SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                          __________________________

                                   FORM 10-K

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

(Mark One)

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

           For the fiscal year ended December 31, 2002
                            OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934

       For the transition period from _____________ to _________________

                        Commission file number 0-22206

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

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

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

      Registrant's telephone number, including area code: (212) 317-1000
       Securities registered pursuant to Section 12(b) of the Act: None

          Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $.001 per share

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

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

         As of June 28, 2002, the aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately $9,845,395 (assumes
the registrant's officers, directors and all stockholders holding 5% or more
of outstanding shares are affiliates).

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

         There were 8,238,517 shares of the registrant's Common Stock
outstanding as of March 27, 2003.

         Documents Incorporated by Reference: Items 10, 11, 12, 13 and 15 of
Part III hereof are incorporated by reference from the Registrant's Proxy
Statement for its 2003 Annual Meeting of Stockholders or will be filed by
amendment to this Form 10-K.


                                   PART I.

ITEM 1.  BUSINESS.

Corporate History

         Niagara Corporation ("Niagara") was organized on April 27, 1993 as a
Delaware corporation under the name International Metals Acquisition
Corporation. When formed, its objective was to acquire an operating business
in the metals processing and distribution industry or in a metals-related
manufacturing industry. Between 1995 and 1999, Niagara completed acquisitions
of three cold finished steel bar producers in the United States and one group
of businesses in the United Kingdom engaged in hot rolling, cold finishing and
distributing steel bars. These acquisitions were financed with proceeds from
Niagara's initial public offering and bank and subordinated debt financings.
See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- Liquidity and Capital Resources." Since they were acquired by
Niagara, these businesses have invested approximately $34 million in capital
expenditures to modernize, improve and expand their facilities, machinery and
equipment.

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

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

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

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

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

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

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

Products

Niagara US

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

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

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

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

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

Niagara UK

         With the acquisition of the eight U.K. steel bar businesses in May
1999, Niagara UK became the largest independent steel bar producer in the
United Kingdom with hot rolling, cold finishing and distribution operations.
These operations represented, respectively, 35%, 34% and 31% of Niagara UK's
total revenues from unaffiliated customers for 2002; 39%, 34% and 27% for
2001; and 48%, 28% and 24% for 2000.

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

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

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

Customers

         Niagara US sells its products primarily to steel service centers,
which accounted for approximately 75% of its sales during 2002, with the
balance of its sales to original equipment manufacturers ("OEMs") and the
screw machine industry. Steel service centers purchase and warehouse large
quantities of standardized steel products which are then sold directly to
OEMs. OEMs use cold drawn steel bars in a wide range of products. Niagara US
concentrates its sales efforts on steel service centers, which purchase
relatively standardized products on a regular basis. By focusing on this
market, Niagara US attempts to minimize the risk of holding obsolete
inventory.

         Niagara US has approximately 550 active customers in North America
with sales outside the United States representing less than 5% of its total
sales for each of 2000, 2001 and 2002. For 2002, Niagara US's 10 largest
customers (by tons shipped) represented approximately 64% of its total sales,
and its 3 largest customers, Alro Steel Corporation, Earle M. Jorgensen Co.
and Joseph T. Ryerson and Sons, Inc., represented approximately 50% of its
total sales. The loss of any of these three largest customers would have a
material adverse effect on Niagara US's sales.

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

         Niagara UK has approximately 6,300 active accounts. For 2002, its
largest account represented less than 4% of its total sales and its 10 largest
customers represented approximately 19% of its total sales. Approximately 67%
of its sales to unaffiliated customers during 2002 were within the U.K., with
17% to continental Europe and 16% to the rest of the world. These amounts were
65%, 19% and 16% for 2001 and 64%, 19% and 17%, for 2000. Niagara UK's sales
to any one foreign country, other than the United States, represented less
than 5% of its total sales for these periods.

Marketing

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

Raw Materials

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

Competition

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

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

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

         In response to an International Trade Commission finding on the
negative effects of imports on the domestic steel industry and its workers, on
March 5, 2002, President Bush announced tariffs and other measures concerning
a broad range of steel products imported into the United States. These
measures became effective on March 20, 2002 and include tariffs on imported
hot rolled and cold finished steel bar of 30% in the first year, 24% in the
second year and 18% in the third year. Excluded from the tariffs are imports
from many developing countries, as well as Canada and Mexico. In May 2002, the
Company submitted applications for exclusion of approximately 22,000 tons of
Niagara UK products (based on 2001 shipments), approximately 58% of which were
granted in August 2002. These exclusions are retroactive to March 20, 2002
thereby entitling Niagara UK to a refund of approximately $834,000 in Section
201 tariffs paid in respect of these excluded products. In November 2002, the
Company submitted applications for exclusion of approximately 7,400 tons of
Niagara UK products (based on 2001 shipments), approximately 69% of which were
granted on March 21, 2003. It is expected that these exclusions will not be
retroactive to any period before March 20, 2003. On March 27, 2003, it was
reported that the World Trade Organization had issued a preliminary ruling
that the Section 201 tariffs were a violation of global trade rules. This
preliminary decision is subject to a one-month comment period. U.S. officials
have stated that the United States would appeal the ruling.

Strategy

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

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

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

Employees

         As of December 31, 2002, the Company had 1,093 employees, 534 were
located in the U.S. and 559 were located in the U.K. All of LaSalle's 197
hourly production employees at its Hammond, Indiana facility as of such date
were covered by a collective bargaining agreement with The Progressive
Steelworker's of Hammond, Inc. which expires on July 18, 2005. All of
LaSalle's 19 hourly employees at its Griffith, Indiana facility as of such
date were covered by a collective bargaining agreement with the United Steel
Workers of America and its local affiliate which expires on February 19, 2006.

         Of the 559 Niagara UK employees as of December 31, 2002, 300 were
covered by collective bargaining agreements with the Iron and Steel Trades
Confederation (236 employees), the Transport and General Workers Union (29
employees) and the General and Municipal Boilermakers Union (35 employees).
These agreements extend indefinitely and contain compensation provisions which
are reviewed annually. These reviews take place at different times throughout
the year based on the facility and the status of the employee. All other
contract terms remain the same from year to year.

ITEM 2.  PROPERTIES.

Niagara

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

Niagara US

         Niagara US operates manufacturing facilities in Buffalo, New York;
Chattanooga, Tennessee; Midlothian, Texas; and Hammond and Griffith, Indiana.
Niagara LaSalle owns the 207,000 square-foot Buffalo facility, leases the
92,000 square-foot Chattanooga facility and owns the 115,000 square-foot
Midlothian facility. LaSalle owns the 550,000 square-foot Hammond facility and
the 51,900 square-foot Griffith facility. The owned facilities are mortgaged
to the Company's lenders. The initial term of the Chattanooga lease extends
through November 30, 2009. Annual rent is $189,996 through November 30, 2004
and $199,992 for the remainder of the initial term. Niagara LaSalle has the
option to extend the term of this lease for an additional 10 years at
specified rents and may terminate this lease beginning on December 1, 2004
upon the payment of a termination fee that varies with the date of
termination.

Niagara UK

         In connection with the acquisition of the U.K. steel bar businesses
in May 1999, Niagara and Niagara UK entered into agreements with subsidiaries
of Glynwed calling for the lease or sublease by Niagara UK of 10 production
facilities in the West Midlands region of England and the assignment of 5
sales office leases located throughout the United Kingdom. Pursuant to these
agreements, the initial term of the lease is 10 years for 9 of the production
facilities and 5 years for the remaining production facility (32,000
square-foot facility in Tipton) at aggregate rents of (pound)50,000
(approximately $80,000) for the first two years; (pound)850,000 (approximately
$1.4 million) for years 3-4; (pound)700,000 (approximately $1.1 million) for
years 5-6; and (pound)870,000 (approximately $1.4 million) for years 7-10.
Each production facility lease can be terminated by Niagara UK on one year's
notice and Niagara UK has the option to purchase any or all of the 8 primary
production facilities (identified by an asterisk "*" below) at prices fixed
for 10 years (which prices total (pound)7,973,000 (approximately $12.8
million)), or to renew the leases with respect thereto for an additional term
of 15 years at commercial market rates.

         Niagara UK's production facilities currently consist of: 124,500
square feet in Dudley (Gadd Dudley Port)*, 204,500 square feet in Moxley
(Ductile Wesson)*, 103,000 square feet in Willenhall (GB Longmore), 32,000
square feet in Tipton (Midland Engineering Steels), 115,600 square feet in
Darlaston (GB Longmore)*, 88,700 square feet in Rugby (Macreadys)*, 15,500
square feet in Newport (Macreadys)* and 28,800 square feet in Bolton
(Macreadys)*. The sales offices (Macreadys) range from 400 to 3,200 square
feet and are currently located in Potters Bar, Southhampton, Leeds and
Glasgow. The sales office leases have various terms ranging to five years.

         In connection with restructuring plans for its hot rolling
operations, Niagara UK terminated the lease of its Ductile Wesson facility in
Willenhall on February 18, 2001 and discontinued production at its Dudley Port
facility in Tipton on November 23, 2001. On March 15, 2002, Niagara UK entered
into an agreement to sell this leased property for (pound)3,600,000
($5,413,572), which Niagara UK had an option to purchase for (pound)1,495,000
($2,248,136). On September 30, 2002, Niagara UK completed the transaction by
selling this option to purchase.

         Management considers its manufacturing facilities, which operated at
approximately 67% of capacity in 2002, suitable for its current operations.

ITEM 3.  LEGAL PROCEEDINGS.

         Niagara US and Niagara UK are subject to extensive environmental laws
and regulations concerning, among other matters, water and air emissions and
waste disposal. Under such laws, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"),
Niagara US and Niagara UK may be responsible for parts of the costs required
to remove or remediate previously disposed wastes or hazardous substances at
locations they own or operate or at locations owned or operated by third
parties where they, or a company from which they acquired assets, arranged for
the disposal of such materials. Claims for such costs have been made against
LaSalle with respect to five such third-party sites. Management believes that,
in four cases, the volumes of the waste allegedly attributable to LaSalle and
the share of costs for which it may be liable are de minimis. In three of
these cases, LaSalle has entered into de minimis settlement agreements
resolving the pending claims of liability. In connection with the fourth site,
the United States Environmental Protection Agency (the "EPA") has notified
LaSalle that it does not intend to seek cost recovery from it at this time. In
the fifth case, LaSalle has entered into an agreement with a group of other
companies alleged to be responsible for remediation of the site in an effort
to share proportionately the costs of remediation. LaSalle and this group of
companies have also signed an Administrative Order on Consent with the EPA and
performed a limited remediation at the site. LaSalle has received insurance
settlements in amounts that largely cover the financial contributions it has
made for these sites through December 31, 2002. Because liability under CERCLA
and analogous state laws is generally joint and several, and because further
remediation work may be required at these sites, LaSalle may be required to
contribute additional funds. However, based on its volumetric share of wastes
disposed and the participation of other potentially liable parties, management
believes that LaSalle's share of the additional costs will not have a material
adverse effect on the Company's financial position or results of operations.

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

         None.





                                   PART II.

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

         Niagara's Common Stock is traded on the Nasdaq National Market. The
following table sets forth the range of high and low sales prices by quarter
for 2001 and 2002.

<TABLE>
<CAPTION>

                                                                            High              Low
                                                                            ----              ---
2001
<S>                                                                       <C>               <C>
     January 1 through March 31...............................            $2.750            $1.750
     April 1 through June 30..................................             2.250             1.560
     July 1 through September 30..............................             2.250             1.400
     October 1 through December 31............................             1.940             1.250
2002
     January 1 through March 31...............................             1.890             1.420
     April 1 through June 30..................................             3.310             1.810
     July 1 through September 30..............................             2.390             1.180
     October 1 through December 31............................             1.955             1.080
</TABLE>

         As of March 25, 2003, there were 36 registered holders of Niagara
Common Stock.

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



ITEM 6.  SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>

                                                                    Year ended December 31,
                                                 1998          1999(1)        2000             2001            2002
                                                 ----           ----          ----             ----            ----

                                                             (in thousands, except per share data)
Statement of Operations Data:
<S>                                         <C>             <C>              <C>             <C>             <C>
Net sales (2)  ........................     $ 217,582       $ 281,117        $336,037        $268,637        $260,875
Cost of products sold (2) .............       187,375         245,170         293,857         239,085         230,286
Gross profit(2)........................        30,207          35,947          42,180          29,552          30,588
Selling, general and administrative
   expenses(2).........................        15,645          24,441          27,996          24,814          25,883
Restructuring costs(3) ................            --              --              --           5,278              --
Interest income........................           172              36               7              --              --
Other income...........................           195             143             152             186              58
Gain on sale of property(4)............            --              --              --              --           3,102
Interest expense.......................         4,154           5,631           7,417           5,373           3,546
Provision (benefit) for income taxes...         4,265           2,299           2,590          (1,100)          2,646
Net income (loss) .....................         6,510           3,757           4,337          (4,627)          1,673
Net income (loss) per share (basic)....      $    .66        $    .40        $    .50        $   (.56)       $    .20
Net income (loss) per share (diluted)..      $    .64        $    .40        $    .50        $   (.56)       $    .20
Weighted average common shares
   outstanding (basic)................          9,880           9,350           8,659           8,329           8,239
Weighted average common shares
   outstanding (diluted)..............         10,250           9,357           8,659           8,329           8,239

                                                                        At December 31,
                                                 1998           1999          2000             2001            2002
                                                 ----           ----          ----             ----            ----
                                                                         (in thousands)
Balance Sheet Data:
Cash and cash equivalents..............        $  441         $ 2,234         $ 2,351         $ 1,692         $ 5,561
Trade accounts receivable, net.........        13,360          53,126          46,138          37,845          34,283
Inventories............................        30,132          59,442          60,901          44,114          55,663
Property, plant and equipment, net.....        89,749         102,984          98,076          89,658          85,775
Goodwill, net..........................         2,100           2,022           1,984           1,904           1,904
Total assets...........................       139,429         227,934         215,418         181,879         189,196
Trade accounts payable.................        14,107          50,191          44,468          32,605          37,657
Accrued expenses.......................         6,555           9,506          10,496          10,671          11,456
Current maturities of long-term debt...         4,797           6,411           7,653           9,709           7,509
Long-term debt, less current maturities        41,572          87,388          77,877          62,294          63,817
Accrued pension and other
   postretirement benefits.............        10,303           8,023           7,718           7,289          11,476
Deferred income taxes..................         7,357           9,849          11,266          10,020           9,602
Total liabilities......................        84,898         171,473         159,539         132,626         141,768
Stockholders' equity ..................       $54,531         $56,461         $55,879        $ 49,253        $ 47,428
</TABLE>

(1)   Includes the results of Niagara UK from May 22, 1999.
(2)   Net sales and cost of products sold have been restated for years 1998
      and 1999 with respect to freight costs in accordance with EITF No. 00-10
      issued in September 2000. This reclassification resulted in the
      recording of such costs in both net sales and cost of products sold and,
      accordingly, resulted in no change to gross profit for such years.
      Previously, net sales for such years had been stated after reduction for
      freight costs. The amounts involved were $10,035,000 and $16,895,000 for
      the years ended December 31, 1998 and 1999, respectively. Certain
      additional reclassifications, primarily in respect of depreciation, have
      been made in 2000 in order to conform to the presentation of subsequent
      years. The net effect of these reclassifications was to decrease cost of
      products sold, and thereby increase gross profit, and to increase
      selling, general and administrative expenses, each by $251,569 for the
      year ended December 31, 2000.
(3)   Represents costs associated with a restructuring of Niagara UK
      operations. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS" and Note 2 to the Consolidated
      Financial Statements.
(4)   Represents gain on sale of property by Niagara UK. See
      "BUSINESS--Corporate History" and Note 2 to the Consolidated Financial
      Statements.

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

Results of Operations

         During 2002, the Company experienced an overall decrease in net sales
and increase in net income as compared to 2001. Results attributable to the
Company's U.S. operations improved throughout the year as a result of modest
price increases and a reduction in capacity, due primarily to the closure of
certain competitors' facilities. As a result, Niagara US's sales, margins and
net income improved for 2002 when compared to 2001.

         During 2002, the Company's U.K. operations continued to be faced with
depressed conditions in the manufacturing sector of the U.K. and imports from
lower-cost foreign competitors. Niagara UK's sales declined in 2002 as
compared to 2001 due primarily to the consolidation of certain hot rolled
production facilities (see below) and management's decision to reduce
production of unprofitable commodity items. Demand and prices for Niagara UK's
products were generally weak throughout the year, though they increased
marginally toward the end of 2002. In addition, the high value of the pound
sterling relative to the Euro and the imposition of U.S. tariffs on imported
steel (notwithstanding the exclusions obtained by the Company) had a negative
impact on Niagara UK's export business. As a result, Niagara UK's sales and
margins declined for 2002 as compared to 2001.

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

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

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

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

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

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

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

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

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

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

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

Year ended December 31, 2001 compared with December 31, 2000

         Net sales for the year ended December 31, 2001 were $268,636,530,
representing a decrease of $67,400,180, or 20.1%, over the same period in
2000. Approximately 64.7% of this decrease was attributable to the Company's
U.S. operations with the remainder, 35.3%, attributable to the Company's U.K.
operations. The decrease in net sales attributable to the Company's U.S. and
U.K. operations was due primarily to a marked decrease in sales volume (18.5%
and 20.1%, respectively) and, to a lesser extent, a decrease in prices.

          Cost of products sold for the year ended December 31, 2001 decreased
by $54,771,824 to $239,084,891, representing a decrease of 18.6% over the same
period in 2000. This decrease was primarily attributable to the decreased
sales volume from both the Company's U.S. and U.K. operations.

         Gross margins for the year ended December 31, 2001 decreased by 1.6%
compared to the same period in 2000 due primarily to the Company's decreased
net sales and the decline in prices in the U.S. These were partially offset by
a more favorable product mix in the U.K.

         Selling, general and administrative expenses for the year ended
December 31, 2001 decreased by $3,181,362 to $24,814,277, or 9.2% of sales,
compared to 8.3% of sales for the same period in 2000. The reduction in dollar
amount was primarily attributable to the Company's cost-cutting measures, and
the increase as a percentage of sales was due primarily to the decrease in net
sales.

         As discussed above, the Company incurred a restructuring charge of
$5,278,074 (approximately (pound)3,662,000) for the year ended December 31,
2001 in connection with a restructuring of its hot rolled bar operations in
the U.K. This charge consisted of equipment write-offs of $3,554,270
(approximately (pound)2,466,000) and redundancy and reorganization costs of
$1,723,804 (approximately (pound)1,196,000). Such costs include approximately
$1,185,000 (approximately (pound)823,000) of severance costs in respect of
approximately 100 employees. At December 31, 2001, approximately $300,000
(approximately (pound)207,000) of these costs were included in accrued
expenses.

         Interest expense for the year ended December 31, 2001 decreased by
$2,044,274 to $5,372,356, due primarily to decreased levels of borrowing and
lower interest rates.

         For the year ended December 31, 2001, the tax benefit on the
Company's loss before income taxes ($5,726,519) was $1,100,000. As described
in Note 11 to the Financial Statements, this tax benefit (19.2% of the loss
before income taxes) differs from the statutory rate (34%) primarily due to a
valuation allowance of $631,000 relating to basis differences on the Company's
property, plant and equipment in the U.K. For the year ended December 31,
2000, the Company's tax expense was $2,590,000. The effective rate for such
year (37.4% on $6,927,218 of income before taxes) differs from the statutory
rate (34%) primarily due to state income taxes.

         Net loss for the year ended December 31, 2001 was $4,626,519, a
decrease of $8,963,737, as compared to net income of $4,337,218 for the year
ended December 31, 2000. Approximately 40.7% of this decrease was attributable
to the Company's U.S. operations and the balance, 59.3%, was attributable to
the Company's U.K. operations. Net loss for the year ended December 31, 2001
includes a restructuring charge of approximately $4.3 million on an after-tax
basis in respect of the Company's operations in the U.K.

Liquidity and Capital Resources

         The Company's short-term liquidity requirement for day-to-day
operating expenses has been, and is expected to continue to be, funded by cash
provided by operations, borrowings under its revolving credit facilities and
advances under its invoice discounting agreement. The Company's principal
long-term liquidity requirement has been, and is expected to continue to be,
the repayment of debt and the funding of capital expenditures to modernize,
improve and expand its facilities, machinery and equipment. At December 31,
2002, the Company had combined debt obligations and operating lease
commitments of approximately $10,544,000 payable in 2003, $63,658,000 payable
in 2004, $5,573,000 payable in 2005, $3,047,000 payable in 2006, $2,882,000
payable in 2007, and $4,560,000 payable thereafter.

         Capital expenditures for the year ending December 31, 2002 were
$3,833,096 compared to $3,110,207 for the same period in 2001. This increase
was attributable to Niagara LaSalle's acquisitions of equipment and related
assets from companies in bankruptcy during the fourth quarter of the year,
which was partially offset by a decrease in capital expenditures by Niagara UK
in response to continued weak operating conditions in the United Kingdom. The
Company anticipates spending approximately $3,500,000 for capital expenditures
during 2003.

         Cash flows provided by operating activities were $7,490,868 for the
year ended December 31, 2002, a decrease of $8,012,565 as compared to cash
flows provided by operating activities of $15,503,433 for the same period in
2001 This decrease was largely attributable to an increase in inventories in
2002 as compared to 2001 (an increase of $9,740,077 in 2002 as compared to a
decrease of $16,026,062 in 2001). This change was partially offset by an
increase in accounts payable, accrued expenses and other non-current
liabilities in 2002 as compared to 2001 (an increase of $3,767,775 in 2002 as
compared to a decrease of $10,918,287 in 2001), and an increase in net income
(net income of $1,673,112 in 2002 as compared to a net loss of $4,626,519 in
2001). Cash and cash equivalents at December 31, 2002 were $5,561,090, an
increase of $3,829,020 as compared to December 31, 2001, which increase was
primarily attributable to the timing of receipt of customer cash collections
at December 31, 2002. Such funds are used for working capital and other
corporate purposes.

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

         At the Company's request, a number of amendments were made to the
Credit Agreement effective September 1, 2002. The revolving credit facility
was reduced from $50,000,000 to $35,000,000 and the balance owed under the
term loan was increased from $14,333,356 to $18,000,000. Principal payments
under the term loan were reduced to $375,000 from $666,666 per month. In
addition, the maturity date of both the term loan and revolving credit loans
made pursuant to the Credit Agreement was extended to July 31, 2004.

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

         The Credit Agreement carries restrictions on, among other things,
indebtedness, liens, capital expenditures, dividends, asset dispositions,
cross-defaults and changes in control of Niagara and Niagara US, and requires
minimum levels of net worth through maturity. Also included in this agreement
are requirements regarding the ratio of consolidated current assets to
consolidated current liabilities, the ratio of net income before interest,
taxes, depreciation and amortization ("EBITDA") to debt service and capital
expenditures, and the ratio of senior secured indebtedness to EBITDA. Niagara
US was in compliance with all of these requirements as of December 31, 2002.

         On May 20, 1998, Niagara's Board of Directors authorized the
repurchase, from time to time, of up to one million shares of Niagara Common
Stock in open market and privately negotiated transactions. On October 6,
1999, Niagara's Board authorized the repurchase of an additional one million
Niagara shares. Such repurchases are subject to market and other conditions
and are financed with internally generated funds and borrowings under the
Company's credit facilities. Shares of Niagara Common Stock repurchased are
held as treasury stock and are available for use in the Company's benefit
plans and for general corporate purposes. As of December 31, 2002, Niagara had
repurchased 1,758,938 shares of its Common Stock at a cost of $8,249,684. No
shares were repurchased during 2002.

         On May 21, 1999 and in connection with the acquisition of the steel
bar businesses from Glynwed Steels, Niagara UK entered into a bank facilities
agreement (the "Facilities Agreement") with National Westminster Bank Plc
("National Westminster") providing for a (pound)10 million (approximately
$16.0 million) term loan and a (pound)9.8 million (approximately $15.7
million) revolving credit facility. The obligations of Niagara UK under the
Facilities Agreement are secured by standby letters of credit issued by M&T to
National Westminster (respectively, the "Term Letter of Credit" and the
"Revolving Letter of Credit," and, together, the "Letters of Credit") and
substantially all of the assets of Niagara UK (for the benefit of M&T).
Niagara UK's agreement to reimburse M&T for drawdowns under the Letters of
Credit is guaranteed by Niagara and Niagara US, which guarantees are secured
by substantially all of the assets of Niagara US on a second priority basis.
As consideration for the issuance of the Letters of Credit, Niagara UK paid
M&T a total of (pound)178,400 (approximately $285,440) at the time of issuance
and agreed to pay further annual fees (in monthly installments) of 2.5% and
2.75% in respect of the Revolving and Term Letters of Credit, respectively.

         Principal of the term loan under the Facilities Agreement amortizes
in monthly installments commencing on May 31, 2000 and ending on August 31,
2005. The principal repayment installments on the term loan escalate from
(pound)125,000 to (pound)213,333 throughout its term. Revolving credit loans
made pursuant to the Facilities Agreement are based upon a percentage of
eligible inventory and will mature on July 31, 2004. Interest on the term and
revolving credit loans under the Facilities Agreement accrue at the BBA LIBOR
rate (for periods specified by Niagara UK from time to time) plus 0.15% and is
payable at the conclusion of such interest periods.

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

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

         At the Company's request, a number of amendments were made to the
Discount Agreement effective August 23, 2002. These amendments included (i) a
reduction in the maximum amount of advances to Niagara UK from (pound)20
million (approximately $32.1 million) to (pound)15.0 million (approximately
$24.1 million), (ii) a reduction in the interest rate applicable to such
advances from 2.25% to 2.0% above Royal Bank of Scotland's base rate and (iii)
the extension of the maturity date on such advances to July 31, 2004. In
connection with these amendments, Niagara and Niagara UK agreed to capitalize
the Subordinated Loan and related accrued interest, which occurred during the
fourth quarter of 2002.

         The Facilities and Discount Agreements carry restrictions on, among
other things, security interests, borrowed money, asset dispositions,
dividends, transactions with affiliates, capital expenditures, cross-defaults,
changes in control of Niagara UK and mergers and acquisitions. Also included
in these agreements are requirements regarding tangible net worth, the ratio
of consolidated EBITDA to consolidated fixed charges and the ratio of current
assets to current liabilities. Niagara UK was in compliance with all of these
requirements as of December 31, 2002.

         In connection with the execution of the Facilities and Discount
Agreements, Niagara and Niagara UK entered into intercreditor agreements
which, among other things (i) restrict the payment of dividends in respect of
the Niagara UK shares, (ii) prohibit the repayment of the Subordinated Loan
until after the discharge of all of Niagara UK's liabilities under the
Facilities and Discount Agreements and (iii) permit the repayment of the
Short-Term Loan upon demand unless payments of principal or interest under
these agreement are owing, certain financial covenants in these agreements
have not been met or an event of default thereunder has occurred and is
continuing.

         As a result of depressed conditions in the manufacturing sector in
the United Kingdom including within the overall steel industry, and conditions
within the insurance industry following the events of September 11, 2001, the
market for credit insurance in the United Kingdom deteriorated over the last
nine months of 2002. This necessitated, during the fourth quarter of 2002,
Niagara guaranteeing on a short-term basis certain trade payables of Niagara
UK in the aggregate amount of up to (pound)6.7 million (approximately $10.7
million) in order to ensure an orderly supply of raw materials.

         At December 31, 2002, the Company had borrowed or been advanced
$45,093,690 under its revolving credit facilities and the Discount Agreement
and had approximately $14,000,000 in available credit thereunder, and the
outstanding balance of its term loans was $25,619,410. Working capital of the
Company at December 31, 2002 was $43,984,022.

Critical Accounting Policies

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

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

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

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

Effects of Recent Accounting Pronouncements

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

         In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets," which requires, among other things, that entities no
longer amortize goodwill and other intangible assets having indefinite useful
lives, but rather test them, at least annually, for impairment. In accordance
with this statement, intangible assets that have finite useful lives will
continue to be amortized over their useful lives. SFAS No. 142 is required to
be applied in fiscal years beginning after December 15, 2001 to all goodwill
and other intangible assets recognized at that date, regardless of when such
assets were initially recognized. The Company adopted SFAS No. 142 during the
year ended December 31, 2002. Amortization of goodwill was computed using the
straight-line method over 30 years in the years ended December 31, 2000 and
2001. There was no amortization of goodwill in the year ended December 31,
2002. See Note 16 to the Financial Statements.

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

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

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

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

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

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

         The Company sells its products primarily to customers in North
America and Europe. Revenues from sales by Niagara US are collected
exclusively in U.S. dollars. Niagara UK's revenues are generally collected in
the local currency of its customers. In order to reduce its exposure to
fluctuations in exchange rates, Niagara UK purchased foreign exchange
contracts in amounts and with expiration dates in line with customer orders.
Following the adoption of the Euro, Niagara UK's exposure to such fluctuations
was substantially reduced. As a result, Niagara UK discontinued its practice
of purchasing foreign exchange contracts in February 2002.

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

         As a result of depressed conditions in the manufacturing sector in
the United Kingdom including within the overall steel industry, and conditions
within the insurance industry following the events of September 11, 2001, the
market for credit insurance in the United Kingdom has been deteriorating over
the last nine months of 2002. This necessitated, during the fourth quarter of
2002, Niagara guaranteeing on a short-term basis certain trade payables of
Niagara UK in the aggregate amount of up to (pound)6.7 million (approximately
$10.7 million) in order to ensure an orderly supply of raw materials.

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

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

o        Cyclicality - The Company's products are used in the automotive,
         agricultural and machine tool industries, among others. As a result,
         demand for such products is closely tied to the economic cycles that
         drive these businesses. For this reason, the Company's financial
         performance has been, and will likely continue to be, cyclical in
         nature.

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

o        Foreign Imports - The presence of low-priced imports of competing
         products and low-priced manufactured products which utilize the
         Company's products can affect the market for the Company's products,
         particularly in Niagara US and Niagara UK's respective home markets.
         Recently enacted tariffs and other measures in the United States and
         the market and governmental responses thereto may also affect both
         the Company's U.S. and U.K. operations. See "BUSINESS --
         Competition."

o        Foreign Sales - Approximately 33% of Niagara UK's sales during 2002
         were to customers outside of the United Kingdom. Revenues in respect
         of such sales are generally collected in the local currency of the
         customer. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS -- Results of Operations" and
         "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK."
         Recently enacted tariffs and other measures in the United States and
         the market and governmental responses thereto may also affect both
         the Company's U.S. and U.K. operations. See "BUSINESS--Competition."

o        Customer Concentration - Niagara US's 3 largest customers represented
         approximately 50% of its total sales for 2002. The loss of any of
         these customers would have a material adverse effect on Niagara US's
         sales. See "BUSINESS -- Customers."

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

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

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

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


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                         INDEX TO FINANCIAL STATEMENTS

                                                                         Page
Report of Independent Certified Public Accountants...................     19
Balance Sheets.......................................................     20
Statements of Operations.............................................     21
Statements of Stockholders' Equity...................................     22
Statements of Cash Flows.............................................     23
Notes to Financial Statements........................................    24-53


Report of Independent Certified Public Accountants



Niagara Corporation
New York, New York

We have audited the accompanying consolidated balance sheets of Niagara
Corporation and its subsidiaries (together, the "Company") as of December 31,
2001 and 2002, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 2002. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Niagara
Corporation and its subsidiaries at December 31, 2001 and 2002, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.

/s/ BDO Seidman, LLP
BDO Seidman, LLP


New York, New York



February 4, 2003
<TABLE>
<CAPTION>

                                                                                                Niagara Corporation
                                                                                                   and Subsidiaries


                                                                                                     Balance Sheets


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

 December 31,                                                                            2001                   2002
 ---------------------------------------------------------------------------------------------------------------------
 Assets (Note 5)
 Current:
<S>                                                                          <C>                     <C>
    Cash and cash equivalents                                                $      1,692,070        $     5,561,090
    Trade accounts receivable, net of allowance for doubtful accounts
       of $1,276,000 and $1,347,000 (Note 11)                                      37,844,609             34,283,089
    Inventories (Note 3)                                                           44,113,663             55,662,799
    Deferred income taxes (Note 10)                                                 1,678,000              1,953,000
    Other current assets (Note 6)                                                   3,870,749              3,146,316
 ----------------------------------------------------------------------------------------------------------------------
         Total current assets                                                      89,199,091            100,606,294
 Property, plant and equipment, net (Note 4)                                       89,658,179             85,775,275
 Goodwill (Note 16)                                                                 1,904,499              1,904,499
 Deferred financing costs, net of accumulated amortization of $516,564
    and $627,252                                                                      258,436                147,748
 Intangible pension asset (Note 6)                                                    370,000                318,000
 Other assets, net (Note 16)                                                          488,725                443,333
 ----------------------------------------------------------------------------------------------------------------------
                                                                               $  181,878,930          $ 189,196,149
======================================================================================================================
 Liabilities and Stockholders' Equity
 Current liabilities:
    Accounts payable                                                          $    32,604,979         $   37,656,820
    Accrued expenses (Note 2)                                                      10,671,116             11,455,990
    Current maturities of long-term debt (Note 5)                                   9,709,148              7,509,462
 ----------------------------------------------------------------------------------------------------------------------
         Total current liabilities                                                 52,985,243             56,622,272
 Other:
    Long-term debt, less current maturities (Note 5)                               62,293,980             63,816,781
    Accrued pension cost (Note 6)                                                   1,987,000              6,729,000
    Accrued other postretirement benefits (Note 6)                                  5,302,483              4,747,067
    Deferred income taxes (Note 10)                                                10,020,000              9,602,000
    Other noncurrent liabilities                                                       37,710                250,667
 ----------------------------------------------------------------------------------------------------------------------
         Total liabilities                                                     $  132,626,416         $  141,767,787
 ----------------------------------------------------------------------------------------------------------------------
 Commitments and contingencies (Notes 8, 9 and 13)
 Stockholders' equity (Notes 6, 7 and 9):
    Preferred stock, $.001 par value - 500,000 shares authorized; none
       outstanding                                                                          -                      -
    Common stock, $.001 par value - 15,000,000 shares authorized;
       9,997,455 issued                                                                 9,998                  9,998
    Additional paid-in capital                                                     50,111,675             50,111,675
    Retained earnings                                                              11,852,159             13,525,271
    Accumulated other comprehensive loss                                           (4,471,634)            (7,968,898)
 ----------------------------------------------------------------------------------------------------------------------
                                                                                   57,502,198             55,678,046
    Treasury stock, at cost, 1,758,938 shares                                      (8,249,684)            (8,249,684)
 ----------------------------------------------------------------------------------------------------------------------
         Total stockholders' equity                                                49,252,514             47,428,362
 ----------------------------------------------------------------------------------------------------------------------
                                                                               $  181,878,930          $ 189,196,149
======================================================================================================================


                                                                  See accompanying notes to financial statements.
</TABLE>

<TABLE>
<CAPTION>

                                                                                                Niagara Corporation
                                                                                                   and Subsidiaries


                                                                                           Statements of Operations




 Year ended December 31,                                                  2000              2001                2002
 ----------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                <C>                 <C>
 Net sales (Note 11)                                             $336,036,710       $268,636,530        $260,874,561
 Cost of products sold (Note 12)                                  293,856,715        239,084,891         230,286,299
 ----------------------------------------------------------------------------------------------------------------------
         Gross profit                                              42,179,995         29,551,639          30,588,262
 Operating expenses and restructuring costs:
    Selling, general and administrative                            27,995,640         24,814,278          25,882,947
    Restructuring costs (Note 2)                                            -          5,278,074                   -
 ----------------------------------------------------------------------------------------------------------------------
         Operating income (loss)                                   14,184,355           (540,713)          4,705,315
 Interest income                                                        7,050                  -                   -
 Interest expense                                                  (7,416,630)        (5,372,356)         (3,546,223)
 Gain on sale of property (Note 2)                                          -                  -           3,102,311
 Other income                                                         152,443            186,550              57,709
 ----------------------------------------------------------------------------------------------------------------------
         Income (loss) before income taxes                          6,927,218         (5,726,519)          4,319,112
 Provision (benefit) for income taxes (Note 10)                     2,590,000         (1,100,000)          2,646,000
 ----------------------------------------------------------------------------------------------------------------------
 Net income (loss)                                             $    4,337,218     $   (4,626,519)      $   1,673,112
=======================================================================================================================
 Net income (loss) per share
    (basic and diluted)                                        $          .50     $         (.56)      $         .20
=======================================================================================================================
 Weighted average common shares outstanding
    (basic and diluted) (Note 14)                                   8,659,013          8,329,145           8,238,517
=======================================================================================================================

                                                                   See accompanying notes to financial statements.
</TABLE>

<TABLE>
<CAPTION>

                                                                                  Niagara Corporation
                                                                                     and Subsidiaries


                                                                   Statements of Stockholders' Equity
=========================================================================================================
 Years ended December 31, 2000, 2001 and 2002
 --------------------------------------------------------------------------------------------------------
                                                     Common stock
                                               ----------------------
                                                Number of                  Additional         Retained
                                                 shares       Amount     paid-in capital      earnings
----------------------------------------------------------------------------------------------------------
<S>                                             <C>          <C>           <C>              <C>
 Balance, January 1, 2000                       9,997,455    $ 9,998       $50,111,675      $12,141,460
 --------------------------------------------------------------------------------------------------------
 Comprehensive income:
    Net income for the year                             -          -                 -        4,337,218
    Foreign currency translation adjustment             -          -                 -                -
    Minimum pension liability adjustment
       ($2,449,000, net of tax benefit of
       $955,000 - Note 6)                               -          -                 -                -
 --------------------------------------------------------------------------------------------------------
       Total comprehensive income
 --------------------------------------------------------------------------------------------------------
 Purchase of treasury stock, at cost (a)                -          -                 -                -
 --------------------------------------------------------------------------------------------------------
 Balance, December 31, 2000                     9,997,455      9,998        50,111,675       16,478,678
 --------------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net loss for the year                               -          -                 -       (4,626,519)
    Foreign currency translation adjustment             -          -                 -                -
    Minimum pension liability adjustment
       ($2,137,000, net of tax benefit of
          $833,000, Note 6)                             -          -                 -                -
 --------------------------------------------------------------------------------------------------------
       Total comprehensive loss
 --------------------------------------------------------------------------------------------------------
 Purchase of treasury stock, at cost (a)                -          -                 -                -
 --------------------------------------------------------------------------------------------------------
 Balance, December 31, 2001                     9,997,455      9,998        50,111,675       11,852,159
 --------------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net income for the year                             -          -                 -        1,673,112
    Foreign currency translation adjustment             -          -                 -                -
    Minimum pension liability adjustment
       ($7,130,000, net of tax benefit of
       $2,781,000, Note 6)                              -          -                 -                -
 --------------------------------------------------------------------------------------------------------
        Total comprehensive loss
 --------------------------------------------------------------------------------------------------------
 Balance, December 31, 2002                     9,997,455     $9,998       $50,111,675      $13,525,271
=========================================================================================================
</TABLE>


Statement of Stockholders' Equity - continued

<TABLE>
<CAPTION>

                                                 Accumulated
                                                    other                                Total
                                                comprehensive     Treasury stock,     stockholders'
                                                    loss              at cost            equity
----------------------------------------------------------------------------------------------------
<S>               <C>                            <C>                 <C>              <C>
 Balance, January 1, 2000                        $   (175,644)       $(5,626,211)     $56,461,278
 ---------------------------------------------------------------------------------------------------
 Comprehensive income:
    Net income for the year                                 -                  -        4,337,218
    Foreign currency translation adjustment        (1,021,575)                 -       (1,021,575)
    Minimum pension liability adjustment
       ($2,449,000, net of tax benefit of
       $955,000 - Note 6)                          (1,494,000)                 -       (1,494,000)
 ----------------------------------------------------------------------------------------------------
       Total comprehensive income                                                       1,821,643
 ----------------------------------------------------------------------------------------------------
 Purchase of treasury stock, at cost (a)                    -         (2,404,198)      (2,404,198)
 ----------------------------------------------------------------------------------------------------
 Balance, December 31, 2000                        (2,691,219)        (8,030,409)      55,878,723
 ----------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net loss for the year                                   -                  -       (4,626,519)
    Foreign currency translation adjustment          (476,415)                 -         (476,415)
    Minimum pension liability adjustment
       ($2,137,000, net of tax benefit of
          $833,000, Note 6)                        (1,304,000)                 -       (1,304,000)
 ----------------------------------------------------------------------------------------------------
       Total comprehensive loss                                                        (6,406,934)
 ----------------------------------------------------------------------------------------------------
 Purchase of treasury stock, at cost (a)                    -           (219,275)        (219,275)
 ----------------------------------------------------------------------------------------------------
 Balance, December 31, 2001                        (4,471,634)        (8,249,684)      49,252,514
 ----------------------------------------------------------------------------------------------------
 Comprehensive loss:
    Net income for the year                                 -                  -        1,673,112
    Foreign currency translation adjustment           851,736                  -          851,736
    Minimum pension liability adjustment
       ($7,130,000, net of tax benefit of
       $2,781,000, Note 6)                         (4,349,000)                 -       (4,349,000)
 ----------------------------------------------------------------------------------------------------
        Total comprehensive loss                                                       (1,824,152)
 ----------------------------------------------------------------------------------------------------
 Balance, December 31, 2002                       $(7,968,898)       $(8,249,684)    $ 47,428,362
=====================================================================================================

 (a) During the years ended December 31, 2000 and 2001, Niagara Corporation
     repurchased 599,129 and 125,300 shares of its Common Stock, respectively,
     at a cost of $2,404,198 and $219,275, respectively.
=====================================================================================================
                                                       See accompanying notes to financial statements.
</TABLE>


<TABLE>
<CAPTION>

                                                                                       Niagara Corporation
                                                                                          and Subsidiaries


                                                                                  Statements of Cash Flows
                                                                                                 (Note 17)
======================================================================================================================

 Year ended December 31,                                                 2000               2001                2002
 ---------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                  <C>               <C>
 Cash flows from operating activities:
    Net income (loss)                                          $    4,337,218    $    (4,626,519)    $     1,673,112
 ---------------------------------------------------------------------------------------------------------------------
    Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
       Depreciation and amortization                                9,120,844          7,684,862           9,104,131
       Gain on sale of property                                             -                  -          (3,102,311)
       Provision for doubtful accounts                                534,000           (165,084)            379,559
       Deferred income taxes                                        1,593,000           (355,000)          2,088,000
       Pension payments, net                                       (3,021,987)        (2,498,000)         (1,734,000)
       Other postretirement benefits                                  (14,050)           (15,053)           (555,416)
       Loss on disposal and write-off of equipment                     38,875          3,554,270                   -
       Changes in assets and liabilities:
           Decrease in accounts receivable                          3,846,937          7,555,242           5,447,822
           Decrease in accounts receivable - other                  2,255,687                  -                   -
           (Increase) decrease in inventories                      (3,450,179)        16,026,062          (9,740,077)
           Decrease (increase) in other current assets                792,733           (724,060)            264,768
           Decrease (increase) in other assets                         30,772            (15,000)           (102,495)
           (Decrease) increase in accounts payable,
             accrued expenses and other noncurrent
             liabilities                                           (2,524,477)       (10,918,287)          3,767,775
 ---------------------------------------------------------------------------------------------------------------------
              Total adjustments                                     9,202,155         20,129,952           5,817,757
 ---------------------------------------------------------------------------------------------------------------------
              Net cash provided by operating activities            13,539,373         15,503,433           7,490,868
 ---------------------------------------------------------------------------------------------------------------------
 Cash flows from investing activities:
    Proceeds from sale of property, net                                     -                  -           3,102,311
    Proceeds from disposal of equipment                                15,550                  -                   -
    Acquisition of property and equipment                          (4,897,032)        (3,110,207)         (3,833,096)
 ---------------------------------------------------------------------------------------------------------------------
              Net cash used in investing activities                (4,881,482)        (3,110,207)           (730,785)
 ---------------------------------------------------------------------------------------------------------------------
 Cash flows from financing activities:
    Proceeds from long-term debt                                    1,102,495                  -           3,666,644
    Repayment of long-term debt                                    (7,028,241)       (12,707,710)         (6,806,021)
    Payments to acquire treasury stock                             (2,404,198)          (219,275)                  -
 ---------------------------------------------------------------------------------------------------------------------
              Net cash used in financing activities                (8,329,944)       (12,926,985)         (3,141,377)
 ---------------------------------------------------------------------------------------------------------------------
 Effect of exchange rate changes on cash and cash
    equivalents                                                      (211,613)          (124,686)            250,313
 ---------------------------------------------------------------------------------------------------------------------
 Net increase (decrease) in cash and cash equivalents                 116,334           (658,445)          3,869,020
 Cash and cash equivalents, beginning of year                       2,234,181          2,350,515           1,692,070
 ---------------------------------------------------------------------------------------------------------------------
 Cash and cash equivalents, end of year                        $    2,350,515    $     1,692,070       $   5,561,090
======================================================================================================================

                                                                      See accompanying notes to financial statements.
</TABLE>



                                                          Niagara Corporation
                                                             and Subsidiaries


                                                Notes to Financial Statements
===============================================================================

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

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

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

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

                                      Principles of Consolidation

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

                                      Earnings Per Share

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

                                      Foreign Currency Translation and
                                      Transactions

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

                                      Cash Equivalents

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

                                      Business and Credit Concentrations

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

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

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

                                      Revenue Recognition

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

                                      Inventories

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

                                      Property, Plant and Equipment

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

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

                                      Goodwill and Other Intangible Assets

                                      Goodwill represents the excess of the
                                      cost of purchased businesses over the
                                      fair value of the net assets acquired.
                                      In July 2001, the Financial Accounting
                                      Standards Board (the "FASB") issued SFAS
                                      No. 142, "Goodwill and Other Intangible
                                      Assets," which requires, among other
                                      things, that entities no longer amortize
                                      goodwill and other intangible assets
                                      having indefinite useful lives, but
                                      rather test them, at least annually, for
                                      impairment. In accordance with this
                                      statement, intangible assets that have
                                      finite useful lives will continue to be
                                      amortized over their useful lives. SFAS
                                      No. 142 is required to be applied in
                                      fiscal years beginning after December
                                      15, 2001 to all goodwill and other
                                      intangible assets recognized at that
                                      date, regardless of when such assets
                                      were initially recognized. The Company
                                      adopted SFAS No. 142 during the year
                                      ended December 31, 2002. Amortization of
                                      goodwill was computed using the
                                      straight-line method over 30 years in
                                      the years ended December 31, 2000 and
                                      2001. There was no amortization of
                                      goodwill in the year ended December 31,
                                      2002. See Note 16.

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

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

                                      Deferred financing costs are being
                                      amortized on a straight-line basis over
                                      the term of the related debt, which is 7
                                      years.

                                      Evaluating Recoverability of Long-Lived
                                      Assets

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

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

                                      Income Taxes

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

                                      Use of Estimates

                                      The preparation of financial statements
                                      in conformity with generally accepted
                                      accounting principles requires
                                      management to make assumptions that
                                      affect the reported amounts of assets
                                      and liabilities, the disclosure of
                                      contingent assets and liabilities at the
                                      date of the financial statements and the
                                      reported amounts of revenues and
                                      expenses during the reporting period.
                                      Actual results could differ from those
                                      estimates.

                                      Stock-Based Compensation

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

                                      The Company has also adopted the
                                      additional disclosure provisions of SFAS
                                      No. 148, "Accounting for Stock-Based
                                      Compensation--Transition and
                                      Disclosure--an amendment of FASB
                                      Statement No. 123," which the FASB
                                      issued in December 2002. This statement
                                      amends the disclosure requirements of
                                      SFAS No. 123 to require prominent
                                      disclosures in both annual and interim
                                      financial statements about the method of
                                      accounting for stock-based employee
                                      compensation and the effect on the
                                      method used on reported results. The
                                      adoption of this statement did not have
                                      an effect on the Company's financial
                                      statements.  See Note 9.

                                      Comprehensive Income or Loss

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

                                      At December 31, 2002, the Company had an
                                      accumulated other comprehensive loss of
                                      $7,968,898. This loss was comprised of
                                      accumulated minimum pension liability
                                      net of tax adjustments of $7,335,000,
                                      representing pension plan obligations in
                                      excess of pension plan assets, and
                                      accumulated foreign currency translation
                                      adjustments of $633,898 arising from the
                                      changing value of the British pound with
                                      respect to the U.S. dollar.

                                      Derivative Instruments and Hedging
                                      Activities

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

                                      New Accounting Pronouncements

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

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

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

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

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

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


   3.       Inventories              Inventories consisted of the following
                                     at December 31, 2001 and 2002:
<TABLE>
<CAPTION>

                                     December 31,                                           2001                2002
                                     --------------------------------------------------------------------------------
<S>                                                                                  <C>                 <C>
                                     Raw materials                                   $10,503,938         $14,749,119
                                     Work-in-process                                   3,783,934           4,071,318
                                     Finished goods                                   29,825,791          36,842,362
                                     --------------------------------------------------------------------------------
                                                                                     $44,113,663         $55,662,799
                                     ================================================================================
</TABLE>

                                      At December 31, 2002, Niagara US
                                      inventories were $37,249,968 determined
                                      using the LIFO method and Niagara UK
                                      inventories were $18,412,831 determined
                                      using the FIFO method.


   4.       Property, Plant and       Property,  plant and equipment consisted
            Equipment                 of the following at December 31, 2001
                                      and 2002:
<TABLE>
<CAPTION>


                                     December 31,                                           2001                2002
                                     --------------------------------------------------------------------------------
<S>                                                                                <C>                 <C>
                                     Land, buildings and improvements              $  26,040,591       $  26,332,987
                                     Leasehold improvements                            1,884,425           1,965,696
                                     Machinery and equipment                          97,564,448         103,442,537
                                     Furniture and fixtures                            4,401,293           4,653,403
                                     --------------------------------------------------------------------------------
                                     Total                                           129,890,757         136,394,623
                                     Less accumulated depreciation and
                                       amortization                                   40,232,578          50,619,348
                                     --------------------------------------------------------------------------------
                                                                                   $  89,658,179        $ 85,775,275
                                     ================================================================================
</TABLE>


<TABLE>
<CAPTION>

   5.       Long-Term Debt           The long-term debt consisted of the
                                     following at December 31, 2001 and 2002:


<S>                                           <C>                                              <C>             <C>
                                     December 31,                                              2001            2002
                                     ------------------------------------------------ --------------- ---------------
                                     Term note payable - bank, maturing in monthly
                                       installments of principal plus interest
                                       through July 2004. Scheduled monthly
                                       installments of principal are $375,000 through
                                       July 1, 2004, with the remaining balance of
                                       principal outstanding of $9,375,000 due on
                                       July 31, 2004. Interest is calculated at
                                       either the LIBOR rate plus 2.85% (2.10% from
                                       January 1, 2000 through June 27, 2001; 2.35%
                                       from June 28, 2001 through December 31, 2001),
                                       or the bank's prime rate plus 1.00% (0.50%
                                       from January 1, 2000 through December 31,
                                       2001)(effective rate of 4.27% at December 31,
                                       2002)                                            $19,333,351     $16,500,000
                                     Secured bank revolving line of credit up
                                       to $35,000,000 due July 31, 2004,
                                       limited to a portion of eligible
                                       accounts receivable and inventories.
                                       Interest is payable in monthly
                                       installments at either the LIBOR rate
                                       plus 2.50% (1.75% from January 1, 2000
                                       through June 27, 2001; 2.00% from June
                                       28, 2001 through December 31, 2001), or
                                       the bank's prime rate plus 0.75% (0.25%
                                       from January 1, 2000 through December
                                       31, 2001) (effective rate of 3.92% at
                                       December 31, 2002)                                26,600,000      29,600,000

                                     Term note payable - bank (facilities agreement),
                                       maturing in monthly installments of principal
                                       plus interest through August 2005. From May
                                       2002 through April 2003, the monthly
                                       installments of principal are (pound)125,000.
                                       The monthly principal payment is adjusted
                                       annually each subsequent May 1 with the final
                                       installment due and payable August 2005.
                                       Interest is calculated at the BBA LIBOR rate
                                       plus 0.15%. The note is secured by, among
                                       other things, a letter of credit for the
                                       balance outstanding with a fee of 2.75%
                                       (effective rate of 4.21% at December 31, 2002)    12,488,706       9,119,410

                                     Secured invoice discounting agreement up to
                                       (pound)15,000,000 ($24,066,000) due July 31,
                                       2004, limited to a portion of the purchased
                                       accounts receivable. Interest is payable in
                                       monthly installments at the Royal Bank of
                                       Scotland base rate plus 2.00% (effective rate
                                       of 6.00% at December 31, 2002)                    12,870,451      15,493,690

                                     Note payable - other, maturing $64,143 annually
                                       on January 31, through 2010, plus interest at
                                       8.5%                                                 577,285         513,143
                                     Note payable - other, maturing $33,333 annually
                                       on April 17, through 2005, plus interest at
                                       10%                                                  133,335         100,000
                                     --------------------------------------------------------------------------------
                                                                                         72,003,128      71,326,243
                                     Less:  Current maturities of long-term debt          9,709,148       7,509,462
                                     --------------------------------------------------------------------------------
                                                                                        $62,293,980    $ 63,816,781
                                     ================================================================================
</TABLE>

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

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

                                      Approximate maturities of long-term debt
                                      are as follows:


                                     Year ended December 31,
                                     -------------------------------------------
                                     2003                          $ 7,509,000
                                     2004                           60,849,000
                                     2005                            2,647,000
                                     2006                               64,000
                                     2007                               64,000
                                     Thereafter                        193,000
                                     -------------------------------------------
                                                                   $71,326,000
                                     ===========================================



   6.       Pension Plans
            and Other
            Postretirement
            Benefits

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

                                      The following tables provide a
                                      reconciliation of the changes in these
                                      plans' benefit obligations and fair
                                      value of assets over the two-year period
                                      ending December 31, 2002, and a
                                      statement of the funded status of these
                                      plans as of December 31, 2001 and 2002:

<TABLE>
<CAPTION>

                                                                    Pension benefits             Other benefits
                                                                 ------------------------    ------------------------
                                                                      2001        2002             2001        2002
                                     --------------------------------------------------------------------------------
                                     Reconciliation of benefit
                                       obligation
<S>                                        <C>                    <C>         <C>             <C>          <C>
                                     Obligation at January 1    $25,299,000  $27,216,000     $6,555,000   $6,649,000
                                     Service cost                   481,000      458,000         48,000       43,000
                                     Interest cost                1,892,000    1,971,000        485,000      471,000
                                     Actuarial loss               1,404,000    1,092,000        176,000      445,000
                                     Benefit payments            (1,860,000)  (1,906,000)      (615,000)  (1,139,000)
                                     --------------------------------------------------------------------------------
                                     Obligation at December 31  $27,216,000  $28,831,000     $6,649,000   $6,469,000
                                     ================================================================================


                                                                    Pension benefits              Other benefits
                                                                 ------------------------     -------------------------
                                                                      2001         2002             2001       2002
                                     ----------------------------------------------------------------------------------
                                     Reconciliation of fair
                                       value of plan assets

                                     Fair value of plan assets                                $             $
                                       at January 1              $22,686,000    $24,078,000            -            -
                                     Actual return on plan
                                       assets                        502,000     (1,893,000)           -            -
                                     Employer contributions        2,750,000      1,840,000       615,000     1,139,000

                                     Benefit payments             (1,860,000)    (1,906,000)     (615,000)   (1,139,000)
                                     ----------------------------------------------------------------------------------
                                     Fair value of plan assets
                                       at December 31            $24,078,000    $22,119,000    $       -    $       -
                                     ==================================================================================


                                                                     Pension benefits            Other benefits
                                                                  -----------------------    -------------------------
                                                                       2001         2002           2001        2002
                                     ---------------------------------------------------------------------------------
                                     Funded status
                                     Funded status at
                                       December 31                $(3,138,000) $(6,712,000) $(6,649,000) $(6,469,000)
                                     Unrecognized prior service
                                       cost                           370,000      318,000            -           -
                                     Unrecognized loss              6,699,000   12,007,000    1,346,517    1,721,933
                                     ---------------------------------------------------------------------------------
                                     Net amount recognized        $ 3,931,000    5,613,000  $(5,302,483) $(4,747,067)
                                     =================================================================================


                                      The following table provides the amounts recognized in the Company's balance
                                      sheets at December 31, 2001 and 2002:


                                                                     Pension benefits             Other benefits
                                                                 ------------------------    ------------------------
                                                                      2001         2002            2001        2002
                                     --------------------------------------------------------------------------------
                                     Prepaid benefit cost        $    654,000  $       -    $         -  $         -
                                     Accrued benefit liability     (1,987,000) (6,729,000)   (5,302,483)  (4,747,067)
                                     Intangible asset                 370,000     318,000             -            -
                                     Accumulated other
                                       comprehensive loss,
                                       pretax                       4,894,000  12,024,000             -           -
                                     --------------------------------------------------------------------------------
                                     Net amount recognized        $ 3,931,000   5,613,000   $(5,302,483) $(4,747,067)
                                     ================================================================================
</TABLE>

                                      At December 31, 2001, LaSalle's salaried
                                      pension plan had plan assets in excess
                                      of the benefit obligation, whereas at
                                      December 31, 2002 the benefit obligation
                                      under this plan was in excess of plan
                                      assets. LaSalle's hourly pension plan
                                      had a benefit obligation in excess of
                                      plan assets at December 31, 2001 and
                                      2002. The salaried plan's benefit
                                      obligation was $8,267,000 and $8,651,000
                                      at December 31, 2001 and 2002,
                                      respectively. Plan assets for the
                                      salaried plan were $8,487,000 and
                                      $7,338,000 at December 31, 2001 and
                                      2002, respectively. The hourly plan's
                                      benefit obligation was $17,639,000 and
                                      $18,833,000 at December 31, 2001 and
                                      2002, respectively. Plan assets for the
                                      hourly plan were $15,591,000 and
                                      $14,781,000 at December 31, 2001 and
                                      2002, respectively. The non-contributory
                                      defined benefit pension plan to which
                                      Niagara and Niagara LaSalle are parties
                                      has no plan assets. This plan's benefit
                                      obligation was $1,310,000 and $1,347,000
                                      at December 31, 2001 and 2002. LaSalle's
                                      plans for postretirement benefits other
                                      than pensions have no plan assets. The
                                      benefit obligation for such plans was
                                      $6,649,000 and $6,469,000 at December
                                      31, 2001 and 2002, respectively.

                                      The following table provides the
                                      components of net periodic (benefit)
                                      cost for the Company's plans for the
                                      years ended December 31, 2000, 2001 and
                                      2002:

<TABLE>
<CAPTION>

                                                  Pension benefits                              Other benefits
                                      -----------------------------------------    -----------------------------------------
                                             2000          2001          2002            2000           2001          2002
----------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>           <C>              <C>            <C>           <C>
Service cost                          $    333,000  $    481,000  $    458,000     $    48,000    $    48,000   $    43,000
Interest cost                            1,674,000     1,892,000     1,971,000         463,000        485,000       471,000
Expected return on plan assets          (2,161,000)   (2,323,000)   (2,553,000)              -              -             -
Amortization of prior service cost          52,000        52,000        52,000               -              -             -
Amortization of unrecognized (gain)
  loss                                     (22,000)      110,000       230,000          49,000         67,000        70,000
----------------------------------------------------------------------------------------------------------------------------
Net periodic (benefit) cost           $   (124,000) $    212,000  $    158,000     $   560,000     $  600,000    $  584,000
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      The amounts included within other
                                      comprehensive income (loss) arising from
                                      a change in the additional minimum
                                      pension liability were $(1,494,000) (net
                                      of tax benefit), $(1,304,000) (net of
                                      tax benefit) and $(4,349,000) (net of
                                      tax benefit) for 2000, 2001 and 2002,
                                      respectively.

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

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

<TABLE>
<CAPTION>

                                                  Pension benefits                              Other benefits
                                      -----------------------------------------    -----------------------------------------
                                          2000          2001          2002             2000          2001          2002
----------------------------------------------------------------------------------------------------------------------------
Weighted average assumptions as of
 December 31:
   Discount rate used to determine:
<S>                                        <C>           <C>           <C>               <C>          <C>           <C>
     yearly expense                        7.75%         7.50%         7.50%             7.75%        7.50%         7.50%
     year-end liability                    7.75%         7.50%         7.00%             7.75%        7.50%         7.00%
   Expected return on plan assets         10.00%        10.00%        10.00%               N/A          N/A           N/A
   Rate of compensation increase:
       hourly plan                         3.00%         3.00%         3.00%               N/A          N/A           N/A
       salaried plan                       N/A            N/A          N/A                 N/A          N/A           N/A
       non-contributory plan               N/A           3.00%         3.00%               N/A          N/A           N/A
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

                                      Niagara LaSalle maintains a contributory
                                      salary deferral retirement plan (401(k))
                                      for all employees of Niagara and Niagara
                                      US other than those subject to a
                                      collective bargaining agreement (the
                                      "Niagara LaSalle 401(k) Plan"). Under
                                      the terms of this plan, participants may
                                      elect to defer up to 15% of their
                                      earnings. This plan provides for a 100%
                                      match for the first 3% of employee
                                      contributions and a 50% match for the
                                      next 2% of employee contributions, and
                                      an additional employer contribution
                                      equal to 2% of earnings. Niagara LaSalle
                                      also maintains a contributory salary
                                      deferral retirement plan (401(k)) for
                                      all employees of LaSalle who are subject
                                      to a collective bargaining agreement
                                      (the "LaSalle 401(k) Plan"). The LaSalle
                                      401(k) Plan provides for a 25% match of
                                      the first 5% of employee contributions
                                      for all participants other than
                                      employees at the Company's Hammond,
                                      Indiana facility hired after May 18,
                                      1998 for whom the plan provides for the
                                      same employer match and additional
                                      contribution provisions as the Niagara
                                      LaSalle 401(k) Plan. All contributions
                                      under these plans are subject to the
                                      limitations of Section 401 of the
                                      Internal Revenue Code of 1986, as
                                      amended, and the requirements of the
                                      Employee Retirement Income Security Act
                                      of 1974, as amended. The funds are
                                      invested as directed by the individual
                                      participants. Total expense related to
                                      these plans was approximately $666,000,
                                      $726,000 and $727,000 for the years
                                      ended December 31, 2000, 2001 and 2002,
                                      respectively.

                                      Niagara UK has a defined contribution
                                      group personal pension arrangement for
                                      all of its employees. Under the terms of
                                      Niagara UK's plan, participants may
                                      elect to contribute prescribed
                                      percentages of their earnings based upon
                                      their age, position and whether they
                                      were members of the predecessor
                                      operator's pension plan. Niagara UK's
                                      contributions to participants' accounts
                                      under this plan are based upon the same
                                      factors. All contributions are subject
                                      to the requirements of the U.K. Inland
                                      Revenue and related pension laws. The
                                      funds are invested as directed by the
                                      individual participants. For the years
                                      ended December 31, 2000, 2001 and 2002,
                                      expenses in respect of this plan totaled
                                      approximately (pound)633,000 ($960,000),
                                      (pound)618,000 ($890,000) and
                                      (pound)532,000 ($800,000), respectively.


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

    8.      Lease Commitments         Niagara leases office space under an
                                      operating lease expiring in December
                                      2007. Niagara US leases equipment and
                                      one operating facility under operating
                                      leases expiring through 2011. Niagara UK
                                      leases equipment, eight operating
                                      facilities and four sales offices under
                                      operating leases expiring through 2009.
                                      At December 31, 2002, future minimum
                                      payments under operating leases were
                                      approximately as follows:


                                     ------------------------------------------
                                     2003                             3,035,000
                                     2004                             2,809,000
                                     2005                             2,926,000
                                     2006                             2,983,000
                                     2007                             2,818,000
                                     Thereafter                       4,367,000
                                     -------------------------------------------
                                     Total minimum lease payments  $ 18,938,000
                                     ===========================================


                                      Rent expense under operating leases was
                                      approximately $1,286,000, $2,412,000 and
                                      $2,960,000 for the years ended December
                                      31, 2000, 2001 and 2002, respectively.


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

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

                                      SFAS No. 123, "Accounting for
                                      Stock-Based Compensation" and SFAS No.
                                      148, "Accounting for Stock-Based
                                      Compensation--Transition and
                                      Disclosure," requires that the Company
                                      provide pro forma information regarding
                                      net income and earnings per share as if
                                      the compensation cost for the Company's
                                      stock option plan had been determined in
                                      accordance with the fair value method
                                      prescribed in SFAS No. 123. The Company
                                      estimates the fair value of each stock
                                      option at the grant date by using the
                                      Black-Scholes option-pricing model with
                                      the following weighted average
                                      assumptions used for grants in 2000:
                                      dividend yield of 0%; expected
                                      volatility of 44.0%; average risk-free
                                      interest rate of 6.2%; expected lives of
                                      10 years; and a discount due to
                                      marketability and dilution of 0%. There
                                      were no stock options granted in 2001
                                      and 2002.

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

<TABLE>
<CAPTION>

                                     Year ended December 31,                  2000             2001           2002
                                     ----------------------------------------------------------------------------------
<S>                                                                     <C>            <C>              <C>
                                     Net income (loss),
                                      as reported                       $4,337,218     $(4,626,519)     $1,673,112
                                     Deduct: Total stock-based
                                       compensation expense
                                       determined under fair-value
                                       based method for all
                                       awards, net of related tax
                                       effects                            (913,590)       (592,109)       (378,121)
                                     ----------------------------------------------------------------------------------
                                     Pro forma
                                      net income (loss)                 $3,423,628     $(5,218,628)     $1,294,991
                                     ==================================================================================
                                     Net income (loss) per share
                                        (basic and diluted):
                                           As reported                      $  .50           $(.56)         $  .20
                                           Pro forma                        $  .40           $(.63)         $  .16
                                     ==================================================================================
</TABLE>

<TABLE>
<CAPTION>

                                      A summary of the status of the Company's stock option plan at December 31, 2000,
                                      2001 and 2002, and changes during the years ending on those dates, is
                                      presented below:


                                           December 31, 2000              December 31, 2001              December 31, 2002
                                       ---------------------------    ---------------------------    ---------------------------
                                                       Weighted                       Weighted                       Weighted
                                                       average                        average                        average
                                                       exercise                       exercise                       exercise
                                          Shares        price            Shares        price          Shares           price
--------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>           <C>           <C>             <C>            <C>             <C>
    Outstanding at beginning of year       2,140,000     $5.72         2,330,000       $5.70          2,330,000       $5.70
    Granted                                  200,000      5.50                 -          -                   -          -
    Forfeited or cancelled                    10,000      5.75                 -          -              20,000        5.63
--------------------------------------------------------------------------------------------------------------------------------
    Outstanding at end of year             2,330,000     $5.70         2,330,000       $5.70          2,310,000       $5.70
================================================================================================================================

    Options exercisable at year-end        1,315,000     $5.65         1,656,000       $5.66          1,882,000       $5.68
================================================================================================================================

    Weighted average fair value of
    options granted during the year                      $2.29                             -                               -
================================================================================================================================
</TABLE>

<TABLE>
<CAPTION>


                                      The following table summarizes information about stock options
                                      outstanding at December 31, 2002.


                                                              Options outstanding              Options exercisable
                                                      ------------------------------------    -----------------------
                                                                    Weighted
                                                                     average     Weighted                   Weighted
                                                        Number      remaining    average         Number     average
                                        Range of      outstanding  contractual   exercise      exercisable  exercise
                                     exercise prices  at 12/31/02     life         price       at 12/31/02    price
                                     --------------------------------------------------------------------------------
<S>                                    <C>   <C>       <C>         <C>            <C>          <C>            <C>
                                       $5.50-$5.88     2,310,000   4.82 years     $5.70        1,882,000      $5.68
                                     ================================================================================
</TABLE>


<TABLE>
<CAPTION>

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


                                     Year ended December 31,                  2000            2001             2002
                                     ---------------------------------------------------------------------------------
                                     Current:
<S>                                                                    <C>             <C>               <C>
                                        Federal                        $   879,000     $  (745,000)      $  509,000
                                        State                              118,000               -           49,000
                                     ---------------------------------------------------------------------------------
                                                                           997,000        (745,000)         558,000
                                     ---------------------------------------------------------------------------------
                                     Deferred:
                                        Federal                          1,105,000         593,000        1,097,000
                                        State                               90,000          14,000          325,000
                                        Foreign (UK)                       398,000        (962,000)         666,000
                                     ---------------------------------------------------------------------------------
                                                                         1,593,000        (355,000)       2,088,000
                                     ---------------------------------------------------------------------------------
                                     Total income tax provision
                                        (benefit)                       $2,590,000     $(1,100,000)      $2,646,000
                                     =================================================================================
</TABLE>


<TABLE>
<CAPTION>

                                      At December 31, 2001 and 2002, deferred tax assets (liabilities) consisted of
                                      the following:


                                     December 31,                                          2001                2002
                                     ---------------------------------------------------------------------------------
<S>                                                                              <C>                   <C>
                                     Federal and state regular tax net
                                       operating loss carryforwards              $    2,355,000        $    893,000
                                     Accrued minimum pension liability                1,908,000           4,689,000
                                     Federal alternative minimum tax credit
                                       carryforwards                                  1,898,000           3,462,000
                                     Accrued expenses deductible when paid              851,000             937,000
                                     New York State investment tax credits              767,000             767,000
                                     Allowance for doubtful accounts                    387,000             397,000
                                     Inventories                                        364,000             618,000
                                     Foreign, book depreciation greater than
                                       tax depreciation and basis
                                       differences on UK property, plant and
                                       equipment                                      1,049,000           1,297,000
                                     Other                                              549,000               3,000
                                     ---------------------------------------------------------------------------------
                                     Gross deferred tax assets                       10,128,000          13,063,000
                                     Valuation allowance for deferred tax
                                       assets                                        (1,398,000)         (2,064,000)
                                     ---------------------------------------------------------------------------------
                                     Net deferred tax assets                          8,730,000          10,999,000
                                     ---------------------------------------------------------------------------------
                                     Tax depreciation greater than book             (15,164,000)        (15,771,000)
                                       depreciation on US  property, plant
                                       and equipment
                                     Pension and postretirement benefit
                                       obligations                                   (1,908,000)         (2,629,000)
                                     Other                                                    -            (248,000)
                                     ---------------------------------------------------------------------------------
                                     Gross deferred tax liabilities                 (17,072,000)        (18,648,000)
                                     ---------------------------------------------------------------------------------
                                     Net deferred tax liabilities                $   (8,342,000)     $   (7,649,000)
                                     =================================================================================


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


                                     December 31,                                          2001                2002
                                     ---------------------------------------------------------------------------------
                                     Current asset for deferred income taxes      $    1,678,000      $    1,953,000
                                     Noncurrent liability for deferred
                                       income taxes                                  (10,020,000)         (9,602,000)
                                     ---------------------------------------------------------------------------------
                                     Net deferred tax liabilities                 $   (8,342,000)      $  (7,649,000)
                                     =================================================================================
</TABLE>


                                      At December 31, 2002, the Company had
                                      available federal alternative minimum
                                      tax credit carryforwards of
                                      approximately $3,462,000 which do not
                                      expire and can be used to offset future
                                      years' regular tax to the extent it
                                      exceeds alternative minimum tax.

                                      At December 31, 2002, the Company had
                                      available net operating loss
                                      carryforwards for regular federal and
                                      state income tax purposes of
                                      approximately $1,362,000 and $8,245,000,
                                      respectively, expiring through 2022.

                                      At December 31, 2002, Niagara LaSalle
                                      had New York state investment tax credit
                                      carryforwards of approximately $767,000,
                                      which may be available to offset certain
                                      future state income taxes. These credits
                                      expire through 2017.

                                      At December 31, 2002, the Company had a
                                      valuation allowance for deferred tax
                                      assets of $2,064,000 comprised of (i)
                                      its New York state investment tax credit
                                      carryforwards of approximately $767,000
                                      and (ii) $1,297,000 relating to basis
                                      differences on its UK property, plant
                                      and equipment. The Company has recorded
                                      the valuation allowance to offset the
                                      related deferred tax assets.

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

<TABLE>
<CAPTION>

                                                          2000                  2001                    2002
                                                   -------------------   -------------------    ---------------------
                                                     Amount      %         Amount       %          Amount       %
                                    ---------------------------------------------------------------------------------
<S>                                                 <C>         <C>      <C>            <C>         <C>        <C>
                                    Tax (benefit)
                                    at statutory
                                    rate           $2,355,000  34.0%     $(1,947,000)   (34.0)%   $1,468,000   34.0%
                                    State
                                    income taxes
                                    net of
                                    federal
                                    income tax
                                    benefit           197,000   2.8          (11,000)     (.2)       244,000    5.7
                                    Effect of
                                    foreign (UK)
                                    operations         76,000   1.1          232,000      4.1        246,000    5.7
                                    Valuation
                                    allowance          11,000    .2          720,000     12.5        666,000   15.4
                                    Other             (49,000)  (.7)         (94,000)    (1.6)        22,000     .5
                                    ---------------------------------------------------------------------------------
                                    Effective
                                    tax rate       $2,590,000  37.4%     $(1,100,000)  (19.2)%    $2,646,000  61.3%
                                    =================================================================================
</TABLE>

                                      Income (loss) before income taxes for
                                      Niagara US was $5,532,268, $(359,884)
                                      and $5,083,340, and for Niagara UK was
                                      (pound)919,527 or $1,394,950,
                                      (pound)(3,726,113) or $(5,366,635) and
                                      (pound)(507,605) or $(764,228) for the
                                      years ended 2000, 2001 and 2002,
                                      respectively.


  11.       Major Customers           Niagara US sales to three customers in
                                      2000 were approximately 25%, 10% and 9%
                                      of its total sales.

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

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

                                      None of Niagara UK's customers exceeded
                                      5% of its total sales for the years
                                      2000, 2001 or 2002.


  12.       Major Suppliers           Niagara US had one supplier from which
                                      purchases were approximately 30%, 32%
                                      and 17% of its total purchases in 2000,
                                      2001 and 2002, respectively.

                                      Niagara UK had one supplier from which
                                      purchases were approximately 42%, 32%
                                      and 29% of its total purchases for the
                                      years 2000, 2001 and 2002, respectively.


  13.       Commitments and           Commitments
            Contingencies
                                      Niagara and Niagara LaSalle are parties
                                      to an employment agreement with one of
                                      the Company's officers. The contract,
                                      which expires in January 2006 (subject
                                      to extension), provides for a minimum
                                      salary level, incentive compensation and
                                      supplemental retirement benefits based
                                      on years of service and compensation
                                      (see Note 6). The aggregate commitment
                                      under this contract for future minimum
                                      salaries at December 31, 2002, excluding
                                      bonuses, was $1,440,000.

                                      At December 31, 2002, Niagara UK was a
                                      party to employment agreements with 13
                                      of its executives. These agreements
                                      provide for a notice period, generally
                                      one year, prior to termination of the
                                      executive's employment with Niagara UK.
                                      If Niagara UK terminates the executive's
                                      employment prior to the expiration of
                                      such notice period, the agreement
                                      provides that the executive will receive
                                      the compensation that would have been
                                      paid for the remainder of the period.

                                      Contingencies

                                      Niagara US and Niagara UK are subject to
                                      extensive environmental laws and
                                      regulations concerning, among other
                                      matters, water and air emissions and
                                      waste disposal. Under such laws,
                                      including the Comprehensive
                                      Environmental Response, Compensation and
                                      Liability Act of 1980 as amended,
                                      Niagara US and Niagara UK may be
                                      responsible for parts of the costs
                                      required to remove or remediate
                                      previously disposed wastes or hazardous
                                      substances at the locations they own or
                                      operate or at the locations which they
                                      arranged for disposal of such materials.
                                      Claims for such costs have been made
                                      against LaSalle with respect to five
                                      third-party sites. The costs expended
                                      through December 31, 2002 have been
                                      largely covered by insurance. Management
                                      believes that the resolution of these
                                      matters will not have a material adverse
                                      effect on the Company's financial
                                      position or results of operations.

                                      Under the Company's insurance programs,
                                      coverage is obtained for catastrophic
                                      exposures as well as those risks
                                      required to be insured by law or
                                      contract. In connection with these
                                      programs, Niagara US has provided
                                      certain insurance carriers with
                                      irrevocable standby letters of credit
                                      totaling $1,345,000 as of December 31,
                                      2002. It is the policy of the Company to
                                      retain a portion of certain expected
                                      losses. These relate primarily to
                                      workers' compensation, physical loss to
                                      property, business interruption
                                      resulting from such loss and
                                      comprehensive general, product, vehicle,
                                      medical and life benefits and liability.
                                      Provisions for losses expected under
                                      these programs are recorded based upon
                                      the Company's estimates of the aggregate
                                      liability for claims. Such estimates
                                      utilize certain actuarial assumptions
                                      followed in the insurance industry and
                                      are included in accrued expenses.


   14.      Earnings (Loss) Per       The following table sets forth the
            Share                     calculation of weighted average common
                                      shares outstanding for the calculation
                                      of basic and diluted earnings (loss) per
                                      share:
<TABLE>
<CAPTION>

                                     Year ended December 31,                     2000           2001            2002
                                     -------------------------------------------------------------------------------
<S>                                                                         <C>            <C>             <C>
                                     Weighted average shares (for           8,659,013      8,329,145       8,238,517
                                       basic earnings per share)
                                     Effect of dilutive securities:
                                       Stock options                                -              -               -
                                     -------------------------------------------------------------------------------
                                     Adjusted weighted average shares
                                       (for diluted earnings per
                                       share)                               8,659,013      8,329,145       8,238,517
                                     ===============================================================================
</TABLE>



                                      Options to purchase 2,330,000, 2,330,000
                                      and 2,310,000 shares of Niagara common
                                      stock at exercise prices ranging from
                                      $5.50 to $5.88 per share were
                                      outstanding during the entire years
                                      ended December 31, 2000, 2001 and 2002,
                                      but were not included in the computation
                                      of diluted earnings per share because
                                      they were antidilutive. These options
                                      expire through 2010.


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


  16.       Goodwill and Other        Effective January 1, 2002, in accordance
            Intangible Assets         with SFAS No. 142, the Company changed
                                      its method of accounting for goodwill.
                                      SFAS No. 142 requires, among other
                                      things, that companies no longer
                                      amortize goodwill, but instead test
                                      goodwill for impairment at least
                                      annually. As required by SFAS No. 142,
                                      the Company completed its impairment
                                      tests on its $1,904,499 of recorded
                                      goodwill, and no impairment charge was
                                      deemed necessary. The effect of the
                                      adoption of SFAS No. 142 on the reported
                                      net income and net income (loss) per
                                      share of the Company for the years ended
                                      December 31, 2000, 2001 and 2002 is as
                                      follows:




<TABLE>
<CAPTION>
  Year ended December 31,                 2000              2001           2002
 -------------------------------- -------------- ---------------- --------------
<S>                                  <C>            <C>              <C>
 Reported net income (loss)          $4,337,218     $(4,626,519)     $1,673,112
 Addback:
   Goodwill amortization                 79,080          79,080              -
 -------------------------------- -------------- ---------------- --------------
 Adjusted net income (loss)          $4,416,298     $(4,547,439)     $1,673,112
 ================================ ============== ================ ==============
 Net income (loss) per share -       $      .50     $      (.56)     $      .20
   basic and diluted:
      As reported
      Addback:
       Goodwill amortization                .01             .01              -
 -------------------------------- -------------- ---------------- --------------
      Adjusted net income (loss)
        per share - basic and
        diluted                      $      .51     $      (.55)     $      .20
 ================================ ============== ================ ==============
</TABLE>



                                      In accordance with SFAS No. 142, other
                                      intangible assets that have finite
                                      useful lives will continue to be
                                      amortized over such useful lives. At
                                      December 31, 2001 and 2002, the Company
                                      had other identifiable intangible assets
                                      recorded at a cost of $797,574, which
                                      are being amortized on a straight-line
                                      basis over approximately 10 years.
                                      Accumulated amortization was $490,071
                                      and $566,943 as of December 31, 2001 and
                                      2002, respectively. The related
                                      amortization expense, which is included
                                      in cost of products sold, was $76,872
                                      for each of the years ended December 31,
                                      2000, 2001 and 2002, and is estimated to
                                      be approximately $77,000 for each of the
                                      years ended December 31, 2003 through
                                      2005, and -0- thereafter.



  17.       Supplemental Cash Flow    Interest paid during the years ended
            Information               December 31, 2000, 2001 and 2002 was
                                      approximately $7,295,000, $5,270,000,
                                      $3,839,000, respectively.

                                      Income tax payments made during the
                                      years ended December 31, 2000, 2001 and
                                      2002 were approximately $1,402,000,
                                      $31,000 and $755,000, respectively.
                                      During the years ended December 31, 2001
                                      and 2002, the Company received income
                                      tax refunds of approximately $215,000
                                      and $1,463,000, respectively.

                                      Non-cash investing and financing
                                      activities consisted of the following:

<TABLE>
<CAPTION>
                                     Year ended December 31,                    2000          2001             2002
                                     --------------------------------- -------------- -------------- ----------------
                                     Adjustment of accrued pension
                                       cost liability (Note 6):
<S>                                  <C>                                 <C>              <C>           <C>
                                           Prepaid benefit cost          $   334,000      $  40,000     $   (654,000)
                                           Intangible asset                  (52,000)       (52,000)         (52,000)
                                           Deferred tax asset                955,000        833,000        2,781,000
                                           Accumulated other
                                             comprehensive income,
                                             net of tax                    1,494,000      1,304,000        4,349,000
                                     --------------------------------- -------------- -------------- ----------------
                                     Noncash pension cost                 $2,731,000     $2,125,000       $6,424,000
                                     ================================= ============== ============== ================
</TABLE>


  18.       Segments and Related      Niagara operates in two reportable
            Information               segments: (i) Niagara US which has
                                      operations in the United States and (ii)
                                      Niagara UK which has operations in the
                                      United Kingdom. Niagara operates these
                                      segments as separate strategic business
                                      units and measures the segment
                                      performance based on earnings (loss)
                                      before interest, taxes, depreciation and
                                      amortization ("EBITDA"). Niagara UK uses
                                      British pounds sterling as its
                                      functional currency and its accounts are
                                      translated to United States dollars in
                                      conformity with SFAS No. 52, "Foreign
                                      Currency Translation." Assets and
                                      liabilities of this subsidiary are
                                      translated at the exchange rates in
                                      effect at the balance sheet dates and
                                      the related revenues and expenses have
                                      been translated at the average rates for
                                      the periods.

<PAGE>



<TABLE>
<CAPTION>
                                      The following  tables set forth certain  performance  and other  information by
                                      reportable segment.

                                      Year ended December 31, 2000
                                     --------------------------------------------------------------------------------
                                                                                   Niagara US         Niagara UK
                                     --------------------------------------------------------------------------------
<S>                                  <C>                                           <C>                 <C>
                                     Net sales                                     $208,718,480        $127,318,230
                                     Segment profit (EBITDA)                         18,586,422           7,239,114
                                     Depreciation and amortization                    7,405,672           1,609,223
                                     Interest expense                                 4,695,292           2,721,338
                                     Net income                                       3,448,198             962,516
                                     Accounts receivable, net                        15,494,516          30,643,633
                                     Long-lived assets                               83,851,921          15,019,955
                                     Goodwill                                         1,983,579                   -
                                     Segment assets                                 141,604,755          73,182,377
                                     Acquisition of property and equipment            2,754,444           2,124,439
                                     --------------------------------------------------------------------------------

                                     Year ended December 31, 2001
                                     --------------------------------------------------------------------------------
                                                                                   Niagara US         Niagara UK
                                     --------------------------------------------------------------------------------
                                     Net sales                                     $165,097,414        $103,539,116
                                     Segment profit (EBITDA) (a)                     11,352,298           3,264,838
                                     Depreciation and amortization                    7,442,515             163,732
                                     Interest expense                                 3,260,602           2,111,754
                                     Net (loss)                                        (131,901)         (4,454,668)
                                     Accounts receivable, net                        13,992,110          23,852,499
                                     Long-lived assets                               78,641,104          11,400,081
                                     Goodwill                                         1,904,499                   -
                                     Segment assets                                 126,347,255          54,474,904
                                     Acquisition of property and equipment            2,189,618             883,523
                                     ----------------------------------------- ------------------- ------------------
                                      (a)  Segment  profit  (EBITDA)  for  Niagara UK does not  include a  $5,278,074
                                           restructuring charge. See Note 2.
                                      --------------------------------------------------------------------------------
</TABLE>



<PAGE>


<TABLE>
<CAPTION>
                                      Year ended December 31, 2002
                                      -------------------------------------------------------------------------------
                                                                                    Niagara US         Niagara UK
                                      -------------------------------------------------------------------------------
<S>                                   <C>                                           <C>                  <C>
                                      Net sales                                     $176,876,327         $83,998,234
                                      Segment profit (loss) (EBITDA)                  15,859,688            (127,199)
                                      Note: Segment (loss) (EBITDA) for Niagara UK does not include
                                            $3,102,311 gain on sale of property.  See Note 2.
                                      Depreciation and amortization                    7,301,591           1,712,794
                                      Interest expense                                 2,003,612           1,542,611
                                      Net income (loss)                                3,275,663          (1,430,228)
                                      Accounts receivable, net                        11,851,973          22,431,116
                                      Long-lived assets                               75,215,777          10,842,535
                                      Goodwill                                         1,904,499                   -
                                      Segment assets                                 133,038,969          55,702,144
                                      Acquisition of property and equipment            3,773,767              76,692
                                      --------------------------------------------------------------------------------

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

                                      Approximately  67% of Niagara  UK's sales  during  2002 were  within the United
                                      Kingdom,  with 17% to  continental  Europe  and 16% to the  rest of the  world.
                                      These  amounts were 65%, 19% and 16% and 64%,  19% and 17%,  respectively,  for
                                      2001 and 2000.  Niagara UK's sales to any one foreign  country,  other than the
                                      United States, for these periods represented less than 5% of its total sales.

                                      Certain of the foregoing segment information (profit or loss,  depreciation and
                                      amortization,  assets and acquisition of property and equipment) do not include
                                      components  attributable  to  Niagara or  incurred  by Niagara on behalf of its
                                      operating subsidiaries.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

        The following table provides a reconciliation of the Company's segment profit (loss) (EBITDA) for the years
        ended December 31, 2000, 2001, and 2002, to the respective net income (loss) attributable to each reportable
        segment for such years:


                                           2000                             2001                                2002
                                 -------------------------        ------------------------          --------------------------
                                 Niagara US    Niagara UK         Niagara US    Niagara UK          Niagara US      Niagara UK
        ------------------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>               <C>            <C>               <C>               <C>
        Segment profit
        (loss) (EBITDA)        $ 18,586,422   $ 7,239,114        $11,352,298   $ 3,264,838        $15,859,688     $  (127,199)

        Depreciation
        and amortization         (7,405,672)   (1,609,223)        (7,442,515)     (163,732)        (7,301,591)     (1,712,794)

        Interest expense         (4,695,292)   (2,721,338)        (3,260,602)   (2,111,754)        (2,003,612)     (1,542,611)

        Intercompany
        interest income
          (expense)                 426,557      (426,557)           405,368      (405,368)           211,469        (211,469)

        Other income                152,443             -            186,550             -             57,709               -

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

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

        Provision for
        doubtful accounts           (61,260)     (473,019)          (103,000)     (244,185)          (108,000)       (271,466)

        Management fees          (1,350,000)     (455,100)        (1,350,000)     (432,393)        (1,350,000)              -

        Intercompany
        profit elimination                -      (158,361)                 -       (82,000)                 -               -

        (Provision) benefit
        for income taxes         (2,205,000)     (433,000)            80,000       998,000         (2,090,000)       (667,000)
        -------------------------------------------------------------------------------------------------------------------------
        Net income (loss)       $ 3,448,198    $  962,516        $  (131,901)  $(4,454,668)       $ 3,275,663     $(1,430,228)
        =========================================================================================================================
</TABLE>


<TABLE>
<CAPTION>
  19.       Quarterly Financial
            Information (Unaudited)

                                                  The following presents certain unaudited
                                                  quarterly financial information:

                                                                        Quarters ended during 2001
                                                ----------------------------------------------------------------------------
                                                    March 31            June 30          September 30        December 31
----------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                <C>                <C>                 <C>
Net sales                                           $81,261,075        $70,294,475        $60,372,998         $56,707,982
Gross profit                                         10,003,365          8,097,579          5,804,722           5,645,973
Operating income (loss) (a)                           3,019,911          1,528,209           (635,819)         (4,453,014)
Net income (loss) (a)                                   834,160            137,673         (1,159,273)         (4,439,079)
Net income (loss) per share
   (basic and diluted) (a)                                 $.10               $.02              $(.14)              $(.54)
----------------------------------------------------------------------------------------------------------------------------
(a)      Results for the quarter ended December 31, 2001 include a restructuring charge of $5,278,074.  See Note 2.
----------------------------------------------------------------------------------------------------------------------------


                                                                        Quarters ended during 2002
                                               -----------------------------------------------------------------------------
                                                    March 31            June 30         September 30        December 31
----------------------------------------------------------------------------------------------------------------------------
Net sales                                          $62,971,239         $66,601,860        $67,650,129        $63,651,333
Gross profit                                         6,829,548           8,055,883          6,870,621          8,832,210
Operating income                                       725,328           1,749,835            251,724          1,978,428
Net income (loss) (b)                                 (188,688)            113,485          1,391,255            357,060
Net income (loss) per share
   (basic and diluted) (b)                               $(.02)               $.01               $.17               $.04
----------------------------------------------------------------------------------------------------------------------------
    (b)   Results for the quarters ended September 30, 2002 and December 31, 2002 include gains on sale of property
          of $2,906,834 and $195,477, respectively. See Note 2.
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

         None.


PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

         The information required by Item 10 will be contained in, and is
incorporated herein by reference from, the section entitled "Election of
Directors" of the Registrant's Proxy Statement for its 2003 Annual Meeting of
Stockholders to be filed with the SEC (the "Proxy Statement"), or will be
filed by amendment to this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

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

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

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

ITEM 14. CONTROLS AND PROCEDURES.

         Within 90 days prior to the date of this annual report, an evaluation
was performed under the supervision and with the participation of the
Company's management, including the Chief Executive Officer and the Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on such evaluation, such
individuals have concluded that as of such evaluation date, the Company's
disclosure controls and procedures are effective in timely alerting them to
material information relating to the Company (including its consolidated
subsidiaries) required to be included in the Company's periodic SEC reports.
There have been no significant changes in the Company's internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of their evaluation.

ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The information required by Item 15 will be contained in, and is
incorporated herein by reference from, the section entitled "Principal
Accountant Fees and Services" of the Proxy Statement, or will be filed by
amendment to this Form 10-K.

PART IV.
ITEM 16. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K.

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

       1. Financial Statements.

              Financial Statements filed as part of this Report on Form 10-K
are listed in Item 8 on page 19.

       2. Financial Statement Schedules:

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

       3.     Exhibits - See Item 16(c) below for a list of the exhibits filed
              as a part of or incorporated by reference into this report.

       (b)    Reports on Form 8-K.

              None.

       (c)    Exhibits
              --------

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

             3.2(2)    Registrant's By-laws.

             4.1(2)    Form of Common Stock Certificate.

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

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

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

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

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

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

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

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

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

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

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

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

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

            4.15(7)    Bank Facilities Agreement, dated May 21, 1999, between
                       National Westminster Bank Plc and Niagara LaSalle (UK)
                       Limited (the "Facilities Agreement").

           4.16(14)    Amendment to the Facilities Agreement, effective June 30,
                       2000.

           4.17(10)    Second Amendment to the Facilities Agreement, effective
                       June 30, 2001.

           4.18(11)    Third Amendment to the Facilities Agreement, effective
                       December 31, 2001.

           4.19(12)    Fourth Amendment to the Facilities Agreement, effective
                       March 31, 2002.

            4.20(7)    Intercreditor Agreement, dated May 21, 1999, between
                       National Westminster Bank Plc, Niagara Corporation and
                       Niagara LaSalle (UK) Limited.

           4.21(15)    Invoice Discounting Agreement, dated August 23, 1999,
                       between Niagara LaSalle (UK) Limited and Lombard Natwest
                       Discounting Limited (the "Discount Agreement").

           4.22(14)    Amendment to the Discount Agreement, effective June 30,
                       2000.

           4.23(10)    Second Amendment to the Discount Agreement, effective
                       June 30, 2001.

           4.24(11)    Third Amendment to the Discount Agreement, effective
                       December 31, 2001.

           4.25(12)    Fourth Amendment to the Discount Agreement, effective
                       March 31, 2002.

           4.26(13)    Fifth Amendment to the Discount Agreement, effective
                       August 23, 2002.

           4.27(15)    Intercreditor Agreement, dated August 23, 1999, between
                       Lombard Natwest Discounting Limited, Niagara Corporation
                       and Niagara LaSalle (UK) Limited.

           4.28(15)    Deed of Priority, dated August 23, 1999, between Lombard
                       Natwest Discounting Limited, National Westminster Bank
                       Plc, Manufacturers and Traders Trust Company, Niagara
                       LaSalle (UK) Limited and Niagara Corporation.

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

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

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

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

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

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

           10.7(20)    Niagara Corporation Employee Stock Purchase Plan.

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

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

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

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

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

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

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

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

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

          10.17(13)    Form of Niagara Corporation Guaranty to Niagara LaSalle
                       (UK) Limited supplier.

                 21    Subsidiaries of the Registrant.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


<PAGE>


                                  SIGNATURES

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


                                          NIAGARA CORPORATION


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

Dated: March 28, 2003



<TABLE>
<CAPTION>
         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>                                               <C>                                           <C>
                                                   Chairman of the Board,
 /s/ Michael Scharf                                President and Chief Executive                 March 28, 2003
     Michael Scharf                                Officer


                                                   Vice President,
/s/ Raymond Rozanski                               Chief Financial and                           March 28, 2003
    Raymond Rozanski                               Principal Accounting Officer


/s/  Gilbert D. Scharf                             Secretary and Director                        March 28, 2003
     Gilbert D. Scharf


 /s/ Frank Archer                                  Director                                      March 28, 2003
     Frank Archer


 /s/ Gerald L. Cohn                                Director                                      March 28, 2003
     Gerald L. Cohn


 /s/ Andrew R. Heyer                               Director                                      March 28, 2003
     Andrew R. Heyer


 /s/ Douglas T. Tansill                            Director                                      March 28, 2003
     Douglas T. Tansill
</TABLE>

                                 CERTIFICATION

         I, Michael Scharf, as the Chief Executive Officer of Niagara
Corporation, certify that:

         1.       I have reviewed this annual report on Form 10-K of Niagara
                  Corporation;

         2.       Based on my knowledge, this annual report does not contain
                  any untrue statement of material fact or omit to state a
                  material fact necessary to make the statements made, in
                  light of the circumstances under which such statements were
                  made, not misleading with respect to the period covered by
                  this annual report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this annual report, fairly
                  present in all material respects the financial condition,
                  results of operations and cash flows of the registrant as
                  of, and for, the periods presented in this annual report;

         4.       The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

         a)       Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation
                  Date"); and

         c)       Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures
                  based on our evaluation as of the Evaluation Date;

         5.       The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of the
                  registrant's board of directors (or persons performing the
                  equivalent function):

         a)       All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and
                  report financial data and have identified for the
                  registrant's auditors any material weaknesses in internal
                  controls; and

         b)       Any fraud, whether or not material, that involved management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

         6.       The registrant's other certifying officer and I have
                  indicated in this annual report whether or not there were
                  significant changes in internal controls or in other factors
                  that could significantly affect the internal controls
                  subsequent to the date of our most recent evaluation,
                  including any corrective actions with regard to significant
                  deficiencies and material weaknesses.

         Date: March 28, 2003



                                /s/ Michael Scharf
                                Michael Scharf
                                Chairman, President & Chief Executive Officer


<PAGE>

                                 CERTIFICATION

         I, Raymond Rozanski, as the Chief Financial Officer of Niagara
Corporation, certify that:

         1.       I have reviewed this annual report on Form 10-K of Niagara
                  Corporation;

         2.       Based on my knowledge, this annual report does not contain
                  any untrue statement of material fact or omit to state a
                  material fact necessary to make the statements made, in
                  light of the circumstances under which such statements were
                  made, not misleading with respect to the period covered by
                  this annual report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this annual report, fairly
                  present in all material respects the financial condition,
                  results of operations and cash flows of the registrant as
                  of, and for, the periods presented in this annual report;

         4.       The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

         a)       Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation
                  Date"); and

         c)       Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures
                  based on our evaluation as of the Evaluation Date;

         5.       The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of the
                  registrant's board of directors (or persons performing the
                  equivalent function):

         a)       All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and
                  report financial data and have identified for the
                  registrant's auditors any material weaknesses in internal
                  controls; and

         b)       Any fraud, whether or not material, that involved management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

         6.       The registrant's other certifying officer and I have
                  indicated in this annual report whether or not there were
                  significant changes in internal controls or in other factors
                  that could significantly affect the internal controls
                  subsequent to the date of our most recent evaluation,
                  including any corrective actions with regard to significant
                  deficiencies and material weaknesses.

         Date: March 28, 2003


                                /s/ Raymond Rozanski
                                Raymond Rozanski
                                Vice President & Treasurer


<PAGE>



                              Niagara Corporation
                               and Subsidiaries






                         Financial Statement Schedules
                              Form 10-K - Item 16
                   Years Ended December 2000, 2001 and 2002



<PAGE>


                                                         Niagara Corporation
                                                            and Subsidiaries


                                                                     Index


        Report of Independent Certified Public Accountants            S-3

        Financial Statement Schedule I:
           Condensed Financial Information of Registrant:
              Balance Sheets                                          S-4
              Statements of Operations                                S-5
              Statements of Stockholders' Equity                      S-6
              Statements of Cash Flows                                S-7
              Notes to Condensed Financial Statements                 S-8

        Financial Statement Schedule II:
           Valuation and Qualifying Accounts                          S-10












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



<PAGE>



Report of Independent Certified Public Accountants



Niagara Corporation
New York, New York

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

In our opinion, such financial statement schedules present fairly, in all
material respects, the information set forth therein.





/s/BDO Seidman,LLP





BDO Seidman, LLP


New York, New York

February 4, 2003


<PAGE>


<TABLE>
<CAPTION>
                                                                                               Niagara Corporation
                                                                                                  and Subsidiaries
                                                                                                        Schedule I

                                                                     Condensed Financial Information of Registrant
                                                                                                    Balance Sheets

 December 31,                                                                           2001                   2002
 ----------------------------------------------------------------------- ---------------------- ----------------------
 Assets
 Current:
<S>                                                                           <C>                    <C>
    Cash and cash equivalents                                                    $    47,155            $    16,008
    Other current assets                                                             469,441                  5,965
 ----------------------------------------------------------------------- ---------------------- ----------------------
         Total current assets                                                        516,596                 21,973
 Property and equipment, net                                                         470,492                372,833
 Investment in and net advances to subsidiaries                                   57,213,088             56,879,972
 Deferred income taxes                                                                     -                399,000
 Other assets, net                                                                    69,683                 59,760
 ----------------------------------------------------------------------- ---------------------- ----------------------
                                                                                 $58,269,859            $57,733,538
 ----------------------------------------------------------------------- ---------------------- ----------------------
 Liabilities and Stockholders' Equity
 Current liabilities:
    Accrued expenses                                                             $   123,296            $    96,967
    Advances from subsidiary                                                       8,894,049             10,208,209
 ----------------------------------------------------------------------- ---------------------- ----------------------
         Total liabilities                                                         9,017,345             10,305,176
 ----------------------------------------------------------------------- ---------------------- ----------------------
 Commitments and contingencies (see Notes 8, 9 and 13 to the
    consolidated financial statements)
 Stockholders' equity (see Notes 6, 7 and 9 to the consolidated
    financial statements):
       Preferred stock, $.001 par value - 500,000 shares authorized,
         none outstanding                                                                  -                      -
       Common stock, $.001 par value - 15,000,000 shares authorized,
         9,997,455 issued                                                              9,998                  9,998
       Additional paid-in capital                                                 50,111,675             50,111,675
       Retained earnings                                                          11,852,159             13,525,271
       Accumulated other comprehensive loss                                       (4,471,634)            (7,968,898)
 ----------------------------------------------------------------------- ---------------------- ----------------------
                                                                                  57,502,198             55,678,046
       Treasury stock, at cost, 1,758,938 shares                                  (8,249,684)            (8,249,684)
 ----------------------------------------------------------------------- ---------------------- ----------------------
            Total stockholders' equity                                            49,252,514             47,428,362
 ----------------------------------------------------------------------- ---------------------- ----------------------
                                                                                 $58,269,859            $57,733,538
 ----------------------------------------------------------------------- ---------------------- ----------------------

                                                            See accompanying notes to condensed financial statements.
</TABLE>



<PAGE>


<TABLE>
<CAPTION>
                                                                                               Niagara Corporation
                                                                                                  and Subsidiaries
                                                                                                        Schedule I

                                                                     Condensed Financial Information of Registrant
                                                                                          Statements of Operations

 Year ended December 31,                                                 2000               2001                2002
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Revenues:
<S>                                                                <C>                <C>                 <C>
    Management fees from subsidiaries (Note 2)                     $1,805,100        $ 1,782,393          $1,350,000
 Expenses:
    General and administrative expenses                             1,839,943          1,930,376           1,632,323
 ----------------------------------------------------------- ------------------ ------------------- ------------------
                                                                      (34,843)          (147,983)           (282,323)
 Other income (loss):
    Equity in net income (loss) of subsidiaries                     4,358,052         (4,536,536)          1,845,435
    Interest income                                                     1,009                  -                   -
 ----------------------------------------------------------- ------------------ ------------------- ------------------
       Income before income tax recoveries                          4,324,218         (4,684,519)          1,563,112
 Income tax recoveries                                                 13,000             58,000             110,000
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Net income (loss)                                                 $4,337,218        $(4,626,519)         $1,673,112
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Net income (loss) per share
  - basic and diluted                                              $      .50        $      (.56)         $      .20
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Weighted average common shares outstanding (see Note 14
    to the consolidated financial statements):
       basic and diluted                                            8,659,013          8,329,145           8,238,517
 ----------------------------------------------------------- ------------------ ------------------- ------------------

                                                              See accompanying notes to condensed financial statements.
</TABLE>




<PAGE>


<TABLE>
<CAPTION>
                                                                                               Niagara Corporation
                                                                                                  and Subsidiaries
                                                                                                        Schedule I

                                                                     Condensed Financial Information of Registrant
                                                                                Statements of Stockholders' Equity

 Years ended December 31, 2000, 2001 and 2002
 ------------------------------------------- ------------------------- ----------------- -----------------
                                                   Common stock
                                             ------------- -----------


                                              Number of                   Additional         Retained
                                                shares       Amount    paid-in capital       earnings
                                             ------------- ----------- ----------------- -----------------
 ------------------------------------------- ------------- ----------- ----------------- -----------------
<S>                                           <C>            <C>         <C>               <C>
 Balance, January 1, 2000                     9,997,455      $9,998      $50,111,675       $12,141,460
 ------------------------------------------- ------------- ----------- ----------------- -----------------
 Comprehensive income:
    Net income for the year                           -           -                -         4,337,218
    Foreign currency translation
       adjustment                                     -           -                -                 -
    Minimum pension liability adjustment
       ($2,449,000, net of tax benefit of
       $955,000)                                      -           -                -                 -
 ------------------------------------------- ------------- ----------- ----------------- -----------------
       Total comprehensive income
 ------------------------------------------- ------------- ----------- ----------------- -----------------
 Purchase of treasury stock, at cost (a)              -           -                -                 -
 ------------------------------------------- ------------- ----------- ----------------- -----------------
 Balance, December 31, 2000                   9,997,455       9,998       50,111,675        16,478,678
 ------------------------------------------- ------------- ----------- ----------------- -----------------
 Comprehensive loss:
    Net loss for the year                             -           -                -        (4,626,519)
    Foreign currency translation
       adjustment                                     -           -                -                 -
    Minimum pension liability adjustment
       ($2,137,000, net of tax benefit of
       $833,000)                                      -           -                -                 -
 ------------------------------------------- ------------- ----------- ----------------- -----------------
    Total comprehensive loss
 ------------------------------------------- ------------- ----------- ----------------- -----------------
 Purchase of treasury stock, at cost (a)              -           -                -                 -
 ------------------------------------------- ------------- ----------- ----------------- -----------------
 Balance, December 31, 2001                   9,997,455       9,998       50,111,675        11,852,159
 Comprehensive loss:
    Net income for the year                           -           -                -         1,673,112
    Foreign currency translation
       adjustment                                     -           -                -                 -
    Minimum pension liability adjustment
       ($7,130,000, net of tax benefit of
       $2,781,000)                                    -           -                -                 -
 ------------------------------------------- ------------- ----------- ----------------- -----------------
    Total comprehensive loss
 ------------------------------------------- ------------- ----------- ----------------- -----------------
 Balance, December 31, 2002                   9,997,455      $9,998      $50,111,675       $13,525,271
 ----------------------------------------------------------------------------------------------------------

 (a)   During the years ended December 31, 2000 and 2001, Niagara Corporation repurchased 599,129 shares,
       and 125,300 shares of its Common Stock, respectively, at a cost of $2,404,198 and $219,275, respectively.
 --------------------------------------------------------------------------------------------------------------

<CAPTION>
[table continued]
                                                                                               Niagara Corporation
                                                                                                  and Subsidiaries
                                                                                                        Schedule I

                                                                     Condensed Financial Information of Registrant
                                                                                Statements of Stockholders' Equity

 Years ended December 31, 2000, 2001 and 2002
 -------------------------------------------  ------------------ ------------------ -----------------
                                                                                         Total

                                                 Accumulated
                                                    other
                                                comprehensive     Treasury stock,    stockholders'
                                                    loss              at cost            equity
                                              ------------------ ------------------ -----------------
 -------------------------------------------  ------------------ ------------------ -----------------
<S>                                              <C>                 <C>              <C>
 Balance, January 1, 2000                        $   (175,644)       $(5,626,211)     $56,461,278
 -------------------------------------------  ------------------ ------------------ -----------------
 Comprehensive income:
    Net income for the year                                 -                  -        4,337,218
    Foreign currency translation
       adjustment                                  (1,021,575)                 -       (1,021,575)
    Minimum pension liability adjustment
       ($2,449,000, net of tax benefit of
       $955,000)                                   (1,494,000)                 -       (1,494,000)
 -------------------------------------------  ------------------ ------------------ -----------------
       Total comprehensive income                                                       1,821,643
 -------------------------------------------  ------------------ ------------------ -----------------
 Purchase of treasury stock, at cost (a)                    -         (2,404,198)      (2,404,198)
 -------------------------------------------  ------------------ ------------------ -----------------
 Balance, December 31, 2000                        (2,691,219)        (8,030,409)      55,878,723
 -------------------------------------------  ------------------ ------------------ -----------------
 Comprehensive loss:
    Net loss for the year                                   -                  -       (4,626,519)
    Foreign currency translation
       adjustment                                    (476,415)                 -         (476,415)
    Minimum pension liability adjustment
       ($2,137,000, net of tax benefit of
       $833,000)                                   (1,304,000)                 -       (1,304,000)
 -------------------------------------------  ------------------ ------------------ -----------------
    Total comprehensive loss                                                           (6,406,934)
 -------------------------------------------  ------------------ ------------------ -----------------
 Purchase of treasury stock, at cost (a)                    -           (219,275)        (219,275)
 -------------------------------------------  ------------------ ------------------ -----------------
 Balance, December 31, 2001                        (4,471,634)        (8,249,684)      49,252,514
 Comprehensive loss:
    Net income for the year                                 -                  -        1,673,112
    Foreign currency translation
       adjustment                                     851,736                  -          851,736
    Minimum pension liability adjustment
       ($7,130,000, net of tax benefit of
       $2,781,000)                                 (4,349,000)                 -       (4,349,000)
 -------------------------------------------  ------------------ ------------------ -----------------
    Total comprehensive loss                                                           (1,824,152)
 -------------------------------------------  ------------------ ------------------ -----------------
 Balance, December 31, 2002                       $(7,968,898)       $(8,249,684)     $47,428,362
 ----------------------------------------------------------------------------------------------------

 (a)   During the years ended December 31, 2000 and 2001, Niagara Corporation repurchased 599,129 shares,
       and 125,300 shares of its Common Stock, respectively, at a cost of $2,404,198 and $219,275,
       respectively.
 ----------------------------------------------------------------------------------------------------


                                            See accompanying notes to condensed financial statements.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                                                                               Niagara Corporation
                                                                                                  and Subsidiaries
                                                                                                        Schedule I

                                                                     Condensed Financial Information of Registrant
                                                                                          Statements of Cash Flows

 Year ended December 31,                                                 2000               2001                2002
 ----------------------------------------------------------- ------------------ ------------------- ------------------
<S>                                                                <C>               <C>                  <C>
 Cash flows from operating activities:
    Net income (loss)                                              $4,337,218        $(4,626,519)         $1,673,112
 ----------------------------------------------------------- ------------------ ------------------- ------------------
    Adjustments to reconcile net income (loss) to net cash
       provided by (used in) operating activities:
         Depreciation and amortization                                105,949            103,980              89,746
         Equity in net (income) loss of subsidiaries               (4,358,052)         4,536,536          (1,845,435)
         Deferred income taxes                                              -                  -            (399,000)
         (Increase) decrease in other current assets                   (5,843)           (38,940)            463,476
         (Decrease) increase in accrued expenses                      (42,403)            79,414             (25,856)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
            Total adjustments                                      (4,300,349)         4,680,990          (1,717,069)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
            Net cash provided by (used in) operating
               activities                                              36,869             54,471             (43,957)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Cash flows from investing activities:
    Acquisition of property and equipment                             (18,149)           (37,065)                  -
    Subsidiary reimbursement of property costs                              -                  -              17,364
    Advances, subsidiaries, net                                     1,808,830            223,741              (4,554)
 ----------------------------------------------------------- ------------------ ------------------- ------------------
            Net cash provided by investing activities               1,790,681            186,676              12,810
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Cash flows from financing activities:
    Payments to acquire treasury stock                             (2,404,198)          (219,275)                  -
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Net (decrease) increase in cash
  and cash equivalents                                               (576,648)            21,872             (31,147)
 Cash and cash equivalents, beginning of year                         601,931             25,283              47,155
 ----------------------------------------------------------- ------------------ ------------------- ------------------
 Cash and cash equivalents, end of year                           $    25,283         $   47,155           $  16,008
 ----------------------------------------------------------- ------------------ ------------------- ------------------

                                                              See accompanying notes to condensed financial statements.
</TABLE>






<PAGE>


<TABLE>
<CAPTION>
                                                                                               Niagara Corporation
                                                                                                  and Subsidiaries
                                                                                                        Schedule I

                                                                     Condensed Financial Information of Registrant
                                                                           Notes to Condensed Financial Statements


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


   2.       Restrictions on           Niagara's subsidiary, Niagara LaSalle Corporation ("Niagara LaSalle"), which
            Distributions             was acquired on August 16, 1995, has a revolving line of credit and term loan
                                      agreement with a group of banks which contains certain restrictions on the
                                      payment of dividends. Niagara LaSalle is permitted, however, to pay management
                                      fees to Niagara and, in each of the years ended December 31, 2000, 2001 and
                                      2002, $1,350,000 of such management fees were included as revenues in the
                                      accompanying condensed financial statements but have been eliminated in the
                                      consolidated financial statements

                                      Niagara's subsidiary, Niagara LaSalle (UK) Limited ("Niagara UK"), which
                                      acquired the equipment, inventory and certain other assets of the steel bar
                                      businesses of Glynwed Steels Limited on May 21, 1999, has bank facilities and
                                      invoice discounting agreements which contain certain restrictions on the
                                      payment of dividends. Niagara UK is permitted, however, to pay management fees
                                      to Niagara of up to (pound)300,000 per year. During the years ended December
                                      31, 2000 and 2001, $455,100 ((pound)300,000) and $432,393 ((pound)300,000),
                                      respectively, of such management fees were included as revenues in the
                                      accompanying condensed financial statements, but have been eliminated in the
                                      consolidated financial statements. During the year ended December 31, 2002,
                                      payment of Niagara UK's management fees were discontinued.

   3.       Trade Payable             During the fourth quarter of 2002, Niagara guaranteed on a short-term basis
            Guarantees                certain trade payables of Niagara UK in the aggregate amount of up to
                                      (pound)6.7 million (approximately $10.7 million) in order to ensure an orderly
                                      supply of raw materials.



</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                                                                               Niagara Corporation
                                                                                                  and Subsidiaries
                                                                                                       Schedule II

                                                                                 Valuation and Qualifying Accounts


 Years ended December 31, 2000, 2001 and 2002
 ---------------------------------- --------------- -------------------------------- ----------------- ---------------
<S>                                   <C>              <C>              <C>           <C>                <C>
                                                               Additions
                                                    --------------------------------
                                      Balance at        Other         Charged to        Deductions       Balance at
                                     beginning of                      costs and                           end of
                                         year                          expenses                             year
 ---------------------------------- --------------- --------------- ---------------- ----------------- ---------------
 December 31, 2002:
    Allowance for doubtful
       accounts                       $1,276,000       $    -            $379,000         $ 308,000      $1,347,000
 ---------------------------------- --------------- --------------- ---------------- ----------------- ---------------
 December 31, 2001:
    Allowance for doubtful
       accounts                       $1,459,000       $    -           $(165,000)        $  18,000      $1,276,000
 ---------------------------------- --------------- --------------- ---------------- ----------------- ---------------
 December 31, 2000:
    Allowance for doubtful
       accounts                       $  925,000       $    -           $ 534,000     $           -      $1,459,000
 ---------------------------------- --------------- --------------- ---------------- ----------------- ---------------
</TABLE>





                                                                  Exhibit 21



                                 SUBSIDIARIES


         Niagara LaSalle Corporation, a Delaware corporation

         LaSalle Steel Company, a Delaware corporation

         Niagara LaSalle (UK) Limited, an English company, which also conducts
         business under the following names:

               -     Gadd Dudley Port
               -     Ductile Wesson
               -     GB Longmore
               -     Midland Engineered Steels
               -     Wesson Bright Products
               -     Macreadys



<PAGE>


                                                                Exhibit 99.1



                        Certification of CEO Pursuant to
                             18 U.S.C. Section 1350,
                             as Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Niagara Corporation (the
"Company") for the year ended December 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Michael Scharf,
as the Chief Executive Officer of the Company, hereby certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that, to the best of my knowledge:

         (1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ Michael Scharf
Michael Scharf
Chairman, President & Chief Executive Officer
March 28, 2003



This certification accompanies the Report pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of
ss.18 of the Securities Exchange Act of 1934, as amended.




<PAGE>


                                                               Exhibit 99.2



                        Certification of CFO Pursuant to
                            18 U.S.C. Section 1350,
                             as Adopted Pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Niagara Corporation (the
"Company") for the year ended December 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Raymond Rozanski,
as the Chief Financial Officer of the Company, hereby certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that, to the best of my knowledge:

         (1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ Raymond Rozanski
Raymond Rozanski
Vice President & Treasurer
March 28, 2003



This certification accompanies the Report pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of
ss.18 of the Securities Exchange Act of 1934, as amended.