UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   Form 10-KSB
                            Annual Report Pursuant to
                           Section 13 or 15(d) of the
                       Securities and Exchange Act of 1934

                    For the fiscal year ended Commission File
                           November 30, 2000 #09-9599

                                    HIA, INC.
        (Exact name of small business issuer as specified in its charter)

                  New York                    16-1028783
       (State or other jurisdiction of    (Federal employer
       Incorporation or Organization)      identification number)

                               4275 Forest Street
                             Denver, Colorado 80216
                     (Address of principal executive office)

                                 (303) 394-6040
                (Issuer's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:            NONE

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

                          Common Stock, Par Value $.01
                                (Title of Class)

The check  mark below  indicates  whether  the Issuer (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  twelve months (or reports),  and (2) has been subject
to such filing requirements for the past ninety days.

                  YES      X                         NO

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-B 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-KSB or any  amendment to
this Form 10-KSB. (X).

The Issuer had net sales of  $32,919,433  for the fiscal year ended November 30,
2000.
The aggregate market value of voting stock held by  non-affiliates of the Issuer
as of January 10, 2001 was  $732,793  based on market value of stock as compiled
by financialweb.com.

The number of shares of the only class of Common Stock of the Issuer outstanding
as of January 10, 2001 was 10,227,275.

Transitional Small Business Disclosure Format (check one): Yes _____ No __X___





<PAGE>





                                     PART I

Item 1. Business

(a) General Development of Business

        HIA, Inc. (the "Company" or "HIA") was incorporated in 1974. The Company
        is a holding  company  with all of its  business  conducted  through its
        wholly owned subsidiary,  CPS Distributors,  Inc. ("CPS").  Through CPS,
        the  Company  distributes  turf  irrigation  equipment  and  commercial,
        industrial  and  residential  well pumps and  equipment  on a  wholesale
        basis.  The  principal  executive  offices of the Company are located at
        4275 Forest Street, Denver, Colorado 80216, telephone (303) 394-6040.

(b) Narrative Description of Business

        General - The Company  acquired  CPS, a one  hundred-year-old  company
        based in Denver, Colorado, in February 1984. CPS serves customers in the
        Rocky Mountain  region in five states  consisting of Colorado,  Wyoming,
        New  Mexico,  Kansas and  Nebraska.  CPS carries a variety of brand name
        products,   including  pumps  and  water  systems,   water  conditioning
        equipment,  pump and well  accessories,  pipe  valves and  fittings  and
        sprinkler  system  equipment.  The Company's  net sales for  industrial,
        commercial  and  residential   pumps  and  turf   irrigation   equipment
        represented  approximately 10% and 90%,  respectively,  of net sales for
        2000 and approximately 12% and 88%, respectively, of net sales in 1999.

        During 1999,  the  Company's  directors  investigated  the best possible
        means to expand the business  operations.  In the past,  the Company has
        grown  the  business  by  establishing  branch  operations  as  start-up
        enterprises.  This strategy has been very  successful  over the past ten
        years with each branch  operating  at a profit after its first full year
        of operations.  In order to expand operations further,  the choices were
        to continue to set up branches  (start-ups)  or acquire a company in the
        same  or  similar   type  of   business.   Since  the   Company  had  an
        internally-calculated  market share for its turf and irrigation products
        of over 38% at the end of 1999,  it was  determined  by the directors of
        the Company that present market territories were adequately  represented
        by its existing  branches and further  expansion of the present  product
        lines would probably be best served by  acquisition  into a local market
        in which the Company was not  adequately  represented.  (The majority of
        the  branches  were  located  in  metropolitan  Denver).  The  directors
        identified a short list of

<PAGE>




        these local market  territories and consulted its financial  advisors in
        determining  the size of business  the Company  could  purchase  without
        adversely affecting its liquidity.

        On May 25th, 1999, the Company through its wholly-owned subsidiary, CPS,
        acquired all of the issued and outstanding  common stock of Western Pipe
        Supply, Inc. ("WPS"), a privately-held corporation established under the
        laws of Colorado,  for a purchase price of $2,746,739  including $84,244
        in acquisition  costs. Of the total purchase price,  $1,485,385 was paid
        in cash  directly  to the  seller  and  $1,177,110  was in the form of a
        subordinated  promissory note taken by the seller.  The cash paid to the
        seller was  financed in part by  additional  borrowings  on the existing
        line of credit with Norwest  Bank of Denver and a  $1,000,000  five-year
        note payable also with Norwest Bank of Denver.

        Recent  Events  - On  October  31,  2000,  the  Company  sent to all its
        shareholders  a tender  offer for up to  3,000,000  shares of its common
        stock for a purchase price of $.25 per share.  The total amount expected
        to be disbursed,  as a result of the tender offer was $850,000 ($750,000
        for the common stock and $100,000 for the associated  legal,  accounting
        and transfer  agent fees).  The total amount was to be financed by Wells
        Fargo Bank, Denver by increasing the existing line of credit by $500,000
        (to an  aggregate  amount of  $5,000,000)  and a term note not to exceed
        $500,000 at an interest rate of 1/8th  percent less than prime  interest
        rate; the note to be amortized no more than five years.

        The  purposes  of the  offer  was  to (1)  offer  the  shareholders  the
        opportunity to sell some or all of their shares on a basis that was more
        favorable  than could  probably  be  achieved  in the open  market  (the
        closing  price as of  October  19th,  2000 was $.13 per  share)  and (2)
        extend an offer which represented a good investment  opportunity for the
        Company and its existing shareholders.

        The Company filed the necessary  Schedule TO and related  documents with
        the SEC on October 27,  2000.  A revision  was filed on November 6, 2000
        and the final  amendment was filed on January 4, 2001. The offer expired
        on December 15, 2000. 732,956 shares of common stock were tendered for a
        total purchase  prices of $183,239.  A total of $57,000 was incurred for
        legal, accounting, transfer agent and other related costs.

        Marketing - CPS's line of products has changed in response to the supply
        and demand  forces of the  marketplace.  The  management of CPS believes
        that  its  two  divisions  (i.e.,  turf  and  irrigation  equipment  and
        industrial,  commercial and residential  pumps and equipment) reduce the
        cyclicality  of sales and earnings  that would  otherwise be affected by
        product line shifts caused by economic and demographic changes; however,
        the Company is subject to the ups and downs of the overall  construction
        activity  in  the  Rocky   Mountain   region.   The  Company   purchases
        approximately  19%  and  10% of its  products  from  two  manufacturers.
        However,  the products  purchased can be obtained  from other  competing
        manufacturers but not as a consolidated product group.

        CPS's sales and service  engineers  provide  technical support to assist
        customers in developing a system specifically tailored to the customers'
        needs.
<PAGE>

        Customer Base and Seasonality - CPS's customers  include  contractors,
        dealers  and  municipalities  with the  majority of sales  derived  from
        contractors.  The Company believes neither its aggregate sales nor those
        of any of its business units are concentrated in or materially dependent
        upon any single customer or small group of customers.

        Quotation activity is especially intense in the winter and spring months
        (December to April) when contracts are reviewed and  eventually  awarded
        for spring or summer construction.  Since over 90% of CPS's business are
        composed of turf and  irrigation  products,  its sales are  concentrated
        from March to October and are therefore seasonal in nature.

        Competition  (Y) The Company  operates in a highly  competitive  market.
        During at least the past ten years,  manufacturers  have  abandoned  the
        exclusive  relationships  with  their  distributors.  As a  result,  the
        Company is competing with other wholesalers of the same products.

        In the past several years, most manufacturers have also abandoned prices
        based on volume  buying  and have gone to a  pricing  system  based on a
        percentage of purchases over the previous years'  business.  This change
        allows smaller wholesalers to buy at the same price levels as the larger
        wholesalers.  Therefore,  a  medium-sized  wholesaler,  such as CPS,  no
        longer has a price  advantage to cover the higher  operating  costs of a
        larger operation.

        CPS  offers   standard   discounts  on  merchandise  to  its  customers.
        Additional  discounts  are given  based on  quantity  of order or annual
        volume of purchases,  depending on product and  competitive  conditions.
        The  Company  has  monthly  specials  on  certain of its  inventory  and
        provides discounts for orders placed at trade shows. The majority of the
        programs  offered are based on  discounts  received  from the  Company's
        suppliers.  Therefore,  there is no material effect on operating results
        from providing these discounts.

        Each  salesperson  receives a draw  against  commission.  Commission  is
        determined as a percentage of the gross profit  generated  from sales to
        the accounts in the sales representative's  territory.  Sales quotas are
        established  for each area.  Sales  personnel  are eligible to receive a
        bonus for meeting or exceeding their assigned quota.

        CPS emphasizes customer service, convenient availability of products and
        knowledge  of the  industry.  However,  pricing,  currently an important
        factor,  is expected to continue in importance  because the  competition
        can provide the same products and warranties.

        CPS has  seven  major  competitors  in its  market  area  for  turf  and
        irrigation  equipment and six major  competitors  in its market area for
        industrial,  commercial  and  residential  pumps  and  equipment.  It is
        estimated  by  management  that CPS has over 18% of the total  market in
        Colorado  for  residential  pumps  and over 36% of the  total  market in
        Colorado for turf and irrigation  equipment.  Some of CPS's  competitors
        have financial resources greater than CPS.
<PAGE>
        CPS increased its market share considerably in 1999 with the purchase of
        WPS which had net sales of over $7  million in 2000 (the first full year
        the Company had ownership of WPS). The acquisition  increased the number
        of branch outlets the Company owns and operates from nine branch outlets
        to eleven branch outlets.


        Management  believes CPS has an established  reputation as a distributor
        of quality  product lines such as Rainbird,  Hunter,  Lasco and Jacuzzi.
        CPS competes  primarily on service  and, to a lesser  extent,  on price,
        quality and reliability of products, technical services and availability
        of products.

        Employees - At November 30, 2000, the Company employed 110 persons, of
        which 29 were warehouse  employees and 81 were sales and  administrative
        employees. The Company considers its employee relations to be good. None
        of the Company's  employees is covered by union  contracts or collective
        bargaining agreements.

        The Company uses  computer  resources  for its order  entry,  inventory,
        payroll and accounting function.


Item 2. Properties

    The  Company's  leased  facilities  in Denver,  Colorado are comprised of an
    aggregate of 32,265 square feet of offices and  warehouse on 166,000  square
    feet of land.  This  building  serves as the main  warehouse  of CPS and the
    executive offices of the Company.  The lease has a ten-year term,  beginning
    March 1995,  with  monthly  rent at $9,500 for the first five  years,  after
    which the monthly  rent may be adjusted  by the  percentage  increase in the
    Consumer  Price  Index.  The Company  has an option to purchase  the related
    property at the end of the initial  ten-year  term at a price  approximating
    the market value at that time,  subject to certain  conditions.  The Company
    also  has two  five-year  options  to  extend  the  lease  term,  one at the
    beginning  of the eleventh  year and one at the  beginning of the 16th year.
    The  Company  is to pay for all  taxes,  insurance  and  maintenance  on the
    property.

    In addition, the Company owns property in Casper, Wyoming, which consists of
    6,159 square feet of  office/warehouse  space on 33,600 square feet of land.
    The Company leased a new warehouse  facility in Casper,  Wyoming on February
    18, 2000 with 14,544 square feet of office/warehouse  space situated on 2.65
    acres of land. The Company  presently has the owned facility for sale with a
    local  realtor.  No  reasonable  offers  have been made or  accepted  by the
    Company as of January 19, 2001.

    The Company  also leases  9,954  square  feet of  office/warehouse  space on
    21,781 square feet of land in Colorado Springs,  Colorado; 4,100 square feet
    of office and warehouse space on 14,000 square feet of land in Fort Collins,
    Colorado;  10,000  square feet of office and  warehouse  space in  Thornton,
    Colorado;  10,000  square feet of office and  warehouse  space in Littleton,
    Colorado;   3,400  square  feet  of  warehouse/office  space  in  Englewood,

<PAGE>

    Colorado;  9,120  square feet of office and  warehouse  space in  Cheyenne,
    Wyoming and 6,400 square feet of office and warehouse  space in Broomfield,
    Colorado.

    On May 25, 1999, CPS acquired WPS in Longmont,  Colorado and contracted with
    the  former  owner to lease  its  existing  two  facilities.  One  warehouse
    facility is located in Boulder,  Colorado consisting of 8,000 square feet of
    office and warehouse space situated on 1.8 acres of land. The main warehouse
    facility is located in Longmont,  Colorado  consisting of 14,340 square feet
    of warehouse and office space situated on 3.9 acres of land. Both facilities
    utilize the available land for outside  storage and customer  pickup of pipe
    and  accessories.  Both leases are for a five-year  period with an option to
    renew the lease for another five years.

    The Company  believes its leased  facilities  are adequate to meet its needs
    for the next several years and anticipates  that it would  encounter  little
    difficulty  in  locating  alternative  facilities  should  its  requirements
    change.


Item 3. Legal Proceedings

    As part of its  ordinary  course of  business,  the  Company is  involved in
    certain  litigious  activities  from time to time. No  litigation  exists at
    November 30, 2000 or to the date of this report that management or its legal
    counsel  believe will have a material  impact on the  financial  position or
    operations of the Company.

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

    There were no matters submitted to a shareholder vote during the fiscal year
ended November 30, 2000.


<PAGE>


                                     PART II

Item 5.  Market for the  Company's  Common  Stock and Related  Security  Holders
Matters

    The  principal  market on which HIA's  common  stock is traded is the Denver
    over-the-counter  market.  Although at least one market  maker  continues to
    quote  prices  for  HIA's  common  stock,  the  Company  is not aware of any
    established public trading market for HIA's common stock since June 6, 1986.

    The following  table sets forth the high and low closing bid  quotations for
    the common stock for the fiscal years ended  November 30, 2000 and 1999. The
    quotations  reflect  inter-dealer  prices,  without  adjustment  for  retail
    mark-ups, mark-downs or commissions and may not necessarily represent actual
    transactions.
<TABLE>

          Fiscal year ended November 30, 2000                                        Bid Quotations
          ------------------------------------------------------------- -----------------------------------------
                                                                               High                  Low
                                                                        -------------------- --------------------
         <S>                                                               <C>                  <C>
          First Quarter                                                             .30                  .25
          Second Quarter                                                            .40                  .156
          Third Quarter                                                             .21                  .156
          Fourth Quarter                                                            .21                  .13

          Fiscal year ended November 30, 1999                                        Bid Quotations
          ------------------------------------------------------------- -----------------------------------------
                                                                               High                  Low
                                                                        -------------------- --------------------
          First Quarter                                                             .21                  .12
          Second Quarter                                                            .21                  .12
          Third Quarter                                                             .18                  .12
          Fourth Quarter                                                            .25                  .13



</TABLE>

    The  approximate  number of  holders of record of HIA's  common  stock as of
    November 30, 2000 was 1,850.  After the tender offer, the approximate number
    of shareholders after January 9, 2001 was 1,680.

    The Company has never  declared any  dividends  with respect to HIA's common
    stock.  The Company  has not in the past and is  currently  restricted  from
    paying cash dividends under its existing line-of-credit agreement.




<PAGE>


Forward Looking Statements

    Statements made in this Form 10-KSB that are historical or current facts are
    "forward-looking  statements" made pursuant to the safe harbor provisions of
    Section 27A of the Securities Act of 1933 ("The ACT") and Section 21E of the
    Securities Exchange Act of 1934. These statements often can be identified by
    the use of terms such as "may," "will," "expect," "believes,"  "anticipate,"
    "estimate,"  "approximate,"  or  "continue,"  or the negative  thereof.  The
    Company intends that such forward-looking  statements be subject to the safe
    harbors for such  statements.  The Company wishes to caution  readers not to
    place undue  reliance on any such  forward-looking  statements,  which speak
    only  as  of  the  date  made.  Any  forward-looking   statements  represent
    management's  best  judgements as to what may occur in the future.  However,
    forward-looking statements are subject to risks, uncertainties and important
    factors  beyond the control of the Company that could cause  actual  results
    and events to differ  materially  from  historical  results of operations to
    revise any  forward-looking  statements to reflect  events or  circumstances
    after the date of such statement or to reflect the occurrence of anticipated
    or unanticipated events.


Item 6. Management's Discussion and Analysis or Plan of Operation

Liquidity and Capital Resources

    For the year ended  November 30, 2000, the Company's net income was $378,187
    compared  to  $487,946  for the year ended  November  30,  1999.  Net income
    decreased by $109,759 as compared to the prior year primarily as a result of
    the  increase  in  interest  expense  of  $259,002  partially  offset by the
    increase in operating income of $146,583. During the year ended November 30,
    2000, the Company used $527,232 in cash from  operations  compared to $6,845
    in cash used in operations during the year ended November 30, 1999

    The  increase  in  inventories  of  $904,739 in 2000 as compared to 1999 was
    attributable to the change in the method of stocking inventory at the branch
    operations  of  the  Company.   In  early  2000,   management  decided  that
    operational  efficiencies  would be realized and sales would be increased if
    the branch  operations  stock a larger  share of the  stocking  inventory as
    compared to the hub-and-spoke method of inventory  distribution  utilized in
    the past,  whereby  larger  quantities of inventory were kept at the central
    location and less at the branch level.  Management  contemplated the overall
    increase in inventory at the time the decision was made,  and expected  that
    after a full year of  operations,  inventory  levels would begin to decrease
    (assuming  the same  volume  of sales) as the  central  distribution  center
    adjusted  its  inventory  levels to  accommodate  the  change  in  inventory
    procedures.

    Deferred income taxes  decreased by $118,355  primarily as the result of the
    utilization  of net operating  losses  acquired  from the WPS purchase.  The
    decrease in both accounts payable and checks written against future deposits
    of  $281,668  as  compared  to  the  prior  year  was  primarily  due to the
    precipitous drop in inventory stocking volume (over $1.4 million) during the
    last 60 days of the  fiscal  year  2000 in  order  to  reach  the  projected

<PAGE>

    inventory  levels to  coincide  with the  company's  cash flow  budget.  All
    payables are normally paid within a 30-day period from date of invoice.

     The decrease in other current  liabilities  which includes  accrued payroll
    and bonuses,  income taxes payable and other current liabilities of $240,782
    was primarily  attributable to the overall decreases in accrued income taxes
    at fiscal  year end 2000 due to the fact that the  Company's  estimated  tax
    payments  made during the year  slightly  exceeded the liability at November
    30, 2000.

    Investing and financing activities were directly effected by the purchase of
    WPS on May 25, 1999. The Company  financed the business  acquisition  with a
    $1,177,110  subordinated  promissory  note with the seller and $1,378,765 in
    cash.

    Net borrowings on the  line-of-credit  increased by $1,598,998  primarily to
    finance the increases in  inventories  for fiscal year 2000. The Company had
    no proceeds from long-term debt in fiscal 2000 as compared to the prior year
    when the Company  entered  into a  $1,000,000  five-year  term note  payable
    during May 1999 to  partially  fund its  business  acquisition.  Payments on
    long-term debt and capital lease  obligations  increased by $212,025  during
    fiscal 2000 due to the additional loans executed as a result of the purchase
    of WPS in May 1999,  and the  purchase of $215,951 and $162,280 in equipment
    during fiscal 2000 and 1999 through capital lease obligations.

    During fiscal 2000,  the Company  issued 600,000 shares of treasury stock at
    $0.1859 per share to its officers for cash proceeds of $111,510  pursuant to
    stock  options  granted to the officers in 1998.  During  fiscal  1999,  the
    Company  issued  485,287  shares  from  treasury  at $.20  per  share to its
    officers  for cash  proceeds of $97,350.  During  fiscal  1999,  the Company
    acquired from non-affiliate  stockholders 119,239 shares of its common stock
    at $.15 to $.20 per share for a total cost of $22,848.

    On October 31, 2000 the Company sent to all its  shareholders a tender offer
    for up to 3,000,000  shares of its common stock for a purchase price of $.25
    per share.  The total  amount  expected to be  disbursed  as a result of the
    tender  offer was $850,000  ($750,000  for the common stock and $100,000 for
    the associated legal,  accounting and transfer agent fees). The total amount
    was to be financed by Wells Fargo Bank,  Denver by  increasing  the existing
    line of credit by $500,000 (to an aggregate amount of $5,000,000) and a term
    note not to exceed  $500,000 at an interest  rate of 1/8th percent less than
    prime interest rate; the note to be amortized no more than five years.

    The purposes of the offer was to (1) offer the  shareholders the opportunity
    to sell some or all of their shares on a basis that was more  favorable than
    could  probably be achieved  in the open  market  (the  closing  price as of
    October  19th,  2000 was $.13  per  share)  and (2)  extend  an offer  which
    represented a good  investment  opportunity for the Company and its existing
    shareholders.
<PAGE>

    The Company filed the necessary  Schedule TO and related  documents with the
    SEC on October 27,  2000.  A revision  was filed on November 6, 2000 and the
    final  amendment was filed on January 4, 2001. The offer expired on December
    15,  2000.  A total of 732,956  shares of common  stock were  tendered for a
    total  purchase  prices of  $183,239.  A total of $57,000 was  incurred  for
    legal, accounting, transfer agent and other related costs.

    Given the amount of stock that was  ultimately  acquired  through the tender
    offer,  the Company did not increase its line of credit,  nor did it enter a
    term note as was expected.

    The following is a two-year summary of working capital and current ratios:

                                          2000                         1999
                                        ----------                   ----------
        Working Capital                 $3,705,745                   $3,333,106
        Current Ratios                   1.88 to 1                    1.96 to 1

    The decrease in the current ratio was primarily due to the increased  levels
    of  inventories  carried at November  30,  2000 as compared to November  30,
    1999.

    As of November 30,  2000,  the Company and its  subsidiary  had an available
    line-of-credit  totaling $4,500,000 of which $2,118,500 was unused. The line
    of credit  expires on May 24, 2001  however,  management  believes that they
    will have the opportunity to renew upon expiration.

    Management  believes  that  the  present  working  capital  as  well  as its
    available line-of-credit is adequate to conduct its present operations.  The
    Company  does not  have  any  additional  purchase  commitments  nor does it
    anticipate any additional material capital expenditure for fiscal 2001.


Results of Operations

Comparison Fiscal 2000 vs. Fiscal 1999

     Net  sales  were up  $6,779,585  primarily  as a result  of a four  percent
     increase in the sale price of merchandise,  the additional  sales generated
     by WPS for the first six  months of 2000 of  $3,158,834,  and the effect of
     the general  increase in business  activity in the Rocky  Mountain  Region.
     Cost of sales  increased by  $5,180,129  which  increase  was  generally in
     proportion  to the  increase  in sales  with  the  exception  of a  general
     decrease  in gross  margins  due to  competitive  bidding in the  Company's
     general market  territories.  Gross profit percent decreased by 1.3% (28.5%
     in 2000 versus 29.8% in 1999) primarily due to competitive pricing.
<PAGE>

     Selling,  general  and  administrative  expenses  increased  by  $1,452,873
     primarily due to the increase in payroll of $842,599 of which  $312,370 was
     attributable  to the WPS  payroll  for the  first 6  months  of  2000.  The
     additional increase in payroll of $530,229 was due primarily to increase in
     pay to  compensate  essential  employees  in a tight  labor  market and the
     addition of salaries due to adding five key  administrative  positions  and
     ten non-administrative  positions. It is anticipated that these tight labor
     market  conditions  will  continue for the next two to three years or until
     such  time as the  economic  growth  begins  to  flatten  out in the  Rocky
     Mountain region. In addition,  rent increased by $217,586  primarily due to
     general  cost-of-living  increases  and the  addition  of the new branch in
     Englewood,  Colorado of  $113,695.  Data  processing  expense  increased by
     $102,458  primarily  as a  result  of  the  expenses  associated  with  the
     changeover  in  computer  systems  during the last  quarter of 1999 and the
     first quarter of 2000.

     Interest expense increased $259,002, primarily due to the first six month's
     interest in the amount of $80,266 for the two loans used to finance the WPS
     purchase in May of 1999 and the increase in interest due to the increase in
     the weighted  average  line-of-credit  loan of $1,118,798  contributing  an
     additional $153,034 in interest as a result (computed at 9.5% per annum).

     The  weighted-average  interest rates on bank borrowings were 9.5% and 7.5%
     for  2000 and  1999,  respectively.  The  weighted-average  bank  borrowing
     balance,  outstanding  of  $2,729,688  for  2000  increased  by  $1,610,890
     compared to 1999.

     Net income for fiscal 2000  decreased by $109,759  primarily as a result of
     the additional  interest  expense of $259,002  partially  offset by the net
     increase in the additional operating income of $146,583.

Income Taxes

   At November  30,  2000,  the Company has  recorded a current net deferred tax
   asset totaling  $137,349 and has recorded a noncurrent net deferred tax asset
   totaling  $67,728.  Based upon the Company's recent history of taxable income
   and its projections  for future  earnings,  management  believes that is more
   likely than not that sufficient  taxable income will be generated in the near
   term to utilize  the net  deferred  tax assets.  See Note 5 to the  Company's
   Consolidated Financial Statements.

    The  Company's  effective  tax rate for the year ended  November 30, 2000 of
    approximately  47% differs from the Company's  blended Federal and State tax
    rate of 37% due primarily to the  non-deductible  nature of the amortization
    of  goodwill  for tax  purposes  and  other  non-deductible  items  which is
    consistent with prior years.


Recent Accounting Pronouncements

    The  Financial  Accounting  Standards  Board  ("FASB") has  recently  issued
    Statement  on  Financial  Accounting  Standards  No.  133,  "Accounting  for
    Derivative  Instruments and Hedging  Activities"  ("SFAS No. 133"). SFAS No.
    133,  amended by SFAS No. 138,  established  standards for  recognizing  all
    instruments  including  those for hedging as either assets or liabilities in
    the statement of financial  position and measuring those instruments at fair
    value.  This  Statement  is for all  fiscal  quarters  of all  fiscal  years
    beginning  after June 15,  2000.  Management  believes  the adoption of this
    statement  will not have a  material  impact on the  Company's  consolidated
    statements.
<PAGE>

    In March 2000,  the FASB issued  Emerging  Issues Task Force Issue No. 00-2,
    Accounting for Web Development Costs" ("EITF 00-2"),  which was for all such
    costs incurred for fiscal quarters beginning after June 30, 2000. This Issue
    establishes accounting and reporting standards for costs incurred to develop
    a web site based on the nature of each cost.  Currently,  as the Company has
    no web site  development  costs,  the adoption of EITF 00-2 had no impact on
    the Company's financial position or results of operations. To the extent the
    Company begins to enter into such  transactions  in the future,  the Company
    will adopt the Issue's  disclosure  requirements in the quarterly and annual
    financial statements for the ending November 30, 2001.

    In March 2000,  the FASB  issued FASB  Interpretation  44,  "Accounting  for
    Certain  Transactions  Involving Stock  Compensation"  ("FIN 44"),  which is
    effective   July  1,  2000,   except  that  certain   conclusions   in  this
    Interpretation  which cover events that occur after either December 15, 1998
    or January 12, 2000 are recognized on a prospective basis from July 1, 2000.
    This  Interpretation  clarifies the application of APB 25 for certain issues
    related to stock  issued to  employees.  The Company  believes  its existing
    stock based compensation  policies and procedures are in compliance with FIN
    44 and  therefore,  the  adoption  of FIN 44 had no  material  impact on the
    Company's financial condition, results of operations or cash flows.

    In December 1999, the Securities and Exchange  Commission (the "SEC") issued
    Staff  Accounting  Bulletin No. 101 ("SAB  101"),  "Revenue  Recognition  in
    Financial   Statements"  which  provides  additional  guidance  in  applying
    generally accepted accounting principles to revenue recognition in financial
    statements.  SAB 101 is  effective  as of the fourth  quarter of fiscal year
    ending November 30, 2001.  Management believes the adoption of this bulletin
    will have no material impact on the Company's financial statements.

Item 7. Financial Statements

    The response to this item is submitted as a separate section of this report.


Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

    There have been no  disagreements  between the  Company and its  independent
    accountants on any matter of accounting principles or practices or financial
    statement disclosure since the Company's inception.


<PAGE>


                                    PART III

Item 9. Directors and Executive Officers of the Company

    (a) Identification of Directors

            The list  presented  below  sets  forth  the  names  and ages of all
            directors of the Company  indicating  all positions and offices with
            the  Company  held by each  such  person  and his term of  office as
            director and the period during which he has served as such.
<TABLE>

          Name                     Age    Positions                               Director Since
       <S>                         <C>   <C>                                      <C>
          Carl J. Bentley           67    Chairman of the Board                       1994
                                          and Director

          Alan C. Bergold           52    President, Treasurer                        1981
                                          and Director

          Donald L. Champlin        49    Executive Vice President,                   1994
                                          Secretary and Director
</TABLE>

    (b) Identification of Executive Officers

        The list presented  below sets forth the names and ages of all executive
        officers of the Company  indicating  all  positions  and offices held by
        such person and the period during which he has served as such.


<PAGE>


<TABLE>

          Name                     Age    Positions                            Year  First Elected (1)
        <S>                        <C>   <C>                                    <C>

        Carl J. Bentley             67    Chairman of the Board                          1996
                                          and Director                                   1994

        Alan C. Bergold             52    President, Treasurer                           1996
                                          and Director                                   1981

        Donald L. Champlin          49    Executive Vice President,                      1996
                                          Secretary
                                          and Director                                   1994
</TABLE>

(1) All officers serve at the discretion of the Board of Directors.


(c) Business Experience

        The material  presented below sets forth a brief account of the business
        experience  during  at least  the  past  five  years  of each  director,
        executive officer and significant employee.

        Carl J. Bentley,  age 67, was appointed Chairman of the Board in October
        1996.  He joined the Company as General  Manager of CPS in July 1985. In
        November  1986,  he  became  President  and a  member  of the  Board  of
        Directors of CPS. He was appointed to the  Company's  Board of Directors
        in 1994.

        Alan C.  Bergold,  age 52, was  appointed  President in October 1996 and
        Executive  Vice President of the Company in July 1983. He served as Vice
        President  and Secretary of the Company from 1981 to 1983.  Mr.  Bergold
        has been a director of the Company since 1981.

        Donald L.  Champlin,  age 49, was appointed  Executive Vice President in
        October 1996.  He joined the Company as Pump Product  Manager in October
        1983.  In February  1989,  he became Vice  President of Marketing  and a
        member  of the  Board  of  Directors  of CPS.  He was  appointed  to the
        Company's Board of Directors in 1994.


(d) Involvement in Certain Legal Proceedings

        None.

(e) Promoters and Control Persons

        Not applicable.
<PAGE>

Item 10.    Executive Compensation

    Summary Compensation Table

        The  following  table  reflects cash and non-cash  compensation  paid or
        accrued by the Company  during the fiscal years ended November 30, 2000,
        1999 and 1998 to or for the account of the chief  executive  officer and
        each executive officer whose cash compensation  exceeded  $100,000,  and
        all executives of the Company as a group:

<TABLE>

                                         Annual Compensation                             Long-term Compensation
                                --------------------------------------- ---------------------------------------------------------

    Name and              Year                               Other      Restricted Securities
    Principal            Ended                              Annual         Stock   Underlying      LTIP          All Other
    Position            Nov. 30   Salary       Bonus     Compensation      Award   Options/SARs   Payouts       Compensation
<S>                  <C>        <C>        <C>           <C>           <C>        <C>           <C>             <C>
Carl J. Bentley       2000      $  169,900   $   81,407   $    -        $      -      200,000    $   -           $     -
   Chairman of the    1999         157,500       99,381        -               -      200,000        -             3,400
   Board              1998         143,620       70,890        -               -            -        -                 -


Alan C. Bergold       2000         167,400       81,407          -             -      200,000        -                 -
   President          1999         155,000       99,381          -             -      200,000        -             8,700
                      1998         141,120       70,890          -             -            -        -                 -


Donald L. Champlin    2000         167,400       81,407          -             -      200,000        -                 -
   Executive          1999         155,000       99,381          -             -      200,000        -             9,800
   Vice-President     1998         141,120       70,890          -             -            -        -                 -

</TABLE>

       The   preceding   table  does  not  include  any  amounts  for   non-cash
       compensation,  including  personal  benefits,  paid  to the  above-listed
       officers.  The Company believes that the value of such non-cash  benefits
       and  compensation  paid during the periods  presented  did not exceed the
       lessor of $50,000 or 10% of the cash compensation reported.

       The Company  compensated  the  directors  for payments  they made on life
       insurance  policies on the life of each of the director's  lives in order
       to  substantially  complete the purchase of the other  director's  common
       stock ownership in case of death of a director.  The details of the stock
       purchase  agreement  are  included  in the  employment  agreement  of the
       officers with the Company.  The agreement  basically  calls for the first
       right of refusal by the Company to purchase the deceased  directors stock
       for a price per share in relation to net book value.

        The Company has employment agreements as follows:

          Carl J. Bentley (1):  $185,000  annual  salary per year,  adjusted for
          cost of living plus five percent per annum base  increase;  plus seven
          and  one-half   percent  bonus  of  net  pretax  income  exclusive  of
          contributions  to the 401(k)  and  profit-sharing  plan;  term of five
          years beginning December 1, 1998.

          Alan C. Bergold (1):  $182,500  annual  salary per year,  adjusted for
          cost of living plus five percent per annum base  increase;  plus seven
          and  one-half   percent  bonus  of  net  pretax  income  exclusive  of
          contributions  to the 401(k)  and  profit-sharing  plan;  term of five
          years beginning December 1, 1998.
<PAGE>

          Donald L. Champlin (1): $182,500 annual salary per year,  adjusted for
          cost of living plus five percent per annum base  increase;  plus seven
          and  one-half   percent  bonus  of  net  pretax  income  exclusive  of
          contributions  to the 401(k)  and  profit-sharing  plan;  term of five
          years beginning December 1, 1998.

     (1) There is a provision for payment of one year's compensation as a result
         of the sale of all or substantially all of the Company's assets.

(b)   Option/SAR Grants in Last Fiscal Year

<TABLE>

                                  Number of
                                  Securities
                                  Underlying                                             Market
                                Options/SARs               % of Total                 Price on Date      Expiration
            Name                   Granted                 Options/SARs                 of Grant            Date
                                                            Granted to
                                                    Employees        Exercise
                                                    in Fiscal         or Base
                                                                      Price/
                                                       Year          ($ Share)
<S>                              <C>               <C>             <C>              <C>                 <C>
Carl J. Bentley                     200,000              33%           $   .25          $  .25            12/31/00
Alan C. Bergold                     200,000              33%               .25             .25            12/31/00
Donald L. Champlin                  200,000              33%               .25             .25            12/31/00
</TABLE>

(c)  Aggregated   Option/SAR   Exercises  and  Last  Fiscal  Year  and  Year-End
     Option/SAR Values

<TABLE>
                                                                        Number of              Value of
                                                                         Securities           Unexercised
                                                                        Underlying           In-the-Money
                                                                       Unexercised              Options/
                                      Shares                           Options/SARs             SARs at
                                    Acquired           Value             at FY-end               FY-end
                  Name             on Exercise        Realized        (all exercisable)      (all exercisable)
<S>                              <C>                <C>              <C>                   <C>
         Carl J. Bentley              200,000        $     37,170             200,000        $      50,000
         Alan C. Bergold              200,000              37,170             200,000               50,000
         Donald L. Champlin           200,000              37,170             200,000               50,000
</TABLE>

         Refer  to  Note  6  to  the  Consolidated   Financial   Statements  for
description of Stock Option Plan.


<PAGE>



Item 11.Security Ownership of Certain Beneficial Owners and Management

(a)      Security Ownership of Certain Beneficial Owners

         The following  table shows the beneficial  ownership of Common Stock by
         each  person  known by the  Company  to own  beneficially  more  than 5
         percent of the outstanding  shares of its Common Stock. The Company has
         no other class of voting securities.

                                                   Common Stock
<TABLE>

                    Name and Address of                   Amount and Nature of               Percent
                    Beneficial Owner                     Beneficial Ownership               of Class
          <S>                                           <C>                                 <C>
           Carl J. Bentley                                2,166,153 (1)                       19.7%
           4275 Forest Street
           Denver, CO  80216

           Alan C. Bergold                                2,652,646 (1)                       24.2%
           4275 Forest Street
           Denver, CO  80216

           Donald L. Champlin                             2,239,797 (1)                       20.4%
           4275 Forest Street
           Denver, CO  80216
</TABLE>

(1)  Includes 250,000 shares,  which may be acquired pursuant to the exercise of
     stock options exercisable on or before December 31, 2003.



<PAGE>


(b) Security Ownership of Management

        The following table shows the equity  securities  beneficially  owned by
        all  directors  of the Company  and all  directors  and  officers of the
        Company as a group.

(1) Directors
<TABLE>

                                                   Common Stock

                    Name and Address of                   Amount and Nature of               Percent
                    Beneficial Owner                     Beneficial Ownership               of Class
        <S>                                              <C>                               <C>

           Carl J. Bentley                                2,166,153 (1)                       19.7%
           4275 Forest Street
           Denver, CO  80216

           Alan C. Bergold                                2,652,646 (1)                       24.2%
           4275 Forest Street
           Denver, CO  80216

           Donald L. Champlin                             2,239,797 (1)                       20.4%
           4275 Forest Street
           Denver, CO  80216
</TABLE>

     (1) Includes 250,000 shares, which may be acquired pursuant to the exercise
     of stock options exercisable on or before December 31, 2003.

(2) Directors and Officers as a Group
                                     Amount and Nature of               Percent
   Title of Class                    Beneficial Ownership               of Class

   Common Stock                          7,058,596 (1)                    64.3%
   (par value $.01)

     (1) Includes 250,000 shares, which may be acquired pursuant to the exercise
     of stock options exercisable on or before December 31, 2003.

(c) Changes in Control

        None.



<PAGE>


Item 12.    Certain Relationships and Related Transactions

(a)   Transactions With Management and Others

        On January 1, 1999, the Board of Directors  granted an option to each of
        the officers of the Company to purchase 600,000 shares of treasury stock
        at $.18585 per share by December 31, 1999.  The options'  exercise price
        was equal to the common  stock's  market price at the date of grant.  On
        December 31, 1999, the officers and directors of the Company exercised a
        total of 600,000  shares of the  January 1, 1999  option at $.18585  per
        share.  During the year ended  November  30,  1999,  the Company  issued
        185,287  shares  from  treasury  to its  officers  for cash  proceeds of
        $30,504.

        On January 1, 2000, the Board of Directors  granted an option to each of
        the officers of the Company to purchase 600,000 shares of treasury stock
        at $.25 per share by December 31, 2000. The options'  exercise price was
        equal to the common  stock's  market price at the date of grant.  During
        the year ended November 30, 2000, the Company issued 600,000 shares from
        treasury to its officers for cash proceeds of $111,510.

        On January 1, 2001, the Board of Directors  granted an option to each of
        the officers of the Company to purchase 750,000 shares of treasury stock
        at $.20 per share by December 31, 2003. The options'  exercise price was
        greater than the common stock's market price at the date of grant.

(b) Certain Business Relationships
        None.

(c) Indebtedness of Management
        None.

(d) Transactions with Promoters
        Not applicable.




<PAGE>


                                                       PART IV

Item 13.    Exhibits and Reports on Form 8-K

Exhibits

(a)     The  documents  listed below have been filed as exhibits to this report.
        As used in this exhibit list, "Form 10" means the Company's Registration
        Statement on Form 10 filed with the Securities  and Exchange  Commission
        in March 1981.

          3.1  Articles of Incorporation  (incorporated by reference to Exhibits
               3.1 and 3.2 to Form 10).

          3.2  By-laws  (incorporated  by  reference  to Exhibit 3.3 to the Form
               10).

          21   Subsidiary of the Company.


(b) No reports on Form 8-K were filed by the Company  during the last quarter of
the period covered by this report.


<PAGE>


HIA, INC. AND SUBSIDIARY


                                   Exhibit 21

                            SUBSIDIARY OF THE COMPANY


Name                                                    State of Incorporation

CPS Distributors, Inc.                                                 Colorado



<PAGE>


                                   SIGNATURES

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

                                             HIA, INC.



                                            By:/s/ Alan C. Bergold
                                                   Alan C. Bergold, President,
                                                   Treasurer and Director

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

Signature                         Title                          Date


/s/ Carl J. Bentley               Chairman of the Board
Carl J. Bentley                   and Director


/s/ Alan C. Bergold               President,
Alan C. Bergold                   Treasurer and Director


/s/ Donald L. Champlin            Executive Vice
Donald L. Champlin                President, Secretary
                                  and Director






<PAGE>



                                                        HIA, Inc. and Subsidiary


                                      Index to Consolidated Financial Statements




 Report of Independent Certified Public Accountants                       F-2

    Financial Statements

       Consolidated Balance Sheets                                  F-3 - F-4

       Consolidated Statements of Income                                  F-5

       Consolidated Statements of Stockholders' Equity                    F-6

       Consolidated Statements of Cash Flows                        F-7 - F-8

       Summary of Accounting Policies                              F-9 - F-15

    Notes to Consolidated Financial Statements                    F-16 - F-30






<PAGE>




Report of Independent Certified Public Accountants



To the Stockholders and Board of Directors
HIA, Inc. and Subsidiary
Denver, Colorado

We have audited the  accompanying  consolidated  balance sheets of HIA, Inc. and
subsidiary  (the  "Company")  as of  November  30, 2000 and 1999 and the related
consolidated  statements of income,  stockholders' equity and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our 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 consolidated  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  financial  position of HIA,  Inc. and
subsidiary at November 30, 2000 and 1999 and the results of their operations and
their cash flows for the years then ended in conformity with generally  accepted
accounting principles.


                                                     /s/ BDO Seidman, LLP


Denver, Colorado
January 10, 2001
                                                                             F-2

<PAGE>



                                                        HIA, Inc. and Subsidiary


                                                     Consolidated Balance Sheets




<TABLE>

November 30,                                                                        2000                1999
---------------------------------------------------------------------------- ------------------- -------------------
<S>                                                                           <C>                 <C>
Assets (Note 2)

Current:
  Cash                                                                         $           -        $      21,117
  Accounts receivable, less allowance of $111,000
     for possible losses for each year                                              3,466,162           3,311,736
  Inventories                                                                       4,264,444           3,359,705
  Other current assets (Notes 5 and 10)                                               223,612             116,327
---------------------------------------------------------------------------- ------------------- -------------------

Total current assets                                                                7,954,218           6,808,885
---------------------------------------------------------------------------- ------------------- -------------------

Property and equipment:
  Land and building (Note 10)                                                               -             143,025
  Leasehold improvements                                                              285,593             196,408
  Equipment (Note 3)                                                                1,307,959           1,089,934
---------------------------------------------------------------------------- ------------------- -------------------
                                                                                    1,593,552           1,429,367
  Less accumulated depreciation and amortization                                    1,008,955             839,372
---------------------------------------------------------------------------- ------------------- -------------------

Net property and equipment                                                            584,597             589,995
---------------------------------------------------------------------------- ------------------- -------------------

Other assets:
  Goodwill, net of accumulated amortization of  $230,112 and $108,954
     (Note 1)                                                                       1,303,969           1,425,127
  Deferred tax asset (Note 5)                                                          67,728             222,771
  Non-compete agreement, net of accumulated amortization of $22,500 and
     $9,000 (Note 1)                                                                  127,500             141,000
  Other                                                                               143,292             116,894
---------------------------------------------------------------------------- ------------------- -------------------

Total other assets                                                                  1,642,489           1,905,792
---------------------------------------------------------------------------- ------------------- -------------------




                                                                              $    10,181,304     $     9,304,672
---------------------------------------------------------------------------- ------------------- -------------------
</TABLE>

                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.
                                                                             F-3
<PAGE>



                                                        HIA, Inc. and Subsidiary


                                                     Consolidated Balance Sheets
                                                                     (Continued)



<TABLE>

November 30,                                                                         2000                     1999
------------------------------------------------------------------- ------------------------ ------------------------
<S>                                                                 <C>                      <C>
Liabilities and Stockholders' Equity

Current liabilities:
  Line-of-credit (Note 2)                                            $          2,381,500     $          1,222,502
  Current maturities of long-term debt (Note 2)                                   290,294                  253,349
  Current maturities of capital lease obligations (Note 3)                        173,946                  126,121
  Accounts payable                                                                795,583                  942,428
  Checks written against future deposits                                          124,055                  258,878
  Accrued payroll and bonuses                                                     301,218                  314,810
  Income taxes payable (Note 5)                                                         -                  217,417
  Other current liabilities                                                       130,501                  140,274
------------------------------------------------------------------- ------------------------ ------------------------

Total current liabilities                                                       4,197,097                3,475,779
------------------------------------------------------------------- ------------------------ ------------------------

Long-term liabilities:
  Long-term debt, less current maturities (Note 2)                              1,464,198                1,784,506
  Capital lease obligations, less current
     maturities (Note 3)                                                          307,804                  321,879
------------------------------------------------------------------- ------------------------ ------------------------

Total long-term liabilities                                                     1,772,002                2,106,385
------------------------------------------------------------------- ------------------------ ------------------------

Total liabilities                                                               5,969,099                5,582,164
------------------------------------------------------------------- ------------------------ ------------------------

Commitments (Notes 4 and 7)

Stockholders' equity: (Note 6)
Common stock, $.01 par value;  20,000,000 shares
  authorized;  13,107,896 issued
  and 10,360,231 and 9,760,231 outstanding                                        131,079                  131,079
Additional paid-in capital                                                      3,109,271                3,109,271
Retained earnings                                                               1,465,591                1,087,404
------------------------------------------------------------------- ------------------------ ------------------------

                                                                                4,705,941                4,327,754
Less treasury stock at cost; 2,747,665 and 3,347,665
  shares                                                                          493,736                  605,246
------------------------------------------------------------------- ------------------------ ------------------------

Total stockholders' equity                                                      4,212,205                3,722,508
------------------------------------------------------------------- ------------------------ ------------------------

                                                                     $         10,181,304     $          9,304,672
------------------------------------------------------------------- ------------------------ ------------------------
</TABLE>

                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.
                                                                             F-4


<PAGE>



                                                        HIA, Inc. and Subsidiary


                                               Consolidated Statements of Income


<TABLE>


Years Ended November 30,                                                             2000                     1999
------------------------------------------------------------------- ------------------------ ------------------------
<S>                                                                 <C>                      <C>
Net sales                                                             $        32,919,433      $        26,139,848

Cost of sales (Note 8)                                                         23,528,394               18,348,265
------------------------------------------------------------------- ------------------------ ------------------------

Gross profit                                                                    9,391,039                7,791,583

Selling, general and administrative                                             8,267,932                6,815,059
------------------------------------------------------------------- ------------------------ ------------------------

Operating income                                                                1,123,107                  976,524

Other income (expense):
    Interest income                                                                50,451                   52,229
    Interest expense                                                             (460,867)                (201,865)
    Miscellaneous income                                                              766                   35,669
------------------------------------------------------------------- ------------------------ ------------------------

Total other expense                                                              (409,650)                (113,967)
------------------------------------------------------------------- ------------------------ ------------------------

Income before taxes on income                                                     713,457                  862,557

Taxes on income (Note 5)                                                          335,270                  374,611
------------------------------------------------------------------- ------------------------ ------------------------

Net income                                                            $           378,187      $           487,946
------------------------------------------------------------------- ------------------------ ------------------------

Net income per common share:
    Basic                                                             $               .04      $               .05
    Diluted                                                           $               .04      $               .05
------------------------------------------------------------------- ------------------------ ------------------------

Basic weighted-average
common shares outstanding                                                      10,309,272                9,774,376
------------------------------------------------------------------- ------------------------ ------------------------

Diluted weighted-average
common shares outstanding                                                      10,324,059                9,812,836
------------------------------------------------------------------- ------------------------ ------------------------
</TABLE>

                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.


                                                                             F-5
<PAGE>



                                                        HIA, Inc. and Subsidiary


                                 Consolidated Statements of Stockholders' Equity




<TABLE>



                                    Common Stock            Additional                             Treasury Stock
                             ------------------------------ Paid-in      Retained         ----------------------------   Total
 Years Ended November 30,        Shares           Amount    Capital      Earnings           Shares           Amount    Stockholders'
 2000 and 1999                                                                                                            Equity
---------------------------- -------------- --------------- ------------ -------------- --------------  -------------- ------------
<S>                         <C>           <C>             <C>            <C>            <C>            <C>           <C>

Balance,
December 1, 1998               13,107,896   $  131,079      $  3,109,271  $  599,458       3,713,713     $  (679,748)  $ 3,160,060

Acquisition of treasury
  stock (Note 6)                        -            -                -            -         119,239         (22,848)      (22,848)

Issuance of shares held in
  treasury (Note 6)                     -            -                -            -        (485,287)         97,350        97,350

Net income                              -            -                -      487,946               -               -       487,946
---------------------------- -------------- -------------- ------------- ------------- ----------------- ------------- -------------

Balance, November 30, 1999      13,107,896      131,079        3,109,271    1,087,404       3,347,665        (605,246)    3,722,508

Issuance of shares held in
  treasury (Note 6)                     -            -                -            -        (600,000)        111,510       111,510

Net income                              -            -                -      378,187               -               -       378,187
---------------------------- -------------- -------------- ------------- ------------- ----------------- ------------- -------------
Balance,                       13,107,896   $  131,079     $  3,109,271  $ 1,465,591       2,747,665     $  (493,736)  $ 4,212,205
November 30, 2000
---------------------------- -------------- -------------- ------------- ------------- ----------------- ------------- -------------
</TABLE>

                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.
                                                                             F-6
<PAGE>



                                                        HIA, Inc. and Subsidiary


                                           Consolidated Statements of Cash Flows




<TABLE>

Increase (Decrease) in Cash

Years Ended November 30,                                                                 2000                1999
---------------------------------------------------------------------------- ------------------- -------------------
<S>                                                                         <C>                   <C>
Operating activities:
  Net income                                                                 $        378,187      $      487,946
  Adjustments to reconcile net income to net cash used in
     operating activities:
     Depreciation and amortization                                                    395,889             347,485
     Loss on disposal of assets                                                        46,350              93,788
     Allowance for doubtful accounts                                                        -              10,508
     Deferred income taxes                                                            118,355             (81,982)
     Changes in operating assets and liabilities, net of business
       combination:
         Accounts receivable                                                         (154,426)           (861,708)
         Inventories                                                                 (904,739)            131,588
         Other current assets                                                         (19,221)             35,046
         Accounts payable                                                            (146,845)           (408,486)
         Other current liabilities                                                   (240,782)            238,970
---------------------------------------------------------------------------- ------------------- -------------------

Net cash used in operating activities                                                (527,232)             (6,845)
---------------------------------------------------------------------------- ------------------- -------------------

Investing activities:
  Purchase of WPS, net of cash acquired                                                     -          (1,378,765)
  Purchase of property and equipment                                                  (91,258)            (44,357)
  Increase (decrease) in other assets                                                 (72,748)              2,393
---------------------------------------------------------------------------- ------------------- -------------------

Net cash used in investing activities                                                (164,006)         (1,420,729)
---------------------------------------------------------------------------- ------------------- -------------------
</TABLE>
                                                                             F-7

<PAGE>



                                                        HIA, Inc. and Subsidiary


                                           Consolidated Statements of Cash Flows
                                                                     (Continued)



<TABLE>

Years Ended November 30,                                                             2000                1999
--------------------------------------------------------------------------- ------------------- --------------------
<S>                                                                          <C>                <C>
Financing activities:
  Proceeds from line-of-credit                                                      9,578,000           7,552,888
  Repayments on line-of-credit                                                     (8,419,002)         (6,992,502)
  Proceeds on long-term debt                                                                -           1,000,000
  Repayments on long-term debt                                                       (283,363)           (139,255)
  Repayments on capital lease obligations                                            (182,201)           (114,284)
  Acquisitions of treasury stock                                                            -             (22,848)
  Proceeds from sale of treasury stock                                                111,510              97,350
  Increase (decrease) in checks written against future
  deposits                                                                           (134,823)             37,473
--------------------------------------------------------------------------- ------------------- --------------------

Net cash provided by financing activities                                             670,121           1,418,822
--------------------------------------------------------------------------- ------------------- --------------------

Decrease in cash                                                                      (21,117)             (8,752)

Cash, beginning of year                                                                21,117              29,869
--------------------------------------------------------------------------- ------------------- --------------------

Cash, end of year                                                            $              -    $         21,117
--------------------------------------------------------------------------- ------------------- --------------------
</TABLE>

                     See accompanying summary of accounting
            policies and notes to consolidated financial statements.

                                                                             F-8

<PAGE>

                                                        HIA, Inc. and Subsidiary


                                                  Summary of Accounting Policies


Principles of
Consolidation
          The  consolidated  financial  statements  include the accounts of HIA,
          Inc.  (the  "Company"  or  "HIA"),  its  wholly-owned  subsidiary  CPS
          Distributors, Inc. ("CPS"), and CPS's wholly-owned subsidiary, Western
          Pipe  Supply   ("WPS")  and  Water  Systems,   Inc.  All   significant
          intercompany   accounts  and  transactions  have  been  eliminated  in
          consolidation.

Lines of
Business
          The principal  business of HIA,  conducted through its subsidiary,  is
          the wholesale Business  distribution of turf irrigation  equipment and
          pumps.

Concentration
of Risk
          The Company's financial instruments that are exposed to concentrations
          of credit risk consist primarily of cash and accounts receivable.  The
          Company  invests  temporary  cash in demand  deposits  with  federally
          insured financial institutions.  Such demand deposit accounts at times
          may exceed federally  insured limits.  The Company has not experienced
          any losses in such accounts.

          Concentrations of credit risk with respect to accounts  receivable are
          limited  due to the large  number of  customers  and  generally  short
          payment terms. The Company reviews a customer's  credit history before
          extending  credit and  establishes an allowance for doubtful  accounts
          based upon the credit risk of specific  customers,  historical  trends
          and  other  information.  Generally,  the  Company  does  not  require
          collateral from its customers.

Use of
Estimates
          The  preparation of  consolidated  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,  the  disclosure  of  contingent  assets and
          liabilities  at the date of the financial  statements and the reported
          amounts of revenue and expenses during the reporting  periods.  Actual
          results could differ from those estimates.
                                                                             F-9
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                                  Summary of Accounting Policies
Financial
Instruments
          The following  methods and assumptions  were used to estimate the fair
          value of each Instruments class of financial  instruments for which it
          is practicable to estimate that value:

          Accounts Receivable, Accounts Payable and Other Current Liabilities

          Fair  values  of  accounts  receivables,  accounts  payable  and other
          current  liabilities  are assumed to approximate  carrying  values for
          these  financial  instruments  since they are short term in nature and
          their carrying  amounts  approximate fair value or they are receivable
          or payable on demand.

          Note Payable, Long-Term Debt, and Capital Lease Obligations

          The note payable,  long-term debt, and capital lease  obligations bear
          interest  at   floating   rates  of   interest   based  upon   lending
          institutions'  prime  lending  rate.  Accordingly,  their  fair  value
          approximates  their reported carrying amounts at November 30, 2000 and
          1999.

Inventories
          Inventories  consist of  wholesale  goods held for  resale,  which are
          primarily  valued at the lower of cost (as determined  using first-in,
          first-out method) or market.

Cost
of Sales
          Cost of sales  consists of the actual cost of products  purchased  for
          resale,  related in-bound  shipping  charges,  and out-bound  shipping
          charges for products shipped to customers.

Fulfillment
Costs
          Included  in  selling,   general   and   administrative   expense  are
          fulfillment costs, which consist of the cost of operating and staffing
          each  branch  location.  Such  costs  include  those  attributable  to
          receiving,  inspecting and warehousing inventories.  Fulfillment costs
          amounted to approximately $3,608,000 and $2,628,000 in fiscal 2000 and
          1999.
                                                                            F-10

<PAGE>
                                                        HIA, Inc. and Subsidiary


                                                  Summary of Accounting Policies
Depreciation,
Amortization, Property and
Equipment
          Property and  equipment are stated at cost.  Depreciation  is computed
          using the straight-line method of accounting over the estimated useful
          lives of the assets,  which  range from three to ten years.  Leasehold
          improvements and leased equipment are amortized over the lesser of the
          estimated  useful  lives or over the term of the leases.  Upon sale or
          retirement,  the cost and related accumulated depreciation of disposed
          assets are eliminated  from the respective  accounts and the resulting
          gain or loss is included  in the  statements  of income.  Depreciation
          expense was $261,231  and  $229,531  for the years ended  November 30,
          2000 and 1999.

Long-Lived
Assets
          Long-lived assets and identifiable intangibles, including goodwill and
          the non-compete agreement, are reviewed for impairment whenever events
          or changes in circumstances  indicate that the carrying amount may not
          be recoverable. If the expected undiscounted future cash flow from the
          use of the  asset  and  its  eventual  disposition  is less  than  the
          carrying  amount of the assets,  an impairment  loss is recognized and
          measured  using the asset's fair value.  Included in selling,  general
          and administrative  expense for 1999 is approximately  $94,000 related
          to the  impairment  loss  of  certain  capitalized  computer  software
          abandoned by the Company.

Goodwill and
Non-Compete
Agreement
          Goodwill  and  the   non-compete   agreement,   which  relate  to  the
          acquisition of WPS in Agreement 1999 (see Note 1), are being amortized
          over a 10-year  period using the  straight-line  method.  Amortization
          expense was $134,658  and  $117,954  for the years ended  November 30,
          2000 and 1999.

Revenue
Recognition
          The  Company  recognizes  revenue  at the time  sales are  shipped  to
          customers in the normal course of business.

                                                                            F-11

<PAGE>
                                                        HIA, Inc. and Subsidiary


                                                  Summary of Accounting Policies

Income
Taxes
          The Company  accounts  for income  taxes under the  liability  method,
          which  requires  an entity  to  recognize,  deferred  tax  assets  and
          liabilities.  Temporary  differences are  differences  between the tax
          basis of assets  and  liabilities  and their  reported  amounts in the
          financial statements that will result in taxable or deductible amounts
          in future years.

Advertising
Costs
          The Company recognizes advertising expense when incurred.  Advertising
          expense  was  approximately  $9,600 and  $25,000  for the years  ended
          November 30, 2000 and 1999.

Net Income
Per Common
Share
          Statement of Financial  Accounting  Standards  No. 128,  "Earnings Per
          Share" provides for the calculation of "Basic" and "Diluted"  earnings
          or net  income  per share.  Basic net  income  per share  includes  no
          dilution  and is  computed  by  dividing  income  available  to common
          stockholders   by  the  weighted   average  number  of  common  shares
          outstanding for the period.  Diluted net income per share reflects the
          potential  dilution of securities  that could share in the earnings of
          an entity, similar to fully diluted net income per share.

          For the year ended  November 30, 2000,  14,787 shares were included in
          dilutive shares outstanding which related to employee stock options to
          purchase  600,000 shares of the Company's  common stock at $0.1859 per
          share.  Employee  stock  options  to  purchase  600,000  shares of the
          Company's  common  stock at $0.25  per  share  were  not  included  in
          dilutive  shares  outstanding  for the year ended November 30, 2000 as
          their  exercise  price  exceeded  the  average  market  price  of  the
          Company's common stock during the period. Likewise, for the year ended
          November  30, 1999,  600,000  employee  stock  options to purchase the
          common   stock  of  the  Company  at  $0.1859  were  not  included  in
          calculating dilutive shares outstanding as the exercise price exceeded
          the average market price of the common stock during the period.

                                                                            F-12

<PAGE>
                                                        HIA, Inc. and Subsidiary


                                                  Summary of Accounting Policies

Statements  of
Cash Flows
          For purposes of the  statements of cash flows,  the Company  considers
          all highly liquid  investments  purchased with an original maturity of
          three months or less to be cash equivalents.

Stock Option
Plans
          The Company applies  Accounting  Principles  Board ("APB") Opinion 25,
          "Accounting   for  Stock  Issued  to   Employees,"   and  the  related
          Interpretation  in accounting  for all stock option  plans.  Under APB
          Opinion 25, no compensation cost has been recognized for stock options
          issued to  employees  as the  exercise  price of the  Company's  stock
          options  granted  equals or exceeds the market price of the underlying
          common stock on the date of grant.

          Statement of Financial  Accounting  Standards No. 123, "Accounting for
          Stock-Based  Compensation"  ("SFAS No. 123"),  requires the Company to
          provide pro forma information  regarding net income as if compensation
          cost for the  Company's  stock  options  plans had been  determined in
          accordance  with the fair value based  method  prescribed  in SFAS No.
          123.  To provide  the  required  pro forma  information,  the  Company
          estimates  the fair  value of each  stock  option at the grant date by
          using the Black-Scholes option-pricing model.

Reclassifications
          Certain  reclassifications  have  been  made  to  the  1999  financial
          statements in order for them to conform to the 2000 presentation. Such
          reclassifications   have  no  impact  on  the  Company's  consolidated
          financial position or results of operation.

Comprehensive
Income
          Comprehensive Income is comprised of net income and all changes to the
          consolidated  statement of stockholders'  equity, except those changes
          made due to investments by  stockholders,  changes in  paid-in-capital
          and  distributions to stockholders.  There is no comprehensive  income
          for the years ended November 30, 2000 and 1999.


                                                                            F-13
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                                  Summary of Accounting Policies

Fourth
Quarter  Adjustments
          The Company  recorded in the fourth quarter of the year ended November
          30,  2000 and 1999,  an  adjustment  to  properly  accrue for  officer
          bonuses in the amount of $244,220 and $298,143.

Recent
Accounting
Pronouncements
          The Financial  Accounting Standards Board ("FASB") has recently issued
          Statement on Financial  Accounting  Standards No. 133, "Accounting for
          Derivative  Instruments and Hedging Activities" ("SFAS No. 133"). SFAS
          No.  133,  amended  by  SFAS  No.  138,   established   standards  for
          recognizing  all  instruments  including  those for  hedging as either
          assets or  liabilities  in the  statement  of  financial  position and
          measuring those  instruments at fair value.  This Statement is for all
          fiscal  quarters of all fiscal  years  beginning  after June 15, 2000.
          Management  believes  the adoption of this  statement  will not have a
          material impact on the Company's consolidated statements.

          In March 2000,  the FASB issued  Emerging  Issues Task Force Issue No.
          00-2,  Accounting for Web Development Costs" ("EITF 00-2"),  which was
          for all such costs incurred for fiscal  quarters  beginning after June
          30, 2000. This Issue  establishes  accounting and reporting  standards
          for costs  incurred  to develop a web site based on the nature of each
          cost. Currently, as the Company has no web site development costs, the
          adoption  of  EITF  00-2  had no  impact  on the  Company's  financial
          position or results of operations. To the extent the Company begins to
          enter into such transactions in the future, the Company will adopt the
          Issue's disclosure  requirements in the quarterly and annual financial
          statements for the ending November 30, 2001.
                                                                            F-14
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                                  Summary of Accounting Policies

Recent
Accounting
Pronouncements
(Continued)

          In March 2000, the FASB issued FASB Interpretation 44, "Accounting for
          Certain Accounting  Transactions  Involving Stock  Compensation" ("FIN
          44"),  which is effective  July 1,  Pronouncements  2000,  except that
          certain  conclusions  in this  Interpretation  which cover events that
          occur  after  either  December  15,  1998  or  January  12,  2000  are
          recognized   on  a   prospective   basis  from  July  1,  2000.   This
          Interpretation  clarifies the application of APB 25 for certain issues
          related  to stock  issued  to  employees.  The  Company  believes  its
          existing  stock based  compensation  policies  and  procedures  are in
          compliance  with FIN 44 and  therefore,  the adoption of FIN 44 had no
          material  impact on the  Company's  financial  condition,  results  of
          operations or cash flows.

          In December 1999, the Securities and Exchange  Commission  (the "SEC")
          issued  Staff  Accounting  Bulletin  No.  101  ("SAB  101"),  "Revenue
          Recognition  in  Financial   Statements"  which  provides   additional
          guidance in  applying  generally  accepted  accounting  principles  to
          revenue recognition in financial  statements.  SAB 101 is effective as
          of the  fourth  quarter  of fiscal  year  ending  November  30,  2001.
          Management  believes  the  adoption  of  this  bulletin  will  have no
          material impact on the Company's financial statements.

                                                                            F-15
<PAGE>



                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements



1.   Business Acquisition
          On May 25, 1999,  the Company,  through its  wholly-owned  subsidiary,
          CPS,  acquired  all of the  issued  and  outstanding  common  stock of
          Western Pipe Supply,  Inc.  ("WPS") for a purchase price of $2,746,739
          including  $84,244 in acquisition  costs. Of the total purchase price,
          $1,485,385  was paid in cash directly to the seller and $1,177,110 was
          in the form of a subordinated  promissory note. (See Note 2.) The cash
          paid to the seller was financed in part by  additional  borrowings  on
          the Company's  existing line of credit of $927,889 (of which  $442,504
          was the  amount  required  to pay off the  seller's  existing  line of
          credit) and a $1,000,000 five-year term note payable.

          The  acquisition  was recorded using the purchase method of accounting
          by which the assets were  valued at fair  market  value at the date of
          acquisition. The preliminary purchase price allocation as reflected in
          the Company's  1999  quarterly  financial  statements  was adjusted to
          reflect  deferred tax assets of $163,099  that existed at the purchase
          date.  Accordingly,  the amount of goodwill  recorded  pursuant to the
          preliminary  purchase price  allocation  was reduced by $163,099.  The
          operating  results  of this  acquisition  have  been  included  in the
          accompanying  consolidated  financial  statements  from  the  date  of
          acquisition.


                                                                            F-16
<PAGE>



                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements





          The final allocation of the purchases price was as follows:
        ----------------------------------------------------------------------

         Cash                                                $      190,864
         Accounts receivable, net                                   806,102
         Inventories                                              1,327,859
         Other current assets                                        15,946
         Property and equipment                                     177,545
         Deferred tax assets                                        163,099
         Goodwill                                                 1,534,081
         Non-compete agreement                                      150,000
         Less:
         Accounts payable                                         1,051,941
         Other current liabilities                                  101,167
         Line of credit                                             442,504
         Long-term obligation                                        23,145
  ------------------------------------------------------- ----------------------

         Total purchase price                                $    2,746,739
  ------------------------------------------------------- ----------------------

          The results of WPS'  operations  for the year ended  November 30, 2000
          are included in the Company's  consolidated  statement of income.  For
          the year ended November 30, 1999,  the results of WPS'  operations are
          included from May 25, 1999, the date of purchase, through November 30,
          1999.
                                                                            F-17
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements


          The   following   unaudited   pro  forma   information   presents  the
          consolidated   results  of   operations  of  the  Company  as  if  the
          acquisition  of WPS occurred at the beginning of fiscal year 1999. The
          unaudited pro forma  financial  data does not purport to be indicative
          of the  results  which  actually  would  have  been  obtained  had the
          purchase  occurred on the dates  indicated or of the results which may
          be obtained in the future.

      Year Ended November 30,                                    1999
      ------------------------------------------- --------------------

      Net sales                                      $     29,327,944

      Net income                                     $        363,486

      Net income per common share:
         Basic                                       $            .04
         Diluted                                     $            .04
      ------------------------------------------- --------------------


2.   Note
     Payable and
     Long-Term Debt

          Line-of-Credit Agreement

          CPS and its subsidiary  have a  line-of-credit  agreement with a bank,
          which  expires on April 30, 2001.  During  fiscal 2000,  the available
          line-of-credit  was  increased  from  $4,000,000  to  $4,500,000.  The
          available  loan  amount is the lesser of  $4,500,000  or the  computed
          borrowing  base,  as  defined  by  the  terms  of the  agreement.  The
          line-of-credit  provides for interest at the lower of the bank's prime
          rate  (9.5%  at  November  30,  2000)  or  8.5%.   The   agreement  is
          collateralized  by principally  all of the Company's  business  assets
          including accounts receivable, inventories and property and equipment,
          excluding owned real estate.  Additionally,  the bank has the right of
          set-off under this agreement. The agreement is also guaranteed by HIA.

                                                                            F-18
<PAGE>

                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

          The agreement  contains several  covenants which,  among other things,
          require that the Company maintain certain  financial  ratios,  minimum
          net worth and minimum working capital as defined in the line-of-credit
          agreement. In addition, the agreement limits the payment of dividends,
          the purchase of property and  equipment,  and officer and  stockholder
          compensation.  As of November 30, 2000,  the Company was in compliance
          with these covenants under the line-of-credit agreement.

          As of  November  30, 2000 and 1999,  $2,381,500  and  $1,222,502  were
          outstanding under this  line-of-credit  agreement,  and as of November
          30, 2000 and 1999, $2,118,500 and $2,777,498 were available under this
          line-of-credit agreement.

                                                                            F-19
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements
<TABLE>

          Long-term debt

          Long-term debt consisted of the following:

          November 30,                                               2000               1999
          ---------------------------------------------- ------------------ ------------------
          <S>                                             <C>                <C>
           Subordinated   note   dated  May  24,   1999;
              monthly  principal  and interest  payments
              of $14,282  through  June 2009,  including
              interest  at 8% per annum.  Collateralized
              by common shares of WPS.                    $      1,054,492        $ 1,137,855

           Promissory  note  dated May 24,  1999;  monthly
              principal    and   interest    payments   of
              approximately   $20,000  through  May  2004,
              including  interest  at  8.125%  per  annum.
              Collateralized  by substantially  all of the
              Company's business assets including accounts
              receivable,  inventories  and  property  and
              equipment, excluding owned
              real estate.                                         700,000            900,000
           ---------------------------------------------- ------------------ ------------------

            Total long-term debt                                 1,754,492          2,037,855

            Less current maturities                                290,294            253,349
           ---------------------------------------------- ------------------ ------------------

            Long-term, less current maturities             $      1,464,198   $      1,784,506
           ---------------------------------------------- ------------------ ------------------

</TABLE>

                                                                            F-20
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

          Aggregate  maturities  of  long-term  debt at November 30, 2000 are as
          follows:

         Years Ending November 30,
         ---------------------------------------- -----------------------
         2001                                     $         290,294
         2002                                               297,765
         2003                                               305,891
         2004                                               214,680
         2005                                               124,198
         Thereafter                                         521,664
         ----------------------------------------- ----------------------

                                                  $       1,754,492
         ----------------------------------------- ----------------------

3. Capital Lease
Obligations
          The following is a schedule by year of future  non-cancelable  minimum
          payments  required under the capital lease,  together with the present
          value of the related payments as of November 30, 2000.

           Years Ending November 30,
            -----------------------------------------------------------------
            2001                                           $       207,757
            2002                                                   207,757
            2003                                                   121,225
            -----------------------------------------------------------------
                                                                   536,739

            Less amount representing interest                       54,989
            -----------------------------------------------------------------

            Present value of minimum lease payments                481,750

            Less current maturities                                173,946
            -----------------------------------------------------------------

            Long-term capital lease obligation, less current
            maturities                                      $      307,804
           ------------------------------------------------------------------

          As of November  30, 2000 and 1999,  the cost of the  computer  related
          equipment leased under the capital lease obligations were $662,383 and
          $446,432, net of accumulated amortization of $275,775 and $153,576.
                                                                            F-21
<PAGE>

                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements
4. Commitments

          Operating Leases

          The Company leases its main warehouse under a non-cancelable operating
          lease requiring  monthly  payments  through February 2005. The Company
          has an option  to  purchase  the  related  property  at the end of the
          initial  ten-year  term at a price  approximating  the market value at
          that time, subject to certain conditions.  The lease also provides for
          two five-year options to extend the lease term.

          The Company also leases vehicles,  equipment and other warehouse space
          under noncancellable operating leases.

          Total lease expense was approximately $908,000 and $648,000 for fiscal
          2000 and 1999.

          As of November 30, 2000 future  annual  minimum lease  payments  under
          non-cancelable operating leases are as follows:

          Years Ending November 30
          ----------------------------------------- ---------------------

           2001                                          $      819,000
           2002                                                 642,000
           2003                                                 544,000
           2004                                                 382,000
           2005                                                 176,000
           Thereafter                                           123,000
           ----------------------------------------- ---------------------

                                                         $    2,686,000
           ----------------------------------------- ---------------------

          Employment Agreements

          The Company  has entered  into  employment  agreements  that extend to
          November 30, 2003 with its officers.  The  employment  agreements  set
          forth  annual  compensation  to its  officers of between  $182,500 and
          $185,000 each.  Compensation is adjusted annually based on the cost of
          living index plus five percent per annum base  increase;  plus a seven
          and  one-half  percent  bonus of net pretax  income  exclusive  of the
          profit-sharing contribution.
                                                                            F-22

<PAGE>

                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

5. Taxes on Income
          The  provision  for taxes on income for the years ended  November  30,
          2000 and 1999 consisted of the following:

                                                 2000             1999
          ------------------------------- -----------------   -----------------

           Current:
            Federal                      $       188,066      $       395,107
            State                                 28,849               61,486
          ------------------------------- -----------------   ------------------
                                                 216,915              456,593
          ------------------------------- -----------------   ------------------

          Deferred (benefit):
           Federal                                99,418              (75,330)
           State                                  18,937               (6,652)
          ------------------------------- -----------------   ------------------
                                                 118,355              (81,982)
          ------------------------------- -----------------   ------------------

                                         $       335,270      $       374,611
          ------------------------------- -----------------   ------------------

          A reconciliation of taxes on income at the federally statutory rate to
          the effective tax rate is shown below:

              Years Ended November 30,                   2000           1999
              -------------------------------------   ------------  ------------

              Income taxes computed at the federal
                statutory rate                        $   242,575    $   293,269
              State income taxes, net of federal
                benefit                                    21,404         25,877
              Amortization of goodwill                     41,194         40,313
              Other permanent differences                  30,097         15,152
              ------------------------------------    -------------  -----------

              Taxes on income                         $   335,270     $  374,611
              ------------------------------------    -------------  -----------

                                                                            F-23

<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements



          Temporary  differences between the consolidated  financial  statements
          carrying amounts and the tax basis of assets and liabilities that give
          rise  to  significant  portions  of the net  deferred  tax  assets  at
          November 30, 2000 and 1999 relate to the following:

<TABLE>
                                            2000                              1999
                             -------------------------------    -----------------------------
                                   Current        Long-term         Current        Long-term
          ------------------- --------------- --------------- ---------------- ---------------
        <S>                   <C>              <C>              <C>             <C>
          Inventories           $   96,200      $       -        $   66,510       $        -
          Accounts
            receivable              41,149              -            40,888                -
          Property and
            equipment                    -          9,776                 -           80,993
          Net operating
            loss
            carryforwards                -         26,170                 -          138,178
          Intangible assets              -         29,662                 -                -
          Other                          -          2,120            (6,737)           3,600
           ------------------- --------------- --------------- ---------------- ---------------

          Net  deferred  tax
          asset                 $  137,349    $    67,728        $  100,661       $  222,771
          ------------------- --------------- --------------- ---------------- ---------------
</TABLE>

          At  November  30,  2000 and 1999,  $137,349  and  $100,661  of the net
          deferred  tax asset is  classified  as current  and  included in other
          current assets in the accompanying  consolidated  balance sheets.  The
          Company has recorded no valuation allowance to offset the net deferred
          tax assets because management believes that it is more likely than not
          that  sufficient  taxable income will be generated in the  foreseeable
          future to realize the net deferred tax assets.

          For  federal  tax  purposes,   the  Company  has  net  operating  loss
          carryforwards of approximately $71,000, which were acquired in the WPS
          acquisition.  As a result of the  change in  ownership,  as defined by
          Section 382 of the  Internal  Revenue  Code,  the net  operating  loss
          carryforwards  acquired are limited in use to  approximately  $130,000
          per year and must be offset only by taxable  income  generated by WPS.
          The net operating loss carryforwards expire in 2011.

                                                                            F-24
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

6. Stockholders'  Equity

          Treasury Stock and Common Stock Options

          On January 1, 2000, the Board of Directors  granted to the officers of
          the Company  options to purchase  600,000  shares of treasury stock at
          $0.25 per share  through  December 31, 2000.  On January 1, 1999,  the
          Board of Directors  granted to the officers of the Company  options to
          purchase 600,000 shares of treasury stock at $0.1859 per share through
          December 31, 1999.  The exercise  price of both these grants was equal
          to the market price of the common stock at the date of grant.

          During fiscal 2000 and 1999,  the Company  issued  600,000  shares and
          300,000  shares from  treasury to its  officers  for cash  proceeds of
          $111,510 and $66,846 in  conjunction  with the  officer's  exercise of
          their  options to purchase the treasury  stock of the Company.  During
          the  year  ended  November  30,  1999,  the  officers  of the  Company
          purchased  185,287  shares  from the  Company's  treasury at $0.16 for
          gross  proceeds of $30,504 which  represented  the market price of the
          shares on the day the shares were purchased.

          The Company acquired from non-affiliate stockholders 119,239 shares of
          its common stock at prices  ranging from $.15 to $.20 per share during
          fiscal 1999 and did not purchase any such shares during fiscal 2000.

                                                                            F-25
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

          The following table summarizes information on stock option activity:

<TABLE>
                                                                    Weighted
                                                    Exercise         Average
                                     Number of       Price per     Exercise Price     Expiration
                                      shares          Share          Per Share         Dates
            --------------------- --------------- --------------- ---------------- ---------------
            <S>                   <C>              <C>            <C>              <C>
            Outstanding at
              December 1, 1998       600,000        $   .2228       $   .2228            1998
                Granted              600,000            .1859           .1859            1999
                Exercised           (300,000)           .2228           .2228            1998
                Expired             (300,000)           .2228           .2228            1998
            --------------------- --------------- --------------- ---------------- ---------------

            Outstanding at
             November 30,1999        600,000            .1859           .1859            1999
                Granted              600,000            .2500           .2500            2000
                Exercised           (600,000)           .1859           .1859            1999
             --------------------- --------------- --------------- ---------------- ---------------

             Outstanding at
              November 30, 2000      600,000        $   .2500       $   .2500            2000
              --------------------- --------------- --------------- ---------------- ---------------
</TABLE>

          SFAS No. 123  requires  the Company to provide  pro forma  information
          regarding net income and net income per share as if compensation costs
          for the  Company's  stock option plans and other stock awards had been
          determined in accordance  with the fair value based method  prescribed
          in SFAS No. 123.  The Company  estimates  the fair value of each stock
          award at the  grant  date by using  the  Black-Scholes  option-pricing
          model with the  following  weighted-average  assumptions  used for the
          grant in 2000: dividend yield of zero percent,  expected volatility of
          63%, risk free interest rate of 6.0% and an expected life of one year.
          The  assumptions  used to value  the  grant in 1999  were as  follows:
          dividend yield of zero percent,  expected volatility of 69%, risk free
          interest rate of 4.5% and an expected life of one year.

                                                                            F-26
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

          Under the  accounting  provisions  of SFAS No. 123, the  Company's net
          income per share would have been  adjusted to the  following pro forma
          amounts:

           -----------------------------------------  ------------- ------------
           Years Ended November 30,                        2000         1999
           -----------------------------------------  ------------- ------------

            Net income:
              As reported                             $      378,187 $   487,946
              Pro forma                                      337,707     455,735

            Basic net income per common share:
              As reported                             $          .04 $       .05
              Pro forma                                          .03         .05

            Diluted net income per common share:
              As reported                              $         .04 $       .05
              Pro forma                                          .03         .05
            ----------------------------------------   ------------- -----------


          The following  information  summarizes  stock options  outstanding  at
          November 30, 2000:
<TABLE>

                               Outstanding                                  Exercisable
            -------------------------------------------------------    ---------------------------
                                              Weighted Average
                                        --------------------------
             Exercise        Number      Remaining     Exercise        Number        Weighted
                                         Contractual                                 Average
                                          Life in                                    Exercise
                Price      Outstanding     Years         Price      Exercisable        Price
          -------------- ------------- ------------- ------------ --------------- --------------
          <S>            <C>           <C>           <C>           <C>             <C>
               $0.25        600,000     Less than 1      $0.25        600,000          $0.25
          -------------- ------------- ------------- ------------ --------------- --------------

</TABLE>

                                                                            F-27
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

7.Employee
Benefits
          Profit Sharing Plan

          The  Company  maintains  a  noncontributory  profit-sharing  plan (the
          "Plan") for the benefit of all full-time  employees of the Company who
          are at least 18 years of age.  Interests  vest ratably after two years
          and are fully  vested  after  seven  years.  The Plan is funded by the
          Company's contribution  determined annually by the Board of Directors.
          Contributions to the Plan were  approximately  $41,500 and $68,000 for
          the years ended November 30, 2000 and 1999.

          401(k) Plan

          The Company has adopted a Section 401(k) profit sharing plan, which is
          available  for employees who are at least 18 years of age and who have
          completed  one year of service with the Company.  Participants  in the
          plan  may  contribute  up to 15% of  their  compensation,  subject  to
          certain   limitations.   Under  the  plan,   the   Company   may  make
          discretionary  contributions to be determined on a year-to-year  basis
          and may make discretionary  matching  contributions.  Company matching
          contributions  vest ratably over 6 years.  For the year ended November
          30, 2000 and 1999, the Company contributed  approximately  $39,900 and
          $31,000.

8. Significant  Suppliers
          During fiscal 2000, the Company purchased approximately 19% and 10% of
          its products  from two  manufacturers,  and  approximately  21% of its
          products  from  one  manufacturer  in  1999.  However,   the  products
          purchased can be obtained from other competing  manufacturers  but not
          as a consolidated product group.


                                                                            F-28
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

9. Supplemental
Disclosures of
Cash Flow Information

          Excluded from the statement of cash flows for the years ended November
          30, 2000 and 1999 were the effects of certain  noncash  investing  and
          financing  activities  including the purchase of equipment in 2000 and
          1999 of $215,951 and $162,280 with third party financing.

          The following table summarizes the net cash used
          in conjunction with the 1999 WPS acquisition:
                                                                     1999
           ------------------------------------------------ --------------------

           Working capital, other than cash acquired             $      996,799
           Property and equipment                                       177,545
           Deferred tax assets                                          163,099
           Goodwill                                                   1,534,081
           Non-compete agreement                                        150,000
           Acquired debt and long-term obligations                   (1,642,759)
           ------------------------------------------------ --------------------

           Net cash used to acquire WPS                          $    1,378,765
           ------------------------------------------------ --------------------

          Cash  payments for interest  were  $460,867 and $201,865 for the years
          ended November 30, 2000 and 1999.  Cash payments for income taxes were
          $455,253 and $234,440 for the years ended November 30, 2000 and 1999.

10.Property  Held
For Sale
          Effective  February  8,  2000,  the  Company  leased  a new  warehouse
          facility in Casper,  Wyoming and  consequently  moved out of its owned
          facility also located in Casper,  Wyoming.  At November 30, 2000, this
          property, which consists of land and office and warehouse space, has a
          carrying   value  of  $51,376  (cost  of  $143,024  less   accumulated
          depreciation  of $91,648) and is included in other  current  assets on
          the Company's  consolidated  balance  sheet at November 30, 2000.  The
          Company expects to sell the property within the next fiscal year.
                                                                            F-29
<PAGE>
                                                        HIA, Inc. and Subsidiary


                                      Notes to Consolidated Financial Statements

11. Subsequent Event
          On October 31, 2000, the Company sent to all its shareholders a tender
          offer for up to  3,000,000  shares of its common  stock for a purchase
          price of $.25 per share. The offer expired on December 15, 2000 and on
          January  4,  2001,  a total of  732,956  shares of common  stock  were
          tendered for a total  purchase  price of $183,239.  A total of $57,000
          was incurred for legal,  accounting,  transfer agent and other related
          costs, related to this tender offer.

                                                                            F-30