STEVENS INTERNATIONAL INC
10-K405, 2000-04-13
PRINTING TRADES MACHINERY & EQUIPMENT
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                            UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C.  20549
               --------------------------------------
                              FORM 10-K
               --------------------------------------

(Mark One)
  [ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
           OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
           For the fiscal year ended December 31, 1999
                                 or
  [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
           OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
           For the transition period from _____________ to _______
                Commission file number     1-9603
               -------------------------------------
                    STEVENS INTERNATIONAL, INC.
       (Exact name of registrant as specified in its charter)
               -------------------------------------
           Delaware                                    75-2159407
  (State of other jurisdiction of                    (IRS Employer
  incorporation or organization)                  identification No.)

           5700 E. Belknap St.                            76117
            Fort Worth, Texas                          (Zip Code)
 (Address of Principal Executive Offices)
               --------------------------------------
 Registrant's telephone number, including area code:  (817) 831-3911

 Securities registered pursuant to Section 12(b) of the Act:
                                         Name of Each Exchange on
       Title of Each Class                 which registered *(1)
 Series A Stock, $0.10 Par Value    Over The Counter Bulletin Board (OTCBB)
 Series B Stock, $0.10 Par Value    Over The Counter Bulletin Board (OTCBB)

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

 Indicate by  check mark  whether the registrant  (1) has  filed all  reports
 required to be filed by Section 13  or 15(d) of the Securities Exchange  Act
 of 1934 during the preceding 12 months (or for such shorter period  that the
 registrant was required to file such  reports), and (2) has been  subject to
 such filing requirements for the past 90 days.
 Yes  [ X ]       No [   ]

 Indicate by check mark if  disclosure of delinquent filers pursuant to  Item
 405 of Regulation S-K  is not contained herein,  and will not be  contained,
 to  be  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.  Yes   [ X ]      No  [   ]
<PAGE>
 The aggregate  market value of  the voting stock  held by non-affiliates  of
 the registrant was approximately $7,105,000    based upon the last  trade of
 the registrant's  Series B  Common Stock on  February 22,   2000  at  $2 per
 share and the closing price of the Series  A Common Stock on  March 23, 2000
 at $1c per  share as reported  by the OTCBB.   As  of  March 23, 2000, there
 were outstanding 7,466,347  shares of Series A  stock and  2,035,786  shares
 of Series B stock.

                DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the  proxy statement for the  annual meeting of stockholders  of
 the Company to be held during 2000 are incorporated by reference in Part III.
 ============================================================================

 *1 Effective August 2, 1999
<PAGE>


                         STEVENS INTERNATIONAL, INC.

                              TABLE OF CONTENTS

 Form 10-K Item                                                        Page

 PART I                                                                ----

      Item 1. Business                                                   3
      Item 2. Properties                                                12
      Item 3. Legal Proceedings                                         12
      Item 4. Submission of Matters to Vote of Security Holders         13

 PART II

      Item 5. Market for the Registrant's Common Stock and Related
               Stockholders Matters                                     13
      Item 6. Selected Financial Data                                   14
      Item 7. Management's Discussion and Analysis of Financial
               Condition and Results of Operations                      15
      Item 8. Financial Statements and Supplementary Data               23
      Item 9. Changes In and Disagreements with Accountants on
               Accounting and Financial Disclosure                      43

 PART III

      Item 10. Directors and Executive Officers of the Registrants      43
      Item 11. Executive Compensation                                   43
      Item 12. Security Ownership of Certain Beneficial Owners
                and Management                                          43
      Item 13. Certain Relationships and Related Transactions           43

 PART IV

      Item 14. Exhibits, Financial Statement Schedules, and Reports
                on Form 8-K.                                            43


<PAGE>
                              PART I


 Item 1.  Business.

      Stevens International, Inc.  was incorporated in  Delaware in  November
 1986.   (All  references  to the  "Company"  or  "Stevens"  include  Stevens
 International, Inc.  and  its  subsidiaries  and  predecessors,  unless  the
 context otherwise requires.)

      The statements in this report that  are forward looking are based  upon
 current  expectations  and  actual  results  may  vary.    See   "Cautionary
 Statements"  under  "Management's  Discussion  and  Analysis  of   Financial
 Condition and Results of Operations" in this report.

      The Company's business  has changed significantly  in the last  several
 years due  to fundamental  changes in  web-fed printing  press  markets, the
 large operating losses that the Company  sustained in 1996 and 1997 and  the
 Company's need to have  reduced indebtedness.  Sales  of the Post  Machinery
 Co. division (1993), the Bernal division (1997), the Zerand division (1998),
 the Hamilton Machining Center  (1998) and the Hamilton, Ohio production  and
 storage facility (1999) have  enabled the Company  to substantially   reduce
 indebtedness.


 General

      Stevens designs, manufactures, markets  and services web-fed  packaging
 and printing  systems  and  related  equipment  for  its  customers  in  the
 packaging  industry  and  in  the  specialty/commercial  and  banknote   and
 securities segments of the printing  industry.  The Company's  technological
 and engineering capabilities  allow it to  combine the  four major  printing
 technologies in  its  systems.    The  Company  combines  various  types  of
 equipment, including printing  presses, die cutting  equipment and  delivery
 systems, into complete  integrated systems, which  are capable of  providing
 finished products in  a single press  pass.  These  systems sell for  prices
 ranging from $1 million to over $10 million.  The Company also  manufactures
 auxiliary and replacement parts and provides service for its equipment which
 represented  76% of the Company's net sales  for 1999, 60% of net sales  for
 1998, and 45% of   net sales for  1997.  Stevens' equipment  is used  by its
 customers to produce hundreds of  end-products, including food and  beverage
 containers, banknotes, postage stamps, lottery tickets, direct mail inserts,
 personal checks and business  forms.  The Company  has an installed base  of
 more than 3,000 machines in  over 50 countries.    The Company also  markets
 and manufactures high-speed  image processing systems  primarily for use  in
 the banknote and securities printing industry.

      All  of  the Company's  presses are "web-fed"  presses, which print  on
 paper  or other substrate that  is fed continuously from a roll (the "web"),
 as distinct from traditional "sheet-fed"  presses,  which  print on  pre-cut
 sheets of paper or  other substrate. Although  sheet-fed equipment is  still
 dominant in the  segments of  the packaging  industry and  the banknote  and
 securities segment of the printing industry that are served by the  Company,
 the Company believes  that numerous opportunities  exist to convert  certain
 users of sheet-fed equipment to its  web-fed packaging and printing  systems
 because of certain efficiencies inherent in the web-fed process.
<PAGE>

 Private Placement of $1 Million  10% Convertible Subordinated Notes  Payable
 Due March 31, 2003

      In April 2000, the Company completed a private placement of $1  million
 of 10% convertible subordinated  notes ("the Notes").   Net proceeds of  the
 Notes will be used for working capital.  The Notes were issued in increments
 of $50,000 and  are convertible  into 2,000,000  shares of  Series A  Common
 Stock  ("SVEIA")  of the Company at  $0.50 per share, subject to adjustment.
 The conversion of the Notes  is at the holder's  option anytime on or  after
 the fifteenth day following the original  issue date of the Notes  and prior
 to the close of business on their maturity date.  Issue costs for the  Notes
 aggregated approximately $151,000.

      The Company has committed to register the shares that would be issuable
 upon conversion of the Notes.  Dilution to existing shareholders would occur
 as a result of the conversion of the Notes  to 2 million shares of Series  A
 common stock.  Should all the  notes be converted, these shareholders  would
 own approximately 17% of  the outstanding stock of  the Company.  The  first
 quarter  of  2000 will  include  a charge for interest expense of $1 million
 with  a corresponding $1 million increase in "Paid in Capital  in Excess  of
 Par Value."


 Liens on Company Assets

      Substantially all  assets of  the Company  continue  to be  pledged  as
 collateral on  the  Company's  credit facilities.    Throughout  the  recent
 history of  the Company  the Senior  Bank lenders  have had  first liens  on
 accounts receivable, inventory,  the real and  personal property in  Tarrant
 County, Texas, and all intangibles of the Company.  Beginning June 30, 1998,
 Paul I. Stevens, the  Company's Chairman and CEO  and principal lender,  was
 granted first  liens on  the "holdback"  from the  sale of  Zerand in  1998,
 certain international contracts, and various  real and personal property  in
 Butler  County,  Ohio,  as  well  as  second  lien  positions  on   accounts
 receivable, inventory, the  real and  personal property  in Tarrant  County,
 Texas, and all intangibles of the Company.

      The Company was unable to pay certain pension plan minimum payments due
 on September 15, 1999.  Accordingly,  the Company filed the necessary  forms
 with the Pension Benefit Guaranty Corporation ("PBGC") to initiate  distress
 terminations of the Company's two defined  benefit pension plans.  The  PBGC
 is a federal agency  that insures and protects  pension benefits in  certain
 pension  plans  when  the  sponsoring  company  cannot  make  the   required
 contributions to fund projected benefit obligations of the plans.

      As a result of the "distress termination" filing in September 1999, the
 PBGC in November 1999 and February 2000 filed $1.6 million in federal  liens
 against all property and rights to property of the Company on behalf of  the
 Company's Pension Plan for Bargaining Unit Employees.

      In December  1999,  the PBGC  granted  a subordination  of  their  lien
 interests to  the extent  of $4  million in  favor of  the Company's  Senior
 lender, Wells Fargo Credit,  Inc., in order to  induce the Senior lender  to
 facilitate further loans or extend financial accommodations to the  Company.
<PAGE>
      In February  2000,  the PBGC  granted  a subordination  of  their  lien
 interests to Paul I. Stevens on  advances of  no more than $550,000  by  Mr.
 Stevens subsequent to February  7, 2000.  The  PBGC reserved certain  rights
 and remedies with respect to prior advances to the Company by Mr. Stevens.


 Overview of 1999 and 1998

      The Company continued to experience a decrease in sales during 1999 and
 1998, which  primarily  reflected  the  sale  of  various  divisions  and  a
 continuation of the reduced  order flow that the Company has experienced for
 the last several years.  Orders for 1999 ($11.1 million) increased 8.8% over
 the previous  year.   The increase occurred in  packaging and specialty  web
 products.  In response to the low  volume of orders,  the Company  continued
 its work  force  and  cost  reductions  and  the  consolidation  of  certain
 facilities and operating functions.  In  an effort to cut costs and  improve
 cash flow, the Company has eliminated certain product lines and consolidated
 manufacturing and assembly at its Fort Worth, Texas,  location.  The Company
 believes these actions have  helped and will continue to help in its efforts
 to return to profitability.


 Results of Operations

 A description of the Company's recent divestitures follow.

 Sale of SSMI

      In January  2000,  the  Company sold  its  French  repair  and  service
 company,  SSMI,  for  a  net  aggregate  consideration  of  $198,000.    The
 transaction resulted in an aggregate loss of $1.65 million, including a loss
 on sale of $0.05 million and a related non-cash foreign currency  adjustment
 of $1.6  million which  had been  previously reported  as a  charge  against
 stockholder equity in accumulated other comprehensive  loss.  SSMI had  1999
 revenues of $3 million and an operating loss of $0.13 million.  Net proceeds
 of this transaction were  used to repay a  portion of the  loans from P.  I.
 Stevens, which were partially collateralized by a lien on this subsidiary.

 Sale of Hamilton Production and Storage Facilities

      In the second quarter  of 1999, the Company  concluded the sale of  the
 real property at  its Hamilton, Ohio  production facility  for an  aggregate
 consideration of $725,000.  The transaction resulted in a small loss due  to
 certain unanticipated costs of vacating the facility.  An inventory  storage
 facility at  Hamilton,  Ohio  was  sold in  August  1999  for  an  aggregate
 consideration of $70,000.  With the conclusion of this transaction, all real
 property in Ohio  has now been  sold.  Proceeds  of these transactions  were
 used to repay certain expenses of the sale, certain property taxes and repay
 a portion  of  the $2.5  million  loan from  Paul  I. Stevens,    which  was
 partially  collateralized  by  a  lien  on  these  production  and   storage
 facilities.
<PAGE>
 Sale of Hamilton Machining Center in July 1998

      In July, 1998 the  Company sold the real  and personal property  at its
 Hamilton, Ohio  machining  center  ("HMC") and  the  major  portion  of  its
 machinery and equipment at  its assembly facility in  Hamilton, Ohio for  an
 aggregate consideration of  approximately $4.33 million.   This  transaction
 resulted in the recording of a second quarter 1998 loss on sale of assets of
 approximately $0.8 million  and an additional  loss of $0.5  million in  the
 third quarter of 1998 as a result of HMC inventory and other inventory  that
 was abandoned by  the Company and  included in the  sale.   Proceeds  of the
 transaction were used to repay the $4 million secured bridge term loan  from
 the Company's new bank  lender (the "Bridge Loan")  which was loaned to  the
 Company on June  30, 1998, transaction  fees and certain  real and  personal
 property taxes. HMC had outside sales  of $1.2 million and operating  losses
 of $0.35  million  in  1997.    The Company  has  replaced  certain  of  the
 capabilities of its  machining center with  a group of  new and  traditional
 suppliers.

 Sale of Assets of Zerand Division in April 1998

      In April, 1998, the  Company sold substantially all  the assets of  its
 Zerand division to Valumaco Incorporated, a new company formed for the asset
 purchase.  In addition, Valumaco Incorporated assumed certain liabilities of
 the Zerand division.  The assets sold included the real property, platen die
 cutter  systems,  and  other  original  Zerand  products  such  as  delivery
 equipment,  wide-web  rotogravure   printing  systems,  stack   flexographic
 printing systems, unwind and butt splicer systems, and related spare  parts,
 accounts  payable,  and  other  assumed  liabilities.    Excluded  from  the
 transaction were  the  System 2000  flexographic  printing systems  and  the
 System 9000 narrow-web rotogravure printing  systems produced at the  Zerand
 division  and  related  accounts   receivable,  inventory  and   engineering
 drawings.  The sale price was  approximately $13.7 million, which  consisted
 of cash proceeds of $10.1 million, a one-year $1 million escrow "hold back",
 and the  purchaser's assumption  of approximately  $2.6 million  of  certain
 liabilities of Zerand, including the accounts payable.

      This transaction resulted  in an approximate  $10 million reduction  of
 the Company's senior secured bank debt.   In 1997, Zerand contributed  sales
 of approximately  $11.6 million  and approximately  $1.8 million  of  income
 before interest,  corporate charges  and taxes.    The Company  realized  an
 approximate $3.6 million gain on the sale of Zerand assets.


 Industry Overview

      Stevens markets its systems to its customers in two distinct  worldwide
 industries-the packaging industry and  the printing industry. Although  both
 the packaging and printing industries utilize printing in the  manufacturing
 process, the printed products have significantly different applications.  In
 the packaging industry, the printed product  functions as the container  for
 the end  product, such  as food  and beverage  containers. In  the  printing
 industry, the  printed product  is  the end  product,  such as  direct  mail
 inserts, postage stamps and personal checks.
<PAGE>
      The Company's products  are designed to  serve the  (1) commercial  and
 specialty printing industry,  (2) banknote  and securities  segments  of the
 printing industry,   (3)  the paperboard  packaging  industry, and  (4)  the
 flexible packaging industry.   The  packaging industry  consists of  several
 large segments, some  of which  the Company  does not  serve. The  Company's
 products are designed to serve the  folding carton,  liquid carton, and  the
 flexible   packaging  segments  of  the  packaging  industry.  The  printing
 industry also consists of several large  segments in which the Company  does
 not participate - including newspapers, periodicals and book publishing.


 Economic Forecasts

      The Company believes that, in the  industry segments which  it  serves,
 several major market trends exist that  are influencing the development  and
 enhancement of  packaging  and  printing  equipment  systems.  These  trends
 include  an  increasing   emphasis  on   productivity,  changing   retailing
 practices-including greater market segmentation-and increasing environmental
 regulation.   In  addition  the  industry  is  experiencing  a  considerable
 consolidation process with numerous customer consolidations taking place  in
 each of the last several years.

      Productivity.  Productivity  in the printing  industry (as measured  by
 output per employee)  is one  of the lowest  among major  industries in  the
 United States. The purchasers of  packaging and printing equipment  continue
 to seek methods of  reducing per unit costs  in response to increased  labor
 and raw  materials  costs,  such  as paper  and  paperboard.  As  a  result,
 purchasers of packaging and printing equipment want to improve efficiency by
 reducing inventories,  "in process"  production time, waste and labor costs.
 Purchasers, therefore,  are demanding  more productive  equipment  including
 integrated systems capable of running at high speeds and producing  finished
 product in  a single  press pass.    The Company  believes its  web  systems
 technology meets these demands for higher productivity.

      Retailing Practices.    Retail  shelf space  is  becoming  increasingly
 expensive and scarce.   In order  to more effectively  utilize shelf  space,
 consumer  product  manufacturers  are   placing  greater  emphasis  on   the
 appearance of the package as  a selling tool for  the product. As a  result,
 purchasers of packaging and printing equipment  are being required by  their
 customers to produce packaging with  improved graphics through an  increased
 number of colors, improved color quality and application of color  enhancing
 coatings. These requirements have increased the complexity of the  packaging
 and printing  processes.     The Company  believes  its products  provide  a
 production solution to these requirements.

      Market Segmentation.  Market  segmentation, or target marketing,  where
 products are marketed  to specific geographic  areas or demographic  groups,
 has resulted in  increased product and  packaging variety  and an  increased
 demand for distinct packaging and more specialized printing.  In response to
 this trend,  which  has  resulted  in  shorter  press  runs,  purchasers  of
 packaging and  printing  equipment  systems  are  demanding  greater  system
 flexibility and automation  to permit quick  and less expensive  change-over
 from one product run  to another.  The  Company believes its technology  has
 distinct advantages in meeting these demands.
<PAGE>
      Environmental Regulation.   Increasingly stringent environmental  laws,
 rules and regulations,  both domestically and  internationally, have  caused
 purchasers of packaging and printing equipment to focus on volatile  organic
 compounds, printing inks,  coatings and chemicals  used for platemaking  and
 equipment  maintenance  which  are  environmentally  safer.  As  a   result,
 purchasers of  packaging and  printing  equipment are  increasingly  seeking
 ecologically-friendly processes  such as  the use  of flexographic  printing
 with water based inks.


 Business Strategy

      The Company's  objective  is  to rebuild  the  Company  into  a  strong
 international business as a manufacturer  of packaging and printing  systems
 through  its  strategy  of  providing  complete  systems  solutions  to  its
 customers. The principal elements of this strategy include the following:

      Technological Advancements.  The Company demonstrates its technological
 advancements through its  research and development  efforts and new  product
 introductions.   This included the introduction of the currency  examination
 equipment, the System 2000 flexographic and System 9000 rotogravure printing
 press systems.  The  Company works  closely  with manufacturers  of  related
 consumables, i.e., printing  plates, anilox rolls,  inks, paper and  similar
 products, to create  new product enhancements.  Historically, the  Company's
 gross expenditures for research  and development (including customer  funded
 projects) have exceeded 5% of net sales.

      Integrated Systems.   The  Company  provides fully  integrated  web-fed
 packaging and printing  systems which are  capable of  producing a  finished
 product  by  taking  paper  or  other  substrate  through  one   continuous,
 uninterrupted process. The Company works closely  with its customers in  the
 design and  development of  its integrated  systems to  meet their  specific
 manufacturing needs.  For  many of its customers,  the Company is a  single-
 source supplier of their packaging and printing systems. The Company has the
 technological and engineering  expertise to combine  any of  the four  major
 printing methods  (lithography,    flexography,  rotogravure  and  intaglio)
 together  with  die  cutters  and  creasers  and  product  delivery  systems
 purchased from other suppliers  into a single  system. The Company  believes
 that its ability to provide customized systems solutions provides it with  a
 competitive  advantage   over  other   packaging  and   printing   equipment
 manufacturers.

      Conversion to Web-Fed Systems.  The  Company believes that, because  of
 the increased  productivity inherent  in  the web-fed  process,  significant
 opportunities exist to convert users of sheet-fed equipment over to  web-fed
 systems in the  segments of the  packaging and printing  industries that  it
 serves. While  web-fed equipment  has been  successfully utilized  for  many
 years in some segments of the  printing industry which the Company  does not
 serve  (including  newspapers  and  periodicals),  sheet-fed  equipment   is
 predominant in the folding carton segment  of the packaging industry and  in
 the banknote and securities segment of the printing industry.
<PAGE>

 Products

      The Company markets a broad range  of packaging and printing  equipment
 systems to the packaging industry and the specialty/commercial and  banknote
 and securities segments  of the  printing industry.  The Company's  complete
 systems integrate a  variety of equipment,  including printing presses,  die
 cutters and creasers and product delivery systems.   Such systems  generally
 include equipment  manufactured by  the Company  and also  that produced  by
 other manufacturers with the Company acting as a "systems integrator".   The
 Company also sells the following system components independently of complete
 systems.

      Automatic Currency Examination ("ACE") Equipment.  The Company  markets
 and manufactures high-speed  image processing systems  primarily for use  in
 the banknote and security printing industry.  These systems are used for the
 examination of banknotes  with error  detection capabilities  for overt  and
 covert anti-counterfeit  components  and other  printing  errors.   The  ACE
 system achieves the final link in the long-sought goal of complete  machine-
 based production, processing, and distribution of banknotes.  The ACE system
 has resulted from many years of technical development of banknote inspection
 by the Bank of England Printing  Works, and continued development and  close
 cooperation with the Company over the last six years.

      ACE is  based  on  a high-speed  digital  image  processor  capable  of
 completely examining each note on  both sides of a  sheet of banknotes in  a
 single pass through the machine at rates up to 10,000 sheets per hour.   ACE
 enhances  productivity  by   replacing  the   requirement  for   examination
 personnel, reducing  the  number  of  related  security  personnel,  and  by
 removing a severe bottleneck in the  production flow of a banknote  printing
 works.   ACE further  provides the  standard of  consistency for  production
 quality required in the public distribution process of banknotes.

      ACE electronically  identifies  banknotes  that do  not  meet  customer
 defined quality  standards.   Once  identified,  the defective  currency  is
 automatically removed  from  the  manufacturing process.    In  addition  to
 currency inspection and  extraction, the ACE  system also  accounts  for the
 number of sheets entering and exiting the automated examination process.

      Printing Presses.  The Company offers all four major printing processes
 on a  worldwide  basis  for  its  web-fed  packaging  and  printing  systems
 including  flexographic,  offset  lithographic,  rotogravure  and   intaglio
 printing and  in  combinations.  Flexography, which  historically  was  well
 suited for  printing large  areas of  solid color,  is typically  the  least
 expensive printing  process.   However, with  the Company's    technological
 advances, certain System 2000 flexographic machines are capable of  printing
 quality that  rivals  offset  lithography, at  much  lower  costs.    Offset
 lithography, which is the  most widely used printing  process, is a  process
 that until now has typically provided a higher quality printed product  than
 flexography. Rotogravure,  which  uses  etched  cylinders  in  the  printing
 process, is a higher quality, more expensive process than either flexography
 or offset lithography.  Intaglio printing, which is the most technologically
 complex and expensive printing process, utilizes engraved plates and applies
 ink under extreme pressure to print banknotes and other security documents.

      Die Cutters and Creasers.  The Company believes that it offers, through
 preferential OEM agreements, a broad array of platen die cutters and  rotary
 cutting products and technology in the packaging and printing industries.
<PAGE>
      Auxiliary  Equipment,  Parts  and   Customer  Service.    The   Company
 manufactures auxiliary equipment and replacement parts and provides  service
 for its presses and collators,   which represented 76% of the Company's  net
 sales for 1999, 60% of net sales for 1998, and  45%  of net sales  for 1997.
 Generally,  auxiliary   equipment  allows   the  customer   to  expand   the
 capabilities of its existing equipment by increasing production capacity  or
 by providing such additional features  as forward numbering, batch  delivery
 and special types of finishing, such  as punching, perforating and  folding.
 Auxiliary equipment also includes print towers to add additional colors  and
 additional collating stations.

      Customer Service.   The  Company provides  a customer  service  program
 including product services  and support through  trained Company and  dealer
 service  representatives.  Product  services  include  installation,   field
 repairs,  routine  maintenance,  replacement  and  repair  parts,   operator
 training and technical consulting services. Parts can be delivered the  same
 day or  overnight in  North  America,  and  within  24-48  hours  worldwide.
 Product services and support programs also are designed to promote the  sale
 of auxiliary equipment.


 Marketing

      The Company primarily markets its products domestically through  direct
 sales engineers and managers and internationally through its agent  network.
 The   Company's   traditional   marketing   efforts   include   advertising,
 participating in major domestic and  international trade shows and  customer
 symposiums,  and  conducting  periodic  product  maintenance  seminars.  The
 Company also conducts limited  market research and analyses   to reveal  and
 study  trends  in  addition  to  actively  participating  in  various  trade
 associations.


 Customers

      The  Company's   customers   include  packaging   companies,   printing
 companies, paper  companies, check  printers, business  forms companies  and
 central bank and private banknote and securities printers.


 Competition

      The  Company  encounters  substantial  competition  in  marketing   its
 products from  manufacturers  of  both sheet-fed  and  web-fed  presses  and
 related equipment. The Company believes that in its selected segments of the
 packaging  and   printing   industries   its   competitors   are   primarily
 manufacturers  of  web-fed  equipment.   The  Company's  principal   web-fed
 competitors are Bobst, S.A., Komori-Chambon and Goebel. The Company believes
 that the packaging industry is also served by manufacturers of offset sheet-
 fed equipment  such as  Koenig and  Bauer-Albert Frankenthal  (KBA)-Planeta,
 Heidelberg, M.A.N. Roland  and Komori. The  banknote and securities  markets
 are predominately served by  sheet-fed equipment made  by Koenig and  Bauer-
 Albert Frankenthal  (KBA) and  marketed by  De La  Rue Giori.   The  Company
 believes that competition  for its products  is based  primarily on  product
 performance, web-fed  versus  sheet-fed  technology,  reliability,  customer
 service, price and delivery.
<PAGE>

 Research and Development

      Company development projects are funded in varying amounts by customers
 who are  in  need of  specialized  equipment  or processes.    Research  and
 development costs are  charged to operations  as incurred and  the total  of
 gross expenditures (including customer-funded  projects) has exceeded 5%  of
 net sales in recent years.


 Employees

      As of March 1, 2000,  the Company had approximately 55 employees.  With
 the closing of the Hamilton plant in 1998, the Company no longer employs any
 collective bargaining employees.


 Backlog and Orders

      The backlog of  the Company  consists of  orders that  have met  strict
 criteria, including having a signed contract with appropriate down  payments
 received. Further, to be included in backlog, these orders must also have  a
 reasonable expectation of  being manufactured, shipped  and paid for  within
 contract terms.  Additionally,  the backlog  does  not generally  include  a
 significant amount of service and parts  orders, which have been in the  30%
 to the 50% range of the  Company's sales volume for the last three years.

      The absolute value of the backlog varies with the amount of  percentage
 of completion revenue recognized in any one period. This value can fluctuate
 since the Company experiences  an average six to  nine month period  between
 the booking of the  order and its final  shipment. The Company's backlog  of
 unfilled orders as  of December  31, 1999  was approximately  $2.5   million
 compared to $2.5  million at December 31, 1998.


 Executive Officers

      The executive officers of the Company are as follows:

      Name              Age  Principal Position with the Company
      ----------------  ---  -----------------------------------
      Paul I. Stevens   85   Chairman of the Board, Chief
                             Executive Officer and Director
      Richard I.        61   President, Chief Operating Officer
      Stevens                and Director
      Constance I.      56   Vice President - Administration,
      Stevens                Assistant Secretary and Director
      George A.         58   Vice President, Treasurer and Chief
      Wiederaenders          Accounting Officer


      Paul I. Stevens founded the Company in 1965. He has served the  Company
 as Chairman of the Board and Chief Executive Officer since its inception. In
 1974, Mr. Stevens founded Stevens  Industries, Inc., a family-owned  holding
 company that  is  an  affiliate of  the  Company  and of  which  he  is  the
 controlling stockholder. Mr. Stevens is the father of Richard I. Stevens and
 Constance I. Stevens.
<PAGE>
      Richard I. Stevens is President, Chief Operating Officer and a director
 of the Company and has served in each of these capacities for at least  five
 years. From May 1992 to December  1993, Mr. Stevens served as President  and
 General Manager of the Company's Hamilton division. He joined the Company in
 1965 and became President in 1969.  In 1973 he was  elected to the Board  of
 Directors. Mr. Stevens is active  in industry professional associations.  He
 has been  a  director of  The  Association  for Suppliers  of  Printing  and
 Publishing Technologies (NPES) since 1982. In October 1995,  Mr. Stevens was
 elected Chairman of the Board of NPES for  a two-year term.  Mr. Stevens  is
 the son of Paul I. Stevens.

      Constance I. Stevens  has served  as a  director of  the Company  since
 April 1987.  Ms. Stevens has  served as Vice President - Administration  and
 Assistant Secretary to the Company since July 1995.  From July 1989 to  July
 1995, Ms. Stevens served as the President of a project management consulting
 firm in Carmel,  California.   From May 1980  until July  1989, Ms.  Stevens
 served as the managing partner of Merritt Associates of Carmel,  California,
 an architectural design and  real estate development firm.   Ms. Stevens  is
 the daughter of Paul I. Stevens.

      George A. Wiederaenders  has served  as Vice  President, Treasurer  and
 Chief Accounting  Officer since  May 1996.   He  has been  Chief  Accounting
 Officer of the Company  since July 1993, was  Treasurer of the Company  from
 September 1987 to August 1993 and had served Stevens as it Vice President  -
 Finance from December  1985 to April  1988.  From  January 1981 to  December
 1985, Mr.  Wiederaenders  was  Executive Vice  President  and  Treasurer  of
 Manufactured Energy Products,  Inc., a manufacturer  of wireline trucks  and
 skids for  oilfield  exploration.    Mr.  Wiederaenders  served  in  various
 capacities with the  public accounting firm  of Coopers &  Lybrand in  Texas
 from 1967 to  1978, including general  practice audit partner  from  1976 to
 1978 and managing  partner of  the Austin, Texas  office from  June 1977  to
 1978.

      Except as  otherwise noted,  no family  relationships exist  among  the
 executive officers of the Company.


 Factors That Could Affect Future Performance

      This report  contains  certain  forward looking  statements  about  the
 business  and  financial  condition   of  the  Company,  including   various
 statements contained in "Management's Discussions and Analysis of  Financial
 Condition and Results  of Operations."   The actual results  of the  Company
 could  differ  materially  from  those  forward  looking  statements.    The
 following information sets forth certain factors that could cause the actual
 results to differ  materially from those  contained in  the forward  looking
 statements.

      The Company's Financial Condition Is Poor.    The Company is  currently
 experiencing severe liquidity problems and has been unable to pay all of its
 obligations when they have become due.  The Company has had operating losses
 in each of the last four years, with net sales declining substantially  each
 year  since  1995.    Since  1997,  cash  flow  from  operations  has   been
 insufficient to meet the  Company's cash requirements.   Unless the  Company
 obtains substantial orders for  printing equipment in  the near future,  the
 Company may be forced to file for bankruptcy.  The Company's liabilities may
 currently exceed the value of its assets.
<PAGE>
      Competition.  The packaging and  printing equipment industry is  highly
 competitive,  and  many  of   the  industry  participants  possess   greater
 management, financial  and  other  resources than  those  possessed  by  the
 Company. The  Company encounters  substantial competition  in  marketing its
 products from  manufacturers  of  both sheet-fed  and  web-fed  presses  and
 related equipment.  The  Company believes that in  selected segments of  the
 packaging  and   printing   industries   its   competitors   are   primarily
 manufacturers  of  web-fed  equipment.   The  Company's  principal   web-fed
 competitors are Bobst S.A., Komori-Chambon, and Goebel. The Company believes
 that the packaging industry is also served by manufacturers of offset sheet-
 fed equipment, such  as Koenig and  Bauer-Albert Frankenthal  (KBA)-Planeta,
 Heidelberg, M.A.N. Roland  and Komori. The  banknote and securities  markets
 are predominately served by sheet-fed equipment marketed by De La Rue Giori.
 The Company believes that competition for its products is based primarily on
 product  performance,  web-fed  versus  sheet-fed  technology,  reliability,
 customer service, price and delivery.

      Economic Downturn.    Sales of  the  Company's packaging  and  printing
 products  may  be  adversely  affected  by  general  economic  and  industry
 conditions and  downturns,  and  particularly by  the  price  of  paper  and
 paperboard.  The  Company's  business  and  results  of  operations  may  be
 adversely affected by inflation, interest rates, unemployment, paper prices,
 and other general economic conditions reflecting a downturn in the  economy,
 which may cause customers to defer  or delay capital expenditure  decisions.
 The Company incurred losses of $34.2 million  in 1996 and  $19.2 million  in
 1997.  These losses were caused by many factors, including a slowdown in its
 customers' capital spending  that surfaced in  the fourth  quarter of  1995;
 changing printing technology that affected demand for the Company's business
 forms printing  systems,  which  prior to  1990  represented  a  substantial
 portion of the Company's revenues, and by a general economic downturn  which
 impacted or delayed capital expenditure decisions  by its customers.   Sales
 of business forms and specialty web printing press systems have historically
 been subject to cyclical variation based upon specific and general  economic
 conditions, and there  can be no  assurance that the  Company will  maintain
 profitability during downturns.

      Technological Advances in  the Printing  Industry.   The packaging  and
 printing industry has experienced many technological advances over the  last
 decade, and the Company  expects such advances to  continue.  Packaging  and
 printing companies  generally want  more  efficient packaging  and  printing
 press  systems  in order  to reduce  inventories,  "in  process"  production
 time, waste and labor costs.  These technological advancements could  result
 in the development  of additional competition  for all or  a portion of  the
 Company's products and  could adversely affect  the competitive position  of
 the Company's products.  Although the Company  has rights  in a  significant
 number of  issued patents  in the  United States  and elsewhere,  management
 believes that  patent  protection  is  less  significant  to  the  Company's
 competitive position than certain other factors.  These factors include  the
 Company's in-depth knowledge of  the industry and  the skills, know-how  and
 technological expertise of the Company's personnel.
<PAGE>
      Dependence  Upon  New  Technologies  and  Product  Development.     The
 Company's  industry   is  highly   competitive  and   is  characterized   by
 technological advances and new product introductions and improvements.   The
 Company believes that its future success depends upon its ability to enhance
 current products, to develop  and introduce new and  superior products on  a
 timely basis  and at  acceptable pricing,  to respond  to evolving  customer
 requirements, and to design and build products which achieve general  market
 acceptance.  The ability of the Company to compete successfully will  depend
 on its ability to maintain a technically competent research and  development
 staff and  to  stay ahead  of  technological  changes and  advances  in  the
 industry.  Many difficulties and delays  are encountered in connection  with
 the development of new technologies and  related products.  There can be  no
 assurance that new products will establish  long-term life cycles or  assure
 long-term field use.  Moreover, there  can be no assurance that any  refined
 or improved versions  of current products  or any new  products that may  be
 introduced in the future will be  commercially viable.  Current  competitors
 or new  market  entrants  could introduce  new  or  enhanced  products  with
 features which render  the Company's technology,  or products  incorporating
 the Company's technology, obsolete or less marketable.

      International Business Risks.   International sales represented 38%  of
 net sales in 1999, 35% in 1998 and 25%   in 1997.  The Company expects  that
 international sales will continue to represent a significant portion of  its
 total sales.    International  operations  are  subject  to  various  risks,
 including  exposure  to  currency   fluctuations,  political  and   economic
 instability, differing economic conditions  and trends, differing trade  and
 business laws,  unexpected changes  in  applicable laws,  rules,  regulatory
 requirements  or  tariffs,  difficulty  in  staffing  and  managing  foreign
 operations, longer customer payment  cycles, greater difficulty in  accounts
 receivable collection,  potentially  adverse tax  consequences  and  varying
 degrees of  intellectual  property  protection.   Fluctuations  in  currency
 exchange rates could result in lower sales volume reported in U.S.  dollars.
  Fluctuations in  foreign  exchange  rates  are  unpredictable  and  may  be
 substantial, and,  since  many of  the  Company's competitors  are  foreign,
 fluctuations in foreign countries may also affect the Company's  competitive
 position in the United States market.  Any event causing a sudden disruption
 of international sales could have a material adverse effect on the Company's
 operations.  There can be no  assurance that the Company will be  successful
 if it engages in such practices to a significant degree in the future.

      Manufacturing Risks and Availability of  Raw Materials.  Disruption  of
 operations at  the  Company's primary manufacturing facility  or any of  its
 subcontractors for any reason, including work stoppages, fire, earthquake or
 other natural disasters, would  cause delays in  shipments of the  Company's
 products.  There can be no  assurance that alternate manufacturing  capacity
 would be available, or if available, that it could be obtained on  favorable
 terms or  on a  timely basis.    The principal  raw  materials used  in  the
 manufacturing of printing press systems are high grade steel and alloys used
 in the making of gears, rollers and side frames.  Steel is in very available
 supply throughout the world.
<PAGE>
      Impact of Estimates Upon Quarterly Earnings.   The Company derives  the
 majority of  its revenues  from the  sale of  packaging and  printing  press
 systems, with prices for each system and most orders ranging from $1 million
 to over  $10  million.   The  Company's policy  is  to record  revenues  and
 earnings for orders in excess of $1 million on the percentage of  completion
 basis of accounting, while revenues for  orders of less than $1 million  are
 recognized upon  shipment  or  when completed  units  are  accepted  by  the
 customer.   The percentage  of completion  method of  accounting  recognizes
 revenues and earnings over the  build cycle of the  press system as work  is
 being performed based upon the cost incurred to date versus total  estimated
 contract cost and management's estimate of the overall profit in each order.
 In  the event that the  Company determines it will  experience a loss on  an
 order, the entire amount of the loss is charged to operations in the  period
 that the loss is  identified.  The Company  believes that the percentage  of
 completion method of accounting properly  reflects the earnings process  for
 major orders.  The informed management judgments inherent in this accounting
 method may cause fluctuations within a given accounting period, which  could
 be significant.  During each accounting period, other management assessments
 include estimates  of  warranty  expense, allowances  for  losses  on  trade
 receivables and many other similar informed judgments.

      Litigation.    As  a  result  of  the  Company's  continuous  liquidity
 problems, the Company has been the  subject of lawsuits, from time to  time,
 with respect to the Company's inability  to pay certain vendors on a  timely
 basis.  To date, most of such actions have been settled, but there can be no
 assurance that all of the actions can be settled, or if named a defendant in
 such actions in the future, the Company  will be able to settle such  claims
 in the  future.   In addition,  the Company  is subject  to various  claims,
 including product liability claims,  which arise in  the ordinary course  of
 business, and  is  a party  to  various legal  proceedings  that  constitute
 ordinary  routine  litigation  incidental  to  the  Company's  business.   A
 successful product liability claim brought against the Company in excess  of
 its product liability coverage could have a material adverse effect upon the
 Company's business, operating results and  financial condition.  See  "Legal
 Proceedings."

      Environmental Costs, Liabilities  and Related Matters.   The  Company's
 production facilities and operations  are subject to  a variety of  federal,
 state, local  and foreign  environmental, health  and  job safety  laws  and
 regulations.  The Company  is not aware of  any conditions or  circumstances
 that, under  applicable  environmental,  health  or  safety  regulations  or
 requirements, will  require  expenditures  by the  Company  that  management
 believes would have a material adverse  effect on its businesses.   However,
 environmental  liabilities  (especially   those  relating  to   discontinued
 production or waste disposal practices) are very difficult to quantify,  and
 it is  possible  that  environmental litigation  or  regulatory  action  may
 require significant unanticipated expenditures or otherwise adversely affect
 the Company. See "Legal Proceedings."

      Control by  Principal Stockholders.   As  of March  20, 2000,  Paul  I.
 Stevens  and  persons   and  entities  related   to  him  beneficially   own
 approximately 13% of the  outstanding Series A Common  Stock and 93% of  the
 outstanding Series B Common Stock of the Company.  This ownership represents
 72.4% of the  combined voting  power.  Although  the impact  of the Stevens'
 holdings is not believed  to be material to  the operations of the  Company,
 such control may have  the effect of reducing  liquidity of the stock  which
 may affect shareholder value.
<PAGE>
      Volatility of Stock Price.  The Company's Series A Common Stock  market
 price in the last few years has ranged from a high   of $4.50  per share  in
 the second quarter of 1998 to a low of $0.09 per share in the fourth quarter
 of 1999.  The trading price of the Common Stock is likely to continue to  be
 highly volatile  and subject  to wide  fluctuations in  response to  factors
 related to the announcement of financial results, new product introductions,
 new orders or order cancellations by the  Company or  its competitors or  by
 announcements of  other  matters related  to  the  Company's  business.   In
 addition, there can be no  assurance that the price  of the Series A  Common
 Stock will not  fluctuate in  the future due  to a  multiplicity of  factors
 outside of  the  Company's control,  including  general economic  and  stock
 market conditions, investor perceptions,  levels  of interest rates and  the
 value of the U.S. dollar.

      Dependence  On  Key  Personnel.    The  Company's  success  is  largely
 dependent  on the personal efforts of Paul I. Stevens, its  Chairman of  the
 Board and Chief  Executive Officer, Richard  I. Stevens,  its President  and
 Chief Operating  Officer,   and  on  various  other members  of  its  senior
 management.  The loss  or interruption of the  services of such  individuals
 could have a material adverse effect on the Company's business or prospects.
 The  success of  the Company  may  also be dependent on  its ability to hire
 and retain  additional  qualified  sales,  marketing  and  other  personnel.
 Competition for qualified  personnel in the  Company's industry is  intense,
 and there can  be no  assurance that the  Company will  be able  to hire  or
 retain  additional  qualified  personnel.    In  addition,  past   financial
 performance of  the  Company  may  limit its  ability  to  hire  and  retain
 management professionals.

      Rapid Growth and Decline of Revenues.  The Company's annual revenue has
 fluctuated dramatically over the years ranging from 30% growth in 1995 to  a
 50%  decrease  in  1999.    The  growth  was  largely  attributable  to  the
 development and sale of new products.  In light of this growth, the  Company
 increased the  amount  of  expenditures  on  its  research  and  development
 programs, particularly in conjunction with the development of  new products.
  In recent years, the Company curtailed many expenditures in response to the
 slowness of new orders which has been due, in large part, to certain product
 performance issues related to  the new products.   These performance  issues
 also severely impacted the Company's liquidity, necessitating large lay offs
 of personnel, a restructuring of operations  to lower operating levels,  and
 consolidation of functions  and facilities.   In addition,  the Company  has
 reduced capital expenditures  and implemented certain  other cost  reduction
 measures.

      Acquisitions.  The Company may from time to time acquire or enter  into
 strategic alliances  concerning technologies,  product lines  or  businesses
 that are complementary to those of the Company.   There can be no  assurance
 that the Company will be able to conclude any acquisitions in the future  on
 terms favorable to it or that,  once consummated, such acquisitions will  be
 advantageous to the Company.
<PAGE>

 Item 2.  Properties.

      The  following  are  the  locations  of  the  Company's  executive  and
 principal manufacturing and  research facilities. In  addition, the  Company
 leases a small sales office in Europe on a month-to-month basis. The Company
 believes its facilities are adequate for its present needs.


                                                          Approx.    Owned or
 Location                    Use                          Sq. Ft.     Leased
- -----------------  ---------------------------------      ------      ------
Fort Worth, Texas  Executive and engineering offices      12,400      Leased
Fort Worth, Texas  Manufacturing facility and             74,000      Owned
                   administration offices


      See notes G, J and L of the notes to consolidated financial  statements
 of the Company for information relating to property, plant and equipment and
 leases. See "Management's  Discussion and Analysis  of Financial  Condition
 and Results of Operations-Liquidity and Capital Resources."


 Item 3.  Legal Proceedings.

      The Company is subject to  various claims, including product  liability
 claims, which arise in the  ordinary course of business,  and is a party  to
 various  legal  proceedings  that  constitute  ordinary  routine  litigation
 incidental to the Company's business.   No assurance can be  given regarding
 the outcome of any case; however  a negative outcome in excess of  insurance
 coverage could have  a material adverse  effect on  the Company's  business,
 operating results and financial condition.

      On September 15, 1999  the Company filed the  necessary forms with  the
 Pension  Benefit   Guaranty   Corporation  (PBGC)   to   initiate   distress
 terminations of the Company's two defined  benefit pension plans.  The  PBGC
 is a federal agency  that insures and protects  pension benefits in  certain
 pension  plans  when  the  sponsoring  company  cannot  make  the   required
 contributions to fund projected benefit obligations of the plans.

      The Company's  low  volume of  printing  press sales  has  resulted  in
 extensive lay-offs, plant closings and sales of certain operating  divisions
 over the  past three  years.   The  reduction in  employment has,  in  turn,
 created a higher than normal demand  for pension benefits necessitating  the
 Company's decision  to file  for distress  termination of  the plans.    The
 filings began a series  of negotiations with the  PBGC regarding funding  of
 the pension benefits of employees.  In November 1999 and February 2000,  the
 PBGC filed federal liens aggregating $1.6  million against all property  and
 rights to property of  the Company on behalf  of the Company's Pension  Plan
 for Bargaining Unit Employees.

      As a result of the Company's continuing liquidity problems, the Company
 has been the subject  of lawsuits, from  time to time,  with respect to  the
 Company's inability to pay certain vendors on a timely basis.  To date, most
 of such actions have been settled, but there can be no assurance that all of
 these actions can be settled  or that the Company,  if named a defendant  in
 such actions  in the  future, will  be able  to settle  such claims  in  the
 future.
<PAGE>
      In February 1990, the Environmental  Protection  Agency ("EPA")  issued
 a Notice of  Potential Liability and  Request for  Participation in  Cleanup
 Activities to approximately  60 parties, including  Post Machinery  Company,
 Inc., a subsidiary of the Company, in relation to the disposition of certain
 substances   that  could  be  characterized   as  "hazardous  wastes"  which
 purportedly were  taken to  the  Coakley Landfill  Site ("Coakley Site")  in
 North Hampton, New  Hampshire prior to  1982.  A committee representing  the
 potentially responsible parties  ("PRPs")  negotiated  a  settlement in  the
 form of consent decrees  (the "Consent Decrees")  with EPA and the State  of
 New Hampshire covering the closure and capping of the Coakley Site. The PRPs
 also agreed that  certain of the  PRPs, including Post,  would no longer  be
 obligated to participate in the cleanup at the Coakley Site in return for  a
 contribution of  a  fixed  amount  into  escrow,  and  such  PRPs  would  be
 indemnified by certain of  the remaining PRPs  from further liability  under
 the EPA's current action. Post contributed $86,719 under this agreement. EPA
 is currently conducting an investigation of ground water conditions under  a
 wetlands area adjacent to the site. EPA has not given notice to any  parties
 of potential liability for ground water under the wetlands. There can be  no
 assurances that no  further claims will  be brought related  to the  Coakley
 Site, or sites affected by contamination from the Coakley Site, or that  any
 claims which might be brought would be covered by the Consent Decrees or the
 agreement  described   above.   In  connection   with   the   aforementioned
 environmental claim, the  Company was indemnified  and reimbursed by  Post's
 predecessor, PXL Holdings Corporation, for its costs in connection with  the
 Coakley matter.

      No assurance can be  given regarding the outcome  of any pending  case;
 however, a negative  outcome in excess  of insurance coverage  could have  a
 material adverse effect  on the  Company's business,  operating results  and
 financial condition.


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

      No matters were submitted to a  vote of the Company's security  holders
 during the last quarter of its fiscal year ended December 31, 1999.

<PAGE>
                              PART II


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

      The Company's  Series A  Common Stock  and Series  B Common  Stock  are
 traded  on the  American  Stock Exchange under the  symbols SVEIA and SVEIB,
 respectively.  The following table sets forth  for the periods indicated the
 range of the high and the low closing sale prices per share for the Series A
 Common Stock and the Series B Common Stock, all as reported on the Composite
 Tape  of  the  American Stock Exchange  Listed Issues,  or closing prices as
 reported by the Over-the-Counter Bulletin Board daily summaries.

<TABLE>
                                           Series A            Series B
                                         Common Stock        Common Stock
                                       -----------------    ------------------
                                        High       Low       High        Low
                                       -------    ------    -------    -------
 <S>                                  <C>        <C>       <C>        <C>
 Year Ending December 31, 1998 .....
 First Quarter .....................  $2  1/2    $1 1/2    $3 15/16   $3  3/8
 Second Quarter ....................   3 13/16    1         4  3/8     3  3/8
 Third Quarter .....................   3 11/16    1         4  1/4     1  1/4
 Fourth Quarter ....................   1  3/8       9/16    1  1/4       13/16

 Year Ending December 31, 1999:
 First Quarter .....................  $1  1/4    $  5/16   $1  3/16   $  11/16
 Second Quarter ....................   1  1/4       5/16      13/16       1/2
 Third Quarter .....................     11/16      1/4        1/2        1/4
 Fourth Quarter ....................      1/2       3/32       1/2        1/4

 First Quarter 2000
   (through March 23, 2000).........  $2  1/4    $  1/4    $2         $   1/16

</TABLE>

 As of March 23, 2000, approximately 7,466,000 shares of the Series A  Common
 Stock were outstanding and held by approximately 200 holders of record,  and
 2,036,000 shares of the Series B  Common Stock were outstanding and held  by
 approximately 65 holders of record.

      The Company  has not  paid cash  dividends on  its capital  stock.  The
 current policy of the Company's Board  of Directors is to retain any  future
 earnings to  provide funds  for the  operation  of the  Company's  business.
 Consequently, the Company does  not anticipate that  cash dividends will  be
 paid on the Company's capital stock in the foreseeable future. If,  however,
 cash dividends are paid, such dividends  will be paid equally to holders  of
 the Series A Common Stock and the Series B Common Stock on a share-for-share
 basis.  See  "Description of  Capital Stock."  In  addition,  the  Company's
 current credit facility  restricts the Company's  ability to pay  dividends.
 For a discussion of restrictions of the Company's ability to pay  dividends,
 see  "Management's  Discussion  and  Analysis  of  Financial  Condition  and
 Results of Operations-Liquidity and Capital Resources."

 Recent Sales of Unregistered Securities

      On March 31, 2000,  the Company  received the net proccees of a private
 placement of $1 million 10% convertible subordinated notes payable due March
 31, 2003 (see Item 1, Business and Note U of Notes to Consolidated Financial
 Statements).  The  notes  are  convertible into 2,000,000 shares of Series A
 Common  Stock (SVEIA),  subject  to  adjustment.  The  Company  issued these
 unregistered  securities  in  reliance  upon Rule 504 of Regulation D of the
 Securities Act of 1933, as amended.
<PAGE>
 Item 6.  Selected Financial Data.

      The  following   tables  set   forth  selected   historical   financial
 information for  the indicated  periods for  the  Company.   The  historical
 information is derived  from the  Consolidated Financial  Statements of  the
 Company.
<TABLE>
                           STATEMENT OF OPERATIONS
                     (In thousands except per share data)
                                                              Year Ended December 31,
                                                   ---------------------------------------------
                                                    1999     1998      1997      1996      1995
                                                   ------   ------    ------    ------   -------
 <S>                                              <C>      <C>       <C>       <C>      <C>
 Net sales                                        $11,137  $22,207   $35,151   $65,659  $139,181
 Cost of sales                                      7,813   17,877    34,011    74,243   108,307
                                                   ------   ------    ------    ------   -------
 Gross profit (loss) (1)                            3,324    4,330     1,140    (8,584)   30,874
 Selling, general and administrative expense        4,909    7,379     9,837    22,485    21,437
 Restructuring charge (3)                               -        -         -     1,300        --
 Loss on impairment of assets                         200      573     6,347       --         --
 Loss on sale of assets                                --       --        --     3,472        --
                                                   ------   ------    ------    ------   -------
 Operating income (loss)                           (1,785)  (3,622)  (15,044)  (35,841)    9,437
 Gain (loss) on sale of assets (4)                 (1,682)   2,203        --        --         -
 Other income (expense)                              (817)  (1,956)   (4,396)   (5,379)   (3,478)
                                                   ------   ------    ------    ------   -------
 Income (loss) before income taxes and
   extraordinary item                              (4,284)  (3,375)  (19,440)  (41,220)    5,959
 Income tax (expense) benefit                           -      (75)      213     7,000    (1,660)
                                                   ------   ------    ------    ------   -------
 Income (loss) before extraordinary item           (4,284)  (3,450)  (19,227)  (34,220)    4,299
 Extraordinary item (2)                                --   11,221         -         -         -
                                                   ------   ------    ------    ------   -------
      Net income (loss)                           $(4,284) $ 7,771  $(19,227) $(34,220) $  4,299
                                                   ======   ======    ======    ======   =======
 Per Common Share - Basic:
 Income (loss) before extraordinary item          $ (0.45) $ (0.36)  $ (2.03)  $ (3.62)    $0.46
 Extraordinary item (2)                                 -     1.18          -         -        -
                                                   ------   ------    ------    ------   -------
      Net income (loss) - basic                   $ (0.45)   $0.82   $ (2.03)  $ (3.62) $   0.46
                                                   ======   ======    ======    ======   =======
 Per Common Share - Diluted:
 Income (loss) before extraordinary item          $  0.45  $ (0.36) $  (2.03)   $(3.62) $   0.45
 Extraordinary item (2)                                --     1.18         -         -         -
                                                   ------   ------    ------    ------   -------
      Net income (loss) - diluted.                $  0.45  $  0.82   $ (2.03)  $ (3.62) $   0.45
                                                   ======   ======    ======    ======   =======
 Weighted average shares outstanding - basic        9,502    9,492     9,457     9,451     9,408
                                                   ======   ======    ======    ======   =======

 Weighted average shares outstanding - diluted      9,502    9,492     9,457     9,451     9,553
                                                   ======   ======    ======    ======   =======
<PAGE>
                              BALANCE SHEET DATA
                                 (In thousands)

                                                        Year Ended December 31,
                                           --------------------------------------------------
                                             1999      1998       1997       1996       1995
                                           -------   -------    -------   --------    -------
   Cash and temporary investments ..      $      6  $    164   $    211  $   3,338   $    814
   Working capital (deficit) .......         1,178     1,965   (10,894)   (11,476)     38,127
   Total assets ....................        10,262    14,651     31,890     77,417    117,647
   Long-term debt ..................         6,158     5,244         55        113     33,470
   Total stockholders' equity (deficit)   $(5,396)  $(2,955)   $(9,611)    $10,896    $45,372
 ______________________________

 (1)  Includes increase in gross profit in  1999 of $1.2 million and in  1998
      of $1.3 million as  a result of  a decrement in  the LIFO inventory  at
      December 31, 1999 and 1998, respectively.

 (2)  In 1998, gain on early extinguishment of debt was $11.2 million.

 (3)  The restructuring charge reflected certain of the estimated costs of  a
      restructuring plan which included closing some facilities, combinations
      of operating units, major personnel reassignments, reductions in number
      of employees, and  severance compensation.   The plan  was designed  to
      bring the  Company's operating  costs in  line with  the current  order
      rates and the recession in the capital goods industry.  The cash outlay
      in 1996 and 1997 for this restructuring was approximately equal to  the
      restructuring charge.

 (4)  Includes loss  on January,  2000 sale  of  SSMI, the  Company's  French
      repair and service  company, of $0.05  million and  a related  non-cash
      foreign currency adjustment of $1.6  million which had been  previously
      reported as a charge against  stockholder equity in "accumulated  other
      comprehensive loss".
</TABLE>
<PAGE>
 Item 7.   Management's Discussion and  Analysis of  Financial Condition  and
 Results of Operations.


 Cautionary Statement

      The  statements  in  this   Form  10-K,  including  this   Management's
 Discussion and Analysis,  that are forward  looking are  based upon  current
 expectations and  actual  results may  differ  materially.   Therefore,  the
 inclusion of such forward  looking information should not  be regarded as  a
 representation of the Company  that the objectives or  plans of the  Company
 will be achieved.   Such  statements include, but  are not  limited to,  the
 Company's expectations regarding the  operations and financial condition  of
 the Company.   Forward looking statements  contained in this  Form 10-K  and
 included in  this Management's  Discussion  and Analysis,  involve  numerous
 risks and uncertainties that could cause actual results to differ materially
 including, but not limited to, the  effect of changing economic  conditions,
 business conditions and  growth in  the printing  and paperboard  converting
 industry, the Company's ability to maintain its lending arrangements, or  if
 necessary,  access  external  sources   of  capital,  implementing   current
 restructuring plans  and accurately  forecasting capital  expenditures.   In
 addition, the Company's future results of operations and financial condition
 may be adversely impacted by various factors including, primarily, the level
 of the  Company's sales.   Certain  of these  factors are  described in  the
 description of the  Company's business, operations  and financial  condition
 contained in this Form 10-K.  Assumptions relating to budgeting,  marketing,
 product development and  other management decisions  are subjective in  many
 respects and  thus susceptible  to  interpretations and  periodic  revisions
 based on actual experience  and business developments,  the impact of  which
 may cause the Company to alter  its marketing, capital expenditure or  other
 budgets, which  may in  turn affect  the  Company's financial  position  and
 results of operations.


 General

      The Company  derives  its  revenues from  the  sale  of  packaging  and
 printing equipment  systems  and  related  equipment  to  customers  in  the
 packaging industry and  the specialty/commercial and  security and  banknote
 segments of the printing industry.  The Company's net sales have  fluctuated
 from a high of $139.2 million in 1995 to a low of $11.1  million in 1999.

      The Company continued to experience a decrease in sales during 1999 and
 1998, which  primarily  reflected  the  sale  of  various  divisions  and  a
 continuation of the reduced order flow that the Company has experienced  for
 the last several  years.  Orders  for 1999 of  $11.1 million increased  8.8%
 over the previous year.   The increase occurred  in packaging and  specialty
 web  products.  In  response to  the  low  volume  of  orders,  the  Company
 continued its  work  force and  cost  reductions and  the  consolidation  of
 certain facilities and operating functions.   In an effort to cut costs  and
 improve cash  flow, the  Company has  eliminated certain  product lines  and
 consolidated manufacturing and assembly at its Fort Worth, Texas,  location.
  The Company believes these actions have helped and will continue to help in
 its efforts to return to profitability.
<PAGE>
 Results of Operations
<TABLE>
      The following  table sets  forth, for  the periods  indicated,  certain
 income statement data as percentages of net sales

                                                     Year Ended December 31,
                                                     -----------------------
                                                      1999     1998     1997
                                                     -----    -----    -----
      <S>                                            <C>      <C>      <C>
      Net sales .......................              100.0%   100.0%   100.0%
      Cost of sales ...................               70.2%    80.5%    96.8%
                                                     -----    -----    -----
      Gross profit (loss) .............               29.8%    19.5%     3.2%
      Selling, general and administrative expenses    44.1%    33.2%    28.0%
      Loss on impairment of assets ....                1.8%     2.6%    18.0%
                                                     -----    -----    -----
      Operating income (loss) .........              (16.1%)  (16.3%)  (42.8%)
      Other income (expense):
           Gain (loss) on sale of assets             (15.1%)    9.9%       -
           Interest, net ..............              ( 6.6%)  ( 7.1%)  (10.2%)
           Other, net .................              ( 0.7%)  ( 1.7%)  ( 2.3%)
                                                     -----    -----    -----
      Loss before income taxes and extraordinary
           items ......................              (38.5%)  (15.2%)  (55.3%)

</TABLE>

      Comparison of Years Ended December 31, 1999 and 1998

      Sales.   The Company's  sales  for the  year  ended December  31,  1999
 decreased by $11.1 million (or 49.8%)  compared to sales in the same  period
 in 1998  due  primarily to  decreases  in packaging  system  products  ($5.6
 million) and French  service and repair  sales ($1.2 million).   A total  of
 $4.3 million of the decrease resulted  from sales of Zerand, which was  sold
 on April 27, 1998.

      Gross Profit.  The Company's gross  profit for the year ended  December
 31, 1999 decreased  by $1.0  million compared to  gross profit  in the  same
 period in 1998.   The gross  profit margin increased  to 29.8%  of sales  as
 compared to 19.5% in the comparable period  in 1998 due (1) to product  mix,
 shipment of products at  near normal margins,  and reduced depreciation  and
 product development costs in 1999, and  (2) the Company's evaluation of  its
 last-in first-out ("LIFO") inventory reserve and corresponding decrement  in
 the calculated  LIFO reserve.   The  Company  evaluated its  LIFO  inventory
 reserve principally  because of  the sale  of its  machining and  production
 facilities  in  Ohio  in  mid-1998  and  the  complete  1998  changeover  of
 manufacturing philosophy from a "machine and make the component parts" to  a
 "purchase the  machined part."   This  LIFO evaluation  process reduced  the
 current year LIFO reserve calculation and, accordingly, increased the  gross
 profit by $1.2 million (or $0.13 per share) for the year ended December  31,
 1999.
<PAGE>
      Selling, General and Administrative  Expenses.  The Company's  selling,
 general, and administrative  expenses decreased by  $2.4 million (or  33.5%)
 for the year ended December 31, 1999 compared to the same period in 1998 due
 to cost  reduction  efforts  at  corporate  headquarters  and  manufacturing
 locations in connection  with the reduced  volume of sales,  as well as  the
 impact of the sale of Zerand.  Selling, general and administrative  expenses
 for the year ended December 31, 1999  were 44.1% of sales compared to  33.5%
 of sales for the same period in 1998 due  to the huge reduction in sales  in
 1999.  The reduction in expenses  was not proportionate to the reduction  in
 sales discussed above.

      Other Income (Expense).   The  Company's interest expense decreased  by
 $0.8 million  for the  year ended  December 31,  1999 compared  to the  same
 period in 1998  due to  the reduced borrowings  in 1999  resulting from  the
 application of  the Zerand  and  Hamilton sale  proceeds  to pay  down  bank
 indebtedness and the early extinguishment  of $17.3 million of  subordinated
 notes, offset by an  increased cost of borrowing  in 1999.  Interest  income
 was negligible for the year ended December 31, 1999 and 1998.

      Comparison of Years Ended December 31, 1998 and 1997

      Net Sales.   The Company's net  sales for the  year ended December  31,
 1998 decreased by $12.9  million, or 36.8%, compared  to the same period  in
 1997, due primarily to decreased sales  of packaging systems products  ($4.7
 million) and  to  the sale  of  the Zerand  division  in April  1998,  which
 contributed $4.3 million in 1998 sales and $11.6 million in 1997 sales.   In
 addition, the Company experienced decreases in its French repair and service
 sales ($0.9 million).  Sales and  gross profit in 1997 include $0.7  million
 in proceeds from  the sale  of certain press  system contract  rights.   The
 Company sold these rights in lieu of a long repossession and resale process.

      Gross Profit.  The Company's gross  profit for the year ended  December
 31, 1998 increased  by $3.2  million compared to  gross profit  in the  same
 period in 1997 due primarily to shipment of products at near normal  product
 margins.  In addition, the Company evaluated its last-in first-out  ("LIFO")
 inventory reserve following the sale of assets, including the inventory,  at
 HMC and  other  inventory  usage in  1998.    The financial  impact  of  the
 calculated decrement in the LIFO inventory  for the year ended December  31,
 1998 was  $1.3 million.   Accordingly,  the gross  profit for  the year  was
 increased $1.3 million ($0.14  per share) and the  LIFO reserve was  reduced
 $1.3 million.  Gross profit margin for  1998 increased to 19.5% of sales  as
 compared to 3.2% for 1997.  This increase in gross profit margin in 1998 was
 due  primarily to product mix, shipment of products at near normal  margins,
 decreased warranty expenses, and  the benefit of the  reduction in the  LIFO
 reserve.  Sales and  gross profit in 1997  include $0.7 million in  proceeds
 from the sale  of certain press  system contract rights.   The Company  sold
 these rights in lieu of a long repossession and resale process.

      Selling, General and Administrative  Expenses.  The Company's  selling,
 general and administrative expenses decreased by  $2.5 million, or 25%,  for
 the year ended December 31, 1998 compared to  the same period in 1997.   The
 decrease was due to cost reduction efforts at corporate headquarters and  at
 manufacturing locations in connection with the  reduced volume of sales,  as
 well as the impact of the sale of the Zerand division.  Selling, general and
 administrative expenses for the year ended  December 31, 1998 were 33.2%  of
 sales compared to 28% of sales for the same  period of 1997 due to the  very
 low sales  in  1998  compared  to  1997.    The  Company's  continuing  cost
 reductions in 1998  did not  equate to  the overall  percentage decrease  in
 sales, and especially the sales decrease in the last half of 1998.
<PAGE>
      Loss on  Impairment  of Assets.    In connection  with  the  continuing
 consolidation of operating facilities, the Company decided in November  1997
 to sell certain production  facilities.  Based upon  bids received or  other
 pertinent valuations, the Company recorded a  fourth quarter 1998 charge  of
 $0.57 million  to reflect  the estimated  ultimate realizable  value of  one
 production and one  inventory storage facility  in Hamilton,  Ohio  held for
 sale (See Note D of Notes to the Financial Statements).

      Gain on Sale of Assets.  The gain on sale of assets of $2.2 million for
 the year ended December 31, 1998 included  a $3.6 million gain on the  April
 1998 sale of the Zerand  division assets, offset by  a $1.4 million loss  on
 the sale of the HMC in July 1998.

      Other Income (Expense).   The Company's  interest expense decreased  by
 $2.0 million  for the  year ended  December 31,  1998 compared  to the  same
 period in 1997  due to  the reduced borrowings  in 1998  resulting from  the
 application of the Zerand and Bernal sale proceeds to pay bank indebtedness,
 and the extinguishment of subordinated indebtedness at June 30, 1998, offset
 by an increased cost of borrowing in 1998.  Interest  income was  negligible
 for the years ended December 31, 1998 and 1997.


 Tax Matters

      The Company's effective state and federal income  tax rate  ("effective
 tax rate")  was  0%  for  1999, 0.3%  for 1998,  and 0.6%  for 1997.    This
 decrease in the effective tax rate was due to the uncertainty of future  tax
 benefits from future operations.
 Quarterly Results (Unaudited)

<TABLE>
      The following table summarizes  results for each  of the four  quarters
 for the years ended December 31, 1999, and 1998.


                                               Three Months Ended
                                   ------------------------------------------
                                   March 31,  June 30,  Sept.30,  December 31,
                                     ------    ------    -------   ------
                                     (In thousands, except per share data)
 <S>                                <C>       <C>       <C>       <C>
 1999:
     Net sales ...................  $ 3,314   $ 2,575   $ 2,415   $  2,833
     Operating income (loss) .....  $   270   $   297   $  (830)  $ (1,522)
     Net income (loss) ...........  $    43   $     5   $  (994)  $ (3,338)

     Net income (loss) per common
      share - basic and diluted ..  $ 0.005   $  0.00   $ (0.10)  $  (0.35)
1998:
     Net sales ...................  $ 9,697   $ 5,343   $ 2,737   $  4,430
     Operating income (loss) .....  $   557   $(1,813)  $  (987)  $ (1,379)
     Extraordinary item      .....       --   $11,221        --         --
     Net income (loss) ...........  $  (416)  $11,556   $(1,785)  $ (1,584)
     Net income (loss) per common
       share - basic  ............  $ (0.04)  $  1.22   $ (0.19)  $  (0.17)
     Net income (loss) per common
       share - diluted ...........  $ (0.04)  $  1.13   $ (0.19)  $  (0.17)
</TABLE>
<PAGE>
      The Company  attributes  the operating  and  net loss  for  the  fourth
 quarter of 1999 to (1)  a continuing decline in   sales volume, (2)  accrual
 for losses on certain major contracts and LIFO inventory, and (3) unabsorbed
 overhead costs due to the low shipment  volume in the quarter, and (4)  loss
 on January 2000 sale of SSMI of $0.05 million and a related non-cash foreign
 currency adjustment of $1.6 million which had been previously reported as  a
 charge against  stockholders  equity  in  "accumulated  other  comprehensive
 loss".

      The Company  attributes  the operating  and  net loss  for  the  fourth
 quarter of 1998 to (1) a  continuing decline in orders ($3.0 million  versus
 $20.3 million for the last six months of 1998 and 1997, respectively); (2) a
 non-cash charge for loss on impairment of asset values of $0.57 million  and
 (3) unabsorbed overhead costs due to the low shipment volume in the quarter.

      The Company  has taken  certain continuing  cost reduction  actions  to
 adjust its expected 2000 production to the  order flow in 1999.


 Liquidity and Capital Resources

      The Company requires capital primarily to fund its ongoing  operations,
 to service  its  existing  debt  and  to  pursue  its  strategic  objectives
 including new product development and penetration of international  markets.
  The Company's working capital needs typically increase because of a  number
 of factors,  including the  duration of  the manufacturing  process and  the
 relatively large size of most orders.

      Net cash provided by (used in) operating activities was $(1.6)  million
 in 1999,   $(5.9) million in  1998, and $(3.3)  million in 1997.   Net  cash
 provided  by  (used  in)   operating  activities  (before  working   capital
 requirements) was  $(1.9)  million in  1999,  $(4.5) million  in  1998,  and
 $(10.4) million  in 1997.   Working  capital provided  (used) cash  of  $0.3
 million in 1999, $(1.4)  million in 1998, and  $7.0 million in  1997.    The
 Company's working  capital needs  increase during  periods of  sales  growth
 because of a number of factors, including the duration of the  manufacturing
 process and the relatively large size of most orders.

      In April 2000, the Company completed a private placement of $1  million
 of 10% convertible subordinated  notes ("the Notes").   Net proceeds of  the
 Notes will be used for working capital.  The Notes were issued in increments
 of $50,000 and  are convertible  into 2,000,000  shares of  Series A  Common
 Stock  ("SVEIA")  of the Company at  $0.50 per share, subject to adjustment.
 The conversion of the Notes  is at the holder's  option anytime on or  after
 the fifteenth day following the original  issue date of the Notes and  prior
 to the close of business on their maturity date.  Issue costs for the  Notes
 aggregated approximately $151,000.

       The Company's capital  expenditures were  $0.1 million  in 1999,  $0.2
 million in 1998,  and $0.1  million in  1997   and were  used primarily  for
 certain machinery and equipment modernization.
<PAGE>
      On June 30, 1998 the Company refinanced a major portion of its  secured
 indebtedness ("the Debt Restructuring")  as part of its  plan to reduce  its
 debt.  Through a combination of new secured bank borrowings of approximately
 $6 million, and loans from its Chairman, CEO and principal shareholder, Paul
 I. Stevens, aggregating $4.5 million, the Company paid off principal amounts
 due its  senior secured  bank lender  and  its secured  senior  subordinated
 noteholders, aggregating  approximately $19.5  million.   Repayment  of  the
 secured Senior Subordinated Notes resulted in an extraordinary gain on early
 extinguishment of debt of approximately $11.2 million.

      The Company's bank credit facility bears interest at 13% over prime and
 matures June  30, 2001.   Under  the bank  facility, the  Company's  maximum
 borrowings are limited to a borrowing base formula, which cannot exceed $4.0
 million  and  may be in the form of direct borrowings and letters of credit.
 As of December 31, 1999 there were $2.07 million in direct borrowings and no
 standby letters  of  credit  outstanding, with  approximately  $0.2  million
 additional availability  for  such  borrowings.    The  Company  is  not  in
 compliance with some of the covenants of its senior bank line of credit loan
 agreement.  The principal default involved the failure to make the  required
 pension plan payments in 1999 and  2000, which necessitated the filing of  a
 distress termination request (see below).   The Company's senior lender  has
 declined to grant waivers  of the defaults.   Although the bank can  declare
 the full amount of the loan immediately payable at any time, it has not done
 so.  The senior bank debt is classified as a current obligation at  December
 31, 1999.

      The Company's bank credit facilities have first liens on certain assets
 of  the  Company,  principally  inventory,  accounts  receivable,  and   the
 Company's Texas  real  estate.   Paul  I. Stevens'  loans  aggregating  $6.1
 million  at  December 31, 1999  have first liens  on certain  assets of  the
 Company, principally a $0.5 million platen cutter relating to the  hold back
 on the sale of the Zerand division, the assets of a foreign subsidiary,  and
 certain accounts receivable  for new customer  equipment.   Mr. Stevens  has
 second liens on  all other  assets of  the Company.   The  Company was  paid
 $500,000 of the Zerand  escrow hold back  funds net of  amounts owed to  the
 purchaser on November 6, 1998.  Because these hold back funds collateralized
 certain Paul I. Stevens advances, the $500,000 was paid to him to reduce his
 secured loans to the Company.   The secured loans  from Paul I. Stevens  are
 due June 30, 2001 and bear  interest at rates that vary  up to 2% over  bank
 prime.

      The borrowings under the  bank credit facility  are subject to  various
 restrictive covenants related to financial ratios as well as limitations  on
 capital expenditures  and  additional  indebtedness.   The  Company  is  not
 allowed to pay dividends.

      The Company was unable to pay certain pension plan minimum payments due
 on September 15, 1999.  Accordingly,  the Company filed the necessary  forms
 with the Pension Benefit Guaranty Corporation ("PBGC") to initiate  distress
 terminations of the Company's two defined  benefit pension plans.  The  PBGC
 is a federal agency  that insures and protects  pension benefits in  certain
 pension  plans  when  the  sponsoring  company  cannot  make  the   required
 contributions to fund projected benefit obligations of the plans.
<PAGE>
      The Company's  low  volume of  printing  press sales  has  resulted  in
 extensive lay-offs, plant closings and sales of certain operating  divisions
 over the  past three  years.   The  reduction in  employment has,  in  turn,
 created a higher than normal demand  for pension benefits necessitating  the
 Company's decision  to file  for distress  termination of  the plans.    The
 filings have begun a series of negotiations with the PBGC regarding  funding
 of the pension benefits of employees.  The PBGC, on behalf of the  Company's
 pension plan for bargaining unit employees, has filed liens in the aggregate
 amount of $1.6 million.

      The Company may incur, from time  to time, additional short- and  long-
 term bank indebtedness (under its existing credit facility or otherwise) and
 may issue, in public or private transactions, its equity and debt securities
 to provide  additional funds  necessary for  the  continued pursuit  of  the
 Company's operational strategies.   The availability and  terms of any  such
 sources of financing will depend on market and other conditions.  There  can
 be no assurance  that such  additional financing  will be  available or,  if
 available,  will  be  on  terms and  conditions acceptable  to the  Company.
 Through December  31, 1999,   the  Company's  Chairman and  Chief  Executive
 Officer has  loaned  the  Company  $6.16 million  for  its  short-term  cash
 requirements.  As of December 31, 1999, this amount has not been repaid.

      The success of the Company's plans will continue to be impacted by  its
 ability to  achieve a  satisfactory level  of orders  for printing  systems,
 timely deliveries, the degree of international orders (which generally  have
 less favorable cash  flow terms and  require letters of  credit that  reduce
 credit availability),  and  improved terms  of  domestic orders.  While  the
 Company believes  it is  making progress  in these  areas, there  can be  no
 assurance that the Company will be successful in these endeavors.


 Item 7a. Quantitative and Qualitative Disclosures About Market Risk.

      Not required for the company.


 Item 8. Financial Statements and Supplementary Data.

 Index to Consolidated Financial Statements and Financial Statement Schedules

                                                                      Page
                                                                     Number
                                                                     ------
 Report of Management.........................................         20
 Report of Independent Certified Public Accountants ..........         21
 Independent Auditors' Report ................................         22
 Consolidated Balance Sheets -- December 31, 1999 and 1998 ...         23
 Consolidated Statements of Operations -- Years Ended December
   31, 1999, 1998 and 1997 ...................................         24
 Consolidated Statement of Stockholders'  Equity -- Years
   Ended  December 31, 1999, 1998 and 1997 ...................         25
 Consolidated Statements of Cash Flows -- Years Ended December
   31, 1999, 1998 and 1997 ...................................         26
 Notes to Consolidated Financial Statements ..................         27
 Schedule II -- Valuation and Qualifying Accounts -- Years
   Ended December 31, 1999, 1998 and 1997.....................         45
<PAGE>
      All other schedules are not submitted  because they are not  applicable
 or not required or because the  information is included in the  consolidated
 financial statements or notes thereto.
 Report of Management

      The consolidated financial  statements of  Stevens International,  Inc.
 have been prepared by management and  have been audited by certified  public
 accountants, whose  reports  follow.   The  management  of  the  Company  is
 responsible for the financial  information and representations contained  in
 the  financial  statements   and   other  sections  of  the  annual  report.
 Management believes  that the  consolidated financial  statements have  been
 prepared  in  conformity  with  generally  accepted  accounting   principles
 appropriate under the  circumstances to reflect,  in all material  respects,
 the substance  of events  and  transactions that  should  be included.    In
 preparing the financial  statements, it  is necessary  that management  make
 informed estimates and judgments based upon currently available  information
 of the effects of certain events and transactions.

      In meeting  its responsibility  for the  reliability of  the  financial
 statements,  management  depends  on   the  Company's  system  of   internal
 accounting control.  This system is designed to provide reasonable assurance
 that assets are safeguarded and transactions are executed in accordance with
 management's authorization and are properly recorded.  In designing  control
 procedures,  management  recognizes  that   errors  or  irregularities   may
 nevertheless occur.  Also,  estimates and judgments  are required to  assess
 and  balance  the  relative  cost  and expected  benefits  of the  controls.
 Management  believes  that   the  Company's   accounting  controls   provide
 reasonable assurance that errors or irregularities that could be material to
 the financial statements are prevented or would be detected within a  timely
 period by  employees  in the  normal  course of  performing  their  assigned
 functions.

      The Board of Directors pursues its oversight role for the  accompanying
 financial statements through its Audit  Committee, which is composed  solely
 of directors  who  are  not officers  or  employees  of  the  Company.   The
 Committee also  meets  with  the independent  auditors,  without  management
 present, to  discuss internal  accounting control,  auditing, and  financial
 reporting matters.
<PAGE>

        REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



 Board of Directors and Stockholders
    Stevens International, Inc.


      We have audited the accompanying consolidated balance sheets of Stevens
 International, Inc. and subsidiaries as of December 31, 1999  and 1998,  and
 the related consolidated statements of operations, stockholders' equity, and
 cash flows for  the years then  ended.  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 audit.

      We conducted our audits in accordance with auditing standards generally
 accepted in the  United States.   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
 Stevens International, Inc. and  subsidiaries as of  December 31, 1999,  and
 1998,  and  the   consolidated  results  of   their  operations  and   their
 consolidated cash  flows  for  the  years  then  ended  in  conformity  with
 accounting principles generally accepted in the United States.

      We have also audited Schedule II for the years ended December 31,  1999
 and 1998.  In  our opinion, this schedule  presents fairly, in all  material
 respects, the information required to be set forth therein.

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

<PAGE>


 GRANT THORNTON LLP

 Dallas, Texas
 March 24, 2000
 (except for Note U as to which
 the date is March 31, 2000)

<PAGE>

                         INDEPENDENT AUDITORS' REPORT



 Board of Directors and Stockholders
 Stevens International, Inc.

      We have audited the accompanying consolidated statements of operations,
 stockholders' equity, and cash flows for   the year ended December 31,  1997
 of Stevens International, Inc.  and subsidiaries.   Our audit also  included
 the financial statement schedule listed in the Index at Item 8 for  the year
 ended December  31, 1997.   These  financial  statements and  the  financial
 statement schedule are the responsibility of the Company's management.   Our
 responsibility is to express  an opinion on  these financial statements  and
 the financial statement schedule based on our audit.

      We conducted our audit 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  audit provided  a
 reasonable basis for our opinion.

      In our  opinion,  the  consolidated  financial  statements  of  Stevens
 International, Inc. and  subsidiaries referred to  above present fairly,  in
 all material respects, the results of their operations and their cash  flows
 for the year ended December 31,  1997 in conformity with generally  accepted
 accounting principles.    Also,  in our  opinion,  the  financial  statement
 schedule, when considered  in relation to  the basic consolidated  financial
 statements taken as a  whole, presents fairly in  all material respects  the
 information set forth therein for the year ended December 31, 1997.

      The  accompanying  consolidated  financial  statements  and   financial
 statement schedule  have  been  prepared  assuming  that  the  Company  will
 continue as  a going  concern.   As discussed  in  Note B  of notes  to  the
 consolidated financial statements  in the 1997  Form 10-K,  the Company  has
 negative working  capital at  December 31,  1997, negative  cash flows  from
 operations for  the  year ended  December  31, 1997,  and  anticipates  that
 negative cash  flows  from  operations  will  continue.    In  addition,  as
 discussed in Note J of  notes to the financial  statements in the 1997  Form
 10-K, at December 31,  1997, the Company would  not have been in  compliance
 with certain covenants of its long-term debt agreements had the lenders  not
 waived the covenants and extended the  debt due dates.  These factors  raise
 substantial doubt  about  the  Company's ability  to  continue  as  a  going
 concern.  Management's plan concerning these  matters are also described  in
 Note B  of  notes  to  the  1997 Form  10-K.    The  consolidated  financial
 statements and financial statement schedule  do not include any  adjustments
 that might result from the outcome of this uncertainty.



 DELOITTE & TOUCHE LLP

 Fort Worth, Texas
 March 31, 1998

<PAGE>
<TABLE>
                STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                 (Amounts in thousands, except share data)

<CAPTION>
                                                         December 31,
                                                     --------------------
                                                      1999          1998
                                                     ------        ------
  <C>                                               <C>           <C>
     ASSETS
  Current assets:
     Cash                                           $     6       $   164
     Trade accounts receivable, less allowance
       for losses of $70 and $529  in 1999 and
       1998, respectively                               936         1,711
     Costs and estimated earnings in excess of
       billings on long-term contracts                  109           665
     Inventories                                      6,303         6,146
     Other current assets                                93         1,076
     Assets held for sale                               363           988
                                                     ------        ------
            Total current assets                      7,810        10,750
  Property, plant and equipment, net                  1,795         2,600
  Other assets, net                                     657         1,301
                                                     ------        ------
                                                    $10,262       $14,651
                                                     ======        ======
<PAGE>
       LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
     Trade accounts payable                        $  2,120     $   3,035
     Other current liabilities                        1,691         3,705
     Income taxes payable                               110            75
     Customer deposits                                  641           310
     Advances from stockholder                          ---         1,645
     Current portion of long-term debt                2,070            15
                                                     ------        ------
            Total current liabilities                 6,632         8,785

  Long-term debt                                        ---         2,294
  Note payable - stockholder                          6,158         2,950
  Accrued pension costs                               3,110         3,577
  Commitments and contingencies                         ---           ---
  Stockholders' equity:
     Preferred stock, $0.10 par value,
       2,000,000 shares authorized , none issued
       and outstanding                                  ---           ---
     Series A Common Stock, $0.10 par value,
       20,000,000 shares authorized, 7,459,000
       and 7,418,000 issued and outstanding at
       December 31, 1999 and 1998, respectively         745           741
     Series B Common Stock, $0.10 par value,
       6,000,000 shares    authorized, 2,042,000
       and 2,085,000 shares issued and outstanding
       at December 31, 1999 and 1999, respectively      205           209

     Additional paid-in capital                      39,961        39,961
     Accumulated other comprehensive (loss)          (2,549)       (4,150)
     Retained deficit                               (44,000)      (39,716)
                                                     ------        ------
            Total stockholders' equity (deficit)     (5,638)       (2,955)
                                                     ------        ------
                                                    $10,262       $14,651
                                                     ======        ======

              See notes to consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>
               STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                (Amounts in thousands, except share data)

                                             Year Ended December 31,
                                          -----------------------------
                                           1999       1998        1997
                                          ------     ------     -------
  <S>                                    <C>        <C>        <C>
  Net sales                              $11,137    $22,207    $ 35,151
  Cost of sales                            7,813     17,877      34,011
                                          ------     ------     -------
  Gross profit                             3,324      4,330       1,140
  Selling, general and
  administrative expenses                  4,909      7,379       9,837
  Loss on impairment of assets               200        573       6,347
                                          ------     ------     -------
  Operating (loss)                        (1,785)    (3,622)    (15,044)

  Other income (expense):
    Gain (loss) on sale of assets         (1,682)     2,203           -
    Interest income                           31         13          95
    Interest expense                        (769)    (1,580)     (3,666)
    Other, net                               (79)      (389)       (825)
                                          ------     ------     -------
                                          (2,499)       247      (4,396)
                                          ------     ------     -------
  (Loss) before taxes and
    extraordinary item                    (4,284)    (3,375)    (19,440)
  Income tax benefit (expense)                --        (75)        213
                                          ------     ------     -------
     (Loss) before extraordinary item     (4,284)    (3,450)    (19,227)

  Extraordinary gain on debt
    extinguishment                             -     11,221           -
                                          ------     ------     -------
  Net income (loss)                      $(4,284)   $ 7,771    $(19,227)
                                          ======     ======     =======
  Net income (loss) per common share
    Income (loss) before
      extraordinary gain                 $ (0.45)   $ (0.36)   $  (2.03)
    Extraordinary gain                         -       1.18           -
                                          ------     ------     -------
  Net income (loss)  - basic and
    diluted                              $ (0.45)   $  0.82    $  (2.03)
                                          ======     ======     =======

  Weighted average number of shares
    of common and common stock
    equivalents outstanding during
    the periods - basic and diluted        9,502      9,492       9,457
                                          ======     ======     =======

             See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
                 STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                            (Amounts in thousands)

                                                                                                    Accumulated
                                                                        Additional                     Other
                                  Series A Stock     Series B Stock       Paid-In       Retained    Comprehensive
                                  Shares  Amount     Shares  Amount       Capital       (Deficit)      Loss         Total
                                  -----     ----     -----    ----        -------        ------       ------        ------
   <S>                            <C>      <C>       <C>     <C>         <C>           <C>           <C>          <C>
   Balance, January 1, 1997       7,340    $ 734     2,111   $ 211       $39,844       $(28,260)     $(1,633)     $ 10,896
    Net loss                          -        -         -       -             -        (19,227)           -       (19,227)
    Foreign currency
       translation adjustment         -        -         -       -             -              -         (602)         (602)
    Excess pension liability
       adjustment                     -        -         -       -             -              -         (779)         (779)
                                                                                                                    ------
    Comprehensive loss                                                                                             (20,608)
                                                                                                                    ------
    Conversion of Series B
      stock to Series A stock        13        1      (13)      (1)            -              -            -             -
    Exercise of stock warrants       38        4         -       -            97              -            -           101
                                  -----     ----     -----    ----        -------        ------       ------        ------
   Balance, December 31, 1997     7,391      739     2,098     210        39,941        (47,487)      (3,014)       (9,611)
    Net income                        -        -         -       -             -          7,771            -         7,771
    Foreign currency
       translation adjustment         -        -         -       -             -              -         (295)         (295)
    Excess pension liability
       adjustment                     -        -         -       -             -              -         (841)         (841)
                                                                                                                     -----
    Comprehensive income                                                                                             6,635
                                                                                                                     -----
    Exercise of stock options        14        1         -       -            20              -            -            21
    Conversion of Series B
      to Series A stock              13        1      (13)      (1)            -              -            -             -
                                  -----     ----     -----    ----        -------        ------       ------        ------
   Balance, December 31, 1998     7,418      741     2,085     209        39,961        (39,716)      (4,150)       (2,955)
   Net loss                           -        -         -       -             -         (4,284)           -        (4,284)
    Foreign currency
       translation adjustment         -        -         -       -             -              -       (1,064)       (1,064)
    Excess pension liability
       adjustment                     -        -         -       -             -              -          537           537
                                                                                                                     -----
   Comprehensive loss                                                                                               (2,683)
   Conversion of Series B
     to Series A stock               41        4       (41)     (4)            -              -            -             -
                                  -----     ----     -----    ----        -------        ------       ------        ------
   Balance, December 31, 1999     7,459    $ 745     2,044   $ 205       $39,961       $(44,000)     $(2,549)      $(5,638)
                                  =====     ====     =====    ====        ======        =======       ======        ======

   See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
                 STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Amounts in thousands)
                                                             Year Ended December,
                                                       -----------------------------
                                                         1999        1998      1997
                                                       -------     -------   -------
 <S>                                                  <C>        <C>        <C>
 Cash provided by operations:
  Net income (loss)                                   $ (4,284)   $  7,771  $(19,227)
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
     Depreciation and amortization                         906         934     3,350
     Extraordinary gain on debt extinguishment               -     (11,221)        -
     Accrued pension costs                                  71        (134)      253
     Loss on impairment of assets                          200         573     6,347
     (Gain) loss on sale of assets                       1,682      (2,203)       --
     Other                                                (521)       (294)     (620)
  Changes in operating assets and liabilities net
    of effects from purchase of subsidiary in 1995:
     Trade accounts receivable                             775       1,446     7,780
     Contract costs in excess of billings                  555       1,411      (357)
     Inventories                                          (157)        464     2,551
     Refundable income taxes                                48         (48)    2,464
     Other assets                                          978         (36)    5,871
     Trade accounts payable                               (915)        344    (5,631)
     Other liabilities                                    (913)     (4,934)   (6,143)
                                                       -------     -------   -------
          Total cash provided by (used in)
            operating activities                        (1,575)     (5,927)   (3,362)
                                                       -------     -------   -------
 Cash provided by (used in) investing activities:
  Additions to property, plant and equipment              (117)       (232)      (93)
  Proceeds from insurance and sale of assets                 -           -         -
  Deposits and other                                         -          16       397
  Disposal of the net assets of divisions                  945      14,733    10,384
                                                       -------     -------   -------
          Total cash provided by (used in)
            investing activities                           828      14,517    10,688
                                                       -------     -------   -------
 Cash provided by (used in) financing activities:
  Increase (decrease) in current portion of
    long-term debt                                         (15)    (13,848)  (10,496)
  Net increase (decrease) in long-term debt                604       5,190       (58)
  Sale of stock and exercise of stock options                -          21       101
                                                       -------     -------   -------
          Total cash provided by (used in)
            financing activities                           589      (8,637)  (10,453)
                                                       -------     -------   -------
 Increase (decrease) in cash                              (158)        (47)   (3,127)
 Cash at beginning of year                                 164         211     3,338
                                                       -------     -------   -------
 Cash at end of year                                  $      6    $    164  $    211
                                                       =======     =======   =======
 Supplemental disclosure of cash flow information:
     Interest                                         $    258    $    614  $  1,252
     Income taxes                                            -          --    (2,677)

 See notes to consolidated financial statements.
</TABLE>
<PAGE>


                 STEVENS INTERNATIONAL, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 Years ended December 31, 1999, 1998 and 1997


 A.  Summary of Significant Accounting Policies

      Nature of Operations

           Stevens International, Inc. (the "Company") designs, manufactures,
 markets, and services  web-fed packaging  and printing  systems and  related
 equipment  for  its  customers  in  the  packaging  industry,  and  in   the
 specialty/commercial and banknote  and securities segments  of the  printing
 industry.

      Basis of Presentation

           The consolidated financial statements include the accounts of  the
 Company and its  wholly owned  subsidiaries.   All significant  intercompany
 transactions have been eliminated in consolidation.

      Revenue Recognition

           The Company recognizes revenue on the sale of equipment and  parts
 when units are shipped or when completed units are accepted by the customer.
 Revenue  and cost on certain long-term  contracts are recognized as work  is
 performed, based upon the percentage that  incurred costs bear to  estimated
 total contract costs (percentage of completion method).  In the event of  an
 anticipated loss  under  the percentage  of  completion method,  the  entire
 amount of the loss is charged to operations during the accounting period  in
 which the amount of the anticipated loss is determined.

      Inventory

           Approximately 53 % of  inventory  at December 31, 1999  is  valued
 at the lower of cost, using the last-in, first-out (LIFO) method, or  market
 with the remainder valued using the first-in, first-out (FIFO) method.   The
 LIFO method was used for 31% of the inventory at December 31, 1998.

      Property, Plant and Equipment

           Property, plant and equipment are recorded at cost.   Depreciation
 is computed on  a straight-line  basis over  the estimated  useful lives  of
 three to forty years for the related assets.

      Other Assets

           Included in other assets are patent costs, and goodwill.    Patent
 costs are amortized over the remaining life of the patents, and goodwill  is
 amortized over thirty years.
<PAGE>
      Income Taxes

           The Company accounts for income  taxes under the liability  method
 and recognizes deferred tax liabilities and  assets for the expected  future
 tax consequences  of  events  that  have  been  recognized  in  a  company's
 financial statements  or  tax returns.    Under this  method,  deferred  tax
 liabilities and assets are determined based upon the difference between  the
 financial statement carrying amounts and tax bases of assets and liabilities
 using enacted tax rates in effect in the years in which the differences  are
 expected to reverse.

      Asset Impairment of Long Lived Tangible and Intangible Assets

           Potential impairment of long-lived tangible and intangible  assets
 is assessed annually (unless economic events warrant more frequent  reviews)
 on an asset-by-asset basis.

      Translation of Foreign Currency

           The financial position and results of operations of the  Company's
 foreign subsidiaries are  measured using  local currency  as the  functional
 currency.  Revenues and expenses of  such subsidiaries have been  translated
 into  U.S. dollars at average  exchange  rates prevailing during the period.
 Assets and liabilities have been translated at the rates of exchange at  the
 balance sheet date.  Translation gains and losses are deferred as a separate
 component of  shareholders'  equity, unless  there  is a  sale  or  complete
 liquidation of  the  underlying  foreign  investments.    Aggregate  foreign
 currency transaction  gains  and  losses are  included  in  determining  net
 earnings.

      Use of Estimates

           The  preparation  of  financial  statements  in  conformity   with
 generally  accepted  accounting  principles  requires  management  to   make
 estimates and  assumptions  that  affect the  reported  amounts  of  certain
 assets, liabilities,  revenues and  expenses as  of  and for  the  reporting
 period.  Estimates and  assumptions are also required  in the disclosure  of
 contingent  assets  and  liabilities  as  of  the  date  of  the   financial
 statements.  Actual results may differ from such estimates.

      Stock-Based Compensation

         Compensation  expense is  recorded  with  respect  to  stock  option
 grants  to  employees  using  the  intrinsic  value  method  prescribed   by
 Accounting  Principles  Board  Opinion  No.  25.    This  method  calculates
 compensation expense on the measurement date (usually the date of grant)  as
 the excess of the current market price of the underlying Company stock  over
 the amount the  employee is required  to pay for  the shares, if  any.   The
 expense is recognized over the  vesting period of the  grant or award.   The
 Company does not  intend to elect  the fair value  method of accounting  for
 stock-based compensation  encouraged,  but  not required,  by  Statement  of
 Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
 Compensation".  See Note P.
<PAGE>
      Earnings Per Share

           Basic earnings per share ("EPS") excludes dilution and is computed
 by dividing income available to common shareholders by the  weighted-average
 number of common shares  outstanding for the period.   Diluted EPS  reflects
 the potential dilution that could occur if securities or other contracts  to
 issue common stock were exercised or converted into common stock.  Potential
 common shares relating to the exercise  of stock options have been  excluded
 from the  computation  as the  effect  of  such conversion  would  be  anti-
 dilutive.


 B.  Liquidity Concerns

      The Company  continues to  experience  a decrease  in  sales due  to  a
 declining market for the Company's products and competitive pressures.   The
 Company has continued to implement  a significant restructuring plan,  which
 included large work force and cost reductions and the sale and consolidation
 of certain facilities and operating functions.

      The Company requires capital to fund its ongoing operations, to service
 its existing  debt and  to pursue  its  strategic objectives  including  new
 product development.  Further, the Company has been dependent on the ability
 of its Chairman  and Chief Executive  Officer, Paul I.  Stevens, to  provide
 certain amounts  of working  capital over  and above  that provided  by  the
 Company's bank credit  facility.   The Company  also must  continue to  meet
 certain financial  covenants  imposed by  its  bank credit  facility.    The
 Company's viability is dependent upon its ability to meet its obligations to
 its  bank  lender  and  to  Mr.   Stevens,  and  ultimately,  a  return   to
 profitability.

 C.  Divestiture of Division Assets

      Sale of SSMI

      In January  2000,  the  Company sold  its  French  repair  and  service
 company,  SSMI,  for  a  net  aggregate  consideration  of  $198,000.    The
 transaction resulted in an aggregate loss of $1.65 million, including a loss
 on sale of $0.05 million and a related non-cash foreign currency  adjustment
 of $1.6  million which  had been  previously reported  as a  charge  against
 stockholder equity in accumulated other comprehensive  loss.  SSMI had  1999
 revenues of $3 million and an operating loss of $0.13 million.  Net proceeds
 of this transaction were used to repay a  portion of the loans from Paul  I.
 Stevens, which were partially collateralized by a lien on this subsidiary.

      Sale of Hamilton Production and Storage Facilities in 1999

      In the second quarter  of 1999, the Company  concluded the sale of  the
 real property at  its Hamilton, Ohio  production facility  for an  aggregate
 consideration of $725,000.  The transaction resulted in a small loss due  to
 certain unanticipated costs of vacating the facility.  An inventory  storage
 facility at  Hamilton,  Ohio  was  sold in  August  1999  for  an  aggregate
 consideration of $70,000.  With the conclusion of this transaction, all real
 property in Ohio  has now been  sold.  Proceeds  of these transactions  were
 used to repay certain expenses of the sale, certain property taxes and repay
 a portion  of the  $2.5 million  loan from  Paul I.  Stevens, the  Company's
 chairman and chief executive officer, which was partially collateralized  by
 a lien on these production and storage facilities.
<PAGE>
      Sale of Hamilton Machining Center in July 1998

      On July 28, 1998 the Company sold the real and personal property at its
 Hamilton, Ohio  machining  center  ("HMC") and  the  major  portion  of  its
 machinery and equipment at  its assembly facility in  Hamilton, Ohio for  an
 aggregate consideration of  approximately $4.33 million.   This  transaction
 resulted in  a second quarter 1998  loss on sale of assets of  approximately
 $0.8 million and an additional loss of $0.5 million in the third quarter  of
 1998 as a result of HMC inventory and other inventory that was abandoned  by
 the Company and included in the sale.  Proceeds of the transaction were used
 to repay the $4 million secured bridge term loan from the Company's new bank
 lender (the "Bridge Loan") which was loaned to the Company on June 30, 1998.
  HMC had outside sales of $1.2 million and operating losses of $0.35 million
 in 1997.   The  Company has  replaced  certain of  the capabilities  of  its
 machining center with a group of new and traditional suppliers.

      Sale of Assets of Zerand Division in April 1998

      On April 27, 1998, the Company sold substantially all the assets of its
 Zerand division to Valumaco Incorporated, a new company formed for the asset
 purchase.  In addition, Valumaco Incorporated assumed certain liabilities of
 the Zerand division.  The assets sold included the real property, platen die
 cutter  systems,  and  other  original  Zerand  products  such  as  delivery
 equipment,  wide-web  rotogravure   printing  systems,  stack   flexographic
 printing systems, unwind and butt splicer systems, and related spare  parts,
 accounts payable, and other assumed liabilities.  Excluded from the proposed
 transaction were  the  System 2000  flexographic  printing systems  and  the
 System 9000 narrow-web rotogravure printing  systems produced at the  Zerand
 division  and  related  accounts   receivable,  inventory  and   engineering
 drawings.  The sale price was  approximately $13.7 million, which  consisted
 of cash proceeds of $10.1 million, a one-year $1 million escrow "hold back",
 and the  purchaser's assumption  of approximately  $2.6 million  of  certain
 liabilities of  Zerand, including  the accounts  payable.   The Company  was
 obligated in 1999 to repurchase a platen cutter at a purchase price of  $0.9
 million.  The remaining balance in the escrow holdback was used to partially
 offset the price of the platen cutter.

      This 1998 transaction resulted in an approximate $10 million  reduction
 of the Company's  senior secured  bank debt.   In  1997, Zerand  contributed
 sales of  approximately  $11.6 million  and  approximately $1.8  million  of
 income before interest, corporate charges and  taxes.  The Company  realized
 an approximate $3.6 million gain on the sale of Zerand assets.


 D.  1999 and 1998 Loss on Impairment of Assets

      In September  1999  certain  inventory assets  were  determined  to  be
 worthless.   A  third quarter  1999  non-cash  charge of  $0.2  million  was
 recorded to reflect this impairment of value.

      In  connection   with  the   continuing  consolidation   of   operating
 facilities, the Company decided in November 1997 to sell certain  production
 facilities.  Based  upon bids received  or other  pertinent valuations,  the
 Company recorded a 1998 fourth quarter  non-cash charge of $0.57 million  to
 reflect the estimated ultimate  realizable value of  one production and  one
 inventory storage facility in Hamilton, Ohio which were sold. The production
 facility was sold in 1999.  The aggregate carrying value of these assets  in
 1998, prior to the impairment adjustment was $1.4 million.
<PAGE>

 E.  Costs and Estimated Earnings on Uncompleted Long-Term Contracts

      Unbilled  costs  and  estimated   earnings  on  uncompleted   contracts
 represent revenue  earned  but  not billable  under  terms  of  the  related
 contracts being accounted  for using  the percentage  of completion  revenue
 recognition method.
<TABLE>
      A summary of all  costs and related progress  billings at December  31,
 1999 and 1998 follows:

                                                      December 31,
                                                   -----------------
                                                    1999       1998
                                                   -----       -----
                                                (Amounts in thousands)
     <S>                                          <C>         <C>
     Cost incurred on uncompleted contracts       $  205      $5,155
     Estimated earnings                              106          --
                                                   -----       -----
     Revenue from long-term contracts                311       5,155
     Less:  Billings to date                         202       4,490
                                                   -----       -----
                                                  $  109      $  665
                                                   =====       =====
</TABLE>
      The  $109,000  and  $665,000  net  differences  are  included  in   the
 accompanying balance sheets under the  caption "Cost and estimated  earnings
 in excess of billings on long-term contracts."


 F.  Inventories
<TABLE>
      Inventories consist of the following:

                                                     December 31,
                                                  ------------------
                                                  1999          1998
                                                  -----         -----
                                               (Amounts in thousands)
         <S>                                     <C>           <C>
         Finished product                        $1,396        $  630
         Work in progress                           349         1,458
         Raw material and purchased parts         4,558         4,058
                                                  -----         -----
                                                 $6,303        $6,146
                                                  =====         =====
</TABLE>
      Replacement  cost   exceeds   financial   accounting   LIFO   cost   by
 approximately $696,000 at December 31, 1999  and $1,938,000 at December  31,
 1998.
<PAGE>

 G.  Property, Plant and Equipment
<TABLE>
      Property, plant and equipment consists of:

                                                           December 31,
                                         Range of       -------------------
                                     Estimated Useful    1999        1998
                                          Lives        (Amounts in thousands)
                                       -----------      ------       ------
      <S>                              <C>             <C>          <C>
      Land ........................        N/A         $   416      $   477
      Building and improvements ...    15-40 years       1,436        1,867
      Machinery and equipment .....     5-18 years       1,515        1,001
      Furniture and fixtures ......     3-10 years       5,968        3,227
      Leasehold improvements ......     8-20 years           -          295
                                                        ------       ------
                                                         9,335        6,867
      Less: accumulated depreciation and amortization    7,540        4,267
                                                        ------       ------
                                                       $ 1,795      $ 2,600
                                                        ======       ======
</TABLE>
 H.  Other Assets
<TABLE>
      Other assets consist of:

                                                             December 31,
                                                            --------------
                                                            1999      1998
                                                            -----     -----
                                                        (Amounts in thousands)
       <S>                                                 <C>       <C>
       Goodwill, net of amortization of $147 and $133      $  235    $  251
       Patents, net of amortization of $286 and $282           58        62
       Intangible pension asset .....................           -       166
       Banknote and securities technology intangible          287       752
         asset ......................................
       Other ........................................          77        70
                                                            -----     -----
                                                           $  657    $1,301
                                                            =====     =====
</TABLE>
<PAGE>
 I.  Other Current Liabilities
<TABLE>
      Other current liabilities consist of:

                                                             December 31,
                                                         -------------------
                                                         1999          1998
                                                         -----         -----
                                                      (Amounts in thousands)
       <S>                                              <C>           <C>
       Salaries and wages .......................       $  205        $  190
       Taxes other than income taxes ............          119           760
       Employee benefits ........................          289           827
       Accrued interest .........................           24           406
       Contract reserves ........................          674           533
       Warranty reserve .........................          150           544
       Other accrued expenses ...................          230           445
                                                         -----         -----
                                                        $1,691        $3,705

</TABLE>


 J.  Long-Term Debt
<TABLE>
      Long-term debt consists of the following:
                                                            December 31,
                                                         1999          1998
                                                         -----         -----
                                                        (Amounts in thousands)
     <S>                                                <C>           <C>
     Paul I. Stevens, interest at prime rate plus 2%    $6,158        $2,950
     Notes payable to banks, interest at prime rate
     plus 13% at December 31, 1999 (Net of unamortized
     origination fees of $52 and $88) ...........        2,070         2,291
     Other ......................................           --            18
                                                         -----         -----
                                                         8,228         5,259
     Less: current portion ......................        2,070            15
                                                         -----         -----
                                                        $6,158        $5,244
                                                         =====         =====
</TABLE>

      The interest rate on direct borrowings under the Company's Bank  Credit
 Facility at December 31, 1999 is at the lender's prime rate (8.5%)  plus 13%
 (or 9.75%).  Under its  credit facility, the Company  may borrow up to  $4.0
 million in the  form of  direct borrowings  and letters  of credit.   As  of
 December 31, 1999 there was  $2.07 million in direct  borrowings and $0   in
 standby letters  of  credit  outstanding, with  approximately  $0.2  million
 additional availability for such  borrowings.  At  December 31, 1998,  $2.38
 million of  the Company's  borrowings were  at the  lender's prime  rate  of
 interest (8.0%) plus 13%.
<PAGE>
      The Company is  not in  compliance with some  of the  covenants of  its
 senior bank  line of  credit  loan agreement  under  which the  Company  has
 outstanding debt  of  approximately  $2  million.    The  principal  default
 involved the failure to make the required pension plan payments in 1999  and
 2000, which necessitated the filing of  a distress termination request  with
 the PBGC (see Note M).   The Company's senior  lender has declined to  grant
 waivers of the defaults.  Although the  bank can declare the full amount  of
 the loan immediately payable at any  time, it has not  done so.  The  senior
 bank debt is classified as a current obligation at December 31, 1999.

      On June 30, 1998 the Company refinanced a major portion of its  secured
 indebtedness ("the Debt Restructuring")  as part of its  plan to reduce  its
 debt.  Through a combination of new secured bank borrowings of approximately
 $6 million, and loans from its Chairman, CEO and principal shareholder, Paul
 I. Stevens, aggregating $4.5 million, the Company paid off principal amounts
 due  its  senior  secured bank  lender and  its secured  senior subordinated
 noteholders, aggregating  approximately $19.5  million.   Repayment  of  the
 secured senior subordinated notes resulted in an extraordinary gain on early
 extinguishment of debt of approximately $11.2 million.  The Company paid  in
 full a $4.0 million bank Bridge Loan on July  28, 1998 from the sale of  HMC
 and the  major  portion of  its  machinery  and equipment  at  its  assembly
 facility in Hamilton, Ohio.

      The Company's Bank Credit Facility has first liens on certain assets of
 the Company, principally inventory,  accounts receivable, and the  Company's
 Texas real  estate.   Paul I.  Stevens' loans  aggregating $6.1  million  at
 December 31,  1999  have first  liens  on  certain assets  of  the  Company,
 principally a $0.5 million  platen cutter relating to  the  holdback on  the
 sale of Zerand,  the assets of  a foreign subsidiary,  and certain  accounts
 receivable for new customer equipment.  Mr. Stevens has second liens on  all
 other assets of the Company.   The Company was  paid $500,000 of the  Zerand
 escrow holdback funds net  of amounts owed to  the purchaser on November  6,
 1998.  Because  these holdback funds  collateralized certain  P. I.  Stevens
 advances, the $500,000 was paid  to him to reduce  his secured loans to  the
 Company.  The secured loans from Paul I.  Stevens are due June 30, 2001  and
 bear interest at rates that vary up to 2% over bank prime.

      The borrowings under the  bank credit facility  are subject to  various
 restrictive covenants related to financial ratios as well as limitations  on
 capital expenditures  and  additional  indebtedness.   The  Company  is  not
 allowed to pay dividends.

      Principal maturities of the outstanding long-term debt at December  31,
 1999, are as follows (Amounts in thousands):

      Year ending December 31, 2001. . . . . . . . . .  $ 6,210

      Less unamortized loan origination fees . . . . .       52
                                                         ------
                                                        $ 6,158
                                                         ======
<PAGE>
 K.  Income Taxes

      The Company and its domestic subsidiaries file consolidated income  tax
 returns.  At  December 31, 1999,  the Company had  the following losses  and
 credits available for carryforward for federal income tax purposes:

        Net operating loss - $11,451,000
        expiring in 2011 and 2012 and $4,283,000
        expiring in 2019                               $15,734,000
        General business credit -- expiring
        in 2005, 2009 and 2010                         $ 1,552,000
        Minimum tax credit -- not subject
        to expiration                                  $   832,000

      During  1998,  the  Company  recognized  income  from  cancellation  of
 indebtedness of $11,221,000.  Pursuant to Internal Revenue Code Section 108,
 this amount was  not includible  in taxable income; however, it reduced  the
 Company's net operating loss carryforward as of  January 1, 1999.  The   net
 operating loss carryforward described above has been reduced for the  impact
 of the 1998 cancellation of indebtedness transaction.

      Deferred income  taxes reflect  the net  tax effects  of (a)  temporary
 differences between  the  carrying amounts  of  assets and  liabilities  for
 financial reporting purposes and the amounts  used for income tax  purposes,
 and (b) operating loss and tax credit carryforwards.
<TABLE>
      The tax  effects  of  significant items  comprising  the  Company's net
 deferred tax assets as of December 31, 1999 and 1998 are as follows:

                                                                December 31,
                                                              1999     1998
                                                             ------   ------
                                                       (Amounts in thousands)
   <S>                                                      <C>      <C>
   Deferred tax assets:
   Difference between book and tax basis of property        $   345  $ 1,055
   Difference between book and tax basis of intangibles           1        1
   Difference between book and tax basis of pension
   liability ................................                   557      557
   Reserves not currently deductible ........                 2,924    3,626
   Net operating loss, credit and other carryforwards         7,745    5,993
   Other ....................................                    60       91
                                                             ------   ------
                                                             11,632   11,323
                                                             ------   ------
   Deferred tax liabilities:
   Excess of tax over book pension cost .....                   124      380
   Differences between book and tax LIFO inventory            1,839    1,916
   reserves .................................
                                                             ------   ------
                                                              1,963    2,296
                                                             ------   ------
   Net deferred tax assets  .................                 9,669    9,027
   Less valuation allowance .................                (9,669)  (9,027)
                                                             ------   ------
   Net deferred tax assets ..................               $   -0-  $   -0-
                                                             ======   ======
</TABLE>
<PAGE>
<TABLE>
      The provisions for income taxes consists of the following:

                                                    Year Ended December 31,
                                                   -------------------------
                                                   1999       1998      1997
                                                   ----       ----      ----
                                                    (Amounts in thousands)
      <S>                                         <C>        <C>       <C>
      Current provision (benefit) for
      income taxes .......................        $  --      $  75     $(213)
      Deferred provision (benefit) for
      income taxes .......................           --         --       --
                                                   ----       ----      ----
                                                  $  --      $  75     $(213)
                                                   ====       ====      ====


      The Company's  effective tax  rate varies  from the  statutory  federal
 income tax rate for the following reasons:

                                                      December 31,
                                           -------------------------------
                                             1999        1998       1997
                                           -------      ------     -------
                                                (Amounts in thousands)
        <S>                               <C>          <C>        <C>
        Tax expense (benefit), at
        statutory rate  ................  $ (1,456)    $ 2,642    $ (6,732)
        Goodwill expense ...............         5       1,483          73
        Other, net .....................       206          (5)       (258)
        State and local taxes ..........        65          --        (213)
        Valuation allowance ............     1,180      (4,045)      6,917
                                           -------      ------     -------
        Actual tax expense (benefit) ...  $    ---     $    75    $   (213)
                                           =======      ======     =======
</TABLE>

 L.  Commitments and Contingencies

      The Company  leases equipment  and  office facilities  under  operating
 leases.  These leases  in some instances include  renewal provisions at  the
 option of  the  Company.   Rent  expense was  $223,000  for the  year  ended
 December 31, 1999, $246,000 in 1998, and $293,000 in 1997.
<PAGE>
 The following is  a schedule by  year of minimum  rental payments due  under
 non-cancelable leases  with  initial or  remaining  minimum lease  terms  in
 excess of one year as of December 31, 1999:


                                                Operating
                                               (Amounts in
                                                thousands)
                                                  ----
           Year ending December 31, 2000 ...     $  66
                2001                                 7
                2002                                 7
                2003                                 7
                2004 and thereafter ........         -
                                                  ----
             Total minimum lease payments...     $  87
                                                  ====


      At December 31, 1999, the Company  had no capital equipment leases  and
 no outstanding capital expenditure purchase commitments.

      The Company is  contingently liable for  approximately $0.2 million  at
 December 31, 1999, under  terms of customer  financing arrangements.   These
 arrangements  provide  for  a  loss  sharing  formula  whereby  the  Company
 generally is responsible for 15%  of the ultimate net  loss, if any, in  the
 event of default by the customers on their financing agreements.  Management
 believes the  likelihood  of materially  adverse  effects on  the  financial
 position, cash flows or results of operations of the Company as a result  of
 these agreements is remote.

      The Company is subject to  various claims, including product  liability
 claims, which arise in the  ordinary course of business,  and is a party  to
 various  legal  proceedings  that  constitute  ordinary  routine  litigation
 incidental to the Company's business.  A successful product liability  claim
 brought against  the Company  in excess  of its  product liability  coverage
 could have a material adverse effect upon the Company's business,  operating
 results and financial condition.  In  management's opinion, the Company  has
 adequate legal defense  and/or insurance  coverage regarding  each of  these
 actions and  does  not believe  that  such  actions, if  they  occur  either
 individually or  in  the aggregate,  will  materially affect  the  Company's
 operations or financial position.


 M.  Employee Benefit Plan

      Effective January 1,  1992, the Company  adopted a  profit sharing  and
 401(k) savings  retirement plan  to cover  all  non-union employees  of  the
 Company.  In 1994,  union employees of the  Company were covered under  this
 plan.   The  401(k) plan  provides  for  a tax  deferred  employee  elective
 contribution up to 15% of annual compensation or the maximum amount  allowed
 as determined by the Internal Revenue  Code ($10,000 in 1999 and $10,000  in
 1998) and a discretionary matching contribution by the Company for non-union
 employees.   Company matching  contributions were  $-0- in  1999, 1998,  and
 1997.
<PAGE>
      The Company has  sponsored defined benefit  pension plans covering  its
 employees.  The two plans provided for monthly benefits, normally at age 65,
 after completion of continuous service requirements.  The Company was unable
 to pay certain  pension  plan minimum  payments  due on  September 15, 1999.
 Accordingly, the Company filed the necessary forms with the Pension  Benefit
 Guaranty Corporation  ("PBGC")  to  initiate distress  terminations  of  the
 Company's two defined benefit pension plans.   The PBGC is a federal  agency
 that insures and protects pension benefits in certain pension plans when the
 sponsoring company cannot make the required contributions to fund  projected
 benefit obligations of the plans.

      The Company's  low  volume of  printing  press sales  has  resulted  in
 extensive lay-offs, plant closings and sales of certain operating  divisions
 over the  past three  years.   The  reduction in  employment has,  in  turn,
 created a higher than normal demand  for pension benefits necessitating  the
 Company's decision  to file  for distress  termination of  the plans.    The
 filings have begun a series of negotiations with the PBGC regarding  funding
 of the pension benefits of employees.  The PBGC, on behalf of the  Company's
 pension plan  for bargaining  unit employees,  has filed  liens against  all
 property and rights to  property of the Company  in the aggregate amount  of
 $1.6 million.  The assets of the pension plans are maintained in trusts  and
 consist primarily of equity  and fixed income  securities.  Pension  expense
 was $259,000 in 1999, $395,000 in 1998, and $145,000 in 1997.

      Beginning January  1, 1989,  the Company  was required  to recognize  a
 liability in  the  amount  of the  Company's  unfunded  accumulated  benefit
 obligation, with an equal  amount to be recognized  as either an  intangible
 asset  or  a reduction  of equity, net of  applicable deferred income taxes.
 Based upon actuarial and plan asset information as of December 31, 1998, the
 Company has recorded a pension liability of $4.0 million and a corresponding
 intangible asset  of  $0.16 million,  and  a  reduction of  equity  of  $3.1
 million.  Benefits  under the  salaried retirement  plan were  frozen as  of
 April 30, 1997, which eliminated future benefit accruals for participants in
 the salaried retirement  plan.   The impact of  this plan  amendment was  to
 reduce pension expense by $360,000 in 1997.
<PAGE>
<TABLE>
      The following  table  summarizes the  funded  status of  the  Company's
 defined benefit  pension plans  and the  related amounts  recognized in  the
 Company's consolidated financial statements for 1999 and 1998.


                     Status of Plans
                                                1999         1998
                                                -----        -----
                                            (Amounts in thousands)
    <C>                                        <C>          <C>
    Actuarial present value of benefit
    obligations:
      Vested .......................           $5,219       $6,662
      Non-vested ...................               --           --
                                                -----        -----
    Accumulated benefit obligation .           $5,219       $6,662
                                                =====        =====

    Plan assets at fair value ......           $2,080       $2,637
    Projected benefit obligation ...            5,219        6,662
                                                -----        -----
    Projected benefit obligation in
    excess of plan assets ..........            3,139        4,025

    Unrecognized prior service cost                --         (358)
    Unrecognized net gain (loss) ...           (2,549)      (3,279)
    Adjustment required to recognize
    minimum liability. .............            2,549        3,637
                                                -----        -----
    Pension liability recognized in
    balance sheet ..................           $3,139       $4,025
                                                =====        =====

</TABLE>
<PAGE>
<TABLE>
      Net periodic pension cost was composed of the following elements:

                                                    December 31,
                                           ---------------------------
                                            1999       1998      1997
                                           ------     ------    ------
                                              (Amounts in thousands)
 <S>                                      <C>        <C>       <C>
 Service cost ...................         $    --    $    37   $   268
 Interest cost ..................             388        408       420
 Prior service cost adjustment ..              --         --        --
 Curtailment gain  ..............              --         --      (360)
 Actual return on plan assets:
    Loss (gain) .................            (217)      (239)     (175)
 Net amortization and deferral ..              88        144       (8)
                                           ------     ------    ------
    Net periodic pension cost ...         $   259    $   395   $   145
                                           ======     ======    ======


                                                      December 31,
                                                  --------------------
                                                  1999    1998    1997
                                                  ----    ----    ----
  <S>                                             <C>     <C>     <C>
  Major assumptions used:
     Discount rate ................               6.5%    6.5%    6.5%
     Expected long-term rate of return on
     assets .......................               8.5%    8.5%    8.5%
     Rate of increase in compensation levels      0.0%    0.0%    0.0%
</TABLE>

      The Company  has executive  incentive  plans which  provide  additional
 compensation for officers and key employees based upon income and attainment
 of  other  predetermined  goals  and objectives.  Such incentives aggregated
 $-0- in 1999, 1998 and 1997.

      In addition to providing certain  retirement benefits, the Company  has
 insurance coverage  available for  certain health  care and  life  insurance
 benefits for retired  personnel on a  fully reimbursable basis.   Since  the
 cost of these  programs is paid  for by retired  employees, no expenses  are
 recorded in accordance with guidelines in Statement of Financial  Accounting
 Standards No. 106, "Employers' Accounting for Postretirement Benefits  Other
 Than Pensions."

 N.  Related Party Transactions

      The Company and Xytec, a subsidiary of Stevens Industries, Inc. one  of
 the principal shareholders of the  Company, entered into  various agreements
 for Xytec to provide software and computer related services and equipment as
 a subcontractor on  certain  major  contracts.  Xytec  was paid $328,000  on
 these agreements in 1999, $856,000 in 1998, and $594,000 in 1997.

      Two company  directors and  officers were  partners in  a venture  that
 leased office facilities to the Company through September 30, 1998.  Amounts
 paid to the partnership as rent and  maintenance were  approximately $84,000
 in 1998, and $111,000 in 1997.
<PAGE>
      Through December 31, 1999, Paul I. Stevens, the Company's Chairman  and
 Chief Executive Officer has loaned the Company $6.16 million on a  long-term
 arrangement.  (See Note J of Notes to Financial Statement.)  As of  December
 31, 1999, this amount has not been repaid.

 O.  Research and Development, Sales to Major Customers and Foreign Sales

      The Company  incurred gross  company  funded research  and  development
 expenses of approximately $125,000,  for the year  ended December 31,  1999,
 $172,000 in 1998, and $44,000 in 1997.

      Net sales to customers outside of the United States  were approximately
 $3,940,000 in 1999 , $7,851,000 in 1998, and $8,796,000 in 1997.

      Shipments to one customer in 1999, Bell Paper Box, exceeded 10% of  the
 sales.  Shipments to one customer in  1998, Field Packaging Co. LLP and  one
 customer in 1997, Universal Packaging Company, exceeded 10% of total  sales.
 The Company has no foreign exchange contracts.


 P.  Stock Transactions and Voting Rights

      The Series A and Series B stock differ only as to voting and conversion
 rights.  As to matters other than the election of directors, the holders  of
 Series A stock and Series B stock vote together as a class, with each holder
 of Series A stock having one-tenth  of one vote for  each share of Series  A
 held and each holder  of Series B stock  having one vote  for each share  of
 Series B stock  held.  Holders  of Series A  stock, voting  separately as  a
 class, are entitled to  elect 25% of  the total membership  of the board  of
 directors.  Holders  of Series B  stock, voting separately  as a class,  are
 entitled to elect the remaining directors.

      The shares of  Series B  stock are  convertible, share-for-share,  into
 shares of Series A stock at the election of the holder thereof at any  time.
 Once a share  of Series B stock is converted into a share of Series A stock,
 such share of Series  A  stock may not be converted into any other security.
 The Company's certificate of incorporation further provides that the Company
 may not  engage in  a merger  or consolidation  with any  other  corporation
 unless each holder  of Series  A stock  and each  holder of  Series B  stock
 receives identical consideration per  share in  the merger or consolidation.
 If a dividend other  than a stock dividend  is to be paid,  it will be  paid
 equally to holders of  both series of common  stock, share-for-share.  If  a
 stock dividend is to  be paid to holders  of common stock,  it must be  paid
 proportionately to the holders of both series of common stock either (a)  in
 Series A stock  to holders of  both Series A  and Series B  stock or (b)  in
 Series A stock to holders of Series A stock and in Series B stock to holders
 of Series B stock.

      In 1987, the Company adopted a stock option plan in which incentive and
 nonqualified stock  options may  be granted  to  key employees  to  purchase
 shares of common stock at a price not less than the fair market value at the
 date of grant for each incentive option and at not less than 85% of the fair
 market value at the  date of the  grant for each  nonqualified option.   The
 aggregate number  of common  shares  for which  options  may be  granted  is
 795,000,  subject  to  adjustment  for   stock  splits  and  other   capital
 adjustments.  The plan permits the grant of options for a term of up to  ten
 years.  Outstanding options are generally exercisable either immediately  or
 in two installments beginning  one year after the  date of grant and  expire
 five to seven years after the date of grant.
<PAGE>
<TABLE>
      Options to purchase shares  of common stock have  also been granted  to
 directors and  others  who are  not  eligible  to participate  in  the  1987
 employee plan.  A summary of stock option activity for the last three  years
 follows:

                                                 Series A   Weighted Average
                                               Stock Option  Exercise Price
                                                  -------         ----
    <C>                                          <C>             <C>
    Stock Option Plan:
    Balance at January 1, 1997 ........           552,900        $5.63
    Granted ...........................           345,000         1.50
    Cancelled  ........................          (502,900)        5.33
                                                  -------         ----
    Balance at December 31, 1997 ......           395,000        $2.18
    Granted ...........................           285,000         1.50
    Exercised .........................           (14,100)        1.50
    Cancelled .........................           (70,900)        5.27
                                                  -------         ----
    Balance at December 31, 1998  .....           595,000        $1.50
    Cancelled .........................          (105,000)        1.50
                                                  -------         ----
    Balance at December 31, 1999  .....           490,000        $1.50
                                                  =======         ====


                                                 Series A   Weighted Average
                                               Stock Option  Exercise Price
                                                  -------         ----
  Directors and Others:
  Balance at December 31, 1996 .....              114,500        $5.15
  Granted ..........................               35,000         1.50
  Cancelled ........................              (39,500)        5.22
                                                  -------         ----
  Balance at December 31, 1997 .....              110,000        $3.97
  Granted ..........................               25,000         2.25
                                                  -------         ----
  Balance at December 31, 1998 and 1999           135,000        $3.65


 Stock Options outstanding as of December 31, 1999 are as follows:

                   Options Outstanding         Options Exercisable
                    -----------------    ------------------------------
 Range of Exercise  Number   Weighted    Weighted    Number    Weighted
     Prices                  Average     Average               Average
                             Years to    Exercise              Exercise
                            Expiration    Price                 Price
  -------------     -------    ----        ----      -------     ----
  <S>               <C>        <C>        <C>        <C>        <C>
  $1.50 ......      490,000    2.35       $1.50      490,000    $1.50
  $5.50 - $7.19      50,000    5.30       $3.65      135,000    $3.65
  $1.50 - $3.00      85,000    5.30
                    -------                          -------
  $1.50 - $7.19     625,000                          625,000

</TABLE>
<PAGE>
      The Company applies the  intrinsic value method  in accounting for  its
 stock option plans.  Accordingly, no  compensation cost has been  recognized
 for its stock option plans.   Had compensation cost for the Company's  stock
 option plan been determined based on the  fair value at the grant dates  for
 awards under the plan,  as described above, the  Company's net income  would
 have been reduced by  $0 million in  1999, $0.3 million  in 1998, and  $0.03
 million in 1997.  Earnings  (loss) per share would  have been reduced by  $0
 per share in 1999, $0.03 per share in 1998, and $0.03 per share in 1997.

      Weighted average grant-date fair  value of options  in 1999 $(0),  1998
 $(1.05), and  1997 $(0.83)  were calculated  in accordance  with the  Black-
 Scholes option pricing model, using the following assumptions:

                                    1999       1998       1997
                                    ----       ----       ----
  Expected volatility ........        60%        60%        60%
  Expected dividend yield ....        0          0          0
  Expected option term .......    5 years    5 years    5 years
  Risk-free rate of return ...       5.5%       5.5%       7.5%


 Q.  Quarterly Results (Unaudited)
<TABLE>
      The following table summarizes  results for each  of the four  quarters
 for the years ended December 31, 1999 and  1998.  Income per share for  each
 year does not  necessarily equal the  sum of the  four quarters  due to  the
 impact of common stock equivalents (stock options).


                                                                  Three Months Ended
                                                -------------------------------------------------------
                                                March 31,       June 30,    September 30,   December 31,
                                                 -------        -------        -------        -------
                                             (Amounts in thousands except per share data)
  <S>                                           <C>            <C>            <C>            <C>
  1999:
    Net sales ..................                $  3,314       $  2,575       $  2,415       $  2,833
    Operating income (loss) ....                $    270       $    297       $   (830)      $ (1,522)
    Net income (loss) ..........                $     43       $      5       $   (994)      $( 3,338)
    Net income (loss) per common
    share - basic and diluted ..                $  0.005       $   0.00       $  (0.10)      $  (0.35)

  1998:
    Net sales ..................                $  9,697       $  5,343       $  2,737       $  4,430
    Operating income (loss) ....                $    557       $ (1,813)      $   (987)      $ (1,379)
    Extraordinary item..........                      --       $ 11,221             --             --
    Net income (loss) ..........                $ ( 416)       $ 11,556       $ (1,785)      $ (1,584)
    Net (loss) per common share - basic         $ (0.04)       $   1.22       $  (0.19)      $  (0.17)
    Net (loss) per common share - dluted        $ (0.04)       $   1.13       $  (0.19)      $  (0.17)
</TABLE>

      The Company  attributes  the operating  and  net loss  for  the  fourth
 quarter of 1999 to (1) continuing  decline in sales volume, (2) accrual  for
 losses on certain  major contracts and  LIFO inventory,  and (3)  unabsorbed
 overhead costs due to the low shipment volume in the quarters, and (4)  loss
 on January 2000 sale of SSMI of $0.05 million and a related non-cash foreign
 currency adjustment of $1.6 million previously reported as a charge  against
 stockholders equity in "accumulated other comprehensive loss."
<PAGE>
      The Company  attributes  the operating  and  net loss  for  the  fourth
 quarter of 1998 to (1) a  continuing decline in orders ($3.0 million  versus
 $20.3 million for the last six months of 1998 and 1997, respectively); (2) a
 non-cash charge for loss on impairment of asset values of $0.57 million  and
 (3) unabsorbed overhead costs due to the low shipment volume in the quarter.

 R.  Business Segment Data (Amounts in 000's)

      The   Company  has  three  business  segments:     Banknote Inspection,
 Printing & Packaging Equipment (web-fed printing presses  and  related parts
 and service), French  Repair & Service Company (repair, moving and servicing
 presses in  Europe),  and Zerand  Platen  Cutter  Equipment  (cutter-creaser
 equipment for packaging-sold in 1998).
<TABLE>
                                   Total     Revenue   Deprec.   Income(loss)  Unusual
                                   Assets              & Amort    From Oper.    Items
                                   ------    -------   -------     -------     -------
 <S>                             <C>        <C>        <C>        <C>         <C>
 Segments in 1999
 ----------------
 Banknote Inspection, Printing
 & Packaging Equipment           $  8,958   $  8,123   $   860    $ (4,153)   $ (1,600) (1)
 French Repair & Service
 Company - Sold in 2000 ...         1,304      3,014        46        (131)          -
                                   ------    -------   -------     -------     -------
 Totals ...................      $ 10,262   $ 11,137   $   906    $ (4,284)   $ (1,600)

 Segments in 1998
 ----------------
 Banknote Inspection, Printing
 & Packaging Equipment           $ 12,920   $ 13,590   $   807    $ (4,453)   $ (1,973) (2)
  French Repair & Service
 Company ..................         1,731      4,312        33         133           -
 Zerand Platen Cutter
 Equipment - Sold in 1998 .             -      4,305        94         698       3,600  (3)
                                   ------    -------   -------     -------     -------
 Totals ...................      $ 14,651   $ 22,207   $   934    $ (3,622)   $  1,627

 Segments in 1997
 ----------------
 Banknote Inspection,              15,153     18,965     2,775     (17,220)     (6,347) (4)
 Printing & Packaging
 Equipment
  French Repair & Service
 Company ..................         1,928      4,592        38         371          -
 Zerand Platen Cutter
 Equipment ................        14,809     11,594       537       1,805          -
                                   ------    -------   -------     -------     -------
 Totals ...................      $ 31,890   $ 35,151   $ 3,350    $(15,044)   $(6,347)

 Notes:  (1) Represents loss  on January 2000 sale  of SSMI of $0.05  million
             and  a  related non-cash  foreign  currency  adjustment of  $1.6
             million which had been previously reported as a  charge  against
             stockholders  equity  in "accumulated other comprehensive loss".
         (2) Represents Loss on Impairment of Asset Values - (-$573) and Loss
             on Sale of Hamilton Machining Center (-$1,400).
         (3) Represents Gain on Sale of Zerand Division Assets ($3,600).
         (4) Represents Loss on Impairment of Asset Values at Hamilton,  Ohio
             Facilities (-$6,347).
</TABLE>
<PAGE>
<TABLE>
      (b)   Sales by geographic area were as follows:


                               Year ended December 31,
                          --------------------------------
                            1999         1998        1997
                          -------     --------     -------
         <S>             <C>         <C>          <C>
         United States   $  7,064    $  14,355    $ 24,132

         Europe             3,839        6,178       6,714

         Asia                  21          898       3,200

         Other                213          776       1,105
                          -------     --------     -------
         Total revenues  $ 11,137    $  22,207    $ 35,151
                          =======     ========     =======
</TABLE>

 S.  Financial Instruments, Market and Credit Risk

      Financial  Accounting  Standards  Board  ("FASB")  Statement  No.  107,
 "Disclosure about  Fair Value  of Financial  Instruments", is  a part  of  a
 continuing  process  by  the  FASB  to  improve  information  on   financial
 instruments.  The following methods and assumptions were used by the Company
 in estimating its fair  value disclosure for  such financial instruments  as
 defined by the Statement:


      Cash and Temporary Investments

           The carrying amount  reported in the  balance sheet  for cash  and
 cash equivalents approximates its fair value.

      Long-Term Debt

           The  carrying  amounts  of  the  Company's  borrowings  under  its
 revolving credit agreements approximate fair value.

      Concentrations of Credit Risk

           Financial instruments  which potentially  subject the  Company  to
 significant  concentrations  of  credit  risk  consist  primarily  of  trade
 accounts receivable.

      The Company  maintains  cash and  cash  equivalents and  certain  other
 financial instruments with  various financial institutions.   The  Company's
 policy is designed to limit exposure to any one institution.  The  Company's
 periodic evaluations  of the  relative credit  standing of  these  financial
 institutions are considered in the Company's investment strategy.

      Concentration of credit risk with respect to trade accounts  receivable
 are limited due to the number of entities comprising the Company's  customer
 base and their dispersion across the printing and graphic arts industries.
 As of December 31,  1999, the Company had  no significant concentrations  of
 credit risk.
<PAGE>
      The carrying  amounts  and  fair  values  of  the  Company's  financial
 instruments at December 31, 1999 are as follows:


                                        Carrying Amount        Fair Value
                                        ---------------        ----------
                                                (Amounts in thousands)
   Cash and temporary investments ..        $    6                $    6
   Long-term debt ..................        $6,158                $6,158

   Off-Balance Sheet Financial
   Instruments: Letters of credit ..        $  -0-                $  -0-


<TABLE>
 T.  Accumulated Other Comprehensive Income

                                                    Minimum      Accumulated
                                       Foreign      Pension         Other
                                      Currency     Liability    Comprehensive
     (Amounts in 000's)                 Items      Adjustment      Income
     -------------------------        -------      --------       --------
     <S>                             <C>          <C>            <C>
     Balance January 1, 1997         $   (167)    $  (1,466)     $  (1,633)

     Current period change               (602)         (779)        (1,381)
                                      -------      --------       --------
     Balance December 31, 1997           (769)       (2,245)        (3,014)

     Current period change               (295)         (841)        (1,136)
                                      -------      --------       --------
     Balance December 31, 1998       $ (1,064)    $  (3,086)     $  (4,150)

     Current period change              1,064           537          1,601
                                      -------      --------       --------
     Balance December 31, 1999       $      0     $  (2,549)     $  (2,549)
                                      =======      ========       ========
</TABLE>

 U. Subsequent  Event  -  Private Placement  of  $1  Million  10%  Convertible
   Subordinated Notes Payable Due March 31, 2003

   In April 2000, the Company completed a private placement of $1 million  of
 10% convertible subordinated notes ("the Notes").  Net proceeds of the Notes
 will be used for working  capital.  The Notes  were issued in increments  of
 $50,000 and are convertible into 2,000,000  shares of Series A Common  Stock
 ("SVEIA") of the  Company at $0.50  per share, subject  to adjustment.   The
 conversion of the Notes is  at the holder's option  anytime on or after  the
 fifteenth day following the  original issue date of  the Notes and prior  to
 the close of business  on their maturity  date.  Issue  costs for the  Notes
 aggregated approximately $151,000.
<PAGE>
   The Company has  committed to register the  shares that would be  issuable
 upon conversion of the Notes.  Dilution to existing shareholders would occur
 as a result of the conversion of the Notes  to 2 million shares of Series  A
 common stock.  Should all the  notes be converted, these shareholders  would
 own approximately 17% of  the outstanding stock of  the Company.  The  first
 quarter  of  2000 will  include  a charge for interest expense of $1 million
 with a corresponding $1 million increase  in  "Paid in Capital in Excess  of
 Par Value."


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

      (a) On  May 21,  1998,  Stevens  International,  Inc.  (the  "Company")
 dismissed Deloitte  & Touche  LLP ("Deloitte  &  Touche") as  its  principal
 independent accountants.   The  decision to  dismiss Deloitte  & Touche  was
 approved by the Company's Board of Directors as well as the Audit  Committee
 of the Board  of Directors.   Deloitte &  Touche's report  on the  Company's
 financial statements for each  of the fiscal years  ended December 31,  1997
 and  1996  did  not  contain an  adverse opinion  or disclaimer  of opinion.
 However, such  reports  were  qualified  or  modified  as  to  uncertainties
 involving factors raising substantial doubt  about the Company's ability  to
 continue as a going concern.  There were no adjustments in the  consolidated
 financial statements that might result from the outcome of this uncertainty.

         During the  Company's 1996  and 1997    fiscal years  and for  the
 period through  May 21,  1998,    there  were no  disagreements between  the
 Company and Deloitte  & Touche  on any  matter of  accounting principles  or
 practices, financial  statement disclosure  or auditing  scope or  procedure
 which if not resolved  to the satisfaction of  Deloitte & Touche would  have
 caused it to make reference to the subject matter(s) of the  disagreement(s)
 in connection with its reports.

         A letter from Deloitte & Touche confirming the statements  contained
 in this Item 9(a) was filed as an exhibit to Form 8-K filed on May 29, 1998.

      (b) On May 21, 1998, the Company retained  Grant Thornton LLP to  serve
 as the Company's  principal independent accountants.   During the  Company's
 past two  fiscal years  and the  periods following  December 31,  1997,  the
 Company did  not consult  Grant Thornton  LLP regarding  the application  of
 accounting principles  to  a specified  transaction  or the  type  of  audit
 opinion that might be rendered on the Company's financial statements.
<PAGE>

                             PART III

 Item 10.   Directors and Executive Officers of the Registrant.

      The information concerning the directors of the Company is set forth in
 the Proxy Statement to be delivered  to stockholders in connection with  the
 Company's Annual Meeting of Stockholders to be held during 2000 (the  "Proxy
 Statement") under the heading "Election of Directors", which information  is
 incorporated herein  by reference.    The name,  age  and position  of  each
 executive officer of the Company is  set forth under "Executive Officers  of
 the Registrant" in Item 1 of this report, which information is  incorporated
 herein by reference.  The information required by Item 405 of Regulation S-K
 is  set  forth  in  the  Proxy  Statement  under  the  heading  "Section  16
 Requirements", which information is incorporated herein by reference.

 Item 11.   Executive Compensation.

      The information  concerning  management compensation  and  transactions
 with management  is set  forth  in the  Proxy  Statement under  the  heading
 "Management   Compensation   and   Transactions",   which   information   is
 incorporated herein by reference.

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

      The information  concerning security  ownership of  certain  beneficial
 owners and management is set forth in the Proxy Statement under the  heading
 "Principal Stockholders  and  Management Ownership",  which  information  is
 incorporated herein by reference.

 Item 13.   Certain Relationships and Related Transactions.

      The  information   concerning   certain   relationships   and   related
 transactions  is  set  forth  in  the  Proxy  Statement  under  the  heading
 "Management   Compensation   and   Transactions",   which   information   is
 incorporated herein by reference.

                              PART IV
<PAGE>
 Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

      (a) The following documents are filed as a  part of this Annual  Report
          on Form 10-K:

         (1)    Financial Statements:

            The financial  statements filed  as  a part  of this  report  are
         listed  in  the "Index  to  Consolidated  Financial  Statements  and
         Financial Statement Schedules" at Item 8.

         (2)    Financial Statement Schedules:

            The financial statement schedules filed as a part of this  report
         are listed in  the "Index to  Consolidated Financial Statements  and
         Financial Statement Schedules" at Item 8.

         (3)    Exhibits

            The exhibits  filed as a  part of  this report  are listed  under
         "Exhibits" at subsection (c) of this Item 14.

      (b) Reports on Form 8-K:

          No report of Form 8-K was  filed on behalf of the Registrant during
          the last quarter of the Company's 1999 fiscal year.

      (c) Exhibits:

  Exhibit
  Number              Description of Exhibit
  ------              ----------------------
    3.1  Second Amended and  Restated Certificate of  Incorporation of  the
         Company.(1)
    3.2  Bylaws of the Company, as amended. (2)
    4.1  Specimen of Series A Common Stock Certificate. (3)
    4.2  Specimen of Series B Common Stock Certificate. (4)
    4.3  Specimen of 10% Convertible Subordinated Note due March 31, 2003.(*)
   10.11 Asset Contract to Purchase Real Estate dated February 8, 1999 by
         and between the Company and Production Manufacturing, Inc. (5)
   21    Subsidiaries of the Company.(*)
   23.1  Consent of Grant Thornton LLP.(*)
   23.2  Consent of Deloitte & Touche LLP. (*)
   27.1  Financial Data Schedule. (*)
 ________
 *    Filed herewith.
 (1)  Previously filed as an exhibit to  the Company's Annual Report on  Form
      10-K for the year  ended December 31, 1990  and incorporated herein  by
      reference.
 (2)  Previously filed as an exhibit to the Company's Registration  Statement
      on Form S-1 (No. 33-15279) and incorporated herein by reference.
 (3)  Previously filed as an exhibit to the Company's Registration  Statement
      on Form S-1 (No. 33-24486) and incorporated herein by reference.
 (4)  Previously filed as  an exhibit  to the  Company's report  on Form  8-A
      filed August 19, 1988 and incorporated herein by reference.
 (5)  Previously filed as  an exhibit to  the Company's Annual Report on Form
      10-K for the year  ended December 31, 1998  and incorporated herein  by
      reference.
<PAGE>

                                   SIGNATURES

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

                          STEVENS INTERNATIONAL, INC.

                          By:  /s/ PAUL I. STEVENS
                               -------------------
                               Paul I. Stevens
                               Chairman of the Board,
                               Chief Executive Officer, and
                               Acting Chief Financial Officer

 Date:    April 6, 2000

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

          Signature                  Title                       Date
         --------------------   --------------------------    -------------
   /s/   PAUL I. STEVENS        Chairman of the Board and     April 6, 2000
         Paul I. Stevens        Chief Executive Officer


   /s/   RICHARD I. STEVENS     President, Chief Operating    April 6, 2000
         Richard I. Stevens     Officer and Director


   /s/   CONSTANCE I. STEVENS   Vice President, Secretary     April 6, 2000
         Constance I. Stevens   and Director


   /s/   JAMES D. CAVANAUGH     Director                      April 6, 2000
         James D. Cavanaugh


   /s    MICHEL A. DESTRESSE    Director                      April 6, 2000
         Michel A. Destresse


   /s/    EDGAR H. SCHOLLMAIER  Director                      April 6, 2000
          Edgar H. Schollmaier

<PAGE>

                                                       SCHEDULE II

<TABLE>
                    STEVENS INTERNATIONAL, INC.

                 VALUATION AND QUALIFYING ACCOUNTS


                                    Balance at    Charged to    Charged to                        Balance at
                                   Beginning of    Costs and      Other                             End of
                                      Period       Expenses      Accounts         Deductions        Period
                                     ---------     ---------    ----------        ---------        ---------
 <S>                                <C>           <C>          <C>               <C>              <C>
 Year Ended December 31, 1999
   Allowance for doubtful accounts  $  529,000    $  (69,000)  $  ( 89,000) (2)  $ (301,000) (1)  $   70,000

 Year Ended December 31, 1998
   Allowance for doubtful accounts  $  374,000    $  194,000   $    23,000       $  (62,000) (1)  $  529,000

 Year Ended December 31, 1997
   Allowance for doubtful accounts  $ 4,225,000   $ (305,000)   $(2,849,000) (2) $ (697,000) (1)  $  374,000


____________
 (1)   Write off of uncollectible accounts.
 (2)   Reclassification of allowance for doubtful accounts to "assets held for sale".

</TABLE>
<PAGE>
                          INDEX TO EXHIBITS


  Exhibit    Number Description of Exhibit                Sequentially
                                                            Numbered
                                                              Pages

      3.1   Second Amended and Restated Certificate of
            Incorporation of the Company.(1)
      3.2   Bylaws of the Company, as amended.(2)
      4.1   Specimen of Series A Common Stock
            Certificate.(3)
      4.2   Specimen of Series B Common Stock
            Certificate.(4)
      4.3   Specimen of 10% Convertible Subordinated
            Note due March 31, 2003. (*)
     10.11  Asset Contract to Purchase Real Estate
            dated February 8, 1999 by and between the
            Company and Production Manufacturing, Inc. (5)
     21.    Subsidiaries of the Company. (*)                    48
     23.1   Consent of Grant Thornton LLP. (*)                  49
     23.2   Consent of Deloitte & Touche LLP. (*)               50
     27.1   Financial Data Schedule. (*)                        51


   *Filed herewith.

 (1) Previously filed as an exhibit  to the Company's  Annual Report on  Form
     10-K for the year  ended December 31,  1990 and  incorporated herein  by
     reference.
 (2) Previously filed as an exhibit  to the Company's Registration  Statement
     on Form S-1 (No. 33-15279) and incorporated herein by reference.
 (3) Previously filed as an exhibit  to the Company's Registration  Statement
     on Form S-1 (No. 33-24486) and incorporated herein by reference.
 (4) Previously filed as an exhibit to the Company's report on Form 8-A filed
     August 19, 1988 and incorporated herein by reference.
 (5) Previously filed as  an exhibit to  the Company's  Annual Report on Form
     10-K for the year  ended December 31,  1998 and  incorporated herein  by
     reference.





                                                                  Exhibit 4.3


                                 [Form of Note]

      This security and the shares of  common stock issuable upon  conversion
 of this security have not been registered under the Securities Act of  1933,
 as amended or any state securities laws.  Neither this security, the  shares
 of common stock issuable upon conversion of this security, nor any  interest
 or  participation  herein  or  therein  may  be  offered,  sold,   assigned,
 transferred, pledged, encumbered or otherwise disposed of in the absence  of
 such registration or unless such transaction is exempt from, or not  subject
 to, registration.


                         STEVENS INTERNATIONAL, INC.

                      10% CONVERTIBLE SUBORDINATED NOTE
                              DUE MARCH 31, 2003



 U.S. $_______________                                      Fort Worth, Texas
                                                               March 31, 2000


      FOR VALUE RECEIVED, Stevens International, Inc., a Delaware corporation
 (hereinafter referred to  as "Obligor"),  promises to  pay to  _____________
 (hereinafter referred  to as  "Holder"), the  principal sum  of  ___________
 Dollars (U.S. $__________), together with interest thereon at a rate of  ten
 percent (10%) per annum (calculated on the basis of a 360 day year comprised
 of twelve 30-day months).   Interest shall be  paid on the then  outstanding
 principal balance  on March  31 and  September  30 of  each year  (each,  an
 "Interest Payment Date")  until maturity, commencing  on September 30,  2000
 and ending on March 31, 2003 (the "Maturity Date").

      This Note is  one of  a duly authorized  issue of  promissory notes  of
 Obligor in the aggregate  principal amount of  $1,000,000 designated as  its
 10% Convertible Subordinated Notes Due March 31, 2003 (the "Notes").

      Obligor may elect to pay all or  a portion of interest due and  payable
 on September 30, 2000 or March 31, 2001  in cash (as described below) or  by
 the issuance of additional notes in the principal amount of the accrued  and
 unpaid interest at  such Interest Payment  Date and dated  the date of  such
 Interest Payment Date.  Any such additional notes shall have the same  terms
 and conditions as this Note.  Interest payments on this Note will be paid to
 the person who is the Holder of record of this Note as shown on the register
 maintained by Obligor to record the  registration and transfer of the  Notes
 at the close of business on the March 15 or September 15 next preceding each
 Interest Payment  Date.   Interest  shall  accrue from  the  next  preceding
 Interest Payment Date to which interest has been paid on this Note or if  no
 interest has been paid from the date hereof.  Cash payments of principal and
 interest will be made in the money of the United States that at the time  of
 payment is legal tender for payment of public and private debts.  Subject to
 the first  sentence of  this paragraph,  all payments  of principal  of  and
 interest on  this  Note may be made by check  or wire payable in such money.
 Cash interest  payments may  be made  by check  and mailed  to the  Holder's
 registered address or at such other place as Holder shall notify Obligor  in
 writing.
<PAGE>
      1.   Subordination.  Except as hereinafter provided, Obligor and Holder
 agree that the  payment of the  principal amount of  this Note and  interest
 thereon is  subordinated  to  the  prior  payment  in  full  of  all  Senior
 Indebtedness (as hereinafter defined) of Obligor, together with all interest
 and fees thereon.  "Senior Indebtedness" as used in this Note means  (i) the
 principal amount of, premium  (if any) and all  interest, fees and  expenses
 (including attorneys' fees and costs of court) on all indebtedness,  whether
 outstanding on  the date  of this  Note or  hereafter created,  incurred  or
 assumed, and  however  evidenced  (whether  by  a  letter  of  credit,  loan
 agreement, promissory  note  indenture  or similar  instrument),  for  money
 borrowed from any and all banks  and savings and loans and other  depository
 institutions,  finance  companies,  insurance  companies,  trust  companies,
 leasing companies, government agencies and  other persons or entities  which
 regularly engage in commercial or asset-based lending and Paul I. Stevens as
 a lender (collectively  "Senior Creditors"), for  the payment  of which  the
 Obligor is  or becomes  directly or  indirectly liable;  (ii) guarantees  by
 Obligor of indebtedness due to Senior Creditors for borrowed money  incurred
 by subsidiaries  of  Obligor  or  subsidiaries  of  such  subsidiaries;  and
 (iii) the principal amount  of and  all interest  and fees  on any  renewal,
 extension,  refunding,  amendment  or  modifications  of  any  such   Senior
 Indebtedness, including without limitation of the foregoing, purchase  money
 mortgages, mortgages made, given  or guaranteed by  Obligor as mortgagor  or
 guarantor, and assumed or guaranteed mortgages, upon property, but excluding
 any indebtedness to trade creditors or  suppliers on open account for  work,
 labor, services and materials  and excluding any  indebtedness which by  the
 terms of the instrument creating or evidencing the same is stated to be  not
 superior in right of payment to the Notes.

      Subject to the following paragraph, Obligor shall pay and holder  shall
 have the right  to receive  and retain  from Obligor  principal and  accrued
 interest owing hereon so long as Obligor is not in default in respect of any
 of its Senior Indebtedness.

      Upon the happening  of an event  of default which  would permit  Senior
 Creditors to declare Senior  Indebtedness due and  payable and upon  written
 notice thereof  given to  Obligor by  any one  or more  Senior Creditors  (a
 "Default Notice"), then, unless and until  such event of default shall  have
 been cured  or waived  or shall  have ceased  to exist,  Obligor shall  not,
 directly or  indirectly,  pay  any  principal  or  interest  on,  redeem  or
 repurchase  any  of,  the  Notes;  provided,  however,  that  the  foregoing
 provisions of this sentence shall not prevent the making of any such payment
 for more than 120 days after the Default Notice shall have been given unless
 the Senior Indebtedness in respect of which such event of default exists has
 been declared due and payable in its entirety, in which case no such payment
 may be made until  the earliest to  occur of (i)  such declaration has  been
 waived, rescinded or annulled, (ii) such Senior Indebtedness shall have been
 paid in full or (iii) payment thereof shall be duly provided for in cash  or
 in any other manner  satisfactory to such Senior  Creditors.  Any number  of
 Default Notices may  be given;  provided, however,  that not  more than  one
 Default Notice  shall be  given with  respect to  the same  issue of  Senior
 Indebtedness within a period of 360 consecutive days, and no specific  event
 of default which existed or was continuing on the date of any Default Notice
 and was known to the Senior Creditors shall be made the basis for the giving
 of a subsequent Default Notice by the Senior Creditors.
<PAGE>
      No rights of any Senior Creditor established in this Section 1 shall at
 any time or in any way  be prejudiced or impaired by  any act or failure  to
 act on the part of Obligor or by any act or failure to act in good faith  by
 any Senior Creditor or by any failure by Obligor to comply with the terms of
 this Note.

      This Note shall  not be secured  by any interest  in any properties  of
 Obligor.

      2.   Events of Default.  Upon the occurrence and during the continuance
 of an Event of Default (as hereinafter defined), other than as described  in
 Subsections  (d)  and  (e)  below,  but  subject  to  any  restrictions  and
 limitations by the  Holder relating to  Senior Indebtedness,  the Holder  of
 this Note shall be entitled, by  written notice to Obligor, to declare  this
 Note to  be,  and upon  such  declaration this  Note  shall be  and  become,
 immediately due and  payable, in addition  to any other  rights or  remedies
 Holder may have under the laws of the  State of Texas.  Upon the  occurrence
 of an Event of Default as described  in Subsections (d) and (e) below,  this
 Note shall  be and  become immediately  due and  payable without  notice  or
 declaration by the Holder.   The  occurrence of any of the following  events
 shall constitute an "Event of Default":

           (a)  Failure to Make Payments When Due.  Failure of Obligor to pay
 any principal,  interest or  other  amount due  under  this Note  when  due,
 whether  at   stated   maturity,  by   required   prepayment,   declaration,
 acceleration, demand or otherwise, and the  failure of Obligor to cure  such
 default within five (5) days after the due date of any such payment; or

           (b)  Breach of  Covenants.    Failure of  Obligor  to  perform  or
 observe any other material term, covenant or agreement on Obligor's part  to
 be performed or observed pursuant to  this Note, and the failure of  Obligor
 to cure such default  within thirty (30) days  after written notice of  such
 default by Holders  owning not less  than twenty-five percent  (25%) of  the
 aggregate principal amount of all Notes then outstanding; or

           (c)  Suspension of Business; Liquidation.  Suspension of the usual
 business activities of  Obligor or the  complete or  partial liquidation  of
 Obligor's business; or

           (d)  Involuntary Bankruptcy, Etc.  (i) A court having jurisdiction
 in the premises  shall enter  a decree  or order  for relief  in respect  of
 Obligor in an involuntary case under Title 11 of the United States Code  (as
 now and hereinafter  in effect, or  any successor  thereto, the  "Bankruptcy
 Code") or any applicable bankruptcy, insolvency or other similar law now  or
 hereafter in  effect, which  decree or  order is  not stayed;  or any  other
 similar relief shall be granted under  any applicable federal or state  law;
 or (ii) an involuntary  case shall be  commenced against  Obligor under  any
 applicable bankruptcy, insolvency or other similar  law now or hereafter  in
 effect; or a decree or order of a court having jurisdiction in the  premises
 for the  appointment  of  a  receiver,  liquidator,  sequestrator,  trustee,
 custodian or other officer having similar powers over Obligor or over all or
 a substantial  part  of  its  property  shall  have  been  entered;  or  the
 involuntary appointment of an interim  receiver, trustee or other  custodian
 of Obligor  for  all  or a  substantial  part  of its  property  shall  have
 occurred; or a  warrant of attachment,  execution or  similar process  shall
 have been issued against  any substantial part of  the property of  Obligor,
 and, in the case of any event described in this clause (d), such event shall
 have continued for sixty (60) days  unless dismissed, bonded or  discharged;
 or
<PAGE>
           (e)  Voluntary Bankruptcy,  Etc.   An order  for relief  shall  be
 entered with respect to Obligor or  Obligor shall commence a voluntary  case
 under the Bankruptcy Code or any applicable bankruptcy, insolvency or  other
 similar law now or hereafter in effect, or shall consent to the entry of  an
 order for  relief  in  an involuntary  case,  or  to the  conversion  of  an
 involuntary case to a voluntary case,  under any such law, or shall  consent
 to the appointment of or taking  possession by a receiver, trustee or  other
 custodian for all or  a substantial part of  its property, or Obligor  shall
 make an assignment for the benefit  of creditors; or Obligor shall admit  in
 writing its inability  to pay its  debts as such  debts become  due; or  the
 Board of  Directors  of Obligor  shall  adopt any  resolution  or  otherwise
 authorize action to approve any of the foregoing.

      Notwithstanding the provisions of this Section  2, if this Note is  not
 paid on the Maturity  Date or in the  event that this  Note becomes due  and
 payable before the Maturity Date, the  Holder shall not be entitled to  seek
 any judgement, order, decree or other action from any court or  governmental
 or  administrative   authority,   including  any   insolvency,   bankruptcy,
 receivership, reorganization  or  related  case  or  proceeding,  until  the
 earlier of (i) 90 days after such declaration or (ii) the payment in full of
 all Senior Indebtedness.

      3.   Conversion Rights.  A Holder of  a Note may convert the  principal
 amount of such  Note (or  any portion thereof  equal to  $50,000 or  amounts
 equal to the sum of $50,000 and any integral multiple of $1,000) into shares
 of Series  A  Common  Stock, par  value  $.10  per share,  of  Obligor  (the
 "Conversion Shares") at any time after April 14, 2000 and prior to the close
 of business on March 28, 2003; provided, however, that if the Note is called
 for redemption  pursuant to  Section 4  hereof,  the conversion  right  will
 terminate at the close of business on the business day immediately preceding
 the redemption  date  for such  Note  or such  earlier  date as  the  Holder
 presents such Note for  redemption (unless Obligor  shall default in  making
 the redemption payment when  due, in which case  the conversion right  shall
 terminate at the close  of business on  the date such  default is cured  and
 such Note is redeemed).  The Holder,  at Holder's option and subject to  and
 in compliance with the provisions of this Section 3, may convert any or  all
 of the outstanding  principal on this  Note at the  time of such  conversion
 (the "Conversion Rights") into  a number of Conversion  Shares equal to  the
 result obtained by  dividing the amount  then being converted  by $0.50  per
 share, as adjusted pursuant to this Section 3 (the "Conversion Price").   No
 payment or  adjustment  shall be  made  on  account of  accrued  but  unpaid
 interest upon conversion of this Note.

           (a)  Registration; Conversion Price  Adjustment.    Pursuant to  a
 Registration Rights Agreement of even date with this Note (the "Registration
 Rights Agreement"), Obligor  will use its  reasonable best  efforts to  file
 with the Securities and Exchange  Commission a registration statement  under
 the Securities Act of 1933 covering the resale of the Conversion Shares.  If
 such registration statement  shall not have  been declared effective  within
 120 days after  the date  hereof, the Conversion  Price will  be reduced  to
 $0.40 per  share.   If  such  registration  statement shall  not  have  been
 declared effective within  180 days after  the date  hereof, the  Conversion
 Price will be further reduced  to $0.25 per share  and shall remain at  such
 amount until the Maturity Date.  Notwithstanding the preceding provisions of
 this Subsection 3(a), any Conversion Price adjustment under this  Subsection
 3(a) shall  be subject  to the  Holder's having  executed and  delivered  to
 Obligor  the  Registration  Rights  Agreement  and  performed  all  of   the
 obligations thereunder  required  to be  performed  by a  Noteholder.    The
 Conversion Price as  reduced by any  adjustment under  this Subsection  3(a)
 shall be subject to further adjustment under Subsection 3(e) hereof.
<PAGE>
           (b)  Manner of Exercising Conversion Rights.  In order to exercise
 the Conversion Rights,  the Holder shall  deliver to  Obligor during  normal
 business hours at the Obligor's address as set forth in Section 8 below, (i)
 the original  of this  Note and  (ii) a  completed and  executed  conversion
 notice in the form  attached.  As  soon as practicable  after the date  (the
 "Conversion Date") on which the Obligor  receives the required documents  in
 proper form  but in  any event  no  later than  fifteen (15)  business  days
 thereafter, Obligor shall issue and deliver to Holder a certificate for  the
 number of whole Conversion  Shares and cash as  provided in Subsection  3(c)
 below, in respect of  any fraction of a  Conversion Share.  Such  conversion
 shall be deemed to have been effected on the Conversion Date, and the Holder
 shall be  deemed  to  have  become  the  holder  of  record  of  the  shares
 represented thereby on  such date.   Obligor  shall not  be obligated,  upon
 exercise of the Conversion Rights by  Holder, to effect the transfer of  any
 Conversion Shares, or cause any Conversion  Shares to be registered, to  any
 persons or in any name or names other than the Holder.

           (c)  Fraction of a Share.  Obligor shall not be required to  issue
 a fraction of a share or scrip representing fractional shares of  Conversion
 Shares.   If  any fraction  of  a Conversion  Share  would, except  for  the
 provisions of this  Subsection (c), be  issuable on the  conversion of  this
 Note, Obligor shall pay to the Holder a cash payment equal to the equivalent
 fraction of the closing price on the Conversion Date.

           (d)  Obligor to Reserve Stock.  As long as the Holder's Conversion
 Rights are in effect, Obligor shall at all times reserve and keep  available
 out of its authorized but unissued Series A Common Stock, for the purpose of
 effecting the conversion of  this Note, such number  of its duly  authorized
 shares of Series A Common Stock as shall from time to time be sufficient  to
 effect the conversion of  this Note.  Obligor  covenants that all shares  of
 Series A Common Stock which may be issued upon conversion of this Note  will
 upon issue be fully  paid and nonassessable and  free from all taxes,  liens
 and charges with respect to the issue thereof.

           (e)  Additional Conversion Price  Adjustments.   If Obligor  shall
 (i) pay  a  dividend or  make  a distribution  in  shares of  capital  stock
 (whether shares  of Series  A Common  Stock or  capital stock  of any  other
 class), (ii) effect  a stock  split or  subdivide the  outstanding Series  A
 Common Stock, (iii) effect a reverse stock split or combine the  outstanding
 Series A Common Stock  into a smaller  number of shares  or (iv) effect  any
 other reclassification or  recapitalization, then  the number  and types  of
 shares of  capital  stock  into  which this  Note  is  convertible  and  the
 Conversion Price in effect  immediately prior thereto  shall be adjusted  so
 that upon the subsequent conversion of this Note the Holder hereof shall  be
 entitled to  receive the  number and  type  of shares  of capital  stock  of
 Obligor that the Holder  would have owned or  have been entitled to  receive
 after the happening of any of the events described above had this Note  been
 converted immediately prior to the happening  of such event.  An  adjustment
 made pursuant to this paragraph shall become effective immediately after the
 record date  for  any  event  requiring  such  adjustment  or  shall  become
 effective immediately after the  effective date of such  event if no  record
 date is set.
<PAGE>
      4.   Redemption.

           (a)  Optional Redemption.  This Note is subject to redemption,  at
 any time after (i) either (A) the registration statement covering the resale
 of the  Conversion Shares  shall be  effective from  the date  of notice  of
 redemption to the redemption date or (B) two years (or such other period  as
 may hereafter be provided in Rule  144(k) under the Securities Act of  1933,
 or any successor rule)  shall have elapsed since  the original date of  this
 Note and (ii) the closing  market price of the  Series A Common Stock  shall
 not have been  less than  $3.00 per  share for  a period  of 20  consecutive
 trading days prior  to the  date of notice  of redemption.   The  redemption
 price of this Note shall be equal to 100% of the principal amount  redeemed,
 plus interest accrued  and unpaid on  the amount redeemed  through the  date
 fixed for redemption (the  "Redemption Date").   The redemption price,  upon
 surrender of this Note or portion thereof, as the case may be, to Obligor at
 its principal office, will be paid by check or wire transfer.

           (b)  Notice of Redemption.  Notice of redemption will be mailed by
 first-class mail at  least 30  days but  not more  than 60  days before  the
 Redemption Date to  each Holder of  Notes to be  redeemed at its  registered
 address.  Notes  in denominations  larger than  $50,000 may  be redeemed  in
 part, but only  in amounts  equal to  the sum  of $50,000  and any  integral
 multiple of $1,000.  On and after the Redemption Date interest will cease to
 accrue on Notes or any portion of the Notes called for redemption.

      5.   Costs and Expenses of Collection.  If this Note is collected by or
 through an attorney at law as a result of a failure of Obligor to pay,  when
 due hereunder,  any payment  of  principal of  and  interest on  this  Note,
 Obligor shall pay all  of Holder's reasonably  incurred costs of  collection
 including, but not limited to, Holder's reasonable attorneys' fees.

      6.   Waivers by Obligor.  The  Obligor waives presentment for  payment,
 protest, notice of dishonor  and protest and consents  to any extensions  of
 time with respect to any payment due under this Note, and to the addition or
 release of any party or of any collateral securing this Note.  No waiver  of
 any payment under this Note shall operate as a waiver of any other payment.

      7.   Effect of Delay or Waiver by Holder.   No delay or failure of  the
 Holder of this Note  in the exercise  of any rights  or remedy  provided for
 hereunder shall be deemed a  waiver of any other  right or remedy which  the
 Holder may have.

      8.   Notices to Obligor.  Any notice  or demand to Obligor shall be  at
 the address as  set forth  on the signature  page of  this Note  and to  the
 Holder as provided to Obligor in the  manner set forth herein, or to  either
 Obligor or the  Holder at  any address  previously furnished  in writing  by
 Obligor or Holder.   Such notice shall  be deemed to  have been received  72
 hours after  its deposit,  postage prepaid,  with the  United States  Postal
 Service, or upon  receipt in  the case of  personal delivery  by courier  or
 otherwise, or  upon  confirmation  of  receipt  if  delivered  by  facsimile
 transmission, provided that  the original thereof  is sent by  mail, in  the
 manner set forth  above, within the  next business day  after the  facsimile
 transmission is sent.

      9.   Governing Law;  Headings.   This  Note is  made  in and  shall  be
 governed by and construed according to the laws of the State of Texas.   The
 Section headings in  this Note  are for  convenience of  reference only  and
 shall not be  considered in, nor  shall they affect,  the interpretation  or
 application of any of the provisions of this Note.
<PAGE>
      10.  Transfer, Exchange.   The  Notes are  in registered  form  without
 coupons.  A Holder may  register the transfer of  or exchange Notes only  on
 the books  of the  Obligor maintained  for that  purpose.   The Obligor  may
 require a Holder,  among other things,  to furnish appropriate  endorsements
 and transfer documents and  to pay any taxes  or other governmental  charges
 that may be imposed in relation thereto by law and proof of compliance  with
 all applicable securities laws.

      11.  Persons Deemed Owners.  The Holder of a Note may be treated as the
 owner of the Note for all purposes.

      12.  Recourse  Against  Others.    A  director,  officer,  employee  or
 shareholder, as  such, of  Obligor  shall not  have  any liability  for  any
 obligations of  Obligor under  the Notes  nor  for any  claim based  on,  in
 respect of or by reason of such obligations or their creation. The Holder of
 this Note by accepting this Note waives and releases all such liability. The
 waiver and release are  part of the consideration  for the issuance of  this
 Note.



                               STEVENS INTERNATIONAL, INC.

                               By:
                                   --------------------
                                   George Wiederaenders
                                   Treasurer

                               Address:

                               5700 East Belknap Street
                               Fort Worth, Texas 76117

<PAGE>

                              CONVERSION NOTICE




      To convert this Note into Series A Common Stock, check the box:

      To convert only  part of this  Note, state the  principal amount to  be
 converted (must be $50,000 or an amount equal to the sum of $50,000 and  any
 integral multiple of $1,000): $____________.


                             Your Signature:

 Date:
       ------------------    ------------------------------------------------
                             (Sign exactly as your name appears on this Note)


                           Name:
                                    -----------------------------------------
                           Address:
                                    -----------------------------------------

<PAGE>

          CERTIFICATE TO BE DELIVERED UPON REGISTRATION OF TRANSFER

     10% Convertible Subordinated Notes Due March 31, 2003 (the "Notes")
                of Stevens International, Inc. (the "Company")

      This certificate relates to $________________ principal amount of Notes
 owned by  _______________________ (the  "Transferor") to  be transferred  to
 ____________________________________________________________________________
 ____________________________________________________________________________
 ____________________________________________________________________________.
  (Insert Transferee's name, address and social security or tax I.D. number)

      The Transferor has requested  the Company to  register the transfer  of
 such Notes.

      In connection with such request and  in respect of each such Note,  the
 Transferor does hereby certify that the Transferor is familiar with transfer
 restrictions relating to the  Notes and the transfer  of such Note is  being
 made pursuant to  an effective registration  statement under the  Securities
 Act of 1933, as amended (the "Securities Act") (check applicable box) or the
 transfer or exchange,  as the case  may be, of  such Note  does not  require
 registration under the Securities Act because (check applicable box):

                Such Note  is  being  transferred pursuant  to  an  effective
 registration statement under the Securities Act.

                Such Note is being transferred pursuant to and in  compliance
 with an exemption  from the registration  requirements under the  Securities
 Act in accordance  with Rule  144 (or  any successor  thereto) ("Rule  144")
 under the Securities Act.

                Such Note is being transferred pursuant to and in  compliance
 with an exemption from the registration  requirements of the Securities  Act
 (other than pursuant to Rule 144), and if Obligor so requests, an opinion of
 counsel satisfactory  to Obligor  to  the effect  that  the transfer  is  in
 compliance with the Securities Act.


 Date:
       ----------------------------      ------------------------------------
                                         (Signature of Transferor)



                                                                   Exhibit 21


                 Material Subsidiaries of the Company


                                  Country or State   Name(s) Under Which
      Name of Subsidiary          of Incorporation   Subsidiary Does Business
      --------------------------  ----------------   ------------------------
  1.  Stevens International, S.A.      France






                                                                 Exhibit 23.1

                    Consent of Grant Thornton LLP
         Consent of Independent Certified Public Accountants



  We  have  issued  our  report   dated  March  20,  2000  accompanying   the
  consolidated financial statements  and schedules incorporated by  reference
  in the Annual Report  of Stevens International, Inc.  on Form 10-K for  the
  year ended December 31,  1999.  We hereby  consent to the incorporation  by
  reference  of  said  report  in  the  Registration  Statements  of  Stevens
  International, Inc. on Form S-3 (File  No. 33-84246) and on Form S-8  (File
  No. 33-25949, File No. 33-36852, and File No. 333-00319).


  /s/  GRANT THORNTON LLP

  GRANT THORNTON LLP

  Dallas, Texas
  April 12, 2000





                                                                 Exhibit 23.2

                   Consent of Deloitte & Touche LLP
                    Independent Auditors' Consent



 We consent to the incorporation by reference in Registration Statements  No.
 33-25949, No. 33-36853 and No. 333-00319  of Stevens International, Inc.  on
 Form S-8 and Registration Statement  No. 33-84246 of Stevens  International,
 Inc. on Form S-3 of our report dated March 31, 1998 appearing in this Annual
 Report on  Form 10-K  of  Stevens International,  Inc.  for the  year  ended
 December 31, 1999.



 /s/  DELOITTE & TOUCHE LLP

 DELOITTE & TOUCHE LLP

 Fort Worth, Texas
 April 12, 2000



<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF STEVENS INTERNATIONAL, INC.
AND SUBSIDIARIES AS OF DECEMBER 31, 1999 AND FOR THE YEAR THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-END>                               DEC-31-1999
<CASH>                                               6
<SECURITIES>                                         0
<RECEIVABLES>                                    1,006
<ALLOWANCES>                                        70
<INVENTORY>                                      6,303
<CURRENT-ASSETS>                                 7,810
<PP&E>                                           9,335
<DEPRECIATION>                                   7,540
<TOTAL-ASSETS>                                  10,262
<CURRENT-LIABILITIES>                            6,632
<BONDS>                                          6,158
                                0
                                          0
<COMMON>                                           950
<OTHER-SE>                                      (6,588)
<TOTAL-LIABILITY-AND-EQUITY>                    10,262
<SALES>                                         11,137
<TOTAL-REVENUES>                                11,137
<CGS>                                            7,813
<TOTAL-COSTS>                                    5,109
<OTHER-EXPENSES>                                    79
<LOSS-PROVISION>                                 1,682
<INTEREST-EXPENSE>                                 738
<INCOME-PRETAX>                                 (4,284)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                             (4,284)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    (4,284)
<EPS-BASIC>                                    (0.45)
<EPS-DILUTED>                                    (0.45)



</TABLE>


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