2nd qtr, 2000 Financial Information

Item 1 Financial Information

Item 1 Financial Statements

THE FLAMEMASTER CORPORATION - CONDENSED BALANCE SHEETS

	March 31, 2000	September 30 1999
	(Unaudited)	(Note)
ASSETS:
Current Assets:
Cash and cash equivalents	$ 2,111,624	$ 1,913,201
Marketable securities (note C)	6,676,943	2,449,981
Accounts receivable, less allowance for of $5,000 and $5,000 respectively	585,846	496,776
Inventories	881,947	873,504
Prepaid Expenses and Other Assets	22,932	36,298
Deferred income taxes (Note K)	33,813	33,485
Other investments	46,287	46,287
Total Current assets:	10,359,392	5,849,532
Machinery & Improvements, net of accumulated depreciation	63,063	21,311
License agreement, net of accumulated amortization	79,227	87,567
Total Assets	$10,501.682	$ 5,958,410
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable	$ 167,524	$ 85,880
Accured Expenses	12,792	8,203
Income tax payable	36,044	-----
Deferred tax liability	14,695	14,695
Deferred credits	22,262	22,262
Total current liabilities:	253,317	131,040
Long-term liabilities:
Notes payable	388,427	376,656
Total Liabilities	641,744	507,696

SHAREHOLDERS' EQUITY
Common Stock, per value, $.01 per share, authorized 6,000,000 shares; issued and outstanding 1,609,865 shares at 3/31/00 and 1,626,935 at 9/30/99	16,098	16,269
Additional paid-in Capital	3,694,668	3,733,846
Retained earnings	1,965,543	1,562,002
Allowance for Marketable Securities	4,183,629	138,597
TOTAL STOCKHOLDERS' EQUITY	$ 9,859,938	$ 5,450,714
TOTAL LIABILITY AND EQUITY	$ 10,501,682	$ 5,958,410
Note: Balance sheet as of September 30, 1999 has been derived from the audited balance sheet at that date. See notes to condensed financial statements.
THE FLAMEMASTER CORPORATION CONDENSED STATEMENTS OF INCOME (UNAUDITED) THREE MONTHS ENDED MARCH 31, 2000
	2000	1999
Net Sales	$ 1,033,424	$ 1,200,829
Royalties	--	1,973
Interest and Other Income	441,797	42,972
Total Revenue	1,475,221	1,245,774
Costs and expenses:
Cost of sales	521,888	520,669
Selling	69,409	62,655
General and administrative	155,902	159,820
Laboratory costs	71,991	63,939
Other expenses	22,544	13,187
Total costs and expenses:	841,734	820,270
Income before income taxes	633,487	425,504
Income taxes	226,358	178,142
Net income	407,129	247,362

Other comprehensive income
Net of income tax
Unrealized Holding Gains (Losses)	374,628	(120,401)
Comprehensive Income	781,757	126,961

Net income per share, basic	$.25	$.15
Net income per share, diluted	********	$.14
Weighted average shares outstanding:
Basic	1,612,131	1,638,237

Diluted	1,697,701	1,754,624
*****Diluted earnings per share is not presented, as effect of the assumed conversion of notes payabe is anti-dilutive.