SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D. C. 20549

                               FORM 10-K/A

(MARK ONE)

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

For the fiscal year ended December 31, 1996

                                    OR

(  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

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
                           -------------------
                      COMMON STOCK, $.001 PAR VALUE
              UNITS, CONSISTING OF COMMON STOCK AND WARRANTS
                    WARRANTS TO PURCHASE COMMON STOCK


         INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER
PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2)
HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES   X    NO
    -----     ------

         INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS
PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL
NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE
PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF
THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. 
YES   X    NO
    ------    ------

         AS OF MARCH 27, 1997, THE AGGREGATE MARKET VALUE OF THE VOTING
STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT WAS APPROXIMATELY
$14,280,031 (ASSUMES OFFICERS, DIRECTORS AND ALL STOCKHOLDERS HOLDING 5%
OF THE OUTSTANDING SHARES ARE AFFILIATES).

         THERE WERE 3,668,750 SHARES OF THE REGISTRANT'S COMMON STOCK
OUTSTANDING AS OF MARCH 27, 1997.

         DOCUMENTS INCORPORATED BY REFERENCE: PORTIONS OF THE
REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON MAY 29, 1997 ARE INCORPORATED BY REFERENCE INTO PART III (ITEMS
10, 11, 12 AND 13) HEREOF.


                             EXPLANATORY NOTE

         This Amendment on Form 10-K/A to the Annual Report on Form
10-K of Niagara Corporation ("Niagara") for the fiscal year ended
December 31, 1996 (the "Form 10-K") amends and restates in their entirety
Items 7 and 8 of Part II thereof. Capitalized terms used and not defined
herein shall have the meanings ascribed thereto in the Form 10-K.

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

OVERVIEW

         Niagara was organized on April 27, 1993 with the objective of
acquiring an operating business in the metals processing and distribution
industry or metals-related manufacturing industry. On June 1, 1995,
Niagara entered into a stock purchase agreement with the stockholders of
Niagara Cold Drawn providing for the purchase by Niagara of all
outstanding shares of common and preferred stock of Niagara Cold Drawn
for $10,744,045 in cash. This acquisition was consummated on August 16,
1995.

         On January 31, 1996, Niagara Cold drawn entered into a stock
purchase agreement with the stockholders of Southwest pursuant to which,
and simultaneously therewith, Niagara Cold Drawn purchased all
outstanding capital stock of Southwest for $1,920,000 in cash and
$1,156,773 principal amount of Niagara Cold Drawn promissory notes
guaranteed by Niagara. In connection with this acquisition, Niagara Cold
Drawn discharged $8,518,691 of Southwest indebtedness and Niagara
guaranteed $898,000 of Southwest indebtedness. On November 1, 1996,
Southwest was merged into Niagara Cold Drawn.

         On May 22, 1996, Niagara issued 168,750 shares of Common Stock
in exchange for unit purchase options (the "Purchase Options") issued to
the underwriters of its 1993 initial public offering. The Purchase
Options were exercisable until August 13, 1998 for an aggregate of
250,000 units at $9.00 per unit (subject, in each case, to certain
antidilution adjustments), with each unit consisting of one share of
Common Stock and two warrants, with each warrant exercisable for one
share of Common Stock at $6.60.

         On January 23, 1997, Niagara entered into a letter of intent to
purchase all of the issued and outstanding shares of LaSalle Steel
Company, a wholly owned subsidiary of Quanex Corporation. Consummation of
the proposed transaction is subject to the satisfaction of certain
conditions including, among others, the satisfactory completion of the
Company's due diligence review and the negotiation and execution of a
mutually acceptable stock purchase agreement.

         Niagara is engaged in substantive commercial activity only
through its wholly owned subsidiary, Niagara Cold Drawn, and the
following comparison of results of operations relates solely to Niagara
Cold Drawn's operations. Such results include the results of operations
of Southwest since February 1, 1996.

YEAR ENDED DECEMBER 31, 1996 COMPARED WITH DECEMBER 31, 1995

         Net sales for the twelve months ended December 31, 1996 were
$76,827,165, an increase of $25,087,414 or 48.5% over the same period in
1995. This increase was primarily due to sales attributable to Southwest.

         Cost of sales for the twelve months ended December 31, 1996 was
$65,824,190, an increase of $21,794,557 or 49.5% over the same period in
1995. This increase was attributable to increased volume following the
acquisition of Southwest. Gross margins for the twelve months ended
December 31, 1996 decreased by 0.6% over the same period in 1995 due to
pricing pressures.

         Selling (absent freight), general and administrative expenses
(absent management charges and bonuses) increased $2,029,753 to
$5,036,332 or 6.6% of sales in the twelve months ended December 31, 1996
compared to 5.8% for the same period in 1995. This increase was caused by
increased costs associated with the increased volume, increased Canadian
goods and services taxes and duties resulting from increased Canadian
sales and increased depreciation and amortization associated with the
step-up in basis of Niagara Cold Drawn's fixed assets.

         Interest expense increased $765,445 to $1,536,717 primarily due
to higher levels of borrowing incurred in financing the acquisition of
Southwest.

         Net income for the twelve months ended December 31, 1996 was
$1,314,218, an increase of $788,841 or 150.2% from the same period in
1995. This increase was due primarily to the inclusion of Niagara Cold
Drawn's results for a full year.

YEAR ENDED DECEMBER 31, 1995 COMPARED WITH DECEMBER 31, 1994

         Net sales for the twelve months ended December 31, 1995 were
$51,739,751, an increase of $5,116,114 or 11.0% over the same period in
1994. Of the 11.0% increase, 7.1% was attributable to increased volume
with the balance attributable to improved pricing.

         Cost of sales for the twelve months ended December 31, 1995 was
$43,967,359, an increase of $3,421,425 or 8.4% over the same period in
1994. This increase was attributable to increased volume. Gross margins
increased approximately 2.0%, primarily as a result of improved pricing,
a more favorable product mix and reduced last-in first-out ("LIFO")
impact.

         Selling (absent freight), general and administrative expenses
(absent management fees and administrative bonuses) increased
approximately $131,000 to $2,923,000 or 5.7% of sales in the twelve
months ended December 31, 1995 compared to 6.0% for the same period in
1994. This increase was caused by increased commission expenses,
increased salaries and increased Canadian goods and services taxes and
duties resulting from increased Canadian sales.

         Interest expense increased $59,854 to $771,272 due to higher
levels of borrowing.

         Net income for the twelve months ended December 31, 1995 was
$525,377, a decrease of $296,222 or approximately 36.1% from the same
period in 1994. Income before taxes was adversely affected by $1,666,327
in expenses related to management exercise of stock options, $235,000
primarily as a result of depreciation and amortization related to the
pushdown of the fair value of acquired assets and $130,000 in increased
management fees.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's short-term liquidity requirement or day-to-day
operating expenses has been and is expected to continue to be funded by
cash provided by operations and borrowings under its revolving credit
agreement. The Company's principal long-term liquidity requirement has
been and is expected to continue to be the funding of capital
expenditures to modernize, improve and expand the facilities, machinery
and equipment of Niagara Cold Drawn. Net capital expenditures for the
year ending December 31, 1996 (after proceeds from the sale of
Southwest's Tulsa facilities) were $3,867,944 compared to $807,768 for
the same period in 1995. The increase in expenditures was largely due to
the construction of the facility in Midlothian, Texas, which became
operational in late 1996. The Company anticipates spending approximately
$4,000,000 for capital expenditures during 1997, which amount includes
the cost of a new production line at the Company's Midlothian facility.

         Cash flows of the Company provided by operations were $4,831,940
for the year ended December 31, 1996, which included cash flows of
Niagara Cold Drawn for the entire year and cash flows of Southwest from
February 1, 1996. Cash flows of the Company used in operations were
$2,371,124 for the year ended December 31, 1995, which included the cash
flows of Niagara Cold Drawn from August 17, 1995. This $7,203,064
increase from the prior year is primarily attributable to an increase of
$719,442 in net income, an increase of $1,373,395 in depreciation and
amortization, a decrease of $1,215,505 in accounts receivable, a decrease
of $2,876,491 in inventories and an increase of $660,836 in accounts
payable. The Company's cash flows provided by operations during 1996,
together with proceeds of $551,000 from the sale of Southwest's Tulsa
facility and $915,856 of financing proceeds, were used to acquire
Southwest and complete the construction of the Midlothian facility.

         Working capital of the Company at December 31, 1996 and 1995 was
$12,087,913 and $11,885,476, respectively. At December 31, 1996, Niagara
Cold Drawn had a $5,146,579 balance under its revolving credit agreement
with Manufacturers and Traders Trust Company ("M&T") and $8,853,421 in
available credit thereunder.

         On January 31, 1996, Niagara Cold Drawn acquired all the
outstanding capital stock of Southwest. This acquisition was financed
pursuant to credit agreements (the "Credit Agreements") entered into with
M&T on January 31, 1996 by Niagara Cold Drawn (and guaranteed by
Niagara). Among these were: (i) a $12,000,000 Term Loan Agreement (the
"Term Loan Agreement") and (ii) a $14,000,000 Amended and Restated
Revolving Credit Agreement (the "Revolving Credit Agreement"). In
connection with the execution of the Credit Agreements, Niagara Cold
Drawn terminated its existing term loan facility with M&T, and Southwest
terminated its existing bank credit agreements.

         The Credit Agreements are guaranteed by Niagara and secured by
substantially all of the assets of Niagara Cold Drawn. These agreements
carry restrictions on, among other things, capital expenditures,
dividends and changes in control and management of Niagara Cold Drawn and
require minimum levels of net worth through maturity. Niagara Cold Drawn
is currently in compliance with these provisions.

         The Term Loan Agreement provides for the payment of (i) interest
in monthly installments from March 1, 1996 through February 1, 1997 and
(ii) principal and interest in monthly installments from March 1, 1997
through February 1, 2003. The interest rate is fixed at 7.49% for the
first two years, and thereafter will be periodically adjusted to 2.5%
above the average yield on certain United States Treasury obligations.
Loans made pursuant to the Revolving Credit Agreement are based on a
percentage of eligible accounts and inventory and will mature on January
31, 1999. The interest rate on each loan is 2.25% above the applicable
LIBOR rate. Monthly interest payments commenced on March 1, 1996.

         Loan proceeds pursuant to the Credit Agreements were used to
consummate the acquisition of Southwest, to repay and discharge certain
indebtedness of Southwest and Niagara Cold Drawn, for certain acquisition
expenses, to finance the completion of Niagara Cold Drawn's Midlothian,
Texas facility and for general corporate purposes.

RECENT ACCOUNTING CHANGES

         In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share
("SFAS 128") which provides a different method of calculating earnings
per share than is currently used in accordance with APB 15. SFAS 128
provides for the calculation of basic and diluted earnings per share.
Basic earnings per share is computed by dividing income available to
common shareholders by the weighted average number of shares outstanding
for the period. Diluted earnings per share reflects the potential
dilution of securities that could share in the earnings of an entity,
similar to fully diluted earnings per share. Early implementation of SFAS
128 would have had no effect on the 1996 net income per share.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                      INDEX TO FINANCIAL STATEMENTS

                                                               Page
                                                               ----
NIAGARA CORPORATION
  AND SUBSIDIARY:

   Report of Independent Certified Public Accountants. . . .     6
   Balance Sheets. . . . . . . . . . . . . . . . . . . . . .     7
   Statements of Operations. . . . . . . . . . . . . . . . .     8
   Statements of Stockholders' Equity. . . . . . . . . . . .     9
   Statements of Cash Flows. . . . . . . . . . . . . . . . .    10
   Notes to Financial Statements . . . . . . . . . . . . . .    11

NIAGARA COLD DRAWN CORP. IS CONSIDERED A PREDECESSOR 
COMPANY AND THE INFORMATION DISCLOSED HEREIN IS AS OF 
AND PRIOR TO THE DATE OF ACQUISITION BY NIAGARA, ON 
AUGUST 16, 1995:

   Report of Independent Certified Public Accountants . . .    30
   Statements of Operations . . . . . . . . . . . . . . . .    31
   Statements of Cash Flows . . . . . . . . . . . . . . . .    32
   Notes to Financial Statements. . . . . . . . . . . . . .    33






REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Niagara Corporation
New York, New York

We have audited the accompanying consolidated balance sheets of Niagara
Corporation (formerly International Metals Acquisition Corporation) and
subsidiary (the "Company") as of December 31, 1995 and 1996, and the
related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Niagara Corporation and subsidiary as of December 31, 1995 and 1996, and
the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.


/s/ BDO Seidman, LLP

BDO Seidman, LLP

New York, New York

March 27, 1997





Niagara Corporation and Subsidiary

Balance Sheets

December 31,                                       1995           1996
---------------------------------------------------------------------------
Assets
Current:
  Cash and cash equivalents                   $  2,186,897    $  1,587,927
  Trade accounts receivable, net of
     allowance for doubtful accounts
     of $184,000 and $233,000
     (Notes 7 and 15)                            4,239,369       5,952,896
  Inventories (Notes 5 and 7)                   14,743,541      14,446,473
  Other current assets                             165,874         253,078
---------------------------------------------------------------------------
        Total current assets                    21,335,681      22,240,374
Property, plant and equipment, net
   (Notes 4, 6 and 7)                           12,745,144      21,649,219
Goodwill, net of accumulated amortization
   of $76,030 (Note 1)                                --         2,543,294
Other assets, net (Notes 1, 4 and 20)              512,587         914,928
---------------------------------------------------------------------------
                                              $ 34,593,412    $ 47,347,815
===========================================================================
Liabilities and Stockholders' Equity
Current:
  Trade accounts payable                      $  4,786,769    $  4,109,731
  Accrued expenses                               3,211,643       3,689,584
  Accrued workmen's compensation                   516,745         480,107
  Current maturities of long-term debt
     (Note 7)                                      733,048       1,662,039
  Deferred income taxes (Note 13)                  202,000         211,000
---------------------------------------------------------------------------
        Total current liabilities                9,450,205      10,152,461
---------------------------------------------------------------------------
Long-term debt, less current maturities
  (Note 7)                                       6,968,860      18,075,147
---------------------------------------------------------------------------
Deferred income taxes (Note 13)                  3,712,000       3,594,000
---------------------------------------------------------------------------
Commitments and contingencies (Notes 10,
  11, 14 and 16)
Stockholders' equity (Notes 2, 8 and 9):
  Preferred stock, $.001 par value - shares
     authorized 500,000; none outstanding             --              --
  Common stock, $.001 par value - shares
     authorized 15,000,000; outstanding
     3,500,000 and 3,668,750                         3,500           3,669
  Additional paid-in capital                    15,560,296      15,560,127
  Deficit                                       (1,101,449)        (37,589)
---------------------------------------------------------------------------
        Total stockholders' equity              14,462,347      15,526,207
---------------------------------------------------------------------------
                                              $ 34,593,412    $ 47,347,815
===========================================================================
             See accompanying notes to financial statements.





Niagara Corporation and Subsidiary

Statements of Operations

<TABLE>
<S>                                     <C>             <C>             <C>
Year ended December 31,                    1994            1995(a)          1996(b)
-------------------------------------------------------------------------------------
Net sales (Note 15)                     $       --      $ 17,454,688    $ 76,827,165
Cost of products sold                           --        15,421,064      65,824,190
-------------------------------------------------------------------------------------
        Gross profit                            --         2,033,624      11,002,975
Operating expenses:
Selling, general and administrative
   (Note 17)                               1,821,665       1,805,269       8,013,589
-------------------------------------------------------------------------------------
        Income (loss) from operations     (1,821,665)        228,355       2,989,386

Other income (expense):
  Interest income                            600,880         628,375         100,244
  Interest expense                              --          (272,312)     (1,536,717)
  Other, net - primarily gain on
     sale of property                           --              --           126,147
-------------------------------------------------------------------------------------
        Income (loss) before taxes
        on income (recovery)              (1,220,785)        584,418       1,679,060
Taxes on income (recovery) (Note 13)          (6,000)        240,000         615,200
-------------------------------------------------------------------------------------
Net income (loss)                       $ (1,214,785)   $    344,418    $  1,063,860
=====================================================================================
Net income (loss) per share             $       (.35)   $        .10    $        .30
=====================================================================================
Weighted average common shares
  outstanding                              3,500,000       3,500,000       3,602,818
=====================================================================================
</TABLE>
------------------
(a)  Includes the results of Niagara Cold Drawn for the period from 
     August 17, 1995 to December 31, 1995.

(b)  Includes the results of Niagara Cold Drawn for the entire year, and
     the results of Southwest from February 1, 1996.


             See accompanying notes to financial statements.




Niagara Corporation and Subsidiary

Statements of Stockholders' Equity

<TABLE>
<CAPTION>
Period January 1, 1994 to December 31, 1996

                                          Common stock
                                     ----------------------        Additional      Retained           Total
                                       Number of                      paid-in       earnings      stockholders'
                                         shares      Amount           capital       (deficit)         equity
---------------------------------------------------------------------------------------------------------------
<S>                                    <C>           <C>          <C>             <C>             <C>         
Balance, January 1, 1994               2,925,001     $ 2,925      $ 12,524,073    $    (17,917)   $ 12,509,081

Net loss for the year                       --          --                --        (1,214,785)     (1,214,785)
Accretion to redemption value of
   common stock subject to
   possible redemption                      --          --                --          (111,721)       (111,721)
---------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994             2,925,001       2,925        12,524,073      (1,344,423)     11,182,575

Accretion to redemption value of
   common stock subject to
   possible redemption through
   August 16, 1995                          --          --                --          (101,444)       (101,444)
Reclassification of common stock
   subject to possible redemption        574,999         575         3,036,223            --         3,036,798
Net income for the year                     --          --                --           344,418         344,418
---------------------------------------------------------------------------------------------------------------
Balance, December 31, 1995             3,500,000       3,500        15,560,296      (1,101,449)     14,462,347

Shares issued (Note 2)                   168,750         169              (169)           --              --

Net income for the year                     --          --                --         1,063,860       1,063,860
---------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996             3,668,750     $ 3,669      $ 15,560,127    $    (37,589)   $ 15,526,207
===============================================================================================================
</TABLE>

             See accompanying notes to financial statements.




Niagara Corporation and Subsidiary

Statements of Cash Flows (Note 19)

<TABLE>
<S>                                                <C>            <C>              <C>
Year ended December 31,                                 1994             1995(a)      1996(b)
------------------------------------------------------------------------------------------------
Cash flows from operating activities:
  Net income (loss)                                $ (1,214,785)   $    344,418    $  1,063,860
------------------------------------------------------------------------------------------------
  Adjustments to reconcile net income
  (loss) to net cash provided by
  (used in) operating activities:
     Depreciation and amortization                        5,364         472,663       1,846,058
     Gain on sale of property                              --              --          (124,773)
     Provision for doubtful accounts                       --            36,000          68,991
     Deferred income taxes                                 --           216,000         229,000
     Interest on U.S. Government
       securities in trust fund                        (558,880)       (507,473)           --
     Changes in assets and liabilities,
       net of effects from purchase of
       Niagara Cold Drawn in 1995 and
       Southwest in 1996:
          (Increase) decrease in accounts
             receivable                                    --           (83,599)      1,131,906
          (Increase) decrease in inventories               --           640,288       3,516,779
          Increase in other assets                         --           (98,613)       (169,909)
          Increase (decrease) in trade
            accounts payable, accrued expenses
            and accrued workmen's compensation        1,386,791      (3,390,808)     (2,729,972)
------------------------------------------------------------------------------------------------
                Total adjustments                       833,275      (2,715,542)      3,768,080
------------------------------------------------------------------------------------------------
                Net cash provided by (used in)
                   operating activities                (381,510)     (2,371,124)      4,831,940
------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Proceeds from sale of property                           --              --           551,000
  Acquisition of Niagara Cold Drawn, net of
    cash acquired                                          --       (11,862,766)           --
  Acquisition of Southwest, net of cash acquired           --              --        (2,354,289)
  Acquisition of fixed assets                              --          (293,661)     (4,418,944)
  Financing costs                                          --              --          (124,533)
  Deferred acquisition costs                               --          (115,000)           --
  Cumulative maturities of U.S. Government
    securities deposited in trust fund               72,166,798      89,592,484            --
  Cumulative maturities of U.S. Government
    securities reinvested in trust fund             (72,166,798)    (74,400,900)           --
------------------------------------------------------------------------------------------------
                Net cash provided by (used in)
                   investing activities                    --         2,920,157      (6,346,766)
------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Net borrowings under revolving line of credit            --           998,445         (31,960)
  Proceeds from long-term debt                             --              --         9,998,963
  Repayment of long-term debt                              --          (297,338)     (9,051,147)
------------------------------------------------------------------------------------------------
                Net cash provided by financing
                    activities                             --           701,107         915,856
------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash
  equivalents                                          (381,510)      1,250,140        (598,970)
Cash and cash equivalents, beginning of year          1,318,267         936,757       2,186,897
------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year             $    936,757    $  2,186,897    $  1,587,927
================================================================================================
</TABLE>
--------------

(a)  Includes the cash flows of Niagara Cold Drawn for the period from 
     August 17, 1995 to December 31, 1995.

(b)  Includes the cash flows of Niagara Cold Drawn for the entire year,
     and the cash flows of Southwest from February 1, 1996.


                See accompanying notes to financial statements.




Niagara Corporation and Subsidiary

Notes to Financial Statements

 1. Summary of Accounting    Organization, Business Operations and
    Policies                 Acquisitions

                             Niagara Corporation, formerly International
                             Metals Acquisition 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 metals-related
                             manufacturing industry.

                             Niagara consummated an initial public
                             offering (the "Offering") on August 20, 1993
                             and raised net proceeds of $15,295,100.

                             On August 16, 1995, Niagara acquired all of
                             the issued and outstanding common and
                             preferred stock of Niagara Cold Drawn Corp.
                             ("Niagara Cold Drawn," and together with
                             Niagara, the "Company") a manufacturer of
                             cold drawn steel bars, for $10,744,045 in
                             cash. Concurrent with this acquisition,
                             which was approved by Niagara's
                             stockholders, the shares of common stock
                             subject to redemption totalling $3,036,798
                             was reclassified as additional paid-in
                             capital since no Niagara shares were
                             redeemed. This acquisition was accounted for
                             as a purchase, and the financial statements
                             include the results of Niagara Cold Drawn
                             from this acquisition date. (see Note 3).

                             The purchase price of Niagara Cold Drawn
                             including certain transaction expenses of
                             $1,174,377, was $11,918,422. Niagara Cold
                             Drawn's stockholder's equity at August 16,
                             1995 was $6,519,678. After giving effect to
                             this excess and a $3,309,000 deferred tax
                             liability (see Notes 3 and 4), the purchase
                             price for Niagara Cold Drawn exceeded the
                             book value of Niagara Cold Drawn's
                             stockholder's equity by approximately
                             $8,708,000. As a result of this acquisition,
                             Niagara's net operating loss carryforward at
                             August 16, 1995 of approximately $1,150,000
                             was able to be utilized. The tax benefit of
                             this loss (that was previously fully
                             reserved by a valuation allowance) totals
                             approximately $460,000, which amount was
                             recorded as a deferred tax asset at the date
                             of the acquisition of Niagara Cold Drawn.
                             Approximately $1,000,000 of this loss was
                             utilized as of December 31, 1995 and the
                             remainder was utilized in 1996 to reduce
                             current tax liabilities. In accordance with
                             SFAS 109, the tax benefit received from this
                             utilization was reflected as a reduction of
                             the deferred tax asset rather than a
                             reduction in tax expense in the statement of
                             operations.

                             On January 31, 1996, Niagara Cold Drawn
                             entered into a stock purchase agreement with
                             the stockholders of Southwest Steel Company,
                             Inc. ("Southwest"), a manufacturer of cold
                             drawn steel bars, pursuant to which, and
                             simultaneously therewith, Niagara Cold Drawn
                             purchased all of the outstanding capital
                             stock of Southwest for $1,920,000 in cash
                             and $1,156,773 principal amount of
                             promissory notes guaranteed by Niagara. In
                             connection with this acquisition, Niagara
                             Cold Drawn discharged $8,518,691 of
                             Southwest indebtedness and Niagara
                             guaranteed $898,000 of Southwest
                             indebtedness to a former Southwest
                             stockholder. The acquisition was accounted
                             for as a purchase and financed by a
                             $12,000,000 term loan facility and the
                             utilization of a portion of Niagara Cold
                             Drawn's revolving line of credit. The
                             financial statements include the results of
                             Southwest from February 1, 1996.

                             The Southwest purchase price, including
                             certain transaction expenses of $524,270,
                             together with liabilities of $350,063
                             assumed in a purchase business combination,
                             totaled $3,951,106. Southwest's
                             stockholders' equity at January 31, 1996 was
                             $1,071,782. The $2,879,324 excess has been
                             allocated to goodwill and is being amortized
                             on a straight-line basis over 30 years (see
                             Note 4). Southwest was merged into Niagara
                             Cold Drawn on November 1, 1996. Southwest's
                             Tulsa, Oklahoma operations were closed
                             during 1996 and its Midlothian, Texas
                             operations became a division of Niagara Cold
                             Drawn following the merger.

                             On May 8, 1996, pursuant to the provisions
                             of the Southwest stock purchase agreement,
                             Niagara Cold Drawn asserted indemnification
                             claims in the aggregate amount of
                             approximately $1,300,000 against the former
                             Southwest stockholders. On May 22, 1996,
                             Niagara Cold Drawn brought an action against
                             such stockholders relating to these claims.
                             The defendants have denied liability in
                             their answer.

                             Niagara Cold Drawn operates from three
                             principal locations: Buffalo, New York;
                             Chattanooga, Tennessee; and Midlothian,
                             Texas. It produces cold drawn steel bars for
                             steel service centers and original equipment
                             manufacturers throughout North America.
                             Niagara Cold Drawn competes in a narrow
                             sector of the steel industry, and its
                             business is affected by conditions within
                             the broader steel and machine tool
                             industries. It grants trade credit toits
                             customers consistent with industry practice.

                             Net Income (Loss) Per Share

                             Net income (loss) per common share is
                             computed on the basis of the weighted
                             average number of common shares outstanding
                             during the period, including common stock
                             equivalents (unless antidilutive) which
                             would arise from the exercise of stock
                             warrants and options.

                             Cash Equivalents

                             For purposes of the statements of cash
                             flows, the Company considers cash
                             equivalents to consist of all short-term
                             highly liquid debt instruments which are
                             readily convertible into cash at par value
                             (cost). Cash equivalent investments were
                             $2,143,172 and $1,370,981 at December 31,
                             1995 and 1996, respectively.

                             Revenue Recognition

                             Revenue from the sale of products is
                             recorded at the time the goods are shipped.

                             Inventories

                             Inventories are stated at the lower of cost
                             or market, with cost being determined using
                             the last-in, first-out (LIFO) method.

                             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 which
                             substantially increase the useful lives of
                             existing property, plant and equipment.
                             Maintenance, repairs and minor renewals are
                             expensed as incurred.

                             Niagara Cold Drawn provides for depreciation
                             of property, plant and equipment at rates
                             designed to amortize such equipment 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 20 years
                             on buildings and improvements and leasehold
                             improvements.

                             Intangible Assets

                             Niagara Cold Drawn has a Power Authority of
                             New York Power Replacement Agreement which
                             provides for low cost energy and is included
                             in other assets (see Note 4). The agreement
                             is being amortized on a straight-line basis
                             over 10 years.

                             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 Statement of
                             Financial Accounting Standards No. 109
                             ("SFAS No. 109"). Valuation allowances are
                             established when necessary to reduce
                             deferred tax assets to the amount expected
                             to be realized. Income tax expense is the
                             tax payable for the period and the change
                             during the period in deferred tax assets and
                             liabilities.

                             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 and
                             disclosure of contingent assets and
                             liabilities at the date of thefinancial
                             statements and the reported amounts of
                             revenues and expenses during the reporting
                             period. Actual results could differ from
                             those estimates.

                             Reclassifications

                             Certain reclassifications have been made to
                             prior year amounts to conform to current
                             year presentation.

                             Recent Accounting Standards

                             In March 1995, the Financial Accounting
                             Standards Board ("FASB") issued Statement of
                             Financial Accounting Standards No. 121,
                             "Accounting for Impairment of Long-Lived
                             Assets and for Long-Lived Assets to be
                             Disposed of" ("SFAS No. 121"). SFAS No. 121
                             requires, among other things, impairment
                             loss of assets to be held and gains or
                             losses from assets that are expected to be
                             disposed of be included as a component of
                             income from continuing operations before
                             taxes on income. The Company assesses
                             recoverability of these assets by estimating
                             future non-discounted cash flows. The
                             Company adopted SFAS No. 121 in fiscal 1996
                             and its implementation did not have a
                             material effect on thefinancial statements.

                             In October 1995, the FASB issued Statement
                             of Financial Accounting Standards No. 123,
                             "Accounting for Stock-Based Compensation"
                             ("SFAS No. 123"). SFAS No. 123 encourages
                             entities to adopt the fair value method in
                             place of the provisions of Accounting
                             Principles Board Opinion No. 25, "Accounting
                             for Stock Issued to Employees" ("APB No.
                             25"), for all arrangements under which
                             employees receive shares of stock or other
                             equity instruments of the employer or the
                             employer incurs liabilities to employees in
                             amounts based on the price of its stock. The
                             Company has not adopted the fair value
                             method encouraged by SFAS No. 123 and will
                             continue to account for such transactions in
                             accordance with APB No. 25 (see Note 11).

                             In March 1997, the FASB issued Statement of
                             Financial Accounting Standards No. 128,
                             Earnings Per Share ("SFAS 128") which
                             provides a different method of calculating
                             earnings per share than is currently used in
                             accordance with APB 15. SFAS 128 provides
                             for the calculation of basic and diluted
                             earnings per share. Basic earnings per share
                             is computed by dividing income available to
                             common shareholders by the weighted average
                             number of common shares outstanding for the
                             period. Diluted earnings per share reflects
                             the potential dilution of securities that
                             could share in the earnings of an entity,
                             similar to fully diluted earnings per share.
                             Early implementation of SFAS 128 would have
                             had no effect on the 1996 net income per
                             share.

 2.  Public Offering         On August 20, 1993, Niagara sold 2,875,000
                             units ("Units") in the Offering. Each Unit
                             consists of one share of Niagara's common
                             stock, $.001 par value, and two Redeemable
                             Common Stock Purchase Warrants ("Warrants").
                             Each Warrant entitles the holder to purchase
                             from Niagara, until the close of business on
                             August 13, 2000, one share of common stock
                             at an exercise price of $5.50, subject to
                             adjustment in certain circumstances. The
                             Warrants will be redeemable at a price of
                             $.01 per Warrant upon 30 days' notice in the
                             event that the last sale price of the common
                             stock has been at least $10.00 per share for
                             20 consecutive trading days ending on the
                             third day prior to the date on which notice
                             of redemption is given.

                             Niagara issued an aggregate of $150,000 of
                             promissory notes to certain accredited
                             investors. These notes bore interest at the
                             rate of 10% per annum and were repaid on the
                             consummation of the Offering with accrued
                             interest thereon. The investors were issued
                             300,000 warrants (valued at a nominal
                             amount) which are (following Niagara's
                             acquisition of Niagara Cold Drawn) identical
                             to the Warrants.

                             On May 22, 1996, Niagara issued 168,750
                             shares of common stock in exchange for unit
                             purchase options (the "Purchase Options")
                             issued to the underwriters of the Offering.
                             The Purchase Options were exercisable until
                             August 13, 1998 for an aggregate of 250,000
                             units at $9.00 per unit (subject, in each
                             case, to certain antidilution adjustments),
                             with each unit consisting of one share of
                             common stock and two warrants, with each
                             warrant exercisable for one share of common
                             stock at $6.60.

 3.  Acquisitions of         As discussed in Note 1, on August 16, 1995,
     Niagara Cold Drawn      Niagara acquired all of the issued and
     and Southwest           outstanding shares of common and preferred
                             stock of Niagara Cold Drawn and, on January
                             31, 1996, Niagara Cold Drawn acquired all of
                             the issued and outstanding capital stock of
                             Southwest. For financial reporting purposes,
                             both transactions were accounted for under
                             the purchase method.

                             Pro forma results of operations for 1995, as
                             if both acquisitions had occurred January 1,
                             1995, are unaudited and are detailed below.
                             Pro forma adjustments primarily include
                             additional depreciation and amortization on
                             the excess purchase price allocated to
                             property, plant and equipment and intangible
                             assets (Niagara Cold Drawn) and goodwill
                             (Southwest), elimination of interest income
                             on the portion of Niagara's investment in
                             U.S. government securities deposited in a
                             trust fund and liquidated upon consummation
                             of the acquisition ofNiagara Cold Drawn,
                             elimination of the Niagara Cold Drawn
                             employment expense (exercise of management
                             options) discussed in Note 16, additional
                             accrual of salaries for Niagara management,
                             elimination of merger costs on terminated
                             transactions prior to the acquisition of
                             Niagara Cold Drawn (see Note 17),
                             elimination of other nonrecurring items and
                             provision for income taxes. This pro forma
                             financial data does not purport to be
                             indicative of the results which actually
                             could have been obtained had such
                             transactions been completed as of the
                             assumed dates or which may be obtained in
                             the future. Information has not been
                             presented for 1996 since the pro forma
                             results reflecting Southwest were not
                             materially different from the accompanying
                             financial statements.


                             Year ended December 31, 1995
                             --------------------------------------------
                             Net sales                       $84,654,000

                             Net income                          882,000

                             Net income per share                    .25
                             =============================================

 4. Excess Purchase Price    As discussed in Notes 1 and 3 above, on August
    of Niagara Cold Drawn    16, 1995, Niagara acquired all of Niagara Cold
    and Southwest Assets     Drawn's outstanding capital stock. The
    and Liabilities          financial statements have been adjusted to
                             reflect the fair value of net assets based
                             on an appraisal which was obtained as of the
                             acquisition date and to reflect the deferred
                             tax asset related to the net operating loss
                             of Niagara. The carrying amounts of certain
                             assets and liabilities were increased by
                             allocation of the following amounts:

                             ----------------------------------------------
                             Inventories                        $ 1,839,000

                             Land, buildings and improvements     2,256,000

                             Machinery and equipment              3,815,000

                             Power Authority of New York
                               Power Replacement Agreement
                               (included in other assets)           338,000

                             Deferred tax asset on net
                               operating loss carryforward          460,000

                             Less: Deferred tax liability        (3,309,000)
                             -----------------------------------------------
                             Allocation of excess purchase
                               price of Niagara                $ 5,399,000
                             ================================================

                             As discussed in Notes 1 and 3 above, on
                             January 31, 1996, Niagara Cold Drawn
                             acquired all of Southwest's capital stock.
                             The book values of assets and liabilities of
                             Southwest reflected the estimated fair
                             values at the date of acquisition and the
                             excess purchase price of $2,879,324 was
                             allocated to goodwill.

                             For the period from August 17, 1995 through
                             December 31, 1995 and for the year ended
                             December 31, 1996, income before income
                             taxes was decreased by approximately
                             $235,000 and $595,000, respectively,
                             primarily as a result of depreciation and
                             amortiza tion, related to the adjustment for
                             the excess purchase price of Niagara Cold
                             Drawn and Southwest.

 5. Inventories              Inventories consisted of the following:

                             December 31,            1995           1996
                             ----------------------------------------------
                             Raw materials       $ 6,978,363    $ 6,302,827

                             Work-in-process       1,088,153      1,252,278

                             Finished goods        6,677,025      6,891,368
                             ----------------------------------------------
                                                $ 14,743,541    $14,446,473
                             ==============================================

 6. Property, Plant and      Property, plant and equipment (after
    Equipment                accounting for the allocation of excess
                             purchase price disclosed in Note 4 above)
                             consisted of the following:
<TABLE>
                             <S>                            <C>              <C> 
                             December 31,                      1995              1996
                             ------------------------------------------------------------
                             Land, buildings
                               and improvements             $ 3,000,370      $ 7,447,214

                             Leasehold improvements             717,095          717,095

                             Machinery and equipment          8,950,643       15,026,487

                             Furniture and fixtures             369,225          476,659

                             Equipment under 
                               capital leases                   134,375           95,265
                             ------------------------------------------------------------
                             Total                           13,171,708       23,762,720

                             Less:

                               Accumulated depreciation        (420,942)      (2,058,256)

                               Accumulated depreciation
                                 on equipment under 
                                 capital leases                  (5,622)         (55,245)
                             ------------------------------------------------------------
                                                            $ 12,745,144    $ 21,649,219
                             ============================================================
</TABLE>

 7. Long-term Debt           The long-term debt consisted of the following:

<TABLE>
                             <S>                                 <C>           <C>
                             December 31,                           1995          1996
                             ------------------------------------------------------------
                             Secured bank revolving line of
                              credit up to $14,000,000, due
                              January 31, 1999, limited to a
                              portion of the value of
                              Niagara Cold Drawn's eligible
                              accounts receivable and
                              inventories. Interest is
                              calculated at the LIBOR rate
                              plus 2.25% (effective rate of
                              7.516% at December 31, 1996)      $ 5,178,539    $ 5,146,579

                             Term note payable - bank,
                              maturing in monthly payments
                              of interest only at 7.49%
                              through February 1, 1997,
                              followed by monthly
                              installments of principal and
                              interest from March 1, 1997
                              through February 1, 2003.
                              Beginning March 1, 1997
                              through February 1, 1998, the
                              monthly installments of
                              principal and interest are
                              $207,423. The monthly
                              principal and interest payment
                              is adjusted annually each
                              March 1 to reflect the current
                              interest rate, which is 2.5%
                              over the weekly average yield
                              on United States Treasury
                              obligations. The note is
                              collateralized by accounts
                              receivable and inventories          2,288,253     12,000,000

                             Notes payable - former
                              Southwest stockholders,
                              maturing $82,627 annually on
                              January 31 through 2010, plus
                              interest at 8.5%, guaranteed
                              by Niagara (see Note 1)                   --       1,156,773

                             Note payable - former
                              Southwest stockholder,
                              maturing $64,143 annually on
                              January 31 through 2010, plus
                              interest at 8.5%, guaranteed
                              by Niagara (see Note 1)                   --         898,000

                             Note payable - former
                              Southwest stockholder,
                              maturing $33,333 annually on
                              April 17 through 2005, plus
                              interest at 10%                          --          300,000

                             Obligations under capital
                              leases maturing in varying
                              monthly and quarterly
                              installments through December
                              1999, including interest
                              ranging from 7.4% to 9.75%,
                              collateralized by leased
                              equipment (see Note 10)                  --          109,102

                             Term note payable - Tennessee
                              landlord, maturing inmonthly
                              installments of $2,643 through
                              June 1998, including interest
                              at 10%, collateralized by
                              equipment                              69,900         44,008

                             Subordinated note payable -
                              development corporation,
                              maturing in monthly
                              installments of $1,467
                              through November 1998,
                              including interest at 6.5%,
                              collateralized by accounts
                              receivable, inventories and
                              equipment, and personally
                              guaranteed by certain officers
                              of Niagara Cold Drawn                  45,458         31,653

                             Subordinated note payable -
                              development corporation,
                              maturing in monthly
                              installments of $1,547
                              through December 1997,
                              including interest at 6%,
                              collateralized by accounts
                              receivable, inventories and
                              equipment, and personally
                              guaranteed by certain officers
                              of Niagara Cold Drawn                  33,524         16,765

                             Subordinated note payable -
                              development corporation,
                              maturing in monthly
                              installments of $888 through
                              May 1999, including interest
                              at 6%, collateralized by
                              accounts receivable and
                              inventories, and person ally
                              guaranteed by certain officers
                              of Niagara Cold Drawn                  32,848         23,920

                             Other                                   53,386         10,386
                             -------------------------------------------------------------
                                                                  7,701,908     19,737,186
                             Less: Current maturities of
                                   long-term debt                   733,048      1,662,039
                             -------------------------------------------------------------
                                                                $ 6,968,860   $ 18,075,147
                             =============================================================
</TABLE>

                             The bank revolving line of credit and term
                             loan agreements contain certain financial
                             covenants relating to Niagara Cold Drawn's
                             working capital, current ratio, tangible net
                             worth, debt to tangible net worth and
                             restrictions on capital expenditures,
                             operating leases and dividends.

                             Approximate maturities of long-term debt are
                             as follows:

                             Year ended December 31,
                             ------------------------------------
                             1997                     $ 1,622,000
                             1998                       2,019,000
                             1999                       7,248,000
                             2000                       2,214,000
                             2001                       2,372,000
                             ====================================

                             Niagara Cold Drawn has a $200,000 open
                             letter of credit with a bank that expires in
                             July 1997, secured by accounts receivable
                             and inventories. No amounts were outstanding
                             under the letter of credit at December 31,
                             1996.

 8. Preferred Stock          Niagara is authorized to issue 500,000
                             shares of preferred stock with such
                             designations, voting and other rights and
                             preferences as may be determined from time
                             to time by its Board of Directors.

 9. Common Stock             At December 31, 1996, 6,050,000 shares of
                             Niagara common stock were reserved for
                             issuance upon exercise of redeemable
                             warrants (see Note 2).

10. Lease Commitments        Niagara leases office space under
                             an operating lease and Niagara Cold Drawn
                             leases equipment and its Chattanooga,
                             Tennessee facility under capital and
                             operating leases. Assets under capital
                             leases are capitalized using interest rates
                             appropriate at the inception of the lease.
                             At December 31, 1996, future minimum
                             payments under capital and noncancellable
                             operating leases are approximately as
                             follows:

                                                       Capital    Operating
                                                        leases     lease
                             ------------------------------------------------
                             1997                      $ 47,000   $  450,000
                             1998                        53,000      338,000
                             1999                        24,000      251,000
                             2000                          --        276,000
                             2001                          --         69,000
                             -----------------------------------------------
                             Total minimum lease 
                               payments                 124,000   $1,384,000
                                                                  ==========
                             Amount representing 
                               interest                 (15,000)
                             -----------------------------------
                             Present value of net 
                               minimum lease 
                               payments (see Note 7)   $109,000
                             ===================================

                             Rent expense under operating leases was
                             approximately $63,000 for the period August
                             17, 1995 to December 31, 1995 and
                             approximately $449,000 for the year ended
                             December 31, 1996. The Chattanooga operating
                             lease expires in May 1998, at which time
                             Niagara Cold Drawn has the option to
                             purchase such property for $1,250,000.

11. Compensation Plans       Incentive Compensation Plan

                             Niagara Cold Drawn has an incentive
                             compensation plan pursuant to which bonuses
                             are paid to participants as designated by
                             Niagara Cold Drawn's Board of Directors.
                             Compensation under the plan is related
                             solely to Niagara Cold Drawn's earnings
                             performance. The amount charged to expense
                             under the plan was approximately $123,000
                             for the period August 17, 1995 to December
                             31, 1995 and approximately $307,000 for the
                             year ended December 31, 1996.

                             Stock Compensation Plan

                             Niagara has a stock option plan which is
                             described below. The Company applies APB
                             Opinion 25, "Accounting for Stock Issued to
                             Employees," and related Interpretations in
                             accounting for the plan. Under APB Opinion
                             25, because the exercise price of Niagara's
                             employee stock options equals the market
                             price of the underlying stock on the date of
                             grant, no compensation cost is recognized.

                             Under Niagara's stock option plan, 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 1,500,000
                             shares of Niagara common stock. The exercise
                             price of each option is no less than the
                             market price of Niagara's common stock on
                             the date of grant.

                             FASB Statement 123, "Accounting for
                             Stock-Based Compensation," requires the
                             Company to provide pro forma information
                             regarding net income and earnings per share
                             as if compensation cost for the Company's
                             stock option plan had been determined in
                             accordance with the fair value method
                             prescribed in FASB Statement 123. The
                             Company estimates the fair value of each
                             stock option at the grant date by using the
                             Black-Scholes option-pricing model with the
                             following weighted average assumptions used
                             for grants in 1995 and 1996: dividend yield
                             of -0- percent; expected volatility of 20
                             percent; risk-free interest rates of 6.6
                             percent; expected lives of 10 years and a
                             discount due to marketability of 28 percent.

                             Under the accounting provisions of FASB
                             Statement 123, the Company's net income and
                             earnings per share would have been reduced
                             to the pro forma amounts indicated below:

                                                         1996      1995
                             ----------------------------------------------
                             Net income:

                               As reported            $344,418   $1,063,860

                               Pro forma               270,368      798,133

                             Primary earnings per 
                             share:

                               As reported                 .10          .30

                               Pro forma                    .8          .22
                             ===============================================

                             A summary of the status of the Niagara's
                             stock option plan as of December 31, 1995
                             and 1996, and changes during the years
                             ending on those dates is presented below:

<TABLE>
<CAPTION>
                             -------------------------------------------------------------
                                               December 31, 1995       December 31, 1996
                                              ---------------------   --------------------
                                                           Weighted               Weighted
                                                            average               average
                                                Shares     exercise    Shares     exercise
                                                 (000)       price      (000)      price
                             -------------------------------------------------------------
                             <S>                <C>         <C>        <C>         <C>  
                             Outstanding            --      $  --      520,000     $5.75
                               at begin-
                               ning of year

                             Granted             520,000      5.75     295,000      5.50

                             Exercised              --         --         --         --

                             Forfeited              --         --         --         --
                             -----------------------------------------------------------
                             Outstanding         520,000     $5.75     815,000     $5.66
                               at end of
                               year
                             ===========================================================
                             Options exercisable
                               at year-end          --       $ --      254,666     $5.70
                             ===========================================================
                             Weighted average fair
                               value of options
                               granted during the
                                year               $2.14                 $1.47
                             ============================================================
</TABLE>

                             The following table summarizes information
                             about fixed stock options outstanding at
                             December 31, 1996.

<TABLE>
<CAPTION>
                                                Options outstanding                Options exercisable
                                         -------------------------------------   ------------------------
                                                        Weighted
                                                         average      Weighted                  Weighted
                             Range of    Number out-     remaining     average     Number        average
                             exercise    standing at    contractual   exercise   exercisable     exercise
                              prices       12/31/96        life         price     at 12/31/96     price
                             ----------------------------------------------------------------------------
                             <S>           <C>            <C>          <C>         <C>            <C>
                             $5.50 to      815,000        9 years      $5.66       254,666        $5.70
                             $5.75
                             ============================================================================
</TABLE>

12. Related Party            During the period from August 17, 1995 to
    Transactions             December 31, 1995, Niagara Cold Drawn
                             incurred approximately $25,000 of freight
                             and shipping charges to a related party.

                             From the effective date of the Offering
                             through the date of the acquisition of
                             Niagara Cold Drawn, Niagara occupied office
                             space provided by a company owned by a
                             stockholder. Niagara paid $5,000 per month
                             for such office space and certain
                             administrative and secretarial services.

13. Income Taxes             The provision for Federal and state income
                             tax expense (benefit) was comprised of the
                             following:

                             Year ended 
                             December 31,      1994       1995      1996
                             -----------------------------------------------
                             Current:
                               Federal       $(4,000)   $12,000   $352,200
                               State          (2,000)    12,000     34,000
                             -----------------------------------------------
                                              (6,000)    24,000    386,200
                             -----------------------------------------------
                             Deferred:
                               Federal           --     208,000    207,000
                               State             --       8,000     22,000
                             -----------------------------------------------
                                                 --     216,000    229,000
                             -----------------------------------------------
                             Total income
                               taxes
                               (recovery)    $(6,000)  $240,000   $615,200
                             ===============================================

                             Niagara Cold Drawn is included in the
                             consolidated Federal income tax return of
                             its parent, Niagara, from the date of
                             acquisition.

                             At December 31, deferred tax assets
                             (liabilities) consisted of the following:
<TABLE>
                             <S>                           <C>              <C>
                             December 31,                        1995            1996
                             -----------------------------------------------------------
                             New York State investment
                               tax credits                 $   715,000      $   427,000
                             Net operating loss 
                               carryforward                     78,000             --
                             Accrued expenses deductible
                               when paid                       231,000          182,000
                             Inventory capitalization          100,000          159,000
                             Allowance for doubtful
                               accounts                         71,000           89,000
                             -----------------------------------------------------------
                                 Gross deferred tax 
                                   assets                    1,195,000          857,000

                             Valuation allowance for
                               deferred tax assets            (715,000)        (427,000)
                             -----------------------------------------------------------
                                 Net deferred tax assets       480,000          430,000
                             -----------------------------------------------------------
                             Differences in property,
                               plant, equipment and
                               intangibles related to
                               allocation of Niagara
                               excess purchase price        (2,574,000)      (2,379,000)

                             Book versus tax depreciation
                               of property, plant and
                               equipment                    (1,138,000)      (1,215,000)

                             Differences in inventories
                               related to allocation of
                               Niagara Cold Drawn excess
                               purchase price                 (682,000)        (641,000)
                             -----------------------------------------------------------
                                 Gross deferred tax
                                   liabilities              (4,394,000)      (4,235,000)
                             -----------------------------------------------------------
                                 Net deferred tax
                                   liabilities             $(3,914,000)     $(3,805,000)
                             ===========================================================
</TABLE>

                             Included in the accompany balance sheets
                             as follows:

<TABLE>
                             <S>                           <C>              <C>
                                                                1995             1996
                             -----------------------------------------------------------
                             Current liability for
                               deferred income taxes       $  (202,000)     $  (211,000)

                             Noncurrent liability for
                              deferred income taxes         (3,712,000)      (3,594,000)
                             -----------------------------------------------------------
                             Net deferred tax liabilities  $(3,914,000)     $(3,805,000)
                             ===========================================================
</TABLE>

                             At December 31, 1996, Niagara Cold Drawn had
                             New York State investment tax credit
                             carryforwards of approximately $427,000,
                             which may be available to offset certain
                             future state income taxes. These credits
                             expire through 2005. A valuation allowance
                             has been provided for these tax credits. The
                             future utilization of these tax credits, if
                             any, will be credited to Niagara Cold
                             Drawn's noncurrent assets.

                             A reconciliation of the statutory Federal
                             income tax rate and effective rate as a
                             percentage of pre-tax income was as follows:
<TABLE>
<CAPTION>
                                                            1995              1996
                                                    ----------------    ---------------
                                                      Amount      %      Amount      %
                             ----------------------------------------------------------
                             <S>                     <C>         <C>    <C>         <C>
                             Tax at statutory
                               rate                  $199,000    34%    $591,000    34%
                             State income taxes,
                               net of Federal 
                               income tax benefit      13,000     2       37,000     3
                             Goodwill amortization        --     --       30,000     3
                             Other, including
                               prior year
                               overaccrual             28,000     5      (42,800)   (3)
                             ----------------------------------------------------------
                             Effective tax rate      $240,000    41%    $615,200    37%
                             ==========================================================
</TABLE>

14. Retirement Plans         Niagara Cold Drawn has a contributory
                             salary deferral retirement plan (401(k)).
                             Under the terms of the plan, participants
                             may elect to defer up to 15% of their
                             earnings. Niagara Cold Drawn matches one
                             quarter of the participant's contribution,
                             up to a maximum of 4% of the participant's
                             earnings. All contributions are subject to
                             the limitations of Section 401 of the
                             Internal Revenue Code of 1986, as amended
                             and the requirements of the Employee Retiree
                             Income Security Act of 1974, as amended.
                             Total expense related to this plan for the
                             period from August 17, 1995 to December 31,
                             1995 and for the year ended December 31,
                             1996 was approximately $25,000 and $8,000,
                             respectively. The funds are invested in
                             annuity contracts.

15. Major Customers          Niagara Cold Drawn had three customers
                             during 1995 to which sales were
                             approximately 25%, 22% and 10% of total
                             sales, and two customers during 1996 to
                             which sales were approximately 25% and 18%
                             of total sales. Accounts receivable
                             outstanding from these major customers
                             represented approximately 65% and 52% of
                             aggregate accounts receivable at December
                             31, 1995 and 1996, respectively.

16. Commitments and          Niagara Cold Drawn is subject to Federal,
    Contingencies            state and local environmental laws and
                             regulations concerning, among other matters,
                             water emissions and waste disposal.
                             Management believes that Niagara Cold Drawn
                             currently is in material compliance with all
                             applicable environmental laws and
                             regulations.

                             During 1994, Axia, Inc. ("Axia"), the prior
                             owner of Niagara Cold Drawn's Buffalo, N.Y.
                             property, alleged that Niagara Cold Drawn
                             and certain other parties are responsible
                             for some or all of the costs that may be
                             incurred to remediate a site adjoining such
                             property. Axia requested payment of $200,000
                             in exchange for Axia's agreeing to assume
                             full responsibility for the remediation and
                             to indemnify Niagara Cold Drawn against any
                             claim arising from this matter. Niagara Cold
                             Drawn offered to pay $40,000 in exchange for
                             Axia's agreeing to assume full
                             responsibility for the remediation, and to
                             indemnify Niagara Cold Drawn against any
                             claim arising from this matter. Axia did not
                             respond to the offer. The financial
                             statements include an accrued liability of
                             $40,000 for this contingency.

                             In accordance with the purchase agreement
                             for the acquisition of Niagara Cold Drawn,
                             on August 16, 1995, Niagara Cold Drawn's
                             former majority stockholder, Adage, Inc.
                             ("Adage"), paid $1,666,327 to certain senior
                             management of Niagara Cold Drawn in
                             satisfaction of such individuals' rights
                             under their existing stock option and
                             employment agreements. Niagara Cold Drawn
                             treated this payment as a contribution of
                             additional paid-in capital and compensation
                             to management which is reflected as an
                             employment expense deduction on Niagara Cold
                             Drawn's financial statements for the period
                             ended August 16, 1995. Pursuant to the
                             purchase agreement, Niagara Cold Drawn is
                             required to pay Adage an amount equal to
                             Niagara Cold Drawn's Federal income taxes
                             for the taxable period January 1, 1995
                             through August 16, 1995, computed as if
                             Niagara Cold Drawn were not included in a
                             consolidated Federal income tax return for
                             such period. In determining such amount,
                             Niagara Cold Drawn deducted from its income
                             the payment made to senior management,
                             thereby reducing the amount payable by
                             Niagara Cold Drawn to Adage. Adage has
                             disputed Niagara Cold Drawn's taking of this
                             $1,666,327 deduction, the tax effect of
                             which is approximately $567,000. The
                             settlement of this matter is subject to
                             binding arbitration by an independent
                             accounting firm.

                             On May 8, 1996, pursuant to the provisions
                             of the Southwest stock purchase agreement,
                             Niagara Cold Drawn asserted indemnification
                             claims in the aggregate amount of
                             approximately $1,300,000 against the former
                             Southwest stockholders. On May 22, 1996,
                             Niagara Cold Drawn brought an action against
                             such stockholders relating to these claims.
                             The defendants have denied liability in
                             their answer.

                             Niagara Cold Drawn and its parent, Niagara,
                             have entered into employment contracts with
                             certain officers of Niagara Cold Drawn. The
                             contracts, which expire in August 2000,
                             provide minimum salary levels, adjusted
                             annually for cost-of-living changes, as well
                             as incentive bonuses and Niagara stock
                             options. The aggregate contract commitment
                             for future minimum salaries at December 31,
                             1996, excluding bonuses and stock options,
                             was approximately $1,529,000.

                             Under Niagara Cold Drawn's insurance
                             programs, coverage is obtained for
                             catastrophic exposures as well as those
                             risks required to be insured by law or
                             contract. It is the policy of Niagara Cold
                             Drawn to retain a portion of certain
                             expected losses related primarily to
                             workers' compensation, physical loss to
                             property, business interruption resulting
                             from suchloss and comprehensive general,
                             product, vehicle, medical and life benefits
                             and liability. Provisions for losses
                             expected under these programs are recorded
                             based upon Niagara Cold Drawn's estimates of
                             the aggregate liability, actual and
                             estimated, for claims. Such estimates
                             utilize certain actuarial assumptions
                             followed in the insurance industry and are
                             included in accrued expenses.

17. Transaction Costs        On October 5, 1994, Niagara entered into a
                             merger agreement with New Jersey Steel
                             Corporation and a related stock purchase
                             agreement with its majority stockholder. On
                             February 1, 1995, the merger agreement and
                             related stock purchase agreement were
                             terminated. The costs of $1,580,333 relating
                             to this transaction were expensed in 1994
                             and included in selling, general and
                             administrative expenses.

                             During 1995, Niagara expensed $321,237 of
                             costs (included in selling, general and
                             administrative expenses) with respect to
                             proposed acquisitions that were later
                             terminated.

18. Disclosure About Fair    The following methods and assumptions were
    Value of Financial       used to estimate the fair value of each class
    Instruments              of 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.

19. Supplemental Cash Flow   Interest paid during 1995 and 1996 was
    Information              approximately $243,000 and $1,357,000, 
                             respectively.

                             Income tax payments made during 1995 and
                             1996 totaled approximately $1,000 and
                             $86,500, respectively.

                             As discussed in Note 3 above, Niagara
                             acquired all the capital stock of Niagara
                             Cold Drawn for $11,918,000 in 1995. In
                             connection with this acquisition,
                             liabilities were assumed as follows:

                             ---------------------------------------------
                             Fair value of Niagara Cold
                                Drawn assets acquired        $30,502,000

                             Cash paid for stock, plus
                                expenses                      11,918,000
                             ---------------------------------------------
                             Liabilities assumed             $18,584,000
                             =============================================

                             As discussed in Note 3 above, Niagara Cold
                             Drawn purchased all of the capital stock of
                             Southwest for $3,951,000 in 1996. In
                             conjunction with this acquisition, net
                             assets were acquired as follows:

                             ---------------------------------------------
                             Fair value of Southwest assets
                               acquired                       $13,529,000

                             Liabilities assumed              (12,457,000)
                             ---------------------------------------------
                             Net assets acquired               $1,072,000
                             =============================================

20. Subsequent Event         Subsequent to December 31, 1996, Niagara
                             entered into a letter of intent to purchase
                             all of the issued and outstanding shares of
                             LaSalle Steel Company ("LaSalle"), a wholly
                             owned subsidiary of Quanex Corporation.
                             LaSalle is a producer of cold finished and
                             special purpose steel bar products with
                             plants in Hammond and Griffith, Indiana.
                             Costs relating to this proposed acquisition,
                             primarily professional fees, totalled
                             $87,000 at December 31,1996, and have been
                             deferred and included in other assets.






REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholder and Board of Directors
Niagara Cold Drawn Corp.
Buffalo, New York

We have audited the accompanying statements of operations and cash flows
for the period from January 1, 1995 to August 16, 1995 for Niagara Cold
Drawn Corp. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the results of Niagara Cold Drawn Corp.
operations and its cash flows for the period from January 1, 1995 to
August 16, 1995 in conformity with generally accepted accounting
principles.


/s/ BDO Seidman, LLP

BDO Seidman, LLP

New York, New York

March 8, 1996






REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholder and Board of Directors
Niagara Cold Drawn Corp.
Buffalo, New York

We have audited the accompanying statements of operations and cash flows
of Niagara Cold Drawn Corp. for the year ended December 31, 1994. These
financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements
based our audit.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the results of Niagara Cold Drawn Corp.
operations and its cash flows for the year ended December 31, 1994, in
conformity with generally accepted accounting principles.


/s/ Macdade Abbott LLP

MACDADE ABBOTT LLP

Paoli, Pennsylvania

July 10, 1995





Niagara Cold Drawn Corp.

Statement of Operations

<TABLE>
<CAPTION>
                                                                                Memorandum
                                                           Period from             only
                                                           January 1,          ------------
                                          Year ended         1995 to           Year ended
                                         December 31,       August 16,         December 31,
                                             1994            1995(a)             1995(b)
---------------------------------------------------------------------------------------------
<S>                                       <C>             <C>                 <C>         
Net sales (Note 7)                        $ 46,623,637    $ 34,285,063        $ 51,739,751
Cost of products sold                       40,545,934      28,608,569          44,029,633
---------------------------------------------------------------------------------------------
       Gross profit                          6,077,703       5,676,494           7,710,118
---------------------------------------------------------------------------------------------
Expenses:
   Selling, general and administrative       4,064,686       3,521,776           4,494,052
   Employment expense - management
      options (Note 2)                            --         1,666,327(c)        1,666,327(c)
   Interest expense                            711,418         498,960             771,272
---------------------------------------------------------------------------------------------
       Total expenses                        4,776,104       5,687,063           6,931,651
---------------------------------------------------------------------------------------------
       Operating income (loss)               1,301,599         (10,569)            778,467

Other income, net                                 --              --                16,910
---------------------------------------------------------------------------------------------
       Income (loss) before income
          taxes                              1,301,599         (10,569)            795,377

Income taxes (Note 5)                          480,000            --               270,000
---------------------------------------------------------------------------------------------
Net income (loss)                         $    821,599    $    (10,569)       $    525,377
=============================================================================================
</TABLE>

------------
(a)  Acquisition date by Niagara.

(b)  This information is unaudited and is provided for informational
     purposes only to provide for comparisons to priorperiods. The 1995
     amounts were derived from combining Niagara Cold Drawn's results of
     operations prior to theacquisition by Niagara (January 1 to August
     16, 1995) with the results after the acquisition by Niagara (August
     17 to December 31, 1995).

(c)  Payment due in accordance with purchase agreement.


             See accompanying notes to financial statements.



Niagara Cold Drawn Corp.

Statements of Cash Flows (Note 9)

                                                              Period from
                                                               January 1,
                                             Year ended          1995 to 
                                              December 31,      August 16,
                                                  1994           1995(a)
---------------------------------------------------------------------------
Cash flows from operating activities:
  Net income (loss)                           $   821,599     $   (10,569)
  Adjustment to reconcile net income
  (loss) to cash provided by (used in)
  operating activities:
    Depreciation and amortization                 740,133         495,185
    (Decrease) increase in allowance
       for doubtful accounts                       72,000           8,494
    Deferred income taxes                         (56,000)           --
    Increase in inventories                    (1,886,251)     (4,272,038)
    Increase in trade accounts
       receivable                              (1,406,589)        (26,892)
    Increase in trade accounts payable,         2,631,108       3,137,441
       accrued expenses and accrued
       compensation
    Net change in other current assets
       and liabilities                            (12,169)        (63,860)
--------------------------------------------------------------------------
          Net cash provided by (used in)
            operating activities                  903,831        (732,239)
--------------------------------------------------------------------------
Cash flows from investing activities:
  Acquisition of property, plant and
     equipment                                   (708,575)       (514,018)
--------------------------------------------------------------------------
Cash flows from financing activities:
  Net increase in revolving line of credit        424,562            --
  Proceeds from term notes                           --              --
  Payment of debt                                (647,882)       (631,239)
  Capital contribution                               --         1,666,327
  Proceeds from long-term debt                       --         1,211,692
  Net payments under revolving line
    of credit                                        --          (323,063)
  Payments of dividends                              --          (313,384)
  Payments of redeemable preferred stock             --          (212,371)
  Redemption of redeemable preferred stock           --          (126,442)
--------------------------------------------------------------------------
           Net cash provided by (used in)
             financing activities                (223,320)      1,271,520
--------------------------------------------------------------------------
Net increase (decrease) in cash                   (28,064)         25,263
Cash, beginning of period                          58,457          30,393
--------------------------------------------------------------------------
Cash, end of period                           $    30,393     $    55,656
==========================================================================

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

(a)  Acquisition date by Niagara.

             See accompanying notes to financial statements.




Niagara Cold Drawn Corp.

Notes to Financial Statements

 1. Summary of Significant   Organization
    Accounting Policies      
                             Niagara Cold Drawn Corp. ("Niagara Cold
                             Drawn") is a Delaware corporation and
                             operates from its two principal locations in
                             Buffalo, New York and Chattanooga,
                             Tennessee. Through August 16, 1995, Niagara
                             Cold Drawn was a wholly owned subsidiary of
                             Adage, Inc. On August 16, 1995, Niagara
                             Corporation, formerly International Metals
                             Acquisition Corporation ("Niagara"),
                             acquired all of the issued and outstanding
                             common and preferred stock of Niagara Cold
                             Drawn for $10,744,045 in cash.

                             Business Activity

                             Niagara Cold Drawn produces cold drawn steel
                             bars for steel service centers and original
                             equipment manufacturers throughout North
                             America. Niagara Cold Drawn competes in a
                             narrow sector of the steel industry and its
                             business is affected by conditions within
                             the broader steel and machine tool
                             industries. Niagara Cold Drawn grants trade
                             credit to its customers consistent with
                             industry practice.

                             Revenue Recognition

                             Revenue from the sale of products is
                             recorded at the time the goods are shipped.

                             Income Taxes

                             Deferred income taxes are recognized for the
                             tax consequences of temporary differences
                             between the financial reporting bases and
                             the tax bases of Niagara Cold Drawn's assets
                             and liabilities in accordance with Statement
                             of Financial Accounting Standards No. 109.
                             Valuation allowances are established when
                             necessary to reduce deferred tax assets to
                             the amount expected to be realized. Income
                             tax expense is the tax payable for the
                             period and the change during the period in
                             deferred tax assets and liabilities.

                             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 and
                             disclosure of contingent assets and
                             liabilities at the date of thefinancial
                             statements and the reported amounts of
                             revenues and expenses during the reporting
                             period. Actual results could differ from
                             those estimates.

 2. Employment Expense -     In accordance with the purchase agreement for
    Management Options       the acquisition of Niagara Cold Drawn, on
                             August 16, 1995, Niagara Cold Drawn's former
                             majority stockholder, Adage, Inc. ("Adage"),
                             paid $1,666,327 to certain senior management
                             of Niagara Cold Drawn in satisfaction of
                             such individuals' rights under their
                             existing stock option and employment
                             agreements. Niagara Cold Drawn treated this
                             payment as a contribution of additional
                             paid-in capital and compensation to
                             management which is reflected as employment
                             expense management options on Niagara Cold
                             Drawn's financial statements for the period
                             from January 1 to August 16, 1995. Adage has
                             disputed the taking of this deduction. The
                             settlement of this matter is subject to
                             binding arbitration by an independent
                             accounting firm (see Note 8).

 3. Incentive Compensation   Niagara Cold Drawn has an incentive
    Plan                     compensation plan pursuant to which bonuses
                             are paid to participants as designated by
                             Niagara Cold Drawn's Board of Directors.
                             Compensation under the plan is related
                             solely to Niagara Cold Drawn's earnings
                             performance. The amount charged to expense
                             for future distributions under this plan was
                             approximately $132,000 in 1994 and $200,000
                             for the period January 1, 1995 to August 16,
                             1995.

 4. Related Party            During the period from January 1 to August 16,
     Transactions            1995, Niagara Cold Drawn incurred
                             approximately $50,000 of freight and
                             shipping charges to a related party. During
                             the year ended December 31, 1994, these
                             charges were $174,000.

                             During the period from January 1 to August
                             16, 1995, Niagara Cold Drawn incurred
                             $62,500 in management fees from its prior
                             parent, Adage, Inc.

                             During 1994, Niagara Cold Drawn incurred
                             interest expense of $80,000 to Adage,
                             related to intercompany balances. During
                             1994, Niagara Cold Drawn incurred $100,000
                             of management fees to Adage. At December 31,
                             1994, $346,000 (included in accrued
                             expenses) was due to Adage.

 5. Income Taxes             The provisions for income taxes were
                             comprised of the following amounts:

                                                        1994         1995
                             ----------------------------------------------
                             Current:
                               Federal                $482,000       $ --
                               State                    54,000         --
                             ----------------------------------------------
                                                       536,000         --
                             ----------------------------------------------
                             Deferred:
                               Federal                 (55,000)         --
                               State                    (1,000)         --
                             ----------------------------------------------
                                                       (56,000)         --
                             ----------------------------------------------
                             Total tax provisions     $480,000        $ --
                             ==============================================

                             A reconciliation of the statutory Federal
                             income tax rate and effective rate as a
                             percentage of pre-tax income is as follows:

                                                           1994      1995
                             ----------------------------------------------
                             Statutory rate               34.00%    34.00%
                             State income taxes, 
                               net of Federal income
                               tax benefit                 3.64        --
                             Other                         (.76)    (34.00)
                             ----------------------------------------------
                             Effective tax rate           36.88%       -- %
                             ==============================================

                             Niagara Cold Drawn had been included in the
                             consolidated Federal income tax return of
                             its parent, Adage. The provision for Federal
                             income taxes is calculated on the separate
                             company basis.

 6. Retirement Plans         Niagara Cold Drawn has a contributory salary
                             deferral retirement plan (401(k)). Under the
                             terms of the plan, participants may elect to
                             defer up to 15% of their earnings. Niagara
                             matches one quarter of the participant's
                             contribution, up to a maximum of 4% of the
                             participant's earnings. All contributions
                             are subject to the limitations of Section
                             401 of the Internal Revenue Code and the
                             requirements of the Employee Retiree Income
                             Security Act of 1974, as amended. Total
                             expense related to this plan for the period
                             from January 1 to August 16, 1995 was
                             approximately $13,000. Total expense related
                             to this plan for 1994 was $18,114. The funds
                             are invested in annuity contracts.

 7. Major Customers          Niagara Cold Drawn had three customers
                             during the period from January 1 to August
                             16, 1995, to which sales were approximately
                             25%, 22% and 10% of Niagara Cold Drawn's
                             total sales. These same customers
                             represented approximately 27%, 14% and 10%
                             of the sales for the year ended December 31,
                             1994. Accounts receivable outstanding from
                             the three major customers represented
                             approximately 65% of Niagara Cold Drawn
                             accounts receivable at August 16, 1995.

 8. Commitments and          Niagara Cold Drawn is subject to Federal,
    Contingencies            state and local environmental laws and
                             regulations concerning, among other matters,
                             water emissions and waste disposal.
                             Management believes that Niagara Cold Drawn
                             currently is in material compliance with all
                             applicable environmental laws and
                             regulations.

                             During 1994, Axia, Inc. ("Axia"), the prior
                             owner of Niagara Cold Drawn's Buffalo, N.Y.
                             property, alleged that Niagara Cold Drawn
                             and certain other parties are responsible
                             for some or all of the costs that may be
                             incurred to remediate a site adjoining such
                             property. Axia requested payment of $200,000
                             in exchange for Axia's agreeing to assume
                             full responsibility for the remediation and
                             to indemnify Niagara Cold Drawn against any
                             claim arising from this matter. Niagara Cold
                             Drawn offered to pay $40,000 in exchange for
                             Axia's agreeing to assume full
                             responsibility for the remediation, and to
                             indemnify Niagara Cold Drawn against any
                             claim arising from this matter. Axia did not
                             respond to the offer, but suggested that the
                             parties continue their settlement
                             discussions. At August 16, 1995, the
                             financial statements include an accrued
                             liability of $40,000 for this contingency.

                             Pursuant to the August 16, 1995 Niagara Cold
                             Drawn purchase agreement, Niagara Cold Drawn
                             is required to pay to Adage an amount equal
                             to Niagara Cold Drawn's Federal income taxes
                             for the taxable period January 1, 1995
                             through August 16, 1995, computed as if
                             Niagara Cold Drawn were not included in a
                             consolidated Federal income tax return for
                             such period. In determining such amount,
                             Niagara Cold Drawn deducted from its income
                             the payment made to senior management
                             thereby reducing the amount payable by
                             Niagara Cold Drawn to Adage (see Note 2).
                             Adage has disputed Niagara Cold Drawn's
                             taking of this $1,666,327 deduction, the tax
                             effect of which is approximately $567,000.
                             The settlement of this matter is subject to
                             binding arbitration by an independent
                             accounting firm.

                             Under Niagara Cold Drawn insurance programs,
                             coverage is obtained for catastrophic
                             exposures, as well as those risks required
                             to be insured by law or contract. It is the
                             policy of Niagara Cold Drawn to retain a
                             portion of certain expected losses related
                             primarily to workers' compensation, physical
                             loss to property, business interruption
                             resulting from suchloss and comprehensive
                             general, product, vehicle, medical and life
                             benefits and liability. Provisions for
                             losses expected under these programs are
                             recorded based upon Niagara Cold Drawn's
                             estimates of the aggregate liability, actual
                             and estimated, for claims. Such estimates
                             utilize certain actuarial assumptions
                             followed in the insurance industry and are
                             included in accrued expenses.

 9. Supplemental Cash Flow   Interest paid for the year ended December 31,
    Information              1994 was $658,133. Interest paid during the
                             period from January 1 to August 16, 1995 was
                             approximately $521,000.

                             Income taxes paid for the year ended
                             December 31, 1994 was $256,204. Income taxes
                             paid during the period from January 1 to
                             August 16, 1995 was approximately $1,000.





                                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, on the 27th day of October, 1997.


                                    NIAGARA CORPORATION


                                    By  /s/ Michael J. Scharf
                                    Michael J. Scharf
                                    Chairman of the Board
                                    Chief Executive Officer and President


         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 J. Scharf        Chairman of the Board,     October 27, 1997
--------------------------     Chief Executive Officer 
      Michael J. Scharf        and President 


  /s/ Gilbert D. Scharf        Vice President, Chief       October 27, 1997
--------------------------     Financial and Principal 
      Gilbert D. Scharf        Accounting Officer, 
                               Treasurer, Secretary
                               and Director

  /s/ Gerald L. Cohn           Director                    October 27, 1997
-------------------------
      Gerald L. Cohn

  /s/ Andrew R. Heyer          Director                    October 27, 1997
-------------------------
      Andrew R. Heyer