SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D. C. 20549


                                 FORM 10-K

(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, 1999
                                                        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. YES X NO__.
           AS OF MARCH 24, 2000, THE AGGREGATE MARKET VALUE OF THE VOTING
STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT WAS APPROXIMATELY $28,102,734
(ASSUMES THE REGISTRANT'S OFFICERS, DIRECTORS AND ALL STOCKHOLDERS
HOLDING 5% OF OUTSTANDING SHARES ARE AFFILIATES).
           THERE WERE 8,738,246 SHARES OF  THE REGISTRANT'S COMMON STOCK
OUTSTANDING AS OF MARCH 24, 2000.
           DOCUMENTS INCORPORATED BY REFERENCE: THE ITEMS COMPRISING PART
III HEREOF (ITEMS 10, 11, 12 AND 13) ARE INCORPORATED BY REFERENCE FROM THE
REGISTRANT'S PROXY STATEMENT FOR ITS 2000 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 Notes 2 and 3 to the Financial
Statements and "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 more than $22
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.

           The Company has announced a restructuring plan for its hot
rolling operations in the United Kingdom. Under the plan, Niagara UK will
close its Ductile Hot Mill facility in Willenhall, transfer most of the
production from this facility to its W Wesson facility in Moxley (which has
been renamed Ductile Wesson), and invest approximately $1.6 million in its
remaining hot rolling businesses. The Company has also determined to
consolidate certain additional U.K. operations. These restructurings are
scheduled to be completed during 2000 and are expected to expand Niagara
UK's product range, improve its product quality and enhance its customer
service capabilities.

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 and/or ground 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 steering columns and shock absorbers, (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 will add a new quench and tempering line
to its Hammond facility and a new continuous shape straightening and
weighing line to its Buffalo plant. Management expects this new equipment
to increase capacity and improve 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 51%, 27% and 22%, respectively, of
Niagara UK's total revenues from unaffiliated customers for the period May
22 through December 31, 1999.

           Niagara UK's hot rolling operations, which operate under the
names Gadd Dudley Port and Ductile Wesson, offers 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 14 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 W Wesson, 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 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 five 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 1999,
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 650 active customers in the United
States and Canada and is not dependent upon any one geographical market.
For 1999, Niagara US's 10 largest customers (by tons shipped) represented
approximately 63% of its sales, and its 3 largest customers, Alro Steel
Corporation, Earle M. Jorgensen Co. and Joseph T. Ryerson and Sons, Inc.
represented approximately 45% of its 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 10,500 active accounts. Its largest
account resulted in less than 5% of sales. Approximately 67% of its sales
during 1999 were within the U.K. with 16% to continental Europe and 17% to
the rest of the world. For 1999, Niagara UK's 10 largest customers
represented approximately 20% of its sales.

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.

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, 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 frequent rolling cycles from a comprehensive raw material
inventory.

           In order to improve profitability, management has chosen to
specialize on 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 implemented a system of inventory management
to supply more efficiently multiple locations of steel service center
companies. In the United Kingdom, the Company is in the process of
restructuring operations and consolidating management and administrative
functions in order to improve product range and quality, more efficiently
meet customer requirements and reduce costs.

           In addition, the Company has invested in new equipment and added
to its information technology staff in order to improve customer service
and efficiency between its various operations. The Company's goal in this
regard is to fully integrate its information systems with those of its
suppliers and customers.

EMPLOYEES

           As of December 31, 1999, the Company had 1,364 employees, 557
were located in the U.S. and 807 were located in the U.K. All of LaSalle's
183 hourly 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, 2001. All of
LaSalle's 21 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 was due to expire on
February 19, 2000. On February 13, 2000, the hourly employees at LaSalle's
Griffith facility ratified a new 3-year collective bargaining agreement.

           Of the 807 Niagara UK employees as of December 31, 1999, 453
were covered by collective bargaining agreements with the Iron and Steel
Trades Confederation (366 employees), the Transport and General Workers
Union (51 employees) and the General and Municipal Boilermakers Union (36
employees). These agreements extend indefinitely and contain compensation
provisions which are reviewed annually. The 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 45,900 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, Niagara and Niagara UK entered into agreements with
subsidiaries of Glynwed calling for the lease or sublease by Niagara UK of
10 operating 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 operating facilities and 5 years for the remaining operating
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 $1.3 million) for years 3-6; and
(pound)1,000,000 (approximately $1.6 million) for years 7-10. The sales
office leases have various terms ranging to five years. Each operating
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 7 primary operating
facilities (identified by an asterisk below) at prices fixed for 10 years
(which prices total (pound)9,468,000 (approximately $15.1 million)), or to
renew the leases with respect thereto for an additional term of 15 years at
commercial market rates.

           Niagara UK's operating facilities consist of : 124,500 square
feet in Dudley (Gadd Dudley Port)*, 204,500 square feet in Moxley (Ductile
Wesson)*, 51,000 (Ductile Wesson) and 103,000 (GB Longmore) square feet in
Willenhall, 121,200 (Gadd Dudley Port)* and 32,000 (Midland Engineering
Steels) square feet in Tipton, 115,600 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 located in
Waltham Cross, Medway, Southhampton, Leeds and Glasgow.

           In connection with a restructuring plan for its hot rolling
operations, Niagara UK gave notice to terminate on February 18, 2001 its
lease of the 51,000 square-foot facility in Willenhall.

           Management considers these manufacturing facilities, which
operated at approximately 70% of capacity in 1999, 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. At three of these sites, LaSalle has
entered into de minimis settlement agreements resolving the pending claims
of liability, one of which awaits further governmental approval. 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 United States Environmental Protection Agency and agreed to perform a
limited remediation at the site. LaSalle has received an insurance
settlement in an amount that largely covers the financial contributions it
has made for these sites through December 31, 1999. 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 does not believe that LaSalle's share of the additional
costs will 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 1998 and 1999.

                                                  HIGH                LOW

1998
    January 1 through March 31................    10 1/8              7 7/8
    April 1 through June 30...................    12                  8 5/8
    July 1 through September 30...............    10                  5 3/4
    October 1 through December 31.............    7 3/8               4 1/8

1999
    January 1 through March 31................    8                   4 11/16
    April 1 through June 30...................    8                   5 1/4
    July 1 through September 30...............    5 11/16             4 1/4
    October 1 through December 31.............    5 3/8               3 1/2

           As of March 24, 2000, there were 32 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."

<TABLE>
<CAPTION>

ITEM 6.              SELECTED FINANCIAL DATA.

                                                                                   YEAR ENDED DECEMBER 31,
                                        -----------------------------------------------------------------------------------------
                                            1995(1)             1996(2)          1997 (3)           1998             1999(4)
                                            ----                ----             ----               ----             ----
                                                                    (in thousands, except per share data)
STATEMENT OF OPERATIONS DATA:
<S>                                     <C>                <C>                 <C>             <C>              <C>
Net sales.............................. $      17,035      $       74,810      $   204,962     $    207,547     $      264,222
Cost of products sold..................        15,541              66,114          180,532          177,340            228,275
Gross profit...........................         1,493               8,695           24,430           30,207             35,947
Selling, general and administrative
   expenses............................         1,265               5,706           12,450           15,645             24,441
Interest income........................           628                 100              160              172                 36
Other income...........................             -                 126              187              195                143
Interest expense.......................           272               1,536            5,874            4,154              5,631
Income taxes...........................           240                 615            2,479            4,265              2,299
Extraordinary loss on early
   extinguishment of debt..............             -                  --            2,062               --                 --
Net income ............................           344               1,064            1,912            6,510              3,757
Net income per share (basic)
   (before extraordinary loss)......... $         .10      $          .30      $       .94     $        .66     $          .40
Net income per share (diluted)
   (before extraordinary loss)......... $         .10      $          .30      $       .78     $        .64     $          .40
Net income per share (basic)........... $         .10      $          .30      $       .45     $        .66     $          .40
Net income per share (diluted)......... $         .10      $          .30      $       .38     $        .64     $          .40
Weighted average common shares
   outstanding (basic).................         3,500               3,603            4,247            9,880              9,350
Weighted average common shares
   outstanding (diluted)...............         3,500               3,603            5,095           10,250              9,357

                                        --------------------------------------------------------------------------------------
                                                                                    AT DECEMBER 31,
                                        --------------------------------------------------------------------------------------
                                           1995                1996             1997             1998              1999
                                           ----               -----             ----             ----              ----
                                                                           (in thousands)
BALANCE SHEET DATA:
Cash and cash equivalents.............. $       2,187      $        1,588      $    13,207     $        441     $        2,234
Trade accounts receivable, net.........         4,239               5,953           21,660           13,360             53,126
Inventories............................        14,744              14,446           35,190           30,132             59,442
Property, plant and equipment, net.....        12,745              21,649           89,163           89,749            102,984
Goodwill, net..........................             -               2,543            2,177            2,100              2,022
TOTAL ASSETS...........................        34,593              47,348          166,520          139,429            227,934
Trade accounts payable.................         4,787               4,110           20,985           14,107             50,191
Accrued expenses.......................         3,212               3,690            8,679            6,555              9,506
Current maturities of long-term debt...           733               1,662            3,498            4,797              6,411
Long-term debt, less current
   maturities..........................         6,969              18,075           59,184           41,572             87,388
Accrued pension and other
   postretirement benefits.............             -                  --           14,537           10,303              8,023
Deferred income taxes..................         3,914               3,805            5,726            7,357              9,849
TOTAL LIABILITIES......................        20,131              31,822          114,524           84,898            171,473
STOCKHOLDERS' EQUITY .................. $      14,462      $       15,526      $    51,996     $     54,531     $       56,461

-------------------
(1)   Includes the results of Niagara LaSalle for the period from August 17, 1995 to December 31, 1995.
(2)   Includes the results of Southwest from February 1, 1996.
(3)   Includes the results of LaSalle from April 1, 1997.
(4)   Includes the results of Niagara UK from May 22, 1999.
</TABLE>



<TABLE>
<CAPTION>

                                                 NIAGARA LASALLE (PREDECESSOR COMPANY)


                                                                YEAR ENDED DECEMBER 31, 1995(1)
                                                          --------------------------------------------
                                                                         (in thousands)
STATEMENT OF OPERATIONS DATA:
<S>                                                                  <C>
Net sales.................................................           $        50,506
Cost of products sold.....................................                    44,386
Gross profit..............................................                     6,120
Selling, general and administrative
   expenses...............................................                     2,904
Employment expense-management options.....................                     1,666
Operating income..........................................                     1,550
Other Income..............................................                        17
Interest expense..........................................                       771
Income before income taxes................................                       795
Income taxes..............................................                       270
Net income................................................           $           525



                                                                     AT AUGUST 16, 1995(2)
                                                          --------------------------------------------
                                                                         (in thousands)
BALANCE SHEET DATA:
Current assets............................................           $        18,257
Current liabilities.......................................                    11,118
Working capital...........................................                     7,139
Property plant and equipment, net ........................                     6,829
TOTAL ASSETS..............................................                    25,103
Long-term debt and capital lease
   obligations (excluding current portion)................                     6,266
TOTAL LIABILITIES.........................................                    18,584
REDEEMABLE PREFERRED STOCK................................                       251
STOCKHOLDERS' EQUITY......................................           $         6,268

(1)  Derived from combining results of operations prior to acquisition by Niagara (January 1 to August 16, 1995) with
     results after such acquisition (August 17 to December 31, 1995).
(2)  Acquisition date by Niagara.
</TABLE>




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

RESULTS OF OPERATIONS

           During the second half of 1998 and for all of 1999, the
Company's U.S. and U.K. operations experienced competitive pressures due to
a marked decline in prices and weakened demand for their products.
Management believes that such developments were due to overcapacity in the
industry and the continuation of low-priced imports, primarily from Asia
and Eastern European countries. Although demand for the Company's products
in the U.S. began to strengthen modestly during the second half of 1999,
prices in the U.S. remained weak during this period primarily due to
pressures from a domestic competitor. In addition, Niagara UK's export
business was negatively impacted as a result of the continued high value of
the British pound.

           The results of operations for the year ended December 31, 1999
include the results of Niagara UK from May 22, 1999. The results of
operations for the year ended December 31, 1997 include the results of
LaSalle from April 1, 1997.

Year ended December 31, 1999 compared with December 31, 1998

           Net sales for the year ended December 31, 1999 were
$264,221,888, representing an increase of $56,675,362, or 27.3%, over the
same period in 1998. This increase was attributable to the inclusion of
$77,789,863 of Niagara UK sales which was offset in part by a decrease in
sales from U.S. operations due to weakened demand for products and a
decline in prices.

           Cost of products sold for the year ended December 31, 1999
increased by $50,934,752 to $228,274,501, representing an increase of 28.7%
over the same period in 1998. This increase was attributable to the
inclusion of $65,045,141 of Niagara UK's cost of products sold, which was
offset in part by reduced raw material costs as a result of the lower sales
volume, lower raw material prices and, to a lesser extent, reduced
operating costs in the U.S.

           Gross margins for the year ended December 31, 1999 decreased by
0.9% over the same period in 1998 due to the decline in selling prices,
which was partially offset by a decrease in raw material prices and the
Company's greater emphasis on higher margin value-added products. If
adjusted for the effects of the curtailment of certain post retirement
welfare benefits and pension costs attributable to U.S. operations for
1998, gross margins for the year ended December 31, 1999 would have
improved by 0.6% over the same period in 1998.

           Selling, general and administrative expenses for the year ended
December 31, 1999 increased by $8,796,088 to $24,440,790, or 9.3% of sales,
compared to 7.5% of sales for the same period in 1998. Both the increase in
dollar amount and increase as a percentage of sales were due to the
inclusion of $10,385,466 of Niagara UK's expenses for the period, which was
offset in part by reduced selling, general, administration expenses from
the Company's U.S. operations due to their decrease in sales and cost
reductions in the U.S.

           Interest expense for the year ended December 31, 1999 increased
by $1,476,564 to $5,630,549. This increase was primarily due to increased
levels of borrowings attributable to the acquisition of the U.K. steel bar
businesses.

           Net income for the year ended December 31, 1999 was $3,756,625,
a decrease of $2,753,481, or 42.3%, as compared to the net income for the
year ended December 31, 1998. This decrease resulted primarily from the
marked decline in prices and weakened demand for the Company's products
during the period. In addition, net income for the year ended December 31,
1998 included $3,019,000 as a result of a curtailment of certain post
retirement welfare benefits and pension costs attributable to U.S.
operations. Net income for the year ended December 31, 1999 included net
income of $388,742 for Niagara UK for the period May 22 through December
31, 1999.

           On a pro forma basis, and as disclosed in Note 3(c) to the
Financial Statements, net loss for the year ended December 31, 1999 would
have been $2,122,086 compared to net income of $7,461,000 for the same
period in 1998. This decrease is attributable to reduced sales of
approximately $72,000,000 and an inventory adjustment of approximately
$5,700,000 to estimated net realizable value at Niagara UK during the first
quarter of 1999.

Year ended December 31, 1998 compared with December 31, 1997

           Net sales for the year ended December 31, 1998 were
$207,546,526, an increase of $2,584,393, or 1.3%, over the same period in
1997. This increase was primarily due to the addition of sales of LaSalle
for the entire period in 1998 as compared to only the last three quarters
in 1997. Management estimates that sales were adversely affected by between
$15 and $20 million during the second half of 1998 due primarily to reduced
production at the Company's Hammond, Indiana facility during the nine-week
strike, lengthy training periods for permanent replacement workers at this
facility and the loss of market share during such period.

           Cost of products sold for the year ended December 31, 1998 was
$177,339,749, a decrease of $3,192,474, or 1.8%, over the same period in
1997. This decrease was due primarily to the reduction in LaSalle's
postretirement benefit obligations (which reduced cost of products sold for
1998 by $3,320,000).

           Gross margins for the year ended December 31, 1998 increased by
2.6% over the same period in 1997 due to the reduction in LaSalle's
postretirement benefit obligations and the continued greater emphasis on
higher margin value-added products. Gross margins for 1998 were adversely
affected by the reduced sales volume in the second half of the year
following the strike.

           Selling, general and administrative expenses increased by
$3,195,197 to $15,644,702, or 7.5%, of sales in the year ended December 31,
1997 compared to 6.1% for the same period in 1997. This increase was due
primarily to the inclusion of LaSalle's selling, general and administrative
expenses for the full period in 1998 as compared to only the last three
quarters in 1997 (which was offset, in part, by a decrease in costs
resulting from the consolidation of selling and administration functions at
Niagara US), the additional administrative expenses associated with the
strike, and costs associated with the upgrade of the Company's computer
systems. These increases were partially offset by a reduction in expenses
relating to the reduction in LaSalle's postretirement benefit obligations
(which reduced selling, general and administrative expenses for 1998 by
$1,629,000). Selling, general and administrative expenses for 1998 were
adversely affected as a percentage of sales by the reduced sales volume in
the second half of the year following the strike.

           Interest expense decreased by $1,720,209 to $4,153,985 primarily
due to reduced levels of borrowing.

           Net income for the year ended December 31, 1998 was $6,510,106,
an increase of $4,597,788, or 240%, from the same period in 1997. This
increase was due primarily to the inclusion of LaSalle's results for the
full year in 1998 as compared to only the last three quarters in 1997,
the extraordinary loss in 1997 of $2,062,185 due to the early
extinguishment of debt and an increase in net income of $3,019,000 million
resulting from the curtailment of LaSalle's postretirement benefit
obligations. Net income for 1998 was also positively affected by interest
savings resulting from the reduction of debt following the redemption of
the Warrants in December 1997 and improved margins from the continued
emphasis on value-added products. Management estimates that net income for
the year ended December 31, 1998 was adversely affected by between $2.0 and
$2.6 million due to the effects of the strike. Net income for the year
ended December 31, 1998 increased by $4,812,654, or 284%, as compared to
pro-forma net income (see Note 3 to the 1998 Financial Statements) for the
year ended December 31, 1997. This increase resulted primarily from the
foregoing factors as well as the reduced earnings of LaSalle in the first
quarter of 1997 as compared to the same period in 1998.

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 funding of capital expenditures to
modernize, improve and expand its facilities, machinery and equipment.
Capital expenditures for the year ending December 31, 1999 were $5,180,444
compared to $6,859,081 for the same period in 1998. This decrease was
attributable to an increase in equipment leases by U.S. operations. The
Company anticipates spending approximately $6,000,000 for capital
expenditures during 2000.

           Cash flows used by operating activities were $5,252,947 for the
year ended December 31, 1999 as compared to $14,676,621 provided by
operating activities for the year ended December 31, 1998. This $19,929,568
decrease, or 136% decline from the prior year, was largely attributable to
an increase in accounts receivable of $41,612,485 ($34,878,254 attributable
to Niagara UK) and inventories of $7,563,220, which was offset, in part, by
an increase in accounts payable and accrued expenses of $32,718,279
($29,504,069 attributable to Niagara UK). Cash and cash equivalents at
December 31, 1999 was $2,234,181, an increase of $1,793,527 as compared to
December 31, 1998.

           On April 18, 1997 and in connection with the acquisition of
LaSalle, Niagara US entered into a revolving credit and term loan agreement
(the "Credit Agreement") with Manufacturers and Traders Trust Company
("M&T"), CIBC Inc., National City Bank, National Bank of Canada and the
Prudential Insurance Company of America, and Niagara LaSalle terminated its
previously existing credit agreements with M&T. The Credit Agreement
provides for a $50,000,000 four-year revolving credit facility and a
$40,000,000 eight-year term loan. 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.

           The acquisition of LaSalle and the refinancing of existing
Niagara LaSalle indebtedness was also financed pursuant to the issuance and
sale of $20,000,000 aggregate principal amount of 12.5% senior subordinated
notes of Niagara LaSalle due April 18, 2005 (the "Subordinated Notes"). In
connection with the subordinated debt portion of this financing, the
purchasers of the Subordinated Notes were issued 285,715 shares of Niagara
Common Stock.

           Principal of the term loan under the Credit Agreement amortizes
in monthly installments that commenced on November 1, 1997 and end on April
1, 2004. The principal repayment installments on the term loan escalate
throughout its term. 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 210 basis points, or M&T's prime rate plus 50 basis
points. Revolving credit loans made pursuant to the Credit Agreement are
based on a percentage of eligible accounts receivable and inventory and
will mature on April 17, 2001. Interest on such loans is payable in monthly
installments and is either 175 basis points above the LIBOR rate (for a
period specified by Niagara US from time to time) or M&T's prime rate plus
25 basis points.

           The Credit Agreement carries restrictions on, among other
things, indebtedness, liens, capital expenditures, dividends, asset
dispositions and changes in control of 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 and the ratio of net income before
interest, taxes, depreciation and amortization to cash interest expense.
Niagara US was in compliance with all of these requirements as of December
31, 1999.

           On October 31, 1997, Niagara exercised its right to redeem on
December 9, 1997 (which date was extended to December 11, 1997) all of its
then outstanding and unexercised Redeemable Common Stock Purchase Warrants
("Warrants") at $.01 per Warrant. As a result of such action, the Warrants
could not be exercised after the redemption date. Each outstanding Warrant
entitled the holder to purchase from Niagara, prior to the exercise
deadline, one share of Niagara Common Stock at an exercise price of $5.50.
Of the 6,050,000 Warrants outstanding prior to the call for redemption,
6,042,990 were exercised resulting in $33,236,445 in gross proceeds to
Niagara and the issuance of 6,042,990 shares of Niagara Common Stock.
During the fourth quarter of 1997, the Company used approximately $21.8
million of such proceeds to prepay, at 107% plus accrued interest, the
Subordinated Notes. During the first quarter of 1998, the Company used
another $10 million of such proceeds to reduce the balance due under a
revolving credit facility.

           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 or
borrowings under the Company's revolving credit facilities or advances under
Niagara UK's invoice discounting agreement. 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, 1999, Niagara had repurchased 1,034,509 shares of its Common Stock at a
cost of $5,626,211, of which 548,629 shares were repurchased at a cost of
$2,726,246 during the year ended December 31, 1999.

           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 million) seven-year term loan and a (pound)9.8 million
(approximately $15.7 million) three-year 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 3% 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
April 30, 2006. The principal repayment installments on the term loan
escalate throughout its term. Revolving credit loans made pursuant to the
Facilities Agreement are based upon a percentage of eligible inventory and
will mature on May 21, 2002. Interest of the term and revolving credit
loans under the Facilities Agreement accrue at the LIBOR rate (for periods
specified by Niagara UK from time to time) plus 15 basis points 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 a three-year Invoice
Discounting Agreement (the "Discount Agreement") with Lombard Natwest
Discounting Limited ("Lombard") providing for up to (pound)20 million
(approximately $32.2 million) of advances to Niagara UK based upon a
formula tied to the receivables purchased by Lombard. Interest on such
advances accrues at the National Westminster base rate plus 2.25%. 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 were further reduced to (pound)2.5 million (approximately $4.0 million)
as of December 31, 1999.

           The Facilities and Discount Agreements carry restrictions on,
among other things, security interests, borrowed money, asset dispositions,
dividends, transactions with affiliates, capital expenditures, changes in
control and mergers and acquisitions. Also included in these agreements are
requirements regarding tangible net worth, the ratio of profit before
interest and taxes to interest and the ratio of current assets to current
liabilities. Niagara UK was in compliance with all of these requirements as
of December 31, 1999.

           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.

           At December 31, 1999, the Company had borrowed or been advanced
$45,347,552 under its revolving credit facilities and the Discount
Agreement and had approximately $26,000,000 in available credit thereunder,
and the outstanding balance of its term loans was $47,508,380. Working
capital of the Company at December 31, 1999 and 1998 was $55,019,020 and
$20,414,031, respectively.

YEAR 2000

           The Company could be adversely affected if the information
technology or operating systems which it or its suppliers, customers or
service providers use do not properly accommodate the "Year 2000" dating
changes necessary to permit the recording of year dates for 2000 and later
years.

           During the fourth quarter of 1999, the Company completed its
Year 2000 readiness program. Under this program, the Company's personnel,
together with outside consultants and engineers, assessed the Company's
information technology and operating systems for Year 2000 readiness.
Management took steps to correct any problems identified by this assessment
or to minimize the impact of any interruptions or performance degradations
caused by the Year 2000. In addition, the Company inquired into the Year
2000 readiness status of its suppliers, customers and essential service
providers and formulated contingency plans to prepare for any Year 2000
issues.

           Since December 31, 1999, the Company has not experienced any
significant Year 2000 interruptions or performance degradations in any of
its internal systems. In addition, the Company has not experienced or been
notified of any such problems from its suppliers, customers or service
providers. However, because of the reliance on and involvement of a great
many third parties, and since it may take additional time for Year 2000
problems to emerge, disruptions in the Company's operations could still
occur which may have a material effect on the Company's results of
operations.

           Total costs associated with the Company's Year 2000 readiness
program have not been material to the Company's results of operations.
Based on current conditions and assessments as well as third party
assurances, management does not expect that such costs will be material to
the Company's results of operations in the future.

EFFECT OF RECENT ACCOUNTING PRONOUNCEMENT

           In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," which requires entities
to recognize all derivatives as either assets or liabilities in the balance
sheet and measure those instruments at fair value. SFAS No. 133, as amended
by SFAS No. 137, is effective for all fiscal years beginning after June 15,
2000. The Company does not presently enter into any transactions involving
derivative financial instruments and, accordingly, does not anticipate that
the new standard will have any effect on its 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) and exchange rate variability. 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 210
basis points, or M&T's prime rate plus 50 basis points. Interest on
revolving credit loans made pursuant to such agreement accrues at either
175 basis points above the LIBOR rate (for a period specified by Niagara US
from time to time) or M&T's prime rate plus 25 basis points. Interest on
the term and revolving credit loans under the Facilities Agreement accrues
at the LIBOR rate (for a period specified by Niagara UK from time to time)
plus 15 basis points. Interest on advances under the Discount Agreement
accrues at National Westminster's base rate plus 2.25%. 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.

           The Company sells its products primarily to customers in North
America and Europe. Niagara UK's revenues are generally collected in the
local currency of its customers. To reduce the Company's exposure to
fluctuations in exchange rates, Niagara UK purchases foreign exchange
contracts in amounts and with expiration dates in line with customer
orders. Revenues from sales by Niagara US are collected exclusively in U.S.
dollars.


           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 or in future
filings by Niagara with the Securities and Exchange Commission, in the
Company's press releases and 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
           could 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 could affect the market for the
           Company's products. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Results of
           Operations."

o          FOREIGN CURRENCY - Approximately 33% of Niagara UK's sales are
           to customers outside of the United Kingdom. Revenues in respect
           of such sales are generally collected in the local currency of
           the customer. While Niagara UK purchases foreign exchange
           contracts to reduce its exposure to fluctuations in exchange
           rates, its export sales have been and will remain subject to the
           value of the British pound in relation to the value of the local
           currencies. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS-- Results of
           Operations" and "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
           MARKET RISK."

o          EXPIRATION OF MANAGEMENT EMPLOYMENT CONTRACTS - Certain members
           of management have employment contracts with the Company which
           expire at various times within the next year. There is no
           assurance that the Company will be able to retain these
           individuals following such expiration dates.

o          EXPIRATION OR REVIEW OF UNION CONTRACTS - LaSalle's hourly
           employees at its Hammond and Griffith, Indiana facilities are
           covered by collective bargaining agreements, which expire on
           July 18, 2001 and February 19, 2003, 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          YEAR 2000 - The Company could be adversely affected if it
           experiences a disruption in its operations due to its inability
           or the inability of its suppliers, customers or service
           providers to comply with the "Year 2000" dating changes
           necessary to permit the recording of year dates for 2000 and
           later years. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Year 2000."


ITEM 8.         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


                       INDEX TO FINANCIAL STATEMENTS

                                                                        Page
Report of Independent Certified Public Accountants.................       18
Balance Sheets.....................................................       19
Statements of Operations...........................................       20
Statements of Stockholders' Equity.................................       21
Statements of Cash Flows...........................................       22
Notes to Financial Statements......................................       23




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, 1998 and 1999, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the
period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Niagara
Corporation and its subsidiaries as of December 31, 1998 and 1999, and the
results of their operations and their cash flows for each of the three
years in the period ended December 31, 1999, in conformity with generally
accepted accounting principles.



/s/ BDO Seidman, LLP
BDO Seidman, LLP


New York, New York
February 18, 2000



<TABLE>
<CAPTION>

                                                                                                  NIAGARA CORPORATION
                                                                                                     AND SUBSIDIARIES

                                                                                                       BALANCE SHEETS

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

December 31,                                                                             1998                         1999(a)
----------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT:
<S>                                                                             <C>                        <C>
      Cash and cash equivalents                                                 $     440,654                 $    2,234,181
      Trade accounts receivable, net of allowance for doubtful
           accounts of $789,000 and $925,000 (Notes 6 and 12)                      13,360,290                     53,126,071
      Accounts receivable - other (Note 9)                                                  -                      2,255,687
      Inventories (Notes 4 and 6)                                                  30,131,877                     59,441,872
      Deferred income taxes (Note 11)                                                 494,000                        957,000
      Other current assets (Note 7)                                                 1,446,130                      3,112,453
----------------------------------------------------------------------------------------------------------------------------
           TOTAL CURRENT ASSETS                                                    45,872,951                    121,127,264
PROPERTY, PLANT AND EQUIPMENT, NET (NOTES 5, 6 AND 14)                             89,748,881                    102,983,882
GOODWILL, NET OF ACCUMULATED AMORTIZATION OF $222,545 AND
      $300,077 (NOTE 3(a))                                                          2,099,593                      2,022,061
DEFERRED FINANCING COSTS, NET OF ACCUMULATED AMORTIZATION OF
      $184,480 AND $295,168                                                           590,520                        479,832
INTANGIBLE PENSION ASSET (NOTE 7)                                                     526,000                        474,000
OTHER ASSETS, NET OF ACCUMULATED AMORTIZATION OF $414,213
      AND $581,444                                                                    591,075                        847,260
----------------------------------------------------------------------------------------------------------------------------
                                                                                $ 139,429,020                  $ 227,934,299

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
      Accounts payable                                                          $  14,106,608                  $  50,191,265
      Accrued expenses (Note 3(c))                                                  6,555,103                      9,506,238
      Current maturities of long-term debt (Note 6)                                 4,797,209                      6,410,741
----------------------------------------------------------------------------------------------------------------------------
           TOTAL CURRENT LIABILITIES                                               25,458,920                     66,108,244
OTHER:
      Long-term debt, less current maturities (Note 6)                             41,572,250                     87,387,943
      Accrued pension cost (Note 7)                                                 4,664,337                      2,690,987
      Accrued other postretirement benefits (Note 7)                                5,638,639                      5,331,586
      Deferred income taxes (Note 11)                                               7,357,000                      9,849,000
      Other noncurrent liabilities                                                    207,331                        105,261
----------------------------------------------------------------------------------------------------------------------------
           TOTAL LIABILITIES                                                    $  84,898,477                   $171,473,021
----------------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTES 9, 10 AND 14)
STOCKHOLDERS' EQUITY (NOTES 2, 7, 8 AND 10):
      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                                                             8,384,835                     12,141,460
      Accumulated other comprehensive loss                                         (1,076,000)                      (175,644)
----------------------------------------------------------------------------------------------------------------------------
                                                                                   57,430,508                     62,087,489
      Treasury stock, at cost, 485,880 and 1,034,509 shares                        (2,899,965)                    (5,626,211)
----------------------------------------------------------------------------------------------------------------------------
           TOTAL STOCKHOLDERS' EQUITY                                           $  54,530,543                  $  56,461,278
----------------------------------------------------------------------------------------------------------------------------
                                                                                $ 139,429,020                  $ 227,934,299
-------------------

      (a)  Includes the balance sheet of Niagara UK.
-----------------------------------------------------------------------------------------------------------------------------
                                                                             See accompanying notes to financial statements.
</TABLE>



<TABLE>
<CAPTION>

                                                                                                        NIAGARA CORPORATION
                                                                                                           AND SUBSIDIARIES

                                                                                                   STATEMENTS OF OPERATIONS



---------------------------------------------------------------------------------------------------------------------------------
Year ended December 31,                                                      1997(a)                  1998                 1999(b)
---------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                    <C>                    <C>                    <C>
NET SALES (NOTE 12)                                                    $204,962,133           $207,546,526           $264,221,888
COST OF PRODUCTS SOLD (NOTES 7 AND 13)                                  180,532,223            177,339,749            228,274,501
---------------------------------------------------------------------------------------------------------------------------------
           GROSS PROFIT                                                  24,429,910             30,206,777             35,947,387
OPERATING EXPENSES:
      Selling, general and administrative (Note 7)                       12,449,505             15,644,702             24,440,790
---------------------------------------------------------------------------------------------------------------------------------
           OPERATING INCOME                                              11,980,405             14,562,075             11,506,597
INTEREST INCOME                                                             160,048                172,076                 36,172
INTEREST EXPENSE                                                         (5,874,194)            (4,153,985)            (5,630,549)
OTHER INCOME                                                                187,244                194,940                143,405
---------------------------------------------------------------------------------------------------------------------------------
           INCOME BEFORE INCOME TAXES AND
                EXTRAORDINARY LOSS                                        6,453,503             10,775,106              6,055,625
INCOME TAXES (NOTE 11)                                                    2,479,000              4,265,000              2,299,000
---------------------------------------------------------------------------------------------------------------------------------
           INCOME BEFORE EXTRAORDINARY LOSS                               3,974,503              6,510,106              3,756,625
EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT OF
      DEBT, NET OF INCOME TAX BENEFIT OF $1,264,000
      (NOTE 18)                                                          (2,062,185)                     -                      -
---------------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                             $  1,912,318           $  6,510,106           $  3,756,625
---------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE (BASIC):
      Income before extraordinary loss                                 $        .94           $        .66           $        .40
      Extraordinary loss                                                       (.49)                     -                      -
---------------------------------------------------------------------------------------------------------------------------------
      Net income per share (basic)                                     $        .45           $        .66           $        .40
---------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE (DILUTED):
      Income before extraordinary loss                                 $        .78           $        .64           $        .40
      Extraordinary loss                                                       (.40)                     -                      -
---------------------------------------------------------------------------------------------------------------------------------
      Net income per share (diluted)                                   $        .38           $        .64           $        .40
---------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
      (NOTE 15):
           Basic                                                          4,246,925              9,879,528              9,350,189
           Diluted                                                        5,095,350             10,249,954              9,357,114
---------------------------------------------------------------------------------------------------------------------------------

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

      (a)  Includes the results of LaSalle from April 1, 1997.
      (b)  Includes the results of Niagara UK from May 22, 1999.
---------------------------------------------------------------------------------------------------------------------------------

                                                                                  See accompanying notes to financial statements.
</TABLE>


<TABLE>
<CAPTION>

                                                                                                           NIAGARA CORPORATION
                                                                                                              AND SUBSIDIARIES

                                                                                            STATEMENTS OF STOCKHOLDERS' EQUITY

-----------------------------------------------------------------------------------------------------------------------
Years ended December 31, 1997, 1998 and 1999
-----------------------------------------------------------------------------------------------------------------------
                                                                   Common stock
                                                  --------------------------------------------
                                                        Number of                                       Additional
                                                         shares                  Amount              paid-in capital
------------------------------------------------  ---------------------  ---------------------  ---------------------
<S>                                                        <C>                       <C>               <C>
BALANCE, JANUARY 1, 1997                                      3,668,750                 $3,669            $15,560,127
Shares issued (a)                                               285,715                    286              1,321,146
Shares issued (b)                                             6,042,990                  6,043             33,230,402
Net income for the year                                               -                      -                      -
------------------------------------------------  ---------------------  ---------------------  ---------------------
BALANCE, DECEMBER 31, 1997                                    9,997,455                  9,998             50,111,675
------------------------------------------------  ---------------------  ---------------------  ---------------------
Comprehensive income:
      Net income for the year                                         -                      -                      -
      Minimum pension liability adjustment
           ($1,764,000, net of tax benefit of
           $688,000)                                                  -                      -                      -
------------------------------------------------  ---------------------  ---------------------  ---------------------
           TOTAL COMPREHENSIVE INCOME
------------------------------------------------  ---------------------  ---------------------  ---------------------
Purchase of treasury stock, at cost (c)                               -                      -                      -
------------------------------------------------  ---------------------  ---------------------  ---------------------
BALANCE, DECEMBER 31, 1998                                    9,997,455                  9,998             50,111,675
------------------------------------------------  ---------------------  ---------------------  ---------------------
Comprehensive income:
      Net income for the year                                         -                      -                      -
      Foreign currency translation adjustments
           (Note 1)                                                   -                      -                      -
      Minimum pension liability adjustment
           ($1,456,000, net of tax expense of
           $568,000)                                                  -                      -                      -
------------------------------------------------  ---------------------  ---------------------  ---------------------
           TOTAL COMPREHENSIVE INCOME
------------------------------------------------  ---------------------  ---------------------  ---------------------
Purchase of treasury stock, at cost (d)                               -                      -                      -
------------------------------------------------  ---------------------  ---------------------  ---------------------
BALANCE, DECEMBER 31, 1999                                    9,997,455                 $9,998            $50,111,675

-----------------------------------------------------------------------------------------------------------------------
</TABLE>

[chart continued]
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------------
Years ended December 31, 1997, 1998 and 1999
---------------------------------------------------------------------------------------------------------------------------------

                                                                       Accumulated other                                Total
                                                  Retained earnings     comprehensive        Treasury stock, at     stockholders'
                                                     (deficit)              loss                    cost               equity
------------------------------------------------  ----------------  ----------------------  --------------------  ---------------
<S>                                              <C>                 <C>                   <C>                   <C>
BALANCE, JANUARY 1, 1997                            $      (37,589)     $                -    $                -    $15,526,207
Shares issued (a)                                                -                       -                     -      1,321,432
Shares issued (b)                                                -                       -                     -     33,236,445
Net income for the year                                  1,912,318                       -                     -      1,912,318
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
BALANCE, DECEMBER 31, 1997                               1,874,729                       -                     -     51,996,402
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
Comprehensive income:
      Net income for the year                            6,510,106                       -                     -      6,510,106
      Minimum pension liability adjustment
           ($1,764,000, net of tax benefit of
           $688,000)                                             -              (1,076,000)                    -     (1,076,000)
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
           TOTAL COMPREHENSIVE INCOME                                                                                 5,434,106
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
Purchase of treasury stock, at cost (c)                          -                       -            (2,899,965)    (2,899,965)
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
BALANCE, DECEMBER 31, 1998                               8,384,385              (1,076,000)           (2,899,965)    54,530,543
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
Comprehensive income:
      Net income for the year                            3,756,625                       -                     -      3,756,625
      Foreign currency translation adjustments
           (Note 1)                                              -                  12,356                     -         12,356
      Minimum pension liability adjustment
           ($1,456,000, net of tax expense of
           $568,000)                                             -                 888,000                     -        888,000
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
           TOTAL COMPREHENSIVE INCOME                                                                                 4,656,981
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
Purchase of treasury stock, at cost (d)                          -                       -            (2,726,246)    (2,726,246)
------------------------------------------------  ----------------  ----------------------  --------------------  -------------
BALANCE, DECEMBER 31, 1999                             $12,141,460            $   (175,644)          $(5,626,211)   $56,461,278

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

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

      (a)  On April 18, 1997, Niagara issued 285,715 shares of its Common Stock in connection with the subordinated debt
           portion of the financing for the acquisition of LaSalle (Notes 2 and 3(b)).
      (b)  Proceeds from exercise of Warrants during December 1997 (Note 2).
      (c)  During the year ended December 31, 1998, Niagara repurchased 485,880 shares of its Common Stock at a cost of
           $2,899,965.
      (d)  During the year ended December 31, 1999, Niagara repurchased 548,629 shares of its Common Stock at a cost of
           $2,726,246.

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

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




                                                                              See accompanying notes to financial statements.

</TABLE>



<TABLE>
<CAPTION>

                                                                                                           NIAGARA CORPORATION
                                                                                                              AND SUBSIDIARIES

                                                                                            STATEMENTS OF CASH FLOWS (NOTE 17)



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

Year ended December 31,                                                           1997(a)                 1998            1999(b)
----------------------------------------------------------------------  ----------------  --------------------  ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                     <C>                   <C>               <C>
     Net income                                                            $   1,912,318         $   6,510,106     $   3,756,625
----------------------------------------------------------------------  ----------------  --------------------  ----------------
     Adjustments to reconcile net income to net cash provided by
         (used in) operating activities:
             Depreciation and amortization                                     5,533,603             6,615,662         8,144,210
             Noncash portion of extraordinary loss                               662,185                     -                 -
             Provision for doubtful accounts                                      88,905                61,151           135,778
             Deferred income taxes                                               520,000             3,226,000         1,461,000
             Accrued pension costs                                              (566,100)              523,437          (740,350)
             Accrued other postretirement benefits                               150,000            (7,052,361)         (307,053)
             Loss on disposal and write-off of equipment                               -                     -           569,008
             Miscellaneous                                                       (13,529)                    -                 -
             Changes in assets and liabilities, net of effects from
                 purchases of LaSalle in 1997 and U.K. steel bar
                 businesses in 1999:
                     (Increase) decrease in accounts receivable                3,144,270             8,238,789       (39,356,798)
                     Increase in accounts receivable - other                           -                     -        (2,255,687)
                     (Increase) decrease in inventories                        3,433,310             5,057,691        (7,563,220)
                     (Increase) decrease in other current assets                       -               381,224        (1,391,323)
                     (Increase) decrease in other assets                      (1,868,179)              452,987          (423,416)
                     Increase (decrease) in accounts payable, accrued
                         expenses and other noncurrent liabilities            (3,663,315)           (9,338,065)       32,718,279
----------------------------------------------------------------------  ----------------  --------------------  ----------------
                             TOTAL ADJUSTMENTS                                 7,421,150             8,166,515        (9,009,572)
----------------------------------------------------------------------  ----------------  --------------------  ----------------
                             NET CASH PROVIDED BY (USED IN)
                                 OPERATING ACTIVITIES                          9,333,468            14,676,621        (5,252,947)
----------------------------------------------------------------------  ----------------  --------------------  ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisition of LaSalle, net of cash acquired                            (67,240,000)           (1,371,000)                -
     Acquisition of U.K. steel bar businesses                                          -                     -       (32,514,281)
     Proceeds from disposal of equipment                                               -                     -            25,864
     Acquisition of property and equipment                                    (5,572,754)           (6,859,081)       (5,180,444)
----------------------------------------------------------------------  ----------------  --------------------  ----------------
                              NET CASH USED IN INVESTING ACTIVITIES          (72,812,754)           (8,230,081)      (37,668,861)
----------------------------------------------------------------------  ----------------  --------------------  ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from exercise of Warrants                                       33,236,445                     -                 -
     Proceeds from long-term debt                                             81,800,000                     -        57,226,432
     Repayment of long-term debt                                             (38,372,928)          (16,312,998)       (9,797,207)
     Financing costs                                                          (1,565,081)                    -                 -
     Payments to acquire treasury stock                                                -            (2,899,965)       (2,726,246)
----------------------------------------------------------------------  ----------------  --------------------  ----------------
                             NET CASH PROVIDED BY (USED IN)
                                 FINANCING ACTIVITIES                         75,098,436           (19,212,963)       44,702,979
----------------------------------------------------------------------  ----------------  --------------------  ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                           -                     -            12,356
----------------------------------------------------------------------  ----------------  --------------------  ----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                          11,619,150           (12,766,423)        1,793,527
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                   1,587,927            13,207,077           440,654
----------------------------------------------------------------------  ----------------  --------------------  ----------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                      $ 13,207,077        $      440,654     $   2,234,181
----------------------------------------------------------------------  ----------------  --------------------  ----------------

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

     (a)     Includes the cash flows of LaSalle from April 1, 1997.
     (b)     Includes the cash flows of Niagara UK from May 22, 1999.
--------------------------------------------------------------------------------------------------------------------------------

                                                                                See accompanying notes to financial statements.
</TABLE>


<TABLE>
<CAPTION>

                                                                                             NIAGARA CORPORATION
                                                                                                AND SUBSIDIARIES

                                                                                     NOTES TO FINANCIAL STAEMENTS
-----------------------------------------------------------------------------------------------------------------


<S>        <C>                        <C>

1.         SUMMARY OF                  Organization and Business Operations
           SIGNIFICANT
           ACCOUNTING                  Niagara Corporation ("Niagara") was incorporated in Delaware on April
           POLICIES                    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 ten 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. The Company competes in a narrow segment 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 credits to its customers consistent with industry practice.

                                       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 have been translated at year-end exchange rates and the related
                                       revenues and expenses have been translated at rates prevailing at the
                                       transaction date, which approximates average rates for the period.
                                       Translation adjustments arising from the use of different exchange rates
                                       from period to period are included as accumulated other comprehensive income
                                       within the Statements of Stockholders' Equity. Gains and losses resulting
                                       from foreign currency transactions are included in other income within the
                                       Statements of Operations.

                                       Cash Equivalents

                                       For purposes of the Statements of Cash Flows, the Company considers
                                       cash equivalents to consist of all short-term highly liquid debt
                                       instruments which are readily convertible into cash. Cash equivalent
                                       investments were $20,098 and $20,972 at December 31, 1998 and 1999,
                                       respectively.

                                       Revenue Recognition

                                       Revenue from the sale of products is recorded at the time the goods are
                                       shipped. Net delivery costs are classified as a reduction of sales.

                                       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 20 years on buildings and improvements and leasehold
                                       improvements.

                                       Other Current Assets

                                       Other current assets at December 31, 1998 included a $500,000 loan due
                                       from a related party. This loan was repaid during 1999.

                                       Intangible Assets

                                       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 seven years.

                                       Goodwill represents the excess of the cost of purchased businesses over
                                       the fair value of the net assets acquired. Amortization is computed
                                       using the straight-line method over 30 years.

                                       Evaluating Recoverability of Long-Lived Assets

                                       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. No impairments have
                                       been recorded through December 31, 1999.

                                       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 and
                                       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

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

                                       Comprehensive Income

                                       The Company has adopted SFAS No. 130, "Reporting Comprehensive Income,"
                                       which establishes standards for reporting and display of comprehensive
                                       income, its components and accumulated balances. Comprehensive income
                                       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 be reported in a financial statement that is
                                       displayed with the same prominence as other financial statements.
                                       Comprehensive income is displayed in the Statements of Stockholders'
                                       Equity.

                                       Pension and Other Postretirement Benefits

                                       The Company has adopted the provisions of SFAS No. 132, "Employers'
                                       Disclosures about Pensions and Other Postretirement Benefits," which
                                       standardizes the disclosure requirements for pensions and other
                                       postretirement benefits.

                                       Recent Accounting Pronouncement

                                       In June 1998, the Financial Accounting Standards Board issued SFAS No.
                                       133 "Accounting for Derivative Instruments and Hedging Activities,"
                                       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. SFAS No. 133, as amended by
                                       SFAS No. 137, is effective for all fiscal years beginning after June
                                       15, 2000. The Company does not presently enter into any transactions
                                       involving derivative financial instruments and, accordingly, does not
                                       anticipate that the new standard will have any effect on its financial
                                       statements.

2 . PUBLIC OFFERING                    On August 20, 1993, Niagara sold 2,875,000 units ("Units") in an
    AND SUBSEQUENT                     initial public offering (the "Offering"). Each Unit consisted of one
    COMMON STOCK ISSUANCES             share of Niagara Common Stock, par value $.001 per share, and two
                                       Redeemable Common Stock Purchase Warrants ("Warrants"). Each Warrant
                                       entitled the holder to purchase from Niagara, until the close of
                                       business on August 13, 2000, one share of Niagara Common Stock at an
                                       exercise price of $5.50, subject to adjustment in certain
                                       circumstances. The Warrants were redeemable at a price of $.01 per
                                       Warrant upon 30 days' notice in the event that the last sale price of
                                       the Common Stock was at least $10.00 per share for 20 consecutive
                                       trading days ending on the third day prior to the date on which notice
                                       of redemption was given.

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

                                       On April 18, 1997, Niagara issued 285,715 shares of its Common Stock in
                                       connection with the subordinated debt portion of the financing for the
                                       acquisition of LaSalle (see Note 3(b)).

                                       On October 31, 1997, Niagara exercised its right to redeem on December
                                       9, 1997 (which date was extended to December 11, 1997) all of its then
                                       outstanding and unexercised Warrants at $.01 per Warrant. As a result
                                       of such action, the Warrants could not be exercised after the
                                       redemption date. Of the 6,050,000 Warrants then outstanding, 6,042,990
                                       were exercised prior to the exercise deadline, resulting in $33,236,445
                                       in gross proceeds to Niagara and the issuance of 6,042,990 shares of
                                       Niagara Common Stock.

3.         ACQUISITIONS OF            (a)     Acquisition of Southwest
           SOUTHWEST,
           LASALLE AND THE U.K.               On January 31, 1996, Niagara LaSalle purchased all of the
           STEEL BAR                          outstanding shares of capital stock of Southwest Steel Company,
           BUSINESSES                         Inc. ("Southwest"), a manufacturer of cold drawn steel bars, for
                                              $1,920,000 in cash and $1,156,773 principal amount of 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 to a former Southwest stockholder. The acquisition
                                              was accounted for as a purchase and financed by a $12,000,000
                                              term loan and the utilization of a portion of Niagara LaSalle's
                                              revolving line of credit.

                                              The Southwest purchase price, including certain transaction
                                              expenses of $524,270, together with assumed liabilities of
                                              $350,063, totaled $3,951,106. Southwest's stockholders' equity
                                              at January 31, 1996 was $1,071,782. The $2,879,324 excess has
                                              been allocated to goodwill and is being amortized on a
                                              straight-line basis over 30 years.

                                              Southwest's Tulsa, Oklahoma facilities were closed during 1996,
                                              and its operations were moved to a new facility in Midlothian,
                                              Texas. Southwest was merged into Niagara LaSalle on November 1,
                                              1996.

                                              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. The difference between the principal amount of
                                              the promissory notes and the amount paid, after related
                                              expenses, reduced the amount of goodwill recorded relating to
                                              the acquisition of Southwest.

                                      (b)     Acquisition of LaSalle

                                              On April 18, 1997, Niagara LaSalle purchased from Quanex
                                              Corporation ("Quanex") all of the outstanding shares of capital
                                              stock of LaSalle, one of the largest domestic producers of cold
                                              drawn steel bars. 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,
                                              1997 through April 18, 1997.

                                              The financial statements include the results of LaSalle from
                                              April 1, 1997. Accordingly, LaSalle's results are included in
                                              the years ended December 31, 1998 and 1999, but are only
                                              included from April 1, 1997 for the year ended December 31,
                                              1997.

                                              The acquisition of LaSalle was accounted for as a purchase. The
                                              purchase price, including acquisition costs and other estimated
                                              liabilities as of the acquisition date, was approximately
                                              $68,000,000. The purchase price exceeded LaSalle's stockholder's
                                              equity by approximately $56,000,000, and based on an appraisal,
                                              the excess was primarily allocated to property, plant and
                                              equipment.

                                              The acquisition of LaSalle and the refinancing of existing Niagara
                                              LaSalle indebtedness was financed pursuant to (i) a revolving credit
                                              and term loan agreement with Niagara US (guaranteed by Niagara),
                                              providing for a $50,000,000 three-year revolving credit facility
                                              (which has been extended for an additional year) and a $40,000,000
                                              eight-year term loan and (ii) the issuance and sale of $20,000,000
                                              aggregate principal amount of 12.5% senior subordinated notes of
                                              Niagara LaSalle due April 18, 2005 (the "Subordinated Notes"). In
                                              connection with the subordinated debt portion of this financing, the
                                              purchasers of the Subordinated Notes were issued 285,715 shares of
                                              Niagara Common Stock (see Note 2). The fair value of these shares
                                              ($1,321,000) was charged to deferred debt issuance costs (see Note
                                              18) and credited to equity.

                                       (c)    Acquisition of U.K. Steel Bar Businesses

                                              On May 21, 1999, Niagara UK purchased the equipment, inventory
                                              and certain other assets of the eight steel bar businesses of
                                              Glynwed Steels Limited ("Gynwed 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 steel bar businesses, which are
                                              engaged in hot rolling, cold finishing and distribution, consist
                                              of the following unincorporated trading units: Ductile Wesson,
                                              Gadd Dudley Port, GB Longmore, Macreadys, Midland Engineering
                                              Steels and W Wesson.

                                              The financial statements include the results of Niagara UK from May
                                              22, 1999. The acquisition of the U.K. steel bar businesses was
                                              accounted for as a purchase. The purchase price for these businesses
                                              was approximately (pound) 21,275,500 (approximately $ 34.4 million)
                                              which amount includes (pound)1,302,000 (approximately $2.1 million)
                                              of acquisition costs and (pound) 1,787,000 (approximately $2.9
                                              million) of estimated costs relating to the intended closure of
                                              certain facilities and intended consolidation of certain operations.
                                              Such estimated costs include approximately (pound)810,000
                                              (approximately $1.3 million) of severance costs in respect of
                                              approximately 90 employees, approximately (pound)470,000
                                              (approximately $0.8 million) of fixed asset write-offs, and
                                              approximately (pound)210,000 (approximately $0.4 million) of site
                                              clearance costs. At December 31, 1999, approximately (pound)1,154,000
                                              (approximately $1.9 million) of such estimated costs were included in
                                              accrued expenses.

                                              In connection with the acquisition of the U.K. steel bar businesses,
                                              Niagara and Niagara UK entered into agreements with subsidiaries of
                                              Glynwed providing for the lease or sublease by Niagara UK of 10
                                              operating facilities and the assignment of 5 sales office leases.
                                              Pursuant to these agreements, (i) the initial term of the lease is 10
                                              years for 9 of the operating facilities and 5 years for the remaining
                                              operating facility at aggregate rents of (pound)50,000 (approximately
                                              $80,000) for the first two years; (pound)850,000 (approximately $1.3
                                              million) for years 3-6; and (pound)1,000,000 (approximately $1.6
                                              million) for years 7-10, (ii) each operating facility lease can be
                                              terminated by Niagara UK on one year's notice and (iii) Niagara UK
                                              has the option to purchase any or all of the 7 primary operating
                                              facilities at prices fixed for 10 years (which prices total
                                              (pound)9,468,000 (approximately $15.1 million)), or to renew the
                                              leases with respect thereto for an additional term of 15 years at
                                              commercial market rates.

                                              The purchase of the U.K. steel bar businesses was financed by
                                              (i) borrowings under a bank facilities agreement entered into on
                                              May 21, 1999 by Niagara UK providing for a (pound)10 million
                                              (approximately $16 million) seven-year term loan and a
                                              (pound)9.8 million (approximately $15.7 million) three-year
                                              revolving credit facility, (ii) a (pound)3.75 million
                                              (approximately $6 million) equity investment by Niagara in
                                              Niagara UK, (iii) a (pound)3.75 million (approximately $6
                                              million) subordinated loan from Niagara to Niagara UK and (iv) a
                                              (pound)2.5 million (approximately $4 million) short-term loan
                                              from Niagara to Niagara UK. The equity investment and
                                              subordinated and short-term loans were financed by borrowings
                                              under a revolving credit and term loan agreement dated April 18,
                                              1997, as amended, with Niagara US. (See Note 3(b)).

                                              On August 23, 1999, Niagara UK entered into a three-year invoice
                                              discounting agreement with Lombard Natwest Discounting Limited
                                              providing for up to (pound)20 million (approximately $32.2
                                              million) of advances to Niagara UK based upon a formula tied to
                                              the receivables purchased by such institution. In connection
                                              with the execution of this agreement, the revolving credit
                                              facility under Niagara UK's bank facilities agreement was
                                              reduced to (pound)4.9 million (approximately $7.9 million). This
                                              facility was further reduced to (pound)2.5 (approximately $4.0
                                              million) as of December 31, 1999.

                                              Pro forma results of operations, assuming the acquisition of the
                                              U.K. steel bar businesses had occurred on January 1, 1998, are
                                              unaudited and detailed below. Pro forma adjustments primarily
                                              include reductions in depreciation and amortization based on
                                              changes in the useful lives of the assets acquired, additional
                                              interest expense relating to the debt incurred in connection
                                              with the acquisition, and changes in rent expense based on
                                              property leases entered into in connection with the acquisition.


                                       Year ended December 31,                      1998                   1999
                                       ------------------------------------------------------------------------
                                       Net sales                            $396,573,526           $324,511,068
                                       Net income (loss)                       7,461,106            (2,122,086)
                                       Net income (loss) per share
                                              (basic)                                .76                  (.23)
                                       Net income (loss) per share
                                              (diluted)                              .73                  (.23)
                                       ========================================================================


4.         INVENTORIES

                                       Inventories consisted of the following at December 31, 1998 and 1999:


                                       December 31,                                  1998                  1999
                                       ------------------------------------------------------------------------
                                       Raw materials                           $7,924,023           $25,231,191
                                       Work-in-process                          4,588,895             5,260,767
                                       Finished goods                          17,718,959            28,949,914
                                       ------------------------------------------------------------------------
                                                                              $30,131,877           $59,441,872
                                       ========================================================================

                                       At December 31, 1999, Niagara US inventories were $36,749,445
                                       determined using the LIFO method and Niagara UK inventories were
                                       $22,692,427 determined using the FIFO method.


5.         PROPERTY, PLANT             Property, plant and equipment consisted of the following at December
           AND EQUIPMENT               31, 1998 and 1999:

                                       December 31,                                  1998                  1999
                                       ------------------------------------------------------------------------
                                       Land, buildings and improvements        $24,446,401          $24,606,004
                                       Leasehold improvements                    1,391,909            1,825,065
                                       Machinery and equipment                  75,597,659           94,364,513
                                       Furniture and fixtures                    1,684,028            3,348,343
                                       ------------------------------------------------------------------------
                                       Total                                   103,119,997          124,143,925
                                       Less:      Accumulated depreciation
                                                    and amortization            13,371,116           21,160,043
                                       ------------------------------------------------------------------------
                                                                               $89,748,881         $102,983,882
                                       ------------------------------------------------------------------------

6.         LONG-TERM DEBT              The long-term debt consisted of the following at December 31, 1998 and 1999:


                                       December 31,                                   1998                 1999
                                       ------------------------------------------------------------------------
                                       Term note payable - bank, maturing in
                                                 monthly installments of
                                                 principal plus interest
                                                 through March 2004. From
                                                 November 1, 1997 through
                                                 April 1, 1998, the monthly
                                                 installments of principal
                                                 were $166,666. From May 1,
                                                 1998 through April 1,
                                                 1999, the monthly
                                                 installments of principal
                                                 were $333,333. From May 1,
                                                 1999 through April 1,
                                                 2000, the monthly
                                                 installments of principal
                                                 are $416,666. The monthly
                                                 principal payment is
                                                 adjusted annually each
                                                 subsequent May 1, with the
                                                 final installment due and
                                                 payable on April 1, 2004.
                                                 Interest is calculated at
                                                 either the LIBOR rate plus
                                                 210 basis points or the
                                                 bank's prime rate plus 50
                                                 basis points (effective
                                                 rate of 8.27% at December
                                                 31, 1999)                     $36,333,340          $31,666,680


                                       Secured bank revolving line of credit
                                                 up to $50,000,000 due April
                                                 17, 2001, limited to a portion
                                                 of the value of eligible
                                                 accounts receivable and
                                                 inventories. Interest is
                                                 payable in monthly
                                                 installments at either the
                                                 LIBOR rate plus 175 basis
                                                 points or the bank's prime
                                                 rate plus 25 basis points
                                                 (effective rates of 8.75%
                                                 on $8,000,000, 7.93% on
                                                 $20,000,000 and 7.91% on
                                                 $2,500,000 at December 31,
                                                 1999)                           9,000,000           30,500,000


                                       Term note payable - bank(facilities
                                                 agreement) maturing in
                                                 monthly installments of
                                                 principal plus interest
                                                 from May 2000 through
                                                 April 2006. The monthly
                                                 installments of principal
                                                 are(pound)50,000 from May
                                                 2000 through April 2001,
                                                 (pound)85,000 from May
                                                 2001 through April
                                                 2002,(pound)125,000 from
                                                 May 2002 through April
                                                 2003,(pound)160,000 from
                                                 May 2003 through Aril
                                                 2004,(pound)200,000 from
                                                 May 2004 through April
                                                 2005, and(pound)213,333
                                                 from May 2005 through
                                                 April 2006. Interest is
                                                 calculated at the LIBOR
                                                 rate plus 15 basis points.
                                                 The note is secured by,
                                                 among other things, a
                                                 letter of credit for the
                                                 balance outstanding with a
                                                 fee of 275 basis points
                                                 (effective rate of 8.66%
                                                 at December 31, 1999)                   -           15,841,700

                                       Secured invoice discounting agreement up
                                                 to(pound)20,000,000
                                                 ($32,330,000) due August
                                                 23, 2002, limited to a
                                                 portion of the purchased
                                                 accounts receivable.
                                                 Interest is payable in
                                                 monthly installments at
                                                 the National Westminster
                                                 Bank base rate plus 225
                                                 basis points (effective
                                                 rate of 8.34% at December
                                                 31, 1999)                               -           14,847,552

                                       Note payable - former Southwest stock-
                                                 holder maturing $64,143
                                                 annually on January 31,
                                                 through 2010, plus
                                                 interest at 8.5%,
                                                 guaranteed by Niagara
                                                 (Note 3(a))                       769,714              705,571


                                       Note payable - former Southwest stock-
                                                 holder maturing $33,333
                                                 annually on April 17,
                                                 through 2005, plus
                                                 interest at 10%                   233,334              200,001
                                       Other notes payable                          33,071               37,180
                                       ------------------------------------------------------------------------
                                                                                46,369,459           93,798,684
                                       Less:  Current maturities of long-term
                                              debt                               4,797,209            6,410,741
                                       ------------------------------------------------------------------------
                                                                               $41,572,250          $87,387,943
                                       ========================================================================

                                       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 and changes in control of 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 and the ratio of net income before
                                       interest, taxes, depreciation and amortization to cash interest
                                       expense.

                                       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's 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, changes in control and mergers and acquisitions. Also
                                       included in these agreements are requirements regarding tangible net
                                       worth, the ratio of profit before interest and taxes to interest and
                                       the ratio of current assets to current liabilities.

                                       Approximate maturities of long-term debt are as follows:


                                       Year ended December 31,
                                       ------------------------------------------------------------------------
                                       2000                                                        $  6,411,000
                                       2001                                                          38,724,000
                                       2002                                                          24,778,000
                                       2003                                                          11,642,000
                                       2004                                                           6,718,000
                                       Thereafter                                                     5,526,000
                                       ------------------------------------------------------------------------
                                                                                                   $ 93,799,000
                                       ========================================================================

7.         PENSION PLANS               LaSalle sponsors two contributory defined benefit pension plans which
           AND OTHER                   cover certain employees of LaSalle, as well as various retiree health
           POSTRETIREMENT              and welfare programs providing postretirement benefits for eligible
           BENEFITS                    employees hired prior to certain specified dates.

                                       LaSalle's benefit plans were revised in 1998 to effect several changes
                                       in benefits. The net effect of these changes, primarily curtailments,
                                       was to reduce expenses by an aggregate of $4,949,000 in the 1998
                                       Statement of Operations (see Note 19). This reduction is reflected as a
                                       reduction of (i) $3,320,000 to cost of products sold and (ii)
                                       $1,629,000 to selling, general and administrative expenses.

                                       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, 1999, and a statement of the funded status
                                       as of December 31, 1998 and 1999:
</TABLE>


<TABLE>
<CAPTION>


                                            Pension benefits            Other benefits
                                      ---------------------------- --------------------------
                                                 1998         1999          1998        1999
---------------------------------------------------------------------------------------------
Reconciliation of benefit obligation
<S>                                      <C>          <C>           <C>          <C>
Obligation at January 1                   $19,799,000  $23,651,000   $12,463,000  $5,483,000
Service cost                                  449,000      517,000       107,000      76,000
Interest cost                               1,559,000    1,605,000       763,000     357,000
Plan amendments                               899,000            -             -           -
Actuarial (gain) loss                       1,398,000   (1,670,000)      191,000   1,153,000
Benefit payments                           (1,220,000)  (1,656,000)     (988,000)   (721,000)
Curtailments                                 (869,000)           -    (7,299,000)          -
Termination benefits                        1,636,000            -       246,000           -
---------------------------------------------------------------------------------------------
Obligation at December 31                 $23,651,000  $22,447,000    $5,483,000  $6,348,000
=============================================================================================



                                            Pension benefits            Other benefits
                                       --------------------------- --------------------------
                                                 1998         1999          1998        1999
---------------------------------------------------------------------------------------------
Reconciliation of fair value of plan
           assets
Fair value of plan assets at January 1    $18,101,000   $19,310,00  $          -  $       -
Actual return on plan assets                  820,000    2,426,000       988,000          -
Employer contributions                      1,609,000    1,030,000             -     721,000
Benefit payments                           (1,220,000)  (1,656,000)     (988,000)   (721,000)
----------------------------------------------------------------------------------------------
Fair value of plan assets at              $19,310,000  $21,110,000  $          -   $       -
           December 31
=============================================================================================
</TABLE>


<TABLE>
<CAPTION>
                                        Pension benefits               Other benefits
                                 ------------------------------ -----------------------------
                                            1998           1999           1998          1999
---------------------------------------------------------------------------------------------
Funded status
<S>                                <C>            <C>            <C>           <C>
Funded status at December 31         $(4,341,000)   $(1,337,000)   $(5,483,000)  $(6,348,000)
Unrecognized prior service cost          526,000        474,000              -             -
Unrecognized (gain) loss               1,445,663       (765,987)      (155,639)    1,016,414
---------------------------------------------------------------------------------------------
Net amount recognized                $(2,369,337)   $(1,628,987)   $(5,638,639)  $(5,331,586)
=============================================================================================

The following table provides the amounts recognized in the Company's
balance sheets at December 31, 1998 and 1999:


                                        Pension benefits               Other benefits
                                 ------------------------------- ----------------------------
                                            1998            1999          1998          1999
---------------------------------------------------------------------------------------------
Prepaid benefit cost                 $     5,000    $    280,000   $         -   $         -
Accrued benefit liability             (4,664,337)     (2,690,987)   (5,638,639)   (5,331,586)
Intangible asset                         526,000         474,000             -             -
Accumulated other comprehensive
  income, pretax                       1,764,000         308,000             -             -
---------------------------------------------------------------------------------------------
Net amount recognized                $(2,369,337)   $ (1,628,987)  $(5,638,639)  $(5,331,586)
=============================================================================================
</TABLE>

LaSalle's hourly pension plan has an accumulated benefit obligation in
excess of plan assets. The plan's accumulated benefit obligation was
$15,613,000 and $14,727,000 at December 31, 1998 and 1999, respectively.
Plan assets for this plan were $10,870,000 and $11,951,000 at December 31,
1998 and 1999, respectively. LaSalle's plans for postretirement benefits
other than pensions have no plan assets. The aggregate benefit obligations
for such plans is $5,483,000 and $6,348,000 at December 31, 1998 and 1999,
respectively.

The following table provides the components of net periodic benefit cost
for LaSalle's plans for fiscal years 1998 and 1999:

<TABLE>
<CAPTION>

                                          Pension benefits              Other benefits
                                   ------------------------------ ---------------------------
                                               1998          1999          1998         1999
---------------------------------------------------------------------------------------------
<S>                                   <C>           <C>           <C>           <C>
Service cost                          $     449,000 $     517,000 $     107,000 $     76,000
Interest cost                             1,559,000     1,605,000       763,000      357,000
Expected return on plan assets           (1,885,000)   (1,912,000)            -            -
Amortization of prior service cost           24,000        52,000             -            -
Amortization of unrecognized loss
           (gain)                                 -        25,000             -      (19,000)
----------------------------------------------------------------------------------------------
Net periodic benefit cost                   147,000       287,000       870,000      414,000
Curtailment/settlement/ termination
           benefits loss (gain)           1,985,000             -    (6,934,000)           -
---------------------------------------------------------------------------------------------
Net periodic benefit cost after
  curtailments and settlements           $2,132,000      $287,000   $(6,064,000)   $ 414,000
=============================================================================================

The amount included within other comprehensive income arising from a change
in the additional minimum pension liability was($1,076,000) (net of tax
benefit) and $888,000 (net of tax expense) for 1998 and 1999, 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 LaSalle's benefit obligation are
shown in the following table:


</TABLE>
<TABLE>
<CAPTION>

                                           Pension benefits             Other benefits
                                    ------------------------------ -------------------------
                                                1998          1999         1998         1999
--------------------------------------------------------------------------------------------
<S>                                            <C>           <C>          <C>          <C>
Weighted average assumptions as
           of December 31:
Discount rate:
   Used for determination of
     expense                                   7.50%         7.00%        7.50%        7.00%
   Used for determination of
     year-end liability                        7.00%         7.75%        7.00%        7.75%
Expected return on plan assets                10.00%        10.00%          N/A          N/A
Rate of compensation increase -
           hourly plan                         3.00%         3.00%          N/A          N/A
Rate of compensation increase -
           salaried plan                       5.00%         5.00%          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 "Salaried 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 employees of LaSalle who are subject to a
collective bargaining agreement. This 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 Salaried 401(k) Plan. All contributions
under these plans are subject to the limitations of Section 401 of the
Internal Revenue Code and the requirements of the Employee Retirement
Income Security Act of 1974. The funds are invested as directed by the
individual participants. Total expense related to these plans was
approximately $288,000, $622,000 and $656,000 for the years ended December
31, 1997, 1998 and 1999, respectively.


Niagara UK established a defined contribution group personal pension
arrangement for all of its employees effective October 1, 1999. (Between
May 21 and October 1, 1999 (the "Transitional Period"), employees of
Niagara UK were able to continue their participation in Glynwed's pension
plans on a transitional basis.) 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 previously
members of a Glynwed 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 period May 22 through December 31, 1999,
expenses in respect of this plan, together with Niagara UK's contributions
to Glynwed's pension plans during the Transitional Period (in respect of
Niagara UK employees), totaled approximately (pound)776,000 (approximately
$1,249,000).


<TABLE>
<CAPTION>


<S>        <C>                       <C>

8.         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.

9.         LEASE                       Niagara leases office space under an operating lease expiring in
           COMMITMENTS                 December 2007. Niagara US leases equipment and one operating facility
                                       under operating leases expiring through November 2009. Niagara UK
                                       leases equipment, ten operating facilities and five sales offices under
                                       operating leases expiring through May 2009. At December 31, 1999,
                                       future minimum payments under noncancellable operating leases were
                                       approximately as follows:


                                       ------------------------------------------------------------------------
                                       2000                                             $               939,000
                                       2001                                                           1,756,000
                                       2002                                                           2,143,000
                                       2003                                                           1,965,000
                                       2004                                                           1,842,000
                                       Thereafter                                                     9,511,000
                                       ------------------------------------------------------------------------
                                       Total minimum lease payments                     $            18,156,000
                                       ========================================================================

                                       Rent expense under operating leases was approximately $458,000,
                                       $418,000 and $975,000 for the years ended December 31, 1997, 1998 and
                                       1999, respectively.

                                       Niagara LaSalle is negotiating an equipment lease with a finance
                                       company. Upon execution of this lease, all purchase price installment
                                       payments made by Niagara LaSalle to the equipment manufacturer
                                       ($2,255,687 as of December 31, 1999) will be reimbursed by the lessor
                                       to Niagara LaSalle.

10.        STOCK OPTION                The Company has a stock option plan which provides that the
           PLAN                        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 Opinion 25, "Accounting for Stock Issued to
                                       Employees," and related Interpretations in accounting for this plan.
                                       Under APB Opinion 25, no compensation cost was recognized because the
                                       exercise price of Niagara's employee stock options equaled the market
                                       price of the underlying stock on the date of grant.

                                       FASB Statement 123, "Accounting for Stock-Based Compensation," 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 such statement. 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 1997, 1998 and 1999: dividend yield of 0%; expected
                                       volatility of 37.3% for 1997 and 1998 and 45.8% for 1999; average
                                       risk-free interest rates of 6.6%, 4.5% and 4.7% for 1997, 1998 and
                                       1999, respectively; expected lives of 10 years; and a discount due to
                                       marketability and dilution of 22% in 1997 and 0% for 1998 and 1999.

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


<TABLE>
<CAPTION>

                                            1997                     1998                     1999
------------------------------  ----------------  -----------------------  -----------------------
Net income:
<S>                                   <C>                      <C>                      <C>
      As reported                     $1,912,318               $6,510,106               $3,756,625
      Pro forma                        1,494,881                6,037,295                3,238,140
Net income per share (basic):
      As reported                            .45                      .66                      .40
      Pro forma                              .35                      .61                      .35
Net income per share (diluted):
      As reported                            .38                      .64                      .40
      Pro forma                              .29                      .59                      .35
==============================  ================  =======================  =======================
</TABLE>


A summary of the status of the Company's stock option plan as of December
31, 1997, 1998 and 1999, and changes during the years ending on those
dates, is presented below:


<TABLE>
<CAPTION>


                      December 31, 1997          December 31, 1998            December 31, 1999
                   -----------------------   --------------------------    ------------------------
                                 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                  815,000     $5.66     1,190,000          $5.68        1,250,000      $5.61
Granted                  375,000      5.72        85,000           5.50          890,000       5.88
Exercised                      -         -             -              -                -          -
Cancelled and
   reissued                    -         -       (25,000)         (8.50)               -          -
----------------------------------------------------------------------------------------------------
Outstanding
at end of year         1,190,000     $5.68     1,250,000          $5.61        2,140,000      $5.72
=================  =======================  =========================== =  ========================
Options
exercisable at
year-end                 485,332     $5.69       751,000          $5.64        1,203,000      $5.67
=================  =======================  =========================== =  ========================
Weighted
average fair
value of
options
granted
during the
year                                 $2.78                        $2.80                       $3.19
=================  =======================  =========================== =  ========================
</TABLE>



<TABLE>
<CAPTION>

The following table summarizes information about stock options outstanding
at December 31, 1999.


                                Options outstanding                     Options exercisable
                    --------------------------------------------    ----------------------------
                                      Weighted
                    Number              average      Weighted           Number       Weighted
     Range of       outstanding        remaining      average         exercisable     average
     exercise         at              contractual    exercise             at         exercise
      prices        12/31/99             life          price           12/31/99        price
------------------------------------------------------------------------------------------------
<S>     <C>         <C>               <C>              <C>             <C>             <C>
        $5.50 to
          $5.88     2,140,000         7.61 years       $5.72           1,203,000       $5.67
================================================================================================
</TABLE>

<TABLE>
<CAPTION>

11.        INCOME TAXES                The provision for federal and state income tax expense was comprised of
                                       the following:

Year ended December 31,                            1997                 1998                  1999
--------------------------------------------------------------------------------------------------
Current:
<S>                                  <C>                            <C>       <C>
           Federal                   $        1,801,000             $887,000  $            738,000
           State                                158,000              152,000               100,000
--------------------------------------------------------------------------------------------------
                                              1,959,000            1,039,000               838,000
--------------------------------------------------------------------------------------------------
Deferred:
           Federal                              425,000            2,622,000             1,130,000
           State                                 95,000              604,000               185,000
           Foreign, U.K.                              -                    -               146,000
---------------------------------------------------------------------------------------------------
                                                520,000            3,226,000             1,461,000
--------------------------------------------------------------------------------------------------
Total income taxes                   $        2,479,000           $4,265,000  $          2,299,000
==================================================================================================
</TABLE>

At December 31, 1998 and 1999, deferred tax assets (liabilities) consisted
of the following:

<TABLE>
<CAPTION>

December 31,                                                       1998                 1999
---------------------------------------------- ---------------------------------------------
<S>                                                 <C>                      <C>
Federal alternative minimum tax
  credit carryforwards                              $         1,095,000      $     1,894,000
Federal and state regular tax net
  operating loss carryforwards                                  690,000            1,095,000
Postretirement benefit obligations                              924,000              270,000
Accrued expenses deductible when
  paid                                                          843,000              723,000
Inventory reserves                                              837,000            1,261,000
Accrued minimum pension liability                               688,000              120,000
New York State investment tax
  credits                                                       667,000              667,000
Allowance for doubtful accounts                                 305,000              325,000
Uniform capitalization in ending tax
  inventory                                                      81,000               87,000
Other                                                            11,000               95,000
---------------------------------------------- ------------------------------------------------
Gross deferred tax assets                                     6,141,000            6,537,000
Valuation allowance for deferred tax
  assets                                                       (667,000)            (667,000)
-----------------------------------------------------------------------------------------------
Net deferred tax assets                                       5,474,000            5,870,000
---------------------------------------------- ------------------------------------------------
Tax depreciation greater than book
  depreciation of property,
  plant and equipment                                        (5,846,000)          (8,459,000)
Pushdown adjustment for property,
  plant, equipment and
  intangibles                                                (4,919,999)          (4,644,000)
Pushdown adjustment for inventories                          (1,572,000)          (1,513,000)
Other                                                                 -             (146,000)
-----------------------------------------------------------------------------------------------
Gross deferred tax liabilities                              (12,337,000)         (14,762,000)
---------------------------------------------- ------------------------------------------------
Net deferred tax liabilities                        $        (6,863,000)     $    (8,892,000)
============================================== ================================================

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


                                                                 1998                  1999
---------------------------------------------------------------------------------------------
Current asset for deferred income
  taxes                                             $         494,000       $       957,000
Noncurrent liability for deferred
  income taxes                                             (7,357,000)           (9,849,000)
---------------------------------------------------------------------------------------------
Net deferred tax liabilities                        $      (6,863,000)      $    (8,892,000)
=============================================================================================
</TABLE>

At December 31, 1999, the Company had available federal alternative minimum
tax credit carryforwards of approximately $1,894,000 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, 1999, the Company had available net operating loss
carryforwards for regular federal and state income tax purposes of
approximately $1,500,000 and $7,000,000, respectively, expiring through
2019.

At December 31, 1999, Niagara LaSalle had New York state investment tax
credit carryforwards of approximately $667,000, which may be available to
offset certain future state income taxes. These credits expire through
2005. A valuation allowance has been provided for these tax credits.

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


<TABLE>
<CAPTION>

                                  1997                   1998                  1999
                        ---------------------------------------------------------------------
                            Amount       %          Amount      %        Amount       %
---------------------------------------------------------------------------------------------

<S>                          <C>         <C>        <C>         <C>    <C>          <C>
Tax at statutory rate        $2,194,000  34.0%      $3,664,000  34.0%   $2,059,000    34.0%
State income taxes
  net of federal
  income tax benefit            167,000   2.6          481,000   4.5       206,000     3.4
Goodwill amortization           118,000   1.8          120,000   1.1        91,000     1.5
Other                                 -     -                -     -       (57,000)    (.9)
---------------------------------------------------------------------------------------------
Effective tax rate           $2,479,000  38.4%      $4,265,000  39.6%   $2,299,000    38.0%
=============================================================================================
</TABLE>

No provision has been made for U.S. or additional U.K. taxes on $388,472 of
undistributed Niagara UK earnings as any such tax would be insignificant.
Such earnings could become subject to additional tax if they were remitted
as a dividend to Niagara. However, as discussed in Note 6, Niagara UK is
restricted under its bank facilities and invoice discounting agreements from
paying dividends to Niagara.

<TABLE>
<CAPTION>

<C>       <C>                         <C>
12.        MAJOR CUSTOMERS             Sales to three customers in 1997 were approximately 27%, 8% and 6% of
                                       total sales.

                                       Sales to three customers in 1998 were approximately 21%, 9% and 9% of
                                       total sales. Accounts receivable from these major customers represented
                                       approximately 38% of aggregate accounts receivable at December 31,
                                       1998.

                                       Niagara US' sales to three customers in 1999 were approximately 23%,
                                       12% and 10% of its total sales. It had accounts receivable from these
                                       major customers representing approximately 43% of its aggregate
                                       accounts receivable at December 31, 1999.

                                       None of Niagara UK's customers exceeded 5% of its total sales.

13.        MAJOR SUPPLIERS             Niagara US had one supplier from which purchases were approximately 29%
                                       of total purchases in 1998. It had two suppliers from which purchases
                                       were approximately 43% of its total purchases in 1999.

                                       Niagara UK had one supplier from which purchases were approximately 36%
                                       of its total purchases in 1999.

14.        COMMITMENTS AND             Commitments
           CONTINGENCIES

                                       In addition to the equipment discussed in Note 9, the Company was
                                       committed to purchase approximately $2,800,000 of machinery and
                                       equipment at December 31, 1999.

                                       Niagara and Niagara LaSalle have entered into employment contracts with
                                       certain of their officers. These contracts, which expire in August
                                       2000, March 2001 and January 2004, provide minimum salary levels, as
                                       well as incentive bonuses and Niagara stock options. The aggregate
                                       contract commitment for future minimum salaries at December 31, 1999,
                                       excluding bonuses and stock options, was approximately $2,437,000.

                                       At December 31, 1999, 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 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 the locations they own or operate or
                                       at the locations which they arranged for disposal of such materials.
                                       The costs expended through December 31, 1999 have been largely covered
                                       by insurance. Management believes any resolution of these matters will
                                       not have a material adverse effect on the Company's financial position
                                       or 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 $350,000 as of December 31, 1999. It is the policy of
                                       the Company to retain a portion of certain expected losses which 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, actual and estimated,
                                       for claims. Such estimates utilize certain actuarial assumptions
                                       followed in the insurance industry and are included in accrued
                                       expenses.


15.        EARNINGS PER                The following table sets forth the calculation of weighted average
           SHARE                       common shares outstanding for the calculation of basic and diluted
                                       earnings per share:
</TABLE>


<TABLE>
<CAPTION>

December 31,                                              1997              1998              1999
--------------------------------------------------------------------------------------------------
<S>                                                  <C>               <C>               <C>
Weighted average shares (for
   basic earnings per share)                         4,246,925         9,879,528         9,350,189
Effect of dilutive securities:
   Employee stock option
     equivalents                                       848,425           370,426             6,925
--------------------------------------------------------------------------------------------------
Adjusted weighted average
  shares (for diluted
  earnings per share)                                5,095,350        10,249,954         9,357,114
==================================================================================================
</TABLE>


<TABLE>
<CAPTION>

<S>       <C>                        <C>

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

                                       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.

17.        SUPPLEMENTAL                Interest paid during the years ended December 31, 1997, 1998 and 1999
           CASH FLOW                   was approximately $5,637,000, $4,306,000 and $5,660,000, respectively.
           INFORMATION
                                       Income tax payments made during the years ended December 31, 1997, 1998
                                       and 1999 totaled approximately $512,000, $2,194,000 and $1,011,000,
                                       respectively.

                                       As discussed in Note 3(b), Niagara LaSalle acquired all of the capital
                                       stock of LaSalle for $68,183,000 in 1997. In connection with this
                                       acquisition, net assets were acquired as follows:

                                       ------------------------------------------------------------------------
                                       Fair value of assets acquired                       $        110,351,000
                                       Liabilities assumed                                          (42,168,000)
                                       ------------------------------------------------------------------------
                                       Net assets acquired                                 $         68,183,000
                                       ========================================================================

                                       As discussed in Note 3(c), Niagara UK acquired certain assets of the
                                       steel bar businesses of Glynwed Steels for approximately $34,391,000 in
                                       1999. In connection with this acquisition, net assets were acquired as
                                       follows:

                                       ------------------------------------------------------------------------
                                       Fair value of assets acquired                      $          38,437,000
                                       Liabilities assumed                                           (4,046,000)
                                       ------------------------------------------------------------------------
                                       Net assets acquired                                $          34,391,000
                                       ========================================================================



                                       Noncash investing and financing activities consisted of the following:
</TABLE>


<TABLE>
<CAPTION>


                                                          1997               1998            1999
------------------------------------------------------------------------------------------------
<S>                                                     <C>            <C>                  <C>
Adjustment of minimum pension liability 275,000 (Note 7):
   Prepaid benefit cost                             $         -        $    5,000     $  275,000
   Intangible asset                                           -           526,000        (52,000)
   Deferred tax asset                                         -           688,000        (568,000)
Accumulated other comprehensive
    income, net of tax                                        -         1,076,000        (888,000)
-------------------------------------------------------------------------------------------------
Accrued pension cost                                $         -        $2,295,000     $(1,233,000)
=================================================================================================
Deferred debt issuance costs recorded
   as additional paid-in capital
   (Note 3(b))                                      $ 1,321,432        $        -     $         -
=================================================================================================
Adjustments arising from satisfaction - of Southwest notes (Note 3(a)):
  Decrease in goodwill                              $   310,715        $        -     $         -
  Decrease in accounts
    receivable                                           89,491                 -               -
  Decrease in inventory                                  81,595                 -               -
-------------------------------------------------------------------------------------------------
Decrease in long-term debt                          $   481,801        $        -     $         -
=================================================================================================
Investment in LaSalle financed by
  amount due to Quanex Corporation                  $   933,000        $        -     $         -
=================================================================================================
</TABLE>


<TABLE>
<CAPTION>

<C>       <C>                         <C>
18.        EXTRAORDINARY               In 1997, Niagara LaSalle sold the Subordinated Notes. Net proceeds from
           ITEM                        the sale, together with borrowings under the revolving credit and term
                                       loan agreement, were used to finance the acquisition of LaSalle (see
                                       Note 3(b)).

                                       In December 1997, in connection with the prepayment of the Subordinated
                                       Notes, the Company was required to write off unamortized debt issuance
                                       costs and incur a prepayment charge in the aggregate amount of
                                       approximately $3,326,000. The resultant one time, after-tax charge
                                       amounted to approximately $2,062,000. The Subordinated Notes and
                                       prepayment charge were paid by Niagara from the proceeds of the
                                       Warrants exercised during the fourth quarter of 1997 (see Note 2).

19.        1998 ADJUSTMENTS            On July 19, 1998, following a nine-week strike, the hourly workers at
                                       LaSalle's Hammond, Indiana facility voted to accept a new three-year
                                       collective bargaining agreement. Among other things, this agreement
                                       provides for a curtailment of certain pension costs and other
                                       postretirement benefits. The net effect of these curtailments was to
                                       reduce the Company's obligations by $1,746,000 during the quarter ended
                                       September 30, 1998 and $3,203,000 during the quarter ended December 31,
                                       1998, for an aggregate reduction of $4,949,000 for 1998. This reduction
                                       increased net income by $1,065,000 for the quarter ended September 30,
                                       1998 and $1,954,000 for the quarter ended December 31, 1998, for an
                                       aggregate increase to net income of $3,019,000 for 1998.

20.        SEGMENTS AND                Niagara operates in two reportable segments: (i) Niagara US which has
           RELATED                     operations in the United States and (ii) Niagara UK which has
           INFORMATION                 operations in the United Kingdom. Niagara operates these segments as
                                       separate strategic business units and measures the segment performance
                                       based on earnings 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 have been translated at year-end exchange rates and the
                                       related revenues and expenses have been translated at rates prevailing
                                       at the transaction date, which approximates average rates for the
                                       period.

                                       The following table sets forth certain performance and other
                                       information by reportable segment. Performance information for Niagara
                                       UK reflects the results from May 22, 1999.


                                       Year ended December 31, 1999
                                       ------------------------------------------------------------------------
                                                                                Niagara US           Niagara UK
                                       ------------------------------------------------------------------------
                                       Net sales                            $  186,432,025     $     77,789,863
                                       Segment profit (EBITDA)                  17,906,574            3,927,950
                                       Depreciation and amortization             7,108,909            1,018,395
                                       Interest expense                          4,081,535            1,549,014
                                       Segment assets                          150,228,015           76,416,825
                                       Acquisition of property and
                                          equipment                              4,029,562              717,726
                                       ========================================================================

                                       Certain of the foregoing segment information (profit, depreciation and
                                       amortization, assets, and acquisition of property and equipment) does
                                       not include components attributable to Niagara or incurred by Niagara
                                       on behalf of its operating subsidiaries. Prior to the acquisition of
                                       the U.K. steel bar businesses, the Company had one segment as all of
                                       its operations were in the United States.

</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 2000 Annual Meeting
of Stockholders to be filed with the Commission (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

           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.


                                  PART IV

ITEM 14.             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 17.

           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.

           (b)       Reports on Form 8-K.

                     None.


<TABLE>
<CAPTION>
                               (C) EXHIBITS

<S>       <C>      <C>
         +3.1       Registrant's Restated Certificate of Incorporation, as amended on May 16, 1996.
         *3.2       Registrant's By-laws.
         *4.1       Form of Common Stock Certificate.
     !!!!!4.2       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       First Amendment to the Credit Agreement, dated as of September 4, 1997.
       +++4.4       Second Amendment to the Credit Agreement, effective as of December 31, 1997.
       !!!4.5       Third Amendment to the Credit Agreement, effective May 15, 1998.
        **4.6       Fourth Amendment to the Credit Agreement, effective as of December 1, 1998.
      ****4.7       Fifth Amendment to the Credit Agreement, effective as of May 21, 1999.
          4.8       Sixth Amendment to the Credit Agreement, effective as of December 31, 1999.
     !!!!!4.9       Stockholders Agreement, dated as of April 18, 1997,
                    among the Registrant, Niagara Cold Drawn Corp., Michael
                    J. Scharf, The Prudential Insurance Company of America,
                    The Equitable Life Assurance Society of the United
                    States and United States Fidelity and Guaranty Company.
        **4.10      Amended and Restated Promissory Note, dated December 15, 1998, made by Gilbert D. Scharf in
                    favor of Niagara Corporation.
      ****4.11      Bank Facilities Agreement, dated May 21, 1999 between National Westminster Bank Plc and
                    Niagara LaSalle (UK) Limited.
      ****4.12      Intercreditor Agreement, dated May 21, 1999, between National Westminster Bank Plc, Niagara
                    Corporation and Niagara LaSalle (UK) Limited.
      ++++4.13      Invoice Discounting Agreement, dated August 23, 1999, between Niagara LaSalle (UK) Limited
                    and Lombard Natwest Discounting Limited.
      ++++4.14      Intercreditor Agreement, dated August 23, 1999, between Lombard Natwest Discounting Limited,
                    Niagara Corporation and Niagara LaSalle (UK) Limited.
      ++++4.15      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       Employment Agreement, dated as of January 1, 1999, by and among Niagara Corporation, Niagara
                    LaSalle Corporation and Michael Scharf.
      ** 10.2       Employment Agreement, dated August 16, 1995, between International Metals Acquisition
                    Corporation, Niagara  Cold Drawn Corp. and Frank Archer.
      ** 10.3       Employment Agreement, dated August 16, 1995, between International Metals Acquisition
                    Corporation, Niagara Cold Drawn Corp. and Raymond Rozanski.
        !10.4       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.
        !10.5       Guaranty, made by the Registrant in favor of the Cohen
                    Family Revocable Trust, u/t/a dated June 15, 1988,
                    dated January 31, 1996.
       !!10.6       International Metals Acquisition Corporation 1995 Stock Option Plan.
     !!!!10.7       First Amendment to the International Metals Acquisition Corporation 1995 Stock Option Plan,
                    dated October 5, 1996.
       ++10.8       Second Amendment to the Niagara Corporation 1995 Stock Option Plan, dated June 8, 1998.
       ++10.9       Niagara Corporation Employee Stock Purchase Plan.
      ** 10.10      First Amendment to Lease, dated May 4, 1998, between Niagara LaSalle Corporation and North
                    American Royalties, Inc.
    *****10.11      Sale of Business Agreement, dated April 16, 1999, between Glynwed Steels Limited, Glynwed
                    International plc, Niagara  LaSalle (UK) Limited and Niagara Corporation
    *****10.12      Property Agreement, dated April 16, 1999, between
                    Glynwed Property Management Limited, Glynwed Properties
                    Limited, Niagara LaSalle (UK) Limited, Niagara
                    Corporation and Glynwed International plc.
    *****10.13      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.
         10.14      Form of Niagara LaSalle (UK) Limited Lease.
         10.15      Form of Niagara LaSalle (UK) Limited Side Deed.
         10.16      Form of Niagara LaSalle (UK) Limited Option Agreement.
         10.17      Form of Niagara LaSalle (UK) Limited Lease Renewal Deed.
         21         Subsidiaries of the Registrant.
         27         Financial Data Schedule.

--------------------------
        +    Incorporated by reference to exhibit 3.1 filed with the
             Registrant's Report on Form 10-Q for the quarter ended
             June 30, 1996.
       ++    Incorporated by reference to Annexes to the Registrant's Proxy
             Statement for the Annual Meeting of Stockholders held on July
             7, 1998.
      +++    Incorporated by reference to exhibits filed with the
             Registrant's Report on Form 10-K for the fiscal year ended
             December 31, 1997.
     ++++    Incorporated by reference to exhibits filed with the
             Registrant's Report on Form 10-Q for the quarter ended
             September 30, 1999.
        *    Incorporated by reference to exhibits filed with the
             Registrant's Registration Statement on Form S-1, Registration
             No. 33-64682.
       **    Incorporated by reference to exhibits filed with the
             Registrant's Report on Form 10-K for the fiscal year ended
             December 31, 1998.
      ***    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.
     ****    Incorporated by reference to exhibits filed with the Registrant's
             Report on Form 8-K, dated June 4, 1999.
    *****    Incorporated by reference to exhibits filed with the Registrant's
             Report on Form 8-K, dated April 27, 1999.
        !    Incorporated by reference to exhibits filed with the
             Registrant's Report on Form 10-K for the year ended December
             31, 1995.
       !!    Incorporated by reference to Annex A to the Registrant's Proxy
             Statement for the Annual Meeting of Stockholders held on May
             16, 1996.
      !!!    Incorporated by reference to exhibit 4.8 to the Registrant's
             Report on Form 10-Q for the quarter ended
             June 30, 1998.
     !!!!    Incorporated by reference to exhibit 10.10 to the Registrant's
             Report on Form 10-K for the fiscal year
             ended December 31, 1996.
    !!!!!    Incorporated by reference to exhibits filed with the
             Registrant's Report on Form 8-K, dated May 2, 1997.



                                 SIGNATURES

           Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized,
on the 30 th day of March, 2000.

                                   NIAGARA CORPORATION


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


</TABLE>
<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 30, 2000
 ---------------------------------------
      Michael Scharf                                        Officer


                                                            Vice President,
                                                            Chief Financial and
/s/   Raymond Rozanski                                      Principal Accounting                          March 30, 2000
---------------------------------------
      Raymond Rozanski                                      Officer


/s/    Gilbert D. Scharf                                    Secretary and Director                        March 30, 2000
---------------------------------------
      Gilbert D. Scharf


/s/   Frank Archer                                          Director                                      March 30, 2000
---------------------------------------
      Frank Archer


/s/   Gerald L. Cohn                                        Director                                      March 30, 2000
---------------------------------------
      Gerald L. Cohn


/s/   Andrew R. Heyer                                       Director                                      March 30, 2000
---------------------------------------
      Andrew R. Heyer


/s/   Douglas T. Tansill                                    Director                                      March 30, 2000
---------------------------------------
      Douglas T. Tansill

</TABLE>



                                                          NIAGARA CORPORATION
                                                             AND SUBSIDIARIES

                                                                        INDEX

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


         REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS         S-2

         FINANCIAL STATEMENT SCHEDULE I:
              Condensed Financial Information of Registrant:
              Balance Sheets                                        S-3
              Statements of Operations                              S-4
              Statements of Stockholders' Equity                    S-5
              Statements of Cash Flows                              S-6
              Notes to Condensed Financial Statements               S-7

         FINANCIAL STATEMENT SCHEDULE II:
              Valuation and Qualifying Accounts                     S-8











         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.




REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Niagara Corporation
New York, New York

The audits referred to in our report dated February 18, 2000 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 18, 2000



<TABLE>
<CAPTION>

                                                                                                       NIAGARA CORPORATION
                                                                                                          AND SUBSIDIARIES
                                                                                                                SCHEDULE I

                                                                             CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                                                                                            BALANCE SHEETS
--------------------------------------------------------------------------------------------------------------------------
December 31,                                                                            1998                         1999
--------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT:
<S>                                                                    <C>                    <C>
    Cash and cash equivalents                                          $              100,135            $         601,931
    Other current assets                                                            1,267,247                      492,256
--------------------------------------------------------------------------------------------------------------------------
                 TOTAL CURRENT ASSETS                                               1,367,382                    1,094,187
PROPERTY AND EQUIPMENT, NET                                                           136,550                      552,800
INVESTMENT IN AND NET ADVANCES TO SUBSIDIARIES                                     53,289,297                   61,687,562
OTHER ASSETS, NET                                                                      80,352                       74,492
--------------------------------------------------------------------------------------------------------------------------
                                                                       $           54,873,581            $      63,409,041
==========================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accrued expenses                                                   $              343,038            $          86,285
    Advances from subsidiary                                                                -                    6,861,478
---------------------------------------------------------------------------------------------------------------------------
                 TOTAL LIABILITIES                                     $              343,038            $       6,947,763
---------------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (SEE NOTES 9, 10 AND
    14 TO THE CONSOLIDATED FINANCIAL STATEMENTS)
STOCKHOLDERS' EQUITY (SEE NOTES 2, 7, 8 AND 10 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                                                           8,384,835                   12,141,460
        Accumulated other comprehensive loss                                       (1,076,000)                    (175,644)
--------------------------------------------------------------------------------------------------------------------------
                                                                                   57,430,508                   62,087,489
        Treasury stock, at cost, 485,880 and 1,034,509
            shares                                                                 (2,899,965)                  (5,626,211)
--------------------------------------------------------------------------------------------------------------------------
                 TOTAL STOCKHOLDERS' EQUITY                            $           54,530,543            $      56,461,278
--------------------------------------------------------------------------------------------------------------------------
                                                                       $           54,873,581            $      63,409,041
==========================================================================================================================
                                                                 See accompanying notes to condensed financial statements.
</TABLE>



<TABLE>
<CAPTION>

                                                                                                       NIAGARA CORPORATION
                                                                                                          AND SUBSIDIARIES
                                                                                                                SCHEDULE I

                                                                             CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                                                                                  STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------------------------------------------------



Year ended December 31,                                                 1997                    1998                   1999
---------------------------------------------------------------------------------------------------------------------------
REVENUES:
<S>                                                   <C>                                <C>                    <C>
    Management fees from subsidiaries                 $            1,125,000            $  1,350,000        $     1,838,175
     (Note 2)
EXPENSES:
    General and administrative expenses                            1,217,817               2,405,744              2,069,283
----------------------------------------------------------------------------------------------------------------------------
                                                                     (92,817)             (1,055,744)              (231,108)
OTHER INCOME:
    Equity in net income of subsidiaries                           1,910,600               7,040,774              3,880,171
    Interest income                                                   94,535                 172,076                 28,562
-----------------------------------------------------------------------------------------------------------------------------
        INCOME BEFORE INCOME TAX RECOVERIES                        1,912,318               6,157,106              3,677,625
-----------------------------------------------------------------------------------------------------------------------------
INCOME TAX RECOVERIES                                                      -                 353,000                 79,000
NET INCOME                                            $            1,912,318             $ 6,510,106        $     3,756,625
===========================================================================================================================
EARNINGS PER SHARE - BASIC:
    Net income per share - basic                      $                  .45             $       .66        $           .40
===========================================================================================================================
EARNINGS PER SHARE - DILUTED:
    Net income per share - diluted                    $                  .38             $       .64        $           .40
===========================================================================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (SEE NOTE 15 TO THE CONSOLIDATED
    FINANCIAL STATEMENTS):
        Basic                                                      4,246,925               9,879,528              9,350,189
        Diluted                                                    5,095,350              10,249,954              9,357,114
===========================================================================================================================

                                                              See accompanying notes to condensed financial statements.

</TABLE>



<TABLE>
<CAPTION>


                                                                                                NIAGARA CORPORATION
                                                                                                   AND SUBSIDIARIES
                                                                                                         SCHEDULE I

                                                                      CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                                                                 STATEMENTS OF STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------------------------------------------



Years ended December 31, 1997, 1998 and 1999
--------------------------------------------------------------------------------------------------------------------
                                                          Common stock
                                                   ------------------------------                     Retained
                                                      Number of                     Additional        earnings
                                                       shares          Amount     paid-in capital     (deficit)
-------------------------------------------------- --------------- -------------- ---------------  ---------------
<S>             <C>                                <C>             <C>            <C>              <C>
BALANCE, JANUARY 1, 1997                                 3,668,750 $        3,669 $    15,560,127  $       (37,589)
Shares issued (a)                                          285,715            286       1,321,146                -
Shares issued (b)                                        6,042,990          6,043      33,230,402                -
Net income for the year                                          -              -               -        1,912,318
--------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER31, 1997                                9,997,455          9,998      50,111,675        1,874,729
-------------------------------------------------- --------------- -------------- ---------------  ---------------
Comprehensive income:
    Net income for the year                                      -              -               -        6,510,106
    Minimum pension liability adjustment
        ($1,764,000, net of tax benefit of $688,000)             -              -               -                -
--------------------------------------------------------------------------------------------------------------------
        TOTAL COMPREHENSIVE INCOME
--------------------------------------------------------------------------------------------------------------------
Purchase of treasury stock, at cost (c)                          -              -               -                -
BALANCE, DECEMBER31, 1998                                9,997,455          9,998      50,111,675        8,384,835
-------------------------------------------------- --------------- -------------- ---------------  ---------------
Comprehensive income:
    Net income for the year                                      -              -               -        3,756,625
    Foreign currency translation adjustments                     -              -               -                -
    Minimum pension liability adjustment
        ($1,456,000, net of tax expense of
        $568,000)                                                -              -               -                -
        TOTAL COMPREHENSIVE INCOME
Purchase of treasury stock, at cost (d)                          -              -               -                -
-------------------------------------------------- --------------- -------------- ---------------  ---------------
BALANCE, DECEMBER 31, 1999                               9,997,455 $        9,998 $    50,111,675  $    12,141,460
================================================== =============== ============== ===============  ===============
</TABLE>


<TABLE>
<CAPTION>

[CHART CONTINUED]

Years ended December 31, 1997, 1998 and 1999

                                                       Accumulated
                                                          other                                Total
                                                      comprehensive     Treasury stock,     Stockholders'
                                                         loss              at cost            Equity
--------------------------------------------------  ------------------ ------------------  ---------------
<S>                                                   <C>            <C>                 <C>
BALANCE, JANUARY 1, 1997                                $            - $                -  $    15,526,207
Shares issued (a)                                                    -                  -        1,321,432
Shares issued (b)                                                    -                  -       33,236,445
Net income for the year                                              -                  -        1,912,318
BALANCE, DECEMBER 31, 1997                                           -                  -       51,996,402
--------------------------------------------------  ------------------ ------------------  ---------------
Comprehensive income:
    Net income for the year                                          -                  -        6,510,106
    Minimum pension liability adjustment
        ($1,764,000, net of tax benefit of $688,000)        (1,076,000)                 -       (1,076,000)
        TOTAL COMPREHENSIVE INCOME                                                               5,434,106
Purchase of treasury stock, at cost (c)                              -         (2,899,965)      (2,899,965)
-----------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998                                  (1,076,000)        (2,899,965)      54,530,543
--------------------------------------------------  ------------------ ------------------  ---------------
Comprehensive income:
    Net income for the year                                          -                  -        3,756,625
    Foreign currency translation adjustments                    12,356                  -           12,356
    Minimum pension liability adjustment
        ($1,456,000, net of tax expense of
        $568,000)                                              888,000                  -          888,000
----------------------------------------------------------------------------------------------------------
        TOTAL COMPREHENSIVE INCOME                                                               4,656,981
-----------------------------------------------------------------------------------------------------------
Purchase of treasury stock, at cost (d)                              -         (2,726,246)      (2,726,246)
--------------------------------------------------  ------------------ ------------------  ---------------
BALANCE, DECEMBER 31, 1999                          $         (175,644)$       (5,626,211) $    56,461,278
==================================================  ================== ==================  ===============

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

(a)   On April 18, 1997, Niagara Corporation issued 285,715 shares of its Common Stock in connection with the
      subordinated debt portion of the financing for the acquisition of LaSalle.
(b)   Proceeds from exercise of Warrants during December 1997.
(c)   During the year ended December 31, 1998, Niagara Corporation repurchased 485,880 shares of its Common Stock at a
      cost of $2,899,965.
(d)   During the year ended December 31, 1999, Niagara Corporation repurchased 548,629 shares of its Common Stock at a
      cost of $2,726,246.

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

                                                               See accompanying notes to condensed financial statements.

</TABLE>


<TABLE>
<CAPTION>

                                                                                                           NIAGARA CORPORATION
                                                                                                              AND SUBSIDIARIES
                                                                                                                    SCHEDULE I

                                                                                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                                                                                      STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------------------



Year ended December31,                                                      1997                   1998                   1999
------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                       <C>                    <C>                    <C>
     Net income                                           $            1,912,318 $            6,510,106 $            3,756,625
-------------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net
     cash provided by (used in) operating
     activities:
        Amortization                                                      19,622                 18,204                 16,906
        Equity in net income of subsidiaries                          (1,910,600)            (7,040,774)            (3,880,171)
        (Increase) decrease in other assets                           (1,824,065)               688,837                780,851
        Increase (decrease) in accrued expenses                          587,107             (1,246,787)              (256,753)
-------------------------------------------------------------------------------------------------------------------------------
            TOTAL ADJUSTMENTS                                         (3,127,936)            (7,580,520)            (3,339,167)
------------------------------------------------------------------------------------------------------------------------------
            NET CASH PROVIDED BY (USED IN)
                 OPERATING ACTIVITIES                                 (1,215,618)            (1,070,414)               417,458
------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisition of property and equipment                                     -               (137,140)              (433,156)
     Investment in subsidiaries                                      (21,400,000)                     -             (6,070,875)
     Advances, subsidiaries, net                                         368,275             (8,152,429)             9,314,615
------------------------------------------------------------------------------------------------------------------------------
            NET CASH PROVIDED BY (USED IN)
                 INVESTING ACTIVITIES                                (21,031,725)            (8,289,569)             2,810,584
------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from exercise of Warrants                               33,236,445                      -                      -
     Payments to acquire treasury stock                                        -             (2,899,965)            (2,726,246)
-------------------------------------------------------------------------------------------------------------------------------
            NET CASH PROVIDED BY (USED IN)
                 FINANCING ACTIVITIES                                 33,236,445             (2,899,965)            (2,726,246)
-------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
     EQUIVALENTS                                                      10,989,102            (12,259,948)               501,796
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                           1,370,981             12,360,083                100,135
-------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                    $           12,360,083 $              100,135 $              601,931
===============================================================================================================================

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


                                          NIAGARA CORPORATION AND SUBSIDIARIES
                                                                    SCHEDULE I

                                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                       NOTES TO CONDENSED FINANCIAL STATEMENTS
------------------------------------------------------------------------------



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

2.         RESTRICTIONS ON            Niagara's subsidiary, Niagara LaSalle
           DISTRIBUTIONS              Corporation ("Niagara LaSalle"), which
                                      was acquired on August 16, 1995, has a
                                      revolving line of credit and term
                                      loan agreement with a bank which
                                      contains certain restrictions on the
                                      payment of dividends. Niagara LaSalle
                                      is permitted, however, to pay
                                      management fees to Niagara and, in
                                      the years ended December 31, 1997,
                                      1998 and 1999, $1,125,000, $1,350,000
                                      and $1,350,000, respectively, of such
                                      management fees were included as
                                      revenues in the accompanying
                                      condensed financial statements, but
                                      have been eliminated in the
                                      consolidated financial statements.

                                      Niagara's subsidiary, Niagara LaSalle
                                      (UK) Limited ("Niagara UK"), which
                                      was formed to acquire the equipment,
                                      inventory and certain other assets of
                                      the steel bar businesses of Glynwed
                                      Steels Limited, 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 and, in
                                      the period May 22 through December
                                      31, 1999, $488,175 ((pound)300,000)
                                      of such management fees were included
                                      as revenues in the accompanying
                                      condensed financial statements but
                                      have been eliminated in the
                                      consolidated financial statements.



<TABLE>
<CAPTION>

                                                                                                        NIAGARA CORPORATION
                                                                                                           AND SUBSIDIARIES
                                                                                                                SCHEDULE II

                                                                                          VALUATION AND QUALIFYING ACCOUNTS

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


Years ended December 31, 1997, 1998 and 1999
---------------------------------------------------------------------------------------------------------------------------
                                                                Additions
                                                    ----------------------------------

                                      Balance at                         Charged to                           Balance at
                                      beginning                           costs and                             end of
                                       of year            Other           expenses          Deductions           year
---------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1999:
    Allowance for doubtful
<S>                                <C>              <C>               <C>               <C>                    <C>
        accounts                   $789,000         $        -        $136,000          $       -              $925,000
===========================================================================================================================
DECEMBER 31, 1998
    Allowance for doubtful
        accounts                   $727,000         $        -        $ 62,000          $       -              $789,000
------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1997:
    Allowance for doubtful
        accounts                   $233,000         $397,000(1)       $101,000          $4,000(2)              $727,000
===========================================================================================================================


-------------------
(1)     Balance in allowance for doubtful accounts for LaSalle Steel Company at April 1, 1997.
(2)     Accounts written off.

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

</TABLE>



                               EXHIBIT INDEX


Exhibit No.                 Description
-----------                 -----------

4.8                Sixth Amendment for the Credit
                       Agreement, effective as of December 31, 1999.
10.14              Form of Niagara LaSalle (UK) Limited Lease.
10.15              Form of Niagara LaSalle (UK) Limited Side Deed.
10.16              Form of Niagara LaSalle (UK) Limited Option Agreement.
10.17              Form of Niagara LaSalle (UK) Limited Lease Renewal Deed.

21                 Subsidiaries of the Registrant.
27                 Financial Data Schedule.