ANTHONY INDUSTRIES INC, 10-K, 1996-03-29

ANTHONY INDUSTRIES INC
10-K, 1996-03-29
SPORTING & ATHLETIC GOODS, NEC

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NO. 1-4290

ANTHONY INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 95-2077125
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)

4900 SOUTH EASTERN AVENUE
LOS ANGELES, CALIFORNIA 90040
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (213) 724-2800

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TILE OF EACH CLASS WHICH REGISTERED
------------------ ------------------------
<S> <C>
Common Stock, par value $1 New York Stock Exchange
Pacific Stock Exchange
Series A Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE

INDICATE BY AN "X" WHETHER THE REGISTRANT HAS FILED ALL REPORTS REQUIRED TO BE
FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE
PRECEDING 12 MONTHS, AND HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE
PAST 90 DAYS. YES X
---

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. [_]

THE AGGREGATE MARKET VALUE OF THE VOTING STOCK OF THE REGISTRANT HELD BY
NONAFFILIATES WAS APPROXIMATELY $324,025,000 AS OF MARCH 15, 1996.

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK AS OF MARCH 15, 1996.

Common Stock, par value $1 16,594,083 Shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the Annual Meeting of Shareholders to
be held May 2, 1996 are incorporated by reference in Part III.

===============================================================================
<PAGE>

FORM 10-K ANNUAL REPORT

PART I

ITEM 1. BUSINESS:

GENERAL

Anthony Industries, Inc. ("Anthony" or the "Company") is a leading designer,
manufacturer and marketer of brand name sporting goods and other recreational
products. The Company is also a major supplier of selected industrial
products. Anthony's sporting goods and other recreational products include
several brand name lines such as K2 and Olin alpine skis, K2 snowboards, K2
Exotech in-line skates, Shakespeare fishing rods and reels, Stearns personal
flotation devices, rainwear and wet suits, ProFlex full-suspension mountain
bikes and Dana Design and Wilderness Experience backpacks and Garuda tents.
The Company also produces and markets Hilton active apparel, K2 ski apparel,
Charles Bastion golf apparel and NASCAR licensed apparel. Anthony's industrial
products consist primarily of Shakespeare monofilament line used in weed
trimmers, in paper mills and as fishing line; Shakespeare fiberglass marine
antennas, light, transmission and distribution poles and Simplex coated and
laminated products. Founded in 1946, Anthony has grown to over $540 million in
annual sales through a combination of internal growth and strategic
acquisitions. For segment and geographic financial information see Note 12 of
Notes to Consolidated Financial Statements.

In recent years, the Company has aggressively expanded into several of what
are recognized as the faster growing sporting goods markets in the United
States, including in-line skates, snowboards and full-suspension mountain
bikes. Management believes these newer products have benefited from the market
share positions of other Company products, several of which are now the #1
brands in their respective markets. For example, in the United States, K2 has
the #1 market position in alpine skis, and management believes that Stearns
has the #1 market position in personal flotation devices and Shakespeare's
Ugly Stik is the top selling line of fishing rods.

In October 1995, the Company signed a letter of intent to sell the assets
and business of its swimming pool and motorized pool cover business (the
"Division"). As a result, the Company reclassified the Division as
discontinued operations, and prior years' operations were similarly
reclassified. A loss from discontinued operations of $4.9 million was recorded
which included an anticipated loss from disposal. On March 5, 1996, the
Company completed the sale of substantially all of the assets of the Division
to General Aquatics, Inc., a national pool builder and pool equipment
manufacturer (see Note 2 of Notes to Consolidated Financial Statements for
further discussion). The discussion which follows focuses on the continuing
operations of the Company.

The Company's common stock was first offered to the public in 1959 and is
currently traded on the New York and Pacific Stock Exchanges (symbol: ANT). On
June 1, 1995, the Company completed a secondary public offering of 4.6 million
new shares of common stock of the Company, resulting in net proceeds of $67.2
million. For further information regarding the stock offering see Note 11 of
Notes to Consolidated Financial Statements.

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SPORTING GOODS AND OTHER RECREATIONAL PRODUCTS

Net sales of sporting goods and other recreational products were $349.4
million in 1995, $264.7 million in 1994 and $227.6 million in 1993. The
following table lists the Company's principal sporting goods and other
recreational products and the brand names under which they are sold.

<TABLE>
<CAPTION>
PRODUCT BRAND NAME
------- ----------
<S> <C>
Alpine Skis K2, Olin
Cross-Country Skis Madshus
Snowboards K2
In-Line Skates K2 Exotech
Fishing Rods and Reels Shakespeare, Ugly Stik
Active Water Sports Products Stearns
Full-Suspension Mountain Bikes ProFlex, Girvin
Backpacks Dana Design, Wilderness Experience
Tents Garuda
Imprinted Active Apparel Hilton, USA
Golf Apparel Charles Bastion
Licensed Apparel NASCAR
Ski Apparel K2
</TABLE>

Alpine Skis. The Company sells its alpine skis under the names K2 and Olin
principally in the United States, Europe and Japan. K2 offers skis in a broad
range of styles for a variety of conditions and types of skiing at numerous
price points. While participation rates for alpine skiing have been relatively
flat during the past few years, the market shares of K2 and Olin skis have
increased due to their popularity among retail purchasers resulting from their
high quality, innovative features, attractive graphics, creative marketing and
their domestic production.

K2 and Olin skis are manufactured by the Company in the United States and
Norway. They are sold to specialty retail shops and sporting goods chains in
the U.S. by independent sales representatives and in Europe and Japan through
independent and Company-owned distributors. K2 alpine skis are marketed to
skiers ranging from beginners to top racers using youthful and often
irreverent advertising. Olin skis are marketed toward more mature and affluent
purchasers. To assist in its marketing efforts, the Company sponsors amateur
and professional skiers including Phil and Steve Mahre and Glen Plake.

Cross-Country Skis. The Company's cross-country skis, which are manufactured
in the Company's plant in Norway, are sold under the name Madshus by a
retailer/distributor which owns the rights to the Madshus name and resells the
skis principally in Europe.

Snowboards. The Company introduced K2 snowboards and snowboard bindings in
1990. The Company began selling snowboard boots in 1993. While the snowboard
market is highly fragmented with over 200 competitors, Anthony is one of the
few snowboard companies which manufactures its own snowboards. Most of its
competitors source their products from other manufacturers. The Company
believes that its manufacturing capability will provide a competitive
advantage as the industry begins to consolidate. Like its alpine skis, K2
snowboards are of high quality, have attractive graphics and are creatively
marketed.

The Company made an important innovation in its snowboard line in early 1995
when it introduced the Clicker, a revolutionary step-in binding system for
snowboards jointly developed with Shimano Inc. The Clicker is among the first
commercially available step-in binding systems for snowboards. The Clicker
will enable snowboarders to release and refasten the binding easily, which
among other things, will facilitate entering and exiting ski lifts.

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K2 snowboards are manufactured by the Company in the United States. They are
sold to specialty retail shops and sporting goods chains in the U.S. by
independent sales representatives and in Europe and Japan through independent
and Company-owned distributors. Like K2 skis, K2 snowboards are marketed using
youthful and irreverent advertising, and the Company sponsors professional and
amateur snowboarders.

In-Line Skates. The Company introduced its K2 Exotech in-line skates in
1994. The in-line skate market has grown dramatically in recent years.
Anthony's in-line skates are priced at the mid to upper end of the industry.
K2 Exotech skates are attractive and of high quality and have innovative
features such as a soft mesh and leather upper designed for improved comfort
and a rigid plastic cuff for support. The Company's in-line skates also offer
high quality in-line skate components such as Hyper(TM) wheels and TwimCam(TM)
bearings, which are manufactured by others.

K2 Exotech in-line skates are manufactured to Company specifications
primarily by vendors in Korea and China. They are sold to specialty retail
shops and sporting goods chains in the U.S. by independent sales
representatives and in Europe and Japan through independent and Company-owned
distributors.

Fishing Rods and Reels. The Company sells fishing rods, reels and fishing
line in most of the world. The Company believes that Shakespeare's Ugly Stik
models have been the best selling fishing rods in the U.S. over the past 18
years. The success of these fishing rods has allowed the Company to establish
a strong position with retailers, thereby increasing sales of new rods, reels
and kits and combos. Shakespeare rods and reels are manufactured principally
in the People's Republic of China, although blanks for the Ugly Stik fishing
rod are made by the Company in the United States. Shakespeare products are
sold directly by the Company and through independent sales representatives to
mass merchants (two of which in the aggregate purchase more than one-half of
the Company's fishing rods and reels), specialty shops and chain stores.

Active Water Sports Products. The Company sells Stearns flotation vests,
jackets and suits ("personal flotation devices"), cold water immersion
products, wet suits and rainwear in the United States and in certain foreign
countries. Stearns has recently introduced towables, which are inflatable
flotation products towed behind waterski boats. In the United States,
occupants of boats are required by law either to wear or have available
personal flotation devices meeting Coast Guard standards. Stearns personal
flotation devices are manufactured to such standards and are subject to
rigorous testing for certification by Underwriters Laboratories. Stearns
manufactures its personal flotation devices in the U.S. and its other products
are outsourced from Asian manufacturers. Stearns products are sold principally
through an in-house marketing staff and independent sales representatives to
mass merchandisers, specialty shops and chain stores and to the off-shore oil
industry, commercial fishermen and other commercial users.

Full-Suspension Mountain Bikes. Girvin, which was acquired by the Company in
October 1993, designs and distributes high quality full-suspension mountain
bikes and components under the names ProFlex, Girvin and Flexstem in the
United States and internationally. The Company believes that full-suspension
bikes are a fast growing segment of the mountain bike market. Performance and
comfort are provided by these bikes which have shock absorbing elements for
both front and rear wheels, thereby improving climbing ability and decreasing
rider fatigue and off-road vibration. Girvin is a pioneer of full-suspension,
and the Company believes it is the largest wholesale distributor of these
bikes in the United States. Girvin manufactures certain components, including
front forks, at its facility in the United States. The bikes are assembled to
Girvin's specifications by a vendor in Taiwan and are distributed through an
in-house marketing staff and by independent sales representatives to
independent bicycle dealers in the U.S. and through distributors
internationally. To assist in its marketing efforts, Girvin co-sponsors the
BMW/ProFlex mountain bike team.

Backpacks. Dana Design, which was acquired by the Company in February 1995,
manufactures and distributes high-end backpacks in the U.S. Dana Design
products are known for their comfort, high quality and innovative features,
such as custom fitting. Dana Design backpacks are manufactured by the Company
in the United States for sale by independent sales representatives to
specialty retailers in the United States. The Wilderness Experience backpacks
and other related apparel lines were acquired by the Company in December

3
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1994, and offer products at more popular price points. The Company believes
that its manufacturing expertise, marketing capabilities and financial support
will benefit these businesses. Garuda was acquired by the Company in December
1995 and manufactures high-end tents in the United States for sale by
independent sales representatives to specialty retailers in the United States.

Active Wear. The Company's Hilton business manufactures and distributes
jackets, shirts, fleece tops and other active wear under the Hilton and USA
brand names. These products are primarily sold in the United States to
advertising specialty customers, embroiderers and screen printers who in turn
sell imprinted items, including garments, to corporate buyers, among others.
Hilton and USA apparel are manufactured by the Company in the United States
and are sold through catalogs, by a direct sales force and by independent
sales representatives. The Company has recently introduced a line of Charles
Bastion golf shirts and a broad line of NASCAR licensed apparel.

Ski Apparel. K2 ski apparel is manufactured to the Company's specifications
by various suppliers located in Europe and Asia. K2 apparel is principally
sold in Europe and through independent distributors for which the Company
receives royalty income, except in Germany where it is sold through a Company-
owned distributor.

INDUSTRIAL PRODUCTS

Net sales of industrial products were $194.9 million in 1995, $170.3 million
in 1994 and $146.1 million in 1993. The Company's industrial products segment
historically has contributed to operations by providing a base of generally
consistent earnings and cash flow. The following table lists certain of the
Company's principal industrial products and the brand names under which they
are sold.

<TABLE>
<CAPTION>
PRODUCT BRAND NAME
------- ----------
<S> <C>
Monofilament Line Shakespeare
Fiberglass Utility and Decorative Light Poles Shakespeare
Marine Radio Antennas Shakespeare
Coated and Laminated Paperboard Products Thermo-ply, Studio Board
Protective Building Wrap Barricade, R-Wrap
Synthetic Commercial Building Coatings Finestone
</TABLE>

Monofilament Line. Nylon and polyester monofilament line is domestically
manufactured by the Company in a variety of diameters, tensile strengths and
softness. Monofilament is used in various applications including the
manufacture of woven mats for use by paper producers in the United States,
Europe and South America and for use as line in weed trimmers in the United
States. Monofilament produced for sale in Europe for woven mats is
manufactured primarily in the Company's U.K. facility. Fishing line is also
manufactured domestically and marketed by Shakespeare's fishing tackle
division to retailers and mass merchandisers.

Fiberglass Utility and Decorative Light Poles. The Company produces
fiberglass products including utility and decorative light poles which are
manufactured and sold under the Shakespeare name in the United States
principally to utility companies and municipalities. The Company believes that
a large majority of major utility companies in the United States have approved
the use of fiberglass light and utility poles.

Marine Radio Antennas. The Company manufactures in the United States
fiberglass radio antennas for marine, citizen band and military application
under the Shakespeare name. These products are sold primarily in the United
States. The Company also distributes marine radios and other marine
electronics under the Shakespeare name which are manufactured in Asia to the
Company's specifications. These antennas, radios and other marine electronics
are sold by an in-house sales department and independent sales representatives
to specialty marine dealers.

4
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Coated and Laminated Paperboard Products. Anthony's Simplex business
manufactures a wide range of coated and laminated paperboard products, which
include insulative sheathing marketed under the trademark Thermo-ply,
container components for fiber drums and flexible packaging paperboard
products. These products are manufactured in the United States and are sold to
a large number of customers in the domestic residential and manufactured
housing, container and industrial packaging industries, and in the case of
Thermo-ply, to the Japanese residential housing industry. The Company also
operates a paper recycling mill which produces chip paperboard primarily used
in the manufacture of Thermo-ply insulative sheathing and secondarily sold to
others in nonconstruction related markets. The Company has recently introduced
Studio Board which is used in set construction for the entertainment industry.
Studio Board is made from 85% recycled material and is also recyclable itself.

Protective Building Wrap. The Company manufactures and sells protective
building wrap in the United States under the names R-Wrap and Barricade to the
domestic residential and manufactured housing industries. These products are
generally sold through distributors to home builders.

Synthetic Commercial Building Coatings. The Company manufactures and sells
synthetic commercial building coatings in the United States under the name
Finestone to the commercial construction industry. These products are marketed
primarily to architects and builders.

COMPETITION

The Company's competition varies among its business lines. The sporting
goods and recreational products markets are generally highly competitive, with
competition mainly centering on product innovation, performance and styling,
price, marketing and delivery. Competition in these products (other than
snowboards and active apparel) consists of a relatively small number of large
producers, some of whom have greater financial and other resources than the
Company. A large number of companies compete in snowboards and active apparel.
While the Company believes that its well-recognized brand names, established
distribution networks and reputation for developing and introducing innovative
products have been key factors in the successful introduction of its sporting
goods products, there are no significant technological or capital barriers to
entry into the markets for many sporting goods and recreational products.
These markets face competition from other leisure activities, and sales of
leisure products are affected by changes in consumer tastes, which are
difficult to predict.

While the Company believes that in its industrial products segment it
competes based on product quality, service and delivery, the Company's
industrial products are, in most instances, subject to price competition,
ranging from moderate in marine antennas and monofilament line to intense for
commodity-type products such as paperboard container components. Insulative
sheathing products compete with substitute products. Fiberglass utility and
light poles compete with products made of other materials, such as wood and
aluminum. Certain industrial competitors have greater financial and other
resources than the Company.

FOREIGN SOURCING AND RAW MATERIALS

The Company has not experienced any substantial difficulty in obtaining raw
materials, parts or finished goods inventory for its sporting goods and other
recreational products businesses. Certain components and finished products,
however, are manufactured or assembled abroad and therefore could be subject
to interruption as a result of local unrest, currency exchange fluctuations,
increased tariffs, trade difficulties and other factors. A major portion of
the Company's fishing rods, including its Ugly Stik models, and reels and
certain in-line skate components are currently manufactured in the People's
Republic of China which trades with the United States under a Most Favored
Nation ("MFN") trade status. While the Company believes that alternative
sources for these products produced in China could be found, maintaining its
existing costs of such products will depend on China's continuing to be
treated under MFN tariff rates, which the United States from time to time has
threatened to rescind. In 1996, the United States has again threatened trade
sanctions against certain products made in China, including fishing rods,
although no such trade sanctions have been imposed to date.

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The Company has not experienced any substantial difficulty in obtaining raw
materials for its industrial products segment, although recycled corrugated
scrap paper, a raw material used in the production of the Company's insulative
sheathing, has become more expensive, a trend which the Company believes may
continue. This increasing cost has had and could continue to have significant
impact on the profitability of the insulative sheathing line. While the
Company has been able to raise its insulative sheathing prices to offset the
increasing cost of this raw material, no assurances can be given of the
Company's continued ability to do so. The Company is currently expanding its
recycling capabilities to lessen its reliance on recycled corrugated scrap
paper.

SEASONALITY AND CYCLICALITY; BACKLOG

Sales of the Company's sporting goods are generally highly seasonal and in
many instances are dependent on weather conditions. The Company's industrial
products are mildly seasonal. This seasonality causes the Company's financial
results to vary from quarter to quarter, and the Company's sales are usually
weakest in the first quarter. In addition, the nature of the Company's ski and
snowboard businesses requires it to make relatively large investments in
inventory in anticipation of these products' selling season, which runs from
July through December, and relatively large investments in receivables during
and shortly after such season. The rapid delivery requirements of the
Company's customers for its sporting goods products and active apparel also
result in investment in significant amounts of inventory. The Company believes
that another factor in its level of inventory investment is the shift by
certain of its sporting goods customers from substantial purchases of pre-
season inventories to deferral of deliveries until the products' retail
seasons.

Sales of sporting goods depend to a large extent on general economic
conditions including the amount of discretionary income available for leisure
activities. Sales of the Company's industrial products are dependent to
varying degrees upon economic conditions in the domestic housing, container
and paper industries.

As a result of the nature of many of the Company's businesses, backlog is
generally not significant, and management believes it is not an important
indicator of future sales.

CUSTOMERS

The Company believes that its customer relationships are excellent, and no
one customer of the Company accounted for ten percent or more of its
consolidated annual net sales in 1994 or 1995. The loss, however, of one of
the Company's two largest customers of its sporting goods products could have
a significant impact on the Company's results of operations.

RESEARCH AND DEVELOPMENT

Consistent with the Company's business strategy of continuing to develop
innovative brand name products and improving the quality, cost and delivery of
products, the Company maintains decentralized research and development
departments at several of its manufacturing centers which are engaged in
product development and the search for new applications and manufacturing
processes. Expenditures for research and development activities totaled
approximately $7.1 million in 1995, $6.3 million in 1994 and $4.3 million in
1993 and were expensed as a part of general and administrative expenses in the
year incurred.

EMPLOYEES

The Company had approximately 4,600 and 3,900 employees at December 31, 1995
and 1994, respectively. The Company believes that its relations with employees
generally have been good.

PATENTS AND INTELLECTUAL PROPERTY RIGHTS

While product innovation is a highly important factor in the Company's
sporting goods and other recreational products segment and many of the
Company's innovations have been patented, the Company does not believe that
the loss of any one patent would have a material adverse effect on it. Certain
of its brand names, such as K2, K2 Exotech, Olin, Shakespeare, Ugly Stik,
Stearns, Girvin, ProFlex, Hilton, Dana Design and Wilderness Experience are
believed by the Company to be well recognized by consumers and therefore
important in the sales of these products. Registered and other trademarks and
tradenames of Company products are italicized in this Form 10-K.

6
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ITEM 2. PROPERTIES

The table below provides information with respect to the principal production
and distribution facilities utilized by the Company for continuing operations
as of December 31, 1995.

<TABLE>
<CAPTION>
OWNED FACILITIES LEASED FACILITIES
----------------- -----------------
TYPE OF NO. OF SQUARE NO. OF SQUARE
LOCATION FACILITY LOCATIONS FOOTAGE LOCATIONS FOOTAGE
-------- -------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
SPORTING GOODS AND OTHER
RECREATIONAL PRODUCTS
Alabama.................... Production 2 156,000
Illinois................... Distribution 1 76,000
Minnesota.................. Distribution
and production 1 290,000
Rhode Island............... Distribution
and production 1 50,000
South Carolina............. Distribution
and production 2 140,000
Washington................. Distribution
and production 1 160,000 1 37,000
Foreign.................... Distribution
and production 3 101,000 6 147,000
--- ------- --- -------
9 847,000 9 310,000
=== ======= === =======
INDUSTRIAL PRODUCTS
Florida.................... Production 1 73,000
Michigan................... Production 2 278,000
South Carolina............. Production 2 484,000
--- -------
5 835,000
=== =======
</TABLE>

The corporate headquarters of the Company is located in 15,000 square feet of
leased office space in Los Angeles, California. The terms of the Company's
leases range from one to eight years, and many are renewable for additional
periods. The termination of any lease expiring during 1996 or 1997 would not
have a material adverse effect on the Company's continuing operations.

The Company believes that, in general, its plants and equipment are
adequately maintained, in good operating condition and are adequate for the
Company's present needs. The Company regularly upgrades and modernizes its
facilities and equipment and expands its facilities to meet production and
distribution requirements.

ITEM 3. LEGAL PROCEEDINGS

Certain of the Company's products are used in relatively high risk
recreational settings and from time to time the Company is named as a defendant
in lawsuits asserting product liability claims relating to its sporting goods
products. To date none of these lawsuits has had a material effect on the
Company, and the Company does not believe that any lawsuit now pending could
reasonably be expected to have such an effect. The Company maintains product
liability, general liability and excess liability insurance coverages. No
assurances can be given that such insurance will continue to be available at an
acceptable cost to the Company or that such coverage will be sufficient to
cover one or more large claims, or that the insurers will not successfully
disclaim coverage as to a pending or future claim.

On December 5, 1995, two of the directors of the Company, Robert T. Anthony
and Abraham L. Gray, Mr. Anthony's mother, acting as stockholders of the
Company filed a complaint in the California Superior Court

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for Los Angeles County (No. BC 140251) entitled Marilyn Anthony, Robert T.
Anthony and Abraham L. Gray vs. John B. Simon, Hugh V. Hunter, Anthony
Industries, Inc. and Does 1 through 100. The complaint purports to be a
derivative complaint brought on behalf of the Company and arises out of the
negotiation and approval of a retirement agreement in November 1995 between the
Company and B.I. Forester, then the Company's Chairman of the Board and Chief
Executive Officer. Under the agreement, Mr. Forester stepped down as Chief
Executive Officer two years prior to the expiration of his employment contract,
allowing for an orderly and timely management succession, and agreed to
continue as the Company's Chairman of the Board and provide consulting services
to the Company. To avert a deadlock on the Board, without the necessity of Mr.
Forester voting on his own retirement agreement, the retirement agreement was
approved by the Executive Committee, with Mr. Forester abstaining. The two
members of the Executive Committee, in addition to Mr. Forester, are Messrs.
Hunter and Simon. At a meeting of the full Board of Directors held the same
day, the full Board, including Mr. Forester, voted to approve the actions of
the Executive Committee, by vote of five to four. Those in favor were Messrs.
Forester, Hunter, Offermans, Rodstein and Simon. Those opposed were Messrs.
Anthony, Goldberg, Gray and Weiner. The complaint seeks recovery of damages
from the two defendant directors of not less than $10 million allegedly
suffered by the Company as a result of the Executive Committee's approval of
the Forester retirement agreement. The complaint alleges that the agreement is
unfair to the Company and that the defendants breached their duties of loyalty;
acted in bad faith; engaged in intentional misconduct; and engaged in a knowing
violation of law in approving the agreement. In the opinion of management of
the Company, the allegations of the complaint are without merit.

The Company is among several potentially responsible parties named in an
Environmental Protection Agency matter involving discharge of hazardous
materials at an old waste site in South Carolina. This action seeks primarily
cleanup costs. The ultimate outcome of this matter cannot be predicted with
certainty; however, to the extent to which not previously reserved against by
the Company, management does not believe this matter will have a material
adverse effect on the Company.

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

Not applicable.

EXECUTIVE OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
NAME POSITION AGE
---- -------- ---
<C> <S> <C>

Richard M. Rodstein President and Chief Executive Officer 41
Robert E. Doyle Senior Vice President; President of
Simplex Products 49
John J. Rangel Senior Vice President--Finance 42
Tony H. Chow Vice President and Director of Taxes 48
David G. Cook Vice President; President of Stearns 58
Timothy C. Cronin Vice President and Executive Vice President
of Hilton 45
Woodrow P. Greene Vice President--Quality and Process
Improvement and President of Shakespeare
Electronics and Fiberglass 51
David H. Herzberg Vice President; President of Shakespeare
Monofilament 53
Marilyn E. Lane Vice President and Treasurer 64
Franklin D. Leibow Vice President; President of Hilton
Active Apparel 46
Henry Miller Vice President 37
Susan E. McConnell Secretary 52
</TABLE>

Mr. Rodstein has been President of the Company for more than the past five
years and Chief Executive Officer since January 1, 1996.

Mr. Doyle has been a Senior Vice President of the Company and president of
Simplex Products for more than the past five years.

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<PAGE>

Mr. Rangel, a CPA, has been Senior Vice President--Finance of the Company for
more than the past five years.

Mr. Chow has been a Vice President of the Company for more than the past five
years.

Mr. Cook has been a Vice President of the Company and president of Stearns
for more than the past five years.

Mr. Cronin has been a Vice President of the Company since January 1, 1996 and
Executive Vice President of Hilton from October 1992 to December 1995. From
February to October 1992 Mr. Cronin was a design and sourcing executive with
Odyssey International Ltd., and for more than one year previous to that he was
a vice president of Wilson Sporting Goods Company.

Mr. Greene has been Vice President--Quality and Process Improvement of the
Company since January 1, 1993, president of Shakespeare Electronics and
Fiberglass since June 22, 1995 and Director of Quality and Process Improvement
of the Company from May 1991 to December 1992. For more than one year previous
to that, Mr. Greene was employed by QualPro, Inc., a quality and process
improvement consulting firm.

Mr. Herzberg has been a Vice President of the Company and president of
Shakespeare Monofilament for more than the past five years.

Mrs. Lane has been a Vice President and Treasurer for more than the past five
years.

Mr. Leibow has been a Vice President of the Company since January 1, 1993 and
president of Hilton Active Apparel since October, 1989.

Mr. Miller has been a Vice President of the Company since January 1, 1996 and
Director of Business Development from June 1992 to December 1995. For more than
five years previous to that Mr. Miller was a vice president of Omega
Corporation.

Mrs. McConnell, a California attorney, has been Secretary of the Company and
administrative assistant to the Chief Executive Officer for more than the past
five years.

Officers of the Company are elected for one year terms by the directors at
their first meeting after the annual meeting of shareholders and hold office
until their successors are elected and qualified.

9
<PAGE>

PART II

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

PRINCIPAL MARKETS

The Company's Common Stock is listed on the New York Stock Exchange and the
Pacific Stock Exchange under the symbol "ANT." At March 15, 1996 there were
1,839 holders of record of Common Stock of the Company.

COMMON STOCK PRICES

The following table sets forth, for the quarters indicated, the reported high
and low sales prices of the Common Stock, as reported by the New York Stock
Exchange during the Company's two most recent fiscal years:

<TABLE>
<CAPTION>
STOCK PRICES DIVIDENDS PER SHARE
---------------------------- ------------------------
HIGH LOW CLOSE CASH STOCK
------ ------ -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1995
Fourth...................... 23 1/4 16 7/8 23 $ .11
Third....................... 20 5/8 18 1/8 18 15/16 .11
Second...................... 18 1/2 15 1/4 18 1/2 .11
First....................... 16 7/8 15 1/8 16 1/4 .11
1994
Fourth...................... 17 3/8 16 16 $ .11 5%
Third....................... 16 7/8 14 3/8 16 1/4 .105
Second...................... 15 1/8 13 7/8 14 1/2 .105
First....................... 17 1/2 14 15 1/8 .105
</TABLE>

- --------
Prices and per share figures have been adjusted for stock dividends, where
applicable.

DIVIDENDS

The Company has paid a cash dividend on the Common Stock since 1978. The
timing, amounts and form of dividends depends on, among other things, the
Company's results of operations, financial condition, cash requirements and
other factors deemed relevant by the Board of Directors. The Company is subject
to credit agreements which limit its ability to pay cash dividends. As of
December 31, 1995, retained earnings were free of such restrictions. See Note 5
of Notes to Consolidated Financial Statements for further description of the
Company's credit facilities.

Trust Agent, Registrar and Dividend Disbursing Agent for Common Stock;

Harris Trust Company of California
601 South Figueroa Street, Suite 4900
Los Angeles, California 90017

10
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1995 1994(A) 1993(A) 1992(A) 1991(A)
-------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT FOR PER SHARE FIGURES)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales.................. $544,268 $434,995 $373,712 $341,545 $309,086
Cost of products sold...... 400,840 319,021 276,759 249,707 227,171
-------- -------- -------- -------- --------
Gross profit............... 143,428 115,974 96,953 91,838 81,915
Selling expenses........... 61,256 49,575 41,519 40,802 34,410
General and administrative
expenses.................. 45,086 38,713 31,759 28,428 27,709
-------- -------- -------- -------- --------
Operating income........... 37,086 27,686 23,675 22,608 19,796
Interest expense........... 9,916 7,481 5,759 6,687 6,813
Other income, net.......... (1,449) (1,239) (903) (872) (1,159)
-------- -------- -------- -------- --------
Income before provision for
income taxes.............. 28,619 21,444 18,819 16,793 14,142
Provision for income taxes. 8,820 7,690 6,455 5,730 5,230
-------- -------- -------- -------- --------
Income from continuing
operations................ 19,799 13,754 12,364 11,063 8,912
Discontinued operations,
net of taxes.............. (4,920) (721) (1,243) (2,542) (2,307)
-------- -------- -------- -------- --------
Net Income................. $ 14,879 $ 13,033 $ 11,121 $ 8,521 $ 6,605
======== ======== ======== ======== ========
Per share:
Continuing operations..... $ 1.37 $ 1.15 $ 1.05 $ .95 $ .77
Discontinued operations... (.34) (.06) (.11) (.22) (.20)
-------- -------- -------- -------- --------
Net income................ $ 1.03 $ 1.09 $ .94 $ .73 $ .57
======== ======== ======== ======== ========
Weighted average shares
outstanding............... 14,498 11,919 11,798 11,635 11,577
BALANCE SHEET DATA:
Total current assets....... $300,455 $226,474 $181,790 $163,729 $146,642
Total assets............... 384,423 301,536 254,093 232,507 216,312
Total current liabilities.. 120,533 79,724 66,790 69,402 81,859
Long-term debt, net of
current portion........... 75,071 109,921 87,271 68,525 43,451
Shareholders' equity....... 175,816 98,996 88,656 83,598 80,663
</TABLE>
- --------
(a) Information has been restated to reflect the sale of the Division (for
further information see Note 2 of Notes to Consolidated Financial
Statements).

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

The Company maintains its books using a 52/53-week year ending on the last
Sunday of December. The years ending December 31, 1995, 1994 and 1993 consisted
of 53, 52 and 52 weeks, respectively. The Company believes that the impact on
the financial statements of the additional week on 1995 was not significant.

In October 1995, the Company signed a letter of intent to sell the assets and
business of its swimming pool and motorized pool cover business (the
"Division"). As a result, the Company reclassified the Division as discontinued
operations, and prior years' operations were similarly reclassified. A loss
from discontinued operations of $4.9 million was recorded which included an
anticipated loss from disposal. On March 5, 1996, the Company completed the
sale of substantially all of the assets of the Division to General Aquatics,
Inc., a national pool builder and pool equipment manufacturer (see Note 2 of
Notes to Consolidated Financial Statements). The discussion which follows
focuses on the continuing operations of the Company.

11
<PAGE>

REVIEW OF OPERATIONS: COMPARISON OF 1995 TO 1994

Net sales from continuing operations increased 25.1% to $544.3 million in
1995 compared to $435.0 in 1994. Net income from continuing operations rose
44.0% to a record $19.8 million from $13.8 million in 1994. Earnings per share
from continuing operations, reflecting the completion on June 1, 1995 of the
Company's public offering of 4.6 million shares, advanced to $1.37 per share in
1995, as compared with $1.15 per share in 1994. Net income for 1995 was $14.9
million, or $1.03 per share.

Net Sales. In the sporting goods and other recreational products group, net
sales increased 32.0% to $349.4 million in 1995 compared to $264.7 million in
1994. The increase in sales was widespread and was led by the rapid growth of
K2 Exotech in-line skates in both the international and domestic markets,
increased demand worldwide for K2 snowboards and step-in bindings and strong
shipments of Shakespeare's new Ugly Stik Lite fishing rod, together with other
new reels and kits and combos. New models of Stearns wetsuits, towables and
flotation vests also contributed significantly to the overall sales growth.
Sales of ProFlex full-suspension mountain bikes increased more than 75% due to
market demand for the new frame design in the U.S. and Europe and expansion of
its domestic dealer and international distributor base. Hilton's new active
apparel styles, the growth of its Charles Bastion golf shirt line and the
inclusion of the Dana Design business, which was acquired in early 1995, also
contributed to the sales growth for the year.

In the industrial products group, net sales advanced 14.4% to $194.9 million
in 1995 compared to $170.3 million in 1994. The increase in sales was fairly
broad based. Half of the sales improvement was attributable to the Simplex
products business, which produces coated and laminated paperboard products,
protective building wrap and synthetic commercial building coatings. The
business benefited from record sales of Thermo-ply insulative sheathing,
continued market penetration of Finestone commercial coatings, expanded sales
of new laminated paper products and from price increases which partially
reduced the impact of some significant cost increases. Improved market
penetration of fiberglass light, electric transmission and distribution poles
and paperweaving monofilament line in the worldwide markets, generated the
majority of the sales gains in the Shakespeare electronics and fiberglass
business and the Shakespeare monofilament business, respectively, which are the
other two businesses of the industrial products group.

Gross profit. Gross profit rose 23.7% to $143.4 million, or 26.3% of net
sales, in 1995 as compared to $116.0 million, or 26.7% of net sales in 1994.
The decline of gross profit as a percentage of net sales was primarily
attributable to the cost of increasing the production capacity of the rapidly
growing line of Shakespeare fiberglass light, distribution and transmission
poles and from certain raw material cost increases. The gross profit was
adversely affected by the dramatic increase in the cost of recycled corrugated
scrap paper, which was subsequently offset by corresponding price increases in
the latter part of the year. Higher sales of lower margin international
shipments, introductory price point flotation vests and active apparel was
offset by the profit impact of greater skate, snowboard and mountain bike
sales.

Costs and Expenses. Selling expenses increased 23.6% to $61.3 million in 1995
compared to $49.6 million in 1994. However, as a percentage of net sales
selling expenses were consistent from year to year. The dollar increase was
primarily due to new product growth of in-line skates, snowboards, full-
suspension mountain bikes and fiberglass light poles and the inclusion of the
recently acquired backpack businesses.

General and administrative expenses increased 16.5% to $45.1 million in 1995
compared to $38.7 million in 1994, although as a percentage of net sales they
were comparable to the prior year. The increase is attributable to spending on
new product development, continued investment in the infrastructure of various
divisions to support the growth of the Company and the inclusion of the 1995
acquisitions of Dana Design and Wilderness Experience, partially reduced by
lower ESOP-related expenses.

Operating Income. Operating income improved by 34.0% to $37.1 million, or
6.8% of net sales in 1995 compared to $27.7 million or 6.4% of net sales in
1994. The percentage increase was due to lower selling, general and
administrative expenses as a percentage of net sales, which was partially
offset by the reduction in gross profit margin percentage.

12
<PAGE>

Interest Expense. Interest expense rose $2.4 million in 1995 compared to
1994. Higher average borrowings of $13.9 million, net of proceeds from the
Company's secondary public offering, was incurred to support the growth of
several product lines and accounted for $1.1 million of additional interest
while $1.3 million reflected higher rates.

Other income. Other income of $1.4 million includes certain royalty, interest
and other miscellaneous income, of which $1.2 million is reported as a
component of segment operating profit.

Income taxes. The effective income tax rate for 1995 has been reduced as a
result of a favorable $0.3 million foreign tax settlement and reduction of the
valuation reserve to reflect the impact of foreign net operating losses
realized.

Segment information. Total segment operating profit (before interest,
corporate expenses and taxes) increased 32.8% to $44.9 million in 1995 compared
to $33.8 million in 1994. The sporting goods and other recreational products
group, reported operating profit of $26.9 million in 1995, up 57.3% from $17.1
million in 1994. Gains from higher sales of snowboards and in-line skates
fueled the increase. The continued strength of sales of new rods, reels and
kits and combos along with higher sales from Stearns also provided earnings
gains. Partially offsetting these gains were lower profitability of the active
apparel business. Mountain bike sales contributed to the profit increase as the
company's sales growth exceeded the growth of its expenses. The industrial
products group's segment operating profit increased 7.8% to $18.0 million in
1995 from $16.7 million in 1994. The increase was attributable to the increased
volume and cost efficiencies of the Shakespeare Monofilament and Simplex
businesses. For additional segment information see Note 12 of Notes to
Consolidated Financial Statements.

REVIEW OF OPERATIONS: COMPARISON OF 1994 TO 1993

Net sales from continuing operations increased 16.4% to $435.0 million in
1994 compared to $373.7 million in 1993. Net income from continuing operations
increased 11.3% to $13.8 million, or $1.15 per share, in 1994 compared to $12.4
million, or $1.05 per share, in 1993.

Net Sales. In the sporting goods and other recreational products group, net
sales increased 16.3% to $264.7 million in 1994 compared to $227.6 million in
1993. Approximately one-half of the improvement was attributable to the
Company's successful introduction of K2 Exotech in-line skates, increased
demand worldwide for K2 snowboards and inclusion for the full year of the
rapidly growing ProFlex mountain bike business acquired in October 1993. Growth
was also achieved from product extensions such as the introduction of 54 styles
of Hilton and USA active apparel for the advertising specialty market and new
models of Stearns raingear, wetsuits and water ski vests, all introduced since
January 1, 1993, along with several new models of fishing rods, reels, and kit
and combo series. Partially offsetting these gains were lower sales of skis to
the economically depressed European and Japanese markets.

In the industrial products group, net sales increased 16.6% to $170.3 million
in 1994 compared to $146.1 million in 1993. Over one-half of the improvement
was attributable to the Simplex products business, which produces coated and
laminated paperboard products, protective building wrap and synthetic
commercial building coatings. This business benefited from increased
penetration of Finestone commercial coatings, expanded models of building wrap
and improved housing starts and shipments into the Japanese market which drove
sales of insulative sheathing to a record level. Improved market penetration,
particularly of fiberglass light poles and paperweaving monofilament line in
the United Kingdom, generated the majority of the sales gains in the
Shakespeare fiberglass business and the Shakespeare monofilament business,
respectively, which are the other two businesses of the industrial products
group.

Gross Profit. Gross profit increased 19.6% to $116.0 million, or 26.7% of net
sales in 1994 compared to $97.0 million, or 25.9% of net sales, in 1993. This
improvement in gross profit margin resulted from an improved sales mix and
gains in efficiency from ongoing applications of Anthony's improvement process
program, particularly at the Stearns, Hilton, Shakespeare Monofilament and
Simplex businesses. Overall gross profit in dollars also improved despite the
costs of the cap ski conversion. Margin and gross profit were unfavorably
impacted by the dramatic increase in the cost of recycled corrugated scrap
paper.

13
<PAGE>

Costs and Expenses. Selling expenses increased 19.5% to $49.6 million in
1994 compared to $41.5 million in 1993, although as a percentage of net sales
they were comparable to the prior year. The increase resulted primarily from
inclusion of the mountain bike business for a full year and increased spending
in support of new products in the in-line skate, mountain bike, snowboard and
apparel businesses.

General and administrative expenses increased 21.7% to $38.7 million in 1994
compared to $31.8 million in 1993. The increase reflects the inclusion of the
mountain bike business for a full year, significant research and development
expenditures primarily at the K2 business, investments in systems and
personnel primarily at the Hilton business and the continuation of other
expenditures to support the growth of the Company.

Operating Income. Operating income increased by 16.9% to $27.7 million in
1994, or 6.4% of net sales, compared to $23.7 million, or 6.3% of net sales,
in 1993. The percentage increase is due to the higher gross profit margin
partially offset by higher general and administrative expenses.

Interest Expense. Interest expense increased by $1.7 million in 1994. Higher
domestic interest rates accounted for $0.5 million of the increase, and $17.4
million higher level of average borrowings, incurred to acquire the mountain
bike business and support the growth of several product lines, accounted for
the remainder.

Other Income. Other income of $1.2 million includes certain royalty,
interest and other miscellaneous income, $0.9 million of which is reported as
a component of segment operating profit.

Income Taxes. Income tax expense included a $0.6 million reclassification of
state tax previously recorded as selling and general and administrative
expenses.

Segment Information. Total segment operating profit (before interest,
corporate expenses and taxes) increased 20.7% to $33.8 million in 1994
compared to $28.0 million in 1993. In the sporting goods product group,
operating profit rose 22.1% to $17.1 million in 1994 compared to $14.0 million
in 1993. The group benefited from the Company's introduction of several new
fishing rods, reels, and kit and combo series in the United States and from
lower manufacturing costs abroad. Sales-related earnings gains also
contributed to the group's improvements, particularly from K2 snowboards and
the successful introduction of certain Stearns and Hilton products. Partially
offsetting these profit gains were the costs of the cap ski conversion and the
impact of declining sales in the European and Japanese ski markets. In the
industrial products group, operating profits increased 19.3% to $16.7 million
in 1994 compared to $14.0 million in 1993. The improvement was mainly due to
sales-related earnings and efficiency gains at Shakespeare Monofilament and
Simplex. For additional information regarding the segment information, see
Note 12 of Notes to Consolidated Financial Statements.

LIQUIDITY AND SOURCES OF CAPITAL

The Company's continuing operations used $36.3 million of cash during 1995,
whereas 1994 continuing operating activities used cash of $15.0 million. The
increased use of cash for the current period was mainly due to financing
higher levels of accounts receivable and inventories arising from the growth
in sales of in-line skates, snowboards, raingear, wetsuits, fishing rods and
reels and full-suspension mountain bikes and, to a lesser extent, from the
recent acquisitions of Dana Design and Wilderness Experience. The Company
believes that another factor in its increased level of inventory investment is
the shift by certain of its sporting goods customers from substantial
purchases of pre-season inventories to deferral of deliveries until the near
arrival of the retail season. The disposition of the Division did not have a
significant impact on the liquidity and cash flows of the Company in 1995,
1994 or 1993.

Net cash used for investment activities increased to $19.7 million in 1995
from $8.7 million in 1994. The increase in cash used in 1995 is attributable
to expenditures to increase manufacturing capacity and improve manufacturing
efficiencies, principally in the industrial products group, and the purchases
of the Dana Design and Wilderness Experience businesses. No material
commitments for capital expenditures existed at yearend.

The Company's principal long-term borrowing facility is an $85 million
Credit Line ("Credit Line") which becomes due on June 28, 1997. At December
31, 1995, $35.5 million was outstanding under this line. Under the

14
<PAGE>

Credit Line, the Company is subject to an agreement which, among other things,
restricts amounts available for payment of cash dividends by the Company. As
of December 31, 1995, retained earnings were free of such restrictions. The
Company also has $40 million of 8.39% unsecured senior notes due through 2004,
payable in nine equal principal payments beginning in 1996. The notes are
subject to agreements which are generally less restrictive than the Credit
Line. The Company has entered into interest rate swap agreements to manage its
exposure on the $40 million 8.39% notes payable. For further information
regarding the Company's interest rate swap agreements, see Note 5 of Notes to
Consolidated Financial Statements. Additionally, the Company had several
foreign and domestic short-term lines of credit available totaling $73.3
million, of which $50.2 million is outstanding at December 31, 1995.

On June 1, 1995, the Company completed a secondary public offering of 4.6
million shares of its common stock, resulting in net proceeds of $67.2
million. For further information regarding the stock offering see Note 11 of
Notes to Consolidated Financial Statements.

The Company anticipates its cash needs in 1996 will be provided from
operations and from borrowings under its Credit Line and Short-term Facility
and other existing credit lines.

ENVIRONMENTAL MATTERS

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The Company plans to adopt Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," in 1996. SFAS No. 121 requires that
impaired assets or assets to be disposed of be accounted for at the lower of
the carrying amount or fair value of the assets less costs of disposal. The
adoption of the new standard is not expected to have a material effect on the
Company's financial statements.

In October 1995, SFAS No. 123, "Accounting for Stock-Based Compensation,"
was issued. Companies will have the option of recognizing compensation expense
for virtually all stock-based compensation arrangements based upon the fair
value of the option at the grant date, or alternatively, continuing to
recognize compensation expense based on the excess of the quoted market price
over the option price on the measurement date in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."
This statement is required to be adopted in 1996. The Company has not yet
adopted SFAS No. 123 and has not yet determined the impact it may have on
future financial statement disclosures.

IMPACT OF INFLATION AND CHANGING PRICES

The inflation rate, as measured by the Consumer Price Index, has been
relatively low in the last few years, and therefore pricing decisions by the
Company have largely been influenced by competitive market conditions. During
1995, however, the cost of recycled corrugated scrap paper dramatically
increased, particularly in the first half of the year, resulting in price
increases of Thermo-ply insulative sheathing. The Company uses the LIFO method
of inventory pricing for 45% of its inventories, which results in the most
recent costs of LIFO-priced inventory being reflected in the income statement.
Current costs of the Company's remaining inventories, priced on a FIFO basis,
are also reflected in part in the income statement because of the relatively
high turnover of these inventories.

Depreciation expense is based on the historical cost to the Company of its
fixed assets and therefore is considerably less than it would be if it were
based on current replacement cost. While buildings, machinery and equipment
acquired in prior years will ultimately have to be replaced at significantly
higher prices, it is expected that this will be a gradual process over many
years.

15
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

STATEMENTS OF CONSOLIDATED INCOME

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------------------
1995 1994 1993
-------------- -------------- --------------
(IN THOUSANDS EXCEPT FOR PER SHARE FIGURES)
<S> <C> <C> <C>
Net Sales...................... $ 544,268 $ 434,995 $ 373,712
Cost of products sold.......... 400,840 319,021 276,759
-------------- -------------- --------------
Gross profit................. 143,428 115,974 96,953
Selling expenses............... 61,256 49,575 41,519
General and administrative
expenses...................... 45,086 38,713 31,759
-------------- -------------- --------------
Operating income............. 37,086 27,686 23,675
Interest expense............... 9,916 7,481 5,759
Other income, net.............. (1,449) (1,239) (903)
-------------- -------------- --------------
Income before provision for
income taxes................ 28,619 21,444 18,819
Provision for income taxes..... 8,820 7,690 6,455
-------------- -------------- --------------
Income from continuing
operations.................. 19,799 13,754 12,364
Discontinued operations........
Loss from operations, net of
taxes....................... (664) (721) (1,243)
Loss on disposal, net of
taxes....................... (4,256)
-------------- -------------- --------------
(4,920) (721) (1,243)
-------------- -------------- --------------
Net Income................... $ 14,879 $ 13,033 $ 11,121
============== ============== ==============
Per share......................
Continuing operations........ $ 1.37 $ 1.15 $ 1.05
Discontinued operations...... (.34) (.06) (.11)
-------------- -------------- --------------
Net Income................... $ 1.03 $ 1.09 $ .94
============== ============== ==============
</TABLE>

See notes to consolidated financial statements.

16
<PAGE>

ANTHONY INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31
------------------
1995 1994
-------- --------
(DOLLARS IN
THOUSANDS, EXCEPT
FOR PER SHARE
FIGURES)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................ $ 7,357 $ 7,700
Accounts receivable less allowances of $8,235 in 1995 and
$7,422 in 1994.......................................... 140,202 109,133
Inventories, net......................................... 140,679 97,936
Deferred taxes........................................... 6,683 7,928
Prepaid expenses and other current assets................ 5,534 3,777
-------- --------
Total current assets................................... 300,455 226,474
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements............................... 1,704 1,426
Buildings and leasehold improvements..................... 28,963 26,161
Machinery and equipment.................................. 103,434 91,294
Construction in progress................................. 5,605 3,851
-------- --------
139,706 122,732
Less allowance for depreciation and amortization......... 82,599 73,640
-------- --------
57,107 49,092
OTHER ASSETS
Intangibles, principally goodwill, net................... 14,108 12,197
Net assets of discontinued operations.................... 8,650 10,207
Other.................................................... 4,103 3,566
-------- --------
Total Assets........................................... $384,423 $301,536
======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Bank loans............................................... $ 50,219 $ 18,341
Accounts payable......................................... 27,985 25,828
Accrued payroll and related.............................. 21,443 18,192
Other accruals........................................... 16,031 14,445
Current portion of long-term debt........................ 4,855 2,918
-------- --------
Total current liabilities.............................. 120,533 79,724
Long-Term Debt............................................. 75,071 109,921
Deferred Taxes............................................. 13,003 12,895
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred Stock, $1 par value, authorized 12,500,000
shares, none issued
Common Stock, $1 par value, authorized 40,000,000 shares,
issued shares--17,064,065 in 1995 and 12,322,851 in
1994.................................................... 17,064 12,323
Additional paid-in capital............................... 130,995 66,973
Retained earnings........................................ 37,121 28,994
Employee Stock Ownership Plan and stock option loans..... (4,778) (3,937)
Treasury shares at cost, 481,059 shares in 1995 and 1994. (4,189) (4,189)
Cumulative translation adjustments....................... (397) (1,168)
-------- --------
Total Shareholders' Equity............................. 175,816 98,996
-------- --------
Total Liabilities and Shareholders' Equity............. $384,423 $301,536
======== ========
</TABLE>

See notes to consolidated financial statements.

17
<PAGE>

ANTHONY INDUSTRIES, INC.

STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
FOR THE THREE YEARS ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------
EMPLOYEE-STOCK
ADDITIONAL OWNERSHIP PLAN TREASURY CUMULATIVE
COMMON PAID-IN RETAINED AND STOCK SHARES TRANSLATION
STOCK CAPITAL EARNINGS OPTION LOANS AT COST ADJUSTMENTS TOTAL
------- ---------- -------- -------------- -------- ----------- --------
(IN THOUSANDS EXCEPT FOR PER SHARE FIGURES)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1,
1993 $11,051 $ 47,977 $33,112 $(3,152) $(3,993) $(1,397) $ 83,598
Net income for the year
1993.................. 11,121 11,121
Exercise of stock
options............... 97 828 (296) 629
Cash dividends, $.405
per share............. (4,733) (4,733)
Stock dividends, 5%
plus cash in lieu of
fractional shares..... 533 8,058 (8,605) (14)
Translation
adjustments........... (2,032) (2,032)
Employee Stock
Ownership Plan,
amortization and
partial loan
repayment............. 87 87
------- -------- ------- ------- ------- ------- --------
BALANCE AT DECEMBER 31,
1993 11,681 56,863 30,895 (3,361) (3,993) (3,429) 88,656
Net income for the year
1994.................. 13,033 13,033
Exercise of stock
options............... 78 764 (575) 267
Cash dividends, $.425
per share............. (5,010) (5,010)
Stock dividends, 5%
plus cash in lieu of
fractional shares..... 562 9,348 (9,924) (14)
Translation
adjustments........... 2,261 2,261
Repurchase of shares
and stock option loan
repayments............ 2 (2) 303 (196) 107
Employee Stock
Ownership Plan,
amortization and
partial loan
repayment............. (304) (304)
------- -------- ------- ------- ------- ------- --------
BALANCE AT DECEMBER 31,
1994 12,323 66,973 28,994 (3,937) (4,189) (1,168) 98,996
Net income for the year
1995.................. 14,879 14,879
Exercise of stock
options............... 141 1,388 (1,274) 255
Cash dividends, $.44
per share............. (6,752) (6,752)
Translation
adjustments........... 771 771
Stock option loan
repayments............ 336 336
Stock offering
proceeds.............. 4,600 62,634 67,234
Employee Stock
Ownership Plan,
amortization and
partial loan
repayment............. 97 97
------- -------- ------- ------- ------- ------- --------
BALANCE AT DECEMBER 31,
1995 $17,064 $130,995 $37,121 $(4,778) $(4,189) $ (397) $175,816
======= ======== ======= ======= ======= ======= ========
</TABLE>

See notes to consolidated financial statements.

18
<PAGE>

ANTHONY INDUSTRIES, INC.

STATEMENTS OF CONSOLIDATED CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1995 1994 1993
-------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Income from continuing operations................ $ 19,799 $ 13,754 $12,364
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization of property, plant
and equipment.................................. 9,510 7,298 7,772
Amortization of intangibles..................... 722 614 558
Deferred taxes.................................. 1,323 (17) 218
Changes in operating assets and liabilities:
Accounts receivable............................ (30,569) (20,759) (9,953)
Inventories.................................... (41,433) (19,274) (4,252)
Prepaid expenses and the current assets........ (1,610) (1,275) 918
Accounts payable............................... 1,446 1,918 2,236
Payrolls and other accruals.................... 4,554 2,770 2,245
-------- -------- -------
Net cash provided by (used in) operating
activities...................................... (36,258) (14,971) 12,106
INVESTING ACTIVITIES
Property, plant and equipment expenditures....... (17,292) (11,273) (8,537)
Disposals of property, plant and equipment....... 101 1,468 159
Purchases of businesses, net of cash acquired.... (2,159) (932)
Other items, net................................. (364) 1,059 (2,657)
-------- -------- -------
Net cash used in investing activities............ (19,714) (8,746) (11,967)
FINANCING ACTIVITIES
Borrowings under long-term debt.................. 22,582 21,500
Payments of long-term debt....................... (33,623) (3,738) (6,534)
Net increase (decrease) in short-term bank loans. 31,878 12,053 (5,004)
Exercise of stock options........................ 255 267 629
Dividends paid................................... (6,752) (5,010) (4,733)
Net proceeds from stock offering................. 67,234
-------- -------- -------
Net cash provided by financing activities........ 58,992 26,154 5,858
-------- -------- -------
Net increase in cash and cash equivalents from
continuing operations............................ 3,020 2,437 5,997
DISCONTINUED OPERATIONS
Loss from discontinued operations................ (4,920) (721) (1,243)
Adjustments to reconcile loss to net cash used in
discontinued operations:
Depreciation and amortization................... 612 722 753
Capital expenditures............................ (575) (347) (178)
Other items, net................................ 1,520 (251) (1,592)
-------- -------- -------
Cash used in discontinued operations.............. (3,363) (597) (2,260)
-------- -------- -------
Net increase (decrease) in cash and cash
equivalents...................................... (343) 1,840 3,737
Cash and cash equivalents at beginning of year.... 7,700 5,860 2,123
-------- -------- -------
Cash and cash equivalents at end of year.......... $ 7,357 $ 7,700 $ 5,860
======== ======== =======
</TABLE>

See notes to consolidated financial statements.

19
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1995

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, Shakespeare Company, K-2 Corporation,
Stearns Manufacturing Company, Girvin Inc. and Dana Design, Ltd. All
significant intercompany accounts and transactions have been eliminated.

Fiscal Periods

The Company maintains its books using a 52/53 week year ending on the last
Sunday of December. For purposes of the consolidated financial statements, the
yearend is stated as December 31. The year ending December 31, 1995 consisted
of 53 weeks. Each of the years ended in 1994 and 1993 consisted of 52 weeks.

Estimates Used

The preparation of financial statements in conformity with Generally
Accepted Accounting Principles ("GAAP") requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements. Actual amounts could differ from those estimates.

Foreign Currency Translation

The functional currency for most foreign operations is the local currency.
Foreign currency financial statements are converted into United States dollars
by translating balance sheet accounts at the current exchange rate at yearend
and income statement items at the average exchange rate for the year, with the
resulting translation adjustment made to a separate component of shareholders'
equity. Transaction gains or losses, other than those related to items deemed
to be of a long-term nature, are included in net income in the period in which
they occur.

Cash Equivalents

Short-term investments (including any debt securities) that are part of the
Company's cash management portfolio are classified as cash equivalents and are
carried at amortized costs. These investments are highly liquid, are of
limited credit risk and have original maturities of three months or less. The
carrying amount of cash equivalents approximates market.

Accounts Receivable and Allowances

Accounts receivable are the result of the Company's worldwide sales
activities. Although the Company's credit risk is spread across a large number
of customers within a wide geographic area, periodic concentrations within a
specific industry occur due to the seasonality of its businesses. As of
December 31, 1995, the Company's receivables from the ski, skate and snowboard
industries amounted to 50% of total receivables. The Company performs periodic
credit evaluations to manage its credit risk. Allowances consist primarily of
allowance for bad debts, but also include reserves for volume-related
discounts of $2,937,000 and $3,018,000 as of December 31, 1995 and 1994,
respectively.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined on
the LIFO method with respect to approximately 45% and 43% of total inventories
at December 31, 1995 and 1994, respectively. Cost was determined on the FIFO
method for all other inventories.

20
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

Property, Plant and Equipment

Property, plant and equipment is recorded at cost. Depreciation is provided
on the straight-line method based upon the estimated useful lives of the
assets. Repairs and maintenance of $7,270,000, $6,020,000 and $5,438,000 in
1995, 1994 and 1993, respectively, were expensed as incurred.

Intangibles

Goodwill arising from acquisitions is amortized on a straight-line basis
over a period up to 40 years. Other intangibles are amortized on a straight-
line basis over 3 to 15 years. Accumulated amortization of intangibles as of
December 31, 1995 and 1994 amounted to $3,481,000 and $2,843,000,
respectively. The Company periodically reviews intangibles for impairment of
value.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs for the years
ended December 31, 1995, 1994 and 1993 amounted to $13,006,000, $10,177,000
and $8,507,000, respectively.

Research and Development

Research and development costs are charged to expense as incurred. Research
and development costs for the years ended December 31, 1995, 1994 and 1993
amounted to $7,132,000, $6,255,000 and $4,271,000, respectively.

Income Taxes

Income taxes are provided for based upon Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes," which requires that
income taxes be provided for using the liability method.

Per Share Data

Earnings and cash dividends per share data have been retroactively adjusted
for stock dividends. Earnings per share were determined by dividing net income
by the average outstanding shares, including common stock equivalents and ESOP
shares, using the treasury stock method. Common stock equivalents include
stock options. Primary earnings per share approximate earnings per share on a
fully diluted basis.

Newly Issued Accounting Standards

The Company plans to adopt SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" in 1996. SFAS
No. 121 requires that impaired assets or assets to be disposed of be accounted
for at the lower of the carrying amount or fair value of the assets less costs
of disposal. The adoption of the new standard is not expected to have a
material effect on the Company's financial statements.

21
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 2--DISCONTINUED OPERATIONS

In October 1995, the Company signed a letter of intent to sell the assets
and business of its swimming pool and motorized pool cover business
("Division") to General Aquatics, Inc. ("GAI"). As a result of the sale, the
Division has been shown in the accompanying financial statements as a
discontinued operation. The Company completed the sale on March 5, 1996.
Consideration included a 5.6% subordinated note with a face value of
approximately $6.2 million and approximately 9% of the outstanding common
stock of GAI, a privately owned company. In addition, the Company received
warrants to purchase additional shares upon the occurrence of certain
conditions. The exercise of the warrants may be funded through the surrender
of the unpaid portion of the note. The note is due at the end of five years.
Additionally, GAI has agreed to assume certain liabilities of the Division. As
required under GAAP the note receivable was discounted to reflect a market
rate and the common stock was valued at an estimated fair market value.

The estimated loss on disposal of the discontinued operations, net of tax
benefit of $3,218,000, includes a provision for anticipated operating losses
of $1,300,000 prior to disposal. The tax benefit is more than the benefit
computed using statutory tax rates due to the realization of the benefit of
deductions treated as permanent differences in prior years. Net assets of
discontinued operations have been segregated in the accompanying Consolidated
Balance Sheets and consist primarily of accounts receivable, inventories,
fixed assets and goodwill offset by accounts payable, accrued payroll and
related items and other accruals (excluding a reserve for estimated losses on
disposal and anticipated operating losses prior to disposal). Net sales of
$65,349,000, $67,449,000 and $57,928,000 in the years ended December 31, 1995,
1994 and 1993, respectively, were excluded from consolidated net sales in the
accompanying Consolidated Statements of Income.

NOTE 3--ACQUISITION OF BUSINESSES

On October 14, 1993, the Company purchased certain assets of Ocean State
International, Inc. ("Girvin"). Girvin is a manufacturer and distributor of
ProFlex full-suspension mountain bikes and Girvin accessories for sale in the
United States and Europe. On February 4, 1995, the Company purchased Dana
Design Ltd., a small manufacturer and distributor of high-end backpacks for
sale primarily in the United States. During the year, the Company purchased
the assets of two additional small businesses.

NOTE 4--INVENTORIES

Inventories consisted of the following at December 31:

<TABLE>
<CAPTION>
1995 1994
-------- --------
(THOUSANDS)
<S> <C> <C>
Finished goods............................................... $ 97,193 $ 61,987
Work in process.............................................. 9,700 8,788
Raw materials................................................ 38,668 32,216
-------- --------
Total inventories at lower of FIFO cost or market
(approximates current cost)................................. 145,561 102,991
Less LIFO valuation reserve.................................. 4,882 5,055
-------- --------
$140,679 $ 97,936
======== ========
</TABLE>

NOTE 5--BORROWINGS AND OTHER FINANCIAL INSTRUMENTS

The Company has a $40 million 364-day unsecured revolving credit line, all
of which was outstanding at December 31, 1995, with the same lenders and
providing for substantially the same covenants, interest rate options and
commitment fees as under the $85 million credit line discussed below. The
Company also has foreign and domestic short-term lines of credit, totaling
$33.3 million, of which $10.2 million was outstanding at December 31, 1995.
The foreign subsidiaries' lines of credit generally have no termination dates
but are reviewed

22
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5--BORROWINGS AND OTHER FINANCIAL INSTRUMENTS--(CONTINUED)

annually for renewal and are denominated in the subsidiaries' local
currencies. At December 31, 1995, interest rates on short-term lines of credit
ranged from 6.1% to 11.2%. The weighted average interest rates on short-term
lines of credit as of December 31, 1995 and 1994 were 6.8% and 6.5%,
respectively.

The principal components of long-term debt at December 31 were:

<TABLE>
<CAPTION>
1995 1994
------- --------
(THOUSANDS)
<S> <C> <C>
Notes payable due in nine equal annual principal instalments
beginning in 1996 through 2004 with semi-annual interest
payable at 8.39%............................................ $40,000 $ 40,000
$85 million three-year bank revolving credit line due June
28, 1997, quarterly interest payments due at LIBOR plus 3/4%
and a commitment fee of 3/8% on the unused portion of the
line through June 1997...................................... 35,500 68,000
Note payable due in monthly instalments through February 2001
with interest payable monthly at LIBOR plus 1 1/2% (7.47% at
December 31, 1995).......................................... 4,325 4,703
Other debt................................................... 101 136
------- --------
79,926 112,839
Less--amounts due within one year............................ 4,855 2,918
------- --------
$75,071 $109,921
======= ========
</TABLE>

The principal amount of long-term debt maturing in each of the five years
following 1995 is:

<TABLE>
<CAPTION>
(THOUSANDS)
-----------
<S> <C>
1996............................. $ 4,855
1997............................. 40,383
1998............................. 4,916
1999............................. 4,950
2000............................. 4,987
</TABLE>

Interest paid on short- and long-term debt for the years ended December 31,
1995, 1994 and 1993 was $9.9 million, $7.5 million and $5.8 million,
respectively.

Under the $85 million revolving credit line, up to $15 million is available
for either standby letters of credit or for borrowings. The credit line is
subject to an agreement which, among other things, restricts amounts available
for payment of cash dividends by the Company. As of December 31, 1995,
retained earnings were free of such restrictions. Interest rates on the
revolving line at December 31, 1995 ranged from 6.5% to 8.5%.

The Company had $15.3 million of letters of credit outstanding as of
December 31, 1995.

The Company has entered into interest rate swap agreements to manage its
interest rate exposure on the $40 million 8.39% notes payable. During 1993,
the Company converted the fixed rate to a variable rate by entering into an
interest rate swap with a maturity in 1996. The Company subsequently entered
into an offsetting swap effectively returning the debt to a fixed rate which
also matures in 1996. The remaining gain of $9,000 arising from these
transactions is being recognized over the remaining life of the interest rate
swap agreements. In 1994 the Company also entered into an interest rate swap
agreement effectively converting the interest rate

23
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5--BORROWINGS AND OTHER FINANCIAL INSTRUMENTS--(CONTINUED)

exposure on the $4.3 million bank loan described above to a fixed rate of
6.97%. The interest rate swap agreement matures at the time the related loan
matures. The Company is exposed to credit loss in the event of nonperformance
by the banks, who are parties to these agreements. However, in view of the
substantial size and financial strength of these banks, the Company believes
that non-performance is remote.

The carrying amounts for the short-term lines of credit and the long-term
bank revolving credit line approximates their fair value since floating
interest rates are charged, which approximate market rates. The fair value of
the $40 million 8.39% notes payable, based on quoted market price, is $39.9
million as compared to a carrying amount of $40.0 million, and the fair value
of the $4.3 million note payable equals the carrying amount.

The Company, including its foreign subsidiaries, enters into forward
exchange contracts to hedge certain anticipated and firm sales and purchase
commitments which are denominated in U.S. or foreign currencies. The purpose
of the foreign currency hedging activities is to reduce the Company's risk to
fluctuating exchange rates. At December 31, 1995, the Company had foreign
exchange contracts with maturities of generally less than one year in the
aggregate amount of $12.4 million, and with net unrealized losses of $44,993.
The unrealized losses will be recognized in earnings when realized and when
the underlying transaction occurs. At December 31, 1995, the Company had no
deferred realized gains or losses from forward exchange contracts.

NOTE 6--INCOME TAXES

Pretax income from continuing operations for the years ended December 31 was
taxed under the following jurisdictions:

<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
(THOUSANDS)
<S> <C> <C> <C>
Domestic................................................ $22,174 $16,353 $15,489
Foreign................................................. 6,445 5,091 3,330
------- ------- -------
$28,619 $21,444 $18,819
======= ======= =======
</TABLE>

Components of the income tax provision applicable to continuing operations
for the three years ended December 31 are:

<TABLE>
<CAPTION>
1995 1994 1993
---------------- ---------------- -----------------
CURRENT DEFERRED CURRENT DEFERRED CURRENT DEFERRED
------- -------- ------- -------- ------- --------
(THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Federal...................... $7,625 $(405) $5,835 $(755) $5,685 $(710)
State........................ 1,310 (40) 1,915 (85) 1,085 (30)
Foreign...................... 310 20 505 275 (5) 430
------ ----- ------ ----- ------ -----
$9,245 $(425) $8,255 $(565) $6,765 $(310)
====== ===== ====== ===== ====== =====
</TABLE>

24
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 6--INCOME TAXES--(CONTINUED)

The principal elements accounting for the difference between the statutory
federal income tax rate and the effective tax rates for the three years ended
December 31 are:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
(PERCENT)
<S> <C> <C> <C>
Statutory federal income tax rate............................. 35.0 35.0 35.0
State income tax effect....................................... 2.9 5.6 3.6
Tax effect of foreign earnings................................ (6.8) (4.8) (4.0)
Other......................................................... (0.2) 0.1 (0.3)
---- ---- ----
30.9 35.9 34.3
==== ==== ====
</TABLE>

No provision for United States income taxes has been made on undistributed
earnings of foreign subsidiaries, since these earnings are considered to be
permanently reinvested. At December 31, 1995, the foreign subsidiaries had
unused operating loss carryforwards of approximately $4.6 million of which
approximately $1.6 million expires in 2000 and the remainder carry forward
indefinitely. Since the use of these operating loss carryforwards is limited
to future taxable earnings of the related foreign subsidiaries, a valuation
reserve has been recognized to offset the deferred tax assets arising from
such carryforwards. As a result of realizing the benefit of certain foreign
operating loss carryforwards, the valuation reserve, which is included in the
tax effect of foreign earnings above, was reduced by $1.4 million and $.5
million, in 1995 and 1993, respectively, and none in 1994.

Deferred tax assets and liabilities are comprised of the following at
December 31:

<TABLE>
<CAPTION>
1995 1994
------- -------
(THOUSANDS)
<S> <C> <C>
Deferred tax liabilities:
Depreciation and amortization of property, plant and equipment. $ 6,323 $ 7,031
Trademark amortization......................................... 246 207
Other.......................................................... 7,869 6,680
------- -------
Deferred tax liabilities..................................... 14,438 13,918
Deferred tax assets:
Insurance accruals............................................. 2,006 1,967
Tax effect of foreign loss carryforwards....................... 1,863 3,222
Bad debt reserve............................................... 879 1,021
Other.......................................................... 5,233 5,963
------- -------
9,981 12,173
Valuation reserve.............................................. 1,863 3,222
------- -------
Current deferred tax assets.................................. 8,118 8,951
------- -------
Deferred tax liabilities, net.................................. $ 6,320 $ 4,967
======= =======
</TABLE>

Income taxes paid, net of refunds, in the years ended December 31, 1995,
1994 and 1993 were $6.8 million, $6.7 million and $5.3 million, respectively.

25
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7--COMMITMENTS AND CONTINGENCIES

Future minimum payments under noncancelable operating leases as of December
31, 1995, are as follows (in thousands):

<TABLE>
<S> <C>
1996.............................................. $2,021
1997.............................................. 2,026
1998.............................................. 1,785
1999.............................................. 1,162
2000.............................................. 565
Thereafter........................................ 500
------
$8,059
======
</TABLE>

Leases are primarily for rental of facilities, and about one-half of these
contain rights to extend the terms from one to ten years.

Net rental expense, including those rents payable under noncancelable leases
and month-to-month tenancies, amounted to $3,105,000, $2,969,000 and
$2,767,000 for the years ended December 31 1995, 1994 and 1993, respectively.

The Company is subject to various legal actions and proceedings in the
normal course of business. While the ultimate outcome of these matters cannot
be predicted with certainty, and to the extent not previously provided,
management does not believe these matters will have a material adverse effect
on the Company's financial statements.

The Company is among several potentially responsible parties named in a
cleanup of a chemical waste disposal site in South Carolina under the
Comprehensive Environmental Response, Compensation and Liability Act. The
ultimate outcome of this matter cannot be predicted with certainty, however,
to the extent to which not previously provided, management does not believe
this matter will have a material adverse effect on the Company's financial
statements.

NOTE 8--PENSION PLANS AND OTHER BENEFIT PLANS

The Company sponsors several trusteed noncontributory defined benefit
pension plans covering most of its employees. Benefits are generally based on
years of service and the employee's highest compensation for five consecutive
years during the years of credited service. Contributions are intended to
provide for benefits attributable to service to date and service expected to
be provided in the future. The Company funds these plans in accordance with
the Employee Retirement Income Security Act of 1974.

The Company also sponsors defined contribution pension plans covering
certain domestic employees who are not covered by a defined benefit pension
plan. Contributions by the Company for the defined contribution plans are
determined as a percent of the amounts contributed by the respective
employees.

26
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 8--PENSION PLANS AND OTHER BENEFIT PLANS--(CONTINUED)

The following table sets forth the defined benefit plans' funded status and
amounts recognized in the Company's consolidated balance sheets at
December 31:

<TABLE>
<CAPTION>
1995 1994
--------------------------- ---------------------------
ASSETS EXCEED ACCUMULATED ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS BENEFITS EXCEED ASSETS
------------- ------------- ------------- -------------
(THOUSANDS)
<S> <C> <C> <C> <C>
Actuarial present value
of benefit obligations:
Accumulated benefit
obligation, including
vested benefits of
$35,870 in 1995 and
$26,202 in 1994...... $(33,505) $(3,298) $(26,510) $(2,347)
======== ======= ======== =======
Projected benefit
obligation for service
rendered to date....... $(42,140) $(3,298) $(32,631) $(2,347)
Plan assets at fair
value, primarily
publicly traded stocks,
bonds, and other fixed
income securities...... 41,067 35,018
-------- ------- -------- -------
Plan assets in excess of
(or less than) the
projected benefit
obligation............. (1,073) (3,298) 2,387 (2,347)
Unrecognized net loss... 3,050 869 1,145 93
Unrecognized prior
service cost........... 415 328 (73) 385
Unrecognized net
transition (asset)
obligation at January
1, 1987, net of
amortization........... (1,430) 523 (1,706) 589
Adjustment required to
recognize minimum
liability.............. (1,720) (1,067)
-------- ------- -------- -------
Prepaid pension cost
(pension liability)
recognized in the
consolidated balance
sheets................. $ 962 $(3,298) $ 1,753 $(2,347)
======== ======= ======== =======
</TABLE>

The weighted average discount rates and rates of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7.25% and 4.4%, respectively, at December
31, 1995 and 8.25% and 4.6%, respectively, at December 31, 1994. The expected
long-term rates of return on plan assets were 9% for each of the three years
ended December 31, 1995. As a result of reducing the weighted average discount
rate from 8.25% to 7.25%, the accumulated benefit obligation and the projected
benefit obligation increased by $4.1 million and $5.8 million, respectively.

Net pension cost consisted of the following at December 31:

<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
(THOUSANDS)
<S> <C> <C> <C>
Service cost-benefits earned during the period...... $ 1,312 $ 1,495 $ 1,108
Interest cost on the projected benefit obligation... 3,018 2,829 2,607
Actual (gains) loss on plan assets.................. (7,369) 360 (2,798)
Net amortization and deferral....................... 4,162 (3,802) (525)
------- ------- -------
Total net periodic pension cost of funded defined
benefit plans...................................... 1,123 882 392
Defined contribution plans.......................... 465 435 517
------- ------- -------
Total pension plan cost............................. $ 1,588 $ 1,317 $ 909
======= ======= =======
</TABLE>

In November 1992, the FASB issued Statement No. 112, "Employers' Accounting
for Postemployment Benefits," that requires accrual accounting for
postemployment benefits instead of recognizing an expense for those benefits
when paid. The Company has complied with the new rules beginning in 1994. The
adoption of the new standard has not had a material effect on the Company's
financial statements.

27
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 9--QUARTERLY OPERATING DATA (UNAUDITED)

The following unaudited quarterly results included below have been restated
from those originally reported to reflect the results of continuing
operations, except for the final net income per share column.

<TABLE>
<CAPTION>
CONTINUING OPERATIONS
-------------------------------
NET GROSS NET NET INCOME NET INCOME
SALES PROFIT INCOME PER SHARE PER SHARE
------ ------ ------ ---------- ----------
(IN MILLIONS EXCEPT FOR PER SHARE FIGURES)
<S> <C> <C> <C> <C> <C>
1995
First quarter........................ $138.0 $ 34.3 $ 3.6 $0.30 $0.17
Second quarter....................... 135.9 36.2 5.4 0.41 0.48
Third quarter........................ 134.7 36.3 6.0 0.36 0.40
Fourth quarter....................... 135.7 36.6 4.8 0.29 (0.01)
------ ------ ----- ----- -----
$544.3 $143.4 $19.8 $1.37 $1.03
====== ====== ===== ===== =====
1994
First quarter........................ $102.1 $ 25.2 $ 1.6 $0.13 $0.04
Second quarter....................... 107.5 30.3 4.1 0.35 0.42
Third quarter........................ 104.6 28.9 3.9 0.33 0.38
Fourth quarter....................... 120.8 31.6 4.2 0.35 0.25
------ ------ ----- ----- -----
$435.0 $116.0 $13.8 $1.15 $1.09
====== ====== ===== ===== =====
</TABLE>

NOTE 10--STOCK OPTIONS

Under the Company's 1994 and 1988 Incentive Stock Option Plans ("1994 and
1988 Plans", respectively), options may be granted to eligible directors and
key employees of the Company and its subsidiaries at not less than 100% of the
market value of the shares on the dates of grant. No further options may be
granted under the 1988 Plan.

The 1994 Plan permits the granting of options for terms not to exceed ten
years from date of grant. The options are exercisable on such terms as may be
established by the Compensation Committee of the Board of Directors at the
dates of grant.

The Company is authorized, at the discretion of the Compensation Committee,
to provide loans to key employees in connection with the exercise of stock
options under both the 1994 Plan and the 1988 Plan. The loans are
collateralized by the underlying shares of stock issued and bear interest at
the applicable rates published by the IRS. At December 31, 1995 and 1994,
there was a total of $3,378,000 and $2,440,000, respectively, of loans and
accrued interest outstanding which are due on various dates through December
2000. The loan amounts have been deducted from shareholders' equity.

28
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 10--STOCK OPTIONS--(CONTINUED)

Further information regarding the 1994 and 1988 Plan is shown below:

<TABLE>
<CAPTION>
1994 PLAN 1988 PLAN
---------------- ---------------
<S> <C> <C>
Status at December 31, 1995
Number of shares subject to option.......... 322,500 232,256
Exercise price per share.................... $15.00 to $23.00 $5.66 to $14.52
Number of shares exercisable................ 26,960 178,182
Available for grant......................... 718,600
---------------- ---------------
Status at December 31, 1994
Number of shares subject to options......... 182,800 399,935
Exercise price per share.................... $15.00 to $17.25 $5.66 to $14.52
Number of shares exercisable................ 184,071
Available for grant......................... 867,200
---------------- ---------------

Information regarding the number of shares subject to options which were
exercised during the three years ended December 31, 1995 is shown below:

<CAPTION>
YEAR SHARES PRICE PER SHARE
---- ---------------- ---------------
<S> <C> <C>
1995........................................ 141,215 $5.66 to $17.25
1994........................................ 83,774 $5.66 to $14.52
1993........................................ 107,240 $5.66 to $ 8.77
---------------- ---------------
</TABLE>

During 1995, options for 182,500 shares were granted at $16.38 to $23.00 per
share, and options for 69,264 shares at $11.75 to $17.25 per share were
canceled or expired. At December 31, 1995, 1,273,356 shares of common stock
were reserved for issuance under the Plans.

NOTE 11--SHAREHOLDERS' EQUITY

Preferred Stock

Shares are issuable in one or more series, and the Board of Directors has
authority to fix the terms and conditions of each series.

Stock Offering

On June 1, 1995, the Company completed a secondary public offering of 4.6
million new shares of its common stock. The net proceeds of $67.2 million were
used to reduce amounts outstanding under the $85 million credit facility.

Employee Stock Ownership Plan

The Company has an Employee Stock Ownership Plan ("ESOP") which covers
substantially all of its domestic non-union employees with at least one year
of service. As of December 31, 1995, the trust was indebted to the Company in
the aggregate amount of $861,000 in connection with stock purchases made from
1982 through 1984 of which 228,255 shares with an aggregate market value of
$5,250,000 as of December 31, 1995 remained unallocated to participants. These
loans are repayable over the next seven to nine years with interest at prime
plus 1/2%, not to exceed 18% and the unallocated shares will be released to
participants proportionately

29
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 11--SHAREHOLDERS' EQUITY--(CONTINUED)

as these loans are repaid. Of the total dividends received by the ESOP on its
investment in the Company's common stock, dividends on unallocated shares in
the amount of $169,000 and $157,000 in 1995 and 1994, respectively, were used
to service these loans. Additionally, the trust was indebted to the Company in
the amount of $400,000, at December 31, 1995 and 1994 in connection with
distributions made to terminees. The balance outstanding was repaid subsequent
to the 1995 year end.

Shareholders' equity has been reduced by the amounts of the loans and any
payments made by the Company on behalf of the trust. The payments, which at
December 31, 1995 totaled $139,000, are being amortized to expense over the
lives of the loan.

The amount of the Company's annual contribution to the ESOP is at the
discretion of the Company's Board of Directors. For the three years 1995, 1994
and 1993 contributions were limited to amounts in excess of annual dividends,
net of debt service, of the ESOP necessary to fund obligations arising in each
of those years to retired and terminated employees. These amounts were
$13,000, $1,016,000 and $1,260,000, respectively. ESOP expense, including
amortization of the foregoing payments, was $264,000, $1,014,000 and
$1,012,000 in 1995, 1994 and 1993, respectively. Allocated shares as of
December 31, 1995 totaled 2,036,347.

Preferred Stock Rights

Rights are outstanding which entitle the holder of each share of Common
Stock of the Company to buy one one-hundredth of a share of Series A preferred
stock at an exercise price of $51.712 per one one-hundredth of a share,
subject to adjustment. The rights are not separately tradable or exercisable
until a party either acquires, or makes a tender offer that would result in
ownership of, at least 20% of the Company's common shares. If a person becomes
the owner of at least 20% of the Company's outstanding common shares (an
"Acquiring Person"), each holder of a right other than such Acquiring Person
and its affiliates is entitled, upon payment of the then current exercise
price per right (the "Exercise Price"), to receive shares of Common Stock (or
Common Stock equivalents) having a market value of twice the Exercise Price.
If the Company subsequently engages in certain mergers, business combinations
or asset sales with the Acquiring Person, each holder of a right other than
the Acquiring Person and its affiliates is thereafter entitled, upon payment
of the Exercise Price, to receive stock of the Acquiring Person having a
market value of twice the Exercise Price. At any time after any party becomes
an Acquiring Person, the Board of Directors may exchange the rights (except
those held by the Acquiring Person) at an exchange ratio of one common share
per right. Prior to a person becoming an Acquiring Person, the rights may be
redeemed at a redemption price of one cent per right, subject to adjustment.
The rights are subject to amendment by the Board.

30
<PAGE>

ANTHONY INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 12--SEGMENT DATA

The Company and its subsidiaries are organized into sporting goods and other
recreational products and industrial products segments. The sporting goods and
other recreational products segment is composed of the following lines of
business: manufacture and sale of skis and snowboards; sale of in-line skates;
manufacture and sale of athletic jackets, imprintable shirts, golf shirts, and
bowling shirts; manufacture and sale of personal flotation devices, towables
and rainwear; manufacture and sale of full-suspension mountain bikes and
accessories; manufacture and sale of rods, reels and other fishing tackle
items; and manufacture and sale of backpacks and tents. The industrial
products segment consists of the manufacture and sale of extruded monofilament
used by the paperweaving industry and for cutting line, fishing line and
sewing thread; fiberglass marine antennas, communication and navigation
equipment, light poles and transmission and distribution poles; and laminated
and coated paperboard products.

The following segment data is presented for continuing operations for the
three years ended December 31, 1995. "Identifiable Assets" are as of
December 31.
<TABLE>
<CAPTION>
NET SALES TO
UNAFFILIATED CUSTOMERS PRETAX INCOME
----------------------- ----------------
1995 1994 1993 1995 1994 1993
------- ------- ------- ---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Sporting goods and other recreational
products............................ 349.4 264.7 227.6 26.9 17.1 14.0
Industrial products.................. 194.9 170.3 146.1 18.0 16.7 14.0
------- ------- ------- ---- ---- ----
Net sales and operating profits...... 544.3 435.0 373.7 44.9 33.8 28.0
======= ======= =======
Corporate
Interest and other income.................................. 0.3 0.4 0.9
Interest expense........................................... (9.9) (7.5) (5.8)
General expense............................................ (6.7) (5.3) (4.3)
---- ---- ----
Pretax income................................................ 28.6 21.4 18.8
==== ==== ====
</TABLE>

<TABLE>
<CAPTION>
IDENTIFIABLE CAPITAL
ASSETS EXPENDITURES DEPRECIATION AMORTIZATION
----------------- -------------- -------------- --------------
1995 1994 1993 1995 1994 1993 1995 1994 1993 1995 1994 1993
----- ----- ----- ---- ---- ---- ---- ---- ---- ---- ---- ----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sporting goods and other
recreational products.. 269.9 203.6 163.4 7.7 6.7 5.8 4.9 3.0 3.3 0.6 0.5 0.5
Industrial products..... 91.3 74.8 66.3 9.6 4.6 2.7 4.5 4.2 4.4
----- ----- ----- ---- ---- --- --- --- --- --- --- ---
Total segment data.... 361.2 278.4 229.7 17.3 11.3 8.5 9.4 7.2 7.7 0.6 0.5 0.5
Corporate............... 14.5 12.9 14.1 0.1 0.1 0.1 0.1 0.1 0.1
----- ----- ----- ---- ---- --- --- --- --- --- --- ---
375.7 291.3 243.8 17.3 11.3 8.5 9.5 7.3 7.8 0.7 0.6 0.6
===== ===== ===== ==== ==== === === === === === === ===
</TABLE>

<TABLE>
<CAPTION>
TOTAL SEGMENT
UNITED STATES FOREIGN ELIMINATIONS DATA
----------------- --------------- ------------------- -----------------
1995 1994 1993 1995 1994 1993 1995 1994 1993 1995 1994 1993
----- ----- ----- ----- ---- ---- ----- ----- ----- ----- ----- -----
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales............... 444.8 354.0 305.2 122.0 99.8 87.1 (22.5) (18.8) (18.6) 544.3 435.0 373.7
Less-intergeographic
sales.................. 7.1 8.5 7.3 15.4 10.3 11.3 (22.5) (18.8) (18.6)
----- ----- ----- ----- ---- ---- ----- ----- ----- ----- ----- -----
Net sales to
unaffiliated customers. 437.7 345.5 297.9 106.6 89.5 75.8 544.3 435.0 373.7
----- ----- ----- ----- ---- ---- ----- ----- -----
Operating profit........ 37.9 27.2 23.6 7.0 6.6 4.4 44.9 33.8 28.0
----- ----- ----- ----- ---- ---- ----- ----- -----
Identifiable assets..... 294.4 228.4 195.3 66.8 50.0 34.4 361.2 278.4 229.7
----- ----- ----- ----- ---- ---- ----- ----- -----
Capital expenditures.... 12.4 9.4 7.1 4.9 1.9 1.4 17.3 11.3 8.5
----- ----- ----- ----- ---- ---- ----- ----- -----
Depreciation............ 7.4 6.0 6.5 2.0 1.2 1.2 9.4 7.2 7.7
----- ----- ----- ----- ---- ---- ----- ----- -----
Amortization............ 0.6 0.5 0.5 0.6 0.5 0.5
===== ===== ===== ===== ===== =====
</TABLE>

31
<PAGE>

ANTHONY INDUSTRIES, INC.

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
Anthony Industries, Inc.

We have audited the accompanying consolidated balance sheets of Anthony
Industries, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these 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 financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Anthony
Industries, Inc. and subsidiaries at December 31, 1995 and 1994, and the
consolidated results of their operation and their cash flows for each of the
three years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Los Angeles, California
February 16, 1996,
except for the first paragraph of Note 2,
as to which the date is March 5, 1996

32
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as noted in the following paragraph the information called for by
Items 10, 11, 12 and 13 have been omitted because on or before April 29, 1996,
Registrant will file with the Commission pursuant to Regulation 14A a
definitive proxy statement. The information called for by these items set
forth in that proxy statement is incorporated herein by reference.

The information called for by Item 10 with respect to executive officers of
the Registrant appears following Item 4 under Part I of this Report.

PART IV

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

The following documents are filed as part of this report.

(a-1) Financial Statements (for the three years ended December 31, 1995
unless otherwise stated):

<TABLE>
<CAPTION>
PAGE REFERENCE
FORM 10-K
--------------
<S> <C>
Statements of consolidated income............................ 16
Consolidated balance sheets at December 31, 1995 and 1994.... 17
Statements of consolidated shareholders' equity.............. 18
Statements of consolidated cash flows........................ 19
Notes to consolidated financial statements................... 20-31
Report of Independent Auditors............................... 32

(a-2) Consolidated financial statement schedule

II-Valuation and qualifying accounts......................... F-1
</TABLE>

All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes.

(a-3) Exhibits

(3)(a)(i) Restated Certificate of Incorporation dated May 4, 1989,
filed as Exhibit (3)(a) to Form 10-K for the year ended
December 31, 1989 and incorporated herein by reference.

(a)(ii) Certificate of Amendment of Restated Certificate of
Incorporation dated May 31, 1995.

(b) By-Laws of Anthony Industries, Inc., as amended, filed as Item
7(c), Exhibit 3.1 to Form 8-K dated November 20, 1995 and
incorporated herein by reference.

33
<PAGE>

(4) (a) Rights Agreement dated August 10, 1989 between the Company and
Harris Trust Company, filed as Item 6, Exhibit (a) to Form 10-Q
for the quarter ended September 30, 1989 and incorporated
herein by reference.

(10) Material contracts

(a) Credit Agreement dated as of June 28, 1993 among Anthony Industries,
Inc., the Banks party thereto and Bank of America National Trust and
Savings Association, as agent filed as Item 6,Exhibit (a)(10)(i) to
Form 10-Q for the quarter ended June 30, 1993 and incorporated herein
by reference.

(1) First Amendment to the Credit Agreement dated as of June 28, 1993
between Anthony Industries, Inc., the Banks, and Bank of America
National Trust and Savings Association as a Bank and as Agent for
the banks filed as Item 6, Exhibit (a)10(i) to Form 10-Q for the
quarter ended June 30, 1994 and incorporated herein by reference.

(2) Second Amendment to Credit Agreement, dated April 21, 1995, filed
as Item 6(a), Exhibit 10.01 to Form 10-Q for the quarter ended
March 31, 1995 and incorporated herein by reference.

(3) Third Amendment to Credit Agreement, dated April 27, 1995, filed as
Item 6(a), Exhibit 10.02 to Form 10-Q for the quarter ended March
31, 1995 and incorporated herein by reference.

(b) Note Agreement Re: $40,000,000 8.39% Senior Notes due November 20, 2004
dated as of October 15, 1992, filed as Exhibit (10)(b) to Form 10-K for
the year ended December 31, 1992 and incorporated herein by reference.

(c) Credit Agreement (364-Day Facility), dated April 27, 1995, filed as
Exhibit 10.03 to Form 10-Q for the quarter ended March 31, 1995 and
incorporated herein by reference.

(d) Executive compensation plans and arrangements

(1) (i) Retirement agreement dated November 20, 1995 between the Company
and B. I. Forester.

(ii) Trust for Anthony Industries, Inc. Supplemental Employee
Retirement Plan for the Benefit of B. I. Forester between the
Company and Wells Fargo Bank N.A., as Trustee, dated November
20, 1995.

(2) (i) Special Supplemental Benefit Agreement between the Company and
Bernard I. Forester dated December 9, 1986, filed as Exhibit
(10)(g) to Form 10-K for the year endedDecember 31, 1986 and
incorporated herein by reference.

(ii) Amendment dated July 27, 1990 to Special Supplemental Benefit
Agreement between the Company and Bernard I. Forester dated
December 9, 1986, filed as Exhibit (10)(f)(2) to Form 10-K for
the year ended December 31, 1990 and incorporated herein by
reference.

(3) 1988 Incentive Stock Option Plan, filed as Exhibit A to the Proxy
Statement for the Annual Meeting of Shareholders held on May 5,
1988 and incorporated herein by reference.

(4) Anthony Industries, Inc. Non-Employee Directors' Benefit Plan
effective May 1, 1992, filed as Item 6, Exhibit (a)(28) of Form 10-
Q for the quarter ended March 31, 1992 and incorporated herein by
reference.

(5) Anthony Industries, Inc. Corporate Officers' Medical Expense
Reimbursement Plan, as amended through October 22, 1993, effective
August 15, 1974, filed as Exhibit (10)(c)(5) to Form 10-K for the
year ended December 31, 1993 and incorporated herein by reference.

(6) Anthony Industries, Inc. Directors' Medical Expense Reimbursement
Plan, as amended through October 22, 1993, effective January 1,
1993 and incorporated herein by reference.

(7) Anthony Industries, Inc. Executive Officers' Incentive Compensation
Plan adopted August 5, 1993 filed as Item 6, Exhibit (a)10(ii) to
Form 10-Q for the quarter ended June 30, 1993 and incorporated
herein by reference.

(8) 1994 Incentive Stock Option Plan, filed as Exhibit A to the Proxy
Statement for the Annual Meeting of Shareholders held on May 5,
1994 and incorporated herein by reference.

34
<PAGE>

(e)(1) Asset Purchase Agreement dated February 16, 1996 among General
Aquatics, Inc., KDI Sylvan Pools, Inc., as Buyer, and Anthony
Industries, Inc., as Seller, filed as Item 7 Exhibit 99(A) to Form 8-K
filed March 21, 1996 and incorporated herein by reference.

(2) 5.61% Subordinated Note Due March 4, 2001, filed as Item 7 Exhibit
99(B) to Form 8-K filed March 21, 1996 and incorporated herein by
reference.

(3) General Aquatics, Inc. Warrant to Purchase Common Stock, filed as
Item 7 Exhibit 99(C) to Form 8-K filed March 21, 1996 and incorporated
herein by reference.

(11) Computation of earnings per share for three years ended December 31,
1995.

(21) Subsidiaries

(23) Consent of Independent Auditors

(27) Financial Data Schedule

(a) 1995 Financial Data Schedule.

(b) 1994 Restated Financial Data Schedule.

(B) REPORTS ON FORM 8-K FILED IN THE FOURTH QUARTER OF 1995:

Form 8-K dated November 20, 1995

Item 5. Bylaws of the Company, as Amended.

35
<PAGE>

SIGNATURES

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

ANTHONY INDUSTRIES, INC.
(Registrant)

By /s/ Richard M. Rodstein
_____________________________________
(Richard M. Rodstein)
President and Chief
Executive Officer

Date March 27, 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.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Richard M. Rodstein Director, President and March 27, 1996
____________________________________ Chief Executive Officer
(Richard M. Rodstein) (Principal Executive
Officer)*

/s/ John J. Rangel Senior Vice President-- March 27, 1996
____________________________________ Finance (Principal Financial
(John J. Rangel) and Accounting Officer)

/s/ B. I. Forester Director, Chairman of the March 27, 1996
____________________________________ Board*
(B. I. Forester)

/s/ Hugh V. Hunter Director* March 27, 1996
____________________________________
(Hugh V. Hunter)

/s/ John H. Offermans Director* March 27, 1996
____________________________________
(John H. Offermans)

/s/ John B. Simon Director* March 27, 1996
____________________________________
(John B. Simon)
</TABLE>

*A majority of the directors of the registrant

36
<PAGE>

ANTHONY INDUSTRIES, INC.

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

(THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONS DEDUCTIONS
--------------------- --------------
CHARGED AMOUNTS
CHARGED TO OTHER CHARGED
BALANCE AT TO COSTS ACCOUNTS TO RESERVE BALANCE
BEGINNING AND (PRIMARILY NET OF AT END
DESCRIPTION OF PERIOD EXPENSES GROSS SALES) REINSTATEMENTS OF PERIOD
----------- ---------- -------- ------------ -------------- ---------
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1995
Allowance for doubtful
items................ $4,404 $2,093 $1,199 $5,298
Other (primarily sales
discounts)........... 3,018 $4,194 4,275 2,937
------ ------ ------ ------ ------
$7,422 $2,093 $4,194 $5,474 $8,235
====== ====== ====== ====== ======
Year ended December 31,
1994(a)
Allowance for doubtful
items................ $3,677 $1,509 $ 782 $4,404
Other (primarily sales
discounts)........... 2,712 5,430 5,124 3,018
------ ------ ------ ------ ------
$6,389 $1,509 $5,430 $5,906 $7,422
====== ====== ====== ====== ======
Year ended December 31,
1993(a)
Allowance for doubtful
items................ $2,879 $1,760 $ 962 $3,677
Other (primarily sales
discounts)........... 2,618 4,563 4,469 2,712
------ ------ ------ ------ ------
$5,497 $1,760 $4,563 $5,431 $6,389
====== ====== ====== ====== ======
</TABLE>
- --------
(a) Information has been restated to reflect the sale of the Division (for
further information see Note 2 of Notes to Consolidated Financial
Statements).

F-1

<PAGE>

EXHIBIT (3)(a)(ii)

CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
ANTHONY INDUSTRIES, INC.

It is hereby certified that:

1. The name of the corporation (hereinafter called the "Company") is
ANTHONY INDUSTRIES, INC.

2. The name under which the Company was originally incorporated is
ANTHONY POOLS, INC., and the date of filing of the original certificate of
incorporation of the Company with the Secretary of State of the State of
Delaware is September 15, 1959.

3. The provisions of the certificate of incorporation as amended and/or
supplemented were restated and integrated into a single instrument entitled
"Restated Certificate of Incorporation of Anthony Industries, Inc.", filed with
the Secretary of State of the State of Delaware on May 12, 1989.

4. The Restated Certificate of Incorporation of the Company is hereby
amended by striking out Article THIRTEENTH thereof and by substituting in lieu
of said Article the following new Article:

"THIRTEENTH: The Board of Directors shall be divided into three
classes. Directors in each class shall be elected to hold office until
the third annual meeting of stockholders following their election. The
Board of Directors shall consist of from six to nine directors, with the
actual number constituting the whole Board, and the number of directors
in each class, being set from time to time by action of the Board of
Directors; provided, however, that no decrease in the number of directors
constituting the whole Board or the number of directors in any class may
shorten the term of any incumbent director."

-1-
<PAGE>

5. The amendment of the Restated Certificate of Incorporation herein
certified has been duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware.

Signed and attested to on May 31, 1995.

/s/ M. E. Lane
___________________________________
M. E. Lane
Vice President

ATTEST:

/s/ Susan E. McConnell
_________________________________
Susan E. McConnell
Secretary

-2-

<PAGE>

EXHIBIT 10(d)(1)(i)

AGREEMENT

AGREEMENT dated as of November 20, 1995 between Anthony Industries,
Inc. (the "Company") and B. I. Forester ("Forester"). Forester has been
President and/or Chief Executive Officer of the Company for over 25 years and
presently serves the Company as Chairman of the Board and Chief Executive
Officer. The Company and Forester desire to provide for Forester's retirement
as an employee of the Company and his continued service to the Company as a
consultant, all as of January 1, 1996 (the "Effective Date"). Forester is
currently employed pursuant to an amended and restated Employment Agreement
dated as of December 31, 1991 and as amended on October 20, 1994 (the "1991
Amended Agreement"). Accordingly, provided that the Employment Period (as
defined in the 1991 Amended Agreement) shall not have been terminated prior to
January 1, 1996 by reason of Forester's death or pursuant to Section 5(a)
thereof, the Company and Forester hereby amend and restate the 1991 Amended
Agreement, effective as of the Effective Date, to read in its entirety as
follows (the "1995 Agreement").

1. (a) The Company hereby engages Forester, for the period
(hereinafter referred to as the "Consulting Period") commencing on the Effective
Date and terminating on December 31, 1998 or Forester's earlier death, as a
consultant to the Company on such matters as the Chief Executive Officer of the
Company may from time to time request, provided such matters are consistent with
Forester's former activities at the Company. Forester shall not be required to
devote more than fifty hours to such consultancy in any calendar month during
the Consulting Period.
<PAGE>

(b) The Company shall pay to Forester, bi-weekly during the
Consulting Period, consulting fees at an annual rate of $200,000. During the
Consulting Period: (i) Forester shall be entitled to receive group medical,
hospital, dental, life and long-term disability insurance substantially the same
as that provided to him immediately prior to the Effective Date and be eligible
for reimbursement under the Company's Officers' or Directors' Medical Expense
Reimbursement Plans, and (ii) the Company shall continue the Commonwealth Life
Insurance Company policy in the amount of $250,000 insuring Forester's life and
payable to the beneficiary designated by Forester ("Commonwealth"). The existing
insurance agreement relating to a split-dollar life insurance policy insuring
Forester's life shall continue in effect in accordance with its terms. With
respect to Commonwealth, the Company shall pay all premiums required to obtain a
fully paid up policy prior to expiration of the Consulting Period. During the
Consulting Period, Forester shall continue to receive the perquisites provided
to him prior to the Effective Date (all material perquisites having been
acknowledged by Forester and the Company in writing), shall be provided an
office and secretarial assistance as required and shall be reimbursed for
business expenses reasonably incurred by him for the benefit of the Company.

2. (a) Forester hereby waives all rights to receive, and agrees to
forego the payment of, any incentive compensation under the Company's Executive
Officers' Incentive Compensation Plan (the "Plan") with respect to 1995. In
lieu of the foregoing incentive compensation, the Company shall pay to Forester
the amount of $431,200 (the "Target Payment") pursuant to the terms of this 1995
Agreement, subject to the following adjustments:

2
<PAGE>

(i) If Incentive Compensation Income (as defined below) for
1995 (the "1995 ICI") is less than $27,984,000 (the "Target ICI") but
not less than $25,507,000, then Forester shall be entitled to receive
an amount equal to the Target Payment reduced by $4.74 for each $100
by which the 1995 ICI is less than the Target ICI. For purposes of
this 1995 Agreement, Incentive Compensation Income means the
consolidated net income of the Company as shown in the annual report
but before (1) extraordinary items (as that term is used in generally
accepted accounting principles), (2) incentive compensation awarded
under the Plan and (3) provision for state and federal income taxes.

(ii) If the 1995 ICI is less than $25,507,000 but not less
than $18,421,000, then Forester shall be entitled to receive an amount
equal to the Target Payment reduced by (y) the amount of $117,410,
plus (z) $4.43 for each $100 by which the 1995 ICI was less than
$25,507,000.

(b) The definitive amount that Forester is entitled to receive
under this Section 2 is hereafter referred to as the "Final Payment" and is
payable in its entirety on March 15, 1996.

3
<PAGE>

(d) Forester hereby waives all right to receive, and agrees to
forego all presently unpaid installments of, awards under the Plan with respect
to prior years. In lieu of such unpaid installments, the Company shall pay to
Forester, pursuant to the terms of this 1995 Agreement, the amount of $432,268,
such amount to be paid to Forester in installments of $259,360 on March 15, 1996
and $172,908 on March 15, 1997. The foregoing payments are hereby vested and
subject to no forfeiture contingency.

3. (a) Upon Forester's death, whether during the Consulting Period
or thereafter, the Company shall pay $50,000 per year, for a period of ten
years, as follows:

(i) $25,000 per year to Eunice Forester, or if she is not
living at the time any such payment is due, such payment shall be made
in equal shares to Donald A. Forester and Kenneth C. Forester or, if
Donald or Kenneth is not then living, his share shall be paid to his
then living issue per stirpes or, if none, to the survivor of Donald
and Kenneth; and

(ii) $25,000 per year to Forester's beneficiaries to be
designated from time to time by a notice from him in writing to the
Secretary of the Company;

the first such payments to be made within thirty days after Forester's death and
subsequent payments to be made on the nine succeeding anniversaries of the date
of his death.

4
<PAGE>

(b) The obligations of the Company set forth in this Section 3
shall survive the expiration or termination of the other provisions of this 1995
Agreement. Those obligations set forth in Section 3(a)(i) hereof may not be
modified without the written consent of Eunice Forester, and those set forth in
Section 3(a)(ii) hereof are subject to Section 14 hereof.

4. The Company will provide Forester with a "supplemental employee
retirement plan" (herein "SERP") as follows:

(a) Commencing on January 1, 1997 and continuing monthly
thereafter during Forester's lifetime, the Company shall pay to Forester an
amount equal to (i) 4.6% of Average Accounting Base Compensation (as
defined herein), reduced by (ii) the monthly amount received by Forester
under the Pension Plan of Anthony Industries, Inc. (the "Pension Plan").
At Forester's death, the Company shall pay to Forester's widow a monthly
benefit in an amount equal to (i) 4.6% of Average Accounting Base
Compensation reduced by (ii) any monthly amount received by Forester's
widow under the Pension Plan, commencing on the first day of the month
following the month in which Forester dies and ending on the earlier of (x)
the date of Forester's widow's death or (y) the completion of a five-year
period. For purposes of this SERP, Average Accounting Base Compensation
shall mean the average of the highest three calendar years of Accounting
Base Compensation during Forester's employment with the Company, and
Accounting Base Compensation for a calendar year shall mean

5
<PAGE>

the sum of Forester's Basic Compensation (as defined in the 1991 Amended
Agreement) and incentive compensation awarded in respect of such calendar
year. The Company shall promptly deliver to Forester, or Forester's widow,
as the case may be, a copy of the schedule of payments required to be made
by this provision and which is to be furnished to the Trustee pursuant to
Section 2.1 of the Trust.

(b) If the Company or the Trustee fails to make any payment to
Forester or Forester's widow (hereinafter referred to as "The Foresters")
provided for in Section 4(a) hereof when due and such failure continues
until the 30th day after demand by The Foresters therefor, The Foresters
shall have the right to declare a breach at any time thereafter (the "Date
of Breach") and require the Company to pay to Forester or his widow, as the
case may be, within seven days after the Date of Breach, in lieu of all
payments otherwise due under Section 4(a) hereof, an amount equal to the
Lump Sum Equivalent (as defined herein). The Lump Sum Equivalent shall
mean an amount equal to the actuarial present value of all remaining
payments computed using a 7.5% discount rate and the average of male and
female mortality factors in the 1983 GAM table. For illustrative purposes,
such factor for a 65 year old male with a 46 year old spouse is 129.872.

(c) Simultaneously with the execution and delivery of this 1995
Agreement, the Company is funding this SERP by promptly establishing a
"rabbi trust" (the "Trust") with Wells Fargo Bank as trustee (Wells Fargo
Bank or its successor, as

6
<PAGE>

provided in the Trust, is hereinafter referred to as the "Trustee") in the
form attached hereto as Exhibit A, and is depositing into the Trust cash in
an amount equal to the Accumulated Benefits Obligation ("ABO") of the
Company to Forester and Forester's widow under this SERP calculated as of
December 31, 1995. The ABO has been calculated in accordance with SFAS 87
(i) using a discount rate of 7.75% and (ii) in respect to the next to the
last sentence of Section 4(a) hereof, including in the calculation the
Target Payment as defined in Section 2(a) hereof. Simultaneously with the
deposit of such funds into the Trust, the Company is delivering to Forester
a certificate, in form and substance reasonably satisfactory to Forester,
of TPF&C or another nationally recognized actuarial firm (hereinafter
"Actuary") certifying that the amount deposited is not less than the
Company's ABO as of December 31, 1995 with respect to the required payments
to Forester and Forester's widow under this SERP calculated on the basis of
the discount rate and Target Payment set forth, or referred to, in this
Section 4(c).

(d) Within 30 days after releasing the audited net income of the
Company for the year 1995 over the wire service, the Company shall deliver
to Forester a supplementary certificate from the Actuary showing the
Company's audited ABO to Forester and Forester's widow at December 31, 1995
calculated on the basis of substituting the Final Payment defined in
Section 2(b) hereof for the assumed Target Payment used in Section 4(c) and
utilizing a discount rate of 7.75%. The difference, if any, between the
amount deposited pursuant to Section 4(c) and the amount of the ABO

7
<PAGE>

calculated in accordance with this Section 4(d) shall be withdrawn from the
Trust by the Company within seven days thereafter.

(e) Commencing with the year 1998, the Company shall deliver to
Forester within 90 days after the end of that year and each subsequent year
(i) a statement of assets and liabilities of the Trust as of the end of the
respective year showing the individual assets at cost and at fair market
value (the "Trust Statement") and (ii) a certificate of the Actuary setting
forth the amount required as of the last day of each year to fully fund the
benefit payable under this SERP utilizing a discount rate of 7.75% (the
"Full Funding Amount"). Such certificate shall set forth all actuarial
assumptions used. To the extent that the Full Funding Amount exceeds the
fair market value of the net assets shown on the Trust Statement as of the
last day of each such year, the difference shall be deposited by the
Company in the Trust in five substantially equal annual payments commencing
seven days after delivery of the Actuary's certificate for the respective
year. To the extent that the fair market value of the net assets shown on
the Trust Statement exceeds the Full Funding Amount, such excess may be
used as an offset against any current and future payments due from prior
years' calculations. To the extent such fair market value of the net
assets exceed 110% of the Full Funding Amount, such excess may be withdrawn
by the Company. The Company shall promptly notify The Foresters of its
decision to withdraw Trust assets in accordance with this Section 4(e).

8
<PAGE>

(f) The Company shall pay the fees and expenses of the Actuary.
The performance by the Company of its obligations under Sections 4(c), 4(d)
and 4(e) hereof shall not relieve the Company of the obligation to make the
payments to Forester and Forester's widow set forth in Section 4(a) hereof.

5. If the Company breaches this 1995 Agreement and such breach
continues uncured for more than 30 days after notice of such breach is given by
Forester ("Notice of Breach") the Company shall, in addition to any other
amounts payable hereunder, pay to Forester within 30 days after the period for
curing such breach has expired the then unpaid amount of consulting fees for the
full unexpired term of the 1995 Agreement and the then unpaid balance of any
payments referenced in Section 2(c) or (d) hereof. The Company shall also pay
in full within 30 days after the period for curing such breach has expired all
future premiums necessary to obtain a fully paid up life insurance policy with
Commonwealth for the insurance coverage described in Section 1(b)(ii) hereof.
For the full unexpired term of the 1995 Agreement commencing with the event of
breach, the Company shall also continue Forester's participation in all group
insurance and medical expense reimbursement plans set forth in Section 1(b)(i)
hereof and shall continue to provide him with, or reimburse him for the cost of,
all perquisites provided to him prior to the event of breach.

6. If a Change in Control (as defined in Section 7 hereof) shall
occur after the Effective Date, the Company shall satisfy all obligations set
forth in Section 5 hereof, except that

9
<PAGE>

all payments required thereunder shall be made promptly after the Change in
Control has occurred.

7. Except as provided below, for purposes of this 1995 Agreement a
Change in Control shall be deemed to have occurred if:

(a) an event that would be required to be reported in response to
Item 6(e) of Schedule 14A promulgated under the 1934 Act, as in effect on
the date hereof, occurs; or

(b) any person (other than any person who as of the date hereof
is the beneficial owner of 10% or more of the Company's voting securities)
or group of persons acting in concert becomes the beneficial owner of 20%
or more of the Company's outstanding voting securities or securities
convertible into such amount of voting securities; or

(c) within two years after a tender offer or exchange offer, or
as the result of a merger, consolidation, sale of substantially all of the
Company's assets or a contested election of the Board of Directors, or any
combination of such transactions, the persons who were directors of the
Company prior to the transaction do not constitute a majority of the Board
of Directors of the Company or its successor; provided, however, that no
such event shall be deemed to constitute a Change in Control if, but only
if, two-

10
<PAGE>

thirds of the Prior Directors of the Company and the Successor Directors,
if any, voting together, within five days after such Prior Directors
receive notice of such event, adopt a resolution stating that such event,
for purposes of this 1995 Agreement, shall not be deemed to constitute a
Change in Control. For purposes of this 1995 Agreement, Prior Directors are
those directors of the Company in office immediately prior to such event,
and Successor Directors are successors to Prior Directors who were
recommended to succeed Prior Directors by a majority of the Prior Directors
then in office.

8. The Company hereby represents to Forester that, subject to the
1995 Agreement becoming effective:

(a) Forester hereby surrenders to the Company all stock options
which are not exercisable prior to December 30, 1995 (the "Surrendered
Options"). The Company hereby agrees to pay to Forester on January 2, 1996
an amount equal to (i) the difference between the weighted average exercise
price of the Surrendered Options and the per share fair market value of the
Company's common stock on the date hereof multiplied by the number of
shares of Company common stock subject to the Surrendered Options, minus
(ii) the amount of $200,000. The per share fair market value of the
Company's common stock, for purposes of this provision, shall be the higher
of (a) the closing sale price of the common stock as reported on the
consolidated reporting system established pursuant to Section 11(a) of the
Securities Exchange Act of 1934, as

11
<PAGE>

amended, or, if the common stock is not so reported, the closing sale price
of the common stock on the principal exchange market for the common stock.

(b) The principal balance of and all accrued interest on any
loans from the Company to Forester arising from the exercise of stock
options by Forester prior to the Effective Date (the "Terminated Loans")
shall be repaid in full on January 2, 1996 pursuant to the following
sentence. Concurrently with the repayment of the Terminated Loans, the
Company shall lend to Forester an amount equal to the principal balance of
and accrued interest on the Terminated Loans (which amount shall be used to
repay such obligations) pursuant to replacement loan agreements which shall
have the identical terms and conditions as the loan agreements relating to
the Terminated Loans, except that the third paragraph of each replacement
loan agreement shall read in its entirety as follows:

(i) For all loans which contain a six-year maturity provision:

"The principal amount of the Loan will become due and
payable on the first to occur of (i) the sixth anniversary of the
date hereof and (ii) one year after the date of my death."

(ii) For that loan which contains a five-year maturity provision:

"The principal amount of the Loan will become due and
payable on the first to occur of (i) the fifth anniversary of the
date hereof and (ii) one year after the date of my death."

(iii) For that loan which contains a four-year maturity
provision:

12
<PAGE>

"The principal amount of the Loan will become due and
payable on the first to occur of (i) the fourth anniversary of
the date hereof and (ii) one year after the date of my death."

(iv) For all loans which contain a three-year maturity provision:

"The principal amount of the Loan will become due and
payable on the first to occur of (i) the third anniversary of the
date hereof and (ii) one year after the date of my death."

Forester hereby consents and agrees to the actions referred to in this Section
8, and acknowledges that the Company is making no representation with respect
to, and shall not in any way be responsible for, the tax consequences, if any,
to Forester of such actions.

9. (a) Forester shall not at any time, either during or after the
Consulting Period, directly or indirectly, disclose, publish or divulge to any
person (except in furtherance of the Company's business), or appropriate, use or
cause, permit or induce any person to appropriate or use, any proprietary,
secret or confidential information of the Company. If so requested by the
Company, Forester shall, following termination of the Consulting Period,
promptly deliver or return to the Company all materials of a proprietary, secret
or confidential nature relating to the Company and any other property of the
Company which may have theretofore been delivered to, or may then be in the
possession or control of, Forester.

13
<PAGE>

(a) Forester shall not, at any time during the Consulting Period or
for a period of one year thereafter, in any manner or capacity engage or have
any interest in any business directly competitive with any business in which the
Company is engaged in the United States or any foreign country; provided,
however, that Forester's ownership of one percent or less interest in any
company whose common stock is publicly traded shall not constitute prohibited
competition for the purposes of this Section 9(b).

10. The Company shall reimburse Forester on demand for all
expenses, including, without limitation, attorneys', accountants', actuaries'
and other experts' fees and expenses, reasonably incurred by Forester at any
time in connection with this 1995 Agreement, including, without limitation, in
connection with defending the validity of, enforcing his rights under, or
recovering amounts due or damages under this 1995 Agreement.

11. Any offer, notice, request or other communication hereunder
shall be in writing and shall be deemed to have been duly given if hand
delivered or mailed by registered or certified mail, return receipt requested,
addressed to the respective address of each party hereinafter set forth, or to
such other address as each party may designate by a notice pursuant hereto,
which change of address shall be effective upon receipt thereof:

If to the Company: Anthony Industries, Inc.
4900 South Eastern Avenue
Los Angeles, CA 90040
Attention: Chief Executive Officer

If to Forester: Mr. Bernard I. Forester

14
<PAGE>

121 Fremont Place
Los Angeles, CA 90005

12. Subject to the terms of the following sentence, if any
provision of this 1995 Agreement shall be held for any reason to be
unenforceable, the remainder of this 1995 Agreement shall nevertheless remain in
full force and effect. In the event that this 1995 Agreement is held to be void
or voidable, or substantially all of its terms are otherwise held to be
unenforceable, then (i) this 1995 Agreement shall be deemed voided, (ii) the
1991 Amended Agreement shall be deemed to remain in full force and effect,
except that each reference in Section 4 thereof to 114.696 shall be deemed to be
a reference to 129.872 (which the parties acknowledge was uncorrected error
therein), (iii) the employment of Forester as Chief Executive Officer of the
Company shall be deemed terminated by the Company in material breach of the
terms of the 1991 Amended Agreement and (iv) the provisions of Section 6 of the
1991 Amended Agreement shall be deemed to apply to such termination and breach,
except that with respect to Section 6(a) of the 1991 Amended Agreement, (A) the
Basic Compensation payable to Forester pursuant to clause 6(a)(i)(x) shall be
deemed to be $200,000 per year, (B) no incentive compensation shall be paid to
Forester pursuant to clause 6(a)(i)(y) with respect to the 1996 and 1997
calendar years (but Forester shall be entitled to any unpaid incentive
compensation with respect to prior years, plus the payment of incentive
compensation for the 1995 calendar year in an amount equal to the amount of the
highest incentive compensation award granted to Forester in respect of any year
during the five calendar years immediately preceding the breach), and (C) no
payments shall be made to Forester pursuant to clause 6(a)(ii). The waiver by
The Foresters

15
<PAGE>

or the Company of a breach by the Company or Forester, as the case may be, of
any provision of this 1995 Agreement shall not be deemed to be a waiver of any
future breach of such provision or of any other provision, no matter how many
such waivers The Foresters or the Company may grant.

13. This 1995 Agreement, including, without limitation, the
provisions of this Section 13, shall be binding upon and inure to the benefit
of, and shall be deemed to refer with equal force and effect to, any corporation
or other successor to the Company which shall acquire, directly or indirectly,
by merger, consolidation, purchase or otherwise, all or substantially all of the
assets of the Company. This 1995 Agreement shall not be assignable by the
Company or any such successor, except to the corporate or other successor
referred to in the preceding sentence. Forester may not assign, pledge or
encumber his interest in this 1995 Agreement without the written consent of the
Company. At Forester's death, his widow shall become a third party beneficiary
of Section 4 hereof with powers to enforce her benefits and rights thereunder or
recover damages for the breach thereof.

14. Forester shall perform all services required under this 1995
Agreement personally and as an independent contractor to the Company. Forester
shall not, while rendering such services, engage in any conduct inconsistent
with his status as an independent contractor. Except as otherwise provided in
this 1995 Agreement, Forester shall not enter into any commitments on behalf of
the Company. Forester or Forester's beneficiaries, as the case may be, shall be
solely responsible for the payment of any and all local, state and federal taxes
due in

16
<PAGE>

respect of amounts paid by the Company pursuant to this 1995 Agreement;
provided, however, that the Company shall have the right to make such provisions
as it deems necessary or appropriate to satisfy any obligation it may have to
withhold federal, state or local income or other taxes incurred by reason of
payments pursuant to this 1995 Agreement. Forester's status as a consultant
under this 1995 Agreement shall not disqualify him from receiving benefits
provided to non-employee directors of the Company generally to which he would
otherwise be entitled, excluding benefits provided under the Directors' SERP.

15. This 1995 Agreement contains the entire agreement and
understanding between the Company and Forester with respect to the subject
matter hereof and may not be changed, amended or terminated orally, but only by
an agreement in writing, nor may any of the provisions hereof be waived orally,
but only by an instrument in writing, in any such case signed by the party
against whom enforcement of any change, amendment, termination or waiver is
sought.

ANTHONY INDUSTRIES, INC.

By: /s/ John J. Rangel
-----------------------
Authorized Signatory

/s/ B. I. Forester
------------------------
B. I. FORESTER

17
<PAGE>

November 17, 1995

<PAGE>

EXHIBIT 10(d)(1)(ii)

TRUST FOR ANTHONY INDUSTRIES, INC.

SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN

FOR THE BENEFIT OF

B. I. FORESTER

This Agreement made this 20 day of November, 1995, by and between
ANTHONY INDUSTRIES, INC. ("the Company") and WELLS FARGO BANK N.A. ("Trustee").

WHEREAS, pursuant to that certain agreement between the Company and B.
I. Forester ("Forester") dated November 20, 1995 (the "November 20 Agreement"),
the Company has adopted a "Supplemental Employee Retirement Plan" for the
benefit of B. I. Forester ("SERP");

WHEREAS, the Company will incur liability under the terms of such SERP
with respect to benefits payable to Forester and his spouse (hereinafter the
"Foresters");

WHEREAS, the Company wishes to establish a trust (hereinafter called
"Trust") and to contribute assets to the Trust that shall be held therein,
subject only to the claims of the Company's creditors in the event of the
Company's Insolvency, as herein defined, until paid to the Foresters in such
manner and at such times as specified in the SERP;

1
<PAGE>

WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the SERP
as an unfunded plan maintained for the purpose of providing deferred
compensation for a "select group of management or highly compensated employees"
for purposes of Title I of the Employee Retirement Income Security Act of 1974;

WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide it with a source of funds to assist it in the meeting of
its liabilities under the SERP;

NOW, THEREFORE, Anthony Industries, Inc. and Wells Fargo Bank N.A. do
hereby establish the Trust and agree that the Trust shall be comprised, held and
disposed of as follows:

ARTICLE 1

ESTABLISHMENT OF TRUST

1.1 The Company hereby deposits with Trustee in trust not less than
One Dollar ($1.00), which shall be the initial principal of the Trust to be
held, administered and disposed of by the Trustee as provided in this Trust
Agreement and the SERP. This Trust Agreement and the SERP are intended to be
administered together by the Company.

1.2 The Trust hereby established shall be irrevocable by the
Company.

2
<PAGE>

1.3 The Trust is intended to be a grantor trust, of which the Company
is the grantor, within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.

1.4 The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes of the Foresters and general creditors as
herein set forth. The Foresters shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the SERP and this Trust Agreement shall be mere unsecured contractual
rights of the Foresters against the Company. Any assets held by the Trust will
be subject to the claims of the Company's general creditors under federal and
state law in the event of Insolvency, as defined in Section 3.1 herein.

1.5 The Company may, from time to time, make additional deposits of
cash in Trust with the Trustee as required by the terms of the SERP, to augment
the principal to be held, administered and disposed of by the Trustee as
provided in the SERP and the Trust.

3
<PAGE>

ARTICLE 2

PAYMENTS TO THE FORESTERS

2.1 At such time as the Foresters become entitled to receive
distributions, the Company shall deliver to the Trustee a schedule (the "Payment
Schedule") that indicates the monthly amounts payable in respect of Forester,
and the monthly due date for payment of such monthly amounts. Upon the death of
Forester, and if Forester's spouse shall have survived him, the Company shall
deliver a new Payment Schedule to the Trustee indicating the monthly amount
payable to Forester's surviving spouse. Except as otherwise provided herein,
Trustee shall make payments to the Foresters in accordance with such Payment
Schedule. The Trustee shall make provision for the reporting and withholding of
any federal, state or local taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the SERP and shall
pay amounts withheld to the appropriate taxing authorities unless the Trustee
determines that such amounts have already been reported, withheld and paid by
the Company.

2.2 The entitlement of the Foresters to benefits under the SERP shall
be determined solely by the Company under the terms of the SERP.

2.3 The Company may make payment of benefits directly to the
Foresters as they become due under the terms of the SERP. The Company shall
notify the Trustee of its decision to make payment of benefits directly prior to
the time each payment is payable to the

4
<PAGE>

Foresters. In addition, if the principal of the Trust, and any earnings thereon,
are not sufficient to make payments of benefits in accordance with the terms of
the SERP, the Company shall make the balance of each such payment as it falls
due. The Trustee shall notify the Company when principal and earnings are not
sufficient.

ARTICLE 3

TRUSTEE RESPONSIBILITY REGARDING

PAYMENTS TO THE FORESTERS

WHEN THE COMPANY IS INSOLVENT

3.1 The Trustee shall cease payment of benefits to the Foresters if
the Company is Insolvent. The Company shall be considered "Insolvent" for
purposes of this Trust if (a) the Company is unable to pay its debts as they
become due, or (b) the Company is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.

3.2 At all times during the continuance of this Trust, as provided in
Section 1.4 hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.

(a) The Board of Directors and Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing of the Company's
Insolvency. If a person claiming to be a creditor of the Company alleges in
writing to the Trustee that the

5
<PAGE>

Company has become Insolvent, the Trustee shall determine whether the Company is
Insolvent and, pending such determination, the Trustee shall discontinue payment
of benefits to the Foresters.

(b) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming to be a
creditor alleging that the Company is Insolvent, the Trustee shall have no duty
to inquire whether the Company is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.

(c) If at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue payments to the Foresters and shall
hold the assets of the Trust for the benefit of the Company's general creditors.
Nothing in this Trust Agreement shall in any way diminish any rights of the
Foresters to pursue their rights as general creditors of the Company with
respect to benefits due under the SERP or otherwise.

(d) The Trustee shall resume the payment of benefits to the
Foresters in accordance with Article 2 of this Trust Agreement only after the
Trustee has determined that the Company is not Insolvent (or is no longer
Insolvent).

6
<PAGE>

3.3 Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3.2
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to the
Foresters under the terms of the SERP for the period of such discontinuance,
less the aggregate amount of any payments made to the Foresters by the Company
in lieu of the payments provided for hereunder during any such period of
discontinuance.

ARTICLE 4

PAYMENTS TO THE COMPANY

Except as permitted under the terms of the SERP or in the case of
Insolvency, the Company shall have no right or power to direct the Trustee to
return to the Company or to divert to others any of the Trust assets before all
payments of benefits have been made to the Foresters pursuant to the terms of
the SERP. In accordance with Section 4(e) of the SERP, the Company shall have
the right and power to direct the Trustee to return Trust assets (including
income that is accumulated and reinvested) to the Company to the extent that the
fair market value of the net assets of the Trust on the last day of the year
exceeds 110% of the Full Funding Amount for such year.

7
<PAGE>

ARTICLE 5

INVESTMENT OF SERP ASSETS

5.1 Except as provided in Article 4, during the term of this Trust,
all income received by the Trust, net of expenses and taxes, shall be
accumulated and reinvested. The Company or an investment manager retained by
the Company, shall direct the Trustee as to the investment of Trust assets. All
investments shall be made at the sole discretion of the Company or such
investment manager, except that in no event may the Trustee invest in securities
(including stock or rights to acquire stock) or obligations issued by the
Company, other than a de minimis amount held in common investment vehicles.
Subject to the Company's obligation to fund the Trust in accordance with the
SERP, the Company shall have no responsibility to make the Trust whole for any
losses resulting from such investments. All rights associated with assets of
the Trust, other than the investment decisions retained by the Company, shall be
exercised by the Trustee or the person designated by the Trustee, and shall in
no event be exercised by or rest with the Foresters.

5.2 Except as provided below, the Company shall have all power and
responsibility for the management, disposition, and investment of the Trust
assets, and the Trustee shall comply with proper written directions of the
Company concerning the Trust assets. The Company shall not issue directions in
violation of the terms of this Agreement. The Trustee shall have no duty or
responsibility to review, initiate action, or make recommendations

8
<PAGE>

regarding the Trust assets and shall retain such assets until directed in
writing by the Company to dispose of them.

5.3 The Company may appoint an Investment Manager or Managers to
direct, control or manage the investment of all or a portion of the Trust
assets. The Company shall notify the Trustee in writing of the appointment of
each Investment Manager and the portion of the Trust assets subject to the
Investment Manager's direction. If the foregoing conditions are met, the
Investment Manager shall have the power to manage, acquire, retain or dispose of
such portion of the Trust assets and the Trustee shall not be liable for the
acts or omissions of the Investment Manager or be under an obligation to invest
or otherwise manage the portion of the Trust assets which is subject to the
direction of such Investment Manager.

5.4 Except as provided in Section 5.1 above, the Trust may hold
assets of any kind, including shares of any registered investment company,
whether or not the Trustee or any of its affiliates is an advisor to, or other
service provided to, such company and received compensation from such company
for the services provided.

ARTICLE 6

ACCOUNTING BY TRUSTEE

The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as

9
<PAGE>

shall be agreed upon in writing between the Company and the Trustee. Within
sixty (60) days following the close of each calendar year and within sixty (60)
days after the removal or resignation of the Trustee, the Trustee shall deliver
to the Company a written account of its administration of the Trust during such
year or during the period from the close of the last preceding year to the date
of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in the
Trust at the end of such year or as of the date of such removal or resignation,
as the case may be, valued separately at cost and at market value.

ARTICLE 7

RESPONSIBILITY OF TRUSTEE

7.1 The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company which is contemplated by,
and in conformity with, the terms of the SERP or this Trust and is given in
writing by the Company. In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent jurisdiction to resolve the
dispute.

10
<PAGE>

7.2 If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's reasonable costs, expenses and liabilities (including, without
limitation, attorneys' fees and expenses) relating thereto and to be primarily
liable for such payments. If the Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, the Trustee may obtain payment from
the Trust, provided, however, that the Company shall have the right to assume
the defense of any such litigation with counsel reasonably acceptable to the
Trustee and to settle any such litigation with the consent of the Trustee, which
consent will not be unreasonably withheld.

7.3 The Trustee may consult with legal counsel (who may also be
counsel for the Company generally) with respect to any of its duties or
obligations hereunder.

7.4 The Trustee shall have, without exclusion, all powers conferred
on trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
the Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.

7.5 Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall not have any power
that could give this Trust

11
<PAGE>

the objective of carrying on a business and dividing the gains therefrom, within
the meaning of section 301.7701-2 of the Procedure and Administrative
Regulations promulgated pursuant to the Internal Revenue Code.

ARTICLE 8

COMPENSATION AND EXPENSES OF TRUSTEE

The Company shall pay all reasonable administrative expenses of the
Trustee and such fees of the Trustee on which the Company and the Trustee may
agree. If not so paid, the fees and expenses shall be paid from the Trust.

ARTICLE 9

REMOVAL OF TRUSTEE

9.1 The Trustee may resign at any time by written notice to the
Company, which shall be effective sixty (60) days after receipt of such notice
unless the Trustee agrees otherwise.

9.2 The Trustee may be removed by the Company on sixty (60) days
notice or upon shorter notice accepted by the Trustee.

12
<PAGE>

9.3 Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within sixty (60) days after receipt
of notice of resignation, removal or transfer, unless the Company extends the
time limit.

9.4 If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Article 10 hereof, by the effective date of
resignation or removal under Sections 9.1 or 9.2. If no such appointment has
been made, the Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of the Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.

ARTICLE 10

APPOINTMENT OF SUCCESSOR

10.1 If the Trustee resigns, or is removed, in accordance with
Section 9.1 or 9.2 hereof, the Company may appoint any bank trust department or
other party that may be granted corporate trustee powers under state law, as a
successor to replace the Trustee upon resignation or removal, except that such
bank trust department or other party may not be a lender or an affiliate of a
lender to the Company. The appointment shall be effective when accepted in
writing by the new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument

13
<PAGE>

necessary or reasonably requested by the Company or the successor Trustee to
evidence the transfer.

10.2 The successor Trustee need not examine the records and acts of
any prior Trustee. The successor Trustee shall not be responsible for and the
Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes the successor
Trustee.

ARTICLE 11

AMENDMENT OR TERMINATION

11.1 This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the SERP or shall make the Trust
revocable.

11.2 The Trust shall not terminate until the date on which the
Foresters are no longer entitled to benefits pursuant to the terms of the SERP.
Upon termination of the Trust any assets remaining in the Trust shall be
returned to the Company.

14
<PAGE>

11.3 Upon written approval of the Foresters, the Company may
terminate this Trust prior to the time all benefit payments under the SERP have
been made. All assets in the Trust at termination shall be returned to the
Company.

ARTICLE 12

MISCELLANEOUS

12.1 Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.

12.2 Benefits payable to the Foresters under this Trust Agreement may
not be anticipated, assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.

12.3 This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of California.

ARTICLE 13

EFFECTIVE DATE

The effective date of this Trust Agreement shall be November 20,
1995.

15
<PAGE>

ARTICLE 14

ACCEPTANCE BY THE TRUSTEE

This Trust has been accepted by the Trustee which agrees to hold in
trust and administer the Fund hereunder, subject to all of the terms and
conditions hereof.

IN WITNESS WHEREOF, ANTHONY INDUSTRIES, INC. and WELLS FARGO BANK N.A.
have executed this Agreement this 20 day of November, 1995.
--

THE COMPANY:

ANTHONY INDUSTRIES, INC.

By: /s/ John J. Rangel
---------------------------

THE TRUSTEE:

WELLS FARGO BANK N.A.

By: /s/ M. J. Cowen
---------------------------

By: /s/ Pamela Howard
---------------------------

16
<PAGE>

November 17, 1995

<PAGE>

EXHIBIT (11)

ANTHONY INDUSTRIES, INC.

COMPUTATION OF EARNINGS PER SHARE

FOR THE THREE YEARS ENDED DECEMBER 31, 1995

(THOUSANDS EXCEPT FOR DOLLARS PER SHARE)

<TABLE>
<CAPTION>
1995 1994(A)(B) 1993(A)(B)
------- ---------- ----------
<S> <C> <C> <C>
Income from continuing operations............... $19,799 $13,754 $12,364
Loss from discontinued operations............... (4,920) (721) (1,243)
------- ------- -------
Net income...................................... $14,879 $13,033 $11,121
======= ======= =======
Primary:
Average shares outstanding..................... 14,367 11,800 11,703
Net effect of dilutive stock options under the
treasury stock method using average price..... 131 119 95
------- ------- -------
Total....................................... 14,498 11,919 11,798
======= ======= =======
Per share amounts:
Continuing operations......................... $ 1.37 $ 1.15 $ 1.05
Net income.................................... $ 1.03 $ 1.09 $ .94
Fully Diluted:
Average shares outstanding..................... 14,367 11,800 11,703
Net effect of dilutive stock options under the
treasury stock method using year end market
price, if higher than average market price.... 212 130 152
------- ------- -------
Total....................................... 14,579 11,930 11,855
======= ======= =======
Per share amounts:
Continuing operations......................... $ 1.36 $ 1.15 $ 1.04
Net income.................................... $ 1.02 $ 1.09 $ .94
</TABLE>
- --------
(a) Retroactively adjusted for stock dividends

(b) Information has been restated to reflect the sale of the Division (for
further information see Note 2 of Notes to Consolidated Financial
Statements).

<PAGE>

EXHIBIT (21)

SUBSIDIARIES

<TABLE>
<CAPTION>
PERCENTAGE OF VOTING SECURITIES
OWNED OR SUBJECT TO VOTING
CONTROL BY
----------------------------------
COMPANY OTHER
---------------- ---------------
<S> <C> <C>
Shakespeare Company, a Delaware
corporation.............................. 100%
Subsidiaries of Shakespeare Company:
Shakespeare (Hong Kong) Ltd., a Hong
Kong corporation....................... 100%
Pacific Rim Metallic Products Ltd., a
Hong Kong corporation.................. 100%
Shakespeare (Aust) Pty. Ltd., an Austra-
lian corporation....................... 100%
Shakespeare Hengelsport, B.V., a Dutch
corporation............................ 100%
Shakespeare International Ltd., a Brit-
ish corporation........................ 100%
Subsidiaries of Shakespeare Interna-
tional Ltd.:
Shakespeare Company (UK) Ltd., a Brit-
ish corporation...................... 100%
Shakespeare Monofilament U.K. Ltd., a
British corporation.................. 100%
Sitca Corporation, a Washington corpora-
tion..................................... 100%
Subsidiaries of Sitca Corporation:
K-2 Corporation, an Indiana corporation. 100%
Subsidiaries of K-2 Corporation:
Madshus A.S., a Norwegian corporation. 100%
K-2 Ski Sport, und Mode, GmbH, a Ger-
man corporation...................... 100%
SMCA, Inc., a Minnesota corporation....... 100%
Subsidiary of SMCA, Inc.:
Stearns Manufacturing Company, a Minne-
sota corporation....................... 100%
Girvin Inc., a Delaware corporation....... 100%
Dana Design Ltd., a Montana corporation... 100%
</TABLE>

<PAGE>

EXHIBIT (23)

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
(Form S-8 dated October 14, 1988 and Form S-8 dated December 28, 1994)
pertaining to the 1988 Incentive Stock Option Plan and the 1994 Incentive
Stock Option Plan of Anthony Industries, Inc. of our report dated February 16,
1996, except for the first paragraph of Note 2, as to which the date is March
5, 1996, with respect to the consolidated financial statements of Anthony
Industries, Inc. included in the Annual Report on Form 10-K for the year ended
December 31, 1995.

Our audits also included the financial statement schedule of Anthony
Industries, Inc. listed in Item 14(a). This schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

Ernst & Young LLP

Los Angeles, California
March 27, 1996

<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 7,357
<SECURITIES> 0
<RECEIVABLES> 148,437
<ALLOWANCES> (8,235)
<INVENTORY> 140,679
<CURRENT-ASSETS> 300,455
<PP&E> 139,706
<DEPRECIATION> 82,599
<TOTAL-ASSETS> 384,423
<CURRENT-LIABILITIES> 120,533
<BONDS> 0
0
0
<COMMON> 17,064
<OTHER-SE> 158,752
<TOTAL-LIABILITY-AND-EQUITY> 384,423
<SALES> 544,268
<TOTAL-REVENUES> 545,717
<CGS> 400,840
<TOTAL-COSTS> 400,840
<OTHER-EXPENSES> 104,249
<LOSS-PROVISION> 2,093
<INTEREST-EXPENSE> 9,916
<INCOME-PRETAX> 28,619
<INCOME-TAX> 8,820
<INCOME-CONTINUING> 19,799
<DISCONTINUED> (4,920)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,879
<EPS-PRIMARY> 1.03
<EPS-DILUTED> 1.02

</TABLE>

<PAGE>

<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 7,700
<SECURITIES> 0
<RECEIVABLES> 116,555
<ALLOWANCES> (7,422)
<INVENTORY> 97,936
<CURRENT-ASSETS> 226,474
<PP&E> 122,732
<DEPRECIATION> 73,640
<TOTAL-ASSETS> 301,536
<CURRENT-LIABILITIES> 79,724
<BONDS> 0
0
0
<COMMON> 12,323
<OTHER-SE> 86,673
<TOTAL-LIABILITY-AND-EQUITY> 301,536
<SALES> 434,995
<TOTAL-REVENUES> 436,234
<CGS> 319,021
<TOTAL-COSTS> 319,021
<OTHER-EXPENSES> 86,779
<LOSS-PROVISION> 1,509
<INTEREST-EXPENSE> 7,481
<INCOME-PRETAX> 21,444
<INCOME-TAX> 7,690
<INCOME-CONTINUING> 13,754
<DISCONTINUED> (721)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,033
<EPS-PRIMARY> 1.09
<EPS-DILUTED> 1.09

</TABLE>