SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[x]    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

           For the fiscal year ended December 31, 2003

                            OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

           For the transition period from _____________ to _________________

                         Commission file number 0-22206

                               NIAGARA CORPORATION
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                   Delaware                            59-3182820
                   --------                            ----------
        (State or Other Jurisdiction of            (I.R.S. Employer
         Incorporation or Organization)            Identification No.)

        667 Madison Avenue, New York, New York             10021
        --------------------------------------             -----
       (Address of Principal Executive Offices)           Zip Code

       Registrant's telephone number, including area code: (212) 317-1000

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

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

Title of Each Class                   Name of Each Exchange on which Registered
-------------------                   -----------------------------------------

Common Stock, par value                       The Nasdaq National Market
$.001 per share

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

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

    As of June 30, 2003, the aggregate market value of the voting stock held by
non-affiliates of the registrant was approximately $11,874,715 (assumes the
registrant's officers, directors and all stockholders holding 5% or more of
outstanding shares are affiliates).

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes ___    No  __X__.

     There were 8,238,517 shares of the registrant's Common Stock outstanding as
of March 26, 2004.

     Documents  Incorporated  by Reference:  Items 10, 11, 12, 13 and 14 of Part
III hereof are incorporated by reference from the  Registrant's  Proxy Statement
for its 2004 Annual  Meeting of  Stockholders  or will be filed by  amendment to
this Form 10-K.


                                    PART I.

ITEM 1.  BUSINESS.

Corporate History

         Niagara Corporation ("Niagara") was organized on April 27, 1993 as a
Delaware corporation under the name International Metals Acquisition
Corporation. When formed, its objective was to acquire an operating business in
the metals processing and distribution industry or in a metals-related
manufacturing industry. Between 1995 and 1999, Niagara completed acquisitions of
three cold finished steel bar producers in the United States and one group of
businesses in the United Kingdom engaged in hot rolling, cold finishing and
distributing steel bars. These acquisitions were financed with proceeds from
Niagara's initial public offering and bank and subordinated debt financings. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--Liquidity and Capital Resources--Financing Activities." Since they
were acquired by Niagara, these businesses have invested approximately $37
million in capital expenditures to modernize, improve and expand their
facilities, machinery and equipment.

         On August 16, 1995, Niagara purchased for $10,744,045 in cash all of
the outstanding shares of Niagara Cold Drawn Corp., which subsequently changed
its name to Niagara LaSalle Corporation ("Niagara LaSalle"). With plants in
Buffalo, New York and Chattanooga, Tennessee, Niagara LaSalle was an established
cold finished steel bar producer in the northeast and southeast regions of the
United States.

         On January 31, 1996, Niagara LaSalle purchased all of the outstanding
shares of Southwest Steel Company, Inc. ("Southwest"), the leading cold drawn
steel producer servicing the southwest region of the United States. As
consideration for such shares, Niagara LaSalle paid $1,920,000 in cash and
$1,156,773 principal amount of Niagara LaSalle promissory notes guaranteed by
Niagara. In connection with this acquisition, Niagara LaSalle discharged
$8,518,691 of Southwest indebtedness and Niagara guaranteed $898,000 of
Southwest indebtedness. During 1996, Southwest completed construction of a new
plant in Midlothian, Texas and relocated its Tulsa, Oklahoma operations to this
new facility. On November 1, 1996, Southwest was merged into Niagara LaSalle. On
November 24, 1997, Niagara LaSalle paid $525,000 to the former Southwest
stockholders in full satisfaction of all amounts owing under the $1,156,773
principal amount of promissory notes issued to such individuals in connection
with the acquisition.

         On April 18, 1997, Niagara LaSalle purchased from Quanex Corporation
("Quanex") all of the outstanding shares of LaSalle Steel Company ("LaSalle,"
and together with Niagara LaSalle, "Niagara US"), which has plants in Hammond
and Griffith, Indiana. In consideration for the sale of such shares, Niagara
LaSalle paid Quanex $65,500,000 in cash at the closing and an additional
$1,371,000, which amount was paid on January 26, 1998, based on changes in
LaSalle's stockholder's equity between October 31, 1996 and March 31, 1997.
Niagara LaSalle also paid Quanex an amount based on cash activity in the
intercompany account between Quanex and LaSalle from April 1 through April 18,
1997. The acquisition of LaSalle gave Niagara LaSalle a strong market position
in the midwest region of the United States and broadened Niagara LaSalle's
product range by adding thermal treated and chrome plated bars. With this
acquisition, Niagara US became the largest independent producer of cold drawn
steel bars in the United States.

         On May 21, 1999, Niagara LaSalle (UK) Limited ("Niagara UK," and
together with Niagara and Niagara US, the "Company"), a newly formed English
company and subsidiary of Niagara, purchased the equipment, inventory and
certain other assets of the eight steel bar businesses of Glynwed Steels Limited
("Glynwed Steels"), an English company and a subsidiary of Glynwed International
plc ("Glynwed"). In consideration for the sale of such assets, Niagara UK paid
Glynwed Steels (pound)21,202,000 (approximately $34 million) in cash at the
closing, (pound)3,015,500 (approximately $4.9 million) of which was returned to
Niagara UK during the third quarter of 1999 as an adjustment to reflect the
value of the net assets transferred. These businesses are engaged in hot
rolling, cold finishing and distribution and represent the largest independent
steel bar concern in the United Kingdom.

         In November 1999 and September 2001, the Company announced
restructuring plans for its hot rolling operations in the United Kingdom.
Under the 1999 plan, Niagara UK closed its Ductile Hot Mill facility in
Willenhall, terminated its lease of the real property, transferred most of the
production from this facility to its W Wesson facility in Moxley (which was
renamed Ductile Wesson) and invested approximately $1.5 million in its
remaining hot rolling businesses. During the same period, Niagara UK
reorganized the management structures in each of its three operating divisions
(hot rolling, cold finishing and distribution). Under the 2001 plan, Niagara
UK closed its Dudley Port hot rolling facility in Tipton and transferred most
of its production to its two other hot rolling facilities. On March 15, 2002,
Niagara UK entered into an agreement to sell this leased property for
(pound)3,600,000 ($5,413,572), which Niagara UK had an option to purchase for
(pound)1,495,000 ($2,248,136). On September 30, 2002, Niagara UK completed
this transaction. In connection with this transaction, Niagara UK purchased a
parcel of land in the fourth quarter of 2002 which it subsequently sold during
this period to the purchaser of the property. These sales resulted in a
pre-tax gain of (pound)2,063,022 ($3,102,311). See Note 2 to the Company's
consolidated financial statements presented under Item 8 below (the "Financial
Statements").

         In the fourth quarter of 2002, Niagara LaSalle completed significant
purchases of equipment and related assets from two companies after having
prevailed at auctions held in connection with such companies' bankruptcy
proceedings. On October 8, 2002, Niagara LaSalle purchased certain production
equipment and related assets of Moltrup Steel Products Company for $375,000.
Niagara US has relocated the majority of these assets to its other operating
facilities. On November 19, 2002, Niagara LaSalle purchased from Republic
Technologies International, LLC ("Republic") all of the equipment and supplies
located at Republic's Harvey, Illinois facility for $2,225,000. Niagara US has
sold or relocated certain of these assets to the Company's other operating
facilities. Management has not yet determined where the balance of this
equipment will be deployed.

         On May 30, 2003, Niagara UK entered into an agreement to sell its GB
Longmore property in Darlaston. Production at this site had previously been
shifted to GB Longmore's Willenhall facility. On September 19, 2003, Niagara UK
completed this transaction receiving (pound)925,000 ($1,512,875) for the sale of
this leased real property after payment of (pound)413,000 ($675,478) to the
landlord under an option to purchase the property. After related costs, the sale
of this property resulted in a pre-tax gain of (pound)488,849 ($799,532), which
gain was partially offset by (pound)204,109 ($333,827) in losses during the year
on the sale of equipment, resulting in a net gain of (pound)284,740 ($465,705).

         During 2003, Niagara's subsidiaries transferred certain equipment to
each other to more effectively meet the market conditions and requirements of
their respective operations. These transfers resulted in Niagara UK recognizing
intercompany gains of (pound)494,475 ($808,734) for the period. These amounts
have been eliminated in the consolidated financial statements.

         Certain financial information for each of the Company's reportable
segments (Niagara US and Niagara UK) is contained in Note 18 to the Financial
Statements.

Products

Niagara US

         Following the acquisition of LaSalle, Niagara US became the largest
independent producer of cold drawn steel bars in the United States. This
acquisition brought to Niagara a technological leader in the development of
specialized cold drawn steel products. LaSalle, which has obtained numerous
foreign and domestic patents throughout its history, pioneered the large
drawbenches commonly used in cold finishing today and developed the principle of
stress-relieving cold finished steel bars.

         The manufacture of cold drawn steel bars involves several steps. Hot
rolled steel bars are cleaned of mill scale by a process that involves
shotblasting the surface of the bars with hardened steel shot. After
shotblasting, the bars are mechanically drawn, or pulled, through a tungsten
carbide die containing an orifice one-sixteenth of an inch smaller in
cross-section than the size of the hot rolled bar. Drawing the hot rolled steel
bar in this manner elongates the bar and creates a quality micro-finished
surface. The bars are then cut to length and straightened. As an additional
step, bars may be turned, ground and/or polished to very close tolerance levels.
This process produces steel bars with (i) a smooth and shiny surface, (ii)
uniform shape, with close size tolerance, (iii) enhanced strength
characteristics and (iv) improved machinability. These characteristics are
essential for many industrial applications.

         Niagara US manufactures round bars, ranging from 1/4 inch to 6 inches
in diameter, and rectangular, square and hexagonal bars in a variety of sizes,
the majority of which are drawn in sizes 1/4 inch to 6 inches thick and up to 15
inches wide. The bars are produced in lengths from 10 to 20 feet, with most
being 10 to 12 feet in length. Niagara US's products include (i) cold drawn bars
which are used in machining applications, automotive and appliance shafts, screw
machine parts and machinery guides, (ii) turned, ground and polished bars which
are used in precision shafting and (iii) drawn, ground and polished bars which
are used in chrome-plated hydraulic cylinder shafts.

         Niagara US employs a number of advanced processing techniques in the
manufacture of value-added steel bars including thermal treatment and chrome
plating. In addition to cold drawn bars, Niagara US's products include (i)
custom-cut bars shipped on a "just-in-time" basis which are used in automotive
rack and steering systems, (ii) stress-relieved bars which are used in high
strength shafting, gears and drive mechanisms, (iii) quench and tempered bars
which are used in high strength bolting and high impact rod cylinders and (iv)
chrome-plated bars which are used in hydraulic and pneumatic cylinders.

         During 2000, Niagara US added a quench and tempering line to its
Hammond facility and a continuous shape straightening and weighing line to its
Buffalo plant. This new equipment has increased capacity and improved the
quality and efficiency of Niagara US's operations.

Niagara UK

         With the acquisition of the U.K. steel bar businesses in May 1999,
Niagara UK became the largest independent steel bar producer in the United
Kingdom with hot rolling, cold finishing and distribution operations. These
operations represented, respectively, 36%, 35% and 29% of Niagara UK's total
revenues from unaffiliated customers for 2003; 35%, 34% and 31% for 2002 and
39%, 34% and 27% for 2001.

         Niagara UK's hot rolling operations, which operate under the names Gadd
Dudley Port and Ductile Wesson, offer one of the most comprehensive ranges of
round, hexagon, flat, square and special profile bars and sections to the
manufacturing industry worldwide. These engineering bars include value-added
products that involve the use of various alloys, customized equipment and
special production procedures. The manufacture of hot rolled steel involves
several steps. Semi-finished steel in the form of billets, blooms or slabs is
heated in a furnace to between 1100 and 1200 degrees centigrade to make the
steel suitable for reshaping. The heated semi-finished product is then passed
through up to 11 pairs of large diameter, water-cooled iron rolls which create
the size and shape of bar desired. After cooling, the bars are straightened,
tested for quality and cut to desired length. Niagara UK's hot rolling
facilities produce round, hexagon and square bars up to 4 1/16 inches in
diameter, rectangular bars up to 20 inches wide and a variety of special shapes
and sections for the cold drawn, construction and engineering markets, among
others.

         Niagara UK's cold finishing operations, which operate under the names
GB Longmore, Midland Engineering Steels and Wesson Bright Products, represent
the largest independent cold drawn bar producer in the United Kingdom and one of
the largest producers of cold finished rectangular bars in Europe. These
operations produce cold drawn, machined and turned bars in sizes up to 16 inches
in diameter for rounds, 6 1/4 inches for squares, 20 inches wide for rectangles
and up to 4 inches across flats for hexagons. These products are available in a
wide range of specifications including carbon alloy and are generally sold in
lengths varying from 10 to 20 feet. These cold finished bars are predominantly
used in machining applications, automotive and appliance shafts, screw machine
parts, hydraulic applications, machinery guides and precision shafting.

         Niagara UK's distribution operations operate under the name Macreadys
and represent one of the leading distributors in the U.K. of cold finished and
hot rolled engineering bars. Macreadys distributes throughout the United Kingdom
with warehousing at three sites and sales offices at an additional four
locations in the U.K.

Customers

         Niagara US sells its products primarily to steel service centers,
which accounted for approximately 75% of its sales during 2003, with the
balance of its sales to original equipment manufacturers ("OEMs") and the screw
machine industry. Steel service centers purchase and warehouse large quantities
of standardized steel products which are then sold directly to OEMs. OEMs use
cold drawn steel bars in a wide range of products. Niagara US concentrates its
sales efforts on steel service centers, which purchase relatively standardized
products on a regular basis. By focusing on this market, Niagara US attempts to
minimize the risk of holding obsolete inventory.

         Niagara US has approximately 525 active customers in North America with
sales outside the United States representing less than 5% of its total sales for
each of 2001, 2002 and 2003. For 2003, Niagara US's 10 largest customers (by
tons shipped) represented approximately 67% of its total sales, and its 3
largest customers, Alro Steel Corporation, Earle M. Jorgensen Co. and Joseph T.
Ryerson and Sons, Inc., represented approximately 50% of its total sales. The
loss of any of these three largest customers would have a material adverse
effect on Niagara US's sales.

         Niagara UK sells to a wide customer base in the United Kingdom, Europe
and the rest of the world. Its customer base includes original equipment
manufacturers, component manufacturers, other cold finishers and a large number
of steel service centers. The volume of individual orders varies significantly.
For example, 100,000 lbs is not unusual for the hot rolling businesses and
Macreadys fills orders as small as 20 lbs.

         Niagara UK has approximately 6,300 active accounts. For 2003, its
largest account represented less than 4% of its total sales and its 10 largest
customers represented approximately 18% of its total sales. Approximately 68% of
its sales to unaffiliated customers during 2003 were within the U.K., with 20%
to continental Europe and 12% to the rest of the world. These amounts were 67%,
17% and 16% for 2002 and 65%, 19% and 16% for 2001. Niagara UK's sales to any
one foreign country, other than the United States, represented less than 5% of
its total sales for these periods.

Marketing

         The Company markets its products through salaried in-house sales
personnel and sales representatives compensated on a commission basis.

Raw Materials

         The Company purchases raw materials from mini-mills and integrated
steel mills. Such materials consist of hot rolled steel bars and coils and
semi-finished billets, blooms or slabs for re-rolling. The cost of products
purchased from mini-mills is primarily dependent on the price of scrap steel and
energy. The cost of products purchased from integrated steel mills is dependent
on a number of factors including demand, the price of scrap steel and the volume
and price of foreign imports. Integrated steel mills are more affected by demand
levels and the level of foreign imports than mini-mills. In both the U.S. and
U.K., the Company obtains raw material from domestic and foreign suppliers.

Competition

         The steel bar market is highly competitive, based on price, product
quality and customer service. Management's strategy is to seek to remain
competitive on price and surpass the Company's competitors in product quality
and customer service. The Company's principal competitors in its home markets
are other domestic companies and foreign exporters, and in its foreign markets,
local producers and other exporters. These competitors include integrated
producers, mini-mills and independent cold drawn steel bar producers.

         Management believes that, in the U.S., the ability to offer a full line
of cold finished bar products and the proximity of facilities to major steel
service center markets are key competitive factors in the industry. Close
geographic proximity to customers results in reduced freight costs and faster
delivery of customer orders. In the U.K., management has focused on smaller
orders and orders which are more difficult to produce such as special sections
and rectangles. By accumulating smaller orders into efficient production runs
the Company can reduce customer lead times, accept orders that larger producers
cannot accommodate and improve profit margins.

         The Company competes in a narrow segment of the steel industry, but its
business is affected by conditions within the broader steel industry and, in
particular, the automotive, agricultural and machine tool industries.
Consequently, a significant downturn in any of these industries or in the
broader steel industry may result in a similar downturn in the cold drawn steel
bar market and have an adverse effect on the Company.

         In response to an International Trade Commission finding on the
negative effects of imports on the domestic steel industry and its workers, on
March 5, 2002, President Bush announced tariffs and other measures concerning a
broad range of steel products imported into the United States. These measures
became effective on March 20, 2002 and included tariffs on imported hot rolled
and cold finished steel bar of 30% in the first year, 24% in the second year and
18% in the third year. Excluded from the tariffs were imports from many
developing countries, as well as Canada and Mexico. In May 2002, the Company
submitted applications for exclusion of approximately 22,000 tons of Niagara UK
products (based on 2001 shipments), approximately 58% of which were granted in
August 2002. These exclusions were retroactive to March 20, 2002 thereby
entitling Niagara UK to a refund of approximately $834,000 in Section 201
tariffs paid in respect of these excluded products. In November 2002, the
Company submitted applications for exclusion of approximately 7,400 tons of
Niagara UK products (based on 2001 shipments), approximately 69% of which were
granted on March 21, 2003. These exclusions applied prospectively. On March 27,
2003, the World Trade Organization issued a ruling that the Section 201 tariffs
were a violation of global trade rules. Following this ruling and the
announcement by certain foreign governments that they would subject US products
to similar measures, on December 4, 2003, the United States ended the further
collection of these Section 201 tariffs.

Strategy

         Management's business strategy focuses on improving product quality and
customer service and on maintaining strict cost controls. In the U.S., the
Company offers a full line of cold finished products on a national level.
Through its U.K. operations, the Company offers, on a worldwide basis, a full
range of standard products and a comprehensive range of special sections and
flats (rectangles and squares) which typically yield a higher margin. In
addition, Niagara UK's distribution operations represent one of the leading
distributors of carbon, alloy and stainless bars in the United Kingdom.

         Management seeks to obtain a competitive advantage through the
Company's ability to supply customers on a timely basis with an extensive range
of sizes and shapes of high quality steel bars often at volumes that are not
attractive to larger steel processors. In this regard, the Company maintains
finished goods inventories of the most commonly ordered sizes and shapes of cold
finished bars and minimizes lead times for its hot rolled bar customers by
employing frequent rolling cycles from a comprehensive raw material inventory.

         In order to improve profitability, management has chosen to specialize
in higher margin and value-added products. Accordingly, the Company has focused
its capital investment on these product lines. In the United States, the Company
continues to upgrade its information technology systems in order to improve
customer service and efficiency. The Company's goal in this regard is to fully
integrate its information systems with those of its suppliers and customers. In
the United Kingdom, the Company has restructured operations and consolidated
management and administrative functions in order to improve product range and
quality, more efficiently meet customer requirements and reduce costs.

Employees

         As of December 31, 2003, the Company had 1,070 employees, 524 were
located in the U.S. and 546 were located in the U.K. All of LaSalle's 196 hourly
production employees at its Hammond, Indiana facility as of such date were
covered by a collective bargaining agreement with The Progressive Steelworker's
of Hammond, Inc. which expires on July 18, 2005. All of LaSalle's 20 hourly
employees at its Griffith, Indiana facility as of such date were covered by a
collective bargaining agreement with the United Steel Workers of America and its
local affiliate which expires on February 19, 2006.

         Of the 546 Niagara UK employees as of December 31, 2003, 300 were
covered by collective bargaining agreements with the Iron and Steel Trades
Confederation (237 employees), the Transport and General Workers Union (27
employees) and the General and Municipal Boilermakers Union (41 employees).
These agreements extend indefinitely and contain compensation
provisions which are reviewed annually. These reviews take place at
different times throughout the year based on the facility and the status of the
employee. All other contract terms remain the same from year to year.

Internet Information

         Copies of the Company's Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as well as beneficial
ownership reports on Forms 3, 4 and 5 filed by Niagara directors, officers and
more than 10% beneficial owners, are available free of charge through the
Company's Web site (www.niag.com) as soon as reasonably practicable after the
Company electronically files the material with, or furnishes it to, the
Securities and Exchange Commission (the "SEC").

ITEM 2.  PROPERTIES.

Niagara

         Niagara utilizes approximately 5,000 square feet of space for its
headquarters in New York, New York under a lease expiring on December 31, 2007.

Niagara US

         Niagara US operates manufacturing facilities in Buffalo, New York;
Chattanooga, Tennessee; Midlothian, Texas; and Hammond and Griffith, Indiana.
Niagara LaSalle owns the 207,000 square-foot Buffalo facility, leases the 92,000
square-foot Chattanooga facility and owns the 115,000 square-foot Midlothian
facility. LaSalle owns the 550,000 square-foot Hammond facility and the 51,900
square-foot Griffith facility. The owned facilities are mortgaged to the
Company's lenders. The initial term of the Chattanooga lease extends through
November 30, 2009. Niagara LaSalle has the option to extend the term of this
lease for an additional 10 years at specified rents and may terminate this lease
beginning on December 1, 2004 upon the payment of a termination fee that varies
with the date of termination.

Niagara UK

         In connection with the acquisition of the U.K. steel bar businesses in
May 1999, Niagara and Niagara UK entered into agreements with subsidiaries of
Glynwed calling for the lease or sublease by Niagara UK of production facilities
in the West Midlands region of England and the assignment of sales office leases
located throughout the United Kingdom.

         Certain information concerning the leases for Niagara UK's production
facilities is set forth below. The term for all of these leases extends through
May 2009.

         Operation                             Square footage     Location
         ---------                             --------------     --------
         Gadd Dudley Port(1)(2)                    124,500        Dudley
         Ductile Wesson(1)(2)                      204,500        Moxley
         GB Longmore(1)                            103,000        Willenhall
         Midland Engineering Steels                 32,000        Tipton
         Macreadys(1)(2)                            88,700        Rugby
         Macreadys(1)(2)                            15,500        Newport
         Macreadys(1)(2)                            28,800        Bolton

         (1) Such leases may be terminated by Niagara UK on one year's notice.

         (2) Niagara UK has the option to purchase such facilities at fixed
         prices (which total (pound)7,560,000 (approximately $13.4 million)), or
         to renew the leases with respect thereto for an additional term of 15
         years at commercial market rates.

         The sales offices (Macreadys) range from 400 to 3,200 square feet and
are currently located in Enfield, Southhampton, Leeds and Glasgow. The sales
office leases have various terms ranging to five years.

         Management considers its manufacturing facilities, which operated at
approximately 65% of capacity in 2003, suitable for its current operations.

ITEM 3.  LEGAL PROCEEDINGS.

         Niagara US and Niagara UK are subject to extensive environmental laws
and regulations concerning, among other matters, water and air emissions and
waste disposal. Under such laws, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), Niagara
US and Niagara UK may be responsible for parts of the costs required to remove
or remediate previously disposed wastes or hazardous substances at locations
they own or operate or at locations owned or operated by third parties where
they, or a company from which they acquired assets, arranged for the disposal of
such materials. Claims for such costs have been made against LaSalle with
respect to six such third-party sites. Management believes that, in five cases,
the volumes of the waste allegedly attributable to LaSalle and the share of
costs for which it may be liable are de minimis. In three of these cases,
LaSalle has entered into de minimis settlement agreements resolving the pending
claims of liability. In connection with the fourth site, the United States
Environmental Protection Agency (the "EPA") has notified LaSalle that it does
not intend to seek cost recovery from it at this time. In the one non-de minimis
case, LaSalle has entered into an agreement with a group of other companies
alleged to be responsible for remediation of the site in an effort to share
proportionately the costs of remediation. LaSalle and this group of companies
have also signed an Administrative Order on Consent with the EPA and performed a
limited remediation at the site. LaSalle has received insurance settlements in
amounts that largely cover the financial contributions it has made for these
sites through December 31, 2003. Because liability under CERCLA and analogous
state laws is generally joint and several, and because further remediation work
may be required at these sites, LaSalle may be required to contribute additional
funds. However, based on its volumetric share of wastes disposed and the
participation of other potentially liable parties, management believes that
LaSalle's share of the additional costs will not have a material adverse effect
on the Company's financial position or results of operations.

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

         None.

                                  PART II.

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

         Niagara's Common Stock is traded on The Nasdaq National Market. The
following table sets forth the range of high and low sales prices by quarter for
2002 and 2003.

                                                            High         Low
                                                            ----         ---
2002
     January 1 through March 31.......................     $1.890       $1.420
     April 1 through June 30..........................      3.310        1.810
     July 1 through September 30......................      2.390        1.180
     October 1 through December 31....................      1.955        1.080
2003
     January 1 through March 31.......................      1.800        1.410
     April 1 through June 30..........................      3.250        1.270
     July 1 through September 30......................      3.650        2.610
     October 1 through December 31....................      8.240        2.370

         As of March 24, 2004, there were 35 registered holders of Niagara
Common Stock.

         Niagara has not declared or paid any dividends on its Common Stock
since its inception. The payment of dividends is conditioned on Niagara's
earnings, which are dependent on the earnings of its subsidiaries, capital
requirements and general financial condition. Pursuant to its financing
agreements, Niagara LaSalle and Niagara UK are subject to restrictions on their
ability to declare dividends to Niagara. See "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--Liquidity and Capital
Resources--Financing Activities."

         Stock Options

         The following table summarizes information concerning securities
authorized for issuance under the Company's stock option plan as of December 31,
2003:

<TABLE>
<CAPTION>
                                                                                        Number of securities
                                  Number of securities to       Weighted-average        remaining available for
                                  be issued upon exercise       exercise price of       future issuance under
       Plan category              of outstanding options      outstanding options     equity compensation plans
       -------------              ----------------------      -------------------     -------------------------
<S>                                       <C>                         <C>                        <C>
Equity compensation plans
approved by security holders              1,860,000                   $5.70                      640,000

Equity compensation plans not
approved by security holders                      -                       -                            -
                                          ---------                   -----                      -------
Total                                     1,860,000                   $5.70                      640,000
                                          =========                   =====                      =======

</TABLE>

ITEM 6.  SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>

                                                                    Year ended December 31,
                                               1999(1)         2000            2001            2002            2003
                                               ----            ----            ----            ----            ----
                                                             (in thousands, except per share data)
Statement of Operations Data:
<S>       <C>                               <C>              <C>             <C>             <C>             <C>
Net sales (2)  ........................     $ 281,117        $336,037        $268,637        $260,875        $295,293
Cost of products sold (2) .............       245,170         293,857         239,085         230,286         263,078
Gross profit(2)........................        35,947          42,180          29,552          30,588          32,215
Selling, general and administrative
   expenses(2).........................        24,441          27,996          24,814          25,883          27,095
Gain on sale of property(3)............            --              --              --           3,102             466
Restructuring costs(4) ................            --              --           5,278              --              --
Interest income........................            36               7              --              --              --
Other income...........................           143             152             186              58             332
Interest expense.......................         5,631           7,417           5,373           3,546           3,085
Provision (benefit) for income taxes...         2,299           2,590          (1,100)          2,646           1,225
Net income (loss) .....................         3,757           4,337          (4,627)          1,673           1,608
Net income (loss) per share (basic)....     $     .40        $    .50        $   (.56)       $    .20        $    .20
Net income (loss) per share (diluted)..     $     .40        $    .50        $   (.56)       $    .20        $    .20
Weighted average common shares
   outstanding (basic)................          9,350           8,659           8,329           8,239           8,239
Weighted average common shares
   outstanding (diluted)..............          9,357           8,659           8,329           8,239           8,239


                                                                        At December 31,
                                                 1999            2000            2001            2002            2003
                                                 ----            ----            ----            ----            ----
                                                                         (in thousands)
Balance Sheet Data:
Cash and cash equivalents..............     $   2,234        $  2,351        $  1,692        $  5,561        $  3,553
Trade accounts receivable, net.........        53,126          46,138          37,845          34,283          39,065
Inventories............................        59,442          60,901          44,114          55,663          56,663
Property, plant and equipment, net.....       102,984          98,076          89,658          85,775          80,144
Goodwill...............................         2,022           1,984           1,904           1,904           1,904
Total assets...........................       227,934         215,418         181,879         189,196         186,330
Trade accounts payable.................        50,191          44,468          32,605          37,657          41,294
Accrued expenses.......................         9,506          10,496          10,671          11,456          13,306
Current maturities of long-term debt...         6,411           7,653           9,709           7,509           6,544
Long-term debt, less current maturities        87,388          77,877          62,294          63,817          55,103
Accrued pension and other
   postretirement benefits.............         8,023           7,718           7,289          11,476           6,846
Deferred income taxes..................         9,849          11,266          10,020           9,602          11,217
Total liabilities......................       171,473         159,539         132,626         141,768         134,537
Stockholders' equity ..................       $56,461        $ 55,879        $ 49,253        $ 47,428        $ 51,792
</TABLE>

(1) Includes the results of Niagara UK from May 22, 1999.
(2) Net sales and cost of products sold have been restated for 1999 with
    respect to freight costs in accordance with EITF No. 00-10 issued in
    September 2000. This reclassification resulted in the recording of such
    costs in both net sales and cost of products sold and, accordingly,
    resulted in no change to gross profit for such years. Previously, net sales
    for 1999 had been stated after reduction for freight costs. The amount
    involved was $16,895,000 for the year ended December 31, 1999. Certain
    additional reclassifications, primarily in respect of depreciation, have
    been made in 2000 in order to conform to the presentation of subsequent
    years. The net effect of these reclassifications was to decrease cost of
    products sold, and thereby increase gross profit, and to increase selling,
    general and administrative expenses, each by $251,569 for the year ended
    December 31, 2000.
(3) Represents gain on sale of property by Niagara UK. See "BUSINESS--Corporate
    History," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
    RESULTS OF OPERATIONS-Restructurings and Investments" and Note 2 to the
    Financial Statements.
(4) Represents costs associated with a restructuring of Niagara UK operations.
    See "BUSINESS--Corporate History," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and Note 2 to the Financial
    Statements.

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

         This section contains statements which constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. See the disclosure following Item 7A below for cautionary information
with respect to such forward-looking statements.

Results of Operations

Overview

         During 2003, the Company experienced an overall increase in net sales
and gross profit as compared to 2002. Lower gains on the sale of property by
the Company's U.K. operations during 2003 versus 2002 resulted in an overall
decline in operating and net income between these two years. Excluding such
gains, the Company's operating results for 2003 also improved in comparison to
2002.

         The Company's U.S. operations generated higher net sales during 2003
as compared to 2002, with improvements in both sales volume and pricing. Market
conditions for Niagara US improved throughout the year with demand increasing
as a result of improved business conditions in the manufacturing sector of the
U.S. economy. At the same time, inventories at steel service centers, Niagara
US's primary customers, continued to decline from their 2002 levels. Despite
the lifting of the Section 201 tariffs in December 2003, imports of competing
products remained lower through the fourth quarter of 2003 as a result of
increased global demand for steel, particularly in China, a weak U.S. Dollar
and higher freight costs.

         The Company's results for 2003 were negatively impacted by operating
losses incurred by Niagara UK for the fourth quarter and the year. These
losses were caused primarily by downward pricing pressure on certain products,
lackluster demand related to a weak U.K. manufacturing sector, disadvantageous
exchange rates which reduced Niagara UK's export sales and profitability, and
increased raw material costs.

         Reflecting the improved market conditions that began in 2003, demand
for Niagara US's products has been very strong in the first quarter of 2004,
resulting in Niagara US raising its prices for many of its products. Beginning
in February 2004, Niagara UK also began to experience a modest improvement in
demand, allowing for some price increases. In addition, the Company's raw
material costs have increased significantly from the end of 2003. These
increases were due to higher scrap and other raw material costs incurred by the
Company's suppliers, which in turn were the result of a number of factors
including increased global demand for steel, especially in China, and higher
energy costs. Generally, the Company's operations have been able to recover
these costs through price increases and/or surcharges. While it is uncertain
how long these market conditions will continue, management anticipates that the
Company's results of operations for the first quarter of 2004 will improve in
comparison to each of the last two quarters of 2003.

Restructurings and Investments

         In the third quarter of 2001, the Company announced a restructuring
plan for its hot rolling operations in the United Kingdom. Under this plan,
Niagara UK closed its Dudley Port hot rolling facility in Tipton and transferred
most of its production to its two other hot rolling facilities. In connection
therewith, the Company recorded, in the fourth quarter of 2001, a restructuring
charge of $5,278,074 (approximately (pound)3,662,000), consisting of equipment
write-offs of $3,554,270 (approximately (pound)2,466,000) and redundancy and
reorganization costs of $1,723,804 (approximately (pound)1,196,000). On March
15, 2002, Niagara UK entered into an agreement to sell this leased property for
(pound)3,600,000 ($5,413,572), which Niagara UK had an option to purchase for
(pound)1,495,000 ($2,248,136). On September 30, 2002, Niagara UK completed this
transaction. In connection with this transaction, Niagara UK purchased a parcel
of land in the fourth quarter of 2002 which it subsequently sold during this
period to the purchaser of the property. These sales resulted in a pre-tax gain
of (pound)2,063,022 ($3,102,311).

         In the fourth quarter of 2002, Niagara LaSalle completed significant
equipment purchases from two companies after having prevailed at auctions held
in connection with such companies' bankruptcy proceedings. See "BUSINESS--
Corporate History."

         On May 30, 2003, Niagara UK entered into an agreement to sell its GB
Longmore property in Darlaston. Production at this site had previously been
shifted to GB Longmore's Willenhall facility. On September 19, 2003, Niagara UK
completed this transaction receiving (pound)925,000 ($1,512,875) for the sale of
this leased real property after payment of (pound)413,000 ($675,478) to the
landlord under an option to purchase the property. After related costs, the sale
of this property resulted in a pre-tax gain of (pound)488,849 ($799,532), which
gain was partially offset by (pound)204,109 ($333,827) in losses during the year
on the sale of equipment, resulting in a net gain of (pound)284,740 ($465,705).

         During 2003, Niagara's subsidiaries transferred certain equipment to
each other to more effectively meet the market conditions and requirements of
their respective operations. These transfers resulted in Niagara UK recognizing
intercompany gains of (pound)494,475 ($808,734) for the period. These amounts
have been eliminated in the consolidated financial statements.

Year ended December 31, 2003 compared with December 31, 2002

         Net sales for the year ended December 31, 2003 were $295,292,719,
representing an increase of $34,418,158, or 13.2%, versus the same period in
2002. Net sales by the Company's U.S. operations increased by $18,372,824, or
10.4%, and net sales by the Company's U.K. operations increased by $16,045,334
or 19.1%. The increase in net sales attributable to the Company's U.S. and U.K.
operations was due primarily to an increase in sales volume (6.0% and 2.5%,
respectively) and, to a lesser extent, an increase in prices (3.1% and 4.1%,
respectively). Net sales (and cost of products sold) by the Company's U.K.
operations also reflect a 13.2% increase in the value of the British pound
relative to the U.S. dollar for the year ended December 31, 2003, as compared to
the same period in 2002. The Company's U.K. operations use British pounds as its
functional currency and its net sales (and cost of products sold) were
translated from British pounds into U.S. dollars at higher relative levels for
the year ended December 31, 2003 as compared to the same period in 2002 as a
result of this change in value.

         Cost of products sold for the year ended December 31, 2003 increased by
$32,791,365 to $263,077,664, representing an increase of 14.2% over the same
period in 2002. Cost of products sold attributable to the Company's U.S. and
U.K. operations increased by $18,350,210 and $14,441,157, respectively. This
increase was primarily attributable to the increase in sales volume by the
Company's operations, and to a lesser extent, a 1.9% and 1.2% increase in raw
material costs incurred by the Company's U.S. and U.K. operations, respectively,
for the year ended December 31, 2003 as compared to the same period in 2002.

         Gross margins for the year ended December 31, 2003 decreased by 0.8%
compared to the same period in 2002. Gross margins for the Company's U.S. and
U.K. operations decreased by 1.1% and 0.3%, respectively, as a result of an
increase in the price of raw materials that was partially offset by an increase
in selling prices.

         Selling, general and administrative expenses for the year ended
December 31, 2003 increased by $1,211,171 to $27,094,118, or 9.2% of net sales,
compared to 9.9% of sales for the same period in 2002. The increase in dollar
amount and the decrease as a percentage of net sales were primarily attributable
to the increase in net sales by the Company's operations.

         The Company realized smaller gains on the sale of property and
equipment to third parties during the year ended December 31, 2003 ($465,705),
as compared to the same period in 2002 ($3,102,311).

         Interest expense for the year ended December 31, 2003 decreased by
$460,800 to $3,085,423, due to decreased levels of borrowing and lower interest
rates.

         The Company's net income for the year ended December 31, 2003 was
$1,607,921, compared to net income of $1,673,112 for the comparable period in
the prior year. Net income attributable to the Company's U.S. operations for the
year ended December 31, 2003 was $2,847,903, a decrease of $256,437 over the
same period in 2002, which was due primarily to a reduction in gross margins
attributable to such operations. Net loss attributable to the Company's U.K.
operations for the year ended December 31, 2003 was $745,249, as compared to a
net loss of $1,430,228 incurred by such operations during the year ended
December 31, 2002. This improvement was primarily due to the higher sales volume
in 2003 as compared to 2002, which was partially offset by Niagara UK realizing
smaller gains on the sale of property and equipment to third parties for the
year ended December 31, 2003 ($450,257) as compared to the same period in 2002
($2,906,834).

         Net income attributable to the Company's U.S. operations for the years
ended December 31, 2002 and 2003 reflects statutory tax rates applied against
income before income taxes. For the year ended December 31, 2002, net income
attributable to the Company's U.K. operations reflects a tax rate higher than
the statutory rate as a result of a reduction in Niagara UK's deferred tax asset
given the uncertainty of its realization.

Year ended December 31, 2002 compared with December 31, 2001

         Net sales for the year ended December 31, 2002 were $260,874,561,
representing a decrease of $7,761,969, or 2.9%, versus the same period in 2001.
Net sales by the Company's U.K. operations decreased by $19,540,882, or 18.9%,
which was partially offset by an increase in net sales by the Company's U.S.
operations of $11,778,913 or 7.1%. The decrease in net sales attributable to the
Company's U.K. operations was due primarily to a decrease in volume of 19.0%
and, to a lesser extent, the imposition of U.S. tariffs on imported steel. The
increase in net sales attributable to the Company's U.S. operations was due
primarily to an increase in sales volume of 6.5% and, to a lesser extent, an
increase in prices.

         Cost of products sold for the year ended December 31, 2002 decreased by
$8,798,592 to $230,286,299, representing a decrease of 3.7% over the same period
in 2001. This decrease was primarily attributable to the decrease in the cost of
products sold by the Company's U.K. operations of $14,450,699 due to the
decrease in sales volume by such operations, which was partially offset by an
increase in the cost of products sold by the Company's U.S. operations of
$5,570,085 due to the increase in sales volume by such operations.

         Gross margins for the year ended December 31, 2002 increased by 0.7%
compared to the same period in 2001. Gross margins for the Company's U.S.
operations increased by 2.9% due primarily to the increase in sales volume by
such operations and, to a lesser extent, an increase in prices. This was
partially offset by a decrease of 2.7% in gross margins for the Company's U.K.
operations due primarily to the decrease in sales volume by such operations.

         Selling, general and administrative expenses for the year ended
December 31, 2002 increased by $1,068,669 to $25,882,947, or 9.9% of sales,
compared to 9.2% of sales for the same period in 2001. The increase in dollar
amount is attributable to additional expenses incurred by the Company's U.S.
operations as a result of the increase in sales volume by such operations. The
increase as a percentage of sales is attributable to the overall decrease in
consolidated net sales.

         As described above, in the fourth quarter of 2002, the Company
completed the restructuring of its hot rolled bar operations in the U.K. that
had been announced in the fourth quarter of 2001. The sales of related
properties resulted in a pre-tax gain of $3,102,311 ((pound)2,063,022).

         Interest expense for the year ended December 31, 2002 decreased by
$1,826,133 to $3,546,223, due primarily to decreased levels of borrowing and
lower interest rates.

         For the year ended December 31, 2002, the Company's income tax expense
was $2,646,000, and its effective income tax rate was 62.3%, on $4,319,112 of
income before taxes. The effective rate differs from the U.S. statutory income
tax rate of 34% primarily due to increasing the valuation allowance associated
with the Company's basis differences in its UK property, plant and equipment, in
order to fully reserve the value of these deferred tax assets. For the year
ended December 31, 2001, the tax benefit on the Company's loss before income
taxes ($5,726,519) was $1,100,000. This tax benefit (19.2% of the loss before
income taxes) differs from the statutory rate (34%) primarily due to the
establishment of the U.K. valuation allowance of $631,000. See Note 11 to the
Financial Statements.

         Net income for the year ended December 31, 2002 was $1,673,112 as
compared to a net loss of $4,626,519 for the year ended December 31, 2001. Net
income attributable to the Company's U.S. operations for the year ended December
31, 2002 was $3,103,340, an increase of $3,275,190 compared to the year ended
December 31, 2001. Net loss attributable to the Company's U.K. operations for
the year ended December 31, 2002 was $1,430,288, an improvement of $3,024,441
compared to the year ended December 31, 2001. Net income attributable to the
Company's U.S. operations for 2002 reflects statutory tax rates, whereas the net
loss attributable to the Company's U.K. operations for this period reflects a
tax provision as a result of fully reserving Niagara UK's deferred tax asset
given the uncertainty of its realization. The Company's and Niagara UK's net
income for 2002 includes gains on sales of property of approximately $2.4
million on an after-tax basis, whereas the Company's and Niagara UK's 2001 net
loss includes a restructuring charge related to Niagara UK operations of
approximately $4.3 million on an after-tax basis.

Liquidity and Capital Resources

         The Company's short-term liquidity requirement for day-to-day operating
expenses has been, and is expected to continue to be, funded by cash provided by
operations, borrowings under its revolving credit facilities and advances under
its invoice discounting agreement. The Company's principal long-term liquidity
requirement has been, and is expected to continue to be, the repayment of debt
and the funding of capital expenditures to modernize, improve and expand its
facilities, machinery and equipment. At December 31, 2003, the Company had
combined debt obligations and operating lease commitments of approximately
$9,549,000 payable in 2004, $28,911,000 payable in 2005, $32,263,000 payable in
2006, $3,129,000 payable in 2007, $2,803,000 payable in 2008, and $2,966,000
payable thereafter. Management anticipates that such obligations will be funded
by cash provided by operations. Loans made pursuant to the Company's revolving
credit facilities mature in 2006 and advances under the Company's invoice
discounting agreement mature in 2005. Historically, the Company has been
successful in extending the maturity dates under these agreements. Management
intends to seek further extensions of these maturity dates and/or to refinance
the obligations thereunder.

Investing Activities

         Capital expenditures for the year ending December 31, 2003 were
$2,981,002, compared to $3,833,096 for the same period in 2002. This reduction
was attributable to decreased acquisition of property and equipment by the
Company's US operations from third parties in 2003 as compared to 2002. The
Company anticipates spending approximately $3,200,000 for capital expenditures
during 2004.

Operating Activities

         Cash flows provided by operating activities were $12,267,599 for the
year ended December 31, 2003, an increase of $4,776,731 as compared to cash
flows provided by operating activities of $7,490,868 for the same period in
2002. This increase was largely attributable to a decrease in inventories in
2003 as compared to 2002 (a decrease of $1,167,609 in 2003 as compared to an
increase of $9,740,077 in 2002), which change was primarily attributable to a
marked increase in inventories in 2002 as compared to 2001 in response to
improved business conditions in 2002. This change was partially offset by an
increase in accounts receivable in 2003 as compared to 2002 (an increase of
$2,408,353 in 2003 as compared to a decrease of $5,447,822 in 2002), which
decrease was primarily attributable to the timing of receipt of customer cash
collections at December 31, 2003 versus 2002. Cash and cash equivalents at
December 31, 2003 were $3,552,665, a decrease of $2,008,425 as compared to
December 31, 2002, which decrease was primarily attributable to the timing of
receipt of customer cash collections. Such funds are used for working capital
and other corporate purposes.

Financing Activities

         On April 18, 1997 and in connection with the acquisition of LaSalle,
Niagara US entered into a revolving credit and term loan agreement (as
amended, the "Credit Agreement") and Niagara LaSalle terminated its
previously existing credit agreements. The other parties to the Credit
Agreement are Manufacturers and Traders Trust Company ("M&T"), Comerica
Bank, Citizens Bank of Pennsylvania, and PNC Bank. The obligations of Niagara
US under the Credit Agreement are guaranteed by Niagara and Niagara UK and
secured by substantially all of the assets and a pledge of all outstanding
capital stock of Niagara US.

         At the Company's request, a number of amendments were made to the
Credit Agreement effective September 1, 2002. The revolving credit facility was
reduced from $50,000,000 to $35,000,000 and the balance owed under the term loan
was increased from $14,333,356 to $18,000,000. Principal payments under the term
loan were reduced to $375,000 from $666,666 per month. In addition, effective
September 2003, the maturity date of the term loan and revolving credit loans
made pursuant to the Credit Agreement were extended to July 31, 2006.

         Interest on the term loan is payable in monthly installments either at
the LIBOR rate (for a period specified by Niagara US from time to time) plus
2.85%, or M&T's prime rate plus 1.00% (effective rate of 4.05% at December 31,
2003). Revolving credit loans made pursuant to the Credit Agreement are based on
a percentage of eligible accounts receivable and inventory. Interest on such
loans is payable in monthly installments at a rate that is either 2.50% above
the LIBOR rate (for a period specified by Niagara US from time to time) or M&T's
prime rate plus 0.75% (effective rate of 3.87% at December 31, 2003).

         The Credit Agreement carries restrictions on, among other things,
indebtedness, liens, capital expenditures, dividends, asset dispositions,
cross-defaults and changes in control of Niagara and Niagara US, and requires
minimum levels of net worth through maturity. Also included in this agreement
are requirements regarding the ratio of current assets to current liabilities,
the ratio of net income before interest, taxes, depreciation and amortization,
adjusted for, among other things, unusual, extraordinary and non-recurring
items ("Adjusted EBITDA") to debt service and capital expenditures, and the
ratio of senior secured indebtedness to Adjusted EBITDA. Niagara US was in
compliance with all of these requirements as of December 31, 2003.

         On May 20, 1998, Niagara's Board of Directors authorized the
repurchase, from time to time, of up to one million shares of Niagara Common
Stock in open market and privately negotiated transactions. On October 6, 1999,
Niagara's Board authorized the repurchase of an additional one million Niagara
shares. Such repurchases are subject to market and other conditions and are
financed with internally generated funds and borrowings under the Company's
credit facilities. Shares of Niagara Common Stock repurchased are held as
treasury stock and are available for use in the Company's benefit plans and for
general corporate purposes. As of December 31, 2003, Niagara had repurchased
1,758,938 shares of its Common Stock at a cost of $8,249,684. No shares were
repurchased during 2003.

         On May 21, 1999 and in connection with the acquisition of the steel bar
businesses from Glynwed Steels, Niagara UK entered into a bank facilities
agreement (the "Facilities Agreement") with National Westminster Bank Plc
("National Westminster") providing for a (pound)10 million (approximately $16.2
million) term loan and a (pound)9.8 million (approximately $15.9 million)
revolving credit facility. The obligations of Niagara UK under the Facilities
Agreement are secured by standby letters of credit issued by M&T to National
Westminster (respectively, the "Term Letter of Credit" and the "Revolving Letter
of Credit," and, together, the "Letters of Credit") and substantially all of the
assets of Niagara UK (for the benefit of M&T). Niagara UK's agreement to
reimburse M&T for drawdowns under the Letters of Credit is guaranteed by Niagara
and Niagara US, which guarantees are secured by substantially all of the assets
of Niagara US on a second priority basis. As consideration for the issuance of
the Letters of Credit, Niagara UK paid M&T a total of (pound)178,400
(approximately $285,440) at the time of issuance and agreed to pay further
annual fees (in monthly installments) of 2.5% and 2.75% in respect of the
Revolving and Term Letters of Credit, respectively.

         Principal of the term loan under the Facilities Agreement amortizes in
scheduled monthly installments throughout its term. Through 2003, such monthly
installments had escalated from (pound)50,000 to (pound)160,000. Effective
December 31, 2003, the amortization schedule was amended to provide for monthly
principal payments of (pound)90,000 through April 2006, with an additional
principal payment of (pound)1,348,750 payable upon maturity of the term loan on
May 21, 2006. Revolving credit loans made pursuant to the Facilities Agreement
are based upon a percentage of eligible inventory. On August 8, 2003, the
maturity date on these revolving credit loans was extended to July 31, 2005.
Interest on the term and revolving credit loans under the Facilities Agreement
accrue at the BBA LIBOR rate (for periods specified by Niagara UK from time to
time) plus 0.15% (effective rate of 4.11% as of December 31, 2003) and is
payable at the conclusion of such interest periods.

         The purchase of the U.K. steel bar businesses was also financed
pursuant to (i) a (pound)3.75 million (approximately $6 million) equity
investment by Niagara in Niagara UK (the "Equity Investment"), (ii) a
(pound)3.75 million (approximately $6 million) subordinated loan from
Niagara to Niagara UK which accrued interest at 7.5% per annum (the
"Subordinated Loan") and (iii) a (pound)2.5 million (approximately $4
million) non-interest bearing short-term loan from Niagara to Niagara UK (the
"Short-Term Loan"). The Equity Investment, the Subordinated Loan and the
Short-Term Loan were financed by borrowings under the Credit Agreement. The
Short-Term Loan was repaid during the third quarter of 1999 and the
Subordinated Loan was capitalized to equity of Niagara UK during the fourth
quarter of 2002.

         On August 23, 1999, Niagara UK entered into an Invoice Discounting
Agreement (the "Discount Agreement") with Royal Bank of Scotland Invoice
Discounting Limited ("RBID") (formerly known as Lombard Natwest Discounting
Limited) providing for advances to Niagara UK based upon a formula tied to the
receivables purchased by RBID. The obligations of Niagara UK under the Discount
Agreement are guaranteed by Niagara and secured by substantially all of the
assets of Niagara UK. In connection with the execution of the Discount
Agreement, the Revolving Letter of Credit and the revolving credit facility
under the Facilities Agreement were reduced to (pound)4.9 million (approximately
$7.9 million), and subsequently reduced to (pound)2.5 million (approximately
$4.0 million) as of December 31, 1999 and (pound)1.25 million (approximately
$2.2 million) on August 8, 2003.

         At the Company's request, a number of amendments were made to the
Discount Agreement effective August 23, 2002. These amendments included (i) a
reduction in the maximum amount of advances to Niagara UK from (pound)20 million
(approximately $35.6 million) to (pound)15.0 million (approximately $26.7
million), (ii) a reduction in the interest rate applicable to such advances from
2.25% to 2.0% above Royal Bank of Scotland's base rate (effective rate of 5.39%
at December 31, 2003) and (iii) the extension of the maturity date on such
advances to July 31, 2004. In connection with these amendments, Niagara and
Niagara UK agreed to capitalize the Subordinated Loan, which occurred during the
fourth quarter of 2002. On August 11, 2003, the maturity date for advances made
pursuant to the Discount Agreement was further extended to July 31, 2005.

         The Facilities and Discount Agreements carry restrictions on, among
other things, security interests, borrowed money, asset dispositions, dividends,
transactions with affiliates, capital expenditures, cross-defaults, changes in
control of Niagara UK and mergers and acquisitions. Also included in these
agreements are requirements regarding tangible net worth, the ratio of Adjusted
EBITDA to fixed charges and the ratio of current assets to current liabilities.
Niagara UK was in compliance with all of these requirements as of December 31,
2003.

         In connection with the execution of the Facilities and Discount
Agreements, Niagara and Niagara UK entered into intercreditor agreements which,
among other things restrict the payment of dividends in respect of the Niagara
UK shares.

         As a result of depressed conditions in the manufacturing sector in the
United Kingdom including within the overall steel industry, and conditions
within the insurance industry following the events of September 11, 2001, the
market for credit insurance in the United Kingdom has deteriorated. This has
necessitated Niagara guaranteeing on a short-term basis certain trade payables
of Niagara UK in the aggregate amount of up to (pound)7.35 million
(approximately $13.1 million) as of December 31, 2003 in order to ensure an
orderly supply of raw materials.

         At December 31, 2003, the Company had borrowed or been advanced
approximately $42.1 million under its revolving credit facilities and the
Discount Agreement, and the outstanding balance of its term loans was
approximately $18.9 million. At December 31, 2003, available credit under the
Company's U.S. revolving credit facility was approximately $10.4 million, and
Niagara US had available cash on deposit of approximately $2.1 million.
Availability under Niagara UK's financing agreements was approximately
(pound)2.0 million (approximately $3.6 million) as of December 31, 2003, and
Niagara UK had available cash on deposit of approximately (pound).8 million
(approximately $1.4 million). Working capital of the Company at December 31,
2003 was approximately $42.5 million.

Contractual Obligations and Commercial Commitments

         The following table sets forth certain information concerning the
Company's unconditional obligations and commitments to make future payments
under contracts existing as of December 31, 2003:

<TABLE>
<CAPTION>
                                                              Payments due by period
                                 ----------------------------------------------------------------------------------
                                                                                                       More than 5
Contractual cash obligations        Total        Less than 1 year     1-3 years        4-5 years         years
----------------------------        -----        ----------------     ---------        ---------         -----
<S>                              <C>               <C>               <C>            <C>               <C>
Long-term debt                   $ 61,648,000      $ 6,544,000       $54,791,000    $    184,000      $   128,000
Operating leases                   17,973,000        3,005,000         6,383,000       5,747,000        2,838,000
Purchase obligations               50,345,000       50,345,000                 -               -                -
Other long-term liabilities           101,000           23,000            47,000          31,000                -
                                 -------------   ----------------   -------------   -------------    -------------
Total                            $130,067,000      $59,917,000       $61,221,000      $5,962,000       $2,966,000
                                 =============   ================   =============   =============    =============
</TABLE>

Critical Accounting Policies

         On December 12, 2001, the SEC issued Financial Reporting Release No. 60
which requires a discussion of the critical accounting policies used by
companies in the preparation of their financial statements. Note 1 to the
Financial Statements includes a summary of the significant accounting policies
used by the Company in the preparation of its financial statements. The Company
believes that the following critical accounting policies affect the significant
judgments and estimates used in the preparation of the Financial Statements.

         The discussion and analysis of the Company's financial condition and
results of operations are based upon the Financial Statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of the Financial Statements requires
that management make estimates and assumptions that affect the reported amounts
of assets and liabilities, revenues and expenses and the related disclosure of
contingent assets and liabilities. On an ongoing basis, management evaluates
these estimates, including those related to inventory reserves, taxes, doubtful
accounts, intangible and long-lived assets, insurance, litigation, environmental
compliance and other contingencies. Management bases its estimates on historical
data, when available, professional advice, experience and various assumptions
that are believed to be reasonable under the circumstances, the combined results
of which form the basis for making judgments about the carrying values of assets
and liabilities. Management believes that the estimates employed are appropriate
and the resulting carrying values are reasonable; however, actual results could
differ from the original estimates requiring adjustments to these carrying
values in future periods.

         Revenue from the sale of products is recorded at the time the goods are
shipped and title and risk of loss has transferred. Revenue from freight charged
to customers is recognized when products are shipped. Provisions for discounts,
customer returns and other adjustments are provided for in the period the
related sales are recorded based upon historical data.

         The Company reviews the carrying values of its long-lived and
identifiable intangible assets for possible impairment whenever events or
changes in circumstances indicate that the carrying amount of the assets may not
be recoverable. The Company assesses recoverability of these assets by
estimating future nondiscounted cash flows. Any long-lived assets held for
disposal are reported at the lower of their carrying amounts or fair value less
cost to sell.

Effects of Recent Accounting Pronouncements

         In June 2001, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations," which requires that entities use the purchase method of
accounting, and prohibits the use of the pooling-of-interests method of
accounting, for all business combinations initiated after June 30, 2001. This
statement also requires that the Company recognize acquired intangible assets
apart from goodwill if the acquired intangible assets meet certain criteria. The
Company's previous business combinations were accounted for using the purchase
method. The adoption of this statement has not had an effect on the Company's
financial statements.

         In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets," which requires, among other things, that entities no longer
amortize goodwill and other intangible assets having indefinite useful lives,
but rather test them, at least annually, for impairment. In accordance with this
statement, intangible assets that have finite useful lives will continue to be
amortized over their useful lives. SFAS No. 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when such assets were
initially recognized. The Company adopted SFAS No. 142 during the year ended
December 31, 2002. Amortization of goodwill was computed using the straight-line
method over 30 years in the year ended December 31, 2001. There was no
amortization of goodwill in the years ended December 31, 2002 and 2003. See Note
16 to the Financial Statements.

         In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," which addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. This statement is required to be applied for
fiscal years beginning after June 15, 2002. The adoption of this statement as of
January 1, 2003 did not have an effect on the Company's financial statements.

         In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which addresses financial
accounting for the impairment or disposal of long-lived assets. This statement
requires that one accounting model be used for long-lived assets to be disposed
of by sale, and broadens the presentation of discontinued operations to include
more disposal transactions. This statement is required to be applied for fiscal
years beginning after December 15, 2001. The adoption of this statement has not
had an effect on the Company's financial statements.

         In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, and Amendment of FASB Statement No. 13, and
Technical Corrections." This statement, among other things, rescinds SFAS No. 4,
"Reporting Gains and Losses from Extinguishment of Debt," which required that
all gains and losses from the extinguishment of debt be aggregated and, if
material, classified as an extraordinary item, net of related income tax effect.
As a result, the criteria in Accounting Principles Board Opinion No. 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," will now be used to classify such gains and losses.
SFAS No. 145 also amends SFAS No. 13 to require that certain lease modifications
that have economic effects similar to sale-leaseback transactions be accounted
for in the same manner as sale-leaseback transactions. Such provisions of SFAS
No. 145 are required to be applied in fiscal years beginning after May 15, 2002.
The adoption of this statement as of January 1, 2003 did not have an effect on
the Company's financial statements.

         In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred, as opposed to prior guidance which provided that
liability for such exit costs be recognized at the date of an entity's
commitment to an exit or disposal plan. This statement is required to be applied
to exit or disposal activities that are initiated after December 31, 2002. The
adoption of this statement as of January 1, 2003 did not have an effect on the
Company's financial statements.

         In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Guarantees of
the Indebtedness of Others," which interprets the guidance in FASB Statement No.
5, "Accounting for Contingencies," relating to a guarantor's accounting for, and
disclosure of, certain types of guarantees. Interpretation No. 45 requires that
a guarantor recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in issuing the guarantee. Under
Interpretation No. 45, the recognition of the liability is required even if it
is not probable that payments will be required under the guarantee. Previously,
SFAS No. 5 required recognition of a liability only for a probable loss. The
recognition requirements of Interpretation No. 45 apply to guarantees issued or
modified after December 31, 2002. The disclosure requirements are effective for
interim and annual financial statements ending after December 15, 2002. The
adoption of Interpretation No. 45 as of January 1, 2003 did not have an effect
on the Company's financial statements.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure--an amendment of FASB
Statement No. 123," which amends the disclosure requirements of SFAS No. 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect on the method used on reported results. The adoption of this statement as
of January 1, 2003 did not have an effect on the Company's financial statements.

         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends SFAS
No. 133 for certain decisions made by the FASB and is effective for contracts
entered into or modified after June 30, 2003 and for hedging relationships
designated after June 30, 2003. SFAS No. 149 is to be applied prospectively. The
provisions of SFAS No. 149 that relate to SFAS No. 133 implementation issues
that have been effective for fiscal quarters that began prior to June 15, 2003
continue to be applicable in accordance with their respective effective dates.
The adoption of this statement as of July 1, 2003 did not have an effect on the
Company's financial statements.

         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity" which
establishes standards for classifying and measuring certain financial
instruments with characteristics of both a liability and equity. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and is otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of this statement as of July 1, 2003
did not have an effect on the Company's financial statements.

         In December 2003, the FASB issued SFAS No. 132 (Revised 2003),
"Employer's Disclosures about Pensions and Other Post-Retirement Benefits,"
which revises employer's disclosures about pension plans and other
postretirement benefit plans. SFAS 132 (Revised 2003) retains the disclosure
requirements of SFAS 132, and requires additional disclosures about the assets,
obligations, cash flows and net periodic benefit cost of defined benefit pension
plans and other defined benefit postretirement plans. The disclosure
requirements of SFAS 132 (Revised 2003) are generally effective for financial
statements with fiscal years ending after December 31, 2003. Certain additional
disclosures about foreign plans and estimated future benefit payments are
effective for fiscal years ending after June 15, 2004. The Company adopted the
required provisions of this revised statement as of December 31, 2003.

         In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities, an interpretation of Accounting Research Bulletin
No. 51," revised in December 2003 ("Interpretation No. 46"), which defines when
a business enterprise must consolidate a variable interest entity.
Interpretation No. 46 applies in the first fiscal year or interim period
beginning after December 15, 2003 to entities in which an enterprise holds a
variable interest that it acquired before February 1, 2003 and applies
immediately to variable interest entities created after January 31, 2003. The
Company did not have any variable interest entities as of December 31, 2003.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's primary market risks include fluctuations in interest
rates, variability in interest rate spreads (i.e., prime to LIBOR spreads),
exchange rate variability, the credit risk of its customers and the availability
to its suppliers of credit insurance on their receivables from the Company. The
Company does not trade in derivative financial instruments. Substantially all of
the Company's non-trade indebtedness relates to loans made pursuant to the
Credit and Facilities Agreements and advances under the Discount Agreement.
Interest on the term loan under the Credit Agreement accrues at either the LIBOR
rate (for a period specified by Niagara US from time to time) plus 2.85%, or
M&T's prime rate plus 1.00%. Interest on revolving credit loans made pursuant to
such agreement accrues at either 2.50% above the LIBOR rate (for a period
specified by Niagara US from time to time) or M&T's prime rate plus 0.75%.
Interest on the term and revolving credit loans under the Facilities Agreement
accrues at the BBA LIBOR rate (for a period specified by Niagara UK from time to
time) plus 0.15%. Interest on advances under the Discount Agreement accrues at
Royal Bank of Scotland's base rate plus 2.0%. Assuming the current level of
borrowings at variable rates and assuming a one point increase in average
interest rates under these borrowings, it is estimated that the Company's annual
interest expense would increase by approximately $600,000. Management attempts
to reduce market risks associated with the fluctuations in interest rates
through the selection of LIBOR periods under the Credit and Facilities
Agreements and advance amounts under the Discount Agreement (see "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
--Liquidity and Capital Resources--Financing Activities").

         The Company sells its products primarily to customers in North America
and Europe. Revenues from sales by Niagara US are collected exclusively in U.S.
dollars. Niagara UK's revenues are generally collected in the local currency of
its customers. In order to reduce its exposure to fluctuations in exchange
rates, Niagara UK purchased foreign exchange contracts in amounts and with
expiration dates in line with customer orders. Niagara UK discontinued this
practice in February 2002. Following the adoption of the Euro and through
December 31, 2003, Niagara UK borrowed funds in foreign currencies and amounts
in line with its export sales, and repaid such borrowings upon receipt of funds
from its foreign customers.

         The Company is subject to the economic conditions affecting its
customers. The Company's exposure to losses on trade accounts receivable is
principally dependent on each customer's financial condition. The Company
monitors its exposure for credit losses and maintains allowances for anticipated
losses after giving consideration to current delinquency data, historical loss
experience, and economic conditions impacting steel service centers and original
equipment manufacturers. Management continuously reviews information concerning
the financial condition of the Company's customers and believes that the
Company's allowance for doubtful accounts is sufficient to cover such risks. In
addition, Niagara UK has insured substantially all of its accounts receivable to
further reduce its customer credit risk. Generally, these insurance policies
provide for payments to Niagara UK of 80% of the unpaid invoiced amounts.

         As a result of depressed conditions in the manufacturing sector in the
United Kingdom including within the overall steel industry, and conditions
within the insurance industry following the events of September 11, 2001, the
market for credit insurance in the United Kingdom has deteriorated. This has
necessitated Niagara guaranteeing certain trade payables of Niagara UK in the
aggregate amount of up to (pound)7.35 million (approximately $13.1 million) as
of December 31, 2003 in order to ensure an orderly supply of raw materials.

             CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
       PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

         The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. Some of the statements in this
Form 10-K, including, without limitation, those made under "BUSINESS" and
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" may constitute forward-looking statements. When used in this Form
10-K, the words "may," "will," "should," "could," "expects," "plans,"
"anticipates," "intends," " believes," "estimates," "predicts," "projects,"
"likely," or "continue" and other similar expressions are intended to identify
such forward-looking statements. These statements involve known and unknown
risks, uncertainties and other factors, many of which are beyond the control of
the Company, that may cause the Company's actual results to be materially
different from those expressed or implied by such forward-looking statements, in
future filings by Niagara with the SEC, in the Company's press releases or in
oral statements made by authorized officers of the Company. Such factors
include, among other things:

o        Cyclicality - The Company's products are used in the automotive,
         agricultural and machine tool industries, among others. As a result,
         demand for such products is closely tied to the economic cycles that
         drive these businesses. In addition, demand and prices for the
         Company's products in the Company's home and export markets are
         impacted by business and economic conditions in foreign countries. For
         these reasons and others, the Company's financial performance has been,
         and will likely continue to be, cyclical in nature.

o        Competition - There is excess world capacity for many of the products
         produced by the Company. In addition, the Company's largest competitors
         are vertically integrated with steelmaking, hot rolling and cold
         drawing capabilities. This integration can result in lower raw material
         costs to these competitors. See "BUSINESS -- Competition."

o        Foreign Imports - Low-priced imports of competing products and
         low-priced manufactured products which utilize the Company's products
         can affect the market for the Company's products, particularly in
         Niagara US and Niagara UK's respective home markets. In addition,
         tariffs and other measures and the market and governmental responses
         thereto may affect the Company's operations. Recently lifted tariffs in
         the U.S. may result in an increase in foreign imports depending upon
         other market factors. See "BUSINESS -- Competition."

o        Foreign Sales - Approximately 32% of Niagara UK's sales to
         non-affiliates during 2003 were to customers outside of the United
         Kingdom. Revenues in respect of such sales are generally collected in
         the local currency of the customer. See "MANAGEMENT'S DISCUSSION AND
         ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Results of
         Operations" and "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
         RISK." Margins on foreign sales can be impacted by, among other things,
         foreign currency exchange rates and transportation costs and
         availability. Tariffs and other measures that may be imposed by the
         different governments in the Company's export markets and the market
         and governmental response thereto may also affect both the Company's
         U.S. and U.K. operations. See "BUSINESS--Competition."

o        Customer Concentration - Niagara US's 3 largest customers represented
         approximately 50% of its total sales for 2003. The loss of any of these
         customers would have a material adverse effect on Niagara US's sales.
         See "BUSINESS -- Customers."

o        Raw Materials - The market for the Company's raw materials can
         experience significant volatility as a result of changes in steel scrap
         prices and energy costs and business and economic conditions throughout
         the world. There is no assurance that the Company will be successful in
         increasing or maintaining prices for its products to recover any
         increases in raw material costs it has incurred or in passing along on
         a timely basis such costs in the form of surcharges to its customers.

o        Debt Obligations - Loans made pursuant to the Company's revolving
         credit facilities mature in 2006 and advances under the Company's
         invoice discounting agreement mature in 2005. Historically, the Company
         has been successful in extending the maturity dates under these
         agreements. While management intends to seek further extensions of
         these maturity dates and/or to refinance the obligations thereunder,
         there can be no assurance that either of these options will be
         available if needed.

o        Interdependence of Operations - Niagara UK sells substantial amounts of
         its products to Niagara US. See Note 18 to the Financial Statements. In
         addition, Niagara US and Niagara UK each guarantee the obligations of
         the other under the Company's financing arrangements, as has Niagara
         which has also guaranteed certain trade indebtedness and lease
         obligations of Niagara UK. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Liquidity and Capital
         Resources--Financing Activities." Accordingly, a significant downturn
         in the financial condition or results of operations of Niagara US or
         Niagara UK can have a corresponding effect on the other and Niagara.

o        Transportation Availability and Costs - The Company is dependent on
         third parties for the delivery of raw materials and to transport much
         of its finished goods to its customers. Recently, increased business
         activity in certain countries and regulatory changes have resulted in
         certain of the Company's operations experiencing reduced transportation
         availability and increased costs. There is no assurance that the
         Company will be successful in fulfilling its transportation needs on a
         timely basis, and increasing its prices to recover such costs or
         passing along such costs in the form of surcharges to its customers.

o        Management Employment Contracts - Certain members of management do not
         have employment contracts with the Company. There is no assurance that
         the Company will be able to retain these individuals.

o        Expiration or Review of Union Contracts - LaSalle's hourly production
         employees at its Hammond and Griffith, Indiana facilities are covered
         by collective bargaining agreements which expire on July 18, 2005 and
         February 19, 2006, respectively. There is no assurance that LaSalle
         will be able to negotiate new agreements on favorable economic terms.
         In addition, a large number of Niagara UK's employees are covered by
         collective bargaining agreements containing compensation provisions
         which are reviewed annually. There is no assurance that Niagara UK will
         be able to agree with the covered employees at the time of such review.
         Accordingly, the Company may experience work stoppages or other labor
         difficulties. See "BUSINESS -- Employees."

o        Environmental Matters - Niagara US and Niagara UK are subject to
         extensive environmental laws and regulations concerning the discharge
         of materials into the environment and the removal or remediation of
         environmental contamination at locations owned or operated by them or
         at locations owned or operated by third parties where they, or a
         company from which they acquired assets, arranged for the disposal of
         such materials. While the costs of complying with the current
         regulations and the Company's share of remediation expenses at
         locations where Niagara's subsidiaries have been identified as a
         responsible party have not adversely affected the Company in any
         material respect, there is no assurance that substantial additional
         costs will not be required as a result of more stringent regulations,
         an increase in the Company's share of remediation costs or the
         discovery of additional contamination at the Company's facilities or
         at other locations for which the Company would be responsible. See
         "LEGAL PROCEEDINGS."

o        Acts of Terrorism or War - The operations of the Company, its
         suppliers and customers may be affected by further acts of terrorism
         or war.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                           Page
                                                                           ----
Reports of Independent Auditors...........................................22-23
Consolidated Balance Sheets..................................................24
Consolidated Statements of Operations........................................25
Consolidated Statements of Stockholders' Equity..............................26
Consolidated Statements of Cash Flows........................................27
Notes to Consolidated Financial Statements................................28-61


Independent Auditors' Report



Niagara Corporation
New York, New York

We have audited the accompanying consolidated balance sheet of Niagara
Corporation and its subsidiaries (together, the "Company") as of December 31,
2003, and the related consolidated statements of operations, stockholders'
equity and cash flows for the year ended December 31, 2003. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Niagara
Corporation and its subsidiaries at December 31, 2003, and the consolidated
results of their operations and their cash flows for the year ended December 31,
2003, in conformity with accounting principles generally accepted in the United
States of America.



/s/ Deloitte & Touche LLP

Parsippany, New Jersey

March 26, 2004


Report of Independent Certified Public Accountants



Niagara Corporation
New York, New York

We have audited the accompanying consolidated balance sheet of Niagara
Corporation and its subsidiaries (together, the "Company") as of December 31,
2002, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the two years in the period ended December 31,
2002. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Niagara
Corporation and its subsidiaries at December 31, 2002, and the consolidated
results of their operations and their cash flows for each of the two years in
the period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.


/s/ BDO Seidman, LLP
BDO Seidman, LLP

New York, New York

February 4, 2003


<TABLE>
                                                                                            NIAGARA CORPORATION
                                                                                               AND SUBSIDIARIES
<CAPTION>


                                                                                    Consolidated Balance Sheets

======================================================================================================================

 December 31,                                                                            2002                   2003
----------------------------------------------------------------------------------------------------------------------
 Assets (Note 5)
 Current:
<S>                                                                             <C>                    <C>
    Cash and cash equivalents                                                   $   5,561,090          $   3,552,665
    Trade accounts receivable, net of allowance for doubtful
       accounts of $1,347,000 and $1,200,000 (Note 11)                             34,283,089             39,064,625
    Inventories (Note 3)                                                           55,662,799             56,662,855
    Deferred income taxes (Note 10)                                                 1,953,000              2,138,000
    Other current assets                                                            3,146,316              2,264,934
----------------------------------------------------------------------------------------------------------------------
         Total current assets                                                     100,606,294            103,683,079

 Property, plant and equipment, net (Note 4)                                       85,775,275             80,143,847
 Goodwill (Note 16)                                                                 1,904,499              1,904,499
 Deferred financing costs, net of accumulated amortization
    of $627,252 and $744,226                                                          147,748                 85,774
 Intangible pension asset (Note 6)                                                    318,000                266,000
 Other assets, net (Note 16)                                                          444,333                246,617
----------------------------------------------------------------------------------------------------------------------
                                                                                $ 189,196,149          $ 186,329,816
======================================================================================================================
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
    Accounts payable                                                            $  37,656,820          $  41,294,480
    Accrued expenses (Note 2)                                                      11,455,990             13,305,585
    Current maturities of long-term debt (Note 5)                                   7,509,462              6,544,359
----------------------------------------------------------------------------------------------------------------------
         Total current liabilities                                                 56,622,272             61,144,424

 Other:
    Long-term debt, less current maturities (Note 5)                               63,816,781             55,103,487
    Accrued pension cost (Note 6)                                                   6,729,000              1,935,000
    Accrued other postretirement benefits (Note 6)                                  4,747,067              4,910,717
    Deferred income taxes (Note 10)                                                 9,602,000             11,217,000
    Other noncurrent liabilities                                                      250,667                226,730
----------------------------------------------------------------------------------------------------------------------
         Total liabilities                                                        141,767,787            134,537,358
----------------------------------------------------------------------------------------------------------------------
 Commitments and contingencies (Notes 8, 9 and 13)
 Stockholders' equity (Notes 6, 7 and 9):
    Preferred stock, $.001 par value - 500,000 shares
       authorized; none outstanding                                                         -                      -
    Common stock, $.001 par value - 15,000,000 shares
        authorized; 9,997,455 issued                                                    9,998                  9,998
    Additional paid-in capital                                                     50,111,675             50,111,675
    Retained earnings                                                              13,525,271             15,133,192
    Accumulated other comprehensive loss                                           (7,968,898)            (5,212,723)
----------------------------------------------------------------------------------------------------------------------
                                                                                   55,678,046             60,042,142
    Treasury stock, at cost, 1,758,938 shares                                      (8,249,684)            (8,249,684)
----------------------------------------------------------------------------------------------------------------------
         Total stockholders' equity                                                47,428,362             51,792,458
----------------------------------------------------------------------------------------------------------------------
                                                                                $ 189,196,149          $ 186,329,816
======================================================================================================================

                                                      See accompanying notes to the consolidated financial statements.
</TABLE>


<TABLE>
                                                                                                NIAGARA CORPORATION
                                                                                                   AND SUBSIDIARIES
<CAPTION>


                                                                              Consolidated Statements of Operations

======================================================================================================================

 Year ended December 31,                                                 2001               2002                2003
----------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                <C>                <C>
 Net sales (Note 11)                                             $268,636,530       $260,874,561       $ 295,292,719
 Cost of products sold (Note 12)                                  239,084,891        230,286,299         263,077,664
----------------------------------------------------------------------------------------------------------------------
         Gross profit                                              29,551,639         30,588,262          32,215,055
 Operating (expenses) income
   and restructuring costs:
    Selling, general and administrative                           (24,814,278)       (25,882,947)        (27,094,908)
    Gain on sale of property (Note 2)                                       -          3,102,311             465,705
    Restructuring costs (Note 2)                                   (5,278,074)                 -                   -
----------------------------------------------------------------------------------------------------------------------
         Operating income (loss)                                     (540,713)         7,807,626           5,585,852
 Interest expense                                                  (5,372,356)        (3,546,223)         (3,085,423)
 Other income                                                         186,550             57,709             332,492
----------------------------------------------------------------------------------------------------------------------
         Income (loss) before income taxes                         (5,726,519)         4,319,112           2,832,921
 Provision (benefit) for income taxes (Note 10)                    (1,100,000)         2,646,000           1,225,000
----------------------------------------------------------------------------------------------------------------------
 Net income (loss)                                               $ (4,626,519)      $  1,673,112       $   1,607,921
======================================================================================================================
 Net income (loss) per share
    (basic and diluted)                                          $       (.56)      $        .20       $         .20
======================================================================================================================
 Weighted average common shares outstanding
    (basic and diluted) (Note 14)                                   8,329,145          8,238,517           8,238,517
======================================================================================================================

                                                   See accompanying notes to the consolidated financial statements.
</TABLE>


<TABLE>

                                                                                                NIAGARA CORPORATION
                                                                                                   AND SUBSIDIARIES
<CAPTION>

                                                                    Consolidated Statements of Stockholders' Equity

==================================================================================================================================

 Years ended December 31, 2001, 2002 and 2003
----------------------------------------------------------------------------------------------------------------------------------
                                       Common stock                                    Accumulated
                                  --------------------    Additional                       other        Treasury       Total
                                  Number of                paid-in       Retained      comprehensive    stock,     stockholders'
                                   shares       Amount     capital       earnings          loss         at cost       equity
--------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>         <C>         <C>            <C>            <C>           <C>           <C>
 Balance, January 1, 2001         9,997,455   $ 9,998     $50,111,675    $16,478,678    $(2,691,219)  $(8,030,409)  $55,878,723
--------------------------------------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net loss for the year                 -         -               -     (4,626,519)             -             -    (4,626,519)
    Foreign currency
       translation adjustment             -         -               -              -       (476,415)            -      (476,415)
    Minimum pension liability
       adjustment ($2,137,000,
       net of tax benefit of
       $833,000 - Note 6)                 -         -               -              -     (1,304,000)            -    (1,304,000)
--------------------------------------------------------------------------------------------------------------------------------
      Total comprehensive loss                                                                                      (6,406,934)
--------------------------------------------------------------------------------------------------------------------------------
 Purchase of treasury stock,
    at cost (a)                           -         -               -              -              -      (219,275)     (219,275)
--------------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 2001       9,997,455     9,998      50,111,675     11,852,159     (4,471,634)    8,249,684)   49,252,514
--------------------------------------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net income for the year               -         -               -      1,673,112              -             -     1,673,112
    Foreign currency
       translation adjustment             -         -               -              -        851,736             -       851,736
    Minimum pension liability
       adjustment ($7,130,000,
       net of tax benefit of
       $2,781,000, Note 6)                -         -               -              -     (4,349,000)            -    (4,349,000)
--------------------------------------------------------------------------------------------------------------------------------
        Total comprehensive loss                                                                                     (1,824,152)
--------------------------------------------------------------------------------------------------------------------------------

 Balance, December 31, 2002       9,997,455    $9,998     $50,111,675     13,525,271     (7,968,898)   (8,249,684)   47,428,362

--------------------------------------------------------------------------------------------------------------------------------
 Comprehensive income:
    Net income for the year               -         -               -      1,607,921              -             -     1,607,921
    Foreign currency
       translation adjustment             -         -               -              -        855,175             -       855,175
    Minimum pension liability
       adjustment ($3,117,000,
       net of tax expense of
       $1,216,000, Note 6)                -         -               -              -      1,901,000             -     1,901,000
--------------------------------------------------------------------------------------------------------------------------------
       Total comprehensive income                                                                                     4,364,096
--------------------------------------------------------------------------------------------------------------------------------
 Balance, December 31, 2003       9,997,455    $9,998     $50,111,675    $15,133,192    $(5,212,723)  $(8,249,684)  $51,792,458
================================================================================================================================


(a) During the year ended December 31, 2001, Niagara Corporation repurchased 125,300 shares of its
    Common Stock at a cost of $219,275
==================================================================================================================================

                                                             See accompanying notes to the consolidated financial statements.
</TABLE>


<TABLE>

                                                                                              NIAGARA CORPORATION
                                                                                                 AND SUBSIDIARIES
<CAPTION>

                                                                            Consolidated Statements of Cash Flows
44                                                                                                        (Note 17)

=====================================================================================================================

 Year ended December 31,                                               2001               2002                2003
---------------------------------------------------------------------------------------------------------------------
 Cash flows from operating activities:
<S>                                                           <C>                <C>                 <C>
    Net income (loss)                                         $  (4,626,519)     $   1,673,112       $   1,607,921
---------------------------------------------------------------------------------------------------------------------
    Adjustments to reconcile net income (loss)
    to net cash provided by operating activities:
       Depreciation and amortization                              7,736,862          9,104,131           9,091,107
       Loss (gain) on sale of property and equipment              3,554,270         (3,102,311)           (465,705)
       Provision for doubtful accounts                             (165,084)           379,559              (4,853)
       Deferred income taxes                                       (355,000)         2,088,000             254,000
       Minimum pension liability adjustment                      (2,137,000)        (7,130,000)          3,117,000
       Changes in assets and liabilities:
           Decrease (increase) in accounts receivable             7,555,242          5,447,822          (2,408,353)
           Decrease (increase) in inventories                    16,026,062         (9,740,077)          1,114,445
           (Increase) decrease in other current assets             (724,060)           918,768           1,052,739
           (Increase) decrease in other assets                      (15,000)          (102,495)             45,652
           (Decrease) increase in accounts payable,
             accrued expenses and other noncurrent
             liabilities                                        (11,346,340)         7,954,360          (1,136,354)
---------------------------------------------------------------------------------------------------------------------
              Total adjustments                                  20,129,952          5,817,757          10,659,678
---------------------------------------------------------------------------------------------------------------------
              Net cash provided by operating activities          15,503,433          7,490,868          12,267,599
---------------------------------------------------------------------------------------------------------------------
 Cash flows from investing activities:
    Proceeds from sale of property, net                                   -          3,102,311             875,367
    Acquisition of property and equipment                        (3,110,207)        (3,833,096)         (2,981,002)
---------------------------------------------------------------------------------------------------------------------
              Net cash used in investing activities              (3,110,207)          (730,785)         (2,105,635)
---------------------------------------------------------------------------------------------------------------------
 Cash flows from financing activities:
    Financing costs                                                       -                  -             (55,000)
    Proceeds from long-term debt                                          -          3,666,644                   -
    Repayment of long-term debt                                 (12,707,710)        (6,806,021)        (12,372,402)
    Payments to acquire treasury stock                             (219,275)                 -                   -
---------------------------------------------------------------------------------------------------------------------
              Net cash used in financing activities             (12,926,985)        (3,141,377)        (12,427,402)
---------------------------------------------------------------------------------------------------------------------
 Effect of exchange rate changes on cash and cash                  (124,686)           250,313             257,013
    equivalents
---------------------------------------------------------------------------------------------------------------------
 Net (decrease) increase in cash and cash equivalents              (658,445)         3,869,020          (2,008,425)
 Cash and cash equivalents, beginning of year                     2,350,515          1,692,070           5,561,090
---------------------------------------------------------------------------------------------------------------------
 Cash and cash equivalents, end of year                       $   1,692,070      $   5,561,090       $   3,552,665
---------------------------------------------------------------------------------------------------------------------
                                                   See accompanying notes to the consolidated financial statements.
</TABLE>



                                                             NIAGARA CORPORATION
                                                                AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements

================================================================================


1.   SUMMARY OF               Organization and Business Operations
     SIGNIFICANT
     ACCOUNTING POLICIES      Niagara Corporation ("Niagara") was
                              incorporated in Delaware on April 27, 1993
                              with the objective of acquiring an operating
                              business in the metals processing and
                              distribution industry or in a metals-related
                              manufacturing industry.

                              Niagara consummated an initial public offering on
                              August 20, 1993 and raised net proceeds of
                              $15,295,100. Since that date, it has made
                              acquisitions of three cold finished steel bar
                              producers in the United States and one group of
                              businesses in the United Kingdom engaged in hot
                              rolling, cold finishing and distributing steel
                              bars.

                              Niagara's subsidiaries, Niagara LaSalle
                              Corporation ("Niagara LaSalle") and LaSalle Steel
                              Company ("LaSalle," and together with Niagara
                              LaSalle, "Niagara US") operate from five locations
                              in the United States. Niagara's subsidiary,
                              Niagara LaSalle (UK) Limited ("Niagara UK"),
                              operates from seven locations in the United
                              Kingdom. Niagara LaSalle and LaSalle are Delaware
                              corporations. Niagara UK is an English company.

                              Niagara's subsidiaries (together with Niagara, the
                              "Company") produce cold drawn and hot rolled steel
                              bars for distribution primarily within North
                              America and Europe.

                              Principles of Consolidation

                              The consolidated financial statements include the
                              accounts of Niagara and its subsidiaries, all of
                              which are wholly-owned. All material intercompany
                              accounts and transactions have been eliminated.

                              Earnings Per Share

                              The Company follows Statement of Financial
                              Accounting Standards ("SFAS") No. 128, "Earnings
                              per Share," which requires presentation of basic
                              earnings per share and diluted earnings per share
                              by all entities that have publicly traded common
                              stock or potential common stock issuances
                              (options, warrants, convertible securities or
                              contingent stock arrangements). Basic earnings per
                              share is computed by dividing income available to
                              common stockholders by the weighted average number
                              of common shares outstanding during the period.
                              Diluted earnings per share gives effect to all
                              dilutive potential common shares outstanding
                              during the period. The computation of diluted
                              earnings per share does not assume conversion,
                              exercise or contingent exercise of securities that
                              would have an antidilutive effect on earnings.

                              Foreign Currency Translation and Transactions

                              Niagara UK uses British pounds sterling
                              ("(pound)") as its functional currency and its
                              accounts are translated to United States
                              dollars in conformity with SFAS No. 52,
                              "Foreign Currency Translation." Assets and
                              liabilities  of this subsidiary are
                              translated at the exchange rates in effect at the
                              balance sheet dates and the related revenues and
                              expenses have been translated at the average rates
                              for the periods. Translation adjustments arising
                              from the use of different exchange rates from
                              period to period are included as accumulated other
                              comprehensive income (loss) within the Statements
                              of Stockholders' Equity. Gains and losses
                              resulting from foreign currency transactions are
                              included in other income (expense) within the
                              Statements of Operations.

                              Cash Equivalents

                              The Company considers all highly liquid
                              investments with maturities of three months or
                              less when purchased to be cash equivalents.

                              Business and Credit Concentrations

                              Financial instruments that potentially subject the
                              Company to concentrations of credit risk consist
                              principally of cash equivalents and trade accounts
                              receivable. The Company places its temporary cash
                              investments with high credit quality financial
                              institutions.

                              The Company competes in a narrow sector of the
                              steel industry and its business is affected by
                              conditions within the broader steel industry and
                              the automotive, agricultural and machine tool
                              industries. It grants trade credit to its
                              customers consistent with industry practice.
                              Exposure to losses on trade accounts receivable is
                              principally dependent on each customer's financial
                              condition. The Company monitors its exposure for
                              credit losses and maintains allowances for
                              anticipated losses after giving consideration to
                              current delinquency data, historical loss
                              experience, and economic conditions impacting
                              steel service centers and original equipment
                              manufacturers. The financial condition of its
                              customers and the related allowance for doubtful
                              accounts is continually reviewed by management.

                              Niagara UK has insured substantially all of its
                              accounts receivable. Generally, these insurance
                              policies provide for payments to Niagara UK of 80%
                              of the unpaid invoiced amounts.

                              Revenue Recognition

                              Revenue from the sale of products is recorded at
                              the time the goods are shipped. The Company
                              follows the classification requirements for
                              freight costs required by Emerging Issues Task
                              Force ("EITF") No. 00-10, "Accounting for Shipping
                              and Handling Fees and Costs." This pronouncement
                              requires that all such costs billed to customers
                              be classified as revenue and the associated
                              expenses be included in cost of products sold.

                              Inventories

                              Inventories are stated at the lower of cost or
                              market, with cost being determined using the
                              last-in, first-out ("LIFO") method for Niagara US
                              and the first-in, first-out ("FIFO") method for
                              Niagara UK.

                              Property, Plant and Equipment

                              Property, plant and equipment is stated at cost.
                              Additions to property, plant and equipment are
                              stated at cost and include expenditures for new
                              facilities and those costs which substantially
                              increase the useful lives of existing property,
                              plant and equipment. Maintenance, repairs and
                              minor renewals are expensed as incurred.

                              The Company provides for depreciation of property,
                              plant and equipment at rates designed to amortize
                              such assets over their useful lives. Depreciation
                              is computed on the straight-line method using
                              lives of 3 to 15 years on machinery and equipment
                              and furniture and fixtures, and 10 to 40 years on
                              buildings and improvements and leasehold
                              improvements.

                              Goodwill and Other Intangible Assets

                              Goodwill represents the excess of the cost of
                              purchased businesses over the fair value of the
                              net assets acquired. In July 2001, the Financial
                              Accounting Standards Board (the "FASB") issued
                              SFAS No. 142, "Goodwill and Other Intangible
                              Assets," which requires, among other things, that
                              entities no longer amortize goodwill and other
                              intangible assets having indefinite useful lives,
                              but rather test them, at least annually, for
                              impairment. In accordance with this statement,
                              intangible assets that have finite useful lives
                              will continue to be amortized over their useful
                              lives. SFAS No. 142 is required to be applied in
                              fiscal years beginning after December 15, 2001 to
                              all goodwill and other intangible assets
                              recognized at that date, regardless of when such
                              assets were initially recognized. The Company
                              adopted SFAS No. 142 during the year ended
                              December 31, 2002. Amortization of goodwill was
                              computed using the straight-line method over 30
                              years in the year ended December 31, 2001. There
                              was no amortization of goodwill in the years ended
                              December 31, 2002 and 2003. See Note 16.

                              In June 2001, the FASB also issued SFAS No. 141,
                              "Business Combinations," which requires that
                              entities use the purchase method of accounting,
                              and prohibits the use of the pooling-of-interests
                              method of accounting, for all business
                              combinations initiated after June 30, 2001. This
                              statement also requires that the Company recognize
                              acquired intangible assets apart from goodwill if
                              the acquired intangible assets meet certain
                              criteria. The Company's previous business
                              combinations were accounted for using the purchase
                              method. The adoption of this statement has not had
                              an effect on the Company's financial statements.

                              Niagara LaSalle has a power replacement agreement
                              with the Power Authority of New York which
                              provides for low cost energy. This agreement,
                              which is included in other assets, is being
                              amortized on a straight-line basis over 10 years.

                              Deferred financing costs are being amortized over
                              the term of the related debt.

                              Evaluating Recoverability of Long-Lived Assets

                              In 2002, the Company adopted the provisions of
                              SFAS No. 144, "Accounting for the Impairment or
                              Disposal of Long-Lived Assets." This statement
                              requires that one accounting model be used for
                              long-lived assets to be disposed of by sale, and
                              broadens the presentation of discontinued
                              operations to include more disposal transactions.
                              The adoption of this statement has not had an
                              effect on the Company's financial statements.

                              The Company reviews the carrying values of its
                              long-lived and identifiable intangible assets
                              subject to amortization for possible impairment
                              whenever events or changes in circumstances
                              indicate that the carrying amount of such assets
                              may not be recoverable. The Company assesses
                              recoverability of these assets by estimating
                              future nondiscounted cash flows. Any long-lived
                              assets held for disposal are reported at the lower
                              of their carrying amounts or fair value less cost
                              to sell.

                              Income Taxes

                              Deferred income taxes are recognized for the tax
                              consequences of temporary differences between the
                              financial reporting bases and the tax bases of the
                              Company's assets and liabilities in accordance
                              with SFAS No. 109. Valuation allowances are
                              established when necessary to reduce deferred tax
                              assets to the amount expected to be realized.

                              Use of Estimates

                              The preparation of financial statements in
                              conformity with generally accepted accounting
                              principles requires management to make 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 revenues
                              and expenses during the reporting period. Actual
                              results could differ from those estimates.

                              Stock-Based Compensation

                              The Company accounts for its stock option plan
                              in accordance with the provisions of Accounting
                              Principles Board ("APB") Opinion No. 25,
                              "Accounting for Stock Issued to Employees," and
                              related interpretations. APB No. 25 provides
                              that compensation expense would be recorded on
                              the date of grant only if the current market
                              price of the underlying stock exceeded the
                              exercise price of the option. SFAS No. 123,
                              "Accounting for Stock-Based Compensation,"
                              permits entities to recognize as expense over
                              the vesting period the fair value of all
                              stock-based awards on the date of grant.
                              Alternatively, SFAS No. 123, as amended by SFAS
                              No. 148, "Accounting for Stock-Based Compensation
                              --Transition and Disclosure--an amendment of
                              FASB Statement No. 123," allows entities to
                              continue to apply the provisions of APB
                              No. 25 and provide pro forma net income and pro
                              forma earnings per share disclosures for
                              employee stock compensation as if the
                              fair-value-based method defined in SFAS No. 123
                              had been applied. The Company has elected to
                              continue to apply the provisions of APB No. 25
                              and provide the pro forma disclosures required
                              of SFAS No. 123 for options issued to employees.

                              The Company has also adopted the additional
                              disclosure provisions of SFAS No. 148,
                              "Accounting for Stock-Based Compensation--
                              Transition and Disclosure--an amendment of FASB
                              Statement No. 123," which the FASB issued in
                              December 2002. This statement amends the
                              disclosure requirements of SFAS No. 123 to
                              require prominent disclosures in both annual and
                              interim financial statements about the method of
                              accounting for stock-based employee compensation
                              and the effect on the method used on reported
                              results. The adoption of this statement did not
                              have an effect on the Company's financial
                              statements.

                              SFAS Nos. 123 and 148 require that the Company
                              provide pro forma information regarding net
                              income and earnings per share as if the
                              compensation cost for the Company's stock option
                              plan had been determined in accordance with the
                              fair value method prescribed in SFAS No. 123.
                              The Company estimates the fair value of each
                              stock option at the grant date by using the
                              Black-Scholes option-pricing model. There were
                              no stock options granted in 2001, 2002 or 2003.

                              The following table illustrates the effect on
                              net income (loss) and net income (loss) per
                              share if the Company had applied the fair value
                              recognition provisions of SFAS No. 123, as
                              amended by SFAS No. 148, to stock-based employee
                              compensation:

                   Year ended December 31,     2001          2002         2003
                   -------------------------------------------------------------
                   Net income (loss),
                   as reported          $(4,626,519)    $1,673,112   $1,607,921

                   Deduct: Total stock
                   -based compensation
                   expense determined
                   under fair-value
                   based method for
                   all awards, net of
                   related tax effects     (592,109)      (378,121)    (178,546)
                   -------------------------------------------------------------
                   Pro forma
                   net income (loss)    $(5,218,628)    $1,294,991   $1,429,375
                   =============================================================
                   Net income (loss)
                   per share
                   (basic and diluted):
                       As reported            $(.56)        $  .20      $  .20
                       Pro forma              $(.63)        $  .16      $  .17
                   =============================================================

                              Comprehensive Income or Loss

                              The Company follows the provisions of SFAS No.
                              130, "Reporting Comprehensive Income," which
                              establishes standards for reporting and display
                              of comprehensive income or loss and its
                              components and accumulated balances.
                              Comprehensive income or loss is defined to
                              include all changes in equity except those
                              resulting from investments by owners and
                              distributions to owners. Among other
                              disclosures, SFAS No. 130 requires that all
                              items that are required to be recognized under
                              current accounting standards as components of
                              comprehensive income or loss be reported in a
                              financial statement that is displayed with the
                              same prominence as other financial statements.
                              Comprehensive income or loss is displayed in the
                              Statements of Stockholders' Equity.

                              At December 31, 2003, the Company had an
                              accumulated other comprehensive loss of
                              $5,212,723. This loss was comprised of
                              accumulated minimum pension liability net of tax
                              adjustments of $5,434,000, representing pension
                              plan obligations in excess of pension plan
                              assets, and accumulated foreign currency
                              translation adjustments of $221,277 arising from
                              the changing value of the British pound with
                              respect to the U.S. dollar.

                              Derivative Instruments and Hedging Activities

                              The Company follows the provisions of SFAS No.
                              133, "Accounting for Derivative Instruments and
                              Hedging Activities," as amended by SFAS No. 137,
                              which requires entities to recognize all
                              derivative financial instruments as either
                              assets or liabilities in the balance sheet and
                              measure these instruments at fair value. The
                              adoption of this statement by the Company during
                              2001 has not had an effect on the Company's
                              financial statements.

                              New Accounting Pronouncements

                              In August 2001, the FASB issued SFAS No. 143,
                              "Accounting for Asset Retirement Obligations,"
                              which addresses financial accounting and
                              reporting for obligations associated with the
                              retirement of tangible long-lived assets and the
                              associated asset retirement costs. This
                              statement is required to be applied for fiscal
                              years beginning after June 15, 2002. The
                              adoption of this statement as of January 1, 2003
                              did not have an effect on the Company's
                              financial statements.

                              In April 2002, the FASB issued SFAS No. 145,
                              "Rescission of FASB Statements No. 4, 44 and 64,
                              and Amendment of FASB Statement No. 13, and
                              Technical Corrections." This statement, among
                              other things, rescinds SFAS No. 4, "Reporting
                              Gains and Losses from Extinguishment of Debt,"
                              which required that all gains and losses from
                              the extinguishment of debt be aggregated and, if
                              material, classified as an extraordinary item,
                              net of related income tax effect.

                              As a result, the criteria in APB No. 30,
                              "Reporting the Results of Operations - Reporting
                              the Effects of Disposal of a Segment of a
                              Business, and Extraordinary, Unusual and
                              Infrequently Occurring Events and Transactions,"
                              will now be used to classify such gains and
                              losses. SFAS No. 145 also amends SFAS No. 13 to
                              require that certain lease modifications that
                              have economic effects similar to sale-leaseback
                              transactions be accounted for in the same manner
                              as sale-leaseback transactions. Such provisions
                              of SFAS No. 145 are required to be applied in
                              fiscal years beginning after May 15, 2002. The
                              adoption of this statement as of January 1, 2003
                              did not have an effect on the Company's
                              financial statements.

                              In July 2002, the FASB issued SFAS No. 146,
                              "Accounting for Costs Associated with Exit or
                              Disposal Activities." This statement requires
                              that a liability for a cost associated with an
                              exit or disposal activity be recognized when the
                              liability is incurred, as opposed to prior
                              guidance which provided that liability for such
                              exit costs be recognized at the date of an
                              entity's commitment to an exit or disposal plan.
                              This statement is required to be applied to exit
                              or disposal activities that are initiated after
                              December 31, 2002. The adoption of this
                              statement as of January 1, 2003 did not have an
                              effect on the Company's financial statements.

                              In November 2002, the FASB issued Interpretation
                              No. 45, "Guarantor's Accounting and Disclosure
                              Requirements for Guarantees, Including
                              Guarantees of the Indebtedness of Others," which
                              interprets the guidance in FASB Statement No. 5,
                              "Accounting for Contingencies," relating to a
                              guarantor's accounting for, and disclosure of,
                              certain types of guarantees. Interpretation No.
                              45 requires that a guarantor recognize, at the
                              inception of a guarantee, a liability for the
                              fair value of the obligation undertaken in
                              issuing the guarantee. Under Interpretation No.
                              45, the recognition of the liability is required
                              even if it is not probable that payments will be
                              required under the guarantee. Previously, SFAS
                              No. 5 required recognition of a liability only
                              for a probable loss. The recognition
                              requirements of Interpretation No. 45 apply to
                              guarantees issued or modified after December 31,
                              2002. The disclosure requirements are effective
                              for interim and annual financial statements
                              ending after December 15, 2002. The adoption of
                              Interpretation No. 45 as of January 1, 2003 did
                              not have an effect on the Company's financial
                              statements.

                              In December 2002, the FASB issued SFAS No. 148,
                              "Accounting for Stock-Based
                              Compensation--Transition and Disclosure--an
                              amendment of FASB Statement No. 123," which
                              amends the disclosure requirements of SFAS No.
                              123 to require prominent disclosures in both
                              annual and interim financial statements about
                              the method of accounting for stock-based
                              employee compensation and the effect on the
                              method used on reported results. The adoption of
                              this statement as of January 1, 2003 did not
                              have an effect on the Company's financial
                              statements.

                              In April 2003, the FASB issued SFAS No.
                              149, "Amendment of Statement 133 on
                              Derivative Instruments and Hedging
                              Activities." SFAS No. 149 amends
                              SFAS No. 133 for certain decisions made by the
                              FASB and is effective for contracts entered into
                              or modified after June 30, 2003 and for hedging
                              relationships designated after June 30, 2003.
                              SFAS No. 149 is to be applied prospectively. The
                              provisions of SFAS No. 149 that relate to SFAS
                              No. 133 implementation issues that have been
                              effective for fiscal quarters that began prior
                              to June 15, 2003 continue to be applicable in
                              accordance with their respective effective
                              dates. The adoption of this statement as of July
                              1, 2003 did not have an effect on the Company's
                              financial statements.

                              In May 2003, the FASB issued SFAS No. 150,
                              "Accounting for Certain Financial Instruments
                              with Characteristics of both Liabilities and
                              Equity" which establishes standards for
                              classifying and measuring certain financial
                              instruments with characteristics of both a
                              liability and equity. SFAS No. 150 is effective
                              for financial instruments entered into or
                              modified after May 31, 2003, and is otherwise
                              effective at the beginning of the first interim
                              period beginning after June 15, 2003. The
                              adoption of this statement as of July 1, 2003
                              did not have an effect on the Company's
                              financial statements.

                              In December 2003, the FASB issued SFAS No. 132
                              (Revised 2003), "Employer's Disclosures about
                              Pensions and Other Post-Retirement Benefits,"
                              which revises employer's disclosures about
                              pension plans and other postretirement benefit
                              plans. SFAS 132 (Revised 2003) retains the
                              disclosure requirements of SFAS 132, and
                              requires additional disclosures about the
                              assets, obligations, cash flows and net periodic
                              benefit cost of defined benefit pension plans
                              and other defined benefit postretirement plans.
                              The disclosure requirements of SFAS 132 (Revised
                              2003) are generally effective for financial
                              statements with fiscal years ending after
                              December 31, 2003. Certain additional
                              disclosures about foreign plans and estimated
                              future benefit payments are effective for fiscal
                              years ending after June 15, 2004. The Company
                              adopted the required provisions of this revised
                              statement as of December 31, 2003.

                              In January 2003, the FASB issued Interpretation
                              No. 46, "Consolidation of Variable Interest
                              Entities, an interpretation of Accounting
                              Research Bulletin No. 51," revised in December
                              2003 ("Interpretation No. 46"), which defines
                              when a business enterprise must consolidate a
                              variable interest entity. Interpretation No. 46
                              applies in the first fiscal year or interim
                              period beginning after December 15, 2003 to
                              entities in which an enterprise holds a variable
                              interest that it acquired before February 1,
                              2003 and applies immediately to variable
                              interest entities created after January 31,
                              2003. The Company did not have any variable
                              interest entities as of December 31, 2003.

                              Reclassifications

                              Certain reclassifications have been made to the
                              2001 and 2002 financial statements to conform to
                              current year presentation.

2.   RESTRUCTURING OF         In the third quarter of 2001, the Company
     UK OPERATIONS            announced a restructuring plan involving the
                              closure of one of its hot rolling facilities in
                              the United Kingdom. Under this plan, Niagara UK
                              closed its Dudley Port hot rolling facility in
                              Tipton and transferred most of its production to
                              its two other hot rolling facilities. In
                              connection therewith, the Company recorded, in
                              the fourth quarter of 2001, a restructuring
                              charge of $5,278,074 (approximately
                              (pound)3,662,000), consisting of equipment
                              write-offs of $3,554,270 (approximately
                              (pound)2,466,000) and redundancy and
                              reorganization costs of $1,723,804
                              (approximately (pound)1,196,000). Such costs
                              include approximately $1,185,000 (approximately
                              (pound)823,000) of severance costs in respect of
                              approximately 100 employees. At December 31,
                              2001, approximately $300,000 (approximately
                              (pound)207,000) of these costs was included in
                              accrued expenses, all of which were expended
                              during 2002.

                              On March 15, 2002, Niagara UK entered into an
                              agreement to sell the leased Dudley Port
                              facility for (pound)3,600,000 ($5,413,572),
                              which Niagara UK had an option to purchase for
                              (pound)1,495,000 ($2,248,136). On September 30,
                              2002, Niagara UK completed the sale. In
                              connection with this transaction, Niagara UK
                              purchased a parcel of land in the fourth quarter
                              of 2002 which it subsequently sold during this
                              period to the purchaser of the property. These
                              sales resulted in a pre-tax gain of
                              (pound)2,063,022 ($3,102,311).

                              On May 30, 2003, Niagara UK entered into an
                              agreement to sell its GB Longmore property in
                              Darlaston. Production at this site had
                              previously been shifted to GB Longmore's
                              Willenhall facility. On September 19, 2003,
                              Niagara UK completed this transaction receiving
                              (pound)925,000 ($1,512,875) for the sale of this
                              leased real property after payment of
                              (pound)413,000 ($675,478) to the landlord under
                              an option to purchase the property. After
                              related costs, the sale of this property
                              resulted in a pre-tax gain of (pound)488,849
                              ($799,532), which gain was partially offset by
                              (pound)204,109 ($333,827) in losses during the
                              year on the sale of equipment, resulting in a
                              net gain of (pound)284,740 ($465,705).

                              During 2003, Niagara's subsidiaries transferred
                              certain equipment to each other to more
                              effectively meet the market conditions and
                              requirements of their respective operations.
                              These transfers resulted in Niagara UK
                              recognizing intercompany gains of (pound)494,475
                              ($808,734) for the period. These amounts have
                              been eliminated in the consolidated financial
                              statements.

3.   INVENTORIES              Inventories consisted of the following at
                              December 31, 2002 and 2003:

                              December 31,               2002             2003
                              -------------------------------------------------
                              Raw materials       $14,749,119      $17,562,025
                              Work-in-process       4,071,318        3,795,854
                              Finished goods       36,842,362       35,304,976
                              -------------------------------------------------
                                                  $55,662,799      $56,662,855
                              =================================================

                              At December 31, 2002 and 2003, Niagara UK
                              inventories were $18,412,831 and $21,310,756,
                              respectively, determined using the FIFO method
                              and Niagara US inventories were $37,249,968 and
                              $35,352,099, respectively, determined using the
                              LIFO method, for which current cost did not
                              exceed LIFO in either year.


4.   PROPERTY,                Property, plant and equipment consisted of
     PLANT                    the following at December 31, 2002 and 2003:
     AND
     EQUIPMENT

                December 31,                             2002             2003
                ----------------------------------------------------------------
                Land, buildings and improvements   $26,332,987      $26,438,229
                Leasehold improvements               1,965,696        1,746,157
                Machinery and equipment            103,442,537      106,689,059
                Furniture and fixtures               4,653,403        4,653,320
                ----------------------------------------------------------------
                Total                              136,394,623      139,526,765
                Less accumulated depreciation
                 and amortization                   50,619,348       59,382,918
                ----------------------------------------------------------------
                                                   $85,775,275     $ 80,143,847
                ================================================================


<TABLE>
<CAPTION>


5.   LONG-TERM DEBT                The long-term debt consisted of the
                                   following at December 31, 2002 and 2003:


                                    December 31,                                              2002            2003
                                   ---------------------------------------------------------------------------------
<S>                                                                                     <C>             <C>
                                     Term note payable - bank, maturing in monthly
                                       installments of principal plus interest
                                       through July 2006. Scheduled monthly
                                       installments of principal are $375,000
                                       through July 1, 2006, with the remaining
                                       balance of principal outstanding of $375,000
                                       due on July 31, 2006. Interest is calculated
                                       at either the LIBOR rate plus 2.85%, or the
                                       bank's prime rate plus 1.00% (effective
                                       rate of 4.05% at December 31, 2003)              $16,500,000     $12,000,000

                                     Secured bank revolving line of credit up to
                                       $35,000,000 due July 31, 2006, limited to
                                       a portion of eligible accounts receivable
                                       and inventories. Interest is payable in
                                       monthly installments at either the LIBOR
                                       rate plus 2.50%, or the bank's prime rate
                                       plus 0.75% (effective rate of 3.87% at
                                       December 31, 2003)                                29,600,000      22,900,000

                                     Term note payable - bank (facilities
                                       agreement), maturing in monthly principal
                                       installments of (pound)90,000 ($160,000)
                                       plus interest from January 2004 through
                                       April 2006, with the remaining principal
                                       balance of (pound)1,348,750 ($2,399,000)
                                       due and payable May 21, 2006. Interest is
                                       calculated at the BBA LIBOR rate plus
                                       0.15%. The note is secured by, among
                                       other things, a letter of credit for the
                                       balance outstanding with a fee of 2.75%
                                       (effective rate of 4.11% at
                                       December 31, 2003)                                 9,119,410       6,881,017

                                     Secured invoice discounting agreement up to
                                      (pound)15,000,000 ($26,670,000) due
                                       July 31, 2005, limited to a portion of the
                                       purchased accounts receivable. Interest
                                       is payable in monthly installments at the
                                       Royal Bank of Scotland base rate plus
                                       2.00% (effective rate of 5.39% at
                                       December 31, 2003)                                15,493,690      19,193,572

                                     Note payable - other, maturing $64,143
                                       annually on January 31, through 2010,
                                       plus interest at 8.5%                                513,143         449,000

                                     Note payable - other, maturing $33,333
                                       annually on April 17, through 2005, plus
                                       interest at 10%                                      100,000          66,667

                                     Capital  lease  obligations  payable in monthly
                                       installments through 2008                                  -         157,590
                                     ---------------------------------------------------------------------------------
                                                                                         71,326,243      61,647,846
                                     Less:  Current maturities of long-term debt          7,509,462       6,544,359
                                     ---------------------------------------------------------------------------------
                                                                                       $ 63,816,781    $ 55,103,487
                                     =================================================================================
</TABLE>


                              The obligations of Niagara US under the revolving
                              credit and term loan agreement are guaranteed by
                              Niagara and Niagara UK and secured by
                              substantially all of the assets and a pledge of
                              all outstanding capital stock of Niagara US. This
                              credit agreement carries restrictions on, among
                              other things, indebtedness, liens, capital
                              expenditures, dividends, asset dispositions,
                              cross-defaults and changes in control of Niagara
                              and Niagara US, and requires minimum levels of net
                              worth through maturity. Also included in this
                              agreement are requirements regarding the ratio of
                              current assets to current liabilities, the ratio
                              of net income before interest, taxes, depreciation
                              and amortization, adjusted for, among other
                              things, unusual, extraordinary and non-recurring
                              items ("Adjusted EBITDA") to debt service and
                              capital expenditures and the ratio of senior
                              secured indebtedness to Adjusted EBITDA.

                              The obligations of Niagara UK under the facilities
                              agreement are secured by standby letters of credit
                              and substantially all of the assets of Niagara UK
                              (for the benefit of the issuer of such letters of
                              credit). Niagara UK's agreement to reimburse the
                              issuer for drawdowns under such letters of credit
                              is guaranteed by Niagara and Niagara US, which
                              guarantees are secured by substantially all of the
                              assets of Niagara US on a second priority basis.
                              The obligations of Niagara UK under the invoice
                              discounting agreement are guaranteed by Niagara
                              and secured by substantially all of the assets of
                              Niagara UK. The facilities and invoice discounting
                              agreements carry restrictions on, among other
                              things, security interests, borrowed money, asset
                              dispositions, dividends, transactions with
                              affiliates, capital expenditures, cross-defaults,
                              changes in control of Niagara UK and mergers and
                              acquisitions. Also included in these agreements
                              are requirements regarding tangible net worth, the
                              ratio of Adjusted EBITDA to fixed charges and the
                              ratio of current assets to current liabilities.

                              The obligations of Niagara LaSalle under the note
                              maturing on January 31, 2010 are guaranteed by
                              Niagara.

                              Approximate maturities of long-term debt are as
                              follows:

                               Year ended December 31,
                               -----------------------------------------------
                               2004                              $ 6,544,000
                               2005                               25,751,000
                               2006                               29,040,000
                               2007                                  100,000
                               2008                                   85,000
                               Thereafter                            128,000
                               -----------------------------------------------
                                                                 $61,648,000
                               ===============================================


6.   PENSION PLANS            LaSalle sponsors two contributory defined benefit
     AND OTHER                pension plans which cover certain postretirement
     POSTRETIREMENT           benefits for eligible employees employees of
     BENEFITS                 LaSalle, as well as various hired prior to certain
                              specified dates. Niagara retiree health and
                              welfare programs providing LaSalle, together with
                              Niagara, is also a party to a non- contributory
                              defined benefit pension plan with one of the
                              Company's officers. See Note 13.

                              The following tables provide a reconciliation of
                              the changes in these plans' benefit obligations
                              and fair value of assets over the two-year period
                              ending December 31, 2003, and a statement of the
                              funded status of these plans as of December 31,
                              2002 and 2003:

                                Pension benefits            Other benefits
                             ------------------------   ------------------------
                                  2002        2003           2002         2003
--------------------------------------------------------------------------------
Reconciliation of benefit
  obligation
Obligation at January 1     $27,216,000   $28,831,000   $6,649,000   $6,469,000
Service cost                    458,000       541,000       43,000       31,000
Interest cost                 1,971,000     1,952,000      471,000      438,000
Actuarial (gain) loss         1,092,000     3,524,000      445,000   (1,692,000)
Benefit payments             (1,906,000)   (1,925,000)  (1,139,000)    (398,000)
--------------------------------------------------------------------------------
Obligation at December 31   $28,831,000   $32,923,000   $6,469,000   $4,848,000
================================================================================


                                Pension benefits            Other benefits
                             ------------------------   ------------------------
                                  2002        2003           2002         2003
--------------------------------------------------------------------------------
Reconciliation of fair
  value of plan assets
Fair value of plan assets
  at January 1              $24,078,000   $22,119,000    $        -   $       -
Actual return on plan
  assets                     (1,893,000)    8,015,000             -           -
Employer contributions        1,840,000     2,200,000     1,139,000     398,000
Benefit payments             (1,906,000)   (1,925,000)   (1,139,000)   (398,000)
--------------------------------------------------------------------------------
Fair value of plan assets
  at December 31            $22,119,000   $30,409,000    $        -   $       -
================================================================================


                               Pension benefits            Other benefits
                            ------------------------   ------------------------
                                 2002        2003           2002         2003
-------------------------------------------------------------------------------
Funded status
Funded status at
  December 31              $(6,712,000) $(2,513,000)   $(6,469,000) $(4,848,000)
Unrecognized prior
 service cost                  318,000      266,000              -            -
Unrecognized (gain)loss     12,007,000    9,487,000      1,721,933      (62,717)
-------------------------------------------------------------------------------
Net amount recognized      $ 5,613,000    7,240,000    $(4,747,067) $(4,910,717)
===============================================================================


The following table provides the amounts recognized in the Company's balance
sheets at December 31, 2002 and 2003:


                               Pension benefits            Other benefits
                            -------------------------  -------------------------
                                 2002        2003          2002         2003
--------------------------------------------------------------------------------
Accrued benefit liability   $(6,729,000) $(1,935,000)  $(4,747,067) $(4,910,767)
Intangible asset                318,000      266,000             -            -
Accumulated other
  comprehensive
  loss, pretax               12,024,000    8,909,000             -            -
--------------------------------------------------------------------------------
Net amount recognized       $5,613,000   $ 7,240,000   $(4,747,067) $(4,910,067)
================================================================================

<TABLE>
<CAPTION>

The following table provides information for pension plans with an accumulated
benefit obligation in excess of plan assets:


                                    -----------------------------------------------------------------------------------
                                             Hourly plan                Salaried plan          Non-contributory plan
                                    -----------------------------------------------------------------------------------
December 31                              2002          2003            2002          2003          2002          2003
-----------------------------------------------------------------------------------------------------------------------
<S>                                 <C>           <C>            <C>           <C>           <C>           <C>
Projected benefit obligation        $18,833,000   $21,329,000    $8,651,000    $9,402,000    $1,347,000    $2,192,000
Accumulated benefit obligation       18,769,000    21,265,000     8,651,000     9,402,000     1,163,000     1,568,000
Fair value of plan assets            14,781,000    21,011,000     7,338,000     9,399,000             -             -
=======================================================================================================================
</TABLE>

LaSalle's plans for postretirement benefits other than pensions have no plan
assets. The benefit obligation for such plans was $6,469,000 and $4,848,000 at
December 31, 2002 and 2003, respectively.



The following table provides the components of net periodic (benefit) cost for
the Company's plans for the years ended December 31, 2001, 2002 and 2003:

<TABLE>
<CAPTION>
                                                   Pension benefits                              Other benefits
                                       -----------------------------------------   ----------------------------------------
                                              2001         2002          2003             2001          2002          2003
 --------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>           <C>              <C>            <C>           <C>
 Service cost                         $   481,000   $   458,000   $   541,000      $   48,000     $  43,000     $  31,000
 Interest cost                          1,892,000     1,971,000     1,952,000         485,000       471,000       438,000
 Expected return on plan assets        (2,323,000)   (2,553,000)   (2,414,000)              -             -             -
 Amortization of prior service cost        52,000        52,000        52,000               -             -             -
 Amortization of unrecognized loss        110,000       230,000       444,000          67,000        70,000        93,000
 --------------------------------------------------------------------------------------------------------------------------
 Net periodic (benefit) cost          $   212,000   $   158,000   $   575,000      $  600,000     $ 584,000     $ 562,000
 ==========================================================================================================================
</TABLE>

The amounts included within other comprehensive income (loss) arising from a
change in the additional minimum pension liability were $(1,304,000) (net of tax
benefit), $(4,349,000) (net of tax benefit) and $1,901,000 (net of tax expense)
for 2001, 2002 and 2003, respectively.

LaSalle provides certain health care and life insurance benefits for eligible
retired employees. Employees may become eligible for such benefits if they reach
the normal retirement age while working for LaSalle. LaSalle continues to fund
benefit costs on a pay as you go basis.

The assumptions used in the measurement of the Company's benefit obligations are
shown in the following table:

<TABLE>
<CAPTION>
                                                  Pension benefits                           Other benefits
                                      ---------------------------------------    -------------------------------------
                                          2001         2002         2003            2001         2002         2003
----------------------------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>          <C>             <C>          <C>          <C>
Weighted average assumptions
 as of December 31:
   Discount rate used to determine:
     yearly expense                        7.50%        7.50%        7.00%           7.50%        7.50%        7.00%
     year-end liability                    7.50%        7.00%        6.25%           7.50%        7.00%        6.25%
   Expected return on plan assets         10.00%       10.00%        9.00%            N/A           N/A          N/A
   Rate of compensation increase:
       hourly plan                         3.00%        3.00%        3.00%            N/A           N/A          N/A
       salaried plan                        N/A        N/A          N/A               N/A           N/A          N/A
       non-contributory plan               3.00%        3.00%        3.00%            N/A           N/A          N/A
======================================================================================================================
</TABLE>

                              Because of changes effected during 1998 to health
                              care benefits under LaSalle's postretirement
                              benefit plans, a zero percent health care cost
                              trend rate has been assumed since then.

                              The Company bases its expected long-term rate of
                              return on plan assets on a weighted average of the
                              expected returns for the major asset classes in
                              which it invests. Asset class expected returns are
                              based on long-term historical returns, inflation
                              expectations, forecasted gross domestic product
                              and earnings growth, and other economic factors.
                              The weighted-average expected return on plan
                              assets used in the calculation of 2004 net
                              periodic benefit cost was 8.50%.

                              The following table provides the Company's
                              weighted-average asset allocations at December 31,
                              2002 and 2003, by asset category, for LaSalle's
                              two contributory defined benefit pension plans:

                              December 31,                   2002         2003
                               -------------------------------------------------
                              Common equity securitie          70%          69%
                              Fixed income securities          21%          17%
                              Cash & money market funds         9%          14%
                              -------------------------------------------------
                                                              100%         100%
                              =================================================

                              The Company utilizes two investment managers to
                              manage the assets of LaSalle's two contributory
                              defined benefit pension plans. The Company has
                              allocated approximately 50% of the plan assets to
                              each of these investment managers, one of which
                              concentrates on investments in U.S. equity
                              securities, and the other in fixed income, U.S.
                              equity and international equity mutual funds. The
                              Company and these investment managers seek to
                              structure such investments to optimize growth of
                              the pension plan trust assets, while minimizing
                              the risk of significant losses, in order to enable
                              the plans to satisfy their benefit payment
                              obligations over the expected life of such
                              obligations. The Company uses benefit payments and
                              sponsor contributions as the primary rebalancing
                              mechanisms to maintain the allocation of plan
                              assets between the two investment managers. The
                              Company also periodically conducts reviews with
                              its investment managers regarding the asset
                              allocation of each, in order to address
                              expectations regarding future returns, the funded
                              position of the plans, and market risks. No plan
                              assets are invested in Niagara stock.

                              LaSalle expects to contribute approximately
                              $1,800,000 and $450,000 to its hourly pension plan
                              and other post-retirement benefit plan,
                              respectively, during 2004. No amounts are expected
                              to be contributed to the salaried pension plan for
                              2004.

                              Niagara LaSalle maintains a contributory salary
                              deferral retirement plan (401(k)) for all
                              employees of Niagara and Niagara US other than
                              those subject to a collective bargaining
                              agreement (the "Niagara LaSalle 401(k) Plan").
                              Under the terms of this plan, participants may
                              elect to defer up to 15% of their earnings. This
                              plan provides for a 100% match for the first 3%
                              of employee contributions and a 50% match for
                              the next 2% of employee contributions, and an
                              additional employer contribution equal to 2% of
                              earnings. Niagara LaSalle also maintains a
                              contributory salary deferral retirement plan
                              (401(k)) for all employees of LaSalle who are
                              subject to a collective bargaining agreement
                              (the "LaSalle 401(k) Plan"). The LaSalle 401(k)
                              Plan provides for a 25% match of the first 5% of
                              employee contributions for all participants
                              other than employees at the Company's Hammond,
                              Indiana facility hired after May 18, 1998 for
                              whom the plan provides for the same employer
                              match and additional contribution provisions as
                              the Niagara LaSalle 401(k) Plan. All
                              contributions under these plans are subject to
                              the limitations of Section 401 of the Internal
                              Revenue Code of 1986, as amended, and the
                              requirements of the Employee Retirement Income
                              Security Act of 1974, as amended. The funds are
                              invested as directed by the individual
                              participants. Total expense related to these
                              plans was approximately $726,000, $727,000, and
                              $798,000 for the years ended December 31, 2001,
                              2002 and 2003, respectively.

                              Niagara UK has a defined contribution group
                              personal pension arrangement for all of its
                              employees. Under the terms of Niagara UK's plan,
                              participants may elect to contribute prescribed
                              percentages of their earnings based upon their
                              age, position and whether they were members of
                              the predecessor operator's pension plan. Niagara
                              UK's contributions to participants' accounts
                              under this plan are based upon the same factors.
                              All contributions are subject to the
                              requirements of the U.K. Inland Revenue and
                              related pension laws. The funds are invested as
                              directed by the individual participants. For the
                              years ended December 31, 2001, 2002 and 2003,
                              expenses in respect of this plan totaled
                              approximately (pound)618,000 ($890,000),
                              (pound)532,000 ($800,000) and (pound)527,000
                              ($862,000), respectively.


7.   PREFERRED STOCK          Niagara is authorized to issue 500,000 shares
                              of Preferred Stock, par value $.001 per share,
                              with such designations, voting and other
                              rights and preferences as may be determined
                              from time to time by its Board of Directors.


8.  LEASE COMMITMENTS         Niagara leases office space under an operating
                              lease expiring in December 2007. Niagara US leases
                              equipment and one operating facility under
                              operating leases expiring through 2011. Niagara UK
                              leases equipment, seven operating facilities and
                              four sales offices under operating leases expiring
                              through 2009. At December 31, 2003, future minimum
                              payments under operating leases were approximately
                              as follows:

                              --------------------------------------------------
                              2004                                  $  3,005,000
                              2005                                     3,160,000
                              2006                                     3,223,000
                              2007                                     3,029,000
                              2008                                     2,718,000
                              Thereafter                               2,838,000
                              --------------------------------------------------
                              Total minimum lease payments          $ 17,973,000
                              ==================================================

                              Rent expense under operating leases was
                              approximately $2,412,000, $2,960,000 and
                              $3,076,000 for the years ended December 31, 2001,
                              2002 and 2003, respectively.


9.  STOCK OPTION PLAN         The Company has a stock option plan which provides
                              that the Compensation Committee of Niagara's Board
                              of Directors may grant options to the Company's
                              officers, directors, employees and independent
                              contractors for up to 2,500,000 shares of Niagara
                              Common Stock.

                              The Company applies APB 25, "Accounting for Stock
                              Issued to Employees," and related interpretations
                              in accounting for this plan. Under APB 25, no
                              compensation cost was recognized because the
                              exercise price of Niagara's employee stock options
                              was equal to or greater than the market price of
                              the underlying stock on the date of grant. There
                              were no stock options granted in 2001, 2002 or
                              2003.

<TABLE>
<CAPTION>


A summary of the status of the Company's stock option plan at December 31, 2001,
2002 and 2003, and changes during the years ending on those dates, is presented
below:


                                       December 31, 2001              December 31, 2002              December 31, 2003
                                   ---------------------------    ---------------------------    --------------------------
                                                   Weighted                       Weighted                       Weighted
                                                   average                        average                        average
                                                   exercise                       exercise                       exercise
                                      Shares        price            Shares        price            Shares        price
---------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>              <C>           <C>              <C>           <C>
Outstanding at beginning of year      2,330,000     $5.70            2,330,000     $5.70            2,310,000     $5.70
Forfeited or cancelled                        -         -               20,000      5.63              450,000      5.69
---------------------------------------------------------------------------------------------------------------------------
Outstanding at end of year            2,330,000     $5.70            2,310,000     $5.70            1,860,000     $5.70
 --------------------------------------------------------------------------------------------------------------------------

0ptions exercisable at year-end       1,656,000     $5.66            1,882,000     $5.68            1,662,000     $5.69
===========================================================================================================================
</TABLE>



The following table summarizes information about stock options outstanding at
December 31, 2003.

<TABLE>
<CAPTION>

                           Options outstanding                   Options exercisable
                 ----------------------------------------    ----------------------------
                                  Weighted
                                  average      Weighted                        Weighted
                    Number       remaining     average           Number        average
  Range of        outstanding    contractual   exercise        exercisable     exercise
exercise prices   at 12/31/03       life       price          at 12/31/03      price
-----------------------------------------------------------------------------------------
<S>     <C>        <C>            <C>            <C>          <C>               <C>
  $5.50-$5.88      1,860,000      3.90 years     $5.70        1,662,000         $5.69
-----------------------------------------------------------------------------------------

</TABLE>

10.  INCOME TAXES             The provision (benefit) for federal and state
                              income taxes was comprised of the following:

<TABLE>
<CAPTION>
                              Year ended December 31,               2001           2002           2003
                              ---------------------------------------------------------------------------
                              Current:
<S>                                                          <C>             <C>           <C>
                                 Federal                     $  (745,000)    $  509,000    $   957,000
                                 State                                 -         49,000         14,000
                              ---------------------------------------------------------------------------
                                                                (745,000)       558,000        971,000
                              ---------------------------------------------------------------------------
                              Deferred:
                                 Federal                         593,000      1,097,000        212,000
                                 State                            14,000        325,000         42,000
                                 Foreign (UK)                   (962,000)       666,000              -
                              ---------------------------------------------------------------------------
                                                                (355,000)     2,088,000        254,000
                              ---------------------------------------------------------------------------
                              Total income tax provision
                                 (benefit)                   $(1,100,000)    $2,646,000     $1,225,000
                              ---------------------------------------------------------------------------
</TABLE>


    At December 31, 2002 and 2003, deferred tax assets (liabilities)
    consisted of the following:


    December 31,                                         2002             2003
    ---------------------------------------------------------------------------
    Federal and state regular tax net            $    893,000     $    418,000
      operating loss carryforwards
    Accrued minimum pension liability               4,689,000        3,473,000
    Federal alternative minimum tax credit
      carryforwards                                 3,462,000        3,450,000
    Accrued expenses deductible when paid             937,000        1,165,000
    New York State investment tax credits             767,000          716,000
    Allowance for doubtful accounts                   397,000          399,000
    Inventories                                       618,000          748,000
    Foreign, book depreciation greater than
      tax depreciation and basis
      differences on UK property, plant and
      equipment                                     1,297,000        1,357,000
    Other                                               3,000                -
    ---------------------------------------------------------------------------
    Gross deferred tax assets                      13,063,000       11,726,000
    Valuation allowance for deferred tax
      assets                                       (2,064,000)      (2,073,000)
    ---------------------------------------------------------------------------
    Net deferred tax assets                        10,999,000        9,653,000
    ---------------------------------------------------------------------------
    Tax depreciation greater than book
      depreciation on US  property, plant
      and equipment                               (15,771,000)     (15,608,000)
    Pension and postretirement benefit
      obligations                                  (2,629,000)      (3,124,000)
    Other                                            (248,000)               -
    ---------------------------------------------------------------------------
    Gross deferred tax liabilities                (18,648,000)     (18,732,000)
    ---------------------------------------------------------------------------
    Net deferred tax liabilities               $   (7,649,000)  $   (9,079,000)
    ---------------------------------------------------------------------------


                              Deferred taxes are included in the accompanying
                              balance sheets as follows:

<TABLE>
<CAPTION>
                              December 31,                                      2002              2003
                              -------------------------------------------------------------------------
<S>                                                                     <C>              <C>
                              Current asset for deferred income taxes   $  1,953,000     $   2,138,000
                              Noncurrent liability for deferred
                                income taxes                              (9,602,000)      (11,217,000)
                              -------------------------------------------------------------------------
                              Net deferred tax liabilities              $ (7,649,000)    $  (9,079,000)
                              -------------------------------------------------------------------------
</TABLE>

                              At December 31, 2003, the Company had available
                              federal alternative minimum tax credit
                              carryforwards of approximately $3,450,000 which
                              do not expire and can be used to offset future
                              years' regular tax to the extent it exceeds
                              alternative minimum tax.

                              At December 31, 2003, the Company had available
                              net operating loss carryforwards for state
                              income tax purposes of approximately $7,800,000
                              expiring through 2021.

                              At December 31, 2003, Niagara LaSalle had New
                              York state investment tax credit carryforwards
                              of approximately $716,000, which may be
                              available to offset certain future state income
                              taxes. These credits expire through 2018.

                              At December 31, 2003, the Company had a
                              valuation allowance for deferred tax assets of
                              $2,073,000 comprised of (i) its New York state
                              investment tax credit carryforwards of
                              approximately $716,000 and (ii) $1,357,000
                              relating to basis differences on its UK
                              property, plant and equipment. The Company has
                              recorded the valuation allowance to offset the
                              related deferred tax assets.

                              A reconciliation of the statutory federal income
                              tax rate and effective rate as a percentage of
                              pre-tax income (loss) was as follows:

<TABLE>
<CAPTION>
                                                    2001                  2002                    2003
                                             -------------------   -------------------    ---------------------
                                               Amount        %         Amount      %         Amount      %
                              ---------------------------------------------------------------------------------
<S>                                         <C>            <C>       <C>         <C>        <C>        <C>
                              Tax
                              (benefit) at
                              statutory
                              rate          $(1,947,000)   (34.0)%   $1,468,000  34.0%      $963,000   34.0%

                              State income
                              taxes net of
                              federal
                              income tax
                              benefit           (11,000)     (.2)       244,000   5.7        192,000    6.8

                              Effect of
                              foreign (UK)
                              operations         232,000     4.1        246,000   5.7         53,000    1.8

                              Valuation
                              allowance          720,000    12.5        666,000  15.4              -      -

                              Other             (94,000)    (1.6)        22,000    .5         17,000     .6
                              ---------------------------------------------------------------------------------
                              Effective
                              tax rate      $(1,100,000)   (19.2)%   $2,646,000  61.3%    $1,225,000   43.2%
                              =================================================================================
</TABLE>

                              Income (loss) before income taxes for Niagara US
                              was $(359,884), $5,083,340 and $5,105,015, and
                              for Niagara UK was (pound)(3,726,113) or
                              $(5,366,635), (pound)(507,605) or $(764,228), and
                              (pound)(641,659) or $(1,049,459), for the years
                              ended 2001, 2002 and 2003, respectively.


11. MAJOR CUSTOMERS           Niagara US sales to three customers in 2001 were
                              approximately 27%, 14% and 9% of its total sales.
                              At December 31, 2001, accounts receivable from
                              these major customers represented approximately
                              52% of its aggregate accounts receivable.

                              Niagara US sales to three customers in 2002 were
                              approximately 26%, 14% and 10% of its total sales.
                              At December 31, 2002, accounts receivable from
                              these major customers represented approximately
                              40% of its aggregate accounts receivable.

                              Niagara US sales to three customers in 2003 were
                              approximately 27%, 13% and 9% of its total sales.
                              At December 31, 2003, accounts receivable from
                              these major customers represented approximately
                              40% of its aggregate accounts receivable.

                              None of Niagara UK's customers exceeded 5% of its
                              total sales for the years 2001, 2002 or 2003.


12.  Major Suppliers          Niagara US had one supplier from which purchases
                              were approximately 32%, 17% and 11% of its total
                              purchases in 2001, 2002 and 2003, respectively.

                              Niagara UK had one supplier from which purchases
                              were approximately 32%, 29% and 38% of its total
                              purchases for the years 2001, 2002 and 2003,
                              respectively.


13.  COMMITMENTS AND          Commitments
     CONTINGENCIES
                              Niagara and Niagara LaSalle are parties to an
                              employment agreement with one of the Company's
                              officers. The contract, which expires in January
                              2007 (subject to extension), provides for a
                              minimum salary level, incentive compensation and
                              supplemental retirement benefits based on years
                              of service and compensation (see Note 6). The
                              aggregate commitment under this contract for
                              future minimum salaries at December 31, 2003,
                              excluding bonuses, was $1,920,000.

                              At December 31, 2003, Niagara UK was a party to
                              employment agreements with 11 of its executives.
                              These agreements provide for a notice period,
                              generally one year, prior to termination of the
                              executive's employment with Niagara UK. If
                              Niagara UK terminates the executive's employment
                              prior to the expiration of such notice period,
                              the agreement provides that the executive will
                              receive the compensation that would have been
                              paid for the remainder of the period.

                              Contingencies

                              Niagara US and Niagara UK are subject to
                              extensive environmental laws and regulations
                              concerning, among other matters, water and air
                              emissions and waste disposal. Under such laws,
                              including the Comprehensive Environmental
                              Response, Compensation and Liability Act of 1980
                              as amended, Niagara US and Niagara UK may be
                              responsible for parts of the costs required to
                              remove or remediate previously disposed wastes or
                              hazardous substances at the locations they own or
                              operate or at the locations which they arranged
                              for disposal of such materials. Claims for such
                              costs have been made against LaSalle with respect
                              to six third-party sites. The costs expended
                              through December 31, 2003 have been largely
                              covered by insurance. Management believes that
                              the resolution of these matters will not have a
                              material adverse effect on the Company's
                              financial position or results of operations.

                              Under the Company's insurance programs, coverage
                              is obtained for catastrophic exposures as well as
                              those risks required to be insured by law or
                              contract. In connection with these programs,
                              Niagara US has provided certain insurance
                              carriers with irrevocable standby letters of
                              credit totaling $1,695,000 as of December 31,
                              2003. It is the policy of the Company to retain a
                              portion of certain expected losses. These relate
                              primarily to workers' compensation, physical loss
                              to property, business interruption resulting from
                              such loss and comprehensive general, product,
                              vehicle, medical and life benefits and liability.
                              Provisions for losses expected under these
                              programs are recorded based upon the Company's
                              estimates of the aggregate liability for claims.
                              Such estimates utilize certain actuarial
                              assumptions followed in the insurance industry
                              and are included in accrued expenses.


14. EARNINGS(LOSS)            The following table sets forth the calculation of
    PER SHARE                 weighted average common shares outstanding for
                              the calculation of basic and diluted earnings
                              (loss) per share:

<TABLE>
<CAPTION>
                              Year ended December 31,                  2001          2002          2003
                              ---------------------------------------------------------------------------
<S>                                                               <C>           <C>           <C>
                              Weighted average shares (for
                                basic earnings per share)         8,329,145     8,238,517     8,238,517
                              Effect of dilutive securities:
                                Stock options                             -             -             -
                              ---------------------------------------------------------------------------
                              Adjusted weighted average
                                shares (for diluted earnings
                                per share)                        8,329,145     8,238,517     8,238,517
                              ===========================================================================
</TABLE>

                              Options to purchase 2,330,000, 2,310,000 and
                              1,860,000 shares of Niagara common stock at
                              exercise prices ranging from $5.50 to $5.88 per
                              share were outstanding at December 31, 2001, 2002
                              and 2003, respectively, but were not included in
                              the computation of diluted earnings per share
                              because they were antidilutive. These options
                              expire through 2010.


15.  FAIR VALUE OF            The following methods and assumptions were used
     FINANCIAL                to estimate the fair value of each class of
     INSTRUMENTS              financial instruments for which it is practicable
                              to estimate that value.

                              The carrying amounts of cash, trade accounts
                              receivable and current liabilities approximate
                              fair value because of the short maturity of these
                              instruments.

                              The carrying amount of debt approximates fair
                              value because the interest rates on these
                              instruments fluctuate with market interest rates
                              or are based on current rates offered to the
                              Company for debt with similar terms and
                              maturities.


16.  GOODWILL AND OTHER       Effective January 1, 2002, in accordance with
     INTANGIBLE ASSETS        SFAS No. 142, the Company changed its method of
                              accounting for goodwill. SFAS No. 142 requires,
                              among other things, that companies no longer
                              amortize goodwill, but instead test goodwill for
                              impairment at least annually. As required by SFAS
                              No. 142, the Company completed its impairment
                              tests on its $1,904,499 of recorded goodwill, and
                              no impairment charge was deemed necessary. The
                              effect of the adoption of SFAS No. 142 on the
                              reported net income and net income (loss) per
                              share of the Company for the years ended December
                              31, 2001, 2002 and 2003 is as follows:

<TABLE>
<CAPTION>
                              Year ended December 31,                 2001              2002            2003
                              --------------------------------------------------------------------------------
<S>                                                            <C>                <C>              <C>
                              Reported net income (loss)       $(4,626,519)       $1,673,112       $1,607,921
                              Addback:
                                Goodwill amortization               79,080                 -                -
                              --------------------------------------------------------------------------------
                              Adjusted net income (loss)       $(4,547,439)       $1,673,112       $1,607,921
                              ================================================================================
                              Net income (loss) per share -
                               basic and diluted:                  $  (.56)         $    .20          $   .20
                                   As reported
                                   Addback:
                                    Goodwill amortization              .01                 -                -
                              ---------------------------------------------------- ---------------------------
                                   Adjusted net income (loss)
                                     per share - basic
                                     and diluted                   $  (.55)         $    .20          $   .20
                              ================================================================================
</TABLE>

                              In accordance with SFAS No. 142, other intangible
                              assets that have finite useful lives will
                              continue to be amortized over such useful lives.
                              At December 31, 2001 and 2002, the Company had
                              other identifiable intangible assets recorded at
                              a cost of $797,574, which are being amortized on
                              a straight-line basis over approximately 10
                              years. Accumulated amortization was $566,943 and
                              $643,815 as of December 31, 2002 and 2003,
                              respectively. The related amortization expense,
                              which is included in cost of products sold, was
                              $76,872 for each of the years ended December 31,
                              2001, 2002 and 2003, and is estimated to be
                              approximately $77,000 for each of the years ended
                              December 31, 2004 and 2005, and $-0- thereafter.


17. SUPPLEMENTAL CASH         Interest paid during the years ended December 31,
    FLOW INFORMATION          2001, 2002 and 2003 was approximately $5,270,000,
                              $3,839,000 and $2,986,000, respectively.

                              Income tax payments made during the years ended
                              December 31, 2001, 2002 and 2003 were
                              approximately $31,000, $755,000 and $933,000,
                              respectively. During the years ended December 31,
                              2001, 2002 and 2003, the Company received income
                              tax refunds of approximately $215,000,
                              $1,463,000, and $125,000 respectively.

                              Property acquired by capital lease for the year
                              ended December 31, 2003 was $128,367.


18. SEGMENTS AND              The Company operates in two reportable segments:
    RELATED                   (i) Niagara US which has operations in the United
    INFORMATION               States and (ii) Niagara UK which has operations
                              in the United Kingdom. Management operates these
                              segments as separate strategic business units and
                              measures their performance based on Adjusted
                              EBITDA. Management believes that Adjusted EBITDA
                              provides the best measurement of segment
                              performance and management regularly calculates
                              Adjusted EBITDA in order to determine compliance
                              with financial covenants in the Company's credit
                              facilities.

                              Niagara UK uses British pounds sterling as its
                              functional currency and its accounts are
                              translated to United States dollars in conformity
                              with SFAS No. 52, "Foreign Currency Translation."
                              Assets and liabilities of this subsidiary have
                              been translated at the exchange rates in effect
                              on the balance sheet dates, and the related
                              revenues and expenses have been translated at
                              average rates for the periods.

                              Niagara US sells its products primarily to
                              customers in the United States.

                              Approximately 68% of Niagara UK's sales to
                              unaffiliated customers during 2003 were within
                              the United Kingdom, with 20% to continental
                              Europe and 12% to the rest of the world. These
                              amounts were 67%, 17% and 16% and 65%, 19% and
                              16%, respectively, for 2002 and 2001. Niagara
                              UK's sales to any one foreign country, other than
                              the United States, for these periods represented
                              less than 5% of its total sales.

<TABLE>
<CAPTION>

The following tables set forth certain performance and other information by reportable segment:


At and for the year ended December 31, 2001

                                                                                    Corporate/
                                              Niagara US        Niagara UK         Eliminations       Consolidated
--------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                <C>                 <C>                <C>
Net sales                                   $165,097,414       $110,667,835        $ (7,128,719)      $268,636,530

Intersegment sales                                     -          7,128,719          (7,128,719)                 -

Net sales to unaffiliated customers          165,097,414        103,539,116                   -        268,636,530

Segment profit (loss) (Adjusted EBITDA)       11,352,298          3,264,838          (1,851,761)        12,765,375

Depreciation and amortization                  7,442,515            163,732              78,615          7,684,862

Interest expense                               3,260,602          2,111,754                   -          5,372,356

Net loss                                        (131,901)        (4,454,668)            (39,950)        (4,626,519)

Accounts receivable, net                      13,992,110         23,852,499                   -         37,844,609

Long-lived assets                             78,641,104         11,400,081             734,155         90,775,340

Goodwill                                       1,904,499                  -                   -          1,904,499

Segment assets                               126,347,255         54,474,904           1,056,771        181,878,930

Acquisition of property and equipment          2,189,618            883,523              37,066          3,110,207
====================================================================================================================
</TABLE>


<TABLE>
<CAPTION>


At and for the year ended December 31, 2002

                                                                                   Corporate/
                                             Niagara US          Niagara UK        Eliminations        Consolidated
---------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                <C>              <C>                 <C>
Net sales                                    $176,876,327      $91,930,621      $ (7,932,387)       $260,874,561

Intersegment sales                                      -        7,932,387        (7,932,387)                  -

Net sales to unaffiliated customers           176,876,327       83,998,234                 -         260,874,561

Segment profit (loss) (Adjusted EBITDA)        15,859,688         (127,199)       (1,542,577)         14,189,912

     Note: Segment (loss) (Adjusted EBITDA) for Niagara UK does not include $3,102,311 gain on sale of property. See Note 2.

Depreciation and amortization                   7,301,591        1,712,794            89,746           9,104,131

Interest expense                                2,003,612        1,542,611                 -           3,546,223

Net income (loss)                               3,275,663       (1,430,228)         (172,323)          1,673,112

Accounts receivable, net                       11,851,973       22,431,116                 -          34,283,089

Long-lived assets                              75,215,777       10,842,535           624,045          86,685,357

Goodwill                                        1,904,499                -                 -           1,904,499

Segment assets                                133,038,969       55,702,144           455,036         189,196,149

Acquisition of property and equipment           3,773,767           76,695           (17,366)          3,833,096
==========================================================================================================================
</TABLE>



<TABLE>
<CAPTION>

At and for the year ended December 31, 2003

                                                                                       Corporate/
                                               Niagara US          Niagara UK          Eliminations        Consolidated
--------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                  <C>                 <C>                  <C>
Net sales                                     $195,249,151         $110,944,442        $ (10,900,874)       $295,292,719

Intersegment sales                                       -           10,900,874          (10,900,874)                  -

Net sales to unaffiliated customers            195,249,151          100,043,568                    -         295,292,719

Segment profit (loss) (Adjusted EBITDA)         14,989,821              907,154           (1,684,931)         14,212,044

Depreciation and amortization                    7,246,592            1,766,334               78,181           9,091,107

Interest expense                                 1,620,705            1,464,718                    -           3,085,423

Net income (loss)                                3,140,015             (745,249)            (786,845)          1,607,921

Accounts receivable, net                        15,017,526           24,047,099                    -          39,064,625

Long-lived assets                               71,166,295            9,922,251             (346,308)         80,742,238

Goodwill                                         1,904,499                    -                    -           1,904,499

Segment assets                                 128,419,846           58,690,500             (780,530)        186,329,816

Acquisition of property and equipment            3,041,469            1,112,167           (1,172,634)          2,981,002
==========================================================================================================================
</TABLE>


<TABLE>
<CAPTION>


The following table provides a reconciliation of the Company's segment profit (loss) (Adjusted EBITDA) for the
years ended December 31, 2001, 2002, and 2003, to the respective net income (loss) attributable to each reportable
segment for such years:



                                                  2001                              2002                        2003
                                        ----------------------------    ----------------------------  ---------------------------
                                        Niagara US       Niagara UK      Niagara US    Niagara UK     Niagara US     Niagara UK
---------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>             <C>              <C>            <C>             <C>
Segment profit (loss)
(Adjusted EBITDA)                       $11,352,298     $ 3,264,838     $15,859,688    $  (127,199)   $14,989,821     $ 907,154

Depreciation and amortization            (7,442,515)       (163,732)     (7,301,591)    (1,712,794)    (7,246,592)   (1,766,334)

Gain on sale of property                          -               -               -      3,102,311              -       465,705

Intercompany gain on sale of property             -               -               -              -              -       808,734

Restructuring costs                               -      (5,278,074)              -              -              -             -

Interest expense                         (3,260,602)     (2,111,754)     (2,003,612)    (1,542,611)    (1,620,705)   (1,464,718)

Intercompany interest income(expense)       405,368        (405,368)        211,469       (211,469)             -             -

Other income                                186,550               -          57,709              -        332,491             -

Provision for doubtful accounts            (103,000)       (244,185)       (108,000)      (271,466)             -             -

Management fees                          (1,350,000)       (432,393)     (1,350,000)             -     (1,350,000)            -

Intercompany profit elimination                   -         (82,000)              -              -              -             -

(Provision) benefit for income taxes         80,000         998,000      (2,090,000)      (667,000)    (1,965,000)      304,210
--------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                       $  (131,901)    $(4,454,668)    $ 3,275,663    $(1,430,228)   $  3,140,015    $(745,249)
================================================================================================================================
</TABLE>


<TABLE>
<CAPTION>


19.  QUARTERLY FINANCIAL             The following presents certain unaudited quarterly financial information:
     INFORMATION (Unaudited)

                                                                                   Quarters ended during 2002
                                                        ------------------------------------------------------------------------
                                                           March 31           June 30          September 30       December 31
           ---------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>               <C>                <C>                <C>
           Net sales                                       $62,971,239       $66,601,860        $67,650,129        $63,651,333
           Gross profit                                      6,829,548         8,055,883          6,870,621          8,832,210
           Operating income (loss) (a)                         725,328         1,749,835          3,158,558          1,978,428
           Net income (loss) (a)                              (188,688)          113,485          1,391,255            357,060
           Net income (loss) per share
              (basic and diluted) (a)                            $(.02)             $.01              $.17                $.04
           ----------------------------------------------------------------------------------------------------------------------
           (a)  Results for the quarters ended September 30, 2002 and December 31, 2002 include gains on sale of
                property of $2,906,834 and $195,477, respectively. See Note 2.
           ======================================================================================================================
</TABLE>


<TABLE>
<CAPTION>

                                                                              Quarters ended during 2003
                                                        -------------------------------------------------------------------------
                                                            March 31           June 30         September 30       December 31
           ----------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                <C>                <C>               <C>
           Net sales                                      $79,748,415        $73,002,583        $69,786,319       $72,755,402
           Gross profit                                     9,563,179          8,299,075          7,532,696         6,820,105
           Operating income (loss) (b)                      2,743,222          1,720,414          1,465,526          (343,310)
           Net income (loss) (b)                            1,424,084            568,193            566,891          (951,247)
           Net income (loss) per share
              (basic and diluted) (b)                            $.17               $.07              $.07              $(.12)
           ----------------------------------------------------------------------------------------------------------------------
           (b)  Results for the quarters ended June 30, 2003, September 30, 2003 and December 31, 2003 include (loss) gain
                on sale of property of $(114,835), $565,092 and $15,448, respectively. See Note 2.
           ======================================================================================================================
</TABLE>


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

            As disclosed in Niagara's Form 8-K, dated April 10, 2003, the Audit
Committee of Niagara's Board of Directors engaged Deloitte & Touche LLP on April
10, 2003 as the Company's principal accountants to audit the Company's financial
statements for 2003.

ITEM 9A.  CONTROLS AND PROCEDURES

         (a) Disclosure Controls and Procedures. The Company's management, with
the participation of the Company's Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company's disclosure controls
and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act) as of December 31, 2003. Based on such evaluation, the
Company's Chief Executive Officer and Chief Financial Officer have concluded
that, as of December 31, 2003, the Company's disclosure controls and procedures
are effective at the reasonable assurance level in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act.

         (b) Internal Control Over Financial Reporting. There have not been any
changes in the Company's internal control over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
three months ended December 31, 2003 that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.


                                   PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

         The information required by Item 10 will be contained in, and is
incorporated herein by reference from, the section entitled "Election of
Directors" of the Registrant's Proxy Statement for its 2004 Annual Meeting of
Stockholders to be filed with the SEC (the "Proxy Statement"), or will be filed
by amendment to this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

         The information required by Item 11 will be contained in, and is
incorporated herein by reference from, the section entitled "Executive
Compensation" of the Proxy Statement, or will be filed by amendment to this Form
10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         The information required by Item 12 will be contained in, and is
incorporated herein by reference from, the section entitled "Security Ownership
of Directors and Executive Officers" of the Proxy Statement, or will be filed by
amendment to this Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by Item 13 will be contained in, and is
incorporated herein by reference from, the section entitled "Election of
Directors -- Certain Relationships and Related Transactions" of the Proxy
Statement, or will be filed by amendment to this Form 10-K.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The information required by Item 14 will be contained in, and is
incorporated herein by reference from, the section entitled "Principal
Accountant Fees and Services" of the Proxy Statement, or will be filed by
amendment to this Form 10-K.


                                   PART IV.

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K.

       (a)    List of documents filed as a part of this Report:

              1. Financial Statements.

                 Financial Statements filed as part of this Report on Form
                 10-K are listed in Item 8 on page 20.

              2. Financial Statement Schedules:

                 Schedules I and II are filed as part of this Report on Form
                 10-K beginning on page S-1 hereof.

              3.  Exhibits

                  See Item 15(c) below for a list of the exhibits filed as a
                  part of or incorporated by reference into this report.

       (b)    Reports on Form 8-K.

              During the quarter ended December 31, 2003, Niagara filed two
              Current Reports on Form 8-K. The first report, dated November 14,
              2003, related to the announcement of the Company's results of
              operations for the three and nine months ended September 30, 2003.
              The second report, dated December 18, 2003, related to the
              announcement that Niagara UK was engaged in discussions with an
              affiliate of The Reserve Group for the sale of Niagara UK's hot
              rolled division and Wesson Bright Products businesses. (As
              disclosed in Niagara's Form 8-K, dated January 14, 2004, such
              discussions ended without the parties reaching agreement.)

       (c)    Exhibits

         3.1(1)     Registrant's Restated Certificate of Incorporation, as
                    amended on May 16, 1996.

         3.2(2)     Registrant's By-laws.

         4.1(2)     Form of Common Stock Certificate.

         4.2(3)     Revolving Credit and Term Loan Agreement, dated as of April
                    18, 1997, by and among Niagara Cold Drawn Corp., LaSalle
                    Steel Company, Manufacturers and Traders Trust Company
                    (individually and as Agent), CIBC Inc. and National City
                    Bank (the "Credit Agreement").

         4.3(4)     First Amendment to the Credit Agreement, dated as of
                    September 4, 1997.

         4.4(4)     Second Amendment to the Credit Agreement, effective as of
                    December 31, 1997.

         4.5(5)     Third Amendment to the Credit Agreement, effective May 15,
                    1998.

         4.6(6)     Fourth Amendment to the Credit Agreement, effective as of
                    December 1, 1998.

         4.7(7)     Fifth Amendment to the Credit Agreement, effective as of
                    May 21, 1999.

         4.8(8)     Sixth Amendment to the Credit Agreement, effective as of
                    December 31, 1999.

         4.9(9)     Seventh Amendment to the Credit Agreement, effective as of
                    March 31, 2000.

         4.10(9)    Eighth Amendment to the Credit Agreement, effective as of
                    June 8, 2000.

         4.11(10)   Ninth Amendment to the Credit Agreement, effective as of
                    June 28, 2001.

         4.12(11)   Tenth Amendment to the Credit Agreement, effective as of
                    December 31, 2001.

         4.13(12)   Eleventh Amendment to the Credit Agreement, effective as of
                    March 31, 2002.

         4.14(13)   Twelfth Amendment to the Credit Agreement, effective as of
                    September 1, 2002.

         4.15(26)   Thirteenth Amendment to the Credit Agreement, effective as
                    of September 1, 2003.

         4.16(7)    Bank Facilities Agreement, dated May 21, 1999, between
                    National Westminster Bank Plc and Niagara LaSalle (UK)
                    Limited (the "Facilities Agreement").

         4.17(14)   Amendment to the Facilities Agreement, effective June 30,
                    2000.

         4.18(10)   Second Amendment to the Facilities Agreement, effective
                    June 30, 2001.

         4.19(11)   Third Amendment to the Facilities Agreement, effective
                    December 31, 2001.

         4.20(12)   Fourth Amendment to the Facilities Agreement, effective
                    March 31, 2002.

         4.21(25)   Fifth Amendment to the Facilities Agreement, dated August
                    8, 2003.

         4.22       Sixth Amendment to the Facilities Agreement, effective
                    December 31, 2003.

         4.23(7)    Intercreditor Agreement, dated May 21, 1999, between
                    National Westminster Bank Plc, Niagara Corporation and
                    Niagara LaSalle (UK) Limited.

         4.24(15)   Invoice Discounting Agreement, dated August 23, 1999,
                    between Niagara LaSalle (UK) Limited and Lombard Natwest
                    Discounting Limited (the "Discount Agreement").

         4.25(14)   Amendment to the Discount Agreement, effective June 30,
                    2000.

         4.26(10)   Second Amendment to the Discount Agreement, effective June
                    30, 2001.

         4.27(11)   Third Amendment to the Discount Agreement, effective
                    December 31, 2001.

         4.28(12)   Fourth Amendment to the Discount Agreement, effective March
                    31, 2002.

         4.29(13)   Fifth Amendment to the Discount Agreement, effective August
                    23, 2002.

         4.30(25)   Sixth Amendment to the Discount Agreement, dated August 11,
                    2003.

         4.31       Seventh Amendment to the Discount Agreement, effective
                    December 31, 2003.

         4.32(15)   Intercreditor Agreement, dated August 23, 1999, between
                    Lombard Natwest Discounting Limited, Niagara Corporation
                    and Niagara LaSalle (UK) Limited.

         4.33(15)   Deed of Priority, dated August 23, 1999, between Lombard
                    Natwest Discounting Limited, National Westminster Bank Plc,
                    Manufacturers and Traders Trust Company, Niagara LaSalle
                    (UK) Limited and Niagara Corporation.

         10.1(16)   Employment Agreement, dated as of January 1, 1999, by and
                    among Niagara Corporation, Niagara LaSalle Corporation and
                    Michael Scharf.

         10.2(17)   Amended and Restated Promissory Note made by Southwest
                    Steel Company, Inc. in favor of the Cohen Family Revocable
                    Trust, u/t/a dated June 15, 1988, in the principal amount
                    of $898,000, dated January 31, 1996.

         10.3(17)   Guaranty, made by the Registrant in favor of the Cohen
                    Family Revocable Trust, u/t/a dated June 15, 1988, dated
                    January 31, 1996.

         10.4(18)   International Metals Acquisition Corporation 1995 Stock
                    Option Plan (the "Stock Option Plan").

         10.5(19)   First Amendment to the Stock Option Plan, dated October 5,
                    1996.

         10.6(20)   Second Amendment to the Stock Option Plan, dated June 8,
                    1998.

         10.7(20)   Niagara Corporation Employee Stock Purchase Plan.

         10.8(6)    First Amendment to Lease, dated May 4, 1998, between
                    Niagara LaSalle Corporation and North American Royalties,
                    Inc.

         10.9(21)   Sale of Business Agreement, dated April 16, 1999, between
                    Glynwed Steels Limited, Glynwed International plc, Niagara
                    LaSalle (UK) Limited and Niagara Corporation

         10.10(21)  Property Agreement, dated April 16, 1999, between Glynwed
                    Property Management Limited, Glynwed Properties Limited,
                    Niagara LaSalle (UK) Limited, Niagara Corporation and
                    Glynwed International plc.

         10.11(21)  Agreement For Lease of Unit 6-8 Eagle Industrial Estate,
                    dated April 16, 1999, between Glynwed Property Management
                    Limited, Glynwed Properties Limited, Niagara LaSalle (UK)
                    Limited and Niagara Corporation.

         10.12(8)   Form of Niagara LaSalle (UK) Limited Lease.

         10.13(8)   Form of Niagara LaSalle (UK) Limited Side Deed.

         10.14(8)   Form of Niagara LaSalle (UK) Limited Option Agreement.

         10.15(8)   Form of Niagara LaSalle (UK) Limited Lease Renewal Deed.

         10.16(11)  Agreement, dated March 15, 2002, between Niagara (UK)
                    Limited and George Wimpey Midland Limited.

         10.17(24)  Agreement dated May 30, 2003 between Niagara LaSalle (UK)
                    Limited and Thamesway Properties Limited relating to the
                    sale of real property in Darlaston, Wednesbury.

         10.18(13)  Form of Niagara Corporation Guaranty to Niagara LaSalle
                    (UK) Limited supplier.

         16(23)     Letter from BDO Seidman, LLP to the Securities and Exchange
                    Commission dated April 7, 2003

         21(22)     Subsidiaries of the Registrant.

         31.1       Certification of Chief Executive Officer pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002.

         31.2       Certification of Chief Financial Officer pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002.

         32.1       Certification of Chief Executive Officer pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002.

         32.2       Certification of Chief Financial Officer pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002.

       (1)  Incorporated by reference to exhibit 3.1 filed with the
            Registrant's Report on Form 10-Q for the quarter ended June 30,
            1996.

       (2)  Incorporated by reference to exhibits filed with the Registrant's
            Registration Statement on Form S-1, Registration No. 33-64682.

       (3)  Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 8-K, dated May 2, 1997.

       (4)  Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-K for the fiscal year ended December 31, 1997.

       (5)  Incorporated by reference to exhibit 4.8 to the Registrant's Report
            on Form 10-Q for the quarter ended June 30, 1998.

       (6)  Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-K for the fiscal year ended December 31, 1998.

       (7)  Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 8-K, dated June 4, 1999.

       (8)  Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-K for the fiscal year ended December 31, 1999.

       (9)  Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-Q for the quarter ended June 30, 2000.

       (10) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-Q for the quarter ended September 30, 2001.

       (11) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-K for the fiscal year ended December 31, 2001.

       (12) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-Q for the quarter ended March 31, 2002.

       (13) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-Q for the quarter ended September 30, 2002.

       (14) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-K for the fiscal year ended December 31, 2000.

       (15) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-Q for the quarter ended September 30, 1999.

       (16) Incorporated by reference to exhibit 10.1 filed with the
            Registrant's Report on Form 10-K/A for the fiscal year ended
            December 31, 1998.

       (17) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-K for the year ended December 31, 1995.

       (18) Incorporated by reference to Annex A to the Registrant's Proxy
            Statement for the Annual Meeting of Stockholders held on May 16,
            1996.

       (19) Incorporated by reference to exhibit 10.10 to the Registrant's
            Report on Form 10-K for the fiscal year ended December 31, 1996.

       (20) Incorporated by reference to Annexes to the Registrant's Proxy
            Statement for the Annual Meeting of Stockholders held on July 7,
            1998.

       (21) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 8-K, dated April 27, 1999.

       (22) Incorporated by reference to exhibit 21 filed with the Registrant's
            Report on Form 10-K for the year ended December 31, 2002.

       (23) Incorporated by reference to exhibit 16.1 filed with the
            Registrant's Report on Form 8-K, dated April 10, 2003.

       (24) Incorporated by reference to exhibit 10.1 filed with the
            Registrant's Report on Form 8-K, dated June 13, 2003.

       (25) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-Q for the quarter ended June 30, 2003.

       (26) Incorporated by reference to exhibits filed with the Registrant's
            Report on Form 10-Q for the quarter ended September 30, 2003.

<PAGE>


                                   SIGNATURES

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


                                     NIAGARA CORPORATION


                                     By:  /s/  Michael Scharf
                                          -------------------------------------
                                          Michael Scharf
                                          Chairman of the Board,
                                          President and Chief Executive Officer

Dated: March 29, 2004



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


/s/ Michael Scharf               Chairman of the Board,           March 29, 2004
------------------------         President and Chief
    Michael Scharf               Executive Officer


/s/ Anthony J. Verkruyse         Vice President, Treasurer        March 29, 2004
------------------------         and Chief Financial Officer
    Anthony J. Verkruyse


/s/ Gilbert D. Scharf            Secretary and Director           March 29, 2004
------------------------
    Gilbert D. Scharf


 /s/ Frank Archer                Director                         March 29, 2004
------------------------
     Frank Archer


 /s/ Gerald L. Cohn              Director                         March 29, 2004
------------------------
     Gerald L. Cohn


 /s/ Andrew R. Heyer             Director                         March 29, 2004
------------------------
     Andrew R. Heyer


 /s/ Douglas T. Tansill          Director                         March 29, 2004
------------------------
     Douglas T. Tansill


<PAGE>


                              NIAGARA CORPORATION
                                AND SUBSIDIARIES










                                                  Financial Statement Schedules
                                                            Form 10-K - Item 15
                                       Years Ended December 2001, 2002 and 2003


<PAGE>





                              NIAGARA CORPORATION
                                AND SUBSIDIARIES








_______________________________________________________________________________
===============================================================================
                                                  Financial Statement Schedules
                                                            Form 10-K - Item 15
                                   Years Ended December 31, 2001, 2002 and 2003




<PAGE>


                                                          NIAGARA CORPORATION
                                                             AND SUBSIDIARIES



                                                                   Index

===============================================================================



        REPORTS OF INDEPENDENT AUDITORS                              S-3

        FINANCIAL STATEMENT SCHEDULE I:
           Condensed Financial Information of Registrant:
              Balance Sheets                                         S-5
              Statements of Operations                               S-6
              Statements of Stockholders' Equity                     S-7
              Statements of Cash Flows                               S-8
              Notes to Condensed Financial Statements                S-9

        FINANCIAL STATEMENT SCHEDULE II:
           Valuation and Qualifying Accounts                         S-11








        All other schedules have been omitted because they are inapplicable or
        not required or the information is included in the consolidated
        financial statements or the notes thereto.


<PAGE>


INDEPENDENT AUDITORS' REPORT



Niagara Corporation
New York, New York

We have audited the consolidated financial statements of Niagara Corporation
and its subsidiaries (together, the "Company") as of December 31, 2003 and for
the year then ended, and have issued our report thereon dated March 26, 2004;
such report is included elsewhere in this Form 10-K. Our audit also included
the financial statement schedules of Niagara Corporation and subsidiaries,
listed in Item 15. These financial statement schedules are the responsibility
of the Corporation's management. Our responsibility is to express an opinion
based on our audit. In our opinion, such 2003 financial statement schedules,
when considered in relation to the basic 2003 consolidated financial statements
taken as a whole, present fairly in all material respects the information set
forth therein.


/s/ Deloitte & Touche LLP
Parsippany, New Jersey

March 26, 2004




<PAGE>


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Niagara Corporation
New York, New York

The audit referred to in our report dated February 4, 2003 relating to the
consolidated financial statements of Niagara Corporation and its subsidiaries
(together, the "Company"), which is contained in Item 8 of Form 10-K, include
the audits of the financial statement schedules for the two years ended
December 31, 2002 listed in the accompanying index. These financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based upon our audits.

In our opinion, such financial statement schedules for the two years ended
December 31, 2002 present fairly, in all material respects, the information
set forth therein.





/s/ BDO Seidman, LLP
BDO Seidman, LLP


New York, New York

February 4, 2003




<PAGE>

<TABLE>
<CAPTION>
                                                                                        NIAGARA CORPORATION
                                                                                           AND SUBSIDIARIES
                                                                                                 SCHEDULE I

                                                              Condensed Financial Information of Registrant
                                                                                             Balance Sheets
===========================================================================================================


 December 31,                                                                 2002                   2003
 ----------------------------------------------------------------------------------------------------------
 ASSETS
 CURRENT:
<S>                                                                 <C>                     <C>
    Cash and cash equivalents                                       $       16,008          $       1,686
    Other current assets                                                     5,965                  8,647
 ----------------------------------------------------------------------------------------------------------
         TOTAL CURRENT ASSETS                                               21,973                 10,333
 PROPERTY AND EQUIPMENT, NET                                               372,833                297,303
 INVESTMENT IN AND NET ADVANCES TO SUBSIDIARIES                         56,879,972             61,537,182
 DEFERRED INCOME TAXES                                                     399,000                428,000
 OTHER ASSETS, NET                                                          59,760                 41,833
 ----------------------------------------------------------------------------------------------------------
                                                                       $57,733,538            $62,314,651
 ===========================================================================================================
 LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES:
    Accrued expenses                                                 $      96,967         $      180,941
    Advances from subsidiary                                            10,208,209             10,341,252
 ----------------------------------------------------------------------------------------------------------
         TOTAL LIABILITIES                                              10,305,176             10,522,193
 ----------------------------------------------------------------------------------------------------------
 COMMITMENTS AND CONTINGENCIES (SEE NOTES 8,
    9 AND 13 TO THE CONSOLIDATED FINANCIAL STATEMENTS)
 STOCKHOLDERS' EQUITY (SEE NOTES 6, 7 AND 9 TO THE
    CONSOLIDATED FINANCIAL STATEMENTS):
       Preferred stock, $.001 par value - 500,000
         shares authorized, none outstanding                                     -                      -
       Common stock, $.001 par value - 15,000,000
          shares authorized, 9,997,455 issued                                9,998                  9,998
       Additional paid-in capital                                       50,111,675             50,111,675
       Retained earnings                                                13,525,271             15,133,192
       Accumulated other comprehensive loss                             (7,968,898)            (5,212,723)
 -----------------------------------------------------------------------------------------------------------
                                                                        55,678,046             60,042,142
       Treasury stock, at cost, 1,758,938 shares                        (8,249,684)            (8,249,684)
 -----------------------------------------------------------------------------------------------------------
            TOTAL STOCKHOLDERS' EQUITY                                  47,428,362             51,792,458
 -----------------------------------------------------------------------------------------------------------
                                                                       $57,733,538            $62,314,651
 ===========================================================================================================
                                                   See accompanying notes to condensed financial statements.



</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                          NIAGARA CORPORATION
                                                                                             AND SUBSIDIARIES
                                                                                                   SCHEDULE I

                                                                Condensed Financial Information of Registrant
                                                                                     Statements of Operations

==============================================================================================================

 Year ended December 31,                                            2001             2002                2003
 -------------------------------------------------------------------------------------------------------------
   <S>                                                                 <C>              <C>                 <C>
REVENUES:
    Management fees from subsidiaries (Note 2)               $ 1,782,393       $1,350,000          $1,350,000
 EXPENSES:
    General and administrative expenses                        1,930,376        1,632,323           1,763,113
 -------------------------------------------------------------------------------------------------------------
                                                                (147,983)        (282,323)           (413,113)
 OTHER INCOME (LOSS):
    Equity in net (loss) income of subsidiaries               (4,536,536)       1,845,435           1,901,034
 -------------------------------------------------------------------------------------------------------------
 (LOSS) INCOME BEFORE INCOME TAX RECOVERIES                   (4,684,519)       1,563,112           1,487,921
 INCOME TAX RECOVERIES                                            58,000          110,000             120,000
 -------------------------------------------------------------------------------------------------------------
 NET (LOSS) INCOME                                           $(4,626,519)      $1,673,112          $1,607,921
 =============================================================================================================
 NET (LOSS) INCOME PER SHARE
  - BASIC AND DILUTED                                        $      (.56)      $      .20          $      .20
 =============================================================================================================
 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 (SEE NOTE 14 TO THE CONSOLIDATED
    FINANCIAL STATEMENTS):
       basic and diluted                                       8,329,145        8,238,517           8,238,517
 =============================================================================================================

                                                      See accompanying notes to condensed financial statements.


</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                                                            NIAGARA CORPORATION
                                                                                                               AND SUBSIDIARIES
                                                                                                                     SCHEDULE I

                                                                                  Condensed Financial Information of Registrant
                                                                                             Statements of Stockholders' Equity

==================================================================================================================================


Years ended December 31, 2001, 2002 and 2003
----------------------------------------------------------------------------------------------------------------------------------
                                              Common stock                               Accumulated
                                           -----------------                                other        Treasury      Total
                                           Number of           Additional     Retained  comprehensive    stock,    stockholders'
                                            shares   Amount  paid-in capital  earnings      loss         at cost       equity
 ----------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>        <C>    <C>           <C>           <C>            <C>          <C>
 BALANCE, JANUARY 1, 2001                  9,997,455  $9,998 $50,111,675   $16,478,678   $(2,691,219)   $(8,030,409) $55,878,723
 ----------------------------------------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net loss for the year                          -       -           -    (4,626,519)            -              -   (4,626,519)
    Foreign currency translation
       adjustment                                  -       -           -             -      (476,415)             -     (476,415)
    Minimum pension liability adjustment
       ($2,137,000, net of tax benefit
       of $833,000)                                -       -           -             -    (1,304,000)             -   (1,304,000)
 ----------------------------------------------------------------------------------------------------------------------------------
    TOTAL COMPREHENSIVE LOSS                                                                                          (6,406,934)
 ----------------------------------------------------------------------------------------------------------------------------------
 Purchase of treasury stock, at cost(a)            -       -           -             -             -       (219,275)    (219,275)
 ----------------------------------------------------------------------------------------------------------------------------------
 BALANCE, DECEMBER 31, 2001                9,997,455   9,998  50,111,675    11,852,159    (4,471,634)    (8,249,684)  49,252,514
 ----------------------------------------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net income for the year                        -       -           -     1,673,112             -              -    1,673,112
    Foreign currency translation
       adjustment                                  -       -           -             -       851,736              -      851,736
    Minimum pension liability adjustment
       ($7,130,000, net of tax benefit
       of $2,781,000)                              -       -           -             -    (4,349,000)             -   (4,349,000)
 ----------------------------------------------------------------------------------------------------------------------------------
    TOTAL COMPREHENSIVE LOSS                                                                                          (6,406,934)
 ----------------------------------------------------------------------------------------------------------------------------------
 BALANCE, DECEMBER 31, 2002                9,997,455   9,998  50,111,675    13,525,271    (7,968,898)    (8,249,684)  47,428,362
 Comprehensive income:
    Net income for the year                        -       -           -     1,607,921             -              -    1,607,921
    Foreign currency translation
       adjustment                                  -       -           -             -       855,175              -      855,175
    Minimum pension liability adjustment
       ($3,117,000, net of tax expense
       of $1,216,000)                              -       -           -             -     1,901,000              -    1,901,000
 ----------------------------------------------------------------------------------------------------------------------------------
    TOTAL COMPREHENSIVE INCOME                                                                                         4,364,096
 ----------------------------------------------------------------------------------------------------------------------------------
 BALANCE, DECEMBER 31, 2003                9,997,455  $9,998 $50,111,675   $15,133,192   $(5,212,723)   $(8,249,684) $51,792,458
 ==================================================================================================================================

 (a)   During the year ended December 31, 2001, Niagara Corporation repurchased 125,300 shares of its Common Stock
       at a cost of $219,275.
==================================================================================================================================
                                                                    See accompanying notes to condensed financial statements.



</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                            NIAGARA CORPORATION
                                                                                               AND SUBSIDIARIES
                                                                                                     SCHEDULE I

                                                                  Condensed Financial Information of Registrant
                                                                                       Statements of Cash Flows

================================================================================================================

 Year ended December 31,                                           2001               2002                2003
 ---------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                 <C>                 <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
    Net (loss) income                                       $(4,626,519)        $1,673,112          $1,607,921
 ---------------------------------------------------------------------------------------------------------------
    Adjustments to reconcile net (loss)
       income to net cash provided by
       (used in) operating activities:
         Depreciation and amortization                          103,980             89,746              78,181
         Equity in net loss (income) of subsidiaries          4,536,536         (1,845,435)         (1,901,034)
         Deferred income taxes                                        -           (399,000)            (29,000)
         (Increase) decrease in other current assets            (38,940)           463,476              (2,682)
         Decrease in other assets                                     -                  -              17,927
         Increase (decrease) in accrued expenses                 79,414            (25,856)             83,974
 ---------------------------------------------------------------------------------------------------------------
            TOTAL ADJUSTMENTS                                 4,680,990         (1,717,069)         (1,752,634)
 ---------------------------------------------------------------------------------------------------------------
            NET CASH PROVIDED BY (USED IN) OPERATING
               ACTIVITIES                                        54,471            (43,957)           (144,713)
 ---------------------------------------------------------------------------------------------------------------
 CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of property and equipment                       (37,065)                 -              (2,652)
    Subsidiary reimbursement of property costs                        -             17,364                   -
    Advances, subsidiaries, net                                 223,741             (4,554)            133,043
 ---------------------------------------------------------------------------------------------------------------
            NET CASH PROVIDED BY INVESTING ACTIVITIES           186,676             12,810             130,391
 ---------------------------------------------------------------------------------------------------------------
 CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments to acquire treasury stock                         (219,275)                 -                   -
 ---------------------------------------------------------------------------------------------------------------
 NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                           21,872            (31,147)            (14,322)
 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                    25,283             47,155              16,008
 ---------------------------------------------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS, END OF YEAR                   $      47,155      $      16,008        $      1,686
 ===============================================================================================================

                                                      See accompanying notes to condensed financial statements.



</TABLE>


<PAGE>

                                                            NIAGARA CORPORATION
                                                               AND SUBSIDIARIES
                                                                     SCHEDULE I

                                  Condensed Financial Information of Registrant
                                                       Statements of Cash Flows

===============================================================================


1.   STATEMENT OF                 The accompanying condensed financial
     ACCOUNTING                   statements have been prepared by Niagara
     POLICY                       Corporation ("Niagara") pursuant to the rules
                                  and regulations of the Securities and
                                  Exchange Commission. Certain information and
                                  footnote disclosures normally included in
                                  financial statements prepared in accordance
                                  with generally accepted accounting principles
                                  have been condensed or omitted pursuant to
                                  these rules and regulations. It is,
                                  therefore, suggested that these condensed
                                  financial statements be read in conjunction
                                  with the consolidated financial statements
                                  and notes thereto.


2.   RESTRICTIONS ON              Niagara's subsidiary, Niagara LaSalle
     DISTRIBUTIONS                Corporation ("Niagara LaSalle"), which was
                                  acquired on August 16, 1995, has a revolving
                                  line of credit and term loan agreement with a
                                  group of banks which contains certain
                                  restrictions on the payment of dividends.
                                  Niagara LaSalle is permitted, however, to pay
                                  management fees to Niagara and, in each of
                                  the years ended December 31, 2001, 2002 and
                                  2003, $1,350,000 of such management fees were
                                  included as revenues in the accompanying
                                  condensed financial statements but have been
                                  eliminated in the consolidated financial
                                  statements

                                  Niagara's subsidiary, Niagara LaSalle (UK)
                                  Limited ("Niagara UK"), which acquired the
                                  equipment, inventory and certain other assets
                                  of the steel bar businesses of Glynwed Steels
                                  Limited on May 21, 1999, has bank facilities
                                  and invoice discounting agreements which
                                  contain certain restrictions on the payment
                                  of dividends. Niagara UK is permitted,
                                  however, to pay management fees to Niagara of
                                  up to (pound)300,000 per year. During the
                                  year ended December 31, 2001, $432,393
                                  ((pound)300,000) of such management fees were
                                  included as revenues in the accompanying
                                  condensed financial statements, but have been
                                  eliminated in the consolidated financial
                                  statements. During the year ended December
                                  31, 2002, payment of Niagara UK's management
                                  fees were discontinued.


<PAGE>


3.   TRADE PAYABLE                As of December 31, 2003, Niagara had
     GUARANTEES                   guaranteed on a short-term basis certain
                                  trade payables of Niagara UK in the aggregate
                                  amount of up to (pound)7.35 million
                                  (approximately $13.1 million) in order to
                                  ensure an orderly supply of raw materials.

<PAGE>

<TABLE>
<CAPTION>
                                                                   NIAGARA CORPORATION
                                                                      AND SUBSIDIARIES
                                                                           SCHEDULE II

                                                     Valuation and Qualifying Accounts

======================================================================================

 Years ended December 31, 2001, 2002 and 2003
--------------------------------------------------------------------------------------
                                             Additions
                                      ---------------------
                       Balance at              Charged to                 Balance at
                       beginning               costs and                    end of
                        of year       Other    expenses     Deductions       year
 -----------------------------------------------------------------------------------
<S>                     <C>           <C>         <C>           <C>         <C>
DECEMBER 31, 2003:
  Allowance for
  doubtful accounts     $1,347,000    $   -    $  (5,000)    $ 142,000   $1,200,000
------------------------------------------------------------------------------------
DECEMBER 31, 2002:
  Allowance for
  doubtful accounts     $1,276,000    $   -    $ 379,000     $ 308,000   $1,347,000
------------------------------------------------------------------------------------
DECEMBER 31, 2001:
  Allowance for
  doubtful accounts     $1,459,000    $   -    $(165,000)    $  18,000   $1,276,000
=====================================================================================
</TABLE>