL DATA
 
                   CONSOLIDATED STATEMENTS OF OPERATIONS DATA
 


                                          1995         1994         1993         1992         1991
                                       ----------   ----------   ----------   ----------   ----------
                                                     (IN THOUSANDS, EXCEPT SHARE DATA)
                                                                            
Net sales............................  $   41,039   $   40,985   $   39,711   $   35,209   $   37,013
Cost of goods sold...................      25,678       25,587       22,504       22,297       22,356
                                        ---------    ---------    ---------    ---------    ---------
  Gross profit.......................      15,361       15,398       17,207       12,912       14,657
Operating expenses...................      17,385       18,185       14,214       13,501       13,022
Restructuring charge.................       2,051        1,701           --           --           --
                                        ---------    ---------    ---------    ---------    ---------
  Operating profit (loss)............      (4,075)      (4,488)       2,993         (589)       1,635
Interest expense.....................        (896)        (999)      (1,066)      (1,038)      (1,182)
Other income (expense) -- net........         688         (295)         126          192          215
                                        ---------    ---------    ---------    ---------    ---------
  Earnings (loss) before income
     taxes...........................      (4,283)      (5,782)       2,053       (1,435)         668
Income tax (expense) benefit.........         273         (221)        (574)         654          (94)
                                        ---------    ---------    ---------    ---------    ---------
  Earnings (loss) before the
     cumulative effect of a change in
     accounting for income taxes.....      (4,010)      (6,003)       1,479         (781)         574
                                        ---------    ---------    ---------    ---------    ---------
Cumulative effect of a change in
  income tax accounting..............          --           --           36           --           --
                                        ---------    ---------    ---------    ---------    ---------
Net earnings (loss)..................  $   (4,010)  $   (6,003)  $    1,515   $     (781)  $      574
                                        =========    =========    =========    =========    =========
Net earnings (loss) per common and
  common equivalent share............  $    (1.11)  $    (1.70)  $     0.43   $    (0.23)  $     0.17
                                        =========    =========    =========    =========    =========
Number of weighted average common and
  common equivalent shares
  outstanding........................   3,616,924    3,538,758    3,511,100    3,448,267    3,454,473
Consolidated Balance Sheet and Cash
  Flow Data:
  Working capital....................  $    6,712   $   11,026   $   12,752   $   11,599   $   10,891
  Land, property, plant and
     equipment -- net................       8,453       10,466       11,524       10,154       10,319
  Intangible assets..................       2,693        1,536        2,941        3,828        4,776
  Total assets.......................      24,976       30,761       35,354       32,828       37,591
  Long-term obligations (less current
     maturities).....................       7,022        9,421        9,120       11,130       12,034
  Stockholders' equity...............      10,847       13,623       19,326       17,715       18,627
  Cash provided by operating
     activities......................       2,574        2,027        4,193        2,917          860

 
                                       17
   18
 
                                                         700 One Prudential
                                                         Plaza
                                                         130 E. Randolph Drive
                                                         Chicago, IL 60601-6203
                                                         312 856-0200
 
                                                  [GRANT THORNTON LOGO]
                                                   GRANT THORNTON LLP
                                                         Accountants and
                                                         Management Consultants
                                                         The U.S. Member Firm of
                                                         Grant Thornton
                                                         International

                             REPORT OF INDEPENDENT       
                          CERTIFIED PUBLIC ACCOUNTANTS
 
Board of Directors
Selfix, Inc.
 
     We have audited the accompanying consolidated balance sheets of Selfix,
Inc. and Subsidiaries as of December 30, 1995 and December 31, 1994, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the fifty-two week period ended December 30, 1995 and the fifty-three
week period ended December 31, 1994 and the fifty-two week period ended December
25, 1993. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated 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 Selfix, Inc.
and Subsidiaries as of December 30, 1995 and December 31, 1994, and the
consolidated results of their operations and their consolidated cash flows for
the fifty-two week period ended December 30, 1995, and the fifty-three week
period ended December 31, 1994 and the fifty-two week period ended December 25,
1993, in conformity with generally accepted accounting principles.
 
     As discussed in Note A, the Company changed its method of accounting for
investments in 1994. In 1993 the Company changed its method of accounting for
income taxes.
 
                                                              Grant Thornton LLP
 
Chicago, Illinois
February 9, 1996
 
                                       18
   19
 
                         SELFIX, INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 


                                                                 1995        1994        1993
                                                                -------     -------     -------
                                                                     (IN THOUSANDS EXCEPT
                                                                      PER SHARE AMOUNTS)
                                                                               
Net sales.....................................................  $41,039     $40,985     $39,711
Cost of goods sold............................................   25,678      25,587      22,504
                                                                -------     -------     -------
          Gross profit........................................   15,361      15,398      17,207
Operating expenses
  Selling.....................................................   10,474      10,991       8,184
  Administrative..............................................    6,433       5,789       5,143
  Amortization of intangible assets...........................      478       1,405         887
  Restructuring charge........................................    2,051       1,701          --
                                                                -------     -------     -------
                                                                 19,436      19,886      14,214
                                                                -------     -------     -------
          Operating profit (loss).............................   (4,075)     (4,488)      2,993
Other income (expenses)
  Interest income.............................................      230         206         151
  Interest (expense)..........................................     (896)       (999)     (1,066)
  Other income (expenses).....................................      458        (501)        (25)
                                                                -------     -------     -------
                                                                   (208)     (1,294)       (940)
                                                                -------     -------     -------
          Earnings (loss) before income taxes and cumulative
            effect of a change in accounting..................   (4,283)     (5,782)      2,053
  Income tax (expense) benefit (Notes A and I)................      273        (221)       (574)
                                                                -------     -------     -------
Earnings (loss) before the cumulative effect of a change
  in accounting for income taxes..............................   (4,010)     (6,003)      1,479
Cumulative effect of a change in income tax accounting........       --          --          36
                                                                -------     -------     -------
Net earnings (loss)...........................................  $(4,010)    $(6,003)    $ 1,515
                                                                =======     =======     =======
Net earnings (loss) per common and common equivalent share
  (Note A) before the cumulative effect of a change in
  accounting for income tax...................................  $ (1.11)    $ (1.70)    $  0.42
Change in accounting for income tax...........................       --          --        0.01
                                                                -------     -------     -------
Net earnings (loss) per share.................................  $ (1.11)    $ (1.70)    $  0.43
                                                                =======     =======     =======

 
        The accompanying notes are an integral part of these statements.
 
                                       19
   20
 
                         SELFIX, INC. AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
                                     ASSETS
 


                                                                                    1995          1994
                                                                                   -------       -------
                                                                                   (IN THOUSANDS EXCEPT
                                                                                   SHARE AMOUNTS)
                                                                                           
Current assets
  Cash...........................................................................  $ 2,327       $ 1,487
  Cash equivalents...............................................................      655         3,372
  Investments in marketable securities (Note A)..................................      516           944
  Accounts receivable
    Trade, net of allowance for doubtful accounts of $1,395 at
      December 30, 1995, $1,431 at December 31, 1994.............................    4,690         4,947
  Notes receivable and other receivables (Note C)................................       83         1,773
  Refundable income taxes (Notes A and I)........................................      222           381
  Inventories (Note A)
    Finished goods...............................................................    3,165         2,344
    Work-in-process..............................................................      893         1,406
    Raw materials................................................................    1,093         1,900
                                                                                   -------       -------
                                                                                     5,151         5,650
  Prepaid expenses and other current assets......................................      175           189
  Deferred income taxes (Notes A and I)..........................................       --            --
                                                                                   -------       -------
         Total current assets....................................................   13,819        18,743
Property, plant and equipment -- at cost (Notes A and G)
  Buildings......................................................................    2,036         2,036
  Land and building under capital lease..........................................    2,535         2,535
  Machinery, equipment and vehicles..............................................    7,259         7,180
  Tools and dies.................................................................    5,570         5,638
  Furniture, fixtures and office equipment.......................................    2,446         2,854
  Leasehold improvements.........................................................    1,385         1,335
                                                                                   -------       -------
                                                                                    21,231        21,578
  Less accumulated depreciation and amortization.................................   12,909        11,243
                                                                                   -------       -------
                                                                                     8,322        10,335
  Land...........................................................................      131           131
                                                                                   -------       -------
                                                                                     8,453        10,466
Other assets
  Restricted cash -- Industrial Revenue Bond.....................................       --             5
  Intangible assets (Notes A and D)..............................................    2,693         1,536
  Sundry.........................................................................       11            11
                                                                                   -------       -------
                                                                                     2,704         1,552
                                                                                   -------       -------
                                                                                   $24,976       $30,761
                                                                                   =======       =======
                                   LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
  Current maturities of long-term obligations (Note G)...........................  $   892       $   992
  Accounts payable -- principally trade..........................................    1,334         1,921
  Accrued liabilities (Note F)...................................................    4,881         4,804
                                                                                   -------       -------
         Total current liabilities...............................................    7,107         7,717
Long-term obligations -- net of current maturities (Note G)......................    7,022         9,421
Deferred income taxes (Notes A and I)............................................       --            --
Commitments and contingencies (Note H)...........................................       --            --
Stockholders' equity (Notes A and J)
  Preferred stock -- authorized, 500,000 shares, $.01 par value; none issued.....       --            --
  Common stock -- authorized 7,500,000 shares, $.01 par value; 3,861,784 shares
    issued and outstanding at December 30, 1995 and 3,603,637 shares at December
    31, 1994.....................................................................       38            36
  Additional paid-in capital.....................................................   10,766         9,360
  Retained earnings..............................................................      490         4,500
  Cumulative foreign currency translation........................................     (192)         (222)
  Unrealized net holding gains (losses) on available for sale securities.........        9           (51)
  Common stock held in treasury at cost (58,762 shares)..........................     (264)           --
                                                                                   -------       -------
                                                                                   $10,847       $13,623
                                                                                   -------       -------
                                                                                   $24,976       $30,761
                                                                                   ========      ========

 
        The accompanying notes are an integral part of these statements.
 
                                       20
   21
 
                         SELFIX, INC. AND SUBSIDIARIES
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 


                                                                                         UNREALIZED
                                                                                        NET HOLDING
                                                                          CUMULATIVE   GAINS (LOSSES)     COMMON
                                                  ADDITIONAL               FOREIGN      ON AVAILABLE    STOCK HELD
                             PREFERRED   COMMON    PAID-IN     RETAINED    CURRENCY       FOR SALE      IN TREASURY
                               STOCK     STOCK     CAPITAL     EARNINGS   TRANSLATION    SECURITIES       AT COST      TOTAL
                             ---------   ------   ----------   --------   ----------   --------------   -----------   -------
                                                                      (IN THOUSANDS)
                                                                                              
Balance at December 26,
  1992.....................     $--       $ 34     $  8,784    $ 8,988      $  (91)         $ --           $  --      $17,715
Translation of foreign
  currency statements......      --         --           --         --         (66)           --              --          (66)
Issuance of 58,762 shares
  of common stock in
  connection with
  contribution to Company
  profit sharing plan......      --          1          161         --          --            --              --          162
Net earnings for the
  period...................      --         --           --      1,515          --            --              --        1,515
                                ---        ---      -------    -------       -----           ---           -----      -------
Balance at December 25,
  1993.....................      --         35        8,945     10,503        (157)           --              --       19,326
Translation of foreign
  currency statements......      --         --           --         --         (65)           --              --          (65)
Issuance of 99,385 shares
  of common stock in
  connection with exercise
  of stock options.........      --          1          415                     --            --              --          416
Net loss for the period....      --         --           --     (6,003 )        --            --              --       (6,003)
Unrealized net
  holding(losses) on
  available for sale
  securities...............      --         --           --         --          --           (51)             --          (51)
                                ---        ---      -------    -------       -----           ---           -----      -------
Balance at December 31,
  1994.....................      --         36        9,360      4,500        (222)          (51)             --       13,623
Translation of foreign
  currency statements......      --         --           --         --          30            --              --           30
Insurance of 250,000 shares
  of common stock in
  connection with the
  acquisition of Mericon
  Child Safety Products....      --          2        1,373         --          --            --              --        1,375
Issuance of 8,147 shares of
  common stock in
  connection with exercise
  of stock options.........      --         --           33         --          --            --              --           33
Purchase of 58,762 common
  shares held in treasury
  at cost..................      --         --           --         --          --            --            (264)        (264)
Net loss for the period....      --         --           --     (4,010 )        --            --              --       (4,010)
Unrealized net holding
  gains on available for
  sale securities..........      --         --           --         --          --            60              --           60
                                ---        ---      -------    -------       -----           ---           -----      -------
Balance at December 30,
  1995.....................     $--       $ 38     $ 10,766    $   490      $ (192)         $  9           $(264)     $10,847
                                ===        ===      =======    =======       =====           ===           =====      =======

 
        The accompanying notes are an integral part of these statements.
 
                                       21
   22
 
                         SELFIX, INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 


                                                                           1995        1994        1993
                                                                          -------     -------     -------
                                                                                  (IN THOUSANDS)
                                                                                         
Cash flows from operating activities:
  Net earnings (loss)...................................................  $(4,010)    $(6,003)    $ 1,515
  Adjustments to reconcile net earnings to net cash
   provided by operating activities:
    Depreciation and amortization.......................................    2,859       2,925       2,242
    Amortization of intangible assets...................................      478       1,405         887
    Deferred income tax expense.........................................       --         378          61
    Cumulative effect of change in accounting for income taxes..........       --          --         (36)
    Provision for restructuring charge..................................    2,051       1,701          --
    (Gain) loss on sale of fixed assets.................................      (84)        148          --
    Amortization of bond premium........................................       77          --          --
    Changes in assets and liabilities
      (Increase) decrease in accounts receivable........................      494        (765)       (471)
      (Increase) decrease in inventories................................      105       1,312      (1,388)
      (Increase) decrease in refundable income taxes....................      159        (151)        399
      (Increase) decrease in prepaid expenses and deposits..............       16          (2)        461
      (Increase) decrease in other assets...............................       23         469        (101)
      (Increase) decrease in notes and other receivables................    1,691      (1,709)        (38)
      Increase (decrease) in accounts payable...........................     (681)        551         299
      Increase (decrease) in accrued liabilities........................     (603)      1,768         362
                                                                          -------     -------     -------
         Total adjustments..............................................    6,585       8,030       2,677
                                                                          -------     -------     -------
         Net cash provided by operating activities......................    2,575       2,027       4,193
Cash flows from investing activities:
  Proceeds from sale or maturity of marketable securities...............      408       2,231          60
  Purchase of property and equipment (net)..............................   (1,215)     (2,326)     (3,131)
  Investment in marketable securities...................................       --      (1,485)     (1,613)
  Restricted cash -- Industrial Revenue Bond............................        5       1,221       1,838
  Payment and direct costs for Mericon Child Safety Products............     (921)         --          --
                                                                          -------     -------     -------
         Net cash (used in) investing activities........................   (1,723)       (359)     (2,846)
Cash flows from financing activities:
  Payments on borrowings................................................   (2,471)     (3,098)       (466)
  Proceeds from borrowings..............................................       --       1,500         170
  Payment of capital lease obligation...................................      (27)        (23)        (62)
  Purchase of treasury stock............................................     (264)         --          --
  Exercise of common stock options......................................       33         416          --
                                                                          -------     -------     -------
         Net cash (used in) financing activities........................   (2,729)     (1,205)       (358)
Effect of exchange rate changes on cash.................................       --           5          (9)
                                                                          -------     -------     -------
         Net increase (decrease) in cash and cash equivalents...........   (1,877)        468         980
Cash and cash equivalents at beginning of year..........................    4,859       4,391       3,411
                                                                          -------     -------     -------
Cash and cash equivalents at end of year................................  $ 2,982     $ 4,859     $ 4,391
                                                                          =======     =======     =======
Supplemental disclosures of cash flow information:
  Cash paid (received) during the year for:
    Interest and swap fees..............................................  $   822     $   905     $ 1,001
    Income taxes, net...................................................     (457)         10         769
Non cash item
  Unrealized net holding (gains) losses on available-for-sale
    securities..........................................................       (9)         51          --
Supplemental schedule of non-cash investing and financing activities:
  During 1995, the Company acquired the common stock of Mericon Child
    Safety Products as described in note L.
    In conjunction with the acquisition, liabilities were assumed as
    follows:
      Fair value of assets acquired were................................  $ 2,421
      Common stock issued...............................................   (1,375)
      Cash consideration and direct costs...............................     (921)
                                                                          -------
      Liabilities assumed...............................................  $   125
                                                                          =======

 
        The accompanying notes are an integral part of these statements.
 
                                       22
   23
 
                         SELFIX, INC. AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Selfix, Inc. and its subsidiaries design, manufacture and market products
in two industry segments: housewares products and home improvement products.
Housewares products are marketed principally through mass market trade channels
throughout the United States and internationally. Home improvement products are
sold principally through wholesalers that service the residential construction,
repair and remodeling industry throughout the United States.
 
     The preparation of the Consolidated Financial Statements in accordance with
generally accepted accounting principles requires management estimates and
assumptions that affect amounts reported and disclosed in the financial
statements and related notes. Actual results could differ from those estimates.
Certain reclassifications were made to prior years amounts to conform with the
1995 presentation. Significant accounting policies are discussed below, or where
applicable, in the Notes that follow.
 
  Principles of Consolidation.
 
     The accompanying statements include the accounts of the Company and its
wholly-owned subsidiaries, Selfix (Housewares) Ltd., Shutters, Inc., Selfix
International (V.I.) Ltd., Selfix of Canada, Ltd., and Selfix (H.K.) Ltd. All
significant intercompany transactions and balances have been eliminated.
 
  Fair Value of Financial Instruments and Credit Risk.
 
     The carrying value of cash, cash equivalents, investments and long-term
obligations approximate their fair values based upon quoted market rates. As of
December 30, 1995 and December 31, 1994, the Company had no significant
concentrations of credit risk related to cash equivalents.
 
  Translation of Foreign Currencies.
 
     All balance sheet accounts of foreign operations are translated into U.S.
dollars at the year-end rate of exchange. The resulting translation adjustments
are made directly to a separate component of stockholders' equity. Statement of
operations items are translated at the weighted average exchange rates for the
year.
 
  Inventories.
 
     Inventories are stated at the lower of cost or net realizable value. Cost
is determined using standards which approximate actual first in, first out
(FIFO) cost.
 
  Property, Plant and Equipment.
 
     Property, plant and equipment are stated at cost. Depreciation is provided
for in amounts sufficient to relate the cost of depreciable machinery,
equipment, tools and furniture to operations over their estimated service lives,
using straight-line and declining-balance depreciation methods. Leased property
and leasehold improvements are amortized on a straight-line basis over the term
of the lease or the service life of the improvement, whichever is shorter.
 
                                       23
   24
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     The estimated service lives of the fixed assets are as follows:
 

                                                                   
            Buildings...............................................  30 years
            Land and building under capital lease...................  lease term
            Machinery, equipment and vehicles.......................  3 - 8 years
            Tools and dies..........................................  5 years
            Furniture, fixtures and office equipment................  2 - 8 years
            Leasehold improvements..................................  lease term

 
  Intangible Assets.
 
     Goodwill, which represents the excess of the purchase price over the fair
value of net assets acquired, is amortized over periods ranging from 20 to 40
years. Covenants not to compete are being amortized on a straight-line basis
over the terms of the respective agreements. Patents, royalty rights, trademarks
acquired and licensing agreements are being amortized over their estimated
useful lives ranging from five to ten years. During 1995, the Company acquired
the stock of Mericon Child Safety Products in a transaction accounted for as a
purchase. As a result of the transaction, intangibles of $2,021 were recorded.
 
  Income Taxes.
 
     Deferred taxes and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases at enacted rates when such amounts are expected to be realized or settled.
 
  Earnings (Loss) Per Share.
 
     Earnings (loss) per share is computed by dividing net earnings (loss) by
the weighted average number of common share and common share equivalents
outstanding during the year. Weighted average common share and common share
equivalents were 3,616,924, 3,538,758 and 3,511,100 for 1995, 1994 and 1993,
respectively.
 
  Benefit Plans.
 
     The Company provides a profit sharing and savings plan (including a 401(k)
plan) to which both the Company and eligible employees may contribute. Company
contributions to the profit sharing and savings plan are voluntary and at the
discretion of the Board of Directors. The Company matches the employee 401(k)
plan contributions with limitations. The total Company contributions to both
plans are limited to the maximum deductible amount under the Federal income tax
law.
 
     The Company also provides a retirement plan for its employees covered under
a collective bargaining agreement. The Company is required to contribute to this
plan based on the number of employees in the collective bargaining unit who have
satisfied eligibility requirements. Employees do not contribute to the plan. The
amount of the Company contribution is determined by the collective bargaining
agreement.
 
     The contributions to all the profit sharing, savings, and retirement plans
for 1995, 1994 and 1993, were $259, $257, and $325, respectively.
 
  Cash and Cash Equivalents.
 
     The Company considers all highly liquid debt instruments, including
investments in bank time deposits and commercial paper, purchased with a
maturity of three months or less, to be cash equivalents.
 
                                       24
   25
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
  Investment in marketable securities
 
     At the beginning of fiscal 1994, the Company adopted a new accounting
method for investment securities in accordance with Statement of Financial
Accounting Standard (SFAS) No. 115 which requires the Company to designate its
securities as held to maturity, available for sale or trading. Securities held
to maturity are accounted for at amortized cost and management must express a
positive intent to hold these securities to maturity. Available-for-sale
securities are those that management designates as available to be sold in
response to changes in market interest rates or liquidity needs. All marketable
securities held by the Company are accounted for as available-for-sales
securities. The Company does not invest in trading securities. The effect of the
accounting change is not applied retroactively; therefore, there is no
restatement of prior year investments or cumulative effect of a change in
accounting principle on prior year income. The cumulative effect at the
beginning of fiscal year 1994 was not material. The Company is currently holding
municipal securities maturing in 1996.
 
  Fiscal year
 
     The Company's fiscal year ends on the last Saturday in December and, as a
result, a fifty-third week is added every 5 or 6 years. The fiscal year ending
December 31, 1994 consisted of 53 weeks. References to the fiscal years 1995,
1994 and 1993 are for the fifty-two weeks ended December 30, 1995, the
fifty-three weeks ended December 31, 1994 and the fifty-two weeks ended December
25, 1993, respectively.
 
NOTE B -- STATEMENT OF OPERATIONS AND RESTRUCTURING CHARGES
 
     The 1994 restructuring charge of $1,701 relates to costs of severance and
termination benefits paid or accrued for a change in the level and composition
of employees, termination of existing employee arrangements, inventory
adjustments and fixed asset writedowns related to product lines to be
discontinued. The actions and charges were based on assessments completed by
year-end 1994. The Company provided for severance benefits approximating $1,010
for employee terminations during the third and fourth quarters. Such benefits
cover approximately 25 employees across most departments, which represented 17%
of the administrative staff, or 5% of total employees. All such terminations
were completed by the end of the first quarter of 1995. Inventory and fixed
asset write-offs related to products to be discontinued were $460 and $231,
respectively. At the end of 1995, no balances remained in these accounts.
 
     In the fourth quarter of 1995, the Company announced its intent to
consolidate facilities and exit additional product lines. The 1995 charge is a
result of the Company's decision to exit certain unprofitable product lines,
close the Company's Canadian facility and move the Canadian operations to the
Chicago manufacturing and distribution facilities. The restructuring charges for
these initiatives total $2,051. The charges for the closing and relocation of
the Canadian operation totaled $951 including severance benefits of $184
covering all of the Canadian employees. The relocation of the Canadian operation
is expected to be completed in the first half of 1996. The remaining $1,100 of
restructuring charges pertains to product lines the Company has decided to exit
and the related write-off of product molds, inventory and patents. Approximately
$555 of inventory reserves, $151 of accrued legal and accrued severance and $484
of accrued facility closing costs remained on the Company's books at December
30, 1995.
 
                                       25
   26
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
NOTE C -- NOTES AND OTHER RECEIVABLES
 
     Notes and other receivables consist of the following:
 


                                                                       1995      1994
                                                                       ----     ------
                                                                          
        Notes receivable.............................................  $ 7      $    8
        Patent Suit Settlement.......................................   --       1,659
        Other........................................................   76         106
                                                                       ---      ------
                                                                       $83      $1,773
                                                                       ===      ======

 
     In 1995, the Company received approximately $1.4 million, net of a
contingent liability, as its share of the net proceeds from the patent suit
settlement. The Company recorded approximately $.5 million as its share of the
proceeds in other income in 1994.
 
NOTE D -- INTANGIBLE ASSETS
 
     Intangible assets consist of the following:
 


                                                                      1995       1994
                                                                     ------     ------
                                                                          
        Goodwill, net of accumulated amortization of $418 on
          December 30, 1995 and $303 on December 31, 1994..........  $2,027     $  353
        Covenants not to compete, net of accumulated amortization
          of $2,460 on December 30, 1995 and $2,178 on
          December 31, 1994........................................      29        281
        Consulting agreement, net of accumulated amortization of
          $854
          on December 31, 1994.....................................      --         21
        Industrial Revenue Bond fees, net of accumulated
          amortization of $169 on December 30, 1995 and $143 on
          December 31, 1994........................................     234        260
        Patents, net of accumulated amortization of $1,269 on
          December 30, 1995 and $1,046 on December 31, 1994........     211        434
        Licensing agreement, net of accumulated amortization of $3
          on December 30, 1995.....................................     192         --
        Trademarks, royalty rights and other, net of accumulated
          amortization of $373 on December 31, 1994................      --        187
                                                                     ------     ------
                                                                     $2,693     $1,536
                                                                     ======     ======

 
     See Intangible Assets discussion under "Intangible Assets: -- Note A"
 
NOTE E -- LINES OF CREDIT
 
     At December 30, 1995, the Company was in the process of consolidating its
banking relationships and obtaining new lines of credit. The new lines of credit
will provide borrowing capability up to $8 million subject to asset based
availability formulas. In addition, a line of credit will be available to
support letters of credit required for the Company's Industrial Development
Finance Authority bonds (See Note G). It is expected the new lines of credit
will be in place in the second quarter of 1996. The Company currently has no
operating lines of credit other than for minimal letters of credit to finance
inventory purchases.
 
                                       26
   27
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
NOTE F -- ACCRUED LIABILITIES
 
     Accrued liabilities consist of the following:
 


                                                                      1995       1994
                                                                     ------     ------
                                                                          
        Salaries and wages.........................................  $1,585     $1,427
        Property, payroll and other taxes..........................     317        352
        Profit sharing trust.......................................     204        185
        Sales incentives and commissions...........................     731        802
        Accrued professional fees..................................     337        266
        Warranty reserve...........................................     495        511
        Accrued consulting and non compete.........................      --        461
        Accrued environmental costs................................      63        300
        Accrued facility closing costs.............................     484         --
        Other......................................................     665        500
                                                                     ------     ------
                  Total............................................  $4,881     $4,804
                                                                     ======     ======

 
                                       27
   28
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
NOTE G -- LONG-TERM OBLIGATIONS
 
     Long term obligations consist of the following:
 


                                                                     1995       1994
                                                                    ------     -------
                                                                         
        Note payable to bank due April 30, 1997, with variable
          interest rate; collateralized by substantially all
          assets of Shutters, Inc., guaranteed by Selfix,
          Inc.(1)(3)..............................................  $   --     $ 1,500
        Promissory notes (unsecured) bearing interest at 8%,
          payable to The Foltman Corporation and its principal
          shareholder in quarterly installments ending February
          1995....................................................      --          79
        Mortgage note payable bearing interest at 85.6% of prime,
          payable in equal monthly installments of $5,208 through
          January 1997; collateralized by land and buildings of
          Shutters, Inc. The prime rate at December 30, 1995 was
          8.5%....................................................      60         123
        Illinois Grant assumed in March 1988, bearing interest at
          5%, payable in quarterly installments of principal and
          interest through September 1995.........................      --          29
        Illinois Development Finance Authority (IDFA) variable
          rate demand bonds (Shutters, Inc. Project) Series 1989,
          issued December 1989, with interest at a weekly variable
          rate and principal payable in annual installments
          commencing December 1, 1992. The variable rate at
          December 30, 1995 was 6.0%(1)(2)........................   2,800       3,200
        Illinois Development Finance Authority (IDFA) variable
          rate demand Industrial Development Revenue Bonds
          (Selfix, Inc. Project) Series 1990, issued September
          1990, with interest at a weekly variable rate and
          principal payable in annual installments commencing
          September 1, 1994. The variable rate at December 30,
          1995 was 6.0%(1)(2).....................................   3,200       3,600
        Capital lease obligations.................................   1,854       1,882
                                                                    ------     -------
                                                                     7,914      10,413
        Less current maturities...................................     892         992
                                                                    ------     -------
                                                                    $7,022     $ 9,421
                                                                    ======     =======

 
(1) Under the terms of this agreement, the Company may not distribute any cash
    dividends.
 
(2) Terms of both IDFA demand bonds provide that the holder may periodically put
    the bonds back to Selfix, which are then remarketed under a remarketing
    agreement with a bank. Terms of each remarketing agreement include
    irrevocable letters of credit, which provides for borrowings by the Company
    to repurchase the bonds until remarketed. Each letter of credit requires the
    Company to maintain a $100,000 balance at the bank issuing the letter of
    credit. One letter of credit extends to March 1996 and has an interest rate
    of 1% at December 30, 1995. The other letter of credit extends to June 1996
    and has an interest rate of 1%. The terms of these debt agreements include
    several financial covenants which have been met by the Company or, in the
    case of the fixed charge coverage ratio, have been waived by the bank
    through 1996. All of the Company's assets are pledged as collateral in
    support of the letters of credit.
 
(3) Note was paid down without penalty on December 29, 1995.
 
                                       28
   29
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     The Company has adopted Statement of Financial Accounting Standards No. 119
which addresses disclosure of interest rate swaps. The Company entered into two
interest rate swaps on October 3, 1990 and May 1, 1994 with termination dates of
October 3, 1995 and May 1, 1997, respectively. The notional amount of the May
1994 contract is $1,500. The fixed rate on the May 1994 contract is 6.45% with
the floating rate option based on the U.S. dollar LIBOR rate. Settlement dates
are calendar quarters which commenced on August 1, 1994. The swap fees are
included in interest expense.
 
     Aggregate principal payments on long-term debt, excluding capital lease
obligations as of December 30, 1995 are as follows:
 

                                                                       
            Years ending,
                 1996...................................................  $  860
                 1997...................................................     800
                 1998...................................................     800
                 1999...................................................     800
                 2000...................................................     800
                 Thereafter.............................................   2,000

 
     Additionally, Selfix, Inc. entered into a seven year consulting agreement
with the former owner of Shutters, Inc. This agreement expired during 1995. The
consulting agreement provided for contingent payments of up to $500, on the same
basis as the purchase agreement. At December 30, 1995, no amount has been
provided or deemed necessary for this contingent liability.
 
     Capital lease obligations include a lease agreement between the Company and
two related trusts for the Company's principal factory and corporate office.
Rental payments in the amount of $491 were made in 1995, $478 in 1994, and $443
in 1993. This rental was subject to adjustment July 31, 1983 and every three
years thereafter to reflect increases in the Consumer Price Index.
 
     The following schedule shows future minimum lease payments together with
the present value of the payments for capital lease obligations.
 
        Years ending:
 

                                                                       
            1996........................................................  $  342
            1997........................................................     342
            1998........................................................     342
            1999........................................................     342
            2000........................................................     342
            Thereafter..................................................   3,281
                                                                          ------
                                                                           4,991
            Less amount representing interest...........................   3,139
                                                                          ------
            Present value of minimum lease payments.....................  $1,852
                                                                          ======
            Long-term portion...........................................  $1,821
            Current portion.............................................      31
                                                                          ------
                                                                          $1,852
                                                                          ======

 
                                       29
   30
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     The following is an analysis of the leased land and building under
capitalized lease:
 


                                                                      1995       1994
                                                                     ------     ------
                                                                          
        Land and building..........................................  $2,535     $2,535
        Less accumulated amortization..............................   1,638      1,509
                                                                     ------     ------
                                                                     $  897     $1,026
                                                                     ======     ======

 
NOTE H -- COMMITMENTS AND CONTINGENCIES
 
  Operating Leases
 
     The Company also leases certain manufacturing, distribution and office
facilities, including the Canadian facility which is leased from a related trust
(annual rental expense of approximately $115), under operating leases expiring
at various dates through 1999. Most of the leases contain options that allow the
Company to renew them.
 
     Future minimum rental payments under noncancellable operating leases are as
follows:
 
        Years ending:
 

                                                                         
            1996..........................................................  $441
            1997..........................................................   196
            1998..........................................................   115
            1999..........................................................    96
                                                                            ----
                                                                            $848
                                                                            ====

 
     Rent expense under operating leases for 1995, 1994 and 1993 was $381, $399,
and $316, respectively.
 
     The Company has investigated and remediated an environmental matter at its
principal facility in Chicago. In 1994, the Company recorded a $.3 million
accrual for the cost of such investigation and remediation. Actions to date have
been funded within this accrual. Approximately $.1 million remained in this
account at the end of 1995.
 
NOTE I -- INCOME TAXES
 
     The components of earnings (loss) before income taxes are as follows:
 


                                                         1995(1)     1994(2)     1993(3)
                                                         -------     -------     -------
                                                                        
        Domestic.......................................  $(3,262)    $(5,631)    $1,682
        Foreign........................................   (1,021)       (151)       371
                                                         -------     -------     ------
                                                         $(4,283)    $(5,782)    $2,053
                                                         =======     =======     ======

 
                                       30
   31
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     Significant components of the Company's net deferred tax assets as of
December 30, 1995 and December 31, 1994 are as follows:
 


                                                                   1995         1994
                                                                  -------     --------
                                                                        
        DEFERRED TAX ASSETS
        Inventory reserve.......................................  $   463     $    546
        Employee benefit expenses and other accruals............      513          390
        Accounts receivable reserve.............................      365          337
        Overhead capitalized in inventory for tax purposes
          only..................................................      171          179
        Capitalized lease treated as operating lease for tax
          purposes..............................................      393          354
        Reserve for returns.....................................      291          364
        Minimum tax, R&D and other credits......................      332          376
        Other accrued liabilities...............................      398          402
        Unrealized capital losses and contribution carry
          forwards..............................................      151          107
        Net operating loss carry forward........................      393          308
        Other...................................................      417          280
                                                                  -------      -------
        Gross tax deferred assets...............................  $ 3,887     $  3,643
                                                                  =======      =======
        DEFERRED TAX LIABILITIES
        Depreciation............................................  $   447     $    664
        Other...................................................       41           43
                                                                  -------      -------
        Gross tax deferred liabilities..........................      488          707
                                                                  -------      -------
        Deferred tax assets net of deferred liability...........    3,399        2,936
        Valuation allowance.....................................   (3,399)      (2,936)
                                                                  -------      -------
        Net deferred tax asset..................................  $    --     $     --
                                                                  =======      =======

 
     Income tax (expense) benefits are as follows:
 


                                                           1995       1994       1993
                                                           -----     -------     -----
                                                                        
        Current
          United States..................................  $ 247     $    45     $(380)
          Foreign........................................    (22)         67       (89)
          State..........................................     48          45       (43)
                                                           -----     -------     -----
                                                             273         157      (513)
        Deferred
          United States and state........................    463       2,215       (61)
          (Increase) in valuation allowance..............   (463)     (2,593)       --
                                                           -----     -------     -----
                                                              --        (378)      (61)
                                                           -----     -------     -----
                                                           $ 273     $  (221)    $(574)
                                                           =====     =======     =====

 
                                       31
   32
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     Income tax (expense) benefit differs from the statutory tax rates applied
to earnings (loss) before tax as follows:
 


                                                            1995       1994       1993
                                                           ------     -------     -----
                                                                         
        Statutory U.S. income tax rate...................  $1,456     $ 1,966     $(698)
        State income taxes, net of federal tax benefit...      32         267       (28)
        Foreign tax rate difference and foreign loss
          carryforwards..................................    (460)         13        36
        Tax exempt interest..............................      25          26        21
        Other............................................     317         100        95
        Valuation allowance..............................    (463)     (2,593)       --
                                                           ------     -------     -----
                                                           $  273     $ ( 221)    $(574)
                                                           ======     =======     =====

 
     The Company increased the valuation allowance from $2,936 as of December
31, 1994 to $3,399 as of December 30, 1995. The increase is based on the
Company's revaluation of the future realization of tax benefits recorded as
deferred tax assets.
 
     The Company also has research and development credit carryforwards of
approximately $61 expiring through the year 2010, net operating loss
carryforwards of $1,008 expiring 2010, state investment tax credit carryforwards
of approximately $71 expiring through 1999, foreign net operating loss
carryforwards of $1,085 expiring in 2002 and alternative minimum tax credit
carryforwards of approximately $198 which do not have an expiration date.
 
NOTE J -- STOCK OPTIONS
 
     Under the 1987, 1991 and 1994 stock option plans, as amended, key employees
and certain key nonemployees were granted options to purchase up to 891,453
shares of the Company's common stock.
 
     The options plans are administered by a committee of the Board of Directors
(ISO committee) whose members are not entitled to receive options. Options
granted may or may not be "incentive stock options" as defined by the Internal
Revenue Code of 1986. The exercise price is determined by the ISO committee at
the time of grant but may not be less than 100% of fair market value at time of
grant for incentive stock options. Options may not be granted for a term greater
than ten years.
 
                                       32
   33
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     A summary of the transactions in the option plans is as follows:
 


                                             1995               1994              1993
                                        --------------     --------------     -------------
                                                                     
        Options outstanding at
          beginning of year...........      557,842            228,460           235,045
        Granted.......................      616,700            458,800            15,000
        Exercised.....................       (8,147)           (99,385)               --
        Cancelled.....................     (577,868)           (30,033)          (21,585)
                                           --------            -------           -------
        Unexercised Options
          outstanding at end of
          year........................      588,527            557,842           228,460
                                           ========            =======           =======
        Available for grant...........      195,394            234,226           212,993
                                           ========            =======           =======
        Options exercisable at end of
          year........................       14,666             83,486           175,087
                                           ========            =======           =======
        Price range of options
        Granted.......................  $4.38 - $ 8.00     $4.25 - $12.00             $6.50
        Exercised.....................  $4.00 - $ 4.23              $4.00                --
        Cancelled.....................  $3.13 - $12.00     $4.75 - $ 6.14     $4.00 - $6.14
        Outstanding...................  $4.23 - $ 8.00     $3.13 - $12.00     $3.13 - $6.50

 
     During 1995, the Company's Board of Directors cancelled 460,000 options to
various members of senior management at prices ranging from $7.50 to $12.00 and
reissued these options at prices ranging from $6.00 to $8.00 which exceeded the
market price on the date of reissuance.
 
     The Statement Of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation, issued in October 1995, establishes accounting and
reporting standards for stock-based employee compensation plans with adoption
required for fiscal years beginning after December 15, 1995. As permitted under
the provisions of this statement, the Company has elected to continue the use of
APB Opinion No. 25 to measure stock based compensation and, in subsequent
reporting, will make the proforma disclosures of net income and earnings per
share.
 
NOTE K -- SEGMENT AND GEOGRAPHIC INFORMATION
 
     The Company operates in two industry segments, the housewares segment and
the home improvement products segment. The housewares segment provided
approximately 79% of the Company's gross sales in 1995 through sales of its home
bathware, hook and home helpers, juvenile products and home organization
products to national and regional discount, variety, supermarket, drug,
hardware/home center and specialty store customers. The home improvement
products segment provided approximately 21% of the Company's gross sales in
1995. The segment's plastic exterior shutters are sold to distributors as well
as national and regional home center retailers. Sales to customers outside the
United States accounted for approximately 16% of total
 
                                       33
   34
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
net sales with Canada accounting for approximately 9% of total net sales.
Information about the Company's operations in these segments is as follows:
 


                                                         1995        1994        1993
                                                        -------     -------     -------
                                                                       
        Gross sales
          Housewares..................................  $34,543     $35,805     $34,252
          Home improvement products...................    8,993       8,417       7,667
                                                        -------     -------     -------
             Consolidated gross sales.................  $43,536     $44,222     $41,919
                                                        =======     =======     =======
        Operating profit (loss)
          Housewares..................................  $(5,258)    $(4,607)    $ 1,919
          Home improvement products...................      817        (539)        474
          Eliminations................................      366         658         600
                                                        -------     -------     -------
             Consolidated operating profit (loss).....  $(4,075)    $(4,488)    $ 2,993
                                                        =======     =======     =======
        Identifiable assets
          Housewares..................................  $20,322     $25,546     $27,700
          Home improvement products...................    5,300       5,998       8,189
          Eliminations................................     (646)       (783)       (535)
                                                        -------     -------     -------
             Consolidated assets......................  $24,976     $30,761     $35,354
                                                        =======     =======     =======
        Depreciation and amortization
          Housewares..................................  $ 2,322     $ 2,106     $ 1,588
          Home improvement products...................      537         819         654
                                                        -------     -------     -------
             Consolidated depreciation................  $ 2,859     $ 2,925     $ 2,242
                                                        =======     =======     =======
        Amortization of intangible assets
          Housewares..................................  $   362     $   977     $   459
          Home improvement products...................      116         428         428
                                                        -------     -------     -------
             Consolidated amortization................  $   478     $ 1,405     $   887
                                                        =======     =======     =======
        Capital spending -- net
          Housewares..................................  $   880     $ 2,158     $ 2,561
          Home improvement products...................      335         168         570
                                                        -------     -------     -------
             Consolidated capital spending............  $ 1,215     $ 2,326     $ 3,131
                                                        =======     =======     =======

 
                                       34
   35
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
     Information about the Company's operations by geographic area is as
follows:
 


                                                         1995        1994        1993
                                                        -------     -------     -------
                                                                       
        Sales
          United States...............................  $40,283     $40,422     $38,731
          Foreign.....................................    3,253       3,800       3,188
                                                        -------     -------     -------
             Consolidated gross sales.................  $43,536     $44,222     $41,919
                                                        =======     =======     =======
        Operating profit (loss)
          United States...............................  $(3,341)    $(4,843)    $ 2,300
          Foreign.....................................   (1,100)       (303)        (93)
          Eliminations................................      366         658         600
                                                        -------     -------     -------
             Consolidated operating profit (loss).....  $(4,075)    $(4,488)    $ 2,993
                                                        =======     =======     =======
        Identifiable assets
          United States...............................  $24,454     $28,222     $33,302
          Foreign.....................................    1,168       3,322       2,587
          Eliminations................................     (646)       (783)       (535)
                                                        -------     -------     -------
             Total consolidated assets................  $24,976     $30,761     $35,354
                                                        =======     =======     =======

 
     One customer represented 12%, 11% and 11% of gross sales for 1995, 1994,
and 1993. The percentage of their receivable to the total receivable is
approximately the same as their relationship to sales.
 
NOTE L -- ACQUISITIONS
 
     On October 24, 1995, the Company acquired common stock of Mericon Child
Safety Products for a purchase price of $2,421. The acquisition agreement also
provided for a non-compete period of five years.
 
     Consideration for the acquisition included issuance of 250,000 shares of
common stock. The purchase price was allocated as follows:
 

                                                                       
            Current assets..............................................  $  400
            Goodwill....................................................   1,796
            Licensing agreement and covenant not to compete.............     225
                                                                          ------
                                                                          $2,421
                                                                          ------
            Less:
              Liabilities...............................................  $  125
              Common stock issued.......................................   1,375
                                                                          ------
                                                                           1,500
                                                                          ------
              Cash consideration and direct costs.......................  $  921
                                                                          ======

 
     Results of operations are included from the date of acquisition. Results of
operations prior to date of acquisition were not material.
 
NOTE M -- EMPLOYEE STOCK PURCHASE PLAN
 
     On July 11, 1995, the Company's shareholders approved the 1995 Employee
Stock Purchase Plan. This plan allows eligible employees to purchase up to
200,000 shares of the Company's stock. The purchase price shall be the lesser of
85% of the fair market value of a common share on the first day of each purchase
period
 
                                       35
   36
 
                         SELFIX, INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
          DECEMBER 30, 1995, DECEMBER 31, 1994, AND DECEMBER 25, 1993
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
or the fair market value of a common share on the last day of such purchase
period adjusted to the nearest 1/8 point. As of December 30, 1995, no shares had
been purchased under the plan. On January 12, 1996, 16,310 shares were purchased
under the plan.
 
ITEM 8. QUARTERLY FINANCIAL INFORMATION UNAUDITED
 


                                    THIRTEEN WEEKS     THIRTEEN WEEKS     THIRTEEN WEEKS     THIRTEEN WEEKS
                                        ENDED              ENDED              ENDED              ENDED
                                       APRIL 1,          MARCH 26,           JULY 1,            JUNE 25,
                                         1995               1994               1995               1994
                                    --------------     --------------     --------------     --------------
                                                    (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                                                                 
Net sales.........................     $ 10,742            $9,932            $ 10,628           $ 11,107
Gross profit......................     $  4,030            $4,378            $  4,226           $  4,983
Net income (loss).................     $   (246)           $  134            $     39           $    409
Earnings (loss) per common
  share...........................     $  (0.07)           $ 0.04            $   0.01           $   0.12
Earnings (loss) per common and
  common equivalent share.........     $  (0.07)           $ 0.04            $   0.01           $   0.12

 


                                    THIRTEEN WEEKS     THIRTEEN WEEKS     THIRTEEN WEEKS     FOURTEEN WEEKS
                                        ENDED              ENDED              ENDED              ENDED
                                    SEPTEMBER 30,      SEPTEMBER 24,       DECEMBER 30,       DECEMBER 31,
                                         1995               1994               1995               1994
                                    --------------     --------------     --------------     --------------
                                                    (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                                                                 
Net sales.........................     $ 10,319           $ 10,458           $  9,350           $  9,488
Gross profit......................     $  3,842           $  3,530           $  3,263           $  2,507
Net income (loss).................     $     42           $ (3,237)          $ (3,845)          $ (3,309)
Earnings (loss) per common
  share...........................     $   0.01           $  (0.92)          $  (1.03)          $  (0.94)
Earnings (loss) per common and
  common equivalent share.........     $   0.01           $  (0.92)          $  (1.03)          $  (0.94)

 
                                       36
   37
 
                                                         700 One Prudential
                                                         Plaza
                                                         130 E. Randolph Drive
                                                         Chicago, IL 60601-6203
                                                         312 856-0200
 

                                 EXHIBIT 24A


                                                   [GRANT THORNTON LOGO]
                                                   GRANT THORNTON LLP
                                                         Accountants and
                                                         Management Consultants
                                                         The U.S. Member Firm of
                                                         Grant Thornton
                                                         International
 
                             REPORT OF INDEPENDENT
                    CERTIFIED PUBLIC ACCOUNTANTS ON SCHEDULE
 
Board of Directors
Selfix, Inc.
 
In connection with our audit of the consolidated financial statements of Selfix,
Inc. and Subsidiaries referred to in our report dated February 9, 1996, we have
also audited Schedule II for the fifty-two week, fifty-three week and fifty-two
week periods ended December 30, 1995, December 31, 1994 and December 25, 1993,
respectively. In our opinion, this schedule presents fairly, in all material
respects, the information required to be set forth therein.
 
                                                              Grant Thornton LLP
 
Chicago, Illinois
February 9, 1996
 
                                       37
   38
 
                                                                     SCHEDULE II
 
                         SELFIX, INC. AND SUBSIDIARIES
 
                       VALUATION AND QUALIFYING ACCOUNTS
                FOR THE FIFTY-TWO WEEKS ENDED DECEMBER 30, 1995,
               FOR THE FIFTY-THREE WEEKS ENDED DECEMBER 31, 1994,
                FOR THE FIFTY-TWO WEEKS ENDED DECEMBER 25, 1993
 


                                                                  ADDITIONS      DEDUCTIONS
                                                   BALANCE AT     CHARGED TO        (NET          BALANCE
                                                   BEGINNING      COSTS AND      WRITE-OFFS/      AT END
                                                   OF PERIOD       EXPENSES      RECOVERIES)     OF PERIOD
                                                   ----------     ----------     -----------     ---------
                                                                       (IN THOUSANDS)
                                                                                     
Allowance for Doubtful Accounts
  December 30, 1995..............................    $1,431         $  524         $  (560)       $ 1,395
  December 31, 1994..............................    $1,255         $  565         $  (389)       $ 1,431
  December 25, 1993..............................    $1,081         $  239         $   (65)       $ 1,255
Warranty Reserves
  December 30, 1995..............................    $  511         $   --         $   (16)       $   495
  December 31, 1994..............................    $   12         $  500         $    (1)       $   511
  December 25, 1993..............................    $   12         $   --         $    --        $    12
Inventory Reserves
  December 30, 1995..............................    $1,560         $1,648         $  (797)       $ 2,411
  December 31, 1994..............................    $  621         $2,018         $(1,079)       $ 1,560
  December 25, 1993..............................    $  574         $  684         $  (637)       $   621

 
                                       38
   39
 
                                  EXHIBIT 22.0
 
                           Subsidiaries of Registrant
 
                            Selfix, of Canada, Ltd.
                          Scarborough, Ontario, Canada
 
                            Selfix (Housewares) Ltd.
                                London, England
 
                                 Shutters, Inc.
                              Hebron, IL., U.S.A.
 
                        Selfix International Ltd. (V.I.)
                       St. Thomas, Virgin Islands, U.S.A.
 
                               Selfix (H.K.) Ltd.
                                   Hong Kong
 
                                       39
   40
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
                                          SELFIX, INC.
 
                                          By      /s/  JAMES R. TENNANT
                                                      James R. Tennant
 
                                          Date March 26, 1996
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
 


                  SIGNATURE                                 TITLE                    DATE
- ---------------------------------------------  -------------------------------  ---------------
                                                                          
            /s/  JAMES R. TENNANT              Chairman of the Board and Chief   March 26, 1996
- ---------------------------------------------  Executive Officer
              James R. Tennant
            /s/  JAMES E. WINSLOW              Senior Vice President, Chief      March 26, 1996
- ---------------------------------------------  Financial Officer and Secretary
              James E. Winslow
          /s/  CHARLES R. CAMPBELL             Director                          March 26, 1996
- ---------------------------------------------
             Charles R. Campbell
           /s/  WILLIAM P. MAHONEY             Director                          March 26, 1996
- ---------------------------------------------
             William P. Mahoney
             /s/  MARSHALL RAGIR               Director                          March 26, 1996
- ---------------------------------------------
               Marshall Ragir
         /s/  JEFFREY C. RUBENSTEIN            Director                          March 26, 1996
- ---------------------------------------------
            Jeffrey C. Rubenstein
            /s/  DANIEL B. SHURE               Director                          March 26, 1996
- ---------------------------------------------
                Daniel Shure

 
                                       40