TYLER CORP /NEW/, 10-K405, 1997-03-10

TYLER CORP /NEW/
10-K405, 1997-03-10
STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
________________

Commission File Number 1-10485

TYLER CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 75-2303920
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)

2121 SAN JACINTO STREET 75201
SUITE 3200 (Zip code)
DALLAS, TEXAS
(Address of principal executive offices)

Registrant's telephone number, including area code: (214) 754-7800
________________

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

Name of each exchange
Title of each class on which registered
------------------- ----------------------

COMMON STOCK, $0.01 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE

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
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
------ ------

THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT ON FEBRUARY 27, 1997, WAS $38,140,552.

THE NUMBER OF SHARES OF COMMON STOCK OF THE REGISTRANT OUTSTANDING ON
FEBRUARY 27, 1997, WAS 19,882,921.

DOCUMENTS INCORPORATED BY REFERENCE

CERTAIN INFORMATION REQUIRED BY PART III OF THIS ANNUAL REPORT IS
INCORPORATED BY REFERENCE FROM THE REGISTRANT'S DEFINITIVE PROXY STATEMENT FOR
ITS ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 28, 1997.

================================================================================
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TYLER CORPORATION
FORM 10-K
TABLE OF CONTENTS

PART I

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Item 1. Business ......................................................... 2
Item 2. Properties ....................................................... 4
Item 3. Legal Proceedings ................................................ 4
Item 4. Submission of Matters to a Vote of Security Holders .............. 7

PART II

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters ................................... 7
Item 6. Selected Financial Data .......................................... 8
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations ..................................... 9
Item 8. Financial Statements and Supplementary Data (see Index to
Financial Statements and Schedule below) ...................... 16
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ...................................... 16

PART III

Item 10. Directors and Executive Officers of the Registrant .............. 17
Item 11. Executive Compensation .......................................... 17
Item 12. Security Ownership of Certain Beneficial Owners
and Management ................................................ 17
Item 13. Certain Relationships and Related Transactions .................. 17

PART IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K .. 18

Signatures ................................................................ 21

INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

Report of Independent Auditors ............................................ 23
Consolidated Statements of Operations for the years ended December 31,
1996, 1995 and 1994 ..................................................... 24
Consolidated Balance Sheets as of December 31, 1996 and 1995 .............. 25
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1996, 1995 and 1994 ........................................ 26
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994 ..................................................... 27
Notes to Consolidated Financial Statements ................................ 28
Schedule II - Allowance for Losses for the years ended December 31, 1996
and 1995 ................................................................ 42
</TABLE>

Tyler Corporation Form 10-K Page 1

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PART I

ITEM 1. BUSINESS.

General. Tyler Corporation ("Tyler" or the "Company") provides products
and services to customers through two operating subsidiaries: Forest City Auto
Parts Company ("Forest City"), which specializes in mechanical and electrical
automotive aftermarket parts for do-it-yourself customers and Institutional
Financing Services, Inc. ("IFS"), which provides products for fund-raising
programs in schools.

Industry Segments. For financial information about industry segments of
Tyler, reference is made to the "Industry Segments" note to the consolidated
financial statements on page 41. This information should be read in
conjunction with the consolidated financial statements and accompanying notes.

Principal Products and Services.

Automotive Aftermarket Parts. Forest City, headquartered in Cleveland,
Ohio, is a retailer of automotive parts and supplies. The company specializes
in selling mechanical and electrical hard parts, such as rack-and-pinion
steering and fuel injectors, to do-it-yourself customers. Forest City also
stocks a wide variety of maintenance items, fluids and accessories. Known for
extensive inventories, Forest City's stores use the slogan, "Stop looking! The
odds are 100 to 1 we have it."

Each Forest City location maintains inventories which average 16,000 parts
for both domestic and foreign cars and light trucks. Company stores carry
deeper inventories than most competitors and stock items that best suit the
vehicle mix in their area. Major Forest City suppliers include AlliedSignal
Inc., Kem Manufacturing Company and TRW Inc. Inventories carried by Forest
City are generally available from multiple sources.

Quality customer service provided by knowledgeable store personnel is
fundamental to the company's strategy. Through on-the-job and formal training
programs, Forest City's employees learn to assist customers in diagnosing
specific problems and selecting the correct parts. The company's use of
incentive compensation and opportunities for promotion allow Forest City to
hire and motivate high-quality individuals.

Albert Bellowe founded the company in 1927 and served the Akron area with
one store until 1961. Toward the end of this period, he was joined by his sons
Stanley and Arnold who began working as teenagers and assumed management
responsibilities after graduation from college. At the end of 1981, the
company had 31 locations in operation. Forest City ended 1996 with 61
locations, closing one store

Tyler Corporation Form 10-K Page 2

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during the fourth quarter. Open seven days a week, each location operates
extended hours to provide maximum customer convenience.

Sources estimate total annual sales to the do-it-yourself portion of the
auto-parts aftermarket at more than $12 billion. Auto-parts retailing is a
fragmented market with major competitors in Forest City's markets including
AutoZone, Inc., Parts America, a division of Western Auto, Murray's Discount
Auto Stores, Inc., Pep Boys--Manny, Moe & Jack and Trak Auto Corp. Additional
competition comes from jobbers who sell principally to wholesale accounts and,
to a lesser extent, from discount and general merchandise stores.

Products for Fund Raising. IFS, headquartered in Benicia, California, was
founded in 1981. The company assists schools in fund raising by arranging for
students to sell company-supplied gift items to family and friends. IFS
markets through a highly trained sales force that contacts school sponsors
interested in raising money for educational and extracurricular uses. Sponsors
include administrators, teachers, coaches and PTA officials. A typical
fund-raising program lasts from three to 14 days and provides cash proceeds and
educational equipment for schools plus incentives for students. Most school
fund-raising programs occur in the fall which result in IFS generating
approximately 60% of its sales in the fourth quarter.

The industry is consolidating somewhat with fewer fund-raising companies
and distributors than five years ago. In this environment, competitors are
actively recruiting salespersons from IFS and other field sales organizations
to act as distributors. Turnover in the IFS sales force has escalated with
vacated sales territories accounting for over half of the 1996 sales decline.
Through mid-February 1997, sales for the spring semester were approximately 20%
below 1996 levels with the majority of the shortfall attributable to turnover
in the sales force in 1996 and early 1997. The Company cannot provide
assurances that this trend will not continue.

IFS continually focuses on making fund raising easier for schools. The
company was the first in the industry to offer separate order packaging by
student and fully automated bookkeeping. IFS provides billing and
administrative follow-up through a centralized customer service department. In
addition, product delivery times are among the shortest in the industry. The
IFS full-service approach to fund raising underlies the company's excellent
reputation and record for building customer loyalty. Over 80% of participating
schools each year have sold company products in the past.

The company's major product offering is costume jewelry. Other products
include specialty gifts, seasonal items, paper products and edibles.
Merchandise is displayed in color brochures often designed

Tyler Corporation Form 10-K Page 3

<PAGE> 5

around specific seasons or holidays. Products are purchased directly from
various domestic and offshore suppliers. IFS experienced no problems in
obtaining these products in 1996.

School fund-raising activities are generally believed to total more than
$1.5 billion in the United States. The industry began more than 30 years ago
and has grown steadily due to increasing financial pressures experienced by
schools. The market includes six major national competitors plus numerous
regional and local companies. Major competitors include Innisbrook Wraps and
Sally Foster Gift Wrap; QSP, Inc., which sells primarily magazine
subscriptions; and Kathryn-Beich, Inc., Cherrydale Farms, Inc. and World's
Finest Chocolate, Inc., all principally selling food and candy.

Employees. At December 31, 1996, the Company had 1,118 employees, of
which 812 were employed by Forest City and 295 by IFS. IFS employs
approximately 265 full-time employees throughout the year. Temporary employees
increase the total to approximately 500 in the fall months due to IFS's
seasonal sales pattern.

ITEM 2. PROPERTIES.

The Company and its subsidiaries occupy approximately 570,000 square feet
of floor space in offices, retail facilities and a distribution center.

As of December 31, 1996, Forest City operated 61 stores in Illinois, New
York, Ohio, Pennsylvania and Wisconsin, most of which were leased, generally
under leases of less than ten-years' duration. Store sizes range from 3,500 to
14,000 square feet with the typical store located in a free-standing building
of approximately 6,000 square feet.

IFS leases offices and a distribution center in Benicia, California which
contain approximately 140,000 square feet and are used in marketing products
for fund-raising programs. The lease expires
in 2006.

ITEM 3. LEGAL PROCEEDINGS.

The New Jersey Department of Environmental Protection and Energy
("NJDEPE") has alleged that a site where a former affiliate of TPI of Texas,
Inc. (formerly named Tyler Pipe Industries, Inc.) ("TPI"), Jersey-Tyler
Foundry Company ("Jersey-Tyler"), once operated a foundry contains lead and
possible other priority pollutant metals and may need on-site and off-site
remediation. The foundry was operated on the site from the early part of this
century to 1969 when it was acquired by Jersey-Tyler. Jersey-Tyler operated
the foundry from 1969 to 1976, at which time the foundry was closed.

Tyler Corporation Form 10-K Page 4

<PAGE> 6

Subsequently, the property was sold to other persons who have operated a
salvage yard on the site. Based on a remedial investigation conducted by TPI,
the NJDEPE has demanded TPI and other potentially responsible parties remediate
the foundry site and the contamination in the adjacent stream and nearby lake.
TPI intends to propose that it conduct a feasibility study to assess its
remediation options, including costs, but does not intend to commit to further
action at this time.

On December 1, 1995, the Company sold all the outstanding capital stock of
Swan Transportation Company ("Swan") to Ransom Industries, Inc. ("Ransom")
(formerly known as Union Acquisition Corporation). In the same transaction,
TPI sold substantially all of its assets to Ransom, and Ransom assumed
substantially all the liabilities of TPI. Pursuant to an Acquisition Agreement
among the Company, TPI and Ransom (the "Acquisition Agreement"), Ransom agreed
to manage and direct the prosecution or defense of these matters on behalf of
TPI. In addition, Ransom agreed to reimburse TPI the first $3,000,000 of
certain costs and expenses incurred in connection with the investigation or
remediation of the New Jersey site, and one-half of such expenses in excess of
$3,000,000. Under any circumstances, however, the maximum amount that Ransom
agreed to reimburse TPI in connection with this matter is $6,500,000. Ransom,
on behalf of TPI, is proceeding against predecessor owners and operators of the
site, as well as others, to bear their share of the cost of the investigation
and any other costs, including any remediation costs incurred by TPI. Some
costs may also be covered by insurance although the insurance carriers are
expected to deny coverage. TPI expects Ransom, on TPI's behalf, to proceed
against such insurance carriers seeking coverage of remediation costs.

In June 1992 Anaheim Foundry Co. ("Anaheim") sued TPI in federal district
court in the Central District of California alleging that TPI violated various
antitrust laws and making other common law claims of anticompetitive business
practices. On October 30, 1996, the parties agreed to an order of dismissal,
and TPI paid $125,000, which was previously accrued, to Ransom to resolve any
obligation it had under the Acquisition Agreement as it related to this
lawsuit.

On January 18, 1988, the Environmental Protection Agency ("EPA") notified
TPI that it is a potentially responsible party at the Novak Sanitary Landfill
Superfund site in Lehigh County, Pennsylvania (the "Novak Site"). TPI recently
negotiated a settlement agreement with other potentially responsible parties at
the Novak Site. Although there is some possibility that the matter could be
reopened and TPI continues to be required to guarantee its portion of the
cleanup costs, the settlement agreement should resolve TPI's liability for the
site. The settlement agreement is based in part on TPI's

Tyler Corporation Form 10-K Page 5

<PAGE> 7

payment of $213,500 and certain amounts previously paid. TPI was reimbursed by
Ransom for these amounts.

Also pursuant to the Acquisition Agreement, Ransom agreed to manage and
direct the prosecution or defense of certain other matters on behalf of TPI,
including but not limited to the Anaheim suit and remediation of the Novak
Site, and to reimburse related costs and expenses. Ransom agreed to reimburse
TPI the first $750,000 of all costs and expenses incurred in connection with
each such matter, and one-half of such expenses in excess of $750,000. The
maximum amount that Ransom agreed to reimburse TPI in connection with all of
these matters excluding Jersey-Tyler is $8,000,000.

Although it is impossible to predict the outcome of legal or regulatory
proceedings, based on negotiations and activities before TPI's sale of assets,
the Company believes that substantially all of the costs, expenses and damages,
if any, resulting from the legal proceedings and environmental matters
described above will be reimbursed by Ransom pursuant to the Acquisition
Agreement or have been adequately provided for in the financial statements.

On January 9, 1997, Swan Transportation Company (formerly known as Tyler
Pipe Industries, Inc. and formerly a subsidiary of the Company) was sued in two
lawsuits in the 71st Judicial District Court of Harrison County, Texas, by 20
current and former employees. The plaintiffs allege that they were exposed to
silica or silica-containing products while employed by a subsidiary of Swan and
that Swan undertook and failed to provide a reasonably safe work place. TPI
currently is defending these two suits. The plaintiffs seek unspecified
damages. No discovery has taken place, and there are no dates set for trial.
Although TPI intends to defend these lawsuits vigorously, it is not possible at
this time to predict the outcome of these lawsuits.

Tyler Corporation Form 10-K Page 6

<PAGE> 8

would not cover awards, if any, of punitive and certain other damages. Forest
City is defending this lawsuit vigorously. The case was subsequently moved to
federal district court in Cleveland, Ohio. The discovery process has not been
completed, and based on results of discovery to date, the outcome of this
lawsuit is uncertain.

Other than ordinary course, routine litigation incidental to the business
of the Company and except as described herein, there are no material legal
proceedings pending to which the Company or its subsidiaries are parties or to
which any of its properties are subject.

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

Not applicable.
PART II

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

Tyler common stock is traded on the New York Stock Exchange. At December
31, 1996, Tyler had over 9,000 shareholders and approximately 3,700
shareholders of record.

The following table sets forth for the calendar periods indicated the high
and low sales price per share of Tyler common stock as reported on the New York
Stock Exchange.

<TABLE>
<CAPTION>
1996 1995
------------- --------------
High Low High Low
---- ---- ------ ----
<S> <C> <C> <C> <C>
First Quarter ................... 3 2 1/4 3 7/8 2 3/4
Second Quarter ................... 2 7/8 2 1/8 3 7/8 3
Third Quarter ................... 2 3/4 1 3/8 3 1/4 2 5/8
Fourth Quarter ................... 2 1/4 1 3/8 3 7/8 2 3/4
</TABLE>

No cash dividends were paid in 1996 or 1995.

Tyler Corporation Form 10-K Page 7

<PAGE> 9

ITEM 6. SELECTED FINANCIAL DATA.

As of or for the years ended December 31,
---------------------------------------------------------------------------------------------
(Dollars and average shares in thousands, except per share data)

1996
VS
1995 1996 1995 1994 (1) 1993 1992
----- ----------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net sales
Forest City ..................... -2% $ 85,074 86,893 $ 91,849 $ 84,464 $ 78,453
IFS ............................. -19 43,299 53,689 61,678 --- ---
----------- ------------- ------------ ------------ -------------
Total ......................... -9 $ 128,373 140,582 $ 153,527 $ 84,464 $ 78,453
Operating profits (2)
Forest City ..................... -- $ 127 (3) 4,002 $ 6,117 $ 8,808 $ 7,617
IFS ............................. -- (3,631)(3) 5,031 3,319 --- ---
----------- ------------- ------------ ------------ -------------
Total ......................... -- $ (3,504) 9,033 $ 9,436 $ 8,808 $ 7,617
Other expenses
Goodwill amortization and
other expenses ................ -11 2,160 2,426 2,610 1,742 1,673
Interest (income) expense, net .. -- (290) 2,628 1,802 85 122
Corporate expense ............... +66 6,858 (4) 4,126 5,018 4,725 4,621
Goodwill and other intangibles
impairment charge ............. -- 52,105 (5) --- --- --- ---
----------- ------------- ------------- ------------- -------------
Income (loss) from continuing
operations before
income tax (benefit) ............ -- (64,337) (147) 6 2,256 1,201
Income tax (benefit) .............. -- (4,307) 560 870 1,308 455
----------- ------------- ------------- ------------- -------------
Income (loss) from continuing
operations ...................... -- (60,030) (707) (864) 948 (6) 746
Income (loss) from discontinued
operations ...................... -- (1,300)(7) (16,266)(7) (3,837) (4,338) 2,489
----------- ------------- ------------- ------------- -------------
Income (loss) before cumulative
effect of accounting change ..... -- $ (61,330) $ (16,973)(7) $ (4,701) $ (3,390)(6) $ 3,235
Earnings (loss) per common share
from continuing operations ...... -- $ (3.02) $(.04) $ (.04) $ .05 (6) $ .04
Net earnings (loss) per common
share ........................... -- $ (3.09)(7) $ (.85)(7) $ (.24) $ (.11) $ .16
Average shares .................... 19,876 19,869 19,925 20,556 20,779
Total assets ...................... - 51 $ 62,944 $ 128,637 $ 213,388 $ 143,171 $ 146,231
Shareholders' equity .............. - 66 32,041 93,362 110,298 117,964 122,343
Long-term debt .................... $ --- $ --- $ 63,500 $ --- $ ---
Capital expenditures .............. +72 $ 3,567 $ 2,078 $ 3,395 $ 2,579 $ 1,955
Depreciation and amortization ..... - 2 4,466 4,575 4,535 1,862 1,412
Stock trading price range ......... 3 - 1 3/8 3 7/8 - 2 5/8 6 1/2 - 3 1/8 5 1/4 - 4 1/4 5 7/8 - 2 3/4
Book value per share .............. - 66 $ 1.61 $4.70 $5.55 $5.81 $ 5.90
</TABLE>

(1) IFS is included in the Company's results since its purchase on January 7,
1994.
(2) In calculating operating profits, amortization and charges for impairment
of goodwill and other intangibles arising from acquisitions are excluded.
(3) Includes pretax restructuring and other charges of $3,634 and $2,647 at
Forest City and IFS, respectively (See "Restructuring and Other
Fourth-Quarter Charges" in Notes to Consolidated Financial Statements.)
(4) Includes pretax restructuring and other charges of $3,616 (See
"Restructuring and Other Fourth-Quarter Charges" in Notes to Consolidated
Financial Statements.)
(5) Includes pretax charges of $14,789 and $37,316 for write-off of goodwill
and other intangibles at Forest City and IFS, respectively (See "Goodwill
and Other Intangibles Impairment Charge" in Notes to Consolidated
Financial Statements.)
(6) Before cumulative effect of change in accounting principles for income tax
resulting in a credit of $1,127, or $.05 per share
(7) Includes loss from discontinued operations relating to the pipe and
fittings operation in 1996 and a loss of $16,631, or $.84 per share, in
1995 on the sale of the pipe and fittings operation (See "Commitments and
Contingencies" in Notes to Consolidated Financial Statements.)

Tyler Corporation Form 10-K Page 8

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

CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE
RESULTS

This annual report contains forward-looking statements about the business,
financial condition and prospects of the Company. The actual results of the
Company could differ materially from those indicated by the forward-looking
statements because of various risks and uncertainties including, without
limitation, changes in product demand, turnover in the sales force, the
availability of products, changes in competition, economic conditions, various
inventory risks due to changes in market conditions, changes in tax and other
governmental rules and regulations applicable to the Company, and other risks
indicated in the Company's filings with the Securities and Exchange Commission.
These risks and uncertainties are beyond the ability of the Company to control
and, in many cases, the Company cannot predict the risks and uncertainties that
could cause its actual results to differ materially from those indicated by the
forward-looking statements. When used in this annual report, the words
"believes," "plans," "estimates," "expects," "anticipates," "intends" and
similar expressions as they relate to the Company or its management are
intended to identify forward-looking statements.

TYLER PIPE DIVESTITURE

On December 1, 1995, the Company sold all the outstanding capital stock of
Swan Transportation Company ("Swan") to Ransom Industries, Inc. ("Ransom")
(formerly known as Union Acquisition Corporation). In the same transaction,
Tyler Pipe Industries, Inc. (subsequently renamed TPI of
Texas, Inc.) ("TPI"), a wholly owned subsidiary of the Company, sold
substantially all of its assets to Ransom, and Ransom assumed substantially all
the liabilities of TPI. The results of these entities and the effect of
subsequent changes in estimates of retained contingent liabilities are included
as discontinued operations. The assets TPI sold and the liabilities Ransom
assumed included all those relating to TPI's business of manufacturing and
marketing cast iron pipe and fittings, excluding cash and certain other assets
and liabilities. Swan is a motor-carrier company that provided transportation
services to TPI prior to the closing.

Based on a July 1, 1995, balance sheet, Ransom paid a net amount of $66.1
million for the stock of Swan and assets of TPI of which $58.5 million was
received at closing on December 1, 1995, and the net remaining payment was
received in January 1996. In addition, TPI distributed cash of approximately
$17.7 million to the Company from July 1, 1995, through closing.

Tyler Corporation Form 10-K Page 9

<PAGE> 11

Between 1968 and December 1995, TPI, together with its predecessors and
subsidiaries, owned and operated foundries. TPI is, and expects to continue to
be, involved in different types of litigation, including environmental claims
and claims for work-related injuries and physical conditions. In 1995 TPI sold
substantially all its assets and the purchaser agreed to reimburse TPI for some
amounts paid in certain litigation, but the purchaser did not agree to
reimburse TPI for, among other things, (a) liabilities relating to the use,
handling, manufacture or sale of products containing asbestos or silica, (b)
claims of individuals for health problems such as (but not limited to)
silicosis, or (c) offsite environmental liabilities. In January 1997 two
lawsuits were filed involving silicosis claims. (See "Legal Proceedings.") In
light of its current litigation, claims and contingent claims that may result
in future litigation involving TPI, a pretax loss from discontinued operations
of $2 million was recorded in 1996 for the investigation of such matters.

INSTITUTIONAL FINANCING SERVICES ACQUISITION

On January 7, 1994, Tyler Corporation completed the purchase of
Institutional Financing Services, Inc., ("IFS") a direct marketer of products
for fund-raising programs. IFS was acquired for approximately $50 million and
the assumption of seasonal working capital debt of $12.8 million. Additional
payments of up to $12 million to former shareholders of IFS are possible based
on cumulative operating profits for the five years ending December 1998.
However, based on IFS's three-year cumulative operating profits ending December
1996, the Company does not anticipate any payments will be made. IFS assists
schools in fund-raising activities by arranging for students to sell
company-supplied gift items to family and friends.

LIQUIDITY

Tyler Corporation ended 1996 with cash and cash equivalents of $15.8
million, an increase of $12.5 million over year-end 1995.

Consolidated cash was generated from working capital liquidations when TPI
collected $7.6 million from Ransom during the year related to the sale of assets
by TPI and an income tax refund of $4.7 million which mainly related to the loss
on the sale of Swan and TPI's sale of assets. In addition, accounts receivable
declined $2.4 million primarily at IFS on much lower levels of sales activity
for the fall school semester. The Company received a $2.3 million cash
reversion relating to the termination of the Company's defined benefit pension
plan.

Tyler Corporation Form 10-K Page 10

<PAGE> 12

In 1996 several benefit plans maintained for certain key employees of the
Company and TPI were terminated. The Company made settlement payments of
approximately $2.4 million in 1996 which were accrued at December 31, 1995, and
an additional final payment of $1.3 million in January 1997 which was accrued
at December 31, 1996. A portion of these payments were funded with the
proceeds of $2.1 million from insurance policies which the Company redeemed in
1996.

In addition, in 1996 the Company made a payment of $2.5 million in
connection with acquisitions of Forest City and IFS to former shareholders and
management of these companies.

Tyler Corporation entered into a tax-benefit transfer lease in 1983
pursuant to which it is obligated to make income tax payments totaling $5.4
million over the next five years beginning in 1997. This obligation is
included in deferred income taxes at December 31, 1996.

Management believes adequate cash resources will be available for the next
12 months to fund capital spending programs and seasonal working capital
increases.

CAPITALIZATION

Historically, Tyler's capital structure has varied depending on Company
strategies and actions. Acquisitions for cash and common stock repurchases
generally have increased debt while cash-generating capabilities of our
operating companies and dispositions of companies have provided funds to reduce
debt.

Total capitalization at the end of 1996 consisted of $32.0 million in
shareholders' equity after an intangible asset impairment charge and
restructuring and other charges in the fourth quarter. (See "Results of
Operations.") There were only nominal temporary borrowings for several days in
January 1996. The Company had $2.3 million of letters of credit outstanding at
December 31, 1996.

In January 1997 the Company terminated its credit agreement and
established a new uncommitted $4.0 million Documentary and Standby Letter of
Credit Line. Under the new agreement, existing letters of credit are required
to be secured by cash collateral.

While the Company has no material commitments for capital expenditures,
Tyler Corporation anticipates that 1997 spending for Forest City and IFS could
exceed last year's level of $3.6 million.

Tyler Corporation Form 10-K Page 11

<PAGE> 13

RESULTS OF OPERATIONS

The continuing operations information excludes the results of operations
of TPI sold in December 1995 unless otherwise stated. Interest expense has
been charged to discontinued operations based on net assets associated with TPI
at the average borrowing rate during each period. Income tax (benefit) has
been charged (credited) to discontinued operations based on the income tax
(benefit) resulting from inclusion of the discontinued operations segment in
the Company's consolidated federal income tax return. Continuing operations
include Forest City Auto Parts and Institutional Financing Services since its
purchase on January 7, 1994. Sales, cost of sales and selling, general and
administrative expenses include IFS since its acquisition. Forest City is a
retailer of automotive parts and supplies, and IFS assists schools in fund
raising by arranging for students to sell company-supplied products and gift
items to family and friends.

Subsidiary operating profits as used herein exclude amortization and the
$52.1 million write-off of goodwill and other intangibles arising from
acquisitions. In Notes to Consolidated Financial Statements, however, segment
operating profits are reduced by the costs mentioned above.

1996 COMPARED TO 1995

For the year ended December 31, 1996, Tyler Corporation had a pretax loss
from continuing operations of $64.3 million. Consolidated sales fell 9% for
the year. The pretax loss from continuing operations includes a pretax charge
of $52.1 million to write off goodwill and other intangibles at Forest City and
IFS, and $9.9 million of restructuring and other charges.

The continued decline in the financial results of both operating companies
in the second half of 1996 and a related strategic and operational review
resulted in an evaluation of goodwill and other intangibles for possible
impairment. The underlying factors contributing to the decline in financial
results included changes in the marketplace and increased competition for both
companies. The Company calculated the present value of expected cash flows to
estimate the fair value of each operating company.

In the fourth quarter of 1996, the Company recorded $1.9 million of
restructuring and other charges in relation to a restructuring plan to reduce
costs and increase future operating efficiency by reducing the work force,
closing and relocating Forest City stores, reducing corporate office space
requirements and discontinuing a small product line at IFS. Also in the fourth
quarter, the Company recorded charges of $6.1 million which included
uncollectible accounts receivable at IFS, the write-down of excess inventory
remaining after fourth-quarter sales declines at IFS, other obligations relating
to the

Tyler Corporation Form 10-K Page 12
<PAGE> 14

termination of former employees, vendor restocking charges for on-hand
inventory items at Forest City and the noncash write-off of certain fixed
assets and software which Forest City decided in the fourth quarter that it
will no longer utilize in its business. In addition, the Company terminated
its defined benefit pension plan in the fourth quarter of 1996 resulting in a
net charge of $1.9 million.

Total restructuring and other charges recorded in the fourth quarter of
1996 were $9.9 million of which $1.4 million is included in cost of sales, and
$8.5 million is included in selling, general and administrative expenses.

Same-store sales at Forest City advanced 5% in the first half of 1996;
however, competitors aggressively opened new stores in Forest City's markets in
the third quarter resulting in a 4% decline in same-store sales comparisons for
the second half.

Forest City's operating profit declined from $4.0 million in 1995 to $3.8
million in 1996 before restructuring and other fourth-quarter charges. Gross
margin was up 1.6% in the year-to-year comparisons. Installation of an
electronic point-of-sale ("POS") system early in 1996, tightened security in
the stores and a management program targeting stores with gross margins below a
minimum standard contributed to this increase. While better productivity
lowered operating payroll as a percentage of sales by 1.5%, these savings were
more than offset by higher costs associated with the new information systems.

As the trend towards consolidation in the industry continues, national and
regional specialty retailers are expected to continue to gain market share at
the expense of jobbers, smaller independent operators and less specialized mass
merchandisers.

Forest City also installed a perpetual inventory system for all hard-parts
inventories late in 1996. The company expects to have all parts on the new
system by mid-1997. The Company expects the new in-store POS and inventory
systems will significantly aid the chain's efforts to accelerate inventory
turnover, improve sales and inventory tracking, enhance productivity at the
counter and maximize each store's in-stock position.

Domestic sales at IFS were 18% below 1995 for the year ended December 31,
1996. The company posted a $1.0 million operating loss before restructuring
and other charges in 1996 versus operating profit of $5.0 million in 1995.
Gross margin declined from 74.9% in 1995 to 73.8% in 1996.
Selling, general and administrative expenses increased significantly as a
percent of sales due to the lower volume. While the company has improved labor
productivity and lowered freight costs in the past two

Tyler Corporation Form 10-K Page 13
<PAGE> 15

years, it was unable to reduce certain fixed components of selling, general and
administrative costs as sales declined.

While the overall market for fund raising has not contracted, the
product-based segment in which IFS competes declined in 1996. Fund raising in
some schools is more tightly controlled by school administrators than in the
past. As a result, schools are participating in fewer large fund-raising
projects and are generally scheduling these projects early in the school
semester. In general, the marketplace is also offering higher profit
percentages which limit the prize programs offered to students which in turn
generally lowers the productivity of each program.

The industry is consolidating somewhat with fewer fund-raising companies
and distributors than five years ago. In this environment, competitors are
actively recruiting salespersons from IFS and other field sales organizations
to act as distributors. Turnover in the IFS sales force has escalated with
vacated sales territories accounting for over half of the 1996 sales decline.
Through mid-February 1997, sales for the spring semester were approximately 20%
below 1996 levels with the majority of the shortfall attributable to turnover
in the sales force in 1996 and early 1997. The Company can give no assurances
that additional salespersons will not be lost or that the impact would not
adversely affect earnings.

IFS is responding to changes in the industry by offering a wider range of
alternatives to schools to customize fund-raising projects. In order to better
serve the needs of school sponsors, IFS is offering varying levels of profit,
service and incentives depending on the needs and desire of individual schools.
These flexible fund-raising programs offer competitive profit percentages to
school sponsors while differentiating IFS through innovative services,
record-keeping and management systems.

After excluding restructuring and other charges, Tyler had much lower
corporate expense for calendar-year 1996 compared to 1995. Savings came from a
gain through sale of an asset and lower personnel expense. This reduction,
coupled with interest income as opposed to interest expense in 1995, lowered
the pretax loss for 1996.

1995 COMPARED TO 1994

Tyler Corporation reported a 1995 loss from continuing operations of $.7
million, or $.04 per share, compared to a loss of $.9 million, or $.04 per
share, in 1994. Net sales from continuing operations for 1995 fell 8% to
$140.6 million from $153.5 million.

Sales at Forest City for 1995 fell 5% to $86.9 million. Lower same-store
sales for the year were offset somewhat by sales from new stores added since
December 31, 1993. Same-store sales declined

Tyler Corporation Form 10-K Page 14

<PAGE> 16

10% for the year reflecting the effects of a very mild winter, a general
slowdown in auto-parts sales in the Northeast and increased competition. The
winter of 1995 was unseasonably warm and ice-free as compared to a severe winter
in 1994. With all of Forest City's stores located in northern climates, a mild
winter affects the level of component failures in cold-weather months and
throughout the remainder of the year.

Forest City operating profit fell to $4.0 million from $6.1 million in 1994
due principally to a higher operating expense ratio. While management was able
to reduce somewhat selling, general and administrative expenses in dollars,
these expenses increased as a percentage of sales due to lower volume. A
narrower gross margin also contributed to the shortfall. In response to
sluggish overall demand and increased competition, Forest City lowered prices in
an effort to maintain market share.

IFS sales for 1995 declined 13% to $53.7 million. International sales were
only $1.6 million compared to $8.4 million in 1994. IFS discontinued most of
its international operations late in 1994 due principally to adverse foreign
regulations and the slim prospect for their reversal. Domestic sales fell 2% as
lower order volume was partially offset by moderate product price increases. The
decline in order volume came in November reflecting an industry trend towards
more concentrated school fund-raising activity early in the semester.

Operating profit at IFS rose to $5.0 million from $2.9 million for
full-year 1994 on a pro forma basis. This advance was achieved through both
lower international losses and profit improvements domestically. IFS lost $.8
million internationally, down from $1.6 million in 1994. Better product
pricing, productivity improvements and lower freight costs yielded a significant
domestic profit increase in 1995.

Interest expense relating to continuing operations rose to $2.6 million
from $1.8 million in 1994 principally due to higher interest rates. During 1995
borrowings under the Company's lines of credit were at an average rate of 7.8%
compared to 5.6% in 1994.

The Company's income tax expense of $.6 million in 1995 was more than the
amount computed by applying the statutory rate to its loss from continuing
operations principally due to nondeductible goodwill amortization.

In 1995 the weighted average discount rate used in determining the
actuarial present value of the projected benefit obligation for the Company's
benefit plans was decreased to 7.25% from 8.5% in 1994 to reflect current
interest rates.

Tyler Corporation Form 10-K Page 15

<PAGE> 17

In connection with TPI's sale of assets to Ransom on December 1, 1995, and
pursuant to the terms of the Acquisition Agreement among the Company, TPI and
Ransom, the Company froze benefit accruals for all Tyler Pipe employees and
transferred the benefit obligation relating to the Tyler Pipe employees and the
related assets to a new plan established by Ransom in April 1996. As a result,
the Company recognized an estimated curtailment gain in 1995 of approximately
$2.7 million. The curtailment gain reduced the loss on disposal of
discontinued operations, and the related prepaid asset is included in the
balance sheet at December 31, 1995.

Prior to the sale to Ransom on December 1, 1995, the Company maintained a
savings and investment plan primarily for the employees of Tyler Pipe and
certain other employees of the Company. As a result of the sale, the Company
ceased substantially all contributions as of December 1, 1995. The Company
transferred all Tyler Pipe employee-account balances to a new plan established
by Ransom in the first quarter of 1996 and terminated the remaining savings and
investment plan in November 1996 after obtaining all necessary governmental
approvals. Substantially all expenses relating to the savings and investment
plan are included in discontinued operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements, together with the report of
independent auditors and financial statement schedule, are included on pages 23
through 42 of this document. Financial statement schedules other than the
schedule included have been omitted because the required information is
contained in the consolidated financial statements or related notes, or such
information is not applicable.

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

Not applicable.

Tyler Corporation Form 10-K Page 16

<PAGE> 18

PART III

The information required by Items 10 through 13 of Part III is
incorporated by reference from the indicated pages of Tyler's definitive proxy
statement for its annual meeting of shareholders to be held on April 28, 1997.

<TABLE>
<CAPTION>
Pages of
Proxy Statement
---------------
<S> <C> <C>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS 3 - 4
OF THE REGISTRANT.

ITEM 11. EXECUTIVE COMPENSATION. 5 - 9

ITEM 12. SECURITY OWNERSHIP OF CERTAIN 2
BENEFICIAL OWNERS AND MANAGEMENT.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED 10
TRANSACTIONS.
</TABLE>

Tyler Corporation Form 10-K Page 17

<PAGE> 19

PART IV

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

(a) (1) The financial statements listed in the Index to Financial Statements
and Schedule included in the Table of Contents on page 1 are filed
as part of this report.

(2) The schedule listed in the Index to Financial Statements
and Schedule included in the Table of Contents on page 1 is filed
as part of this report.

(3) Exhibits

Certain of the exhibits to this report are hereby incorporated by
reference, as specified:

3. Exhibits.

3.1 Certificate of Incorporation of Tyler Three, as amended through May
14, 1990, and Certificate of Designation of Series A Junior
Participating Preferred Stock (filed as Exhibit 3.1 to the Company's
Form 10-Q for the quarter ended June 30, 1990, and incorporated herein).

3.2 Amended and Restated By-Laws of Tyler Three, as amended through March
31, 1990 (filed as Exhibit 3.2 to the Company's registration statement
no. 33-33505 and incorporated herein).

4.1 Uncommitted $4,000,000 Documentary and Standby Letter of Credit Line
between the Company and NationsBank of Texas, N.A., dated January 31,
1997.

4.2 Rights Agreement, dated as of March 14, 1993, by and between Tyler
Corporation and The First National Bank of Boston, as Rights Agent, which
includes the form of Rights Certificate as Exhibit B thereto (filed as
Exhibit 4 to the Company's Form 8-K, dated January 29, 1993, and
incorporated herein).

4.3 Specimen of Common Stock Certificate (filed as Exhibit 4.1 to the
Company's registration statement no. 33-33505 and incorporated herein).

10.1 Form of Indemnification Agreement for directors and officers (filed as
Exhibit 10.1 to the Company's Form 10-Q for the quarter ended March 31,
1992, and incorporated herein).

*10.2 Stock Option Plan (including forms of option agreements)(filed as
Exhibit 10.2 to the Company's registration statement no. 33-33505 and
incorporated herein).

*10.3 Salary Continuation Agreement (filed as Exhibit 10.3 to the Company's
registration statement no. 33-33505 and incorporated herein).

*10.4 Management Security Agreement (filed as Exhibit 10.4 to the Company's
registration statement no. 33-33505 and incorporated herein).

Tyler Corporation Form 10-K Page 18

<PAGE> 20

*10.5 Split-dollar life insurance agreement with Joseph F. McKinney (filed as
Exhibit 10.5 to the Company's registration statement no. 33-33505 and
incorporated herein).

*10.6 Supplemental Retirement Plan (filed as Exhibit 10.6 to the Company's
registration statement no. 33-33505 and incorporated herein).

10.7 Indemnification Agreement, dated December 20, 1989 (filed as Exhibit 2.3
to the Company's registration statement no. 33-33505 and incorporated
herein).

10.8 Stock Purchase Agreement among Tyler Corporation and the Shareholders of
Forest City Auto Parts Company, South Main Auto Parts, Inc., and General
Distributors, Inc., dated December 12, 1990 (filed as Exhibit 2.1 to the
Company's Form 8-K, dated March 5, 1991, and as amended under cover of
Form 8 filed March 12, 1991, and incorporated herein).

10.9 Amendment dated December 31, 1991, to the Stock Purchase Agreement, dated
December 12, 1990, among Tyler Corporation and the Shareholders of Forest
City Auto Parts Company (filed as Exhibit 10.16 to the Company's Form
10-K for the year ended December 31, 1991, and incorporated herein).

10.15 Stock Purchase Agreement among Tyler Corporation, Institutional
Financing Services, Inc. and the Shareholders of Institutional Financing
Services, Inc., dated December 16, 1993 (filed as Exhibit 2.1 to the
Company's Form 8-K, dated January 20, 1994, and as amended under cover
of Form 8-K/A filed March 22, 1994, and incorporated herein).

*10.17 Amended and Restated Stock Option Agreement, dated March 18, 1993,
between Institutional Financing Services, Inc. and E. Peter Raisbeck
(filed as Exhibit 10.17 to the Company's Form 10-K for the year ended
December 31, 1993, and incorporated herein).

*10.18 First Amendment to Amended and Restated Stock Option Agreement, dated
January 7, 1994, among Tyler Corporation, Institutional Financing
Services, Inc. and E. Peter Raisbeck (filed as Exhibit 99.2 to the
Company's Form 8-K, dated
January 20, 1994, and incorporated herein).

10.19 Acquisition Agreement dated as of November 20, 1995, by and among the
Registrants, Tyler Pipe Industries, Inc. and Ransom Industries, Inc.,
formerly known as Union Acquisition Corporation (filed as Exhibit 2.1 to
the Company's Form 8-K, dated December 14, 1995, and incorporated
herein).

*10.20 Consulting Agreement between the Company and Joseph F. McKinney, dated
October 7, 1996.

Tyler Corporation Form 10-K Page 19

<PAGE> 21

21 Subsidiaries of Tyler

23 Consent of Ernst & Young LLP

Tyler will furnish copies of these exhibits to shareholders upon written
request and payment of $0.15 per page.

(b) Reports on Form 8-K

Tyler did not file any Current Reports on Form 8-K during the fourth
quarter of 1996.

*Management contract or compensatory plan or arrangement

Tyler Corporation Form 10-K Page 20

<PAGE> 22

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.

TYLER CORPORATION

Date: March 10, 1997 By: /s/ C. A. Rundell, Jr.
--------------------------------
C. A. Rundell, Jr.
Interim Chief Executive Officer

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

Date: March 10, 1997 By: /s/ C. A. Rundell, Jr.
-------------------------------------
C. A. Rundell, Jr.
Chairman of the Board and
Interim Chief Executive Officer
(a principal executive officer)

Date: March 10, 1997 By: /s/ Richard W. Margerison
-------------------------------------
Richard W. Margerison
President and Chief Operating Officer
Director
(a principal executive officer)

Date: March 10, 1997 By: /s/ Linda K. Hill
-------------------------------------
Linda K. Hill
Vice President, Controller and
Treasurer
(principal financial officer and
principal accounting officer)

Tyler Corporation Form 10-K Page 21

<PAGE> 23

Date: March 10, 1997 By: /s/ Ernest H. Lorch
-------------------------------------
Ernest H. Lorch
Director

Date: March 10, 1997 By: /s/ F. R. Meyer
-------------------------------------
F. R. Meyer
Director

Date: March 10, 1997 By: /s/ James E. Russell
-------------------------------------
James E. Russell
Director

Tyler Corporation Form 10-K Page 22

<PAGE> 24

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Tyler Corporation

We have audited the accompanying consolidated balance sheets of Tyler
Corporation as of December 31, 1996 and 1995, and the related consolidated
statements of operations, shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 1996. Our audits also included the
financial statement schedule referred to in the Index at Item 14(a). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and the schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Tyler Corporation at December 31, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken
as a whole, presents fairly, in all material respects, the information set
forth therein.

Ernst & Young LLP

Dallas, Texas
February 14, 1997

Tyler Corporation Form 10-K Page 23

<PAGE> 25

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31

<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Net sales.................................................. $128,373,000 $140,582,000 $153,527,000
Costs and expenses
Cost of sales............................................ 61,359,000 64,585,000 71,254,000
Selling, general and administrative expenses............. 79,536,000 73,516,000 80,465,000
Interest (income) expense, net........................... (290,000) 2,628,000 1,802,000
Goodwill and other intangibles
impairment charge....................................... 52,105,000 --- ---
------------ ------------ ------------
192,710,000 140,729,000 153,521,000
------------ ------------ ------------

Income (loss) from continuing operations
before income tax (benefit)............................. (64,337,000) (147,000) 6,000

Income tax (benefit)
Current................................................. (935,000) (1,968,000) (53,000)
Deferred................................................ (3,372,000) 2,528,000 923,000
------------ ------------ ------------
(4,307,000) 560,000 870,000
------------ ------------ ------------
Loss from continuing operations (60,030,000) (707,000) (864,000)
Discontinued operations
Income (loss) from discontinued operations,
after income tax (benefit)............................ (1,300,000) 365,000 (3,837,000)
Loss on disposal of discontinued
operations, after income tax.......................... --- (16,631,000) ---
------------ ------------ ------------
Loss from discontinued operations........................ (1,300,000) (16,266,000) (3,837,000)
------------ ------------ ------------

Net loss................................................. $(61,330,000) $(16,973,000) $(4,701,000)
============ ============ ============

Loss per common share
Continuing operations.................................. $ (3.02) $ (.04) $ (.04)
Discontinued operations................................ (.07) (.81) (.20)
------------ ------------ ------------

Net loss per common share............................. $ (3.09) $ (.85) $ (.24)
============ ============ ============

Average shares 19,876,000 19,869,000 19,925,000
</TABLE>

See accompanying notes.

Tyler Corporation Form 10-K Page 24

<PAGE> 26

CONSOLIDATED BALANCE SHEETS
December 31

1996 1995
------------- -------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents .......................... $ 15,773,000 $ 3,247,000
Accounts receivable (less allowance for losses
of $1,364,000 in 1996 and $396,000 in 1995) ...... 11,633,000 16,250,000
Amount due from Ransom Industries, Inc. ............ --- 7,599,000
Merchandise inventories ............................ 20,127,000 22,258,000
Income tax receivable .............................. 907,000 4,361,000
Prepaid expense .................................... 963,000 5,529,000
Deferred income tax benefit......................... 3,438,000 1,406,000
------------- -------------
Total current assets.............................. 52,841,000 60,650,000
------------- -------------
Property, plant and equipment, at cost .............. 14,502,000 16,062,000
Less allowance for depreciation .................... 6,369,000 6,376,000
------------- -------------
8,133,000 9,686,000
Other assets
Goodwill and other intangibles ..................... --- 54,265,000
Sundry ............................................. 1,970,000 4,036,000
------------- -------------
1,970,000 58,301,000
------------- -------------
$ 62,944,000 $ 128,637,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable ................................... $ 5,779,000 $ 7,587,000
Accrued wages and commissions ...................... 3,867,000 3,176,000
Accrued taxes other than federal income taxes ...... 2,042,000 1,176,000
Other accrued liabilities .......................... 8,944,000 11,620,000
------------- -------------
Total current liabilities ........................ 20,632,000 23,559,000

Deferred income tax ................................. 6,136,000 8,058,000
Other liabilities ................................... --- 1,208,000
Other liabilities - TPI of Texas, Inc. .............. 4,135,000 2,450,000

Commitments and contingencies
Shareholders' equity
Common stock, $.01 par value, 50,000,000 shares
authorized, 21,309,277 shares issued ............. 213,000 213,000
Capital surplus .................................... 48,520,000 48,538,000
Retained (deficit) earnings ........................ (10,083,000) 51,247,000
------------- -------------
38,650,000 99,998,000
Less 1,428,828 treasury shares in 1996 and
1,433,783 treasury shares in 1995, at cost ....... 6,609,000 6,636,000
------------- -------------
Total shareholders' equity ....................... 32,041,000 93,362,000
------------- -------------
$ 62,944,000 $ 128,637,000
============= =============
</TABLE>

See accompanying notes.

Tyler Corporation Form 10-K Page 25

<PAGE> 27

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
Common Stock Treasury Stock
-------------------- ------------------------
Retained
Capital (Deficit)
Shares Amount Surplus Earnings Shares Amount
---------- -------- ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>

Balance at December 31, 1993 .... 21,309,277 $213,000 $ 49,109,000 $ 72,921,000 (1,011,046) $(4,279,000)
Issuance of treasury shares upon
exercise of stock options .... -- -- (647,000) -- 137,222 754,000
Net purchase of treasury
shares from employee
benefit plan ................. -- -- (17,000) -- (395,115) (2,152,000)
Purchase of treasury shares
from benefit plans of
former subsidiaries .......... -- -- -- -- (181,239) (1,045,000)
Federal income tax benefit from
exercise of nonqualified
stock options ................ -- -- 142,000 -- -- --
Net loss ....................... -- -- -- (4,701,000) -- --
---------- -------- ------------ ------------ ---------- -----------

Balance at December 31, 1994 .... 21,309,277 213,000 48,587,000 68,220,000 (1,450,178) (6,722,000)

Issuance of treasury shares upon
exercise of stock options .... -- -- (57,000) -- 12,770 75,000
Net sale of treasury
shares to employee
benefit plan ................. -- -- -- -- 3,625 11,000
Federal income tax benefit from
exercise of nonqualified
stock options ................ -- -- 8,000 -- -- --
Net loss ....................... -- -- -- (16,973,000) -- --
---------- -------- ------------ ------------ ---------- -----------
Balance at December 31, 1995 .... 21,309,277 213,000 48,538,000 51,247,000 (1,433,783) (6,636,000)
Net sale of treasury
shares to employee
benefit plan ................. -- -- (18,000) -- 4,955 27,000
Net loss ....................... -- -- -- (61,330,000) -- --
---------- -------- ------------ ------------ ---------- -----------
Balance at December 31, 1996 .... 21,309,277 $213,000 $ 48,520,000 $(10,083,000) (1,428,828) $(6,609,000)
========== ======== ============ ============ ========== ===========
</TABLE>

See accompanying notes.

Tyler Corporation Form 10-K Page 26

<PAGE> 28

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31

<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
Cash flows from operating activities
<S> <C> <C> <C>
Net loss ................................................. $(61,330,000) $(16,973,000) $ (4,701,000)
Adjustments to reconcile loss from operations to net cash
provided (used) by operations:
Depreciation and amortization .......................... 4,466,000 4,575,000 4,535,000
Goodwill and other intangibles impairment charge ....... 52,105,000 -- --
Other noncash charges .................................. 13,973,000 -- --
Provision for losses on accounts receivable ............ 1,116,000 359,000 1,112,000
Deferred income tax (benefit) .......................... (3,954,000) 2,965,000 2,421,000
Decrease in accounts receivable ........................ 1,263,000 2,932,000 1,974,000
(Increase) decrease in inventories ..................... 577,000 2,688,000 (2,811,000)
(Increase) decrease in prepaid expenses ................ 383,000 191,000 (142,000)
Decrease in accounts payable ........................... (1,808,000) (932,000) (1,119,000)
Decrease in accrued liabilities ........................ (2,775,000) (1,050,000) (1,886,000)
Increase (decrease) in income tax ...................... 3,454,000 (3,338,000) (3,406,000)
Decrease in other liabilities .......................... (161,000) (1,073,000) (335,000)
Discontinued operations - noncash charges and working
capital changes ...................................... -- 25,586,000 1,129,000
------------ ------------ ------------

Net cash provided (used) by operating activities ..... 7,309,000 15,930,000 (3,229,000)
------------ ------------ ------------

Cash flows from investing activities
Proceeds from sale of pipe and fittings segment,
after expenses ......................................... 7,599,000 58,540,000 --
Additions to property, plant and equipment ............... (3,567,000) (2,078,000) (3,395,000)
Cost of acquisitions, net of cash acquired ............... (2,528,000) -- (59,064,000)
Proceeds from disposal of property, plant and equipment .. 2,040,000 1,645,000 37,000
Investing activities of discontinued operations .......... -- (8,385,000) (10,369,000)
Other .................................................... 1,664,000 (1,639,000) (414,000)
------------ ------------ ------------
Net cash provided (used) by investing activities ..... 5,208,000 48,083,000 (73,205,000)
------------ ------------ ------------

Cash flows from financing activities
Long-term debt (repayments) additions .................... -- (62,700,000) 63,500,000
Issuance of common stock ................................. -- 26,000 249,000
Net sale (purchase) of treasury shares to (from) employee
benefit plan ........................................... 9,000 11,000 (2,169,000)
Purchase of treasury shares from benefit plans of
former subsidiaries .................................... -- -- (1,045,000)
------------ ------------ ------------

Net cash provided (used) by financing activities ..... 9,000 (62,663,000) 60,535,000
------------ ------------ ------------

Net increase (decrease) in cash and cash equivalents ...... 12,526,000 1,350,000 (15,899,000)
Cash and cash equivalents at beginning of year ............ 3,247,000 1,897,000 17,796,000
------------ ------------ ------------

Cash and cash equivalents at end of year .................. $ 15,773,000 $ 3,247,000 $ 1,897,000
============ ============ ============
</TABLE>

See accompanying notes.

Tyler Corporation Form 10-K Page 27

<PAGE> 29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF BUSINESS

Tyler Corporation provides products and services to customers through two
operating subsidiaries. Forest City Auto Parts Company ("Forest City"), which
specializes in selling mechanical and electrical automotive aftermarket parts
to do-it-yourself customers and Institutional Financing Services, Inc. ("IFS"),
which provides products for fund-raising programs in schools. IFS's major
product offering is costume jewelry, with other products including specialty
gifts, seasonal items, paper products and edibles. Forest City is
headquartered in Cleveland, Ohio and maintains 61 store locations in Illinois,
New York, Ohio, Pennsylvania and Wisconsin. IFS is headquartered in Benicia,
California and markets through a highly trained sales force that contacts
school sponsors interested in raising money for educational and extracurricular
uses. Geographic markets for IFS include principally all of the United States
and a modest presence in the Caribbean.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include the accounts of Tyler
Corporation and its subsidiaries, all of which are wholly owned.

Inventories are valued at the lower of cost or market. Costs of
inventories are determined by the first-in, first-out method.

Depreciation for financial statement purposes is provided principally by
the straight-line method over the estimated useful lives of the various assets.
Depreciation expense was $2,306,000, $1,849,000 and $1,925,000 for 1996, 1995
and 1994, respectively. For income tax purposes, accelerated depreciation is
used with recognition of deferred income tax for the resulting temporary
differences.

For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with maturities of three months or
less to be cash equivalents. Excess cash during the year was invested at an
average rate of approximately 5%. Interest paid in 1996 was $65,000. Interest
paid in 1995 and 1994 was $6,935,000 and $2,699,000, respectively, which
includes interest charged to the results of discontinued operations.

Tyler Corporation Form 10-K Page 28

<PAGE> 30

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Certain prior-year amounts have been reclassified to conform to the
current-year presentation.

DISCONTINUED OPERATIONS

On December 1, 1995, the Company sold all the outstanding capital stock of
Swan Transportation Company ("Swan") to Ransom Industries, Inc. ("Ransom")
(formerly known as Union Acquisition Corporation). In the same transaction,
Tyler Pipe Industries, Inc., (subsquently renamed TPI of Texas, Inc.) ("TPI") a
wholly owned subsidiary of the Company, sold substantially all of its assets to
Ransom, and Ransom assumed substantially all the liabilities of TPI. The
results of these entities and the effects of subsequent changes in estimates of
retained contingent liabilities are included as discontinued operations. The
assets TPI sold and the liabilities Ransom assumed included all those relating
to TPI's business of manufacturing and marketing cast iron pipe and fittings,
excluding cash and certain other assets and liabilities. Swan is a
motor-carrier company that provided transportation services to TPI prior to the
closing.

Based on a July 1, 1995, balance sheet, Ransom paid a net amount of
$66,139,000 for the stock of Swan and assets of TPI of which $58,540,000 was
received at closing on
December 1, 1995, and the net remaining payment was received in January 1996.
In addition, TPI distributed approximately $17,700,000 to the Company from July
1, 1995, through closing.

Operating results of the discontinued pipe and fittings segment for the years
ended December 31, 1996, 1995 and 1994 were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
------------- ------------- -------------

<S> <C> <C> <C>
Net sales .................................. $ --- $ 202,508,000 $ 204,323,000

Income (loss) before income tax (benefit) .. $ (2,000,000) $ 821,000 $ (5,573,000)
Income tax (benefit) ....................... (700,000) 456,000 (1,736,000)
------------- ------------- -------------

Net income (loss) from discontinued
operations ............................ $ (1,300,000) $ 365,000 $ (3,837,000)
</TABLE>

Tyler Corporation Form 10-K Page 29

<PAGE> 31

Interest has been charged to discontinued operations based on net assets
of the pipe and fittings segment. Interest expense allocated to discontinued
operations for 1995 and 1994 was $2,933,000 and $2,018,000, respectively.
Income tax (benefit) has been charged (credited) to discontinued operations
based on the income tax (benefit) resulting from inclusion of the discontinued
segment in the Company's consolidated federal income tax return.

The income tax (benefit) differs from the amount which would be provided
by applying the statutory income tax rate to income (loss) before income tax
(benefit) for 1995 and 1994 due primarily to differences resulting from excess
book over tax amortization and differences in book and tax bases of inventory
and fixed assets.

The income tax of $4,157,000 on the loss on disposal of discontinued
operations differs from the amount which would be provided by applying the
statutory income tax rate to the pretax loss primarily as a result of excess
book over tax amortization and differences in book and tax bases of inventory,
fixed assets and goodwill.

The Company recorded a pretax loss from discontinued operations of
$2,000,000 in 1996 for the investigation of certain claims and contingent
claims. (See "Commitments and Contingencies" footnote.)

ACQUISITIONS

On January 7, 1994, the Company completed the purchase of Institutional
Financing Services, Inc. IFS assists schools in fund raising by arranging for
students to sell company-supplied gift items to family and friends. IFS was
acquired for approximately $50,000,000 and the assumption of seasonal working
capital debt of $12,800,000. The purchase agreement provides for additional
payments of up to $12,000,000 based on cumulative operating profits for the
five years ending December 1998. However, based on IFS's three-year cumulative
operating profits ending December 1996, the Company does not anticipate any
payments will be made. The acquisition has been accounted for as a purchase,
and the net assets and results of operations of IFS are included in the
Company's Consolidated Financial Statements beginning January 7, 1994. The
purchase price was allocated to the assets and liabilities of IFS based on
their respective fair values. The purchase price and expenses associated with
the acquisition exceeded the fair value of IFS's net assets by approximately
$40,854,000 which was assigned to goodwill. (See "Goodwill and Other
Intangibles Impairment Charge" footnote.)

Tyler Corporation Form 10-K Page 30

<PAGE> 32

In connection with the 1991 acquisition of Forest City, the Company made a
final payment of $1,320,000 in the first quarter of 1996 to former shareholders
and certain other executives of Forest City as the result of achieving
certain cumulative profit objectives. The amount paid was accrued at December
31, 1995. In addition, the Company has paid $660,000 in 1994 for 1993
performance, $660,000 in 1993 for 1992 performance and $660,000 in 1992 for
1991 performance for a total of $3,300,000 since the acquisition.

Pursuant to the 1994 IFS acquisition agreement, the Company made a
$1,208,000 payment in the third quarter of 1996 to former shareholders and
executives at IFS. The amount was accrued at December 31, 1995.

PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
Depreciation
Lives
(in years) 1996 1995
---------- ----------- -----------
<S> <C> <C> <C>

Land ............................... $ 789,000 $ 1,141,000
Buildings and leasehold
improvements ..................... 7 to 30 4,297,000 5,030,000
Machinery and transportation
equipment ........................ 3 to 15 9,416,000 9,891,000
----------- -----------
$14,502,000 $16,062,000
=========== ===========
</TABLE>

Tyler Corporation Form 10-K Page 31

<PAGE> 33

BANK DEBT

During 1996, the Company had only nominal temporary borrowings for several
days in January under credit agreements existing in 1996 at an average rate of
7%.

The Company had outstanding letters of credit aggregating approximately
$2,320,000 at December 31, 1996. Approximately $2,000,000 relates to
guarantees of performance to a third party for potential environmental
remediation.

In January 1997 the Company terminated its credit agreement and
established a new uncommitted $4,000,000 Documentary and Standby Letter of
Credit Line. Under the new agreement, existing letters of credit are required
to be secured by cash collateral.

INCOME TAX

The (benefit) provision for income tax consists of the following:

<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Current:
Federal ................. $ (938,000) $(1,971,000) $ (287,000)
State ................... 3,000 3,000 234,000
----------- ----------- -----------
(935,000) (1,968,000) (53,000)

Deferred ................ (3,372,000) 2,528,000 923,000
----------- ----------- -----------
$(4,307,000) $ 560,000 $ 870,000
=========== =========== ===========
</TABLE>

The income tax (benefit) provision differs from amounts computed by
applying the statutory tax rate to income (loss) from continuing operations as
follows:

<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Income tax (benefit) at
statutory rate ............... $(22,518,000) $ (52,000) $ 2,000
State income tax, net of
federal income tax benefit ... 2,000 2,000 170,000
Foreign operating losses
with no current tax benefit .. (4,000) 57,000 245,000
Life insurance ................. 534,000 (5,000) (61,000)
Excess book amortization ....... 487,000 506,000 468,000

Goodwill and other intangibles
impairment charge ............ 17,136,000 -- --
Other, net ..................... 56,000 52,000 46,000
------------ ------------ ------------
$ (4,307,000) $ 560,000 $ 870,000
============ ============ ============
</TABLE>

Tyler Corporation Form 10-K Page 32

<PAGE> 34

Significant components of deferred tax assets and liabilities as of
December 31, 1996, and 1995 are as follows:

<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Deferred income tax assets:
Inventories .............................. $ 667,000 $ 573,000
Insurance reserves ....................... 154,000 98,000
Operating expenses not
currently deductible ................... 3,684,000 1,550,000
Benefit of foreign
abandonment losses not
currently deductible ................... -- 1,259,000
Employee benefit plans ................... 253,000 1,112,000
Other .................................... 347,000 100,000
------------ ------------
Total deferred income tax assets ....... 5,105,000 4,692,000
------------ ------------

Deferred income tax liabilities:
Tax-benefit transfer lease ............... (5,370,000) (6,080,000)
Property, plant and equipment ............ (2,176,000) (2,199,000)
Pension plan ............................. -- (1,464,000)
Other .................................... (257,000) (1,601,000)
------------ ------------
Total deferred income tax liabilities .. (7,803,000) (11,344,000)
------------ ------------
Net deferred income tax liabilities .. $ (2,698,000) $ (6,652,000)
============ ============
</TABLE>

Included in the Company's income (loss) from continuing operations before
income tax (benefit) are losses related to IFS's foreign operations in 1995 and
1994 of $782,000 and $1,500,000, respectively.

The Company received refunds of prior years' income tax paid of $4,693,000
in 1996. The Company paid income tax, net of refunds received, of $803,000 in
1995 and $2,513,000 in 1994.

LEASES

The Company leases certain offices, a distribution center, retail stores,
transportation, computer and other equipment used in its operations under
noncancellable operating lease agreements expiring at various dates through
2010. Most leases contain renewal options and some contain purchase options.
The leases generally provide that the Company pay taxes, maintenance, insurance
and certain other operating expenses.

Tyler Corporation Form 10-K Page 33

<PAGE> 35

Rent expense was approximately $3,377,000 in 1996, $3,342,000 in 1995 and
$3,189,000 in 1994. Minimum rental payments under the leases described above
are as follows:

<TABLE>
<S> <C>
1997 ......... $ 2,978,000
1998 ......... 2,689,000
1999 ......... 2,180,000
2000 ......... 1,952,000
2001 ......... 1,616,000
Later years .. 5,430,000
-----------
$16,845,000
===========
</TABLE>

EMPLOYEE BENEFIT PLANS

Forest City maintains a profit-sharing plan for the benefit of eligible
employees of Forest City. Forest City's annual contribution to the
profit-sharing plan was $90,000 in 1996, 1995 and 1994. The amount of Forest
City's contribution to the profit-sharing plan is determined by its board of
directors but may not exceed 15% of the aggregate compensation paid by Forest
City to eligible employees for any plan year.

A defined contribution pension plan and a defined contribution
profit-sharing plan are in effect covering substantially all the employees of
IFS. The profit-sharing plan includes a 401(k) salary-deferral plan
["401(k)"]. The pension contributions are determined as a percentage of each
participating employee's compensation. The profit-sharing contributions are
made at the board of directors' discretion. Contributions to the 401(k) are in
the form of employee-salary deferrals which may be subject to employer-matching
contributions up to a specified limit. IFS's contributions to the pension plan
in 1996, 1995 and 1994 were $779,000, $791,000 and $810,000, respectively. In
addition, IFS's contributions to the profit-sharing plan in 1996, 1995 and 1994
were $227,000, $266,000 and $315,000, respectively.

Prior to TPI's sale of assets to Ransom on December 1, 1995, the Company
maintained a defined benefit pension plan (the "Plan") which provided income
and death benefits for certain employees of the Company and employees of TPI.
The benefits were generally based on final average salary and years of service.
The Company's policy was to fund net pension cost accrued. However, the
Company would not contribute an amount less than the minimum funding
requirements of the Employee Retirement Income Security Act of 1974 or more
than the maximum tax-deductible amount.

Tyler Corporation Form 10-K Page 34

<PAGE> 36

In connection with TPI's sale of assets to Ransom and pursuant to the
terms of the acquisition agreement among the Company, TPI and Ransom (the
"Acquisition Agreement"), the Company froze benefit accruals for all TPI
employees on December 1, 1995, and transferred the benefit obligation relating
to the TPI employees and the related assets to a new plan established by Ransom
(the "Ransom Plan") in April 1996. The assets transferred to the Ransom Plan
consisted principally of publicly traded stocks and bonds, U.S. government
securities and 251,200 shares of the Company's common stock. The assets
remaining in the Company's Plan were invested in short-term fixed income
securities. As a result, the Company recognized an accrued curtailment gain in
1995 of approximately $2,700,000. The curtailment gain reduced the loss on
disposal of discontinued operations in 1995, and the related prepaid asset is
included in the balance sheet at December 31, 1995.

Subsequent to the asset and obligation transfer to the Ransom Plan, the
Company terminated the Plan on June 30, 1996, and determined that the remaining
Plan assets exceeded the obligation relating to the remaining participants. As
a result, the Plan was amended to provide a "pro rata benefit increase" as
described in section 4980(d)(3) of the Internal Revenue Code of 1986. This
amendment allows the excise tax associated with the excess asset reversion to
be 20% rather than 50%. The Company received a favorable determination letter
from the IRS in November 1996 relating to the termination of the Plan including
the terms of the pro rata benefit increase. As a result of the amendment and
termination of the Plan, the Company received cash and recorded income from
reversion of excess assets from a defined benefit pension plan of approximately
$2,300,000 and accrued an excise tax liability of approximately $465,000 in
December 1996. In addition, the Company also recorded a settlement loss of
approximately $3,700,000 and reduced the related prepaid pension asset in
accordance with Statement of Financial Accounting Standards No. 88 -
"Employers' Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination of Benefits." These two events, the income
reversion and the settlement of the pension plan, resulted in a net charge of
$1,865,000. Final distributions were paid to all remaining participants in the
form of lump-sum settlements. No assets or liabilities of the Plan remained at
December 31, 1996. In addition, no pension cost was recorded in 1996.

Prior to TPI's sale of assets to Ransom on December 1, 1995, the Company
maintained several other benefit plans for certain key employees of the Company
and TPI. These plans were also terminated in 1996. Approximately 55% of these
benefits were funded by insurance policies which

Tyler Corporation Form 10-K Page 35

<PAGE> 37

were redeemed in 1996. The Company made final settlement payments of
approximately $2,400,000 in 1996 and an additional $1,300,000 remained accrued
at December 31, 1996, and was paid in January 1997.

Prior to TPI's sale of assets to Ransom on December 1, 1995, the Company
maintained a savings and investment plan primarily for the employees of TPI and
certain other employees of the Company. As a result of the sale, the Company
ceased substantially all contributions as of
December 1, 1995. The Company transferred all TPI employee account balances to
a new plan established by Ransom in the first quarter of 1996 and received
governmental approval in November 1996 to terminate the remaining savings and
investment plan. All account balances were distributed by year end.
Substantially all expenses in 1995 relating to the savings and investment plan
are included in discontinued operations.

RESTRUCTURING AND OTHER FOURTH-QUARTER CHARGES

In the fourth quarter of 1996, the Company recorded $1,929,000 of
restructuring and other charges in relation to a restructuring plan to reduce
costs and increase future operating efficiency by reducing the work force,
closing and relocating Forest City stores, reducing corporate office space
requirements and discontinuing a small product line at IFS. Also in the fourth
quarter, the Company recorded charges of $6,103,000 which included
uncollectible accounts receivable at IFS, the write-down of excess inventory
remaining after fourth-quarter sales declines at IFS, other obligations
relating to the termination of former employees, vendor restocking charges for
on-hand inventory items at Forest City and the noncash write-off of certain
fixed assets and software which Forest City decided in the fourth quarter that
it will no longer utilize in its business. In addition, the Company terminated
its defined benefit pension plan in December 1996 resulting in a net charge of
approximately $1,865,000. (See "Employee Benefit Plans" footnote.)

The total restructuring and other charges recorded in the fourth quarter
of 1996 were $9,897,000 of which $1,361,000 is included in cost of sales and
$8,536,000 is included in selling, general and administrative expenses.

Tyler Corporation Form 10-K Page 36

<PAGE> 38

GOODWILL AND OTHER INTANGIBLES IMPAIRMENT CHARGE

Prior to December 1996, goodwill was amortized over 40 years. In December
1996 the Company recognized a goodwill and other intangibles impairment charge
of $52,105,000 related to the 1991 acquisition of Forest City and the 1994
acquisition of IFS. The continued decline in the financial results of both
operating companies in the second half of 1996 and a related strategic and
operational review resulted in an evaluation of goodwill and other intangibles
for possible impairment. The underlying factors contributing to the decline in
financial results included changes in the marketplace and increased competition
for both companies. The Company calculated the present value of expected cash
flows to estimate the fair value of each operating company.

COMMITMENTS AND CONTINGENCIES

The New Jersey Department of Environmental Protection and Energy
("NJDEPE") has alleged that a site where a former affiliate of TPI of Texas,
Inc., Jersey-Tyler Foundry Company ("Jersey-Tyler"), once operated a foundry
contains lead and possible other priority pollutant metals and may need on-site
and off-site remediation. The foundry was operated on the site from the early
part of this century to 1969 when it was acquired by Jersey-Tyler.
Jersey-Tyler operated the foundry from 1969 to 1976, at which time the foundry
was closed. Subsequently, the property was sold to other persons who have
operated a salvage yard on the site. Based on a remedial investigation
conducted by TPI, the NJDEPE has demanded TPI and other potentially responsible
parties remediate the foundry site and the contamination in the adjacent stream
and nearby lake. TPI intends to propose that it conduct a feasibility study to
assess its remediation options, including costs, but does not intend to commit
to further action at this time.

In connection with TPI's sale of assets to Ransom, on December 1, 1995,
pursuant to the Acquisition Agreement, Ransom agreed to manage and direct the
prosecution or defense of these matters on behalf of TPI. In addition, Ransom
agreed to reimburse TPI the first $3,000,000 of certain costs and expenses
incurred in connection with the investigation or remediation of the New Jersey
site, and one-half of such expenses in excess of $3,000,000. Under any
circumstances, however, the maximum amount that Ransom agreed to reimburse TPI
in connection with this matter is $6,500,000. Ransom, on behalf of TPI, is
proceeding against predecessor owners and operators of the site, as well as
others, to bear their share of the cost of the investigation and any other
costs,

Tyler Corporation Form 10-K Page 37

<PAGE> 39

including any remediation costs incurred by TPI. Some costs may also be
covered by insurance although the insurance carriers are expected to deny
coverage. TPI expects Ransom, on TPI's behalf, to proceed against such
insurance carriers seeking coverage of remediation costs.

Pursuant to the Acquisition Agreement, Ransom agreed to manage and direct
the prosecution or defense of certain other matters on behalf of TPI and to
reimburse related costs and expenses. Ransom agreed to reimburse TPI the first
$750,000 of all costs and expenses incurred in connection with each such matter
and one-half of such expenses in excess of $750,000. The maximum amount that
Ransom agreed to reimburse TPI in connection with all of these matters
excluding Jersey-Tyler is $8,000,000. Although it is impossible to predict the
outcome of legal or regulatory proceedings, based on negotiations and
activities before TPI's sale of assets, the Company believes that substantially
all of the costs, expenses and damages, if any, resulting from the legal
proceedings and environmental matters described above will be reimbursed by
Ransom pursuant to the Acquisition Agreement or have been adequately provided
for in the financial statements.

Ransom did not agree to reimburse TPI for, among other things, (a)
liabilities relating to the use, handling, manufacture or sale of products
containing asbestos or silica, (b) claims of individuals for health problems
such as (but not limited to) silicosis, or (c) offsite environmental
liabilities. Between 1968 and December 1995, TPI owned and operated foundries.
TPI is, and expects to continue to be, involved in different types of
litigation, including environmental claims and claims for work-related injuries
and physical conditions. In January 1997 two lawsuits were filed involving
silicosis claims. In light of its current litigation, claims and contingent
claims that may result in future litigation involving TPI, a pretax loss from
discontinued operations of $2,000,000 was recorded in 1996 for the
investigation of such matters. Based on the facts available, the Company is
not able to make a determination as to the likelihood of a favorable outcome or
to estimate the range of potential loss for any asserted or unasserted claims
arising from any of the sources described in this paragraph.

In June 1995 Forest City was sued by a former executive in the Court of
Common Pleas of Cuyahoga County, Ohio alleging that Forest City terminated the
plaintiff because of his age and making other common law claims arising out of
his termination. The plaintiff seeks damages in excess of $16,000,000.
Although Forest City maintains insurance to cover claims of this nature, such
insurance would not cover awards, if any, of punitive and certain other
damages. Forest City is defending this lawsuit vigorously. The case was
subsequently moved to federal district court in

Tyler Corporation Form 10-K Page 38

<PAGE> 40

Cleveland, Ohio. The discovery process has not been completed, and based on
results of discovery to date, the outcome of this lawsuit is uncertain.

Other than ordinary course, routine litigation incidental to the business
of the Company and except as described herein, there are no other material
legal proceedings pending to which the Company or its subsidiaries are parties
or to which any of its properties are subject.

SHAREHOLDERS' EQUITY

The Company has authorized 1,000,000 shares of $10 par value voting
preferred stock. The board of directors designated 250,000 shares as Series A
Junior Participating Preferred Stock which are reserved for issuance upon
exercise of the Company's stock purchase rights. In 1993 the Company declared
a dividend of one stock purchase right for each outstanding share of common
stock. Each right may be exercised to purchase 1/100 of a share of Series A
Junior Participating Preferred Stock for $21. Each share of Series A Junior
Participating Preferred Stock will have a minimum preferential quarterly
dividend of 100 times the dividend declared on common stock and a minimum
liquidation preference of $100 per share. Upon liquidation or any merger or
other business combination in which common stock is exchanged, the holders of
the Series A Junior Participating Preferred Stock will be entitled to receive
100 times the amount received per share of common stock.

The stock purchase rights may be exercised only after public announcement
that a person or group has acquired 20% or more of the Company's common stock
or public announcement of an offer for 30% or more of the Company's common
stock. The rights, which do not have voting rights, will expire on March 14,
2003. The rights may be redeemed by the Company at a price of $.01 per right
at any time prior to 15 days (or such longer period as the board of directors
may determine) after the acquisition of 20% of the Company's common stock. If
the Company is acquired in a merger or other business combination after the
rights become activated, each right will entitle its holder to purchase, at the
exercise price of $21, shares of common stock in the acquiring company having a
market value of $42. If the Company is the surviving corporation, each right
will entitle the holder to purchase, at the exercise price of $21, shares of
common stock of the Company having a market value of $42.

Tyler Corporation Form 10-K Page 39

<PAGE> 41

STOCK OPTION PLAN

The Tyler Corporation Stock Option Plan provides for the granting of
nonqualified and incentive stock options, as defined by the Internal Revenue
Code, to key employees of the Company and its subsidiaries at prices which
represent fair market value at dates of grant.

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS No. 123"). Accordingly, no compensation cost has been
recognized for the stock option plan. Had compensation cost for the Company's
stock option plan been determined based on the fair value at the grant date for
awards in 1996 and 1995 consistent with the provisions of FAS No. 123, the
effect on the Company's net earnings and earnings per share would not have been
material.

Following is a summary of option transactions during 1996, 1995 and 1994:

<TABLE>
<CAPTION>
Number of Option
Shares Prices
----------- ----------------
<S> <C> <C>
Options outstanding at January 1, 1994 .... 335,890 $. 17 to $5.00
Granted .................................. 33,500 3.50 to 5.50
Exercised ................................ (137,222) .17 to 3.50
----------
Options outstanding at December 31, 1994 .. 232,168 .17 to 5.50
Granted .................................. 10,000 2.75
Canceled ................................. (109,524) 3.00 to 5.50
Exercised ................................ (12,770) 1.37
----------
Options outstanding at December 31, 1995 .. 119,874 .17 to 5.50
Granted .................................. 225,000 1.625 to 2.125
Canceled ................................. (14,605) 2.75 to 4.87
----------
Options outstanding at December 31, 1996 .. 330,269 $.17 to $5.50
==========

Exercisable at December 31, 1996 .......... 150,702
Reserved for future options ............... 569,518
</TABLE>

Tyler Corporation Form 10-K Page 40

<PAGE> 42

INDUSTRY SEGMENTS

The Company sells products and services to retail and institutional
customers through two principal operating units. Selected financial
information is presented below for 1996, 1995 and 1994 (000 omitted).

<TABLE>
<CAPTION>
Segment Net Sales Segment Operating Profits(1)
------------------------------ -----------------------------
1996 1995 1994 1996 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Automotive aftermarket parts ..... $ 85,074 $ 86,893 $ 91,849 $(15,763) $ 3,190 $ 5,006
Products for fund-raising programs 43,299 53,689 61,678 (42,006) 3,417 1,820
-------- -------- -------- -------- -------- --------
Segment totals ................. $128,373 $140,582 $153,527 (57,769) 6,607 6,826
======== ========= ========
Interest (income) expense, net .............................. (290) 2,628 1,802
Unallocated corporate expense(2) ............................ 6,858 4,126 5,018
-------- -------- --------
Income (loss) from continuing operations before income tax (benefit)... $(64,337) $ (147) $ 6
======== ======== ========

<CAPTION>
Capital Expenditures Depreciation and Amortization
-------------------------- -----------------------------
1996 1995 1994 1996 1995 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Automotive aftermarket parts ..... $1,034 $1,737 $2,274 $2,368 $1,910 $1,799
Products for fund-raising programs 2,533 334 742 1,997 2,403 2,529
Other ............................ -- 7 379 101 262 207
------ ------ ------ ------ ------ ------
Total continuing operations .... $3,567 $2,078 $3,395 $4,466 $4,575 $4,535
====== ====== ====== ====== ====== ======
<CAPTION>

Tangible Assets Intangible Assets
---------------------------- -------------------------
1996 1995 1994 1996 1995 1994
------- ------- ------- ----- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Automotive aftermarket parts ........ $27,643 $29,072 $26,222 $--- $15,890 $17,362
Products for fund-raising programs .. 19,411 25,985 33,886 -- 38,375 40,538
Other ............................... 15,890 19,315 7,330 -- -- --
------- ------- ------- ----- ------- -------
Total continuing operations ....... $62,944 $74,372 $67,438 $--- $54,265 $57,900
======= ======= ======= ===== ======= =======

<CAPTION>
Identifiable Assets
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Automotive aftermarket parts ........ $ 27,643 $ 44,962 $ 43,584
Products for fund-raising programs .. 19,411 64,360 74,424
Other(3) ............................ 15,890 19,315 7,330
-------- -------- --------
Total continuing operations ....... $ 62,944 $128,637 $125,338
======== ======== ========
</TABLE>

(1) In 1996 the segment operating profit for the automotive aftermarket parts
and the products for fund-raising programs includes goodwill and other
intangibles impairment charges of $14,789 and $37,316, respectively, and
restructuring and other charges of $3,634 and $2,647, respectively. (See
"Restructuring and Other Fourth-Quarter Charges" and "Goodwill and Other
Intangibles Impairment Charge" footnotes.)

(2) Unallocated corporate expense relates principally to salaries and related
employee-benefit costs and space requirements. In 1996 unallocated
corporate expense also includes $3,616 restructuring and other charges.
(See "Restructuring and Other Fourth-Quarter Charges" footnote.)

(3) Other identifiable assets consist primarily of cash, cash equivalents and
federal income tax receivable.

Tyler Corporation Form 10-K Page 41

<PAGE> 43

SCHEDULE II - ALLOWANCE FOR LOSSES

Years ended December 31, 1995 and 1996

Year ended December 31, 1995:

<TABLE>
<S> <C>
Balance at beginning of year ............. $ 657,000
Additions charged to costs and expenses .. 359,000
Deductions for accounts charged off ...... (620,000)
-----------

Balance at end of year ................ $ 396,000
===========

Year ended December 31, 1996:

Balance at beginning of year ............. $ 396,000
Additions charged to costs and expenses .. 1,116,000
Deductions for accounts charged off ...... (148,000)
-----------

Balance at end of year ................ $ 1,364,000
===========
</TABLE>

Tyler Corporation Page 42

<PAGE> 44

INDEX TO EXHIBITS
-----------------

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.1 Uncommitted 4,000,000 Documentary and Standby
Letter of Credit

10.20 Consulting Agreement between the Company and Joseph F.
McKinney dated October 7, 1996

21 Subsidiaries of Tyler

23 Consent of Ernst & Young L.L.P.

27 Financial Data Schedule

</TABLE>

<PAGE> 1

Exhibit 4.1

January 31, 1997

Tyler Corporation
3200 San Jacinto Tower
2121 San Jacinto Street
Dallas, Texas 75201

Re: Documentary and Standby Letter of Credit Line

Gentlemen:

NationsBank of Texas, N.A. ("NationsBank") is pleased to provide an uncommitted
$4,000,000 Documentary and Standby Letter of Credit Line to Tyler Corporation
("Tyler") and such of its subsidiaries as may have made or may make application
for a letter of credit hereunder (Tyler and each such subsidiary being herein
call a "Borrower") upon the following terms and conditions:

Uncommitted Line: An uncommitted $4,000,000 Documentary and
Standby Letter of Credit Line (the "Line")
which shall be on an "as available" basis.
NationsBank shall have no obligation to issue
any letter of credit under the Line.
NationsBank may, in its discretion, cause any
letter of credit issued under the Line to be
issued by any of its bank affiliates; provided,
however, that if NationsBank undertakes to
issue any such letter of credit through an
affiliate that is not acceptable to the
proposed beneficiary, NationsBank will use
reasonable efforts to cause such letter of
credit to be issued either by it or through an
affiliate acceptable to such proposed
beneficiary. The outstanding available amount
of the letters of credit issued under the Line
may not exceed $4,000,000. The letters of
credit described on Exhibit A hereto which have
been previously issued by NationsBank for the
account of a Borrower (the "Existing Letters of
Credit") shall be deemed to be letters of
credit issued under the Line and shall remain
outstanding to their stated expiration dates
(or, if earlier, the date on which they are
fully drawn) notwithstanding the uncommitted
nature of the Line. NationsBank shall have no
obligation to renew or extend any Existing
Letter of Credit.

Minimum Amount
of Letter of Credit: $5,000.

<PAGE> 2

Terms of Letters A Borrower may request a letter of credit under
of Credit: the Line not later than 2:00 p.m. two business
days before the business day such letter of
credit is requested to be issued. The letter
of credit commission (a) for each documentary
letter of credit (including each documentary
Existing Letter of Credit from and after the
date hereof) will be .25% per annum (minimum of
$250) and (b) for each standby letter of credit
(including each standby Existing Letter of
Credit from and after the date hereof) will be
.50% per annum (minimum of $250). Letter of
credit commissions shall be calculated on the
basis of actual days elapsed over a 360 day
year and shall be paid quarterly in advance.

Availability Period: Letters of credit may be requested from the
date of acceptance of this letter by Tyler to
the date either NationsBank or Tyler, in its
sole discretion, terminates the Line in
writing; provided that in no event may letters
of credit be requested after the first
anniversary of the date of this letter.

Letter of Credit The terms of a Borrower's reimbursement
Agreement: obligations in respect of each letter of credit
shall be evidenced by an Application and
Agreement for Commercial Letter of Credit or an
Application and Agreement for Standby Letter of
Credit, as applicable, (a "L/C Agreement") in
form and substance acceptable to NationsBank.
The terms of a Borrower's reimbursement
obligations in respect of each Existing Letter
of Credit shall be evidenced by the Application
and Agreement for Commercial Letter of Credit
or Application and Agreement for Standby Letter
of Credit (each of which shall also be a L/C
Agreement) previously executed and delivered by
such Borrower in connection therewith.

Collateral: The reimbursement obligations of a Borrower in
respect of each letter of credit, including the
Existing Letters of Credit, shall be secured by
cash collateral in an amount equal to the
amount available to be drawn under such letter
of credit pledged by Tyler and/or such Borrower
to NationsBank in a manner and pursuant to
documentation acceptable to NationsBank.

Conditions Precedent: Concurrently with the execution of this letter
and prior to the issuance of any additional
letter of credit under the Line, a Borrower
must deliver to NationsBank the following:

A L/C Agreement
Appropriate Cash Collateral Documentation
Appropriate Corporate Resolutions
Appropriate Incumbency and Specimen Signature
Certificates

Governing Law: Texas

<PAGE> 3

THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER DOCUMENTS AND INSTRUMENTS
EXECUTED AND DELIVERED PURSUANT HERETO, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS
BETWEEN THE PARTIES.

Very truly yours,

NATIONSBANK OF TEXAS, N.A.

By: /s/Dan Killian
Title: Vice President

Accepted and Agreed To:

TYLER CORPORATION

By: /s/Linda K. Hill
Title: Treasurer

<PAGE> 1

EXHIBIT 10.20

CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is made and entered into by and
between TYLER CORPORATION, a Delaware corporation, (the "Company"), and JOSEPH
F. MCKINNEY, an individual resident of Dallas, Texas ("Consultant"), effective
as of October 7, 1996.

1. Consulting Relationship Consultant agrees to serve as a consultant to
the Company, on the terms and conditions set forth in this Agreement. The
parties agree that Consultant will be an independent contractor, not an
employee.

2. Services. Consultant agrees during the term of service as a consultant
to devote such time and effort as shall be reasonably required of Consultant.
All services rendered by Consultant on behalf of the Company shall be performed
to the best of his ability and in furtherance of the welfare and objectives of
the Company.

3. Term. Consultant's term of service as a consultant to the Company
under this Agreement shall commence on October 7, 1996, and shall terminate on
October 6, 1997.

4. Compensation. For all services rendered by Consultant under this
Agreement, the Company shall pay Consultant, and Consultant agrees to accept as
full consideration for his services as a consultant $475,000. Consultant shall
bear all of Consultant's expenses incurred in the performance of this
agreement.

5. Confidentiality. During the term of this Agreement, Consultant will
have access to and become familiar with various trade secrets, including, but
not limited to, compilations of information, records, specifications, and other
non-public information (all of which are hereinafter referred to as "Trade
Secrets") which are owned by and are regularly used in the business of the
Company and its affiliates. Consultant acknowledges that such Trade Secrets
are valuable assets of the Company, the disclosure of which would cause loss of
profits and goodwill to the Company. Consultant shall not directly or
indirectly disclose any of the Trade Secrets or use any of them in any way,
either during the term of this Agreement or at any time thereafter, except as
required in the course of rendering services on behalf of the Company pursuant
to this Agreement. All files, records, documents, drawings, specifications,
information , data, and similar items relating to the business of the Company
and its affiliates, whether prepared by Consultant or otherwise coming into his
possession, shall remain the exclusive property of the Company and its
affiliates and shall not be used under any circumstances without the prior
written consent of the Company, and in any event shall be promptly delivered to
the Company upon the termination of Consultant's employment hereunder. For the
purpose of this Agreement, an "affiliate" of the Company shall be deemed to be
any natural person or entity that controls, is controlled by, or is under
common control with the Company.

6. Effect of Termination on Compensation. If this Agreement terminates
because of the death of Consultant, any amount that may be due to him hereunder
as of the date of his death shall be paid to his estate.

7. Compliance With Laws. Consultant represents and warrants to the
Company that, during the term of this Agreement, he shall not (i) take any
action the taking of which would result in, or (ii) fail to take any action if
such failure would result in, the violation by the

<PAGE> 2

Company of any statute, judicial ruling, regulation, rule, procedure, or other
binding legal provision of the United States or of any other jurisdiction.

8. Assignment. This Agreement is personal to the parties and may not be
assigned in any way by either.

9. Notices. All notices required or permitted to be given to either party
hereto shall be in writing and shall be deemed to have been duly given when
actually delivered or when mailed by registered or certified mail, postage
prepaid, return receipt requested, to such party at the appropriate one of the
following addresses:

If to the Company: Tyler Corporation
2121 San Jacinto Street
Suite 3200
Dallas, Texas 75201

If to Consultant: Joseph F. McKinney
4222 University Boulevard
Dallas, Texas 75205

Either party may change his address by giving notice of change of address to
the other party.

10. Company Contracts. Consultant shall have no right or authority at any
time to make any contract or binding promise of any nature on behalf of the
Company, whether oral or written, without the express written consent of the
Company.

11. Costs of Enforcement. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, court costs, and necessary
disbursements in addition to any other relief to which he or it may be
entitled.

12. Miscellaneous. Whether or not specifically required under the terms
of this Agreement, each party hereto shall execute and deliver such documents
and take such further action as shall be necessary in order for such party to
perform all of his or its obligations specified herein or reasonably implied
from the terms hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.

TYLER CORPORATION
By: /s/Richard W. Margerison
----------------------------------

CONSULTANT

/s/Joseph F. McKinney
----------------------------------
Joseph F. McKinney

<PAGE> 1
Exhibit 21

SIGNIFICANT SUBSIDIARIES

Place of
Name Incorporation
---- -------------

Tyler Corporation Delaware

Forest City Auto Parts Company Delaware

Institutional Financing Services, Inc. California

<PAGE> 1

Exhibit 23

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in (i) the Registration Statement
(Form S-3 No. 33-55602) of Tyler Corporation and the related Prospectus and
(ii) the Registration Statement (Form S-8 No. 33-34544) pertaining to the Tyler
Corporation Stock Option Plan of our report dated February 14, 1997, with
respect to the consolidated financial statements and schedule of Tyler
Corporation included in the Annual Report (Form 10-K) for the year ended
December 31, 1996.

ERNST & YOUNG LLP

Dallas, Texas
March 5, 1997

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 15,773
<SECURITIES> 0
<RECEIVABLES> 11,633
<ALLOWANCES> 1,364
<INVENTORY> 20,127
<CURRENT-ASSETS> 52,841
<PP&E> 14,502
<DEPRECIATION> 6,369
<TOTAL-ASSETS> 62,944
<CURRENT-LIABILITIES> 20,632
<BONDS> 0
0
0
<COMMON> 213
<OTHER-SE> 31,828
<TOTAL-LIABILITY-AND-EQUITY> 62,944
<SALES> 128,373
<TOTAL-REVENUES> 0
<CGS> 61,359
<TOTAL-COSTS> 61,359
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,116
<INTEREST-EXPENSE> 227
<INCOME-PRETAX> (64,337)
<INCOME-TAX> (4,307)
<INCOME-CONTINUING> (60,030)
<DISCONTINUED> (1,300)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (61,330)
<EPS-PRIMARY> (3.09)
<EPS-DILUTED> (3.09)

</TABLE>