|UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-QSB
|-------------------------------------------------------------------------------------

|[X] | QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------

| | For the quarterly period ended March 31, 2004
| | ---------------------------------------------

|[   ] | TRANSITION REPORT UNDER SECTION 12 OR 15(d) OF THE EXCHANGE ACT
|----- | ---------------------------------------------------------------

| | For the transition period from ________ to ________
| | ---------------------------------------------------

|Commission File Number
000-05391



METWOOD, INC.(Exact
name of registrant as specified in its charter)
|-------------------------------------------------------------------------------------------------------

|NEVADA(State or other jurisdictionof
incorporation) |  | 83-0210365(IRS Employer
Identification No.)
|--------------------------------------------------- |  | -------------------------------------------

|819 Naff Road, Boones
Mill, VA 24065(Address of principal executive offices)


(540) 334-4294 (Issuers telephone number)


Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 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


Number of shares of common stock
outstanding as of May 14, 2004: 11,920,049


Transitional Small Business
Disclosure Format (Check one) Yes [   ] No  [X]
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|METWOOD, INC. AND
SUBSIDIARYTABLE OF CONTENTS - FORM 10-QSB
|-----------------------------------------------------------

|                                                                | 
|--------------------------------------------------------------- | 
|PART I - FINANCIAL INFORMATION                                  | 
|                                                                | 
|Item 1  Financial Statements                                    | 
|                                                                | 
|Consolidated Balance Sheet As of March 31, 2004                 | 
|                                                                | 
|Consolidated Statements of Income for the Three and Nine Months | 
|Ended March 31, 2004 and 2003                                   | 
|                                                                | 
|Consolidated Statements of Cash Flows for the Nine Months       | 
|Ended March 31, 2004 and 2003                                   | 
|                                                                | 
|Notes to Consolidated Financial Statements                      | 
|                                                                | 
|Item 2  Managements Discussion and Analysis                    | 
|                                                                | 
|Item 3  Controls and Procedures                                 | 
|                                                                | 
|PART II - OTHER INFORMATION                                     | 
|                                                                | 
|Item 6  Exhibits and Reports on Form 8-K                        | 
|                                                                | 
|Signatures                                                      | 
|                                                                | 
|Index to Exhibits                                               | 
|                                                                | 
|Exhibits                                                        | 

|ii
|--

|METWOOD, INC. AND
SUBSIDIARYCONSOLIDATED BALANCE SHEETAS OF MARCH 31, 2004
(UNAUDITED)
|--------------------------------------------------------------------------------------

|                                            | 
|------------------------------------------- | 
|ASSETS                                      | 
|                                            | 
|Current Assets                              | 
|Cash                                        | 
|Accounts receivable                         | 
|Inventory                                   | 
|Prepaid expenses                            | 
|                                            | 
|Total current assets                        | 
|                                            | 
|Property and Equipment                      | 
|Furniture, fixtures and equipment           | 
|Computer hardware, software and peripherals | 
|Machinery and shop equipment                | 
|Vehicles                                    | 
|Buildings and improvements                  | 
|Land and land improvements                  | 
|                                            | 
|                                            | 
|Less accumulated depreciation               | 
|                                            | 
|Net property and equipment                  | 
|                                            | 
|Goodwill                                    | 
|                                            | 
|TOTAL ASSETS                                | 
|                                            | 

|See accompanying notes
to consolidated financial statements.


1
|----------------------------------------------------------------

|METWOOD, INC. AND
SUBSIDIARYCONSOLIDATED BALANCE SHEETAS OF MARCH 31, 2004
(UNAUDITED)
|--------------------------------------------------------------------------------------

|                                                        | 
|------------------------------------------------------- | 
|LIABILITIES AND STOCKHOLDERS EQUITY                    | 
|                                                        | 
|Current Liabilities                                     | 
|Accounts payable and accrued expenses                   | 
|Bank line of credit                                     | 
|                                                        | 
|Total current liabilities                               | 
|Long-term Liabilities                                   | 
|Note payable                                            | 
|Deferred income taxes                                   | 
|                                                        | 
|Total long-term liabilities                             | 
|                                                        | 
|Total liabilities                                       | 
|                                                        | 
|Stockholders Equity                                    | 
|Common stock, $.001 par, 100,000,000 shares authorized; | 
|11,920,049 shares issued and outstanding                | 
|Common stock not yet issued ($.001 par, 4,950 shares)   | 
|Additional paid-in capital                              | 
|Retained earnings                                       | 
|                                                        | 
|Total stockholders' equity                              | 
|                                                        | 
|TOTAL LIABILITIES                                       | 
|AND STOCKHOLDERS' EQUITY                                | 
|                                                        | 

|See accompanying notes
to consolidated financial statements.


2
|----------------------------------------------------------------

|METWOOD, INC. AND
SUBSIDIARYCONSOLIDATED STATEMENTS OF INCOMEFOR THE
THREE AND NINE MONTHS ENDED MARCH 31, 2004 AND 2003(UNAUDITED)
|-----------------------------------------------------------------------------------------------------------------------------------

|                                     | Three Months EndedMarch 31, | Nine Months EndedMarch 31,
|------------------------------------ | --------------------------- | --------------------------
|
|REVENUES                             |                             |                           
|Construction sales                   |                             | $      662,509            
|Engineering sales                    |                             | 77,969                    
|                                     |                             |                           
|Gross sales                          |                             | 740,478                   
|                                     |                             |                           
|Cost of construction sales           |                             | 451,561                   
|Cost of engineering sales            |                             | 50,185                    
|                                     |                             |                           
|Gross cost of sales                  |                             | 501,746                   
|                                     |                             |                           
|                                     |                             |                           
|Gross profit                         |                             | 238,732                   
|                                     |                             |                           
|ADMINISTRATIVE EXPENSES              |                            
|Advertising                          |                             | 34,205                    
|Depreciation                         |                             | 12,805                    
|Insurance                            |                             | 15,121                    
|Payroll and property taxes           |                             | 8,418                     
|Professional fees                    |                             | 12,635                    
|Research and development             |                             | 6,923                     
|Salaries and wages                   |                             | 96,662                    
|Telephone                            |                             | 6,297                     
|Vehicle                              |                             | 6,460                     
|Other                                |                             | 44,369                    
|                                     |                             |                           
|Total administrative expenses        |                             | 243,895                   
|                                     |                             |                           
|                                     |                             |                           
|Operating income (loss)              |                             | (5,163                    
|                                     |                             |                           
|Other income (expense)               |                             | (5,687                    
|                                     |                             |                           
|                                     |                             |                           
|Income (loss) before income taxes    |                             | (10,850                   
|                                     |                             |                           
|Income taxes                         |                             | (13,590                   
|                                     |                             |                           
|                                     |                             |                           
|Net income (loss)                    |                             | $          2,740          
|                                     |                             |                           
|                                     |                             |                           
|Basic and diluted earnings per share |                             | **                        
|                                     |                             |                           
|Weighted average number of shares    |                             | 11,941,203                

|**Less than $.01


See accompanying notes
to consolidated financial statements.


3
|-----------------------------------------------------------------------------------

|METWOOD, INC. AND
SUBSIDIARYCONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 2004 AND 2003(UNAUDITED)
|------------------------------------------------------------------------------------------------------------------------------

|                                                               | 2004 | 2003      
|-------------------------------------------------------------- | ---- | ----------
|CASH FLOWS FROM OPERATING ACTIVITIES                           |      |           
|Net income (loss)                                              |      | $ 134,794 
|Adjustments to reconcile net income to net cash from operating |     
|activities                                                     |     
|Depreciation                                                   |      | 71,332    
|Common stock issued for services                               |      | 3,500     
|Changes in operating assets and liabilities                    |     
|Decrease in accounts receivable                                |      | 4,240     
|Increase in inventory                                          |      | (151,778  
|Increase in prepaid expenses                                   |      | (49,666   
|Increase in accounts payable and accrued expenses              |      | 137,679   
|Increase (decrease) in current income taxes payable            |      | 37,500    
|Increase in deferred income taxes                              |      | 24,829    
|                                                               |      |           
|Net cash from (used for) operating activities                  |      | 212,430   
|                                                               |      |           
|CASH FLOWS USED FOR INVESTING ACTIVITIES                       |     
|Net expenditures for fixed assets                              |      | (146,382  
|Common stock issued for equipment                              |      |          
|                                                               |      |           
|Net cash used for investing activities                         |      | (146,382  
|                                                               |      |           
|CASH FLOWS FROM FINANCING ACTIVITIES                           |     
|Common stock retired                                           |      | (25,000   
|Net borrowings from related party                              |      | 6,200     
|Net borrowings (repayment) of note payable                     |      | 2,802     
|Net borrowings under line-of-credit agreement                  |      | 1,200     
|                                                               |      |           
|Net cash from (used for) financing activities                  |      | (14,798   
|                                                               |      |           
|                                                               |      |           
|Net increase (decrease) in cash                                |      | 51,250    
|                                                               |      |           
|Cash, beginning of the year                                    |      | 9,482     
|                                                               |      |           
|Cash, end of the period                                        |      | $   60,732
|                                                               |      |           

|See accompanying notes
to consolidated financial statements.


4
|----------------------------------------------------------------

|METWOOD, INC. AND
SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSMARCH 31,
2004(UNAUDITED)


NOTE 1  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES


Business
Activity Metwood, Inc. (Metwood) was organized under the laws of the
Commonwealth of Virginia on April 7, 1993. On June 30, 2000, Metwood entered into an
Agreement and Plan of Reorganization in which the majority of its outstanding common
stock was acquired by a publicly held Nevada shell corporation. The acquisition was a
tax-free exchange for federal and state income tax purposes and was accounted for as a
reverse merger in accordance with Accounting Principles Board (APB) Opinion
No. 16. Upon acquisition, the name of the shell corporation was changed to Metwood, Inc.,
and Metwood, Inc., the Virginia corporation, became a wholly owned subsidiary of Metwood,
Inc., the Nevada corporation. The publicly traded shell corporation had not had a
material operating history for several years prior to the merger.


Effective
January 1, 2002, Metwood acquired certain assets of Providence Engineering, PC (Providence),
a professional engineering firm with customers in the same proximity as Metwood. The
total purchase price of $350,000 was paid with $60,000 in cash and with 290,000 shares of
the Companys common stock to the two Providence shareholders. These shares were
valued at the closing active quoted market price of the stock at the effective date of
the purchase, which was $1.00 per share. One of the shareholders of Providence was also
an officer and existing shareholder of Metwood prior to the acquisition. On January 15,
2004, Metwood purchased from that shareholder and retired 137,500 of the originally
issued 290,000 shares for $25,000. The initial purchase transaction was accounted for
under the purchase method of accounting. The purchase price was allocated as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                     | 
| | ------------------- | 
|
| | Accounts receivable | 
| | Fixed assets        | 
| | Goodwill            | 
| |                     | 
| | Total               | 
| |                     | 

|The
consolidated company (the Company) provides construction-related products and
engineering services to residential customers and contractors, commercial contractors,
developers and retail enterprises, primarily in southwestern Virginia.


Basis
of Presentation The financial statements include the accounts of Metwood, Inc. (a
Nevada corporation) and its wholly owned subsidiary, Metwood Inc. (a Virginia
corporation) prepared in accordance with accounting principles generally accepted in the
United States of America and pursuant to the rules and regulations of the Securities and
Exchange Commission. All significant intercompany balances and transactions have been
eliminated.


5
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
the opinion of management, the unaudited condensed consolidated financial statements
contain all the adjustments necessary in order to make the financial statements not
misleading. The results for the period ended March 31, 2004 are not necessarily
indicative of the results to be expected for the entire fiscal year ending June 30, 2004.


Fair
Value of Financial Instruments For certain of the Companys financial
instruments, none of which are held for trading, including cash, accounts receivable,
accounts payable and accrued expenses, and the bank lines of credit, the carrying amounts
approximate fair value due to their short maturities.


Managements
Use of Estimates The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures of contingent assets and liabilities at the date of
consolidated financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.


Accounts
Receivable The Company grants credit in the form of unsecured accounts receivable
to its customers based on an evaluation of their financial condition. The Company
performs ongoing credit evaluations of its customers. The estimate of the allowance for
doubtful accounts, which is charged off to bad debt expense, is based on managements
assessment of current economic conditions and historical collection experience with each
customer. At March 31, 2004, the allowance for doubtful accounts was $0. Specific
customer receivables are considered past due when they are outstanding beyond their
contractual terms and are charged off to the allowance for doubtful accounts when
determined uncollectible. For both the three and nine months ended March 31, 2004 and
2003, the bad debt expense was $0.


Inventory Inventory, consisting of metal and wood raw materials, is located on the Companys
premises and is stated at the lower of cost or market using the first-in, first-out
method.


Property
and equipment Property and equipment are recorded at cost and include expenditures
for improvements when they substantially increase the productive lives of existing
assets. Maintenance and repair costs are expensed to operations as incurred. Depreciation
is computed using the straight-line method over the assets estimated useful lives,
which range from three to forty years.


When
a fixed asset is disposed of, its cost and related accumulated depreciation are removed
from the accounts. The difference between undepreciated cost and the proceeds from
disposition is recorded as a gain or loss.


Patents The Company has been assigned several key product patents developed by certain
Company officers. No value has been recorded in the Companys financial statements
because the fair value of the patents was not determinable within reasonable limits at
the date of assignment.


6
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Goodwill In June 2001 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill
and Other Intangible Assets. This statement requires that goodwill and intangible
assets deemed to have an indefinite life not be amortized. Instead, such assets are to be
tested for impairment annually or immediately if conditions indicate that such an
impairment could exist. The Company adopted the provisions of SFAS 142 beginning July 1,
2002 and completed the transitional impairment test of goodwill as of July 1, 2002 and
again as of June 30, 2003 using discounted cash flow estimates and found no goodwill
impairment.


Revenue
Recognition Revenue is recognized when goods are shipped and earned or when
services are performed, provided collection of the resulting receivable is probable. If
any material contingencies are present, revenue recognition is delayed until all material
contingencies are eliminated. Further, no revenue is recognized unless collection of the
applicable consideration is probable.


Income
Taxes Income taxes are accounted for in accordance with SFAS No. 109, Accounting
for Income Taxes. A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and for net operating loss carryforwards,
where applicable. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or the entire
deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of enactment.


Research
and Development The Company performs research and development on its metal/wood
products, new product lines, and new patents. Costs, if any, are expensed as they are
incurred. For the three months ended March 31, 2004 and 2003, the expenses relating to
research and development were $6,923 and $7,500, respectively. For the nine months ended
March 31, 2004 and 2003, research and development expenses were $22,826 and $22,482,
respectively.


Earnings
Per Common ShareBasic earnings per share amounts are based on the weighted average
shares of common stock outstanding. If applicable, diluted earnings per share would
assume the conversion, exercise or issuance of all potential common stock instruments
such as options, warrants and convertible securities, unless the effect is to reduce a
loss or increase earnings per share. This presentation has been adopted for the quarters
presented. There were no adjustments required to net income for the years presented in
the computation of diluted earnings per share.


Reclassifications Certain items in the financial statements for the three and nine months ended
March 31, 2003 have been reclassified to conform to the March 31, 2004 financial
statement presentation.


Recent
Accounting Pronouncements In April 2003, the FASB issued SFAS No. 149 Amendment
of Statement 133 on Derivative Instruments and Hedging Activities. This statement
amends and clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities. The effective
date for implementation of this statement is for contracts entered into or modified after
June 30, 2003. The adoption of this statement has had no impact on the Companys
consolidated financial condition or results of operations.


7
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This statement
establishes standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It requires that an
issuer classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). The remaining provisions of this statement are consistent
with the Boards proposal to revise the definition of liabilities to encompass
certain obligations that a reporting entity can or must settle by issuing its own equity
shares, depending on the nature of the relationship established between the holder and
the issuer. This statement is effective for financial instruments entered into or
modified after May 31, 2003, and is effective at the beginning of the first interim
period beginning after June 15, 2003. The adoption of this statement has had no material
impact on the Companys consolidated financial condition or results of operations.


NOTE 2  EARNINGS
PER SHARE


Net
income and earnings per share for the three and nine months ended March 31, 2004 and 2003
are as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                           | For the Three Months EndedMarch 31, | For the Nine Months EndedMarch 31, | 
|------------------------------------------ | ----------------------------------- | ---------------------------------- | 
|
|Net income (loss)                          |                                     | $         2,740                    | 
|Income per share - basic and fully diluted |                                     | **                                 | 
|Weighted average number of shares          |                                     | 11,941,203                         | 

|**Less than $.01


NOTE 3 
SUPPLEMENTAL CASH FLOW INFORMATION


Supplemental
disclosures of cash flow information for the tnine months ended March 31, 2004 and 2003
are summarized as follows:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                           | For the Nine Months EndedMarch 31,
|-------------------------- | ----------------------------------
|
|Cash paid for income taxes |                                   
|Cash paid for interest     |                                   

|For
the nine months ended March 31, 2004, the Company, in a non-cash transaction, transferred
land to a related party (further discussed in Note 4) with a book and fair market value
of $89,000.


NOTE 4 
RELATED-PARTY TRANSACTIONS


From
time to time, the Company contracts with a construction company related through common
ownership which provides capital improvements and maintenance work on the Companys
buildings and grounds. For the three and nine months ended March 31, 2004, the related
party billed $160,555 for its services. No
services were billed to the Company for the three and nine months ended March
          31, 2003. The Company also entered into certain agreements with the related
          party in which it transferred ownership of two vehicles to the Company in
          exchange for the Companys note. The net amount payable to the related
          party was $6,200 at March 31, 2004 and $0 at March 31, 2003.


8
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|For
the three and nine months ended March 31, 2004, the Company had sales of $60,096 and
$72,265, respectively, to its shareholder and CEO, Robert Callahan. As of March 31, 2004,
the related receivable was $0.


The
Company transferred land at its book and fair market value of $89,000 in partial payment
of the construction companys $160,555 bill. Additionally, because the construction
company is owned by Mr. Callahan, the Companys receivable from Mr. Callahan was
settled by offsetting the balance owed by him at March 31, 2004 against the Companys
payable to the related construction company.


NOTE 5  BANK CREDIT
LINE


The
Company has available a $600,000 revolving line of credit with a local bank. Interest is
payable monthly on the outstanding balance at the prime lending rate, which was 4.0% as
of March 31, 2004. The note is secured by accounts receivable, equipment, general
intangibles, inventory, and furniture and fixtures. The note is personally guaranteed by
the Companys CEO. The balance outstanding as of March 31, 2004 was $528,200.


NOTE 6  SEGMENT
INFORMATION


The
Company operates in two principal business segments: (1) construction-related products
and (2) engineering services. Performance of each segment is evaluated based on profit or
loss from operations before income taxes. These reportable segments are strategic
business units that offer different products and services. Summarized revenue and expense
information by segment for the three and nine months ended March 31, 2004 and 2003, as
excerpted from internal management reports, is as follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             | For the Three Months EndedMarch 31, | For the Nine Months EndedMarch 31,
|---------------------------- | ----------------------------------- | ----------------------------------
|
|Construction:                |                                     |                                   
|Sales                        |                                     |                                   
|Cost of sales                |                                     |                                   
|Corporate and other expenses |                                     |                                   
|                             |                                     |                                   
|Segment income (loss)        |                                     |                                   
|                             |                                     |                                   
|Engineering:                 |                                     |                                   
|Sales                        |                                     |                                   
|Cost of sales                |                                     |                                   
|Corporate and other expenses |                                     |                                   
|                             |                                     |                                   
|Segment income (loss)        |                                     |                                   

|9
|-

|ITEM 2 
MANAGEMENTS DISCUSSION AND ANALYSIS


With
the exception of historical facts stated herein, the matters discussed in this report are
forward-lookingstatements that involve risks and uncertainties that could
cause actual results to differ materially from projected results. Such forward-looking statements
include, but are not necessarily limited to, statements regarding anticipated levels of
future revenues and earnings from operations of the Company. Readers of this report are
cautioned not to put undue reliance on forward-looking statements, which are
by their nature, uncertain as reliable indicators of future performance.


Description of Business


Background


As
discussed in detail in Note 1, the Company was incorporated under the laws of the
Commonwealth of Virginia on April 7, 1993 and, on June 30, 2000, entered into a reverse
merger in which it became the wholly owned subsidiary of a public Nevada shell
corporation, renamed Metwood, Inc. Effective January 1, 2002, Metwood acquired certain
assets of Providence Engineering, PC in a transaction accounted for under the purchase
method of accounting.


Principal
Products/Services and Markets


Metwood


Residential
builders are aware of the superiority of steel framing vs. wood framing, insofar as steel
framing is lighter; stronger; termite, pest, rot and fire resistant; and dimensionally
more stable in withstanding induced loads. Although use of steel framing in residential
construction has generally increased each year since 1980, many residential builders have
been hesitant to utilize steel due to the need to retrain framers and subcontractors who
are accustomed to a stick-built construction method where components are laid
out and assembled with nails and screws. The Companys founders, Robert Callahan and
Ronald Shiflett, saw the need to combine the strength and durability of steel with the
convenience and familiarity of wood and wood fasteners.


Metwoods primary products and
services are:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · Girders and headers·
Floor joists· Floor joist reinforcers· Roof and floor trusses | · Garage, deck and porch concrete pour-over systems 
· Garage and post-and-beam buildings 
· Engineering, design and custom building services
| | ------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------

|Metwood
manufactures light-gage steel construction materials, usually combined with wood or wood
fasteners, for use in residential and commercial applications in place of more
conventional wood products, which are inferior in terms of strength and durability. The
steel and steel/wood products allow structures to be built with increased load strength
and structural integrity and fewer support beams or support configurations, thereby
allowing for structural designs that are not possible with wood-only products.


10
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Providence


Providence
is extensively involved in ongoing product research and development for Metwood.
Additionally, Providence offers its customers civil engineering capabilities which
include rezoning and special use submissions; erosion and sediment control and
storm-water management design; residential, commercial, and religious facility site
development design; and utility design, including water, sewer and onsite treatment
systems. Providences staff is familiar with construction practices and has been
actively involved in construction administration and inspection on multiple projects.


Providence
also performs a variety of structural design and analysis work, successfully providing
solutions for many projects, including retaining walls, residential framing, commercial
building framing, light-gage steel fabrication drawings, metal building retrofits and
additions, mezzanines, and seismic anchors and restraints.


Providence
has designed numerous foundations for a variety of structures. Its foundation design
expertise includes metal building foundations, traditional building construction
foundations, atypical foundations for residential structures, tower foundations, and sign
foundations for a variety of uses and applications.


Providence
has also designed and drafted full building plans for several applications. When
subcontracting with local professional firms, Providence has the ability to provide basic
architectural, mechanical, electrical, and detailed civil and structural design services
for these facilities.


Providence
has reviewed designs by manufacturers for a variety of structures and structural
components, including retaining walls, radio towers, tower foundations, sign foundations,
timber trusses, light-gage steel trusses, and light-gage steel beams. This service
enables clients to take generic designs and have them certified and approved for
construction in the desired locality.


Distribution Methods of
Products and Services


The
Companys sales are primarily retail, directly to contractors and do-it-yourself
homeowners in Virginia and North Carolina. Approximately 20% of the Companys sales
are wholesale to lumberyards, home improvement stores, hardware stores, and plumbing and
electrical suppliers in Virginia and North Carolina. Metwood relies primarily on its own
sales force to generate sales; additionally, however, the Company has distributors in
Virginia, New York, Oklahoma, Arizona and Colorado and also utilizes the salespeople of
wholesale yards stocking the Companys products as an additional sales force. The
Company is in discussions with national engineered I-joist manufacturers who are
interested in marketing the Companys products and expects to announce affiliations
with these companies in the near future. Metwood intends to continue expanding the
wholesale marketing of its unique products to retailers and to license the Companys
technology and products to increase its distribution outside of Virginia, North Carolina
and the South.


11
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Status of Publicly
Announced New Products or Services


The
Company has acquired four new patents through assignment from Robert Callahan and Ronald
Shiflett, the patent holders. All four patents reflect various modifications to the
Companys Joist Reinforcing Bracket which will make it even easier for tradesmen to
insert utility conduits through wood joists.


Seasonality of Market


The
Companys sales are subject to seasonal impacts, as its products are used in
residential and commercial construction projects which tend to be at peak levels in
Virginia and North Carolina between the months of March and October. Accordingly, the
Companys sales are greater in its fourth and first fiscal quarters. The Company
builds an inventory of its products throughout the winter and spring to support its sales
season.


Competition


Nationally,
there are over one hundred manufacturers of the types of products produced by the
Company. However, the majority of these manufacturers are using wood-only products or
products without metal reinforcement. Metwood has identified only one other manufacturer
in the United States that manufactures a wood-metal floor truss similar to that of the
Company. However, Metwood has often found that its products are the only ones that will
work within many customers design specs.


Sources and Availability of Raw
Materials and the Names of Principal Suppliers


All
of the raw materials used by the Company are readily available on the market from
numerous suppliers. The light-gage metal used by the Company is supplied primarily by
Dietrich Industries, Marino-Ware, and Consolidated Systems, Inc. The Companys main
sources of lumber are Lowes, 84 Lumber Company and Smith Mountain Building Supply.
Gerdau Amersteel, Descosteel and Adelphia Metals provide the majority of the Companys
rebar. Because of the number of suppliers available to the Company, its decisions in
purchasing materials are dictated primarily by price and secondarily by availability. The
Company does not anticipate a lack of supply to affect its production; however, a
shortage might cause the Company to pass on higher materials prices to its buyers.


Dependence on One or a
Few Major Customers


Presently
the Company does not have any one customer whose loss would have a substantial impact on
the Companys operations.


Patents


The Companys eight U.S. Patents
are:


U.S. Patent
No. 5,519,977, Joist Reinforcing Bracket, a bracket that           reinforces
wooden joists with a hole for the passage of a utility conduit. The           Company
refers to this as its Floor Joist Patch Kit.


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|U.S.
Patent No. 5,625,997, Composite Beam, a composite beam that includes
          an elongated metal shell and a pierceable insert for receiving nails, screws or
          other penetrating fasteners.


U.S.
Patent No. 5,832,691, Composite Beam, a composite beam that includes
          an elongated metal shell and a pierceable insert for receiving nails, screws or
          other penetrating fasteners. This is a continuation-in-part of U.S. Patent No.
          5,625,997.


U.S.
Patent No. 5,921,053, Internally Reinforced Girder with Pierceable
          Nonmetal Components, a girder that includes a pair of c-shaped members
          secured together so as to form a hollow box, which permits the girder to be
          secured within a building structure with conventional fasteners such as nails,
          screws and staples.


U.S.
Patent Nos. D472,791S; D472,792S; D472,793S; and D477,210S, all modifications of
          Metwoods Joist Reinforcing Bracket, which will be used for repairs of
wood           I-joists.



Each
of these patents was originally issued to the inventors and Company founders, Robert
Callahan and Ronald Shiflett, who licensed these patents to the Company.


Need for Government
Approval of Principal Products


The
Companys products must either be sold with an engineers seal or applicable
building code approval. Once that approval is obtained, the products can be used in all
fifty states. The Companys Floor Joist Reinforcer received Bureau Officials Code
Association (BOCA) approval in April 2001. Currently, the Companys
chief engineer has obtained professional licensure in several states which permit
products not building code approved to be sold and used with his seal. The Company
expects his licensure in a growing number of states to greatly assist in the uniform
acceptability of its products as it expands to new markets.


Time Spent During the
Last Two Fiscal Years on Research and Development Activities


Approximately
fifteen percent of the Companys time and resources have been spent during the last
two fiscal years researching and developing its metal/wood products, new product lines,
and new patents.


Costs and Effects of
Compliance with Environmental Laws


The
Company does not incur any costs to comply with environmental laws. It is an
environmentally friendly business in that its products are fabricated from recycled
steel.


Number of Total Employees
and Number of Full-Time Employees


The
Company had twenty-one employees at March 31, 2004, twenty of whom were full time.


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|Results of Operations


Net Income


The
Company had net income of $2,740 and $134,794, respectively, for the three and nine
months ended March 31, 2004, versus net income of $21,729 and net losses of $49,905,
respectively, for the three and nine months ended March 31, 2003. This represents a
decrease in net income of $18,989 for the three months ended March 31, 2004, but an
increase of $184,699 for the nine months ended March 31, 2004 compared to the same
periods in 2003. The decrease in net income for the quarter ended March 31, 2004 over
2003 resulted from higher administrative costs for those three months in 2004 compared to
2003 not offset by a comparable increase in gross profit. For the nine months ended March
31, 2004, the significant increase in net income over 2003 was attributable to increased
sales volume, yet fairly constant administrative expenses.


Revenues


Gross
sales were $740,478 for the three months ended March 31, 2004 compared to $384,034 for
the same period in 2003, an increase of $356,444, or 93%. Gross sales for the nine months
ended March 31, 2004 were $2,111,454 versus $1,334,451 for the same prior-year period, an
increase of $777,003, or 58%. These increases resulted from a combination of greater
sales volume and an average increase of 20% in selling prices.


The
Companys significant growth in 2004 sales over 2003 resulted from several factors,
all of which will continue to have a positive impact on sales into the future. Awareness
of the Companys products has increased as a result of aggressive marketing
campaigns, and its patented, innovative products are becoming known throughout the
country. The Companys customer base continues to grow as a result. Additionally,
new products using the technology of the Companys four newly issued patents began
production at the beginning of the current fiscal year and contributed to the growth in
revenues for the three and nine months ending March 31, 2004.


Although
gross sales nearly doubled for the quarter ended March 31, 2004 compared to the same
period in 2003, materials costs tripled in 2004 compared to 2003. Skyrocketing metal
costs accounted for most of the increase in those costs. Additionally, payroll expenses
increased approximately 30% in 2004 over 2003. For the nine months ended March 31, 2004,
materials costs doubled over 2003, again primarily due to higher metal prices. Materials
costs as a percentage of sales was 47% in 2004, but only 40% for the nine months ended
March 31, 2003. Because of the higher cost of materials, the Companys gross profit
only increased 2% for the three months ended March 31, 2004 and 51% for the nine months
then ended compared to the same periods in 2003, even though gross sales increased 93%
and 58% for the three and nine months ended March 31, 2004 over 2003.


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|Expenses


Total
administrative expenses were $243,895 for the quarter ended March 31, 2004, versus
$207,387 for the quarter ended March 31, 2003, an increase of $36,508 (18%). Areas of
particular increase for the three months ended March 31, 2004 over 2003 were advertising
(100%), depreciation (45%), insurance (52%), and professional fees (30%). Salaries and
wages decreased 9% only because the Companys President and CEO deferred his salary
for a period in order to sustain cash flows for the buildup in inventory required to meet
sales demands.


For
the nine months ended March 31, 2004, administrative expenses were $671,468 compared to
$622,083 for the nine months ended March 31, 2003, an increase of $49,385 (8%). The
largest percentage increases in 2004 over 2003 occurred primarily in advertising (95%),
reflecting the Companys increased participation in trade shows around the country,
and vehicle expense (48%), which mirrors the rise is gas prices. The only category which
decreased for the nine months ended March 31, 2004 over the same period in 2003 was
professional fees (52%).


Liquidity and Capital
Reserves


On
March 31, 2004, the Company had cash of $60,732 and working capital of $142,724. Net cash
provided by operating activities was $212,430 for the nine months ended March 31, 2004
compared to net cash used for operating activities of $94,951 for the nine months ended
March 31, 2003. The greater provision of cash in the current year resulted primarily from
a higher sales volume and an increase in income taxes payable that did not require a
current cash outlay.


Net
cash used in investing activities was $146,382 for the nine months ended March 31, 2004
compared to net cash used of $255,647 during the same period in the prior year. Cash
flows used in investing activities for the current period were for building and land
improvements ($169,628), shop equipment ($27,580), vehicles ($22,313) and office
equipment, computers, software and engineering equipment ($18,175) offset by disposals of
assets with a net book value of $91,314.


Cash
used for financing activities totaled $14,798 for the nine months ended March 31, 2004 as
compared to $294,003 provided for the nine months ended March 31, 2003. During the period
ended March 31, 2004, the Company purchased from a former Providence shareholder and
retired 137,500 shares of stock for $25,000. Cash was also borrowed from the bank line of
credit in both the current period and the prior year for operating capital and for the
purchase of plant and equipment.




ITEM 3  CONTROLS
AND PROCEDURES


The
Companys management has reviewed the systems of internal controls and disclosures
within the specified time frame of ninety days. Management believes that the systems in
place allow for proper controls and disclosures of financial reporting information. There
have been no changes in these controls since our last evaluation date.


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|PART II  OTHER
INFORMATION




ITEM 6  EXHIBITS
AND REPORTS ON FORM 8-K


(a)
Exhibits


See
index to exhibits.


(b) Reports on Form 8-K


There
were no reports on Form 8-K filed during the quarter ended March 31, 2004.



SIGNATURES


In
accordance with the requirements 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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: May 14, 2004 |  | /s/ Robert M. CallahanRobert M. CallahanChief Executive Officer
|------------------ |  | ---------------------------------------------------------------

| |  | /s/ Annette G. MarianoAnnette G. Mariano
Chief Financial Officer
| |  | ----------------------------------------------------------------

|16
|--

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

|NUMBER |  | DESCRIPTION
OF EXHIBIT
|------ |  | ----------------------

|3(i)* |  | Articles
of Incorporation
|----- |  | -------------------------

|3(ii)* |  | By-Laws
|------ |  | -------

|31.1 |  | Certification
of Chief Executive Officer Pursuant to Securities Exchange Act Rules 13a-14        and
15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14        and
15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|32 |  | Certifications
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
|-- |  | -----------------------------------------------------------------------------------------

|*Incorporated by reference on Form
8-K, filed February 16, 2000



17
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