<PAGE>

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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-K

[X]Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
   Act of 1934
   For the fiscal year ended December 31, 2001
[_]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 0-12362

                             BERGER HOLDINGS, LTD.
            (Exact name of registrant as specified in its charter)

               Pennsylvania                            23-2160077
     (State or other jurisdiction of      (I.R.S. Employer Identification No.)
      incorporation or organization)

805 Pennsylvania Boulevard, Feasterville,                 19053
                    PA
                                                        (Zip Code)
 (Address of principal executive offices)

              Registrant's telephone number, including area code:

                                 215-355-1200

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

                                     None

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

                              Title of each class
                         Common Stock, $.01 par value
                                    Rights

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

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

  As of March 27, 2002, 5,056,461 shares of the Company's common stock, $.01
par value ("Common Stock") of the registrant were outstanding and the
aggregate market value of the Common Stock (based upon the average of high and
low bid prices of the Common Stock on the National Association of Securities
Dealers Automatic Quotation System on March 27, 2002) of the registrant, held
by nonaffiliates was approximately $21,083,000.(1)

Documents Incorporated By Reference:
Part Portions of the registrant's definitive proxy statement, which will be
III--filed with the Securities and Exchange Commission in connection with
     the registrant's 2002 Annual Meeting of Shareholders, are incorporated
     by reference into Part III of this report.

--------
(1)  Such figure excludes the shares of Common Stock held by the registrant's
     executive officers and directors. The information provided shall in no
     way be construed as an admission that any person whose holdings are
     excluded from the figure is an affiliate or that any person whose
     holdings are included is not an affiliate and any such admission is
     hereby disclaimed.

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<PAGE>

                                    PART I

Item 1. Business

Background

  Berger Holdings, Ltd., a Pennsylvania corporation formed in 1979
(collectively with its subsidiaries, the "Company"), is a leading manufacturer
of roof drainage systems, residential and commercial snow guards and specialty
metal architectural products relating to roofing. In 2000, the Company
acquired CopperCraft, Inc. and Walker Metal Products, Inc. as described below.
The Company continues to search for opportunistic acquisitions. The Company
operates five facilities with over 310,000 square feet used in manufacturing,
warehousing and distribution. In May 1999, the Company received approval from
its Board of Directors to begin an open market stock repurchase program under
which the aggregate number of shares currently authorized for repurchase is
1,560,000. Of this amount, the Company had repurchased 758,475 shares as of
December 31, 2001, excluding the private purchase of 144,000 shares from
various investors.

  In 1989, the Company entered its present business of manufacturing and
distributing roof drainage products by acquiring Berger Bros Company which was
founded in 1874. On February 7, 1997, the Company completed the Real-Tool
Acquisition (as defined below). Real-Tool, Inc. provided the Company with a
complete line of commercial snow guards. On January 2, 1998, the Company
acquired (the "Obdyke Acquisition") the roof drainage division of Benjamin
Obdyke, Inc. ("Obdyke"). On December 7, 1998, the Company acquired (the "Sheet
Metal Acquisition") certain assets of Sheet Metal Manufacturing Co., Inc.
("Sheet Metal"). Obdyke and Sheet Metal were the Company's two largest
competitors prior to the Obdyke and Sheet Metal Acquisitions. On March 31,
2000, the Company acquired (the "CopperCraft Acquisition") all of the stock of
CopperCraft, Inc. ("CopperCraft"). On October 31, 2000, the Company acquired
(the "Walker Acquisition") all of the stock of Walker Metals Products, Inc.
("Walker"). CopperCraft provides the Company with a Southwest presence, as
well as an internal source of specialty metal architectural products, while
Walker provides the Company with a Southeast presence.

Product Line

  The Company is principally engaged in the manufacture and distribution of
metal roof drainage and ancillary products ("RDP"). Since 1993, the Company
has also engaged in a program of internal development and product expansion.
Internal development has primarily consisted of the modernization of
production facilities, machinery and equipment and the introduction of
complementary products. External development has been directed principally
towards increasing the sales volume and market penetration of the Company's
products through acquisitions, advertising and expanding the Company's RDP
product line.

  The Company's RDP line, consisting of gutters, downspouts, soffits, fascias,
snow guards, trim coil, custom metal architectural pieces and other associated
accessories and fittings is manufactured by the Company at its three suburban
Philadelphia facilities, one suburban Dallas facility and one Atlanta
facility. The Company sells RDP through its telemarketing representatives
principally to wholesale distributors who sell directly to roofing and general
contractors for use in the repair and replacement of roof drainage systems in
existing buildings that are primarily residential. The geographical
distribution of the Company's products is generally limited to the United
States.

  The primary raw materials used in manufacturing RDP are aluminum, steel and
copper. Supplies of these materials, in either coil, sheet or bar form, are
procured by the Company from primarily domestic suppliers. Although the
Company believes that adequate available sources of supply exist at
customarily accepted market prices, trade restrictions, work stoppages or
adverse weather or political conditions may affect the prices and availability
of these materials. Rapid increases in prices of raw materials could adversely
affect the operations of the Company because the cost of raw materials
constitutes the largest single element of the Company's cost of sales.

                                       2
<PAGE>

  A significant portion of the Company's raw material requirements is provided
by five key suppliers. The remaining raw materials are provided by a large
number of small suppliers. All raw materials procured by the Company, as well
as finished products, are scrutinized for quality control using industry
standards and internal guidelines.

Acquisitions

  On October 31, 2000, the Company completed the Walker Acquisition. The
acquisition of Walker, a manufacturer of roof drainage products, was funded in
part by an increase in the Company's bank credit facility. As consideration,
the Company paid cash and issued notes payable.

  On March 31, 2000, the Company completed the CopperCraft Acquisition. The
acquisition of CopperCraft, a manufacturer of primarily copper specialty metal
architectural products, was funded in part by an increase in the Company's
bank credit facility. As consideration, the Company paid cash and issued notes
payable.

  On December 7, 1998, the Company completed the Sheet Metal Acquisition. The
acquisition of Sheet Metal, a manufacturer of roof drainage products, was
funded in part by an increase in the Company's bank credit facility. As
consideration, the Company paid cash and issued a note payable.

  On January 2, 1998, the Company consummated the Obdyke Acquisition, funded
with the proceeds received through an issuance of 40,000 shares of the
Company's Series A convertible preferred stock. As consideration, the Company
paid cash, issued a note payable, issued 125,000 shares of Common Stock, which
the Company had the obligation to repurchase at the election of the seller,
and issued warrants to purchase 50,000 shares of Common Stock. These warrants
expired unexercised in January 2000.

  On February 7, 1997, the Company consummated the purchase (the "Real-Tool
Acquisition") of all of the outstanding shares of the common stock of Real-
Tool, Inc., a Virginia corporation ("Real-Tool"). As consideration, the
Company paid cash, issued shares of Common Stock, and issued a note payable.
Concurrent with the purchase, the Company entered into a royalty agreement
with the sole shareholder of Real-Tool, which expires in 2012. Under this
agreement, the Company is required to pay royalties of 6% of revenues, with a
minimum of $75,000 annually through 2002. Subsequent to 2002, the Company has
the option to increase the percentage of royalties paid to this individual and
eliminate the minimum payment requirement. The Company intends to continue
paying royalties of 6% of revenues through 2012.

  These acquisitions were accounted for as a purchase and the excess of the
purchase price over the fair value of the assets (goodwill) were being
amortized through 2001 on a straight-line basis for periods ranging from 20 to
25 years. For a description of new accounting standards applicable to goodwill
beginning in 2002, see "New Accounting Standards" under Item 7 below and Note
2 to the Consolidated Financial Statements.

Competition

  The Company's business is highly competitive. In general, the building
products market is highly fragmented. The Company competes with numerous small
and large manufacturers and fabricators. Some of the Company's competitors
have substantially greater resources than the Company. The Company competes
primarily in the Northeast/Mid-Atlantic region. During the past four years,
the Company has implemented an advertising and marketing program to expand its
geographic range of operations to a more national level. Competition is
primarily based upon product quality, completeness of product lines, service
and price.

Geographic Market

  The Company's products are principally sold throughout the states in the
Northeast/Mid-Atlantic region. The Company has developed greater national
exposure from the Walker and CopperCraft Acquisitions in both the Southeast
and Southwest regions.

                                       3
<PAGE>

Major Customers

  During 2001, no individual customer accounted for more than 10% of the
Company's sales. The Company has no ongoing contracts for sales of its
products, but rather services customers on a per-order basis.

Seasonal Nature of the Business

  The building products industry is seasonal, particularly in the
Northeast/Mid-Atlantic region of the United States, where inclement weather
during the winter months usually reduces the level of building activity in
both the home-building and home improvement markets. Typically, the Company's
sales volume is lowest during the months of December, January and February.

Inventory Practices

  The Company's policy is to obtain, fabricate and/or manufacture inventory in
sufficient volume in order to provide a reasonable inventory level to support
estimated minimum and maximum levels based on customers' historical demand.
Because of the nature of the RDP market, in which an order generally must be
filled within three to five days of placement, the Company does not have any
substantial backlog. Because of the variations involved with custom
architectural products, the Company generally fills these orders within two to
four weeks.

  The Company is subject to fluctuations in metal prices when procuring raw
material. Metal pricing is outside of the Company's control and although the
Company generally attempts to pass raw material price increases onto its
customers, it is not always able to do so.

Employees

  As of December 31, 2001, the Company had 212 employees, including 24 in
sales and marketing; 165 in manufacturing and delivery and 23 in
administration. Approximately 110 of the Company's employees are represented
by one of two labor unions, The International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America, Local 169 and the Teamsters
Local Union 107. In December 2001, the Company's contracts with both unions
were extended for four years to December 31, 2005. The Company believes that
its employee relations are good.

Government Regulation

  The Company is subject to numerous federal and state regulations relating
to, among other things, the operations of its manufacturing facilities, the
storage and disposal of environmentally sensitive materials, the control of
emission levels, employee safety and health, employee wages and general
environmental matters. The Company believes that it is in compliance with
these regulations in all material respects.

Patents and Trademarks

  The Company owns or licenses nine U.S. design and utility patents, which
have expiration dates ranging from 2002 through 2015, that protect certain of
its products, and is presently in the process of applying for at least one
additional patent. The Company continuously reviews its new products and
applies for patents where it believes the patent will have future value. The
Company owns four federally registered trademarks used in connection with its
products and is in the process of applying for federal registration of four
other trademarks.

Item 2. Properties

  The Company owns a 120,000 square foot operating facility in Feasterville,
Pennsylvania. The corporate, administrative and sales offices occupy 14,000
square feet of office space at this location. The Company also operates two
additional facilities in Pennsylvania. One is a 90,000 square foot
manufacturing facility in Southampton, PA, which is leased through 2002 with a
five-year renewal option, and the second is a 56,000 square foot warehousing
facility in Huntingdon Valley, PA, which is leased through 2003 with a two-
year renewal option.

                                       4
<PAGE>

  The Company also leases a 22,300 square foot manufacturing facility in
Keller, Texas for the CopperCraft operation. This property is leased through
March 31, 2003 with a three-year renewal option. The Company also has on
option to lease an additional 5,400 square foot addition at this location
should the need arise. This property is leased from the former owner of Copper
Craft for approximately $123,000 annually.

  The Company leases two properties in Atlanta, Georgia for the Walker
operation. The properties are 10,500 square foot and 13,000 square foot
manufacturing facilities, which are leased through October 31, 2003 with two
three-year renewal options. These properties are leased from the two former
owners of Walker for approximately $85,000 annually.

  The Company has a mortgage liability on the Feasterville facility in the
principal amount of $2,558,748 at December 31, 2001. The mortgage is being
repaid in monthly installments of approximately $27,400 through March 2008
with a balloon payment of $1,431,391 due at maturity.

Item 3. Legal Proceedings

  As of the date hereof, there are no material legal proceedings pending
against the Company.

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

  Not applicable.

Item 4A. Executive Officers of the Registrant

  The following table sets forth information relating to all executive
officers of the Company as of February 28, 2002. All of the executive officers
have employment agreements with the Company with terms ending December 31,
2002.

<TABLE>
<CAPTION>
Name                     Age Position(s)
----                     --- -----------
<S>                      <C> <C>
Theodore A. Schwartz....  72 Chairman of the Board of Directors,
                             Chief Executive Officer
Joseph F. Weiderman.....  60 President, Chief Operating Officer,
                             Secretary, and Treasurer
Paul L. Spiese, III.....  50 Vice President--Manufacturing
Francis E. Wellock,
 Jr. ...................  37 Vice President--Finance and Chief Financial Officer
</TABLE>

  THEODORE A. SCHWARTZ served as President of the Company from May 5, 1988 to
May 30, 1989 and from July 17, 1990 to January 15, 1991. From May 30, 1989 to
present, Mr. Schwartz has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company. Mr. Schwartz holds a B.S. in Economics
from the Wharton School of Business and spent 35 years in the investment field
prior to joining the Company.

  JOSEPH F. WEIDERMAN was Chief Financial Officer of the Company from January
1990 to January 1991, and was elected President of the Company on January 15,
1991. He also serves as Secretary and Treasurer of the Company. Mr. Weiderman
holds a Bachelor of Science Degree in Accounting and a Master of Business
Administration Degree in Finance from LaSalle University. Prior to his joining
the Company, Mr. Weiderman had served for over fourteen years as the Chief
Financial Officer of Harry Levin, Inc., a multi-store retailer.

  PAUL L. SPIESE, III joined Berger Bros as Plant Manager in 1985 and was
named Vice President--Manufacturing of the Company in July 1990. Previously,
he was employed by Hurst Performance, Inc. as a Plant Manager.

  FRANCIS E. WELLOCK, JR., CPA, was hired as Controller of the Company on June
10, 1991 and was elected Vice President-Finance and Chief Financial Officer on
August 19, 1996. Mr. Wellock holds a Bachelor of Science Degree in Accounting
from Saint Joseph's University and a Masters in Taxation from Philadelphia
College of Textiles and Science. Prior to joining the Company, Mr. Wellock
worked for a public accounting firm.

                                       5
<PAGE>

                                    PART II

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

  The Company's Common Stock is traded in the over-the-counter market and is
included for quotation on the Nasdaq SmallCap Market operated by the Nasdaq
Stock Market, Inc. under the symbol "BGRH."

  The following table sets forth certain information with respect to the high
and low bid prices of the Company's Common Stock during 2001 and 2000. These
quotations reflect inter-dealer prices, without retail mark-ups, mark-downs or
commissions and may not represent actual transactions.

<TABLE>
<CAPTION>
                                             High   Low
                                             ----- -----
            <S>                              <C>   <C>
            2001
            First Quarter................... $2.25 $1.44
            Second Quarter..................  2.96  1.57
            Third Quarter...................  3.70  2.70
            Fourth Quarter..................  4.10  3.15

            2000
            First Quarter................... $2.94 $2.13
            Second Quarter..................  2.66  1.25
            Third Quarter...................  2.28  1.75
            Fourth Quarter..................  2.63  1.38
</TABLE>

  At December 31, 2001, there were approximately 1,900 holders of record of
shares of Common Stock.

Dividend Policy

  The Company has not paid any cash dividends on its Common Stock to date, and
does not anticipate paying cash dividends in the foreseeable future.

Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                                            Year Ended December 31
                          -----------------------------------------------------------------------
                             2001           2000           1999           1998           1997
                          -----------    -----------    -----------    -----------    -----------
<S>                       <C>            <C>            <C>            <C>            <C>
Net sales...............  $51,128,096    $45,372,283(1) $39,522,427(1) $35,251,542(1) $20,474,519(1)
Cost of sales...........   38,926,409     36,096,580(1)  32,229,480(1)  28,887,785(1)  16,252,796(1)
                          -----------    -----------    -----------    -----------    -----------
Gross profit............   12,201,687      9,275,703      7,292,947      6,363,757      4,221,723
Selling, administrative
 and general expenses...    7,497,046      5,962,397(1)   4,641,913(1)   4,172,012(1)   2,634,096(1)
                          -----------    -----------    -----------    -----------    -----------
Income from operations..    4,704,641      3,313,306      2,651,034      2,191,745      1,587,627
Interest expense........   (1,581,753)    (1,791,727)    (1,852,088)    (1,284,761)      (581,624)
Other income............        5,624         18,703         24,517        136,643         14,374
                          -----------    -----------    -----------    -----------    -----------
Income before income tax
 (benefit) and preferred
 stock dividend.........    3,128,512      1,540,282        823,463      1,043,627      1,020,377
Income tax (benefit)....    1,376,545(2)     677,903(3)     441,666(4)    (647,201)    (1,000,000)
                          -----------    -----------    -----------    -----------    -----------
Net income before
 preferred stock
 dividend...............    1,751,967        862,379        381,797      1,690,828      2,020,377
Preferred stock
 dividend...............          --             --             --         400,000            --
                          -----------    -----------    -----------    -----------    -----------
Net income available to
 common stockholders....  $ 1,751,967    $   862,379    $   381,797    $ 1,290,828    $ 2,020,377
                          ===========    ===========    ===========    ===========    ===========
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
                                           Year Ended December 31
                         ---------------------------------------------------------------
                            2001        2000        1999           1998         1997
                         ----------- ----------- -----------    -----------  -----------
<S>                      <C>         <C>         <C>            <C>          <C>
EARNINGS PER COMMON
 SHARE:
Income before preferred
 stock dividend......... $      0.33 $      0.16 $      0.07    $      0.31  $      0.40
Preferred stock
 dividend...............         --          --          --           (0.07)         --
                         ----------- ----------- -----------    -----------  -----------
Basic earnings per
 common share........... $      0.33 $      0.16 $      0.07    $      0.24  $      0.40
                         =========== =========== ===========    ===========  ===========
Diluted earnings per
 common share........... $      0.28 $      0.16 $      0.07    $      0.22  $      0.31
                         =========== =========== ===========    ===========  ===========
TOTAL ASSETS............ $35,639,890 $38,928,711 $32,567,820    $34,587,204  $19,751,213
                         =========== =========== ===========    ===========  ===========
LONG-TERM DEBT, CAPITAL
 LEASES AND REDEEMABLE
 STOCK.................. $15,148,108 $18,940,883 $16,888,606(5) $15,060,307  $ 6,022,147(6)
                         =========== =========== ===========    ===========  ===========
STOCKHOLDERS' EQUITY.... $13,344,726 $11,832,639 $11,445,370    $15,361,725  $12,493,271
                         =========== =========== ===========    ===========  ===========
</TABLE>
--------
(1)  Sales, Cost of Sales and Selling, Administrative and General expenses
     have been reclassified to be consistent with the current presentation.
(2)  The Company will pay approximately $300,000 in federal and state income
     taxes on account of 2001 income.
(3)  The Company paid approximately $150,000 in federal and state income taxes
     on account of 2000 income.
(4)  The Company paid approximately $54,000 in federal and state income taxes
     on account of 1999 income.
(5)  Long-Term Debt includes 10.0% subordinated debentures in the principal
     amount of $4,000,000, which were issued in 1999 in exchange for
     convertible preferred stock.
(6)  Long-Term Debt includes a 12.25% subordinated debenture in the principal
     amount of $2,000,000 issued in connection with the Obdyke Acquisition in
     January 1998 and the cash received for the debenture at December 31, 1997
     was included in cash and cash equivalents.

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Results of Operations

  The Company's results of operations for the year ended December 31, 2001,
represent the consolidated operations of Berger Holdings, Ltd. and its
subsidiaries, Berger Financial Corporation ("BFC"), Berger Bros Company
("Berger Bros"), CopperCraft and Walker. The Company's results of operations
for the year ended December 31, 2000 represent the consolidated operations of
Berger Holdings, Ltd. and its subsidiaries, BFC, Berger Bros, CopperCraft
(beginning as of April 1, 2000) and Walker (beginning as of November 1, 2000).
The Company's results of operations for the year ended December 31, 1999
represent the consolidated operations of Berger Holdings, Ltd. and its
subsidiaries, BFC and Berger Bros.

  Net sales increased by 12.7% to $51,128,096 in 2001 from $45,372,283 in 2000
and by 14.8% in 2000 from $39,522,427 in 1999. The $5,755,813 increase in
sales in 2001 was primarily attributable to a full year of sales from both the
CopperCraft and Walker Acquisitions as well as growth within the existing
business. The CopperCraft and Walker Acquisitions accounted for approximately
$3,800,000 of the $5,800,000 increase in 2000 sales, while Berger Bros' sales
in 2000 increased approximately $2,000,000. The increase in Berger Bros sales
for 2000 was a result of ongoing marketing efforts in order to expand the
Company's existing customer base.

  The Company's gross profit, as a percentage of net sales, was 23.9% in 2001,
20.4% in 2000 and 18.5% in 1999. The increase in gross profit percentage in
2001 was attributable to the CopperCraft and Walker acquisitions and a decline
in raw material costs through the year. The increase in gross profit
percentage in 2000 was primarily attributable to the CopperCraft Acquisition,
while the Company also continued to improve its product mix by selling a
larger percentage of higher margin products.

  Selling, administrative and general expenses, as a percentage of net sales,
increased to 14.7% in 2001 from 13.1% in 2000 and 11.7% in 1999. The increase
in selling, administrative and general expenses during the

                                       7
<PAGE>

three-year period is primarily due to the additional costs of CopperCraft and
Walker's ongoing operations and ongoing operating expenses for Berger Bros.

  Income from operations increased 42.0%, or $1,391,335, to $4,704,641 in
2001, while income from operations increased 25.0%, or $662,272, to $3,313,306
in 2000. As a percentage of revenues, income from operations was 9.2%, 7.3%
and 6.7% for 2001, 2000 and 1999, respectively. The increase in 2001 was
primarily from the improved product mix generated by the CopperCraft and
Walker Acquisitions and internal sales growth through the remaining
operations. Approximately 78% of the increase in 2000 was attributable to the
CopperCraft and Walker Acquisitions, while 22% of the increase occurred from
improvements in the remaining operations.

  Interest expense decreased to $1,581,753 in 2001 compared to $1,791,727 in
2000 and $1,852,088 in 1999. The Company's interest expense decrease in 2001
was primarily due to both the reduction throughout the year in the Company's
borrowing rate and the Company's ability to pay down debt with cash generated
from operations. The Company's interest expense decreased in 2000 from 1999,
despite incurring additional debt to finance the CopperCraft and Walker
Acquisitions. The interest expense decrease in 2000 was attributable to the
Company's ability to pay down debt with cash generated from operations and the
reduction in its borrowing rate on its credit facility in December 1999 to one
half percent below the prime rate. In addition, because the CopperCraft and
Walker Acquisitions closed in March and October 2000, respectively, less than
a full year of interest was incurred in 2000 with respect to these
transactions.

  Income from continuing operations increased 103.1% to $3,128,512, or 6.1% of
net sales, in 2001 compared to $1,540,282, or 3.4% of net sales, in 2000
compared to $823,463, or 2.1% of net sales, in 1999. The increase in income
from operations during 2001 was attributable to having the benefit of a full
year of operations from both the CopperCraft and Walker Acquisitions,
decreased interest expense and the Company's ability to absorb fixed operating
expenses from the growth of the remaining existing operations. Approximately
43% of the $716,819 increase in 2000 was a direct result of the CopperCraft
and Walker Acquisitions, while the remaining 57% increase resulted from a
continued improvement in product mix.

  Net income increased 103.2% to $1,751,967, or 3.4% of net sales, in 2001 as
compared to $862,379, or 1.9% of net sales, in 2000 and $381,797, or 1.0% of
net sales, in 1999. The increase in net income in 2001 was primarily
attributable to the CopperCraft and Walker Acquisitions, while the Company
continued to improve the product mix of RDP lines. In 2001, the Company
reported income tax expense of $1,376,545, but will pay approximately $300,000
in federal and state income taxes due to the utilization of a net operating
loss carryforward. In 2000, the Company reported income tax expense of
$677,903, but paid approximately $150,000 in federal and state income taxes
due to the utilization of the net operating loss carryforward.

  The Company has determined that it is more likely than not that the deferred
tax asset will be realized. At December 31, 2001, the Company had net
operating loss carryforwards of approximately $330,000, which will reduce the
actual cash paid for income taxes by approximately $112,000 in future periods.
The effective tax rate was 44%, 44% and 54% for 2001, 2000 and 1999,
respectively (see Note 9).

Liquidity and Capital Resources

  At December 31, 2001, the working capital of the Company was $5,519,067
(resulting in a ratio of current assets to current liabilities of 1.8 to 1),
compared to $4,881,678 (1.6 to 1) at December 31, 2000. The increase in
working capital is primarily due to a decrease in accounts payable, as a
result of the cash flow provided by operating activities used to pay down
outstanding obligations.

  At December 31, 2001, current liabilities totalled $6,920,260, consisting
primarily of $4,094,475 of accounts payable and accrued expenses and
$2,825,785 of current maturities of long-term debt. Total liabilities

                                       8
<PAGE>

decreased $4,800,908 as compared to 2000, primarily due to the Company's
ability to pay down debt and other current liabilities with cash generated
from operations.

  At December 31, 2001, obligations to Fleet Bank, N.A., formerly Summit Bank,
N.A. (the "Bank"), totaled $9,233,022, compared to $11,096,446 at December 31,
2000 and $9,699,591 at December 31, 1999. The decrease in 2001 was the result
of the Company's ability to pay down debt with cash generated from operations.
The increase in 2000 over 1999 was the result of financing the Bank provided
to the Company to acquire both CopperCraft and Walker.

  The Company finances its operations primarily from cash flow from its
business and the Company's credit facility (the "Credit Facility") with the
Bank. The Credit Facility consists of a revolving line of credit (the "Credit
Line") and an acquisition line facility (the "Acquisition Line"). All
borrowings under the Credit Facility bear interest at one half of one percent
below the Bank's prime lending rate, and are secured by, among other assets,
the Company's accounts receivable and inventory. On October 31, 2000, at the
Company's request, the maximum amount available under the Credit Line was
reduced from $17,500,000 to $15,000,000, thereby reducing applicable fees. On
April 12, 2001, at the Company's request, the maximum amount available under
the Credit Line was reduced from $15,000,000 to $12,000,000, thereby further
reducing applicable fees. The Company has two term loan notes outstanding
under the Acquisition Line, and two other term loan notes with the Bank,
secured by the Company's equipment and other assets. The total principal
outstanding under the Credit Line at December 31, 2001 was $6,873,941.

  Cash flow provided by operating activities for 2001 was $4,137,295 as
compared to $5,910,908 provided by operating activities for 2000. The cash
provided by operating activities decreased primarily due to the pay down of
accounts payable. In 2000, the Company financed some of its acquisition costs
through the extension of trade payables. In 2001, the Company made a concerted
effort to pay down debt and trade payables from the cash provided by
operations.

  Net cash used in investing activities for 2001 was $700,803 compared to net
cash used in investing activities of $7,235,822 in 2000. This change was
primarily the result of cash used to fund the CopperCraft and Walker
Acquisitions in 2000 and a decrease in cash used to fund capital expenditures
in 2001. In 1999, net cash used in investing activities totaled $1,165,314,
which was primarily a result of investments in capital equipment. From 1997
through 2000, the Company had invested heavily in acquiring and upgrading its
manufacturing equipment, which now needs to be maintained rather than
upgraded.

  Net cash used in financing activities was $3,278,340 for 2001, as compared
to $1,524,710 provided by financing activities in 2000, as compared to
$2,694,110 used in financing activities in 1999. The change from 2000 to 2001
was primarily the result of the Company paying down debt in 2001. The change
from 1999 to 2000 occurred as a result of the following during 2000: the
Company's financing approximately $6,000,000 for the CopperCraft and Walker
Acquisitions, the Company's using cash from operations to pay down
approximately $2,700,000 of senior and subordinated debt, the Company's using
of approximately $1,250,000 cash to repurchase common shares of the Common
Stock and the payment on account of a repurchase obligation with respect to
Common Stock issued in the Obdyke Acquisition. Approximately $252,000 of debt
relief and other related payments was provided to officers of the Company
during 2001, in accordance with operating income achievements established by
the Board of Directors. This relief reduced subscribed stock by $193,666. As
of December 31, 2001, there are no agreements that provide for future officer
debt relief. During 2001, the Company concentrated on paying down debt.

  The operating cash flow anticipated to be received from operations in 2002
and the availability of funds under the working capital loan is anticipated to
be sufficient to cover the Company's capital expenditures of approximately
$500,000 and any other operating expenses for 2002.

                                       9
<PAGE>

  The Company's contractual obligations and commercial commitments over the
next five years and beyond are as follows:

<TABLE>
<CAPTION>
                                         Expected Cash Payments by Year (in
                                                     thousands)
                                      -----------------------------------------
                                                                 2006 &
Contractual Commitments                2002   2003    2004  2005 Beyond  Total
-----------------------               ------ ------- ------ ---- ------ -------
<S>                                   <C>    <C>     <C>    <C>  <C>    <C>
Revolving credit..................... $  --  $ 6,874 $  --  $--  $  --  $ 6,874
Long term debt.......................  2,447   4,541  1,081  265  1,897  10,231
Capital lease obligations............    379     362    107   18      3     869
Operating lease obligations..........  1,028     531    158   81      5   1,803
                                      ------ ------- ------ ---- ------ -------
  Total.............................. $3,854 $12,308 $1,346 $364 $1,905 $19,777
                                      ====== ======= ====== ==== ====== =======
</TABLE>

  The Company's three year Credit Facility expires in January 2003. The credit
agreement contains financial covenants related to consolidated net worth, net
income and debt and interest expense coverage. The Company was in compliance
with the covenants relating to the Credit Facility as of December 31, 2001.
The Company expects to renew or replace the Credit Facility prior to its
expiration.

  The Company's lease obligations will increase slightly by the end of 2002
due to the acquisition and resulting financing needed for some new custom
equipment. The Company's leases currently carry interest rates ranging from
2.9% to 9.37%.

  On January 21, 2000, the holder of Common Stock received in the Obdyke
Acquisition exercised its option to receive cash proceeds of $500,000. The
holder sold the 125,000 shares of Common Stock at $2.25 per share to an
unrelated third party. The remaining $226,254, including transfer fees, was
paid by the Company.

  On December 20, 2000, the holder of Common Stock subject to the holder's
right to require the Company to purchase or place the shares exercised that
right, and the Company purchased the 125,000 shares of Common Stock at $2.00
per share.

New Accounting Standards

  In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 141 "Business Combinations" ("SFAS 141"). This statement requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method and supersedes APB Opinion No. 16, "Business
Combinations," and FASB Statement No. 38, "Accounting for Preacquisition
Contingencies of Purchased Enterprises." Also in July 2001, the FASB issued
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 142 supersedes APB Opinion No. 17
"Intangible Assets." Under SFAS 142, goodwill is no longer subject to
amortization over its estimated useful life, but is instead, subject to at
least an annual assessment for impairment by applying a fair-value-based test.
The effective date of SFAS 142 is January 1, 2002, with the exception of
goodwill and intangible assets acquired after June 30, 2001, which are
immediately subject to the provisions of the statement.

  As of the date of adoption, the Company has unamortized goodwill in the
amount of $10,165,850, which will be subject to the transition provisions of
the SFASs 141 and 142. Amortization expense related to goodwill was $630,634
and $503,521 for 2001 and 2000, respectively. Because of the extensive effort
needed to comply with adopting SFASs 141 and 142, it is not currently
practicable to estimate the impact of adopting these statements on the
Company's financial statements.

  In July 2001, the Financial Accounting Standards Board issued Statement No.
143, "Accounting for Asset Retirement Obligations," ("SFAS 143") which
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. The standard applies to legal obligations with the
retirement of long-lived assets that result from the acquisition,
construction, development and (or) normal use of the asset. Adoption is
required for fiscal years beginning after June 15, 2002,

                                      10
<PAGE>

with earlier adoption encouraged. The Company is in the process of analyzing
the implications of SFAS 143 and does not believe that the adoption of this
statement will have a material impact on the net earnings of the Company.

  In October 2001, the Financial Accounting Standards Board issued FASB
Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," ("SFAS 144") which addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. While SFAS 144 supersedes
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," it retains many of the
fundamental provisions of that Statement. SFAS 144 also supersedes the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations--Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," for the disposal of a segment of a business. However, it
retains the requirement in Opinion No. 30 to report separately discontinued
operations and extends that reporting to a component of an entity that either
has been disposed of (by sale, abandonment, or in a distribution to owners) or
is classified as held for sale. SFAS 144 is effective for fiscal years
beginning after December 15, 2001. The Company is in the process of analyzing
the implications of this statement and does not expect the guidance to have a
material impact on the net earnings of the Company.

  In July 2001, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 102 ("SAB 102"), "Selected Loan Loss Allowance
Methodology and Documentation Issues." This bulletin summarizes certain of the
SEC's views about applying a systematic methodology for determining allowances
for loan and lease losses in accordance with accounting principles generally
accepted in the United States of America to receivables in financial
statements. The Company does not expect this guidance to have a material
impact on the net earnings of the Company.

Significant Accounting Policies

  The significant accounting policies of the Company are described in Note 1
to the Consolidated Financial Statements. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expense during
the reporting period.

  Certain accounting estimates and assumptions are particularly sensitive
because of their significance to the consolidated financial statements and
possibility that future events affecting them may differ markedly. The
accounting policies of the Company with respect to significant estimates and
assumptions are described below.

Allowance for Doubtful Accounts

  The Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. If
the financial condition of the Company's customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required. The allowance for doubtful accounts is adjusted
according to the Company's past experience from actual losses incurred and
potential future losses that could occur. The Company also maintains credit
insurance on various accounts to minimize its exposure to potential future
losses.

Inventory Reserves

  The Company records its inventory at cost, and writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the difference
between the cost of inventory and the estimated market value based upon
assumptions about future demand and market conditions. If actual market
conditions are less favorable than those projected by management, additional
inventory write-downs may be required.


                                      11
<PAGE>

Deferred Taxes

  The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those
temporary differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities and projected future taxable income in
making this assessment. Based upon the level of historical taxable income and
projections for future taxable income over the periods in which the deferred
tax assets are deductible, along with reasonable and prudent tax planning
strategies and the expiration dates of carryforwards, management believes it
is more likely than not that the Company will realize the benefits of these
deductible differences, net of the existing valuation allowances, at December
31, 2001.

 Forward-Looking and Cautionary Statements

  Certain statements contained herein that include forward-looking terminology
such as "may," "will," "should," "expect," "anticipate," "estimate," "plan" or
"continue" or the negative thereof or other variations thereon are, or could
be deemed to be "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements are
affected by known and unknown risks, uncertainties and other factors that may
cause the Company's actual results, performance or achievements to differ
materially from the results, performance and achievements expressed or implied
in the Company's forward-looking statements. These risks, uncertainties and
factors include competition by competitors with more resources than the
Company and the cyclical nature of roofing repair. Certain factors that could
cause the actual results, performance or achievement of the Company to differ
materially from those contained in or implied by any forward-looking statement
made by or on behalf of the Company, including forward-looking statements
contained herein, are as follows:

  Increases in the price of raw materials may reduce the Company's profits.

  The prices of the raw materials the Company utilizes (for example, aluminum,
steel, and copper) are subject to fluctuation. The Company may not be able to
pass along any or all of these increases to its customers. As a result,
increases in the price of raw materials may decrease the profit margin for
sales of the Company's products.

  Downturns in the housing market and the home building and home improvement
industry may reduce the level of the Company's sales and profits.

  Demand for the Company's products is dependent upon the housing market and
the home building and home improvement industry which tend to be cyclical in
nature and have experienced significant downturns in past years. Negative
industry cycles in the future could decrease the Company's sales and profits
during those periods.

  Seasons of extreme weather conditions may reduce the demand for the
Company's products.

  Inclement winter weather and excessively hot and dry summer weather usually
cause a reduction in the level of building activity in both the homebuilding
and home improvement markets, which in turn may lead to reductions in the
Company's sales and profits. The Company has reported losses in the quarters
which corresponded to severe winter and summer seasons, including, for
example, the Company's first quarter of 2001, in which it reported an 8.7%
reduction in sales (excluding sales from recent acquisitions) compared to the
first quarter of 2000, primarily due to severe weather experienced in the
Company's core markets during that quarter. In addition, the absence of snow
and other storms can also lessen the demand for the Company's products by
alleviating some of the consumer's need to replace or repair the roofing
products which it sells.

  Any future acquisitions may result in dilution and increased leverage and
increased depreciation and amortization expense that may result in losses or
reduced profits.

  The Company may issue equity to finance any future acquisitions. This would
dilute the proportionate ownership of the Company's current shareholders and
may reduce their per share value. Acquisitions may also lead to increased
levels of borrowing. This would result in increased interest expense as well
as limit the Company's ability to borrow for internal growth. Acquisitions are
also likely to increase the Company's

                                      12
<PAGE>

depreciation and amortization expense. These factors may lead to the Company
to incur losses or reduced profits in the future.

  The Company's attempts to expand its operations may not be successful, and
may result in losses or reduced growth of the Company's sales and profits.

  The Company may seek to expand through acquisitions. However, the Company
may not be able to so expand or to identify targets for acquisitions on terms
that are attractive to it. If the Company fails to expand its business, the
Company's sales may not maintain recent growth rates or may decline.
Furthermore, the Company does not know whether its products will be
sufficiently accepted to sustain the Company's efforts to expand. As a result,
if the Company is unsuccessful in this expansion, the Company's profitability
may decline or the Company may incur losses.

  The Company's failure to successfully integrate the operations of acquired
businesses could diminish its overall profitability.

  The process of incorporating newly acquired businesses into the Company's
current business can produce increases in expenses or reductions in sales. In
some cases, the additional overhead associated with newly acquired operations
may not be fully or immediately absorbed by the Company's current operations.
For example, in the first quarter of 2001, the Company reported a net loss
that was partly attributable to increased selling, administrative and general
expenses as a result of its recent acquisitions. In addition, customers that
purchased products from the acquired business prior to the acquisition may not
purchase products from the Company after the acquisition or may purchase a
smaller amount of products. Accordingly, if the Company is unable to
successfully integrate the operations of its recently acquired businesses or
any subsequently acquired businesses with its current operations, the
Company's sales and profits may be reduced.

  The inability to obtain additional financing may prevent the Company from
expanding its current business or acquiring new business.

  The Company may require additional debt and/or equity financing as a result
of its expansion of its existing business or acquisition of new businesses if
the Company's current financing is not sufficient. Additional financing may
not be available to the Company on advantageous terms or at all, if, for
example, the interest rates were unattractive or the Company did not have
sufficient collateral available to secure the desired increase in debt.
Currently, all of the Company's assets are being used to secure its
outstanding debt, so unless the Company acquires unsecured assets or obtain a
partial release from the Company's secured creditor of its security interests,
the Company would not have available to it any collateral to pledge to new
debtors. Any equity financing would dilute the proportionate ownership of the
Company's current shareholders and may reduce their per share value.

  The Company may not be able to successfully compete in its industry and, as
result, the Company's level of sales and profits may fall.

  The Company faces significant competition in connection with the products it
provides. There are many other companies engaged in the manufacture and
distribution of roof drainage products, and many of these companies have
greater financial and other business resources than those possessed by the
Company. Further, other companies may enter the Company's area of business in
the future. If competition increases, especially with respect to the Company's
higher margin products, the Company's sales and profits are likely to decline.

  The Company's sales and profits may decline if it is unable to retain its
key personnel.

  The Company depends upon the efforts and skills of certain of its key senior
executives. The Company's top four executives, Theodore A. Schwartz, Chairman
of the Board of Directors, Joseph F. Weiderman, President and Chief Operating
Officer, Paul L. Spiese, III, Vice President of Manufacturing, and Francis E.
Wellock, Jr., Chief Financial Officer, have a combined 50 years of experience
in the Company's business. If the Company loses the services of one or more of
these individuals, it may face difficulty replacing any one of them since few
successors are available with similar levels of experience in the Company's
industry. Competition for senior management is intense, and the Company may
not be successful in retaining these key personnel or in attracting

                                      13
<PAGE>

and retaining other key personnel that it may require in the future. The
Company's inability to secure replacement personnel in key positions could
lead to declining sales and profits through loss of current customers or
vendors, through decline in the efficiency of the Company's operations, or
through lack of strategic leadership.

  If the Company is unable to retain its customer base, the Company's level of
sales may fall.

  All sales contracts between the Company and its customers represent a single
transaction. As a result, the Company does not have long term commitments from
its customers. The Company's current customers may not continue to purchase
products from the Company or may not maintain or increase their level of
purchases in the future. The Company's sales will decline over time if it
cannot retain or replace the demand from the Company's current customers.

  The Company does not currently pay dividends on the Common Stock and it does
not expect to do so for the foreseeable future.

  The Company expects to retain its future earnings, if any, for the operation
and expansion of its business, and to pay no cash dividends for the
foreseeable future. The terms of the Company's current financing agreements
limit its payment of dividends, and other agreements the Company enters into
may contain terms that limit the amount of dividends it may pay or prohibit
any payment of dividends.

  Trading volume in the Common Stock has historically been limited.

  There is a limited market for the Common Stock. There can be no assurance
that a broader market for the Common Stock will develop. Selling shares of the
Common Stock may be difficult because smaller quantities of shares are bought
and sold and security analysts' and the news media coverage about the Company
is limited. These factors could result in lower prices and larger spreads in
the bid and asked prices for the shares of Common Stock.

  Anti-takeover provisions and its right to issue preferred stock could make a
third-party acquisition of the Company difficult and limit the price paid for
the Company's shares.

  The Company's articles of incorporation provide that the board of directors
may issue preferred stock without stockholder approval. In addition, the
Company's by-laws provide for a classified board, with each board member
serving a three-year term. The board of directors has also adopted a
stockholder rights plan, commonly referred to as a "poison pill." The issuance
of preferred stock, the existence of a classified board and the stockholder
rights plan could make it more difficult for a third party to acquire the
Company without the approval of the Board of Directors. They could also limit
the price that certain investors might be willing to pay in the future for the
Common Stock.

Item 7A. Qualitative and Quantitative Disclosure

  The Company's exposure to market risk for changes in interest rates relates
primarily to the Company's investment portfolio. The Company does not have any
derivative financial instruments in its portfolio. The Company places its
investments in instruments that meet high credit quality standards. The
Company is adverse to principal loss and ensures the safety and preservation
of its invested funds by limiting default risk, market risk and reinvestment
risk. As of December 31, 2001, the Company's investments consisted of cash and
money market funds. The Company does not expect any material loss with respect
to its investment portfolio.

  The Company's financial instruments include debt instruments, which
primarily consist of its lines of credit and variable rate term loans. The
Company does not actively manage its interest rate risk because the impact of
a 10% (approximately 90 basis points) increase in interest rates on its
variable rate debt (using year-end debt balance and effective interest rates)
would have a relatively nominal after-tax impact on the Company's results of
operations.

  The Company has no derivative or off-balance sheet instruments.


                                      14
<PAGE>

Item 8. Financial Statement and Supplementary Data

  Attached at pages F-1 through F-18 are the financial statements and
financial statement schedules identified in Item 14 hereof.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

  None.

                                      15
<PAGE>

                                   PART III

Item 10. Directors and Executive Officers of the Registrant

  Except as set forth under the caption "Executive Officers of the Registrant"
in Part I of this Annual Report on Form 10-K, this information will be
contained in the Company's definitive Proxy Statement with respect to the
Company's Annual Meeting of Shareholders for 2002, to be filed with the
Securities and Exchange Commission within 120 days following the end of the
Company's fiscal year ended December 31, 2001, and is hereby incorporated by
reference thereto.

Item 11. Executive Compensation

  This information will be contained in the Company's definitive Proxy
Statement with respect to the Company's Annual Meeting of Shareholders for
2002, to be filed with the Securities and Exchange Commission within 120 days
following the end of the Company's fiscal year ended December 31, 2001, and is
hereby incorporated by reference thereto.

Item 12. Security Ownership of Certain Beneficial Owners and Management

  This information will be contained in the Company's definitive Proxy
Statement with respect to the Company's Annual Meeting of Shareholders for
2002, to be filed with the Securities and Exchange Commission within 120 days
following the end of the Company's fiscal year ended December 31, 2001, and is
hereby incorporated by reference thereto.

Item 13. Certain Relationships and Related Transactions

  This information will be contained in the Company's definitive Proxy
Statement with respect to the Company's Annual Meeting of Shareholders for
2002, to be filed with the Securities and Exchange Commission within 120 days
following the end of the Company's fiscal year ended December 31, 2001, and is
hereby incorporated by reference thereto.

                                      16
<PAGE>

                                    PART IV

Item 14.  Exhibits, Financial Statement Schedule, and Reports on Form 8-K

(a) The following documents are filed as a part of this report:

  1.  Financial statements--attached at pages F-1 through F-18 are the
      consolidated financial statements and consolidated financial schedules
      set forth below, which are incorporated by reference in Item 8:

Berger Holdings, Ltd.

<TABLE>
<S>                                                                        <C>
Independent Auditors' Report on Consolidated Financial Statements......... F-1

Consolidated Balance Sheets as of December 31, 2001 and 2000.............. F-2

Consolidated Statements of Operations for the years ended December 31,
 2001, 2000, and 1999..................................................... F-3

Consolidated Statements of Stockholders' Equity for the years ended
 December 31, 2001, 2000 and 1999......................................... F-4

Consolidated Statements of Cash Flows for the years ended December 31,
 2001, 2000 and 1999...................................................... F-5

Notes to Consolidated Financial Statements................................ F-6
</TABLE>

2.  Financial statement schedule--The following consolidated financial
    statement schedule is included herein:

SCHEDULE II
BERGER HOLDINGS, LTD.
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2001, 2000 and 1999

<TABLE>
<CAPTION>
        Column A          Column B   Column C     Column D    Column E
        --------         ---------- ----------- ------------- --------
                                     Additions                Balance
                         Balance at   Charged                  at End
                         Beginning  to Cost and                  of
      Description        of Period    Expense   Deductions(1)  Period
      -----------        ---------- ----------- ------------- --------
<S>                      <C>        <C>         <C>           <C>
2001 Accounts
 Receivable-
Allowance for doubtful
 accounts...............  $30,000    $153,895      $86,895    $97,000
2000 Accounts
 Receivable-
Allowance for doubtful
 accounts...............  $30,000    $ 15,000      $15,000    $30,000
1999 Accounts
 Receivable-
Allowance for doubtful
 accounts...............  $30,000    $  9,249      $ 9,249    $30,000
</TABLE>
--------
(1)  Write off of uncollectible accounts.

  All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are included in the financial statements or the
notes thereto and therefore have been omitted.

                                      17
<PAGE>

         Independent Auditors' Report on Financial Statement Schedule

To the Stockholders and Board of Directors of Berger Holdings, Ltd.

  Under date of March 7, 2002, we reported on the consolidated balance sheets
of Berger Holdings, Ltd. and subsidiaries as of December 31, 2001 and 2000,
and the related consolidated statements of operations, stockholders' equity
and cash flows for each of the years in the three-year period ended December
31, 2001. In connection with our audits of the aforementioned consolidated
financial statements, we also audited the related consolidated financial
statement schedule for each of the years in the three-year period ended
December 31, 2001, as listed in the accompanying index (item 14). This
financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement schedule based on our audits.

  In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

                                          /s/ KPMG LLP

Philadelphia, PA
March 7, 2002

3.Exhibits

<TABLE>
<CAPTION>
 Exhibit
 Number                 Title                          Method of Filing
 -------                -----                          ----------------
 <C>     <C>                                  <S>
   3(a)  Articles of Incorporation and Bylaws Incorporated by reference to
                                              Exhibit 3 of the Registration
                                              Statement on on Form S-18 filed
                                              February 15, 1983 (File No. 2-
                                              81851-W)

   3(b)  Articles of Amendment dated          Incorporated by reference to
         November 29, 1989                    Exhibit 3(b) of the Annual Report
                                              on Form 10-K for the year ended
                                              December 31, 1989

   3(c)  Articles of Amendment effective      Incorporated by reference to
         July 30, 1990                        Exhibit 3(c) to Amendment No. 1
                                              to the Registration Statement on
                                              Form S-1 filed on October 15,
                                              1990 (File No. 33-35898)

   3(d)  Amended and Restated Bylaws          Incorporated by reference to
                                              Exhibit 3(d) of the Registration
                                              Statement on Form S-1 filed June
                                              16, 1993 (File No. 33-64468)

   3(e)  Articles of Amendment dated July 22, Incorporated by reference to
         1993                                 Exhibit 3(e) of the Annual Report
                                              on Form 10-K for the year ended
                                              December 31, 1993

   3(f)  Articles of Amendment dated December Incorporated by reference to
         29, 1997                             Exhibit 3(f) of the Annual Report
                                              on Form 10-K for the year ended
                                              December 31, 1997

  10(a)  Stock Purchase Agreement dated as of Incorporated by reference to
         February 7, 1997 between Berger      Exhibit 2.1 of the Company's 8-K
         Holdings, Ltd. and Roger M. Cline    filed on February 20, 1997

  10(b)  Amendment to Stock Purchase          Incorporated by reference to
         Agreement dated as of February 7,    Exhibit 2.2 of the Company's 8-K
         1997 between Berger Holdings, Ltd.   filed on February 20, 1997
         and Roger M. Cline
</TABLE>

                                      18
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                 Title                          Method of Filing
 -------                -----                          ----------------
 <C>     <C>                                  <S>
 10(c)   Asset Purchase Agreement dated as of Incorporated by reference to
         December 3, 1997 among Berger        Exhibit 2.1 of the Company's 8-K
         Holdings, Ltd., Benjamin Obdyke      filed on January 20, 1998
         Incorporated and its shareholders

 10(d)   Amended and Restated Loan and        Incorporated by reference to
         Security dated as of January 2, 1998 Exhibit 2.4 to the Company's
         among Berger Financial Corp., Berger Current Report filed on January
         Bros. Company, CopperCraft, Inc. (by 20, 1998
         joinder dated March 31, 2000),
         Walker Metal Products, Inc. (by
         joinder dated October 31, 2000) and
         Summit Bank, N.A. ("Loan and
         Security Agreement")

 10(e)   Amendment dated as of December 31,   Incorporated by reference to
         1998 to Loan and Security Agreement  Exhibit 2.2 to the Company's
                                              Current Report on Form 8-K dated
                                              December 22, 1998

 10(f)   Amendment dated as of December 20,   Incorporated by reference to
         1999 to Loan and Security Agreement  Exhibit 10(p) to the Company's
                                              Annual Report on Form 10-K for
                                              the year ended December 31, 1999

 10(g)   Amendment dated as of October 31,    Incorporated by reference to
         2000 to Loan and Security Agreement  Exhibit 10(b) to the Company's
                                              Quarterly Report on Form 10-Q for
                                              the period ended September 30,
                                              2000

 10(h)   Amendment effective April 12, 2001   Incorporated by reference to
         to Loan and Security Agreement       Exhibit 10(a) to the Company's
                                              Quarterly Report on Form 10-Q for
                                              the quarter ended March 31, 2001

 10(i)   Exchange Agreement dated September   Incorporated by reference to
         29, 2000 between Berger Holdings,    Exhibit 10(b) to the Company's
         Ltd. and Finova Mezzanine Capital    Quarterly Report on Form 10-Q for
         Inc.                                 the period ended September 30,
                                              2000

 10(j)   Exchange Agreement dated January 12, Incorporated by reference to
         2001 between Berger Holdings, Ltd.   Exhibit 10 to the amended
         and Argosy Investment Partners, L.P. Schedule 13D filed by Argosy
                                              Investment Partners, L.P. on
                                              February 7, 2001

 10(k)*  Employment Agreement between Berger  Incorporated by reference to
         Holdings, Ltd. and Theodore A.       Exhibit 10(j) to the Company's
         Schwartz dated as of January 1, 2001 Annual Report for the period
                                              ended December 31, 2000

 10(l)*  Employment Agreement between Berger  Incorporated by reference to
         Holdings, Ltd. and Joseph F.         Exhibit 10(k) to the Company's
         Weiderman dated as of January 1,     Annual Report for the period
         2001                                 ended December 31, 2000

 10(m)*  Employment Agreement between Berger  Incorporated by reference to
         Holdings, Ltd. and Paul L. Speise,   Exhibit 10(l) to the Company's
         III dated as of January 1, 2001      Annual Report for the period
                                              ended December 31, 2000

 10(n)*  Employment Agreement between Berger  Incorporated by reference to
         Holdings, Ltd. and Francis E.        Exhibit 10(m) to the Company's
         Wellock dated as of January 1, 2001  Annual Report for the period
                                              ended December 31, 2000
</TABLE>


                                       19
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                 Title                          Method of Filing
 -------                -----                          ----------------
 <C>     <C>                                  <S>
 10(o)*  Form of Change of Control Agreement  Incorporated by reference to
         dated as of January 1, 2001 between  Exhibit 10(n) to the Company's
         Berger Holdings, Ltd. and each of    Annual Report for the period
         Theodore A. Schwartz, Joseph F.      ended December 31, 2000
         Weiderman, Paul L. Spiese, III,
         Francis E. Wellock, Denise C. Ashby,
         Richard Falconio, David Stewart, and
         Gregory J. Weiderman

 10(p)*  Berger Holdings, Ltd. 1996 Stock     Incorporated by reference to
         Incentive Plan (amended at June 17,  Exhibit 4 to the Company's
         1998 meeting of the Company's        Registration Statement on Form S-
         shareholders)                        8 filed April 10, 1997

 21      List of Subsidiaries of the Company  Filed Herewith

 23      Consent of KPMG LLP                  Filed Herewith
</TABLE>
--------
*This exhibit is a management contract or compensatory plan or arrangement.

  All other exhibits for which provision is made in the applicable regulations
of the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.

(b)  Reports on Form 8-K:

  None.

                                      20
<PAGE>

                                  SIGNATURES

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-K to be signed on its behalf by the
undersigned, thereunto duly authorized on the 22nd day of March, 2002.

                                          Berger Holdings, Ltd.

                                                /s/ Theodore A. Schwartz
                                          By: _________________________________
                                                    Theodore A. Schwartz
                                                  Chief Executive Officer

  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:

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----

<S>                                    <C>                        <C>
     /s/ Theodore A. Schwartz          Chief Executive Officer      March 22, 2002
______________________________________  and Chairman of the Board
         Theodore A. Schwartz           (Principal Executive
                                        Officer)

     /s/ Paul L. Spiese, III           Director                     March 22, 2002
______________________________________  Vice President
         Paul L. Spiese, III

     /s/ Joseph F. Weiderman           President, Chief Operating   March 22, 2002
______________________________________  Officer and Director
         Joseph F. Weiderman

         /s/ Larry Falcon              Director                     March 22, 2002
______________________________________
             Larry Falcon

        /s/ Jacob I. Haft              Director                     March 22, 2002
______________________________________
         Jacob I. Haft, M.D.

         /s/ Jon M. Kraut              Director                     March 22, 2002
______________________________________
         Jon M. Kraut, D.M.D.

           /s/ Jay Seid                Director                     March 22, 2002
______________________________________
               Jay Seid

    /s/ John Paul Kirwin, III          Director                     March 22, 2002
______________________________________
        John Paul Kirwin, III

   /s/ Francis E. Wellock, Jr.         Chief Financial Officer      March 22, 2002
______________________________________  (Principal Financial and
       Francis E. Wellock, Jr.          Accounting Officer)
</TABLE>

                                      21
<PAGE>

                         Independent Auditors' Report

Stockholders and Board of Directors
Berger Holdings, Ltd.
Feasterville, Pennsylvania

  We have audited the accompanying consolidated balance sheets of BERGER
HOLDINGS, LTD. and subsidiaries as of December 31, 2001 and 2000 and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three year period ended December 31, 2001.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

  In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of BERGER
HOLDINGS, LTD. and subsidiaries as of December 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the years in the
three year period ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America.

                                          /s/ KPMG LLP

Philadelphia, Pennsylvania
March 7, 2002

                                      F-1
<PAGE>

                             BERGER HOLDINGS, LTD.

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                            December 31
                                                      ------------------------
                                                         2001         2000
                                                      -----------  -----------
<S>                                                   <C>          <C>
                       ASSETS
Current assets
  Cash and cash equivalents.......................... $   465,064  $   306,912
  Accounts receivable, net of allowance for doubtful
   accounts of $97,000 in 2001 and $30,000 in 2000...   4,502,631    4,671,903
  Inventories........................................   6,496,091    6,994,548
  Prepaid and other current assets...................     577,451      679,379
  Deferred income taxes..............................     398,090      384,125
                                                      -----------  -----------
    Total current assets.............................  12,439,327   13,036,867
Property, plant and equipment, net...................  10,082,728   11,067,983
Deferred income taxes................................         --       858,512
Other assets, net of accumulated amortization of
 $1,132,955 in 2001 and $859,304 in 2000.............   2,951,985    3,218,906
Goodwill, net of accumulated amortization of
 $2,457,848 in 2001 and $1,827,214 in 2000...........  10,165,850   10,746,443
                                                      -----------  -----------
                                                      $35,639,890  $38,928,711
                                                      ===========  ===========
        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Current maturities of long-term debt............... $ 2,825,785  $ 1,877,804
  Accounts payable...................................   1,705,751    4,140,500
  Accrued expenses...................................   2,388,724    2,136,885
                                                      -----------  -----------
    Total current liabilities........................   6,920,260    8,155,189
Long-term debt.......................................  15,148,108   18,940,883
Deferred income taxes................................     226,796          --
Commitments and contingencies........................         --           --
Stockholders' equity
  Common stock, $.01 par value Authorized 20,000,000
   shares in 2001 and 2000 Issued 5,989,736 and
   5,739,736 shares in 2001 and 2000 Outstanding
   5,087,261 and 5,127,936 shares in 2001 and 2000...      59,897       57,397
  Additional paid-in capital.........................  18,187,726   17,690,226
  Accumulated deficit................................  (2,326,843)  (4,078,810)
                                                      -----------  -----------
                                                       15,920,780   13,668,813
  Less common stock subscribed.......................    (289,250)    (482,916)
  Less 902,475 and 611,800 common shares of treasury
   stock in 2001 and 2000, respectively, at cost.....  (2,286,804)  (1,353,258)
                                                      -----------  -----------
    Total stockholders' equity.......................  13,344,726   11,832,639
                                                      -----------  -----------
                                                      $35,639,890  $38,928,711
                                                      ===========  ===========
</TABLE>


          See accompanying notes to consolidated financial statements

                                      F-2
<PAGE>

                             BERGER HOLDINGS, LTD.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                              Year Ended December 31
                                        -------------------------------------
                                           2001         2000         1999
                                        -----------  -----------  -----------
<S>                                     <C>          <C>          <C>
Net sales.............................. $51,128,096  $45,372,283  $39,522,427
Cost of sales..........................  38,926,409   36,096,580   32,229,480
                                        -----------  -----------  -----------
Gross profit...........................  12,201,687    9,275,703    7,292,947
Selling, administrative and general
 expenses..............................   7,497,046    5,962,397    4,641,913
                                        -----------  -----------  -----------
Income from operations.................   4,704,641    3,313,306    2,651,034
Interest expense.......................  (1,581,753)  (1,791,727)  (1,852,088)
Other income, net......................       5,624       18,703       24,517
                                        -----------  -----------  -----------
Income before income tax...............   3,128,512    1,540,282      823,463
Provision for income tax...............   1,376,545      677,903      441,666
                                        -----------  -----------  -----------
Net income............................. $ 1,751,967  $   862,379  $   381,797
                                        ===========  ===========  ===========
Basic earnings per share............... $      0.33  $      0.16  $      0.07
                                        ===========  ===========  ===========
Diluted earnings per share............. $      0.28  $      0.16  $      0.07
                                        ===========  ===========  ===========
</TABLE>


          See accompanying notes to consolidated financial statements

                                      F-3
<PAGE>

                             BERGER HOLDINGS, LTD.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years Ended December 31, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                 Series A Convertible
                   Preferred Stock           Common Stock                                 Treasury Stock
                 -----------------------   ----------------- Additional                ---------------------
                   Number                  Number of           Paid-in    Accumulated   Number
                  of Shares     Amount      Shares   Amount    Capital      Deficit    of Shares   Amount
                 -----------   ---------   --------- ------- -----------  -----------  --------- -----------
<S>              <C>           <C>         <C>       <C>     <C>          <C>          <C>       <C>
Balance,
 December 31,
 1998...........       40,000  $     400   5,301,330 $53,013 $21,114,214  $(5,322,986)      --           --
Conversion of
 preferred
 shares to
 debt...........      (40,000)      (400)        --      --   (3,999,600)         --        --           --
Exercise of
 188,406 stock
 options........          --         --      188,406   1,884      54,366          --        --           --
Net income......          --         --          --      --          --       381,797       --           --
Purchase of
 124,400 shares
 treasury stock,
 at cost........          --         --          --      --          --           --    124,400  $  (354,402)
                  -----------  ---------   --------- ------- -----------  -----------   -------  -----------
Balance,
 December 31,
 1999...........          --   $      --   5,489,736 $54,897 $17,168,980  $(4,941,189)  124,400  $  (354,402)
Common shares
 issued.........          --         --      250,000   2,500     521,246          --        --           --
Net income......          --         --          --      --          --       862,379       --           --
Purchase of
 487,400 shares
 treasury stock,
 at cost........          --         --          --      --          --           --    487,400  $  (998,856)
                  -----------  ---------   --------- ------- -----------  -----------   -------  -----------
Balance,
 December 31,
 2000...........          --   $      --   5,739,736 $57,397 $17,690,226  $(4,078,810)  611,800  $(1,353,258)
Common shares
 issued.........          --         --      250,000   2,500     497,500          --        --           --
Forgiveness of
 loans on stock
 subscribed
 (note 13)......          --         --          --      --          --           --        --           --
Net income......          --         --          --      --          --     1,751,967       --           --
Purchase of
 290,675 shares
 treasury stock,
 at cost........          --         --          --      --          --           --    290,675  $  (933,546)
                  -----------  ---------   --------- ------- -----------  -----------   -------  -----------
Balance,
 December 31,
 2001...........          --   $     --    5,989,736 $59,897 $18,187,726  $(2,326,843)  902,475  $(2,286,804)
                  ===========  =========   ========= ======= ===========  ===========   =======  ===========
<CAPTION>
                    Common Stock
                     Subscribed
                 ---------------------
                  Number
                 of Shares   Amount
                 ---------- ----------
<S>              <C>        <C>
Balance,
 December 31,
 1998...........  347,500   $(482,916)
Conversion of
 preferred
 shares to
 debt...........      --          --
Exercise of
 188,406 stock
 options........      --          --
Net income......      --          --
Purchase of
 124,400 shares
 treasury stock,
 at cost........      --          --
                 ---------- ----------
Balance,
 December 31,
 1999...........  347,500   $(482,916)
Common shares
 issued.........      --          --
Net income......      --          --
Purchase of
 487,400 shares
 treasury stock,
 at cost........      --          --
                 ---------- ----------
Balance,
 December 31,
 2000...........  347,500   $(482,916)
Common shares
 issued.........      --          --
Forgiveness of
 loans on stock
 subscribed
 (note 13)...... (154,666)    193,666
Net income......      --          --
Purchase of
 290,675 shares
 treasury stock,
 at cost........      --          --
                 ---------- ----------
Balance,
 December 31,
 2001...........  192,834   $(289,250)
                 ========== ==========
</TABLE>


          See accompanying notes to consolidated financial statements

                                      F-4
<PAGE>

                             BERGER HOLDINGS, LTD.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                Year Ended December 31
                                          -------------------------------------
                                             2001         2000         1999
                                          -----------  -----------  -----------
<S>                                       <C>          <C>          <C>
Cash flows from operating activities
  Net income............................  $ 1,751,967  $   862,379  $   381,797
  Adjustments to reconcile net income to
   net cash provided by (used in)
   operating activities
   Deferred income taxes................    1,071,343      568,542      404,022
   Depreciation and amortization........    2,667,659    2,436,741    1,973,240
   Increase in accounts receivable
    allowance...........................       67,000          --           --
   Decrease in inventory reserve........          --           --      (100,000)
   Decrease in stock subscribed.........      193,666          --           --
  Change in operating assets and
   liabilities, excluding acquisitions
   Accounts receivable..................      102,272     (298,629)     233,184
   Inventories..........................      498,457     (450,230)   1,033,412
   Other current and long-term assets...      (32,160)    (174,849)    (559,697)
   Accounts payable.....................   (2,434,749)   2,481,885      258,578
   Accrued expenses.....................      251,839      485,069      192,119
                                          -----------  -----------  -----------
Net cash provided by operating
 activities.............................    4,137,294    5,910,908    3,816,655
                                          -----------  -----------  -----------
Cash flows from investing activities
  Acquisition of companies, net of cash
   acquired.............................          --    (6,001,584)         --
  Acquisition of property and equipment,
   net of retirements...................     (700,803)  (1,234,238)  (1,165,314)
                                          -----------  -----------  -----------
    Net cash used in investing
     activities.........................     (700,803)  (7,235,822)  (1,165,314)
                                          -----------  -----------  -----------
Cash flows from financing activities
  Net proceeds (repayments) from working
   capital line.........................     (161,047)   1,953,401     (792,707)
  Net repayments from equipment term
   loan.................................   (1,702,376)    (556,546)    (531,996)
  Proceeds from long-term debt..........       56,585    1,996,915    2,380,539
  Loan and mortgage repayments..........     (537,955)    (643,950)  (3,451,794)
  Proceeds from issuance of stock,
   private placements, stock warrants
   and stock options....................          --           --        56,250
  Net payment for redeemable common
   stock................................          --      (226,254)         --
  Repurchase of common stock............     (933,546)    (998,856)    (354,402)
                                          -----------  -----------  -----------
Net cash provided by (used in) financing
 activities.............................   (3,278,339)   1,524,710   (2,694,110)
                                          -----------  -----------  -----------
Net increase (decrease) in cash.........      158,152      199,796      (42,769)
Cash and cash equivalents, beginning of
 year...................................      306,912      107,116      149,885
                                          -----------  -----------  -----------
Cash and cash equivalents, end of year..  $   465,064  $   306,912  $   107,116
                                          ===========  ===========  ===========
Supplemental Disclosure of Cash Flow
 Information
Cash paid during the year for interest..  $ 1,581,753  $ 1,791,727  $ 1,852,088
Cash paid during the year for taxes.....  $   113,738  $    54,000  $    37,337
                                          ===========  ===========  ===========
</TABLE>

  The Company entered into capital leases aggregating $61,585, $700,288, and
$380,539 in the years 2001, 2000, and 1999, respectively.

          See accompanying notes to consolidated financial statements

                                      F-5
<PAGE>

                             BERGER HOLDINGS, LTD.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business Organization

  The Company operates primarily from three manufacturing facilities located
in Feasterville, PA, Keller, TX and Atlanta, GA. The Company operates one
business segment producing roof drainage and ancillary products. The Company
primarily sells to wholesale building product distributors throughout the
United States and its territories. The Company routinely grants credit to
these distributors.

2. Summary of Significant Accounting Policies

 Principles of Consolidation

  The financial statements include the accounts of the Company and its wholly
owned subsidiaries, Berger Financial Corporation, Berger Bros Company,
CopperCraft, Inc. and Walker Metal Products, Inc. All significant intercompany
transactions and balances have been eliminated.

 Cash and Cash Equivalents

  Cash and cash equivalents consist of all highly liquid instruments with
original maturities of three months or less.

 Property and Equipment and Depreciation and Amortization

  Property and equipment are carried at cost. Depreciation is computed by
straight-line and accelerated methods using estimated useful lives of
generally 5 to 39 years for buildings and improvements and generally 3 to 15
years for machinery and equipment. Improvements are capitalized and
expenditures for maintenance, repairs and minor renewals are charged to
expense when incurred. At the time assets are retired or sold, the costs and
accumulated depreciation are eliminated and the resulting gain or loss, if
any, is reflected in the consolidated statement of operations.

 Other Assets

  Costs and payments pursuant to noncompetition arrangements entered into in
connection with business acquisitions are amortized over the terms of the
arrangements. Other intangibles include patents, capitalized acquisition costs
and acquired customer lists or markets. Costs related to start-up activities
and organization costs are expensed as incurred. All intangibles are being
amortized by the straight-line method over periods not exceeding 15 years. The
Company assesses the recoverability of intangibles by determining whether the
amortization of the asset balance can be recovered through projected
undiscounted cash flows over its remaining life.

 Goodwill

  Goodwill is amortized using the straight-line method over generally 10 to 25
years. The Company assesses the recoverability of intangible assets by
determining whether the amortization of the goodwill balance over the
remaining life can be recovered through projected undiscounted future cash
flows. The amount of the impairment, if any, is measured based on projected
discounted future operating cash flows using a discount rate reflecting the
Company's average cost of funds or fair value of the asset, where appropriate.
The assessment of the recoverability of intangible assets will be impacted if
estimated future operating cash flows are not achieved.

 Revenue Recognition

  The Company records revenues on its products when goods are shipped.

                                      F-6
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


 Income Taxes

  Income taxes are accounted for under the asset and liability method. The
Company accounts for the recognition of deferred tax assets and liabilities
based on the expected future tax consequences of events that have been
included in the financial statements or tax returns. Deferred income taxes
result from temporary differences, which consist of different tax bases for
assets and liabilities than their reported amounts in the financial
statements. Such differences result in recognition of income or expense in
different years for tax and financial statement purposes. Deferred tax assets
are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or
settled.

 Earnings Per Share

  Basic earnings per share are computed by dividing net income available to
common stockholders by the weighted average number of shares of common stock
outstanding during the year. Diluted earnings per common share reflects the
potential dilution of securities that could share in the earnings.

 Segment Disclosures

  The Company has one operating segment. This one operating segment is engaged
in the production of aluminum, galvanized steel, painted steel and copper roof
drainage and specialty metal architectural products. The segment disclosure is
consistent with the management decision-making process that determines the
allocation of resources and the measuring of performance.

 Reclassification

  Certain balances have been reclassed to conform to the current year
presentation. The Company has reclassified customer program incentive costs to
net sales.

 Management's Judgments and Accounting Estimates

  The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and 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.

 Impairment of Long-Lived Assets to Be Disposed Of

  The Company accounts for long-lived assets in accordance with the provisions
of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." This Statement requires that long-lived
assets and certain identifiable intangibles be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to future
net cash flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.


                                      F-7
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

 Accounting Standards Adopted

  In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133
standardizes the accounting for derivative instruments, including derivative
instruments embedded in other contracts, by requiring that an entity recognize
those items as assets for liabilities in the statement of financial position
and measure them at fair value. The Company adopted SFAS No. 133 as of January
1, 2001, which had no impact on the financial statements or liquidity of the
Company. The Company does not have any off-balance sheet financial instruments
or derivatives.

 New Accounting Standards

  In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 141 "Business Combinations" ("SFAS 141"). This statement requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method and supersedes APB Opinion No. 16, "Business
Combinations," and FASB Statement No. 38, "Accounting for Preacquisition
Contingencies of Purchased Enterprises." Also in July 2001, the FASB issued
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 142 supersedes APB Opinion No. 17
"Intangible Assets." Under SFAS 142, goodwill is no longer subject to
amortization over its estimated useful life, but is instead, subject to at
least an annual assessment for impairment by applying a fair-value-based test.
The effective date of SFAS 142 is January 1, 2002, with the exception of
goodwill and intangible assets acquired after June 30, 2001, which are
immediately subject to the provisions of the statement.

  As of the date of adoption, the Company has unamortized goodwill in the
amount of $10,165,850, which will be subject to the transition provisions of
the SFASs 141 and 142. Amortization expense related to goodwill was $630,634
for 2001. Because of the extensive effort needed to comply with adopting SFASs
141 and 142, it is not currently practicable to estimate the impact of
adopting these statements on the Company's financial statements.

  In July 2001, the Financial Accounting Standards Board issued Statement No.
143, "Accounting for Asset Retirement Obligations," ("SFAS 143") which
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. The standard applies to legal obligations with the
retirement of long-lived assets that result from the acquisition,
construction, development and (or) normal use of the asset. Adoption is
required for fiscal years beginning after June 15, 2002, with earlier adoption
encouraged. The Company is in the process of analyzing the implications of
SFAS 143 and does not believe that the adoption of this statement will have a
material impact on the net earnings of the Company.

  In October 2001, the Financial Accounting Standards Board issued FASB
Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," ("SFAS 144") which addresses financial accounting and reporting for
the impairment or disposal of long-lived assets. While SFAS 144 supersedes
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," it retains many of the
fundamental provisions of that Statement. SFAS 144 also supersedes the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations--Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," for the disposal of a segment of a business. However, it
retains the requirement in Opinion No. 30 to report separately discontinued
operations and extends that reporting to a component of an entity that either
has been disposed of (by sale, abandonment, or in a distribution to owners) or
is classified as held for sale. SFAS 144 is effective for fiscal years
beginning after December 15, 2001. The Company is in the process of analyzing
the implications of this statement and does not expect the guidance to have a
material impact on the net earnings of the Company.

                                      F-8
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


3. Acquisitions

  On October 31, 2000, the Company purchased all of the outstanding shares of
the common stock of Walker Metal Products, Inc., a Georgia corporation
(Walker). As consideration, the Company paid $4,176,537 consisting of
$3,000,000 in cash, a note payable of $800,000 and assumed liabilities of
$376,537. Walker reported sales of $4,200,000 and net income of $50,000 (net
of former officers' withdrawals) for the fiscal year ending September 30,
2000. The Company utilized funds obtained from its credit facility to acquire
Walker. The acquisition was accounted for as a purchase and the excess of the
purchase price over the fair value of the assets (goodwill) is being amortized
through 2001 on a straight-line basis generally over 20 years.

  On March 31, 2000, the Company purchased all of the outstanding shares of
the common stock of CopperCraft, Inc., a Texas corporation (CopperCraft). As
consideration, the Company paid $2,642,410 consisting of $1,740,822 in cash, a
note payable of $512,500 and assumed liabilities of $389,088. CopperCraft
reported sales of $2,400,000 and net income of $150,000 for the fiscal year
ending December 31, 1999. The Company utilized funds obtained from its credit
facility to acquire CopperCraft. The acquisition was accounted for as a
purchase and the excess of the purchase price over the fair value of the
assets (goodwill) is being amortized through 2001 on a straight-line basis
generally over 20 years.

  The following table presents the unaudited pro forma results of operations
as if the acquisition of Walker and CopperCraft had occurred at the beginning
of 2000 after giving effect to certain adjustments, including amortization of
goodwill and increased interest expense. These pro forma results have been
prepared for comparative purposes only and do not purport to be indicative of
what would have occurred had the acquisitions been made as of those dates or
results which may occur in the future.

<TABLE>
<CAPTION>
                                                                     Year Ended
                                                                      December
                                                                      31, 2000
                                                                     -----------
   <S>                                                               <C>
   Net Sales........................................................ $50,300,662
                                                                     -----------
   Net Income....................................................... $   941,546
                                                                     -----------
   Earnings Per Share
     Basic.......................................................... $       .18
                                                                     ===========
     Diluted........................................................ $       .18
                                                                     ===========
</TABLE>

4. Inventories

  Inventories are valued at the lower of cost or market. Cost is determined
using a weighted average calculation.

  As of December 31, 2001 and 2000, inventories consisted of the following:

<TABLE>
<CAPTION>
                                                             2001       2000
                                                          ---------- ----------
   <S>                                                    <C>        <C>
   Raw materials......................................... $3,527,911 $4,249,060
   Finished goods........................................  2,862,205  2,591,824
   Packaging materials and supplies......................    105,975    153,664
                                                          ---------- ----------
                                                          $6,496,091 $6,994,548
                                                          ========== ==========
</TABLE>

                                      F-9
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


5. Property and Equipment

  As of December 31, 2001 and 2000, property and equipment consisted of the
following:

<TABLE>
<CAPTION>
                                                           2001        2000
                                                        ----------- -----------
   <S>                                                  <C>         <C>
   Land................................................ $   485,000 $   485,000
   Building............................................   5,497,197   5,497,197
   Machinery...........................................   8,094,556   8,850,370
   Furniture and fixtures..............................   1,811,825   1,726,841
   Trucks and autos....................................   1,123,340   1,213,906
   Dies................................................   1,299,184   1,248,873
   Leasehold improvements..............................   2,153,645   1,991,215
                                                        ----------- -----------
                                                         20,464,747  21,013,402
   Less accumulated depreciation.......................  10,382,019   9,945,419
                                                        ----------- -----------
                                                        $10,082,728 $11,067,983
                                                        =========== ===========
</TABLE>

  Depreciation expense for the years ended December 31, 2001, 2000 and 1999
was $1,686,058, $1,620,504 and $1,289,357, respectively.

  Total cost of machinery under capital leases included above as of December
31, 2001 and 2000 was $1,548,270 and $1,667,809, respectively. Accumulated
depreciation for machinery under capital leases included above as of December
31, 2001 and 2000 was $853,389 and $576,949, respectively.

6. Other Assets

  As of December 31, 2001 and 2000, other assets consisted of the following:

<TABLE>
<CAPTION>
                                                             2001       2000
                                                          ---------- ----------
   <S>                                                    <C>        <C>
   Patents and customer lists, net....................... $1,238,521 $1,264,979
   Non-compete agreements, net...........................    980,952  1,071,428
   Capitalized acquisition costs, net....................    539,616    592,241
   Other long term assets................................    192,896    290,258
                                                          ---------- ----------
                                                          $2,951,985 $3,218,906
                                                          ========== ==========
</TABLE>

                                     F-10
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


7. Long-Term Debt

  As of December 31, 2001 and 2000, long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                           2001        2000
                                                        ----------- -----------
<S>                                                     <C>         <C>
$12,000,000 revolving line-of-credit expiring in
 January, 2003. Interest is due monthly at prime less
 1/2% (prime was 4.75% as of December 31, 2001).
 Borrowing is restricted to 85% of eligible accounts
 receivable and 50% of eligible inventory. All assets
 collateralize this revolving line-of-credit..........  $ 6,873,941 $ 7,784,988
10.0% subordinated debenture, due December 31, 2003,
 interest is payable quarterly through maturity (see
 Note 13).............................................    1,500,000   1,500,000
11.0% subordinated debenture, due December 29, 2003,
 interest is payable quarterly through maturity (see
 Note 13).............................................    2,500,000   2,500,000
Mortgage note payable, principal and interest (7.25%)
 due in monthly payments of approximately $27,400
 through March, 2008 with a balloon of $1,431,391 due
 then.................................................    2,558,748   2,696,404
Term loan, payable in 33 monthly installments of
 $60,600 plus interest at prime less 1/2% through
 December, 2002. This loan is uncollateralized. ......      727,400   1,454,600
Term loan, payable in 18 monthly installments of
 $41,667 plus interest at prime less 1/2% through
 October, 2002. This loan is uncollateralized.........      416,667         --
Term loans, payable in monthly installments of $53,487
 plus interest at prime less 1/2% through January
 2002, and a balloon payment of $272,016 due January,
 2002. Monthly payments of $9,154 plus interest at
 prime less 1/2% from February, 2002 through November
 1, 2005. Monthly payments of $2,746 plus interest at
 prime less 1/2% through April 1, 2005. These loans
 are collateralized by machinery and equipment. ......    1,215,015   1,856,858
Capital leases, due in monthly installments of
 approximately $36,677, including interest, ranging
 from 2.90% to 9.37% through 2006; collateralized by
 certain equipment. ..................................      869,622   1,213,337
12.25% subordinated debenture, due December 31, 2003,
 interest is payable quarterly through maturity (see
 Note 13).............................................          --      500,000
Note payable to previous owner in connection with an
 acquisition of assets, due on March 31, 2002 plus
 quarterly installments of interest at 7.0% through
 March 31, 2002. .....................................      512,500     512,500
Note payable to previous owner in connection with an
 acquisition of assets, due on October 31, 2004 plus
 quarterly installments of interest at 7.0% through
 October 31, 2004.....................................      800,000     800,000
                                                        ----------- -----------
                                                         17,973,893  20,818,687
Less current maturities...............................    2,825,785   1,877,804
                                                        ----------- -----------
                                                        $15,148,108 $18,940,883
                                                        =========== ===========
</TABLE>

                                      F-11
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  Scheduled annual maturities of long-term debt as of December 31, 2001 are as
follows:

<TABLE>
<CAPTION>
   Year Ending December 31
   -----------------------
   <S>                                                               <C>
     2002........................................................... $ 2,825,785
     2003...........................................................  11,776,526
     2004...........................................................   1,188,057
     2005...........................................................     283,745
     2006...........................................................     200,453
     Thereafter.....................................................   1,699,327
                                                                     -----------
                                                                     $17,973,893
                                                                     ===========

  Scheduled annual maturities of capital leases as of December 31, 2001 are as
follows:

<CAPTION>
   Year Ending December 31
   -----------------------
   <S>                                                               <C>
     2002........................................................... $   379,403
     2003...........................................................     361,658
     2004...........................................................     107,223
     2005...........................................................      18,469
     2006...........................................................       2,869
                                                                     -----------
                                                                     $   869,622
                                                                     ===========
</TABLE>

8. Accrued Expenses

  As of December 31, 2001 and 2000, accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                                             2001       2000
                                                          ---------- ----------
   <S>                                                    <C>        <C>
   Payroll and related expenses.......................... $  336,651 $  280,552
   Other accrued expenses................................  2,052,073  1,856,333
                                                          ---------- ----------
   Total accrued expenses................................ $2,388,724 $2,136,885
                                                          ========== ==========
</TABLE>

9. Income Taxes

  The sources of temporary differences and the tax effect of each as of
December 31, 2001 and 2000 as follows:

<TABLE>
<CAPTION>
                                                             2001       2000
                                                           --------  ----------
   <S>                                                     <C>       <C>
   Inventory reserves..................................... $ 17,250  $   17,250
   Net operating loss carryforwards.......................  329,129   1,394,219
   Depreciation........................................... (146,615)   (109,115)
   Goodwill / intangibles................................. (224,420)   (168,170)
   AMT credit carryforward................................  144,239      81,587
   Other..................................................   51,711      26,866
                                                           --------  ----------
     Total net deferred tax asset......................... $171,294  $1,242,637
                                                           ========  ==========
</TABLE>

                                     F-12
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

  The net deferred asset has been recognized on the balance sheet as follows:

<TABLE>
<CAPTION>
                                                              December 31
                                                          ---------------------
                                                            2001        2000
                                                          ---------  ----------
   <S>                                                    <C>        <C>
   Current deferred tax asset............................ $ 398,090  $  384,125
   Noncurrent deferred tax (liability) asset.............  (226,796)    858,512
                                                          ---------  ----------
                                                          $ 171,294  $1,242,637
                                                          =========  ==========
</TABLE>

  As of December 31, 2001, the Company had net operating loss carryforwards of
approximately $330,000, expiring through 2010.

  Provision for income taxes for 2001, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                                      2001      2000     1999
                                                   ---------- -------- --------
   <S>                                             <C>        <C>      <C>
   Current federal tax expense.................... $   62,652 $ 32,000 $ 13,467
   Current state tax expense......................    226,273   77,361   24,177
   Deferred tax expense...........................  1,087,620  568,542  404,022
                                                   ---------- -------- --------
   Provision for income tax....................... $1,376,545 $677,903 $441,666
                                                   ========== ======== ========
</TABLE>

  Significant differences between taxes computed at the federal statutory rate
and the provision for income taxes were.

<TABLE>
<CAPTION>
                                                             Years Ended
                                                            December 31,
                                                          ---------------------
                                                          2001    2000    1999
                                                          -----   -----   -----
   <S>                                                    <C>     <C>     <C>
   Taxes at U.S. Federal statutory rate.................. 34.00%  34.00%  34.00%
   State income taxes, net of federal benefit............  7.23%   5.40%   3.52%
   Other, net............................................ (1.72)% (0.87)%  6.64%
   Permanent differences.................................  4.49%   5.48%   9.47%
                                                          -----   -----   -----
                                                          44.00%  44.01%  53.63%
                                                          =====   =====   =====
</TABLE>

  Certain gains which were recognized as a result of the Company's emergence
from bankruptcy, in 1993, are not considered taxable income for either federal
or state purposes. Additionally, gains recognized from exchanging debt for
common stock are not considered taxable income. However, these gains reduce
prior years' net operating loss carryforwards.

  In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities and projected
future taxable income in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income over the
periods which the deferred tax assets are deductible, along with reasonable
and prudent tax planning strategies and the expiration dates of carryforwards,
as of December 31, 2001 management believes it is more likely than not the
Company will realize the benefits of these deductible differences.

                                     F-13
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


10. Common Stock Subject to Repurchase Agreements

  During 1998, the Company issued 125,000 shares of common stock valued at
$500,000 in connection with the acquisition of the roof drainage manufacturing
segment of Benjamin Obdyke, Inc. In conjunction with the transaction, the
Company entered into a repurchase agreement whereby the holder of the common
stock had the option to require the Company to repurchase the stock at $4.00.
These shares have been classified as redeemable common stock in the
consolidated financial statements. On January 21, 2000, the holder of the
common stock exercised its option to receive cash proceeds of $500,000. The
holder sold the 125,000 shares of common stock at $2.25 per share to an
unrelated third party. The remaining $226,254, including transfer fees, was
paid by the Company.

  On December 20, 2000 the holder of common stock subject to the holder's
right to require the the Company to purchase the shares exercised that right,
and the Company purchased the 125,000 shares of common stock at $2.00 per
share.

11. Earnings per Share

  Basic and diluted earnings per share for the years 1999 through 2001 are as
follows:

<TABLE>
<CAPTION>
                                                  2001       2000       1999
                                               ---------- ---------- ----------
<S>                                            <C>        <C>        <C>
Basic earnings per share
  Net income available to common
   stockholders............................... $1,751,967 $  862,379 $  381,797
                                               ---------- ---------- ----------
  Weighted average common shares outstanding..  5,271,971  5,364,497  5,483,726
                                               ---------- ---------- ----------
Basic earnings per share...................... $     0.33 $     0.16 $     0.07
                                               ========== ========== ==========
Diluted earnings per share
  Income before preferred stock dividend...... $1,751,967 $  862,379 $  381,797
  Add back interest expense net of tax effect
   on dilutive shares.........................      1,143    189,000    208,000
                                               ---------- ---------- ----------
  Diluted Net Income.......................... $1,753,110 $1,051,379 $  589,797
                                               ========== ========== ==========
  Weighted average common shares outstanding..  5,271,971  5,364,497  5,483,726
  Add: effect of vested and non-vested
   dilutive securities........................  1,085,907    597,311    956,293
  Add: effect of convertible debt shares......     11,604    794,118    941,177
                                               ---------- ---------- ----------
                                                6,369,481  6,755,925  7,381,196
                                               ========== ========== ==========
  Diluted earnings per share (1).............. $     0.28 $     0.16 $     0.07
                                               ========== ========== ==========
</TABLE>
--------
(1)  Diluted earnings per share cannot be antidilutive or show additional
     income.

  Stock equivalents which were exercisable at prices greater than the average
market price of the common shares during the year have been excluded from the
computation since the effect would be anti-dilutive. As of December 31, 2001,
there were 118,450 options meeting this criterion.

                                     F-14
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


12. Stock Options

  The Company may grant stock options to key executives, directors, management
personnel, other employees and consultants under its stock option plan and
under various grants made outside the plan. Grants of stock options for the
periods indicated were as follows:

<TABLE>
<CAPTION>
                                    Wtd. Avg.            Wtd. Avg.            Wtd. Avg.
                           2001       Price     2000       Price     1999       Price
                         ---------  --------- ---------  --------- ---------  ---------
<S>                      <C>        <C>       <C>        <C>       <C>        <C>
Outstanding as of
 beginning of year...... 2,966,450    $1.78   2,375,350    $1.75   2,341,450    $1.73
Options granted.........    30,000    $2.95     645,000    $2.00      37,400    $2.25
Options exercised or
 cancelled..............  (188,942)   $3.01     (53,900)   $2.64      (3,500)   $1.78
                         ---------            ---------            ---------
Outstanding as of
 December 31............ 2,807,508    $1.71   2,966,450    $1.78   2,375,350    $1.75
                         =========            =========            =========
Exercisable as of
 December 31............ 2,487,508    $1.67   2,371,450    $1.73   1,890,350    $1.76
                         =========            =========            =========
</TABLE>

  The following table summarizes information about stock options outstanding
as of December 31, 2001:

<TABLE>
<CAPTION>
                                Weighted
                                 Average
                                Remaining      Weighted                     Weighted
 Range of       Number of       Years of       Average       Number of      Average
 Exercise        Options       Contractual     Exercise       Options       Exercise
   Price       Outstanding        Life          Price       Exercisable      Price
 --------      -----------     -----------     --------     -----------     --------
<S>            <C>             <C>             <C>          <C>             <C>
$1.50-$2.99     2,719,058         7.28          $1.66        2,399,058       $1.61
$3.00-$3.50        88,450         7.24          $3.28           88,450       $3.28
                ---------                                    ---------
                2,807,508                                    2,487,508
                =========                                    =========
</TABLE>

  The Company did not recognize compensation costs for stock based
compensation awards in 2001, 2000 and 1999. The Company accounts for such
compensation under the provisions of Accounting Principles Board Opinion No.
25. Had compensation cost for the Company's stock-based compensation plans
been determined based on the fair value at the grant dates for awards granted
in 2001, 2000 and 1999 consistent with SFAS 123 "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), there would have been no change to income
available to common stockholders or earnings per share.

13. Common Stock and Warrants

  In January 1998, in connection with the purchase of certain Obdyke assets
the Company issued 300,000 warrants at an exercise price of $4.25. In January,
1998 and December 1997, the Company issued 40,000 shares of Series A
Convertible Preferred Stock for $100 per share. These shares had a $100 per
share liquidating preference. Effective as of January 1, 1999, the 40,000
shares of Series A Preferred Stock were exchanged for 10% Subordinated
Convertible Debentures (the "10% Debentures") due January 2, 2004. The 10%
Debentures were convertible at any time into 23.53 common shares for each $100
of principal amount of the 10% Debentures outstanding on the conversion date
subject to specified anti-dilution adjustments. The 10% Debentures were pre-
payable only when the Company's common stock trades above $9.00 per share for
10 consecutive days. Simultaneously with the exchange of the Series A
Preferred Stock, the Company extended the exercise date on the 300,000 common
stock warrants from January 2, 2003 to December 31, 2003.

  Effective September 30, 2000, the Company entered into an agreement pursuant
to which: (a) one of the Company's 10% Debentures in the principal amount of
$2,500,000 was amended and restated to (i) increase the interest rate from 10%
to 11%, (ii) delete the conversion provisions, and (iii) provide for a
prepayment premium; (b) a stock purchase warrant for the purchase of 240,000
shares of the Company's common stock held was canceled; and (c) 125,000
unregistered shares of the Company's common stock were issued to the holder of
the

                                     F-15
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

above debenture. On December 20, 2000, after the holder of the 125,000 shares
exercised its right to require the Company to purchase those shares, the
Company purchased all 125,000 shares at $2.00 per share.

  Effective January 12, 2001, the Company entered into an agreement pursuant
to which the holder surrendered the Company's 12.25% Subordinated Debenture in
the principal amount of $500,000 and was issued 250,000 shares of the
Company's common stock. The holder also surrendered a warrant for the purchase
of 60,000 shares of the Company's common stock and agreed to the amendment and
restatement of the Company's other 10% Debenture in the principal amount of
$1,500,000 to delete the conversion provisions.

  Effective February 7, 2001, the Company purchased from four individuals
certain options for the purchase of an aggregate of 100,000 shares of the
Company's common stock at exercise prices ranging from $3.25 to $4.65 per
share. The purchase price paid by the Company for these warrants was $0.25 per
warrant, for a total consideration of $25,000.

  Stock warrant transactions are summarized as follows:

<TABLE>
<CAPTION>
                                                           Stock    Wt Avg Price
                                                          Warrants  per Warrant
                                                          --------  ------------
   <S>                                                    <C>       <C>
   Outstanding, January 1, 1998..........................  375,000     $1.53
   Issued................................................  350,000      4.27
                                                          --------     -----
   Outstanding, December 31, 1998........................  725,000      2.86
   Exercised and expired................................. (425,000)     1.87
                                                          --------     -----
   Outstanding, December 31, 1999........................  300,000     $4.25
   Exercised, expired or cancelled....................... (240,000)     4.25
                                                          --------     -----
   Outstanding, December 31, 2000........................   60,000     $4.25
   Exercised, expired or cancelled.......................  (60,000)     4.25
                                                          --------     -----
   Outstanding, December 31, 2001........................      --        --
                                                          ========     =====
</TABLE>

  At December 31, 2001, $289,250 is due from officers and one director for
stock subscribed, relating to loans for the exercise of options and the
purchase of stock.

  In December 2001, the Board of Directors approved the forgiveness of
$193,666 of debt related to subscribed stock in the form of a bonus, which was
included in selling, general and administrative expense in the consolidated
statement of operations for the year ended December 31, 2001.

                                     F-16
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


14. Commitments and Contingencies

  The Company leases certain real property and equipment under noncancellable
operating leases. Under certain leasing arrangements, the Company pays
property taxes, insurance and maintenance related to the leased property. Rent
expense for the years ended December 31, 2001, 2000 and 1999 was $1,074,164,
$907,156 and $833,464, respectively. The Company rents warehouse facilities
under long term operating leases from the previous owners of Walker and
CopperCraft. Total rent expense was $206,676 and $106,008 for 2001 and 2000,
respectively. As of December 31, 2001, minimum rental commitments under long-
term, noncancellable operating leases were as follows:

<TABLE>
<CAPTION>
   Year Ending December 31
   -----------------------
   <S>                                                                <C>
     2002............................................................ $1,028,316
     2003............................................................    531,109
     2004............................................................    158,374
     2005............................................................     81,117
     2006............................................................      4,444
                                                                      ----------
                                                                      $1,803,360
                                                                      ==========
</TABLE>

  The Company's current involvement in legal proceedings are those which arise
in the ordinary course of business. In the opinion of management, the outcome
of these matters will not have a material adverse effect on the financial
position, results of operation, or liquidity of the Company.

  The Company participates in a multi-employer pension plan covering
substantially all of its union employees. The union employees comprise 52% of
the Company's workforce, which are represented by two unions. The Company
makes monthly payments as required into the multi-employer plan trust
established for union employees. Under the Employee Retirement Income Security
Act of 1974, as amended by the Multi-Employer Pension Plan Amendments Act of
1980, an employer is liable for a proportionate part of the plan's unfunded
vested benefits liability. The Company's share of the unfunded liability
relating to Local 107 Multi-Employer Pension Plan for the year ending December
31, 2001 is approximately $170,000. The Company's share of the unfunded
liability relating to Local 169's Multi-Employer Pension Plan for the year
ending December 31, 2001 is $0. The Company expensed approximately $355,000
and $80,000 in 2001 for the Local 169 and Local 107 pension plans,
respectively. The Company's union agreements expire on December 31, 2005.

15. Concentration of Credit Risk Arising from Cash Deposits

  The Company maintains cash balances at a financial institution located in
the Delaware Valley area. The accounts at the institution are insured by the
Federal Deposit Insurance Corporation up to $100,000. During the year, the
Company's cash balances periodically exceed the insured limit.

16. Disclosure About Fair Value of Financial Instruments

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

  Accounts Receivable and Accounts Payable

  The carrying amount approximates fair value because of the short maturity of
those instruments.

                                     F-17
<PAGE>

                             BERGER HOLDINGS, LTD.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  Long-Term Debt

  The fair value of the Company's long-term debt is estimated based on the
current rates available to the Company for debt of the same remaining
maturities. As of December 31, 2001, the carrying value of this debt,
aggregating $17,973,893 approximates the fair value.

17. Supplementary Information (Unaudited)

  This table summarizes the unaudited results of operations for each quarter
of 2001 and 2000.

<TABLE>
<CAPTION>
                            First       Second       Third      Fourth       2001
                         -----------  ----------- ----------- ----------- -----------
<S>                      <C>          <C>         <C>         <C>         <C>
2001
  Net Sales............. $10,224,362  $13,870,909 $14,203,824 $12,829,001 $51,128,096
  Operating income......      65,641    1,491,735   1,886,708   1,260,557   4,704,641
  Net income (loss).....    (205,773)     603,473     831,965     522,302   1,751,967
  Basic earnings (loss)
   per share............ $      (.04) $       .11 $       .16 $       .10 $       .33
  Diluted earnings
   (loss) per share..... $      (.04) $       .10 $       .13 $       .08 $       .28

<CAPTION>
                            First       Second       Third      Fourth       2000
                         -----------  ----------- ----------- ----------- -----------
<S>                      <C>          <C>         <C>         <C>         <C>
2000
  Net Sales............. $ 8,721,187  $11,737,993 $12,396,183 $12,516,920 $45,372,283
  Operating income......     497,564    1,021,159   1,050,411     744,172   3,313,306
  Net income............      49,805      298,191     315,140     199,243     862,379
  Basic earnings per
   share................ $      0.01  $      0.06 $      0.06 $      0.04 $      0.16
  Diluted earnings per
   share................ $      0.01  $      0.05 $      0.05 $      0.04 $      0.16
</TABLE>

  The sum of quarterly earnings per common share may differ from full-year
amounts due to changes in the number of shares outstanding during the year.

                                     F-18