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U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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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, 2000

OR

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

FOR THE TRANSITION PERIOD FROM  TO

COMMISSION FILE NUMBER 0-13198

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MORTON INDUSTRIAL GROUP, INC.(Exact name of registrant as specified in its charter)

Georgia(State or other jurisdiction of
Incorporation or organization)

38-0811650(I.R.S. Employer Identification No.)


1021 W. Birchwood, Morton, Illinois 61550(Address of principal executive offices)

(309) 266-7176(Registrant's telephone number, including area code)

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

Securities
registered pursuant to section 12(g) of the Act: Class A Common Stock, par value $.01 per share(Title of class)

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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.   /x/

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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 13, 2001, the aggregate market value of the Class A Common Stock held by non-affiliates was approximately $3,240,000 and there were
4,400,850 shares of Class A Common Stock and 200,000 shares of Class B Common Stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement of the Registrant for the Annual Meeting of Shareholders to be held in June, 2001 are incorporated by reference into
Part III hereof.

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"Safe
Harbor" Statement Under The Private Securities Litigation Reform Act Of 1995: This annual report contains "forward looking statements" within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements containing the words "anticipates," "believes," "intends," "estimates," "expects,"
"projects" and similar words. The forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any
future results expressed or implied by such forward looking statements. Such factors include, among others, the following: the loss of certain significant customers; the cyclicality of our
construction and agricultural sales; risks associated with our acquisition strategy; general economic and business conditions, both nationally and in the markets in which we operate or will operate;
competition; and other factors referenced in the Company's reports and registration statements filed with the Securities and Exchange Commission. Given these uncertainties, prospective investors are
cautioned not to place undue reliance on such forward looking statements. The forward looking statements contained herein speak only of the Company's expectation as of the date of this annual report.
We disclaim any obligations to update any such factors or publicly announce the result of any revisions to any of the forward looking statements contained herein to reflect future events or
developments.

PART I

Item 1. Business

General Development of the Business

On January 20, 1998, Morton Metalcraft Holding Co. and its subsidiaries ("Morton") merged (the "Merger") with MLX Corp. ("MLX"), with MLX being the
surviving corporation. As a result of the Merger, Morton ceased to exist as a separate corporate entity and MLX amended its Articles of Incorporation to change the corporate name of MLX to Morton
Industrial Group, Inc. (the Company). Morton was engaged in the business of manufacturing fabricated metal components for construction and agricultural original equipment manufacturers.

Since
the date of Merger, we have made four acquisitions in 1998, one acquisition in 1999 and one disposition at the end of 1999.

We
established our Morton Custom Plastics Division in March 1998 through the acquisition of Carroll George Inc., located in Northwood, Iowa, a manufacturer of
thermoformed acoustic products for construction and agricultural original equipment manufacturers. We expanded our plastic manufacturing capabilities and capacity with the acquisition of
Mid-Central Plastics in May, 1998. Operating out of its facility in West Des Moines, Iowa, Mid-Central Plastics specializes in manufacturing injection molded plastic products
for construction and agricultural original equipment manufacturers as well as other industrial customers. We sold the assets of Carroll George Inc. on December 31, 1999.

In
April 1998, we acquired B&W Metal Fabricators, a sheet metal fabricator with a facility in Welcome, North Carolina. Through the acquisition of B&W Metal Fabricators, we
expanded our presence in the southeastern United States, allowing us to better serve our existing customers. We also acquired certain assets of SMP Steel Corporation in 1998, including its sheet metal
fabrication facility in Honea Path, South Carolina. The acquisition of these assets added metal fabrication capacity for our growing business in the southeastern United States.

On
April 15, 1999, we acquired from Worthington Custom Plastics three manufacturing facilities that produce plastic components for industrial original equipment manufacturers.
The Worthington acquisition expanded our plastic product offerings to include washing machine parts, electronics housings and other injection molded and thermoformed plastic products. The Worthington
acquisition provided us critical mass in the plastics business and added new original equipment manufacturers to our customer base.

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Narrative Description of Business

BUSINESS

Overview

We are a contract manufacturer of highly engineered metal and plastic components and subassemblies for industrial, construction and agricultural original
equipment manufacturers ("OEM's"). Our metal products include cabs, engine enclosures, panels, platforms, frames and complex weldments used in backhoes, excavators, tractors, lifts and similar
industrial equipment. Our plastic products include parts used in off-road recreational vehicles, home appliances, aircraft interiors, electronic equipment enclosures and covers, marine
engines and commercial lighting products. Our largest customers include Deere & Co. ("Deere"), Caterpillar Inc. ("Caterpillar"), GE Appliances, B/E Aerospace, Compaq and
Polaris Industries. Our twelve manufacturing facilities are located in the midwestern and southeastern United States in close proximity to their customers.

MARKETS

Customers use our products in industrial, construction and agricultural equipment. As OEM's in these industries have intensified their focus on core
competencies, they have increasingly outsourced more of their production parts to reduce costs. To effectively manufacture products for OEMs, suppliers must invest in technologically advanced
equipment, develop in-house design capabilities, and coordinate manufacturing and product delivery with their customers.

Historically,
our largest customers, Deere, Caterpillar, GE Appliances, B/E Aerospace, Compaq and Polaris Industries, have been supplied by a large number of local suppliers that
would each produce a small number of products. As these OEMs have increased the complexity of their equipment and become more dependent on component and subassembly suppliers, they have reduced
the size of their supplier base and have established close relationships with a smaller number of sophisticated suppliers who can provide a range of services, including design engineering,
prototyping, sophisticated quality systems, and just-in-time delivery. The high levels of service necessary to serve these customers, coupled with significant tooling
investments, have resulted in the sole-sourcing of many products rather than dual or multi-sourcing. Currently, we are the sole-source provider of over 85% of the products that
we supply to our customers. As these customers continue to reduce the size of their supplier base and outsource a growing percentage of their product needs, we expect to become the
sole-source provider on an increasing number of products.

Industrial Equipment

We produce a range of components and subassemblies for equipment used in a variety of industrial applications. Our products are used in off-road
recreational vehicles, home appliances, computer equipment, aircraft interiors and commercial lighting products. Customers in the industrial equipment area generally serve stable or growth markets,
and these customers include GE Appliances, Compaq, B/E Aerospace, Honda, Yamaha, Polaris, Arctic Cat, and Lithonia Lighting. Industrial equipment products account for approximately 55% of our 2000 net
sales.

Construction Equipment

The $22 billion U.S construction equipment industry includes construction, earth moving and forestry equipment, as well as some material handling
equipment, lifts, off-highway trucks and a variety of machines for specialized industrial applications. Caterpillar and Deere dominate the U.S. construction equipment industry, and
together accounted for approximately 55% of total unit sales in 2000. We supply metal components and subassemblies, such as engine enclosures, panels, platforms, frames and complex weldments as well
as plastic components such as interior cab dash surround panels, air ducts and handles.

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Our customers use these products in backhoes, excavators, wheel loaders, skid steer loaders, lifts and similar construction equipment. Our sales per construction equipment vehicle range from $500 to
$2,500. Construction equipment products account for approximately 30% of our 2000 net sales.

Agricultural Equipment

The $15 billion U.S. agricultural equipment industry includes large, relatively expensive products such as tractors, combines and other farming
equipment. Deere and Caterpillar accounted for approximately 35% of total agricultural equipment unit sales in 2000. We supply metal components and subassemblies such as steps, fenders, feeder
housings, grills, and landing decks as well as plastic components such as fenders, tool boxes, facia and covers used in tractors, combines and other agricultural equipment. Our sales per agricultural
equipment vehicle range from $200 to $4,000. Agricultural equipment products account for approximately 15% of our 2000 net sales.

PRODUCTS AND SERVICES

Products

Our investments in modern equipment and systems have allowed us to produce a broad line of highly engineered components and subassemblies. We strive to meet
customers' needs for design engineering, prototyping, product fabrication and just-in-time delivery.

Sheet Metal Fabrication

Our sheet metal fabrication capabilities include laser cutting, forming, press punching, welding, painting and assembly processes. Our sheet metal fabrication
processes operate on information created by CAD/CAM software, utilize optic laser cutting machines to cut parts at high speeds and use robotic welders to complement manual welding operations. Our
painting operations are capable of producing the wide variety of paint finishes required by customers.

Fabricated
Sheet Metal Products Include:



Injection Molded and Thermoformed Plastic Components

Our injection molded plastic capabilities include such secondary and assembly processes as ultrasonic and hot plate welding, adhesive and solvent bonding,
insert staking, snapfit and fastener assembly. Our capabilities in injection molded processes include a wide range of injection molding machine press sizes and gas assist units. Both manual and
robotic painting capability exists at a number of plastics facilities.

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Our thermoformed plastic capabilities include vacuum and pressure thermoforming, robotic router trimming, and adhesive and ultrasonic bonding. In addition, we have extensive capability in plastic
machining including specialized equipment to handle plastic gears.

Plastic
Components include:



SERVICES

We offer our customers a number of services described below:

Product Design and Development

This service category includes design, development, analysis and costing for our products. We prefer to and often work with customers in the early stages of
designing their products.

Prototype Tooling

This service category includes prototype, tooling and preproduction steps in the manufacturing process. Our dedicated prototype and tooling departments work
with customers throughout development efforts, allowing for a smooth introduction of new products.

Part Decorating and Exterior Finishing

This service category includes a number of decorating operations such as pad printing, hot stamping, liquid and powder coat painting and decal application.

Just-In-Time Delivery

This service category includes providing customers the ability to order products in low lot sizes with minimal lead time enabling them to reduce their overall
order cycle time. Morton also provides deliveries that are specially sequenced to customers' manufacturing schedules.

Engineering and Design Capabilities

Engineering capabilities have become increasingly emphasized as suppliers' design services for new projects. Computer aided design capabilities include
Pro-Engineering, Anvil 1000/5000, Apollo, Merry Mechanization and CADKEY. We have focused our computer aided design investment on the Pro-Engineering system during the last
several years because Pro-Engineering is the preferred system of the majority of our customers. Computer aided design allows us to download completed and approved

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designs directly to production equipment in most plants. The resulting direct interaction between customers' designers and our engineers facilitates joint development of new components and redesigns
of old parts.

Systems and Controls

Consistent with our emphasis on technology, computer systems and controls are an integral part of our operating strategy. We have invested heavily in
management information systems and computer aided design capabilities and control functions, particularly during the last several years. We also use computer systems to provide timely performance
measurements of shop floor quality and activity, daily actual cost information for each factory, electronic data interchange with major customers, real-time dispatching of work orders,
integration of purchasing information with production scheduling, capacity management and inventory information.

Sales and Marketing

To better serve our customers, we have combined our sales and engineering organizations. The sales and engineering group has primary responsibility for
managing relationships with customers and working with them to design new products. Our customers are serviced by account teams led by an account manager and including representatives from our primary
functional areas. These areas include engineering, quality assurance and customer service. Account teams work with the customer to design products and produce prototypes, schedule production and
monitor quality and customer satisfaction. Our account managers also lead the new business development process, working with customers to obtain details of new outsourcing programs, new products
currently being designed and existing products which will be redesigned. We believe that the structure of our sales and marketing organization helps to ensure cooperation in product design and helps
us to gain repeat and new business from our customers.

Manufacturing/Production

We use a range of manufacturing processes to serve the needs of our customers. Using these processes, we can manufacture products ranging from simple metal and
plastic parts to more complex metal and plastic subassemblies. Our design and engineering capabilities provide us with a competitive edge in obtaining and maintaining preferred supplier status with
our customers.

Sheet Metal Fabrication.Our sheet metal fabrication capabilities include laser cutting, forming, press punching,
folding, welding, painting and assembly processes. Our sheet metal fabrication processes, operating on information created by Pro Engineering software, use optic laser cutting machines to cut parts at
high speeds. We use robotic welders to complement our manual welding operations. Our painting operations are capable of producing the wide variety of paint finishes required by our customers.

Injection Molded and Thermoforming Plastic Components.Our injection molded plastic capabilities include ultrasonic and
hot plate welding, adhesive and solvent bonding, insert staking, snapfit and fastener assembly. Our injection molded processes use injection molding machine presses and gas assist units. Our
thermoformed plastic capabilities include vacuum and pressure thermoforming, robotic trimming, and adhesive and ultrasonic bonding. These processes are performed on thermoform units and automated
robotic trim stations.

Raw Materials

The primary raw materials that we use are sheet steel, compounded injection molding resins, fabrications, thermoplastic sheeting, sheeted foam, assembly parts,
paint and vinyl sheeting. Prices of these raw materials fluctuate, although the price of our most significant raw material, steel, has dropped over the past several years. Historically we have been
able to negotiate with our customers to have them absorb increases in our raw material costs. In addition, we have generally passed on reductions in our raw material

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costs to our customers. We also participate in the steel purchase programs of certain major customers which lowers our cost for steel. Generally, we purchase our raw materials from multiple suppliers,
and we believe that the prices we obtain are competitive.

Competition

The manufacturing and supplying of highly engineered metal and plastic products to original equipment manufacturers is a fragmented and highly competitive
business, with no single supplier having significant market share. We believe suppliers with a strong management team, a range of capabilities, modernized facilities and technologically sophisticated
equipment like us are more likely to benefit from original equipment manufacturers' increased outsourcing of production than other participants in the industry lacking such assets. However,
competitive pressures or other factors could cause us to lose market share or could result in a significant price erosion with respect to our products.

Regulatory/Environmental Matters

Our operations are subject to numerous federal, state and local environmental and worker health and safety laws and regulations. We believe that we are in
substantial compliance with such laws and regulations.

Financial Information about Industry Segments

Morton Industrial Group, Inc. has two reportable segments, contract metal fabrication and contract plastic fabrication. The contract metal fabrication
segment provides full-service fabrication of parts and sub-assemblies for the construction, agricultural, and industrial equipment industry. The contract plastic fabrication
segment provides full-service vacuum formed and injection-molded parts and sub-assemblies for the construction, agricultural, and industrial equipment industry.

Additional
information regarding segments can be found in footnote 17 of the accompanying Notes to Consolidated Financial Statements of the Company.

Backlog

Our backlog of orders was approximately $150.0 million at December 31, 2000, and $135.0 million at December 31, 1999. We anticipate
that we will substantially fill all of the backlog orders as of December 31, 2000 during the current year.

Patents, Trademarks, Licenses, Franchises, and Concessions

We hold no material patents, trademarks, franchises, or concessions. We are the licensee under a number of software licenses that we use in our design,
production, and other business operations. All of these licenses have customary terms and conditions.

Working Capital Items

Our working capital requirements reflect several business factors. Our working capital requirements are typically greater during the second half of the
calendar year because both Deere & Co. and Caterpillar, Inc. suspend operations for two weeks of vacation time during July and/or August. Production operations of both of these customers
also slow during the last two weeks of December. During these periods, we must rely more heavily on our credit facilities for liquidity. Our rapid growth over the last two years has also increased our
need for working capital to meet the capital expenditures required to increase production capacity.

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Employees

As of March 1, 2001, we employed 2,407 employees, of which 1,966 were hourly and 441 were salaried. None of these employees was subject to a collective
bargaining agreement. We believe our relationship with our employees is good.

Item 2. Properties

The following table presents summary information regarding our facilities. The properties are owned except where indicated by the word "leased". Lease terms
for these facilities expire between 2001 and 2008. Our facilities are generally located in close proximity to our customers.

|Location                                               |  | Approx.
Sq. Ft. |  | Products Manufactured                                                                                                                        
|------------------------------------------------------ |  | --------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|844 (leased) and 1021 West Birchwood Street,Morton, IL |  | 310,000         |  | Sheet metal enclosures and boxes, sheet metal component packages and store fixtures                                                          
|400 Detroit Avenue,Morton, IL (leased)                 |  | 155,000         |  | Special weldments, including seat modules, cabs and fabricated steel tanks                                                                   
|Peoria, IL (leased)                                    |  | 160,000         |  | Special weldments, including feeder housings and tractor frames                                                                              
|Apex, NC (leased)                                      |  | 100,000         |  | Special weldments, sheet metal enclosures and boxes, sheet metal component packages and fabricated steel tanks                               
|Honea Path, SC                                         |  | 30,000          |  | Store fixtures and sheet metal component packages                                                                                            
|Welcome, NC                                            |  | 185,000         |  | Sheet metal enclosures and boxes, special weldments, fabricated steel tanks and sheet metal component packages                               
|West Des Moines, IA                                    |  | 115,000         |  | Off road work and recreational vehicle parts and subassemblies, off road vehicle interiors and appliance parts and components                
|7301 Caldwell Road Harrisburg, NC                      |  | 110,000         |  | Electronics enclosures and components and other plastic components and subassemblies                                                         
|5685 Hwy 49 South Harrisburg, NC (leased)              |  | 127,000         |  | Plastic components and subassemblies                                                                                                         
|Concord, NC (leased)                                   |  | 76,000          |  | Plastics components and subassemblies                                                                                                        
|Lebanon, KY                                            |  | 176,000         |  | Appliance parts and components, off road work and recreational vehicle parts and subassemblies and other plastic components and subassemblies
|St. Matthews, SC                                       |  | 135,000         |  | Off road work and recreational vehicle parts and subassemblies and other plastic components and subassemblies                                

In
addition to manufacturing operations, our 1021 W. Birchwood Street complex in Morton, Illinois, houses the senior management of the Company.

While
we own much of the equipment used in our operations, we also use customer-owned tooling and equipment as well as equipment under operating leases. We believe our facilities are
adequate to satisfy current and reasonably anticipated production requirements.

Item 3. Legal Proceedings

On May 1, 2000, Worthington Industries, Inc. (Worthington) filed suit (in the United States District Court for the Southern District of Ohio,
Eastern Division) related to our 1999 acquisition of the non-automotive plastics business from Worthington. Worthington claims that it is owed additional amounts under the sales agreement
and a related service agreement, and that it is owed dividends on the preferred

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stock that it received. We believe that certain warranties and representations made by Worthington at the time of acquisition have been breached and that amounts claimed by Worthington are not due. We
have filed a counterclaim against Worthington related to these matters. Management believes that we will prevail in this litigation and does not anticipate any material impact on our financial
condition or results of operations.

We
are also involved in routine litigation. We are not currently a party to any legal proceedings that we believe would have a material adverse effect on our financial condition or
results of operations.

Item 4. Submission of Matters to Vote of Security Holders

Not applicable

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

During 1999 and through October 19, 2000, our Class A common stock traded on the Nasdaq Small Cap Market under the symbol "MGRP". Effective
October 20, 2000, the Company's Class A common stock began trading on the Nasdaq Small Cap Market under the symbol "MGRPC".

The
following table sets forth the quarterly high and low close prices during 2000 and 1999 as reported by the Nasdaq Stock Market.

|     |                          | High |   | Low   
|---- | ------------------------ | ---- | - | ------
|2000 |                          |      |   |       
|     | October 1 to December 31 |      | $ | 3.438 
|     | July 1 to September 30   |      | $ | 4.750 
|     | April 1 to June 30       |      | $ | 6.000 
|     | January 1 to March 31    |      | $ | 6.375 
|1999 |                          |      |   |       
|     | October 1 to December 31 |      | $ | 5.125 
|     | July 1 to September 30   |      | $ | 7.375 
|     | April 1 to June 30       |      | $ | 9.000 
|     | January 1 to March 31    |      | $ | 14.000

As
of March 13, 2001 there were 3,573 holders of record and 1,998 beneficial holders of our Class A Common Stock.

We
did not declare or pay any common stock dividends in our fiscal years ended December 31, 2000 and 1999. Our credit agreements preclude the payment of dividends.

On
September 20, 2000, the Company issued warrants to purchase 238,548 shares of its Class A common stock. The warrants are exercisable at any time during the period
from September 28, 2000 through September 28, 2001, at an exercise price of $.01 per share.

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Item 6. Selected Financial Data

SELECTED HISTORICAL FINANCIAL DATA

Set forth below are certain selected historical financial data. This information should be read in conjunction with our financial statements and the related
notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein. The financial data for, and as of the end of, the fiscal years ended
June 30, 1996 and 1997, the six months ended December 31, 1997 and the fiscal years ended December 31, 1998, 1999 and 2000 are derived from our audited financial statements. The
financial data for, and as of the end of, the six months ended December 31, 1996 and the year ended December 31, 1997 are derived from our unaudited financial statements.

|                                                |                                                                                 | Year Ended
June 30, |        | Six Months Ended
December 31, |     | Year Ended
December 31, |       
|----------------------------------------------- | ------------------------------------------------------------------------------- | ------------------- | ------ | ----------------------------- | --- | ----------------------- | ------
|
|
|Operating data:                                 |                                                                                 |                     |        |                               |     |                         |       
|                                                | Net sales                                                                       |                     | $      | 59,006                        |     | $                       | 80,762
|                                                | Cost of sales                                                                   |                     |        | 50,049                        |     |                         | 70,541
|                                                | Gross profit                                                                    |                     |        | 8,957                         |     |                         | 10,221
|                                                | Selling and administrative expenses                                             |                     |        | 4,900                         |     |                         | 7,003 
|Merger related charges(1)                       |                                                                                 |                     |       |                               |     |                        |       
|                                                | Operating income (loss)                                                         |                     |        | 4,057                         |     |                         | 3,218 
|Gain (loss) on sale of business units and other |                                                                                 |                     |       |                               |     |                        |       
|Interest and other expense                      |                                                                                 |                     | (3,096 | )                             |     | (3,206                  | )     
|                                                | Earnings (loss) before income taxes, accounting change and extraordinary charge |                     |        | 961                           |     |                         | 12    
|                                                | Income taxes                                                                    |                     |        | (424                          | )   |                         | (5    
|                                                | Earnings (loss) before accounting change and extraordinary charge               |                     | $      | 537                           |     | $                       | 7     
|                                                | Earnings (loss) before accounting change and extraordinary charge per share:    |                     |        |                               |     |                         |       
|                                                |                                                                                 | Basic               |        |                               | .28 |                         |       
|                                                |                                                                                 | Diluted             |        |                               | .16 |                         |       
|Financial position (at end of period):          |                                                                                 |                     |        |                               |     |                         |       
|                                                | Working capital                                                                 |                     | $      | 4,078                         |     | $                       | 2,147 
|                                                | Total assets                                                                    |                     |        | 29,576                        |     |                         | 34,362
|                                                | Total debt                                                                      |                     |        | 26,994                        |     |                         | 27,608
|                                                | Stockholders' equity (deficit)                                                  |                     | $      | (9,106                        | )   | $                       | (9,099

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

MANAGEMENT'S DISCUSSION AND ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this annual
report.

General

We are a contract manufacturer of highly engineered metal and plastic components and subassemblies for construction, agricultural and industrial original
equipment manufacturers. Our largest customers, Caterpillar Inc. and Deere & Co., accounted for approximately 53% of our 2000 net sales.

We
price our fabricated metal and thermoformed plastic products on a cost plus basis and use an industry standard to price our injection molded plastic products. In pricing our
products, we consider the volume of the product to be manufactured, required engineering resources and the complexity of the product.

Our
customers typically expect us to offset any manufacturing cost increases with improvements in production flow, efficiency, productivity or engineering redesigns. As a part of
their supplier development programs, our primary customers initiate cost improvement efforts on a regular basis. At the conclusion of any such effort, when savings can be documented, we share the
savings with our customer.

We
have historically grown net sales and increased profitability through increased penetration of our key customers. We have increased the number of customer equipment models that
include our products and have increased the number of our products on each of our customers' equipment models. We have also grown our net sales by expanding into the southeastern United States. In
addition, we have increased our product offerings to our customers through acquisitions. These acquisitions allow us to better serve our customers growing outsourcing needs.

Results of Operations

The following table presents certain historical financial information expressed as a percentage of our net sales.

|                                                                                                     |  | Year Ended December 31, |  
|---------------------------------------------------------------------------------------------------- |  | ----------------------- | -
|
|Statements of Operations Data:                                                                       |  |                         |  
|Net sales                                                                                            |  | 100.0                   | %
|Gross profit                                                                                         |  | 14.2                    |  
|Selling and administrative expenses                                                                  |  | 9.6                     |  
|Operating income (loss)                                                                              |  | 4.6                     |  
|Gain (loss) on sales of business units and other                                                     |  |                        |  
|Interest and other expense                                                                           |  | 2.9                     |  
|Earnings (loss) before income taxes, cumulative effect of accounting change and extraordinary charge |  | 1.7                     |  

Year Ended December 31, 2000 versus Year Ended December 31, 1999

Net sales for the year ended December 31, 2000 were $278.8 million compared to $219.3 million for the year ended December 31, 1999,
an increase of $59.5 million or 27.1%. Sales increased over $41.4 million in the contract metal fabrication segment of the business. This increase resulted primarily from existing
customers' selection of us to manufacture components for new construction and agricultural products. Sales for the contract plastics fabrication segment of the business increased by
$18.1 million for

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2000 compared to 1999, due primarily to a full year of operations for Morton Custom Plastics, acquired in April, 1999; sales decreased, however, on a pro forma basis approximately $9 million
for 2000 compared to 1999. This approximately 6% decrease resulted from lower sales of computer-related products.

Sales
to Caterpillar and Deere were approximately 53% and 49% of our net sales for 2000 and 1999, respectively.

Gross
profit for the year ended December 31, 2000 was $36.1 million compared with $24.9 million for the year ended December 31, 1999, an increase of
$11.2 million or 45.1%. Gross profit for the contract metal fabrication segment of the business increased $4.9 million, or 33.8%. The overall gross profit percentage for this segment
decreased slightly, to 13.2% from 13.7%, primarily as a result of costs incurred related to new projects. Gross profit for the contract plastic fabrication segment increased $6.3 million, or
60.8%, due primarily to a full year of operations for Morton Custom Plastics, acquired in April, 1999. The combined gross profit percentage increased to 13.0% from 11.3%, primarily as a result of cost
savings efforts introduced at the facilities acquired in 1999.

Selling
and administrative expenses for the year ended December 31, 2000 amounted to $27.0 million compared with $24.1 million in the prior year, an increase of
$2.9 million or 12.2%. This increase relates primarily to costs incurred by the operations acquired in 1999. During 2000, we owned those facilities for a full year, compared to less than
9 months in 1999.

Other
income of $1.3 million resulted primarily from separate sales of land and a product line from our Harrisburg, NC operations.

Interest
expense in the year ended December 31, 2000 amounted to $10.8 million compared to $8.2 million in 1999. This increase resulted primarily from additional
interest costs incurred related to the 1999 acquisitions (a full year in 2000 compared to less than 9 months in 1999), an increased interest rate and other costs related to our financing
agreements.

We
recognized an income tax benefit of $1.2 million when our deferred tax assets were increased to reflect future anticipated utilization of income tax net operating loss
carryforwards. The utilization of the income tax net operating loss carryforwards is based upon the Company's future ability to generate taxable income.

Year Ended December 31, 1999 versus Year Ended December 31, 1998

Net sales for the year ended December 31, 1999 were $219.3 million compared to $151.2 million for the year ended December 31, 1998,
an increase of $68.1 million or 45.0%. The Worthington Custom Plastics acquisitions made during 1999 provided incremental net sales of approximately $73.9 million. Sales decreased by
$5.8 million in the operations owned in both 1998 and 1999, primarily from decreased sales of components and subassemblies used in agricultural machinery. This decrease relates to a softening
in demand for agricultural products that began in the fourth quarter of 1998 and is continuing.

Sales
to Caterpillar and Deere were approximately 49% and 79% of our net sales for 1999 and 1998, respectively.

We
were selected to manufacture a number of additional components for new construction and industrial products for Caterpillar and Deere in 1999. Sales of these additional components
partially offset the loss of agricultural sales.

Gross
profit for the year ended December 31, 1999 was $24.9 million compared with $21.5 million for the year ended December 31, 1998, an increase of
$3.4 million or 15.8%. The Worthington Custom Plastics acquisition provided $7.1 million of incremental gross profit. A gross margin decrease of $3.7 million was incurred by the
operations owned in both 1998 and 1999, which resulted from the lower sales referenced above and product mix changes.

11

---

Selling and administrative expenses for the year ended December 31, 1999 amounted to $24.1 million compared with $14.5 million in the prior year, an increase of
$9.6 million or 66%. This increase relates primarily to costs incurred by the operations acquired in 1999, a full year of selling and administrative costs related to the 1998 acquisitions,
approximately $575,000 of costs written-off in the first quarter, 1999, consisting of costs associated with a suspended high-yield financing, and $400,000 associated with fees
related to amendments in the Company's credit facilities.

We
sold the assets of Carroll George Inc. on December 31, 1999 for $7.5 million and incurred a loss of approximately $2.5 million.

Interest
expense in the year ended December 31, 1999 amounted to $8.2 million compared to $4.7 million in 1998. This increase resulted primarily from additional
interest costs incurred related to the 1999 acquisitions and a full year of interest related to the 1998 acquisitions.

We
incurred a charge of $1.1 million, net of a state income tax benefit, for the cumulative effect of adopting AICPA Statement of Position 98-5 "Reporting on the
Costs of Start-Up Activities" which requires costs of start-up activities and organization costs to be expensed as incurred.

An
income tax benefit of $1.2 million was recognized as a previously established state income tax reserve was no longer required.

Financial Position and Liquidity

Historically, we have funded our business with cash generated from operations and borrowings under revolving credit and term loan facilities. In the years
ended December 31, 1998, 1999 and 2000, we generated (used) cash from (in) operating activities of $(.7) million, $2.8 million and $2.9 million respectively. Our capital
expenditures for the years ended December 31, 1998, 1999 and 2000, were $10.3 million, $5.0 million and $6.7 million respectively. These capital expenditures were
principally for additions to improve or maintain our manufacturing capacity and efficiency.

In
the most significant 2000 cash transactions, we sold land, a product line and a metal machining division, generating cash proceeds of approximately $4.2 million. Sales
proceeds were used to reduce debt.

Our
consolidated working capital at December 31, 2000 was $12.9 million compared to $9.8 million at December 31, 1999. This represents an increase in
working capital of approximately $3.1 million.

We
have two separate credit facilities. The first facility is with Harris Trust and Savings Bank (Harris), and serves the company's operations other than the operations acquired from
Worthington Custom Plastics, Inc. (Worthington). The second facility, with General Electric Capital Corporation (GECC), serves the operations acquired from Worthington during the second
quarter, 1999. These facilities are separate and provide financing for the named operations. The two credit facilities are separately secured by the assets of the operations they support.

On
May, 28, 1998, we entered into a credit agreement with Harris, as Agent. The credit agreement, as last amended in December, 2000, provides a credit facility with the
following components: (i) a $23 million secured revolving credit facility; (ii) a $25 million secured term loan that matures 5 years from the date of the credit
agreement closing; and (iii) a $30 million secured term loan that matures 7 years from the date of the credit agreement closing. Both term loans fully amortize over their
respective terms with quarterly payments. The interest rates on the loans vary from 1% to 3.75% above the lender's prime rate. We used the proceeds under the facility to refinance the then existing
indebtedness, to finance the 1998 acquisitions, and for general corporate purposes. As described in Note 7 of the accompanying financial statements, warrants were issued on September 20,
2000 in connection with the Harris credit agreement.

The
amount of revolving credit availability is calculated using a borrowing base of qualified accounts receivable and inventory. As of December 31, 2000, we had additional
availability of approximately

12

---

$2.4 million under the Harris facility. We are paying this lender a fee of .125% per month based upon the amount of the revolving credit commitment and the balance of the term loans.

In
connection with the Harris financing, we have two fixed interest rate swap agreements with a commercial bank (the "counter party"). The first agreement has a notional principal
amount of $8.1 million and a termination date of May 31, 2003. The second agreement has a notional principal amount of $14.4 million and a termination date of June 30,
2003. The notional principal amount declines over the term of both agreements based upon a defined amortization schedule. The counter party has the unilateral right to cancel both agreements as of
June 30, 2001. As described in Item 7A below, these agreements are for the purpose of limiting the effects of interest rate increases on half of the Company's floating rate term debt.

Our
sources of funds to meet near term liquidity requirements for the businesses not acquired from Worthington will be the cash flows from operations, the Harris line of credit, and
management of working capital to reflect current levels of operations. We believe that these sources will be adequate through the end of the current fiscal year and beyond.

Our
separate financing arrangements for the operations acquired from Worthington are described below.

On
April 15, 1999, we entered into a financing agreement with GECC. The agreement contains a 41/2 year secured revolving credit facility with maximum
availability of $24 million and a $26 million secured term loan with a 41/2 year term. The amount of availability is based upon a borrowing base of qualified accounts
receivable and inventory. Both of the facilities bear interest at variable interest rates based on the prime rate, plus variable margins. We also incur a fee based upon a certain percentage of the
unused revolving credit facility. The term loan facility amortizes quarterly throughout its term. We must also prepay certain amounts from the sale of assets, the issuance of new equity capital and
from "excess cash flow", as defined in the agreement.

As
of December 31, 2000, we had additional availability of $0.4 million, under the GECC credit facility. We believe that the agreement with GECC, as amended in March,
2001, will provide the necessary term and revolving financing, and along with cash flows from operations, will provide the necessary levels of liquidity for the operations acquired from Worthington
through the end of the current fiscal year and beyond.

As
part of the financing for the Worthington acquisition, we issued 10,000 shares of redeemable preferred stock, which we must redeem in April, 2004 at $1,000 per share plus any
dividends accrued since April 15, 1999. The $10 million face value preferred stock was recorded at its fair value of $4.25 million. We are accreting the discount over a five year
period using the effective yield method. Dividends are payable in kind at the rate of 8% per annum. We believe that certain provisions of the agreement with Worthington preclude the payment of
dividends, and no dividends have been accrued in 2000. There are current legal proceedings related to certain Worthington matters as described in Part I, Item 3.

On
November 3, 2000, the Company entered into an agreement with First Union Securities, Inc. ("FUSI"), under which FUSI will act as the Company's exclusive financial
advisor with respect to possible debt or equity financings or recapitalizations. Mark Mealy, a director of the Company, is a Managing Director at FUSI.

We
incurred $6.7 million of capital expenditures during 2000, primarily for purchases of manufacturing equipment.

We
estimate that our capital expenditures in 2001 will total approximately $5.5 million of which $2.0 million will be for new production equipment and the remaining
$3.5 million will be for normal replacement items.

13

---

Year 2000 Readiness

We completed our preparation in 1999 for the Year 2000 date change. Our plan addressed all hardware, software and microprocessor embedded technologies. We also
surveyed our customers' and suppliers' Year 2000 readiness. We noted no significant disruptions in service and we were able to fully utilize our core business unit systems, including order entry,
inventory management, purchasing, payroll, invoicing, accounts payable, accounts receivable and general ledger.

We
expended approximately $235,000 in our Year 2000 readiness effort.

We
will continue to monitor our systems and customer and supplier readiness throughout 2001 to address unanticipated problems (which may include problems associated with
non-Year 2000 issues and disruptions to the economy in general) and ensure that all processes continue to function properly.

Seasonality

Our operating results vary significantly from quarter to quarter due to, among other things, the purchasing schedules of our key customers. Our sales and
profits historically have been higher in the first half of the calendar year due to our largest customers' preparation in the first two quarters for increased demand during the warmer months of the
year.

Impact of New Accounting Standards

In
June 1998, the Financial Accounting Standards Board issued Statement No. 133, "Accounting for Derivative Instruments and for Hedging Activities," with the effective date amended by
Statement No. 137 to fiscal years beginning after June 15, 2000. The Statement will require the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. If the derivative is a hedge, then depending on the nature of the hedge, changes in the fair value will either be offset through earnings,
against the change in fair value of hedged assets, liabilities or firm commitments or recognized in other comprehensive income until the hedged item is recognized in income. The ineffective portion of
a hedge's change in fair value will be
immediately recognized in income. The adoption of this statement will not have a material impact on the Company's financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to interest rate changes primarily as a result of our lines of credit and long-term debt used for maintaining liquidity, funding
capital expenditures and expanding our operations. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flow and to lower overall borrowing
costs. To achieve our objectives, we entered into two separate financing agreements with a group of banks and another lender. Both financing arrangements contain term loans and revolving credit
facilities. Interest is based on our lead bank's or lender's prime rate plus an applicable variable margin. We have also entered into two interest rate swap agreements, as required by our bank
financing arrangement, to limit the effect of increases in the interest rates on half of our floating rate term debt. We do not enter into interest rate transactions for speculative purposes. Under
the swap agreements, which expire May 31, 2003 to June 30, 2003, the interest rate component of the interest rate is limited to 5.875% on half of our $35,922 term loans under that
certain financing arrangement.

14

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Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

|MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES                                                                 |  |   
|-------------------------------------------------------------------------------------------------------------- |  | --
|Report of KPMG LLP, Independent Auditors                                                                       |  | 16
|Consolidated Balance Sheets as of December 31, 1999 and 2000                                                   |  | 17
|Consolidated Statements of Operations for the years ended December 31, 1998, 1999
and 2000                     |  | 18
|Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 1998, 1999 and 2000 |  | 19
|Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999
and 2000                     |  | 20
|Notes to Consolidated Financial Statements                                                                     |  | 21
|Schedule IIValuation and Qualifying Accounts for the years ended December 31, 1998, 1999 and 2000             |  | 39

15

---



Independent Auditors' Report

The
Board of Directors and Stockholders
Morton Industrial Group, Inc.:

We
have audited the accompanying consolidated balance sheets of Morton Industrial Group, Inc. and Subsidiaries as of December 31, 1999 and 2000, and the related
consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2000. In connection with our
audit of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial
statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule 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 Morton Industrial Group, Inc. and
Subsidiaries as of December 31, 1999 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,
2000, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related consolidated 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.



Indianapolis,
Indiana
March 16, 2001

16

---



MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIESConsolidated Balance Sheets    December 31, 1999 and 2000  (Dollars in thousands, except share data)

|                                                                                                                                                                     |                                                                                                                                           | 1999                                 |         | 2000    |        
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ------- | ------- | -------
|Assets                                                                                                                                                               |                                                                                                                                           |                                      |         |         |        
|Current assets:                                                                                                                                                      |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     | Trade accounts receivable, less allowance for doubtful accounts of $320 in 1999 and $1,324 in 2000                                        |                                      | $       | 27,968  |        
|                                                                                                                                                                     | Inventories                                                                                                                               |                                      |         | 22,420  |        
|                                                                                                                                                                     | Prepaid expenses                                                                                                                          |                                      |         | 1,277   |        
|                                                                                                                                                                     | Refundable income taxes                                                                                                                   |                                      |         | 63      |        
|                                                                                                                                                                     | Deferred income taxes                                                                                                                     |                                      |         | 1,172   |        
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     |                                                                                                                                           | Total current assets                 |         |         | 52,900 
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|Property, plant, and equipment, net                                                                                                                                  |                                                                                                                                           |                                      | 56,333  |         | 51,555 
|Intangible assets, at cost, less accumulated amortization                                                                                                            |                                                                                                                                           |                                      | 11,827  |         | 11,186 
|Deferred income taxes                                                                                                                                                |                                                                                                                                           |                                      | 4,646   |         | 5,398  
|Other assets                                                                                                                                                         |                                                                                                                                           |                                      |        |         | 643    
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     |                                                                                                                                           | $                                    | 125,706 |         | 130,533
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|Liabilities and Stockholders' Equity (Deficit)                                                                                                                       |                                                                                                                                           |                                      |         |         |        
|Current liabilities:                                                                                                                                                 |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     | Outstanding checks in excess of bank balance                                                                                              |                                      | $       | 1,123   |        
|                                                                                                                                                                     | Current installments of long-term debt                                                                                                    |                                      |         | 10,076  |        
|                                                                                                                                                                     | Accounts payable                                                                                                                          |                                      |         | 26,471  |        
|                                                                                                                                                                     | Accrued expenses                                                                                                                          |                                      |         | 5,421   |        
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     |                                                                                                                                           | Total current liabilities            |         |         | 43,091 
|Long-term debt, excluding current installments                                                                                                                       |                                                                                                                                           |                                      | 80,880  |         | 78,156 
|Other liabilities                                                                                                                                                    |                                                                                                                                           |                                      | 312     |         | 280    
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     |                                                                                                                                           | Total liabilities                    |         |         | 124,283
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|Redeemable preferred stock. Authorized 10,000 shares; issued and outstanding 10,000 shares in 1999 and 2000 (redemption value $10,567 at December 31, 2000 and 1999) |                                                                                                                                           |                                      | 5,379   |         | 6,277  
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|Stockholders' equity (deficit):                                                                                                                                      |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     | Class A common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 4,304,116 shares in 1999 and 4,400,850 in 2000 |                                      |         | 43      |        
|                                                                                                                                                                     | Class B common stock, convertible, $.01 par value. Authorized 200,000 shares; issued and outstanding 200,000 shares in 1999 and 2000      |                                      |         | 2       |        
|                                                                                                                                                                     | Additional paid-in capital                                                                                                                |                                      |         | 19,981  |        
|                                                                                                                                                                     | Retained deficit                                                                                                                          |                                      |         | (23,982 | )      
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     |                                                                                                                                           | Total stockholders' equity (deficit) |         |         | (3,956 
|Commitments and contingencies (notes 8 and 18)                                                                                                                       |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        
|                                                                                                                                                                     |                                                                                                                                           | $                                    | 125,706 |         | 130,533
|                                                                                                                                                                     |                                                                                                                                           |                                      |         |         |        

See
accompanying notes to consolidated financial statements.

17

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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIESConsolidated Statements of Operations    Years ended December 31, 1998, 1999 and 2000  (Dollars in thousands,
except per share data)

|                                                                                     |                                   | December 31,                                                                                        |        
|------------------------------------------------------------------------------------ | --------------------------------- | --------------------------------------------------------------------------------------------------- | -------
|
|Net sales                                                                            |                                   | $                                                                                                   | 151,196
|Cost of sales                                                                        |                                   |                                                                                                     | 129,740
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Gross profit                                                                                        |        
|                                                                                     |                                   |                                                                                                     |        
|Operating expenses:                                                                  |                                   |                                                                                                     |        
|                                                                                     | Selling expenses                  |                                                                                                     |        
|                                                                                     | Administrative expenses           |                                                                                                     |        
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Total operating expenses                                                                            |        
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Operating income                                                                                    |        
|                                                                                     |                                   |                                                                                                     |        
|Other income (expense):                                                              |                                   |                                                                                                     |        
|                                                                                     | Gain (loss) on sale of businesses |                                                                                                     |        
|                                                                                     | Interest income                   |                                                                                                     |        
|                                                                                     | Interest expense                  |                                                                                                     |        
|                                                                                     | Other                             |                                                                                                     |        
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Total other income (expense)                                                                        |        
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Earnings (loss) before income taxes, cumulative effect of accounting change, and extraordinary item |        
|Income taxes                                                                         |                                   |                                                                                                     | 415    
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Earnings (loss) before cumulative effect of accounting change and extraordinary item                |        
|Cumulative effect of accounting change, net of income tax benefit of $69             |                                   |                                                                                                     |       
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Earnings (loss) before extraordinary item                                                           |        
|Extraordinary charge for early retirement of debt, net of income tax benefit of $257 |                                   |                                                                                                     | 419    
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Net earnings (loss)                                                                                 |        
|Dividends and accretion of discount on preferred shares                              |                                   |                                                                                                     |       
|                                                                                     |                                   |                                                                                                     |        
|                                                                                     |                                   | Net earnings (loss) available to common stockholders                                                |        
|                                                                                     |                                   |                                                                                                     |        
|Earnings (loss) available to common stockholders per sharebasic                     |                                   | $                                                                                                   | 0.41   
|                                                                                     |                                   |                                                                                                     |        
|Earnings (loss) available to common stockholders per sharediluted                   |                                   | $                                                                                                   | 0.36   
|                                                                                     |                                   |                                                                                                     |        

See
accompanying notes to consolidated financial statements.

18

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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIESConsolidated Statements of Stockholders' Equity (Deficit)    Years ended December 31, 1998, 1999 and 2000  (Dollars
in thousands)

|                           |                                                         | Class A
common stock |            | Class B
common stock |    |     |         |         |   |   |   |   |       
|-------------------------- | ------------------------------------------------------- | -------------------- | ---------- | -------------------- | -- | --- | ------- | ------- | - | - | - | - | ------
|
|Balance, December 31, 1997 |                                                         | 5,066,665            |            | $                    | 51 |     | 100,000 |         | $ | 1 |   | $ | 1,203 
|                           | Cancellation of treasury shares                         |                      | (3,222,221 | )                    |    | (33 | )       |        |   |   |  |   |       
|                           | MLX Corp. merger                                        |                      | 1,907,500  |                      |    | 19  |         | 100,000 |   |   | 1 |   |       
|                           | Net earnings                                            |                      |           |                      |    |    |         |        |   |   |  |   |       
|                           | Stock options exercised                                 |                      | 115,000    |                      |    | 2   |         |        |   |   |  |   |       
|                           |                                                         |                      |            |                      |    |     |         |         |   |   |   |   |       
|Balance, December 31, 1998 |                                                         | 3,866,944            |            |                      | 39 |     | 200,000 |         |   | 2 |   |   | 19,937
|                           | Net loss                                                |                      |           |                      |    |    |         |        |   |   |  |   |       
|                           | Stock options exercised                                 |                      | 437,172    |                      |    | 4   |         |        |   |   |  |   |       
|                           | Dividends and accretion of discount on preferred shares |                      |           |                      |    |    |         |        |   |   |  |   |       
|                           |                                                         |                      |            |                      |    |     |         |         |   |   |   |   |       
|Balance, December 31, 1999 |                                                         | 4,304,116            |            |                      | 43 |     | 200,000 |         |   | 2 |   |   | 19,981
|                           | Net earnings                                            |                      |           |                      |    |    |         |        |   |   |  |   |       
|                           | Stock options exercised                                 |                      | 96,734     |                      |    | 1   |         |        |   |   |  |   |       
|                           | Issuance of warrants                                    |                      |           |                      |    |    |         |        |   |   |  |   |       
|                           | Accretion of discount on preferred shares               |                      |           |                      |    |    |         |        |   |   |  |   |       
|                           |                                                         |                      |            |                      |    |     |         |         |   |   |   |   |       
|Balance, December 31, 2000 |                                                         | 4,400,850            |            | $                    | 44 |     | 200,000 |         | $ | 2 |   | $ | 20,883
|                           |                                                         |                      |            |                      |    |     |         |         |   |   |   |   |       

See accompanying notes to consolidated financial statements.

19

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MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows    Years ended December 31, 1998, 1999 and 2000  (Dollars in thousands)

|                                                   |                                                                                                      | December 31,                                                                                   |                                                  
|-------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | -------------------------------------------------
|
|Cash flows from operating activities:              |                                                                                                      |                                                                                                |                                                  
|                                                   | Net earnings (loss)                                                                                  |                                                                                                | $                                                
|                                                   | Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: |                                                                                                |                                                  
|                                                   |                                                                                                      | Depreciation and amortization of plant and equipment                                           |                                                  
|                                                   |                                                                                                      | Other amortization                                                                             |                                                  
|                                                   |                                                                                                      | Write-off of intangible assets                                                                 |                                                  
|                                                   |                                                                                                      | Increase (decrease) in allowance for doubtful accounts                                         |                                                  
|                                                   |                                                                                                      | Deferred income taxes                                                                          |                                                  
|                                                   |                                                                                                      | (Gain) loss on sale of property and equipment                                                  |                                                  
|                                                   |                                                                                                      | (Gain) loss on sale of businesses                                                              |                                                  
|                                                   |                                                                                                      | Changes in current assets and liabilities, excluding effects of acquisitions and dispositions: |                                                  
|                                                   |                                                                                                      |                                                                                                | Decrease (increase) in accounts receivable       
|                                                   |                                                                                                      |                                                                                                | Decrease (increase) in inventories               
|                                                   |                                                                                                      |                                                                                                | Decrease (increase) in prepaid expenses          
|                                                   |                                                                                                      |                                                                                                | (Increase) in other assets                       
|                                                   |                                                                                                      |                                                                                                | Decrease (increase) in refundable income taxes   
|                                                   |                                                                                                      |                                                                                                | Increase (decrease) in accounts payable          
|                                                   |                                                                                                      |                                                                                                | Increase (decrease) in accrued expenses and other
|                                                   |                                                                                                      |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|Cash flows from investing activities:              |                                                                                                      |                                                                                                |                                                  
|                                                   | Capital expenditures                                                                                 |                                                                                                |                                                  
|                                                   | Proceeds from sale of property and equipment                                                         |                                                                                                |                                                  
|                                                   | Merger with MLX Corp.                                                                                |                                                                                                |                                                  
|                                                   | Acquisitions, net of cash acquired                                                                   |                                                                                                |                                                  
|                                                   | Increase in intangible assets                                                                        |                                                                                                |                                                  
|                                                   | Proceeds from sale of businesses                                                                     |                                                                                                |                                                  
|                                                   | Decrease (increase) in tax escrow                                                                    |                                                                                                |                                                  
|                                                   | Repayment of note receivablestockholder                                                             |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|Cash flows from financing activities:              |                                                                                                      |                                                                                                |                                                  
|                                                   | Net borrowings (repayments) of notes payable                                                         |                                                                                                |                                                  
|                                                   | Increase (decrease) in checks issued in excess of bank balance                                       |                                                                                                |                                                  
|                                                   | Proceeds from issuance of long-term debt                                                             |                                                                                                |                                                  
|                                                   | Principal payments on long-term debt and capital leases                                              |                                                                                                |                                                  
|                                                   | Proceeds from issuance of common stock                                                               |                                                                                                |                                                  
|                                                   | Proceeds from issuance of preferred stock                                                            |                                                                                                |                                                  
|                                                   | Debt issuance cost                                                                                   |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|Net increase (decrease) in cash                    |                                                                                                      |                                                                                                | (138                                             
|Cash at beginning of period                        |                                                                                                      |                                                                                                | 138                                              
|                                                   |                                                                                                      |                                                                                                |                                                  
|Cash at end of period                              |                                                                                                      | $                                                                                              |                                                 
|                                                   |                                                                                                      |                                                                                                |                                                  
|Supplemental disclosures of cash flow information: |                                                                                                      |                                                                                                |                                                  
|                                                   | Cash paid during the year for:                                                                       |                                                                                                |                                                  
|                                                   |                                                                                                      | Interest                                                                                       |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  
|                                                   |                                                                                                      | Income taxes                                                                                   |                                                  
|                                                   |                                                                                                      |                                                                                                |                                                  

See accompanying notes to consolidated financial statements.

20

---



MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements        December 31, 1999 and 2000        (Dollars in thousands, except per share data)

(1)  Description of Business and Summary of Significant Accounting Policies



21

---



22

---



23

---



(2)  Mergers and Acquisitions



Equity of MLX Corp.

$
34,789Recognition of tax benefit


3,071Repurchase of shares, options and warrants


(19,991
)Effect of merger

$
17,869




24

---



25

---



December 31,1998

1999Net sales

$
280,841

$
246,187Net earnings (loss) available to common shareholders

$
3,226

$
(11,679
)Net earnings (loss) available to common shareholders per sharebasic

$
0.8

$
(2.75
)Net earnings (loss) available to common shareholders per sharediluted

$
0.71

$
(2.75
)


(3)  Sale of Businesses

On December 31, 1999, the Company sold substantially all of the assets and certain liabilities of Carroll George, Inc. The Company received
$7,500 of cash for net assets with a book value at the date of sale of $9,963, resulting in a loss on the sale of subsidiary of $2,463.



(4)  Inventories

A summary of inventories follows:

December 31,1999

2000Finished goods

$
8,633

$
9,555Work in process


2,818


7,121Raw materials


10,969


12,753$
22,420

$
29,429


26

---

MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

December 31,
1999 and 2000

(Dollars
in thousands, except per share data)

(5)  Property, Plant, and Equipment

A summary of property, plant, and equipment, including assets held under capital leases as described in note 8 is as follows:

December 31,Depreciable
Lives
(in years)1999

2000Land and land improvements

15

$
2,722

$
1,837Buildings and leashold improvements

15 - 39


13,995


15,003Machinery and vehicles

5 - 12


46,311


46,642Tooling

3


7,364


8,676Office equipment

5 - 10


5,319


6,160Construction in progress




1,043


1,57476,754


79,892Less accumulated depreciation




20,421


28,337Property, plant and equipment, net



$
56,333

$
51,555


(6)  Intangible Assets

A summary of intangible assets is as follows:

December 31,1999

2000Goodwill

$
11,063

$
11,063Covenants not to compete


2,591


2,591Debt issuance costs


1,910


2,629Other


435


43515,999


16,718Less accumulated amortization


4,172


5,532Net intangible assets

$
11,827

$
11,186


27

---

(7)  Long-term Debt

A summary of long-term debt follows:

December 31,1999

2000Revolving credit facilities

$
21,559

$
31,535Note payable to bank, with variable rate interest (9.50% and 10.5% as of December 31, 1999 and 2000, respectively), due in various quarterly payments with the balance due May 31, 2003, net of unamortized
discount of $164 at December 31, 2000


16,274


12,747Note payable, bank, with variable rate interest (12.25% and 13.25% as of December 31, 1999 and 2000, respectively), due in various quarterly payments with the balance due June 30, 2005, net of unamortized
discount of $580 in 2000 at December 31, 2000


24,092


23,175Note payable, bank, with variable rate interest (9.0% to 10.5% as of December 31, 1999 and 10.5% to 11.5% at December 31, 2000) due in various quarterly payments with the balance due October 15,
2003


25,300


17,747Subordinated note payable with interest payable at 7.0%, discounted $393 to yield 10.0%, due in quarterly payments with the balance due April 8, 2008


2,885


2,624Note payable, bank, with interest payable at 8.5%, due in monthly payments with the balance due December 1, 2002


278


185Note payable, bank, with interest payable at 7.85%, due in monthly payments with the balance due May 1, 2001


152


47Note payable, electric cooperative, non-interest bearing, due in monthly payments with the balance due November 1, 2006


306


263Capital lease obligations


109


34Total


90,956


88,357Less current installments


10,076


10,201Long-term debt, less current installments

$
80,880

$
78,156


In
May 1998, the Company entered into a new revolving credit facility with a group of banks. The revolving credit agreement, as amended, permits the Company to borrow up to a
maximum of $23,000. The agreement requires payment of a quarterly commitment fee of .25% of the average daily unused portion of the revolving credit facility. Interest is due monthly and is based on
the Bank's prime rate plus an applicable margin (9.5% and 10.5% at December 31, 1999 and 2000, respectively). The amount available under the revolving credit facility is limited to 85% of
qualified accounts receivable, 50% of eligible inventory, plus $2,000 of other assets. The revolving credit agreement expires May 31, 2003.

To
finance the acquisition of certain assets of Worthington Custom Plastics, Inc., the Company entered into a revolving credit facility which allows for borrowings up to a
maximum of $24,000. Interest is

28

---

due monthly and is based on the prime rate as published in theWall Street Journalplus an applicable margin (9.0% at December 31, 1999 and 10.5%
at December 31, 2000). The Company also incurs a fee based upon the unused revolving credit facility. The amount available under the revolving credit facility is generally limited to 85% of
qualified accounts receivable and 60% of eligible inventory. The revolving credit agreement expires October 15, 2003.

At
December 31, 1999 and 2000, the Company had $21,559 and $31,535, respectively, outstanding and $8,193 and $2,852, respectively, available under its revolving credit
facilities.

In
May 1998, the Company entered into a financing arrangement with a group of banks which originally provided for term loans of up to $55,000. The term loans under this
financing arrangement are amortized quarterly with the balances due May 31, 2003 and June 30, 2005. Interest is payable monthly at rates based upon the lender's prime rate plus an
applicable margin. The agreement is secured by a first lien on all of the Company's accounts receivable, inventory, equipment and various other assets. Effective January 30, 2000, the Company
is paying this lender a fee of .125% per month based upon the amount of the revolving credit commitment and the balance of the term loans.

This
debt agreement contains restrictions on capital expenditures, incurring additional debt or liens, making investments, mergers and acquisitions, selling assets or making payments
such as dividends or stock repurchases. The revolving credit agreements also contain various financial covenants.

In
connection with the acquisition of certain assets of Worthington Custom Plastics, Inc. in April 1999, the Company obtained a term loan facility which allows for
maximum borrowings of $26,000 and expires on October 15, 2003. Interest is due monthly and is based on the prime rate as published by theWall Street
Journalplus an applicable margin which will vary depending on certain financial ratios achieved by the Company. The term loan facility amortizes quarterly throughout its term.
The Company must also prepay certain amounts from the sale of assets, the issuance of new equity capital and from excess cash flow as defined by the agreement.

Under
the most restrictive covenant in any agreement, no amount was available for payment of dividends at December 31, 1999 and 2000.

The
aggregate amounts of long-term debt maturities and principal payments for each of the five years subsequent to December 31, 2000 and thereafter are as follows:

Fiscal year ending:2001

$
10,2012002


11,5172003


30,8512004


12,6432005


22,090Thereafter


1,055$
88,357


29

---

On
September 20, 2000, the Company issued warrants to a lender, in connection with an amendment to the credit agreement, to purchase 238,548 shares of its Class A common
stock. The 238,548 warrants issued are exercisable at any time during the period from September 28, 2000 through September 28, 2001, at an exercise price of $.01 per share. The warrants
were valued at $863 and were recorded as a discount on the related term loans.

In
connection with replacement of its debt arrangements, the Company wrote off debt issuance costs of $676 during the year ended December 31, 1998. This early termination of
the Company's debt agreements resulted in extraordinary charges of $419, after income tax benefit, for the year ended December 31, 1998. The extraordinary charges were equal to ($.11) per share
for basic earnings per share and ($.09) per share for diluted earnings per share for the year ended December 31, 1998.

(8)  Leases

The Company has operating leases for several of its plants, certain warehouse space, and manufacturing and computer equipment. Rental expense for operating
leases was $4,254, $6,733 and $7,266 for the years ended December 31, 1998, 1999 and 2000, respectively.

Future
minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2000 are:

Year ending December 31:2001

$
7,3152002


7,1472003


6,7642004


6,1312005


4,889Thereafter


7,963Total minimum lease payments

$
40,209


30

---

(9)  Income Taxes

Total income tax expense for the periods presented was allocated as follows:

December 31,1998

1999

2000Income before extraordinary item

$
415

$
(1,165
)
$
(1,230
)Extraordinary item


(257
)




Cumulative effect of accounting change





(69
)

Stockholders' equity, for compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes


(517
)




$
(359
)
$
(1,234
)
$
(1,230
)


Current

Deferred

TotalYear ended December 31, 1998:Federal

$


$


$
State

$
415

$


$
415$
415

$


$
415Year ended December 31, 1999:Federal

$


$


$
State


(1,165
)




(1,165
)$
(1,165
)



$
(1,165
)Year ended December 31, 2000:Federal

$


$
(1,072
)
$
(1,072
)State





(158
)

(158
)$


$
(1,230
)
$
(1,230
)


Total
income tax expense (benefit) attributable to income before extraordinary item and cumulative effect of accounting change differed from the amounts computed by
applying the U.S. Federal corporate income tax rate of 34% for all periods to earnings (loss) before income taxes as a result of the following:

December 31,1998

1999

2000Computed "expected" tax expense (benefit)

$
849


(3,344
)
$
(120
)State income taxes (benefit), net of Federal income tax benefit (expense)


274





(104
)Amortization of goodwill


102





(149
)Officer's life insurance


19


23


29Increase (decrease) in valuation allowance


(846
)

3,104


(1,085
)Resolution of tax contingency





(1,165
)

Other, net


17


65


(99
)$
415

$
(1,165
)
$
(1,230
)


31

---

The
state tax benefit for the year ended December 31, 1999 primarily results from the resolution of a tax contingency related to the merger with MLX Corp.

The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 1999 and 2000, are
presented below:

December 31,1999

2000Deferred tax assets attributable to:Net operating loss and credit carryforwards

$
29,035

$
28,043Accrued vacation pay


237


314Compensation expense from issuance of stock options


291


291Reserve and other


669


818Total gross deferred tax assets


30,232


29,466Less valuation allowance


(18,944
)

(17,461
)Net deferred tax assets


11,288


12,005Deferred tax liabilities attributable to:Plant and equipment, principally due to differences in depreciation


(5,178
)

(4,723
)Recapture of inventory LIFO valuation for tax purposes


(78
)

(39
)Excess of tax over book amortization of organization costs


(71
)

(63
)Discount on debt for financial reporting purposes


(143
)

(132
)Total deferred tax liabilities


(5,470
)

(4,957
)Net deferred tax asset

$
5,818

$
7,048


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, projected future taxable income, and tax planning strategies in making this assessment. In order to fully realize the deferred
tax asset, the Company will need to generate future taxable income of approximately $18,000 prior to the expiration of the net operating loss carryforwards in 2020. Management believes it is more
likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at December 31, 2000 based upon anticipated profitability over
the period of years that the temporary differences are expected to become tax deductions. Management believes that sufficient book and taxable income will be generated to realize the benefit of these
tax assets. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

32

---

MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

December 31,
1999 and 2000

(Dollars
in thousands, except per share data)

(9)  Income Taxes (Continued)

During 2000, net operating loss carryforwards of approximately $1,200 expired unused. Accordingly, deferred tax assets and the related valuation allowance were
reduced by $398. At December 31, 2000, the Company has net operating loss carryforwards for Federal income tax purposes of $71,657 which are available to offset future federal taxable income,
if any, through 2020.

(10)  Redeemable Preferred Stock

Pursuant to the agreement to purchase certain assets of Worthington Custom Plastics, Inc., the Company issued 10,000 shares of preferred stock, without
par value, of Morton Industrial Group, Inc. to Worthington. The preferred stock is mandatorily redeemable five years from its issuance date at $1,000 per share, and will pay or accrue annual
dividends at a rate of 8%. The Company may pay such dividends in cash or in additional shares of preferred stock. The agreement provides that the dividend rate may be reduced based upon changes in
pricing of certain customer contracts. The Company has determined that those dividends should be reduced as provided in the agreement, and accordingly, has accrued no dividends for the year ending
December 31, 2000. The preferred stock was valued at $4,250 at the time of the acquisition and the discount is being accreted over a five year period using the effective yield method.

(11)  Stockholders' Equity

The Company's capital stock consists of Class A and Class B common stock. The Class A and Class B shares have the same rights and
preferences, except that the Class B shares guarantee the holders certain special voting rights. The holders of the Class B common stock are ensured that the total votes available to be
cast by the holders, when combined with Class A common stock held, will be at least 24% of the votes available to be cast by all holders of common stock.

The
Board of Directors is also authorized to issue one or more series of preferred stock, with the number of shares, dividend rate, voting rights, redemption features and other rights
to be determined by the Board of Directors.

(12)  Stock Option Plans

In 1998, the Company adopted a stock option plan (the "Plan") pursuant to which the Company's Board of Directors may grant stock options to officers and key
employees. The Plan authorizes grants of options to purchase up to 1,166,896 shares of authorized but unissued Class A common stock. Stock options are granted with an exercise price equal to
the stock's fair market value at the date of grant. All stock options under the Plan have ten-year terms and vest and become fully exercisable after three years from the date of grant. At
December 31, 1999 and 2000, there were 275,330 and 139,150 additional shares available for grant under the Plan.

Prior
to the Merger, the Company had a stock option plan under which key officers and employees were granted options at prices equal to fair market value of the stock on the date of
grant. At December 31, 1999 and 2000, there were 165,690 and 68,956 options outstanding under the prior plan.

The
per share weighted-average fair value of stock options granted during 1999 and 2000 was $3.37 and $3.70 on the date of grant using the Black Scholes option-pricing model with the
following weighted-

33

---

average assumptions: expected dividend yield 0%, risk-free interest rate of 6%, volatility of 91%, and an expected life of 10 years.

The
Company applies APB Opinion No. 25 in accounting for its Plan and, accordingly, no compensation cost has been recognized for its stock options in the financial statements.
Had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, the Company's net earnings would have been reduced to the pro
forma amounts indicated below:

1999

2000Net earnings (loss) available to common shareholders:As reported

$
(10,872
)
$
(20
)Pro forma


(12,334
)

(1,622
)Diluted earnings (loss) available to common shareholders per share:As reported


(2.55
)

0.00Pro forma


(2.90
)

(0.36
)


Stock
option activity during the periods indicated is as follows:

Number of
shares

Weighted
average
exercise
priceOutstanding at December 31, 1998

1,466,143

$
10.057Issued

56,100


7.109Exercised

(437,172
)

0.111Forfeited

(28,000
)

(6.660
)Outstanding at December 31, 1999

1,057,071


14.040Issued

164,000


4.610Exercised

(96,734
)

0.411Forfeited

(27,820
)

(11.235
)Outstanding at December 31, 2000

1,096,517

$
13,904


34

---

The
following is summary information about the Company's stock options outstanding at December 31, 2000:

Number of
Shares

Exercise price

Expiration Date59,697

0.216

July 13, 20029,259

0.900

May 8, 2005765,461

17.125

January 20, 200850,000

16.563

July 13, 200830,000

13.125

September 2, 20088,100

8.000

February 11, 200010,000

7.375

June 8, 2009152,000

4.500

March 10, 201012,000

6.000

June 13, 20101,096,517


At
December 31, 1999 and 2000, the number of options exercisable was 456,877 and 638,573, respectively, and the weighted-average exercise price of those options was $10.74 and
$15.06, respectively.

(13)  Concentration of Sales

Sales to customers in excess of 10% of total net sales for the years ended December 31, 1998, 1999 and 2000 are as follows:

Customer A

Customer BPeriods ended:December 31, 1998

28
%
51
%December 31, 1999

20
%
29
%December 31, 2000

18
%
35
%


Trade
accounts receivable with these customers totaled $9,800 and $9,100 at December 31, 1999 and 2000, respectively.

(14)  Employee Participation Plan

The Morton Metalcraft Co. Employee Participation Plan allows substantially all employees to defer up to 15 percent of their income through payroll
deduction of pre-tax contributions under section 401(k) of the Internal Revenue Code. The Company matches 25 percent of the first 6 percent of pre-tax
income contributed by each employee. Employees may also make contributions of after-tax income. Additionally, the Company may make discretionary contributions to the plan for the benefit
of participating employees. Certain of the acquired subsidiaries also had defined contribution plans which allow for employee pre-tax contributions and employer matching and discretionary
contributions. The expense charged to operations related to defined contribution plans was $458, $365 and $490 for the years ended December 31, 1998, 1999 and 2000, respectively.

35

---

(15)  Earnings (Loss) Per Share

The following reflects the reconciliation of the numerators and denominators of the earnings (loss) per share and net earnings (loss) per share assuming
dilution computations:

Year ended December 31, 1998Income
(numerator)

Shares
(denominator)

Per share
amountBasic earnings per share

$
1,665

4,023,373

$
.41Effect of dilutive securities




559,241Diluted earnings per share

$
1,664

4,582,614

$
.36


Year ended December 31, 1999Income
(numerator)

Shares
(denominator)

Per share
amountBasic loss per share available to
common stockholders

$
(10,872
)
4,253,763

$
(2.55
)Effect of dilutive securities




Diluted loss per share available
to common stockholders

$
(10,872
)
4,253,763

$
(2.55
)


Year ended December 31, 2000Income
(numerator)

Shares
(denominator)

Per share
amountBasic loss per share available to
common stockholders

$
(20
)
4,563,958

$
0.00Effect of dilutive securities




Diluted earnings per share available
to common stockholders

$
(20
)
4,562,958

$
0.00


Options
to purchase 1,057,071 shares of Class A common stock at an average purchase price of $14.040 were outstanding at December 31, 1999, but were not included in the
computation of diluted earnings per share because they were anti-dilutive.

Options
to purchase 1,096,517 shares of Class A common stock at an average price of $13.904 per share and warrants to purchase 238,548 shares of Class A common stock at
$.01 per share were outstanding at
December 31, 2000, but were not included in the computation of diluted earnings per share because they were anti-dilutive.

36

---

(16)  Related Party Transactions

During the year ended December 31, 1999, the Company paid $64 for merger and acquisition advisory services to two firms affiliated with members of the
Company's board of directors.

On
November 3, 2000, the Company entered into an agreement with First Union Securities, Inc. ("FUSI"), under which FUSI will act as the Company's exclusive financial
advisor with respect to possible debt or equity financings or recapitalizations. A director of Morton Industrial Group, Inc. is a Managing Director at FUSI.

(17)  Segment Reporting

Morton Industrial Group, Inc. has two reportable segments, contract metal fabrication and contract plastic fabrication. The contract metal fabrication
segment provides full-service fabrication of parts and sub-assemblies for the construction, agricultural, and industrial equipment industry. The contract plastic fabrication
segment provides full-service vacuum formed and injection-molded parts and sub-assemblies for the construction, agricultural, and industrial equipment industry. Prior to
March 30, 1998, the Company operated in only one reportable segment, contract metal fabrication.

The
accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Morton
Industrial Group, Inc. accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices, although
these intersegment sales were insignificant in 1999 and 2000.

Morton
Industrial Group, Inc.'s reportable segments are strategic business units that offer different products and services. They are managed separately because each business
requires different technology and production methods. Most of the businesses were acquired as a unit, and most of the management at the time was retained.

1998Contract
Metal
Fabrication

Contract
Metal
Fabrication

TotalRevenues from external customers

$
116,333

$
34,863

$
151,196Intersegment revenues


20


20


40Interest income


35


24


59Interest expense


4,211


568


4,779Depreciation and amortization


4,167


1,214


5,381Segment operating profit


5,624


1,333


6,957Expenditures for segment fixed assets


7,832


2,427


10,259


37

---

1999Contract
Metal
Fabrication

Contract
Metal
Fabrication

TotalRevenues from external customers

$
106,048

$
113,275

$
219,323Intersegment revenues





314


314Interest income





15


15Interest expense


4,802


3,406


8,208Depreciation and amortization


6,428


2,765


9,193Segment operating profit


2,416


(1,594
)

822Segment assets including intangible assets


53,905


71,801


125,706Expenditures for segment fixed assets


3,363


1,600


4,963


2000Contract
Metal
Fabrication

Contract
Metal
Fabrication

TotalRevenues from external customers

$
150,809

$
128,019

$
278,828Intersegment revenues





596


596Interest expense


4,249


6,552


10,801Depreciation and amortization


5,459


4,163


9,622Segment operating profit


8,093


1,018


9,111Segment assets including intangible assets


58,350


72,183


130,533Expenditures for segment fixed assets


3,912


2,739


6,651


(18)  Litigation

On May 1, 2000, Worthington Industries, Inc. filed suit (in the United States District Court for the Southern District of Ohio, Eastern Division)
related to the Company's 1999 acquisition of the non-automotive plastics business from Worthington. Worthington claims that it is owed additional amounts under the sales agreement and a
related service agreement, and that it is owed dividends on the preferred stock that it received. The Company believes that certain warranties and representations made by Worthington at the time of
acquisition have been breached and that amounts claimed by Worthington are not due. The Company has filed a counterclaim against Worthington related to these matters. Management believes that the
Company will prevail in this litigation and does not anticipate any material impact on earnings or financial position.

The
Company is also involved in routine litigation. Management does not believe that any legal proceedings would have a material adverse effect on the Company's financial condition or
results of operations.

38

---



MORTON INDUSTRIAL GROUP, INC. AND SUBSIDIARIESSchedule IIValuation and Qualifying Accounts

|                                 |                              |  |   | Additions |  |       |  |    
|-------------------------------- | ---------------------------- |  | - | --------- |  | ----- |  | ---
|
|Allowance for doubtful accounts: |                              |  |   |           |  |       |  |    
|                                 | Year ended December 31, 1998 |  | $ | 100       |  |      |  | 214
|                                 |                              |  |   |           |  |       |  |    
|                                 | Year ended December 31, 1999 |  | $ | 314       |  | 64    |  | 370
|                                 |                              |  |   |           |  |       |  |    
|                                 | Year ended December 31, 2000 |  | $ | 320       |  | 1,430 |  |   
|                                 |                              |  |   |           |  |       |  |    

---

39

---



Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

Information About the Selection of Our Auditors

Selection of KPMG LLP (February 17, 1999)

On February 17, 1999, the Company's Board of Directors, acting upon the recommendation of the Audit Committee of the Board, selected KPMG LLP ("KPMG")
to serve as the Company's independent accountants for the fiscal year ended December 31, 1998, and the fiscal year ending December 31, 1999, and dismissed Clifton Gunderson L.L.C.
("Clifton Gunderson") as independent accountants for the Company. Clifton Gunderson had served as the independent accountants for Morton Metalcraft Holding Co. (Morton) (which merged with the Company
on January 20, 1998) for the six months ended December 31, 1997, and the fiscal years ended June 30, 1997 and 1996. On April 14, 1998, as reported on
Form 8-K dated April 16, 1998, and Form 8-K/A dated April 22, 1998, our Board of Directors, acting upon the recommendation of its Audit Committee
selected Clifton Gunderson to serve as our Company's independent accountants. The action of the Board of Directors on February 17, 1999, dismissing Clifton Gunderson and appointing KPMG
reflected the Board's determination that our recent and anticipated growth merited our selection of a recognized national accounting firm rather than a smaller, regional firm.

During
the period from April 14, 1998, to and including February 17, 1999, with respect to the Company, and prior thereto with respect to Morton, including the period
from January 1, 1998, to April 14, 1998, the six months ended December 31, 1997, and the fiscal years ended June 30, 1997 and 1996, Clifton Gunderson's reports on the
financial statements of Morton did not contain an adverse opinion or disclaimer of opinion, nor were they qualified in any way, and no reports of Clifton Gunderson were qualified as to uncertainty,
audit scope, or accounting principles. (Clifton Gunderson issued no reports on the financial statements of the Company during the period that began April 14, 1998, and ended February 17,
1999.) During the same periods, neither the Company nor Morton had any disagreements with Clifton Gunderson on any matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure. During the period from April 14, 1998, to and including February 17, 1999, with respect to us, and prior thereto with respect to Morton, including the period
from January 1, 1998, to April 14, 1998, the six months ended December 31, 1997, and the fiscal years ended June 30, 1997 and 1996, Clifton Gunderson did not advise us or
Morton that:



During
the period from April 14, 1998, to and including February 17, 1999, with respect to us, and prior thereto with respect to Morton, including the period from
January 1, 1998 to April 14, 1998, the six months ended December 31, 1997, and the fiscal years ended June 30, 1997, and 1996, neither we nor Morton consulted KPMG about
either (a) the application of accounting principles to a specified transaction, either completed or proposed, or (b) the type of audit opinion that might be rendered on our or Holding's
financial statements, or (b) any matter that was a subject of a disagreement between us or Holding and Clifton Gunderson or that was a reportable event of the kind described in four listed
items in the immediately preceding paragraph. Selection of Clifton Gunderson (April 14, 1998).

40

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PART III

Item 10. Directors and Executive Officers of the Registrant.

The information required by this Item 10 about the executive officers and Directors of the Company is incorporated herein by reference to the information set
forth under the caption "Election of Directors" in our definitive proxy statement for the 2001 annual meeting of shareholders, which we expect to file with the Securities and Exchange commission not
later than one hundred twenty days after December 31, 2000 pursuant to Regulation 14A.

Item 11. Executive Compensation.

The information required by this Item 11 is incorporated herein by reference to the information set forth under the caption "Executive Compensation" in our
definitive proxy statement for the 2001 annual meeting of shareholders, which we expect to file with the Securities and Exchange commission not later than one hundred twenty days after
December 31, 2000 pursuant to Regulation 14A.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The information required by this Item 12 is incorporated herein by reference to the information set forth under the caption "Principal Shareholders of the
Company" in our definitive proxy statement for the 2001 annual meeting of shareholders, which we expect to file with the Securities and Exchange commission not later than one hundred twenty days after
December 31, 2000 pursuant to Regulation 14A.

Item 13. Certain Relationships and Related Transactions.

The information required by this Item 13 is incorporated herein by reference to the information set forth under the caption "Executive
CompensationCertain Relationships and Related Transactions" in our definitive proxy statement for the 2001 annual meeting of shareholders, which we expect to file with the Securities and
Exchange commission not later than one hundred twenty days after December 31, 2000 pursuant to Regulation 14A.

PART IV

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

The
following financial statements of the Company are included in Item 8:

The
following financial statement schedule of the Company is included in Item 8:

Schedule IIValuation
and Qualifying Accounts for the years ended December 31, 1998, 1999 and 2000

41

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|Exhibit Number and Document Title                                                                                                                                                                                                        |  | Incorporated by Reference to                                                                                                                         |  | Filed Herewith
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------
|                                                                                                                                                                                                                                         |  |                                                                                                                                                      |  |               
|2.1 and 10.1Agreement and Plan of Merger Between MLX Corp. and Morton Metalcraft Holding Co., dated as of October 20, 1997                                                                                                              |  | Annex B to the Definitive Proxy Statement on Schedule 14A filed by MLX Corp. with the Securities and Exchange Commission ("SEC") on January 6, 1998. |  |               
|2.2 and 10.2Securities Purchase Agreement Among MLX Corp. and Security Holders of Morton Metalcraft Holding Co., dated as of October 20, 1997                                                                                           |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                         |  |               
|3.1 and 4.1Articles of Incorporation of the registrant as Amended prior to January 20, 1998                                                                                                                                             |  | MLX Corp. Form 10-Q for the quarter ended June 30, 1993                                                                                              |  |               
|3.2 and 4.2Articles of Amendment to Articles of Incorporation of the Registrant Effective January 20, 1998                                                                                                                              |  | Exhibit 3 to Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on February 4, 1998                                                 |  |               
|3.2 and 4.2Bylaws of the Registrant, as Amended                                                                                                                                                                                         |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                         |  |               
|4.3 and 10.3Credit Agreement Among the Registrant, Metalcraft Co., Morton Metalcraft Co. of North Carolina and Harris Trust & Savings Bank, individually and as Agent, dated January 20, 1998                                           |  | Morton Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                  |  |               
|4.4 and 10.4Security Agreement executed by Morton Industrial Group, Inc., Morton Metalcraft Co., and Morton Metalcraft Co. of North Carolina in favor of Harris Trust & Savings Bank, individually and as Agent,
dated January 20, 1998 |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                         |  |               
|4.5 and 10.5Mortgage and Security Agreement with Assignment of Rents executed by Morton Metalcraft Co. in favor of Harris Trust & Savings Bank, individually and as Agent, dated January 20, 1998                                       |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                         |  |               
|4.6 and 10.6Pledge Agreement executed by Registrant in favor of Harris Trust & Savings Bank, individually and as Agent, dated January 20, 1998                                                                                          |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                         |  |               
|10.7Limited Indemnification Agreement dated as of October 20, 1997, among MLX Corp., William D. Morton, and Other Morton Metalcraft Shareholders and Option Holders                                                                     |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                         |  |               
|10.8Industrial Building Lease between Morton Welding Co., Inc., and Morton Metalcraft Co. dated September 1, 1994                                                                                                                       |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                                                         |  |               

42

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|10.9Lease between Caterpillar, Inc., and Morton Metalcraft Co., Inc. dated June 9, 1995                                 |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------- |  | 
|10.10Lease between Agracel, Inc., and Morton Metalcraft Co. dated November 6, 1996.                                     |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.11Employment Agreement dated as of January 20, 1998, between the Registrant and William D. Morton                    |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.12Employment Agreement dated as of January 20, 1998, between the Registrant and Daryl R. Lindemann                   |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.13MLX Corp. 1997 Stock Option Plan                                                                                   |  | Appendix C to the Definitive Proxy Statement on Schedule 14A filed by MLX Corp. with the SEC on January 6. 1998. |  | 
|10.14MLX Corp. 1995 Stock Option Plan                                                                                   |  | MLX Corp. Definitive Proxy Statement on Schedule 14A for the 1995 Annual Meeting of Stockholders                 |  | 
|10.15Master Lease Agreement between Morton Metalcraft Co. and General Electric Capital Corporation dated August 7, 1996 |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.16Guaranty of Master Lease Agreement by Morton Metalcraft Holding Co., dated August 7, 1996                          |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.17Split Dollar Insurance Agreement between Morton Metalcraft Co. and William D. Morton dated February 3, 1995.       |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.18Split Dollar Assignment between William D. Morton and Morton Metalcraft Co. dated February 3, 1995                 |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.19Split Dollar Insurance Agreement between Morton Metalcraft Co. and William D. Morton dated October 10, 1993        |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.20Split Dollar Assignment between William D. Morton and Morton Metalcraft Co., dated October 10, 1993                |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.21Split Dollar Insurance Agreement between Morton Metalcraft Co. and Daryl R. Lindemann dated October 10, 1993       |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 
|10.22Split Dollar Assignment between Daryl R. Lindemann and Morton Metalcraft Co., dated October 10, 1993               |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                                     |  | 

43

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|10.23Death Benefit Agreement between Morton Metalcraft Co. and William D. Morton                                                                                                                                                                       |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                          |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------- |  | 
|10.24Salary Continuation Agreement between Morton Metalcraft Co. and William D. Morton dated February 26, 1996.                                                                                                                                        |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1997                          |  | 
|10.25Stock Purchase Agreement among the Company and Gary L. George and Gloria J. George, dated March 2, 1998.                                                                                                                                          |  | Exhibit 10.1 to Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on April 14, 1998 |  | 
|10.26Stock Purchase Agreement among the Company, Joseph T. Buie, Jr., and Ernest J. Butler, dated April 8, 1998.                                                                                                                                       |  | Exhibit 10.2 to Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on April 14, 1998 |  | 
|10.27Non-negotiable Promissory Note (subordinated) of the Company to Joseph T. Buie, Jr., dated April 8, 1998.                                                                                                                                         |  | Exhibit 10.3 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on April 14, 1998    |  | 
|10.28Non-negotiable Promissory Note (subordinated) of the Company to Ernest. J. Butler, dated April 8, 1998.                                                                                                                                           |  | Exhibit 10.4 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on April 14, 1998    |  | 
|10.29Stock Purchase Agreement among the Company and Richard L. Goreham, Delores A. Staples and William B. Goreham, dated April 27, 1998.                                                                                                               |  | Exhibit 10.1 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998     |  | 
|10.30Credit Agreement dated May 28, 1998 among the Company, Harris Trust and Savings Bank, and the lenders signatory thereto.                                                                                                                          |  | Exhibit 10.2 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998     |  | 
|10.31Mortgage and Security Agreement with Assignment of Rents executed by Carroll George Inc. dated May 28, 1998.                                                                                                                                      |  | Exhibit 10.3 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998     |  | 
|10.32Deed of Trust and Security Agreement with Assignment of Rents executed by B&W Metal Fabricators, Inc.                                                                                                                                             |  | Exhibit 10.4 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998     |  | 
|10.33Amended and Restated Security Agreement executed by the Company, Morton Metalcraft Co., Morton Metalcraft Co. of North Carolina, Morton Metalcraft Co. of South Carolina, Carroll George Inc. and B&W Metal
Fabricators, Inc. dated May 28, 1998. |  | Exhibit 10.5 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998     |  | 
|10.34Amended and Restated Pledge Agreement executed by the Company, Morton Metalcraft Co., Morton Metalcraft Co. of North Carolina, Morton Metalcraft Co. of South Carolina, Carroll George Inc. and B&W Metal
Fabricators, Inc. dated May 28, 1998.   |  | Exhibit 10.6 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998     |  | 

44

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|10.35Amended and Restated Mortgage and Security Agreement with Assignment of Rents executed by Morton Metalcraft Co., dated May 28, 1998.                                                                                                                                                                     |  | Exhibit 10.7 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998               |  |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------- |  | -
|10.35Mortgage and Security Agreement with Assignment of Rents to executed by Mid-Central Plastics, Inc. dated May 28, 1998.                                                                                                                                                                                   |  | Exhibit 10.8 Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on June 12, 1998               |  |  
|10.36First Amendment to Credit Agreement with Harris Trust & Savings Bank.                                                                                                                                                                                                                                    |  | Morton Industrial Group, Inc. Form 10-K for the year ended December 31, 1998                                    |  |  
|10.37Asset Purchase Agreement among the Company, Morton Custom Plastics, LLC, and Worthington Custom Plastics, Inc. dated February 26, 1999 and First Amendment to Asset Purchase Agreement, dated as of April 15,
1999, among the Company, Morton Custom Plastics, LLC and Worthington Custom Plastics, Inc. |  | Exhibits 10.1 and 10.2 to Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on April 29, 1999 |  |  
|10.38Credit Agreement dated as of April 15, 1999, among Morton Custom Plastics, LLC, Morton Holding, LLC and General Electric Capital Corporation                                                                                                                                                             |  | Exhibit 99.1 to Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on April 29,1999            |  |  
|10.39Agreement dated December 31, 1999 by and among Carroll George Inc., Morton Industrial Group, Inc. and Advanced Component Technologies, Inc.                                                                                                                                                              |  | Exhibit 99.2 to Morton Industrial Group, Inc. Report on Form 8-K filed with SEC on January 18, 2000             |  |  
|10.40Third Amendment to Credit Agreement with Harris Trust & Savings Bank                                                                                                                                                                                                                                     |  | Exhibit 99.1 to Morton Industrial Group, Inc. Report on Form 8-K filed with SEC on February 29, 2000            |  |  
|13Annual Report                                                                                                                                                                                                                                                                                               |  | Exhibit 13.1 to Morton Industrial Group, Inc. Report on Form 10-K filed with SEC on April 2, 2001               |  | X
|16.2Letter re: change in certifying accountant                                                                                                                                                                                                                                                                |  | Exhibit 16.1 to Morton Industrial Group, Inc. Report on Form 8-K filed with the SEC on February 18, 1999        |  |  
|21.1Subsidiaries of Registrant                                                                                                                                                                                                                                                                                |  |                                                                                                                 |  | X
|23.1Consent of KPMG LLP                                                                                                                                                                                                                                                                                       |  |                                                                                                                 |  | X

None

45

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SIGNATURES

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

|                      |  | MORTON INDUSTRIAL GROUP, INC.
|--------------------- |  | -----------------------------
|                      |  |                              
|Dated: March 30, 2001 |  | By:                          

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 in the capacities and on
the dates indicated.

|Signatures                                  |  | Title                                                                      |  | Date          
|------------------------------------------- |  | -------------------------------------------------------------------------- |  | --------------
|                                            |  |                                                                            |  |               
|/s/WILLIAM D. MORTONWilliam D. Morton       |  | President, Chief Executive Officer, and Chairman of the Board of Directors |  | March 30, 2001
|/s/THOMAS D. LAUERMANThomas D. Lauerman     |  | Vice President of Finance and Treasurer (Principal Accounting Officer)     |  | March 30, 2001
|/s/FRED. W. BROLINGFred. W. Broling         |  | Director                                                                   |  | March 30, 2001
|/s/ALFRED R. GLANCY IIIAlfred R. Glancy III |  | Director                                                                   |  | March 30, 2001
|/s/MARK W. MEALYMark W. Mealy               |  | Director                                                                   |  | March 30, 2001
|/s/WILLEM F.P. DE VOGELWillem F.P. de Vogel |  | Director                                                                   |  | March 30, 2001

46

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SHAREHOLDER INFORMATION

CORPORATE OFFICES

Morton
Industrial Group, Inc.
1021 W. Birchwood
Morton, Illinois 61550-0429
Phone: 309-263-3300 Fax: 309-263-3216

INVESTOR INFORMATION

Shareholders
and prospective investors are welcome to call or write with questions or requests for additional information. Please direct inquiries to Van Negris at:

Kehoe,
White, Van Negris & Company, Inc.
766 Madison Avenue
New York, NY 10021
Phone: 212-396-0606 Fax: 212-396-9025

ANNUAL MEETING

The
Annual Meeting of the Shareholders of Morton Industrial Group, Inc. will be held at:

Hilton
Charlotte University Place
8629 J. M. Keynes Drive
Charlotte, North Carolina 28262
Tuesday, June 12, 2001 at 10:00 a.m. (EDT)

FORM 10-K

A
copy of form 10-K, the Annual Report which the Company is required to file with the Securities and Exchange Commission, is available without charge upon request to the Company at
the above address.

STOCK TRANSFER AGENT AND REGISTRAR

For
inquiries about stock transfers or address changes, shareholders may contact:

American
Stock Transfer & Trust Co.
59 Maiden Lane
New York, NY 10038
Phone: 800-937-5449

INDEPENDENT PUBLIC ACCOUNTANTS

KPMG
LLP
Indianapolis, Indiana

STOCK MARKET INFORMATION

The
common stock of Morton Industrial Group, Inc. is traded on the Nasdaq SmallCap Market under the ticker symbol MGRPC.

47

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BOARD OF DIRECTORS

William
D. Morton
  Chairman of the Board, President and CEO
  Morton Industrial Group, Inc.

Fred
W. Broling
  President and CEO
  US Precision Glass

Willem
F.P. de Vogel
  President
  Three Cities Research, Inc.

Alfred
R. Glancy III
  Chairman and CEO
  MCN Energy Group, Inc.

Mark
W. Mealy
  Managing Director
  First Union Securities, Inc.

CORPORATE OFFICERS

William
D. Morton
  Chairman of the Board, President and CEO

Daryl
R. Lindemann
  Secretary

Thomas
D. Lauerman
  Vice President of Finance & Treasurer

48

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